Oct
17th
Sat
17th
Triffin’s Dilemma And The Dollar As The World Working Capital
The Triffin dilemma is back in vogue: the reserve currency country needs to have a current account deficit to finance the global need of liquidity but at the same time a negative balance of payments undermines the value of the reserve currency itself.
The US has been providing the “working capital” financing for the world, but that will ultimately devalue the dollar. It is also true that a slower global growth will have lower financing needs.
