Doing without the Dollar

Pessimism used to be for monetary cranks; now even Goldman Sachs warns the dollar will go the way of the pound.

The staggering sum of US$18 trillion – nearly equal to a year’s gross domestic product (GDP) – is the amount that the United States has taken in from foreigners since the Great Financial Crisis of 2008.

The notion that the dollar’s dominance in world finance might come to an end was a fringe view only five years ago when America’s net foreign investment position was a mere negative $8 trillion. Now one reads forecasts of the end of the dollar era in research reports by Goldman Sachs and Credit Suisse.

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