Senior U.K. think-tank Chatham House has out a commentary on why the U.S. dollar allegedly will remain the global reserve currency for many years, despite challenges from the BRICS and supporting nations. This is a frequent enough theme for U.S. and U.K. officials and supporters of floating-exchange-rate dominance. But this article is more frank: Preservation of U.S./NATO military dominance is bluntly explained as the key factor in maintaining dollar supremacy as a “store of value,” even as it loses ground as the global “medium of exchange” in trade. Ironically, this military-power analysis of dollar supremacy, written by David Lubin of Chatham House’s Global Economy and Finance Programme, is otherwise spelled out only in analyses by certain Chinese scholars.
U.S. military superiority over all its NATO allies and most other nations not only enables direct and strong threatening of nations challenging the dollar’s reserve status (as by regime-change, although author Lubin does not mention it); more importantly, in this Chatham House view, U.S. military power makes for prompt unanimity of U.S. allies and their central banks, in imposing what effectively become near-global sanctions on nations the U.S. (and U.K.) want to subject. This occurs even if the allies have their own reasons to object to the sanctions.
“While dollar dominance is uncomfortable for many countries, U.S. military power, the structure of its alliances and the slow pace at which the distribution of currency power changes will preserve its status as the top currency for the foreseeable future,” the column concludes.
Though making no direct reference to the Ukraine war, the article logically implies the purpose of provoking that war: To defeat a threatening new financial and economic system led by Russia-China and the BRICS+, when the existing floating-exchange-rate system is unable to sustain its own oceans of unpayable debts.
