Authored by Christoph Gisiger via themarket.ch,

Economist Barry Eichengreen is one of the foremost experts on the global financial system. His new book examines 2,500 years of international currency history. In this interview, he discusses the fading hegemony of the dollar, outlines the coming global monetary order, and explains his growing concerns.

King Dollar is staging a comeback.Since the start of the Iran war, the greenback has been in demand as a safe-haven asset. The losses following the price slide at the beginning of the year against the Swiss franc, euro, and other major currencies have been recuperated.

Yet, although the dollar accounts for around 60% of global foreign exchange reserves and dominates more than half of world trade,its hegemony appears more fragile than ever.

"From the war in Iran to the tariff chaos and domestic political uncertainty, I fear that the Trump administration's actions are prompting the rest of the world to reduce its dependence on the dollar; “most obviously in Europe but elsewhere as well"

This is the conclusion reached by Barry Eichengreen. In his new book,"Money Beyond Borders: Global Currencies from Croesus to Crypto", the US economist examines the long history of international currencies, from ancient coins to blockchain technology. He demonstrates that the same factors contributing to the widespread use of a dominant currency ultimately lead to its replacement.

As the professor at the University of California, Berkeley, and profound expert on the global monetary system argues, the dollar is now on the downside of this cycle. A major reason for its downturn is that political institutions in the US are weakened, including high public debt and attacks on the independence of the central bank. Likewise, America is no longer a reliable partner for international alliances.

“To me, the argument that the dollar is in a secular decline as the dominant global currency remains intact,”says Eichengreen.

In this wide-ranging interview, which has been lightly edited for length and clarity, he applies historical examples of leading currencies to the present and identifies potential winners and losers should intensify the flight from dollar assets.

Contrary to increasing doubts, the dollar has proven itself as a safe haven since the start of the Iran war. From a historical perspective, what are the central characteristics of a global reserve currency?

Source: ZeroHedge News