Following the destruction of World War II the Allies in general and America in  particular were in a position to re-make much of the world, including international trade.  Meeting in Geneva, it was no accident that the official language of such trade and international contract law became English.  As the dollar was then backed by gold, it was natural that the world also gravitated to the dollar as the world’s reserve currency.  This has given us many benefits, guaranteeing a large demand for our currency, which drives up its value, keeping the dollar strong for decades.

A few months ago, China raised the obvious possibility that the world needs another reserve currency, like the renminbi, of course.  Few Americans have ever lived when the dollar was not world’s reserve currency.  Most don’t take the risk of losing our privileged status very seriously, but it is not a birthright.  Take a look at this graph of history: