Our Dollar, Your Problem: An Insider's View of Seven Turbulent Decades of Global Finance, and the Road Ahead

by Kenneth Rogoff

A leading economist explores the global rise of the U.S. dollar and shows why its future stability is far from assured.

Our Dollar, Your Problem argues that America’s currency might not have reached today’s lofty pinnacle without a certain amount of good luck. Drawing in part on his own experiences, including with policymakers and world leaders, Kenneth Rogoff animates the remarkable postwar run of the dollar—how it beat out the Japanese yen, the Soviet ruble, and the euro—and the challenges it faces today from crypto and the Chinese yuan, the end of reliably low inflation and interest rates, political instability, and the fracturing of the dollar bloc. Americans cannot take for granted that the Pax Dollar era will last indefinitely, not only because many countries are deeply frustrated with the system, but also because overconfidence and arrogance can lead to unforced errors. Rogoff shows how America’s outsized power and exorbitant privilege can spur financial instability—not just abroad but also at home.

Genres: Economics, Finance, Nonfiction, History, Business, Politics, Money

360 pages, Kindle Edition

First published May 6, 2025

Reviews

[Jason Furman · Rating 5 out of 5]

Our Dollar, Your Problem is a tour-de-force that is a rare book that reflects and incorporates both the frontier of cutting edge economic research and also the cutting edge of international policymaking. It is also a marvel of writing in that Ken Rogoff manages to make it lively and interesting while leaving seemingly no international macroeconomic issue uncovered: China, Japan, Europe, Lebanon, Argentina, the IMF, SDRs, monetary policy, fiscal policy, regulation, financial repression, fixed exchange rates, Rey on dilemma not trilemma, Hausmann on dark matter, etc. etc. etc.

Officially the thesis is: “The era in which the dollar was utterly dominant and reliably stable may have passed its peak. The likely result will be a global rise in the number and intensity of debt, inflation, financial, and exchange rate crises… an important part of the vaunted stability seemingly engineered by central banks over the last half century is an artifact of a period in which trade and financial globalization were rapidly increasing, great power conflict had faded, and populism had been suppressed… Although the dollar will likely stay on top for some time to come, its global footprint may shrink after decades of continual expansion; if so, the shift could further exacerbate the difficult fiscal adjustment the United States already faces.”

But unofficially there is another story that Rogoff does not call out to the same degree that to my mind might be even stronger and go in the opposite direction. That is the combination of economic research (with Rogoff making a disproportionate contribution), policy recommendations from places like the IMF, and country experience all leading to better policies and thus more resilience. More flexible exchange rates, larger reserves, less foreign borrowing, central bank independence, new institutions like swap lines, etc., have all combined to mean that big events like COVID did not turn into international macroeconomic crises. Instead of the widespread contagion of the 1990s the recent crises and problems in places like Argentina, Sri Lanka (not mentioned in the book, I guess it did leave at one international macroeconomic issue uncovered) and Turkey have not spread (and Turkey itself has been a bit of a disaster but arguably not a crisis).

Also unofficially the book is more balanced and nuanced than you might think from some of the summaries. Rogoff does not make dramatic predictions about rapid changes but instead more is about erosion and risks.

In terms of quibbles, he attributes a substantial funding advantage to US convenience yield and exorbitant privilege, 50bp and plausibly more. I think that could easily be gone and more like zero now.

Also, he does the “perks and burdens of being the dominant currency” without engaging with the issue of persistent appreciation of the dollar and its impact on the structure of the U.S. economy, particularly manufacturing. I would have listed that on the “burden” side of the ledger but could be wrong but regardless wanted to know Rogoff’s view.

But overall a stunning, cutting edge and generally reasonable and persuasive summary of the international macroeconomics of just about every issue facing the global economy today—with the dollar at the center of them all.

[Paul Fulcher · Rating 3 out of 5]

I have watched my magician friend David Blaine perform some of his incredible card tricks a dozen times now, and I still cannot figure them out. (Our mutual connection was the former world chess champion Bobby Fischer.) I can, however, help elucidate how the SDR works.

Our Dollar, Your Problem is subtitled "An Insider's View of Seven Turbulent Decades of Global Finance, and the Road Ahead" - and which immediately highlights one issue. Getting the inside story from someone who was, for example, the IMF's Chief Economist in 2001-3 is helpful, but Rogoff seems to use this as more of an excuse to turn this into a form of autobiography (or self hagiography) at times e.g. the gratuitous double name dropping in the quote above prompted simply by the suggestions that the IMF's Special Drawing Right can seem to operate like magic.

The other issue is timing - the book having a half page postscript noting Trump's win. And while Rogoff argues his book was designed to not depend on which party controls power in the short term, the radical suggestions from the Trump regime, in particular the view that the dollar's position is more of an exorbitant burden than a privilege and the so-called “Mar-a-Lago Accord” to address is, really necessitate a new chapter of their own in any paperback edition. In the meantime Rogoff's views can be found in op-eds e.g. here.

Those two issues aside, this is a good and very readable survey- indeed perhaps a little too accessible, deliberately only scratching the surface of some complex topics.

[Xinyu Tan]

A difficult read. I still don't understand many things even with the help of ChatGPT. But this might be one of the most important area to know about at the moment. The author and others predicted a financial crisis in the coming years. Financial crisis is not just banks and companies bankrupt, also mass unemployment and hard-earned savings / assets wiped out; not just scarcity of money, also loss of opportunities.

We are living in such an interesting time; I find myself oscillated between wonder of the so-called greatest technological shift and fear of the looming crisis. My eyes are watching God.

[Simon Grimm · Rating 5 out of 5]

First of, I'm giving out too many 5-star reviews.

Otherwise, a solid book. Lots of detail on monetary politics. I don't yet grok everything, but have a far better understanding than before, which is very useful given that monetary politics are back in the news (looking at France, the US, and the UK). The biggest take-away is that the dollar's status as the world's dominant currency is not assured. Based on historical precedent, various other currencies were dominant in the past (Spanish real, British pound) but lost power, most often due the country losing military power (Spain) or becoming heavily indebted (UK after WW2).

The biggest threat to the USD is inflation and the government becoming too indebted, with the US currency and bonds losing their safe haven status.

There are slight signs of this already happening, with the USD and bonds losing value at the same time, which normally doesn't happen. TLDR for my own understanding:

Normally if there is inflation, interest rates rise, which makes newly issued bonds have higher coupon rates, leading to already issued bonds becoming cheaper in the private market (as their coupon rates are lower), leading to an increase in the yields of said bonds.

But recently, 10-year yields and the USD have both been losing value, meaning that people neither want to buy bonds or the USD, as they lose trust in the US's general fiscal situation.

Aside from this, the book discussed why USD pegs close to never work (they often get broken by private actors by selling the currency, lowering its value until the country's central bank has no more reserves to buy their own currency, breaking the peg). It also discusses why various other currencies have not yet dethroned the USD. Another update for me was that the Euro seems somewhat more flawed than I originally thought (Greece couldn't devalue their currency, having them go through brutal austerity instead).

Finally, I've updated somewhat in favor of fiscal conservatism and austerity. Looking at the price of German Bunds is reassuring (2.670% vs ~5% for most other countries).

[Beauregard Bottomley · Rating 2 out of 5]

Rogoff blamed those who used his shitty spreadsheet results not the crappy algorithm with its ‘excel error’ that he used and chastised them for thinking he meant a hard speed limit.

All the rot in modern magical thinking (MMT) economics is woven within this mythological fairy tale retelling of economic history.

Harvard economist want austerity for others and pretend debt destroys when ordinary people benefit. Greenspan assured us that he was shocked, that he couldn’t believe it, but the bankers lied to him. Rogoff assumes rational agents are at play when he should question the hype and delusion as it is happening. The “Big Short” and Adam Tooze’s “Crashed” cover the financial housing crisis of 2008 in more realistic terms than this book was capable since Rogoff was trapped in a myth of neo-liberalism nonsense and never manages to get out of his myths.

Books like this one will greatly please the opinion writers of the WSJ. I suspect it was a Journal’s review that highlighted this book for me. I would suggest a far better book than this one if you haven’t yet read it “Money and Government: Unsettled issues in Macroeconomics” by Skidelsky.

Rogoff's hubris gets in the way of telling a more balanced view of macroeconomics. His snipes at Elizabeth Warren and AOC were without context within the book and he owed it to the reader to explain why he said those snipes.

I’m going to go out on the limb here and say bitcoin is not going to replace the dollar and generative AI is not going to morph into AGI.

Economics doesn’t have to be magical thinking and it really can make a difference. See Tooze’s book “The Wages of Destruction: the making and breaking of the Nazi Economy.” We’re currently ruled by morons and I cringed every time Rogoff quoted from Lawrence Summers, didn’t he go to Epstein Island multiple times? Didn’t Harvard repeatedly cave into Epstein’s best friend Donal Trump? I can’t fault Rogoff for the disaster that is Trump since this book didn’t get the chance to see Trump fail at everything after this book was published. China is playing Trump for the fool that he is and that can affect the strength of the dollar.

[Richard Marney · Rating 5 out of 5]

This is a rare and special book.

First, the reader can follow decades of global financial and economic history through the eyes of a central and important market, academic, and policymaking participant. Having a ring-side seat is the best!!

Second, there are a number of themes, a mastery of which is essential to understanding the global context during the transition from the end of the Bretton Woods era through the present day beyond the stated topic of the title of the book, that the author elaborates with succinctness and clarity. In particular, I appreciated the discussion of the trials and risks of fixed exchange rate regimes and the rapid often unexpected jump from vulnerability to crisis.

The book’s main act - the role and the fraught future of the USD - is outstanding.

Must reading for finance professionals.

[Olivia · Rating 5 out of 5]

Fair, balanced book that tackles topics from high debt problems to the US’s role as the global hegemon, to possible contenders for the next global hegemon. Really really enjoyed and will keep on my desk as a reference.

[Nick Sliwka · Rating 4 out of 5]

Rogoff writes quite well and clearly, but it still remains a dense Econ book. Content-wise, a very nuanced perspective on how or if the dollar will lose its status as the reserve currency that goes beyond the usual talking points.

[Jesus David Valverde · Rating 5 out of 5]

This book is outstanding for several reasons.

First, the question of the dollar’s exceptionalism (or lack thereof) is one of the most important topics in today’s global economic landscape. Second, the author is arguably one of the most authoritative voices on the subject, thanks to his career and prominent role at the IMF. And third, it’s a truly enjoyable read: it blends technical mastery, current macro insights, economic history, and fascinating personal anecdotes with key political and financial leaders — the kind of people most of us only ever see on CNBC or Bloomberg. But this guy? He’s been in the room with them for the past 50 years.

Key takeaway?
The exorbitant privilege of the dollar is real — it grants the U.S. near-constant access to cheap financing and countercyclical capital, given its role as a safe haven during crises. While this is well known, what’s less discussed are the costs: maintaining this status means acting as the world’s policeman through military power (and its budget), and serving as the global lender and insurer — roles that come with a price tag. Still, the net benefit remains positive.

Lastly, his thesis on the peak dollar is highly convincing. He doesn’t predict the collapse of the dollar’s dominance, but rather that it has likely reached its high-water mark. From here, a slow decline is expected, driven by fiscal, demographic, and geopolitical shifts.

[Tiago · Rating 4 out of 5]

Why is (was?) the dollar the world's dominant currency since the postwar period? What are the consequences of that status? If you don't really know, this is a good introduction.

The book goes from past challengers to dollar dominance, through: China as an alternative; the consequences of dollar dominance for other countries; alternative currencies; pros and cons of having a dominant currency; to an argument for why we might be at peak dollar dominance.

One obvious cause of the weakening of the dollar as a reserve currency is the willingness of Western countries to seize and use foreign assets after Russia's invasion of Ukraine. This point is only briefly addressed in the book but it feels like it deserved more space. It complements the impact of tariffs and erratic economic policy - why do you think gold has had such a run in 2025? - though you can't fault the author for not predicting the future (the book went to print just after the 2024 presidential election). Nicholas Mulder's "The Economic Weapon" is a great complement if you're interested in the impacts of weaponizing one's financial system.

As Rogoff shows, there aren't any clear alternatives to the dollar for the mantle of a dominant currency. While the dollar might remain a transaction currency - that is, used for most exchanges if not for much else internationally - there are no present suitable replacements. China is facing Japanese-like stress in its financial system after decades of overbuilding, a savings glut, and financial repression with capital controls and currency manipulation. It doesn't have deep financial markets, which are centralized around state-owned banks. Europe is full of dwarves: it lacks fiscal and political union to make the Euro a more cohesive and powerful policy instrument. It also overregulates and fragments its financial industry - no European unity in banking. Crypto is only used in black-market transactions and hyperinflated countries.

This situation could change. As Rogoff warns by the end of the book, the United States is playing risky games with its fiscal and monetary policies. If the debt continues increasing so much faster than the economy with no end in sight, the escape routes aren't pretty. And they likely result in less trust in the dollar and the American economy. Turns out you can't turn reality off to fund your pet projects or indefinitely extend emergencies; debt funding isn't a free lunch. Wile E. Coyote eventually has to look down.

Aside: Rogoff really enjoys dropping names. It's as if some insecurity keeps nagging him to validate his decades of experience by mentioning whatever bigwig he was with or prestigious institution he was in. It gets a tad funny by the end - perhaps his years of competitive chess and being at Harvard have made him too aware of the fact that there's always someone out there doing better than you at something.

[Simonas · Rating 5 out of 5]

Patiko labai - gebėjimas gan paprastai paaiškinti dolerio dominavimo priežastis ir pasekmės bei nors ir atsargūs spėliojimai ir simuliacijos kas gali būti toliau. Įdomi tema man, nustebino kaip galima aiškiai dėlioti gana sudėtingus modelius.

[Caleb Meredith · Rating 5 out of 5]

Timely.

[Caio Garzeri · Rating 4 out of 5]

Very balanced and well written. Nice anedoctes. A bit too many "i told you so" s but I guess that s OK. I am afraid he is right on almost everything.

[Jung]

Kenneth Rogoff’s "Our Dollar, Your Problem: Seven Turbulent Decades of Global Finance, and the Road Ahead" offers a sweeping exploration of how the US dollar became, and remains, the backbone of the international financial system. Rogoff traces the dollar’s rise to prominence through the critical moment in 1971, when President Nixon ended the dollar’s convertibility to gold, shocking European allies who had been assured that dollars were as good as gold. Treasury Secretary John Connally’s infamous remark to frustrated European leaders — “Our dollar, your problem” — perfectly summed up the bold and somewhat dismissive American attitude that has shaped dollar policy ever since. This attitude rests on the 'strong dollar' belief: that a robust dollar provides global stability. Yet Rogoff demonstrates that this view has had serious consequences for other countries, including manufacturing losses and trade imbalances, while even within the United States the strong dollar has harmed industries reliant on competitive exports. He questions whether this complacency could lead to even greater instability both within America and abroad in the years to come.

The book explores how global currency dominance is extremely sticky — it usually changes hands just once every few centuries. In the sixteenth century, Spanish silver coins reigned supreme, while in the seventeenth century the Dutch florin led European trade thanks to banknote innovations. The British pound was the standard from the Napoleonic era until World War I, after which the dollar gradually took over. Rogoff argues that by the 1944 Bretton Woods conference, the dollar was cemented as the world’s monetary anchor, with the US economy accounting for a staggering 36 percent of global output. Bretton Woods created a system of fixed exchange rates that put the dollar at its center, obligating other countries to peg their currencies to the greenback. After the war, this arrangement gave the United States remarkable advantages, placing the dollar at the heart of international trade and finance. Over time, as globalization spread, the dollar’s influence only deepened. In contrast to centuries past, the modern era’s integration of markets means a dominant currency’s reach is far more global — people in Japan may have had no opinion on the Dutch florin, but they absolutely care about the dollar today.

Rogoff explains why the dollar’s supremacy is so resilient. Thanks to network effects, using a dominant currency is far cheaper than juggling multiple exchange rates, so the dollar naturally crowds out other options. Around ninety percent of all foreign exchange trades involve dollars on one side, as it offers unparalleled liquidity and lower transaction costs. Approximately sixty percent of global central bank reserves are also held in dollars. Commodities and goods are frequently priced in dollars, with oil being the most notable — about eighty percent of oil contracts use the greenback. These patterns create an ecosystem where alternatives struggle to gain a foothold.

Yet there have been challenges to the dollar’s status. The Soviet ruble once appeared to be a potential rival, especially during the 1970s, as the USSR expanded rapidly with massive infrastructure projects and technological achievements like nuclear power and the space race. However, centrally planned systems failed to adapt, and efforts to reform the Soviet economy in 1964 fell short. Had the reforms succeeded, Rogoff argues, the ruble might have seriously competed with the dollar. Japan’s yen also briefly looked like a challenger. During its rapid post-war expansion, Japan’s manufacturing and technology sectors achieved incredible success. But the 1985 Plaza Accord, designed to address America’s trade deficit, forced a rapid strengthening of the yen, which soon doubled in value and devastated Japanese export competitiveness. The moment to rival the dollar passed, and no other nation today pegs its currency to the yen. Europe’s euro appeared the strongest competitor yet, backed by an enormous economic bloc with deep financial markets and inherited inflation-fighting credibility from the Deutsche Mark. When introduced in 1999, the euro quickly gained ground and even reached \$1.60 per euro by 2008. But the eurozone crisis in 2010 laid bare the fundamental weakness of a monetary union without fiscal union. Countries could not coordinate their responses to asymmetric shocks, revealing deep flaws that destroyed confidence in the euro’s challenge to the dollar.

In our own time, the Chinese yuan and cryptocurrency represent new threats to American monetary primacy. China has pursued yuan internationalization with determination, using tools like its Belt and Road initiative to expand yuan-denominated loans across Asia, Africa, and Latin America. It has also built bilateral swap agreements with dozens of countries to bypass the dollar, and the development of a digital yuan could sidestep dollar-based payment systems entirely. China’s economic might and its position as the largest trading partner for over a hundred countries make this challenge credible. Likewise, cryptocurrency represents a fundamentally different path, aiming to escape any government-controlled currency system. Although still small and volatile compared to traditional financial markets, cryptocurrencies attract attention for their resistance to capital controls and potential to democratize payments. Stablecoins already process billions in cross-border transactions without legacy banking infrastructure. Nevertheless, neither crypto nor the yuan has reached the critical mass of trust and network effects necessary to dethrone the dollar just yet.

Rogoff then considers how most nations have learned to live with the dollar instead of fighting it, often by pegging their currencies directly to it. Pegging brings short-term benefits: reduced exchange rate volatility, imported stability, and greater trade predictability. But fixed pegs are fragile, and crises can emerge suddenly. Mexico’s peso peg in the late 1980s initially crushed hyperinflation and attracted capital, but when underlying imbalances grew, the peg collapsed in 1994, slashing the peso’s value by half and throwing Mexico into recession. Similarly, Thailand in the 1990s kept a fixed rate that supported an economic boom until property bubbles and deficits made it unsustainable. When the baht peg fell in 1997, the contagion triggered the Asian Financial Crisis. Such pegs are effective only until domestic fundamentals diverge too far from the fixed rate, leading to sudden, often catastrophic, adjustments.

The benefits to the US from dollar dominance are considerable. Foreign governments are willing to hold massive amounts of US debt because Treasuries are viewed as safe and liquid, providing the US with extremely cheap borrowing. This 'exorbitant privilege' means the United States can sustain deficits that would bankrupt other nations, since imports are paid for with its own currency. When America buys goods from abroad, it pays with dollars, essentially IOUs it can print. As a result, presidents of both parties have felt comfortable running massive budget deficits without triggering balance-of-payments crises. Furthermore, the dollar’s supremacy gives the United States immense geopolitical leverage, as it can deny adversaries access to the dollar-based global financial system, inflicting enormous damage without using military force. Dollar-based assets also attract huge foreign capital inflows, fueling American investment and economic growth, though sometimes encouraging dangerous asset bubbles. The Fed, too, benefits from this system, enjoying far greater freedom to set interest rates based on domestic needs rather than fearing sudden capital flight.

However, the book warns that these privileges come with serious vulnerabilities. America’s federal debt has exceeded \$33 trillion, about 120 percent of GDP, and continues to grow without a credible reduction plan. Servicing this debt will become even harder if interest rates rise, since higher borrowing costs quickly explode the government’s interest payments. If inflation returns and the Fed tries to control it with high rates, this could destabilize government finances. There is enormous political pressure to keep rates low to sustain economic growth and reduce debt burdens, but such a policy risks reigniting inflation. Rogoff compares this scenario to the 1970s, when loose monetary policy and oil shocks pushed inflation into double digits, requiring extremely painful rate hikes and a deep recession to restore stability. If confidence in the dollar evaporated due to spiraling inflation or a debt crisis, global reserve holders might flee dollar assets en masse, destroying the trust that anchors the entire system. Given the dollar’s centrality, such a loss of confidence could spark chaos in world trade and financial markets.

In the end, Rogoff’s book offers a sobering but balanced assessment. America has drawn immense benefits from being the world’s banker, but these benefits have created dangerous complacency. As rivals such as China’s yuan or cryptocurrencies mature, and as America’s fiscal and monetary strains worsen, the era of unchallenged dollar hegemony may be drawing closer to its end. The global economy has been built around dollar stability, but that stability relies on continued trust in America’s institutions, responsible policy, and a willingness to make hard economic choices. If these break down, the consequences could be devastating. Rogoff urges readers to recognize that while dollar supremacy looks durable, it is ultimately fragile, and preserving its advantages will demand more effort and wisdom than ever before.

[Shreyas · Rating 4 out of 5]

Rogoff is a bit pompous and name droppy. But as an introduction to the role of the US dollar in the global economy, this book is a good read

[cristina · Rating 5 out of 5]

in my humble opinion this book was amazing (Elliott if you’re reading pls stop because whatever I’m about to say I’m sure you’ll find stupid). As someone with very little macro understanding he explains stuff in a very simple manner and throws in personal anecdotes that make it super reader friendly I’m def reading again and just bought “this time is different”. Also first time ever I binge an econ(ish) book

[Mohammad Ahsan · Rating 5 out of 5]

The author has covered the dominance of U.S. dollar as the global reserve currency since the WWII, past and present challengers to dollar such as Japanese Yen, Russian Rouble, Euro and Chinese Yuan, various forms of exchange regimes, alternative currencies including crypto, stable coins and central bank digital currencies, the costs and benefits to the US due to dollar���s reserve currency status, and key threats to that status.

The book was completed in 2024 before the U.S. presidential elections, but the author has covered important topics such as central bank independence, rising debt and higher interest rates, exorbitant privilege of being a reserve currency, non-financial factors strengthening the dollar’s position and weaponisation of dollar’s reserve currency status for political and military gains. Most of these issues have gained prominence under President Trump’s second term. This is not the first time that Kenneth Rogoff has identified key risks well in advance. He had warned of the global financial crisis due to U.S. subprime mortgages in a paper written in January 2008, had argued for years that low inflation and ultra-low interest rates post the GFC were not permanent and would reverse, and had given an early warning about China’s property market bubble in 2020.

The title of the book is inspired by former U.S. Treasury Secretary John Connally’s famous remark “The dollar is our currency, but it’s your problem”, aimed at the European finance ministers at the 1971 G-10 meeting in Rome, shortly after the suspension of the Gold Standard by President Nixon. What he meant was that America would do whatever it wished with its currency, and the world would just have to live with the consequences. The emergence of the U.S. as a global military, political and technological power since the end of the WWII was accompanied by a rise of U.S. dollar as a global currency dominating trade, international payments, global financial markets and central banks reserves.


Kenneth Rogoff has divided the book into six sections and has used his extensive knowledge, detailed research and strong professional and academic connections to explain how the U.S. dollar was ultimately crowned as the indisputable global reserve currency. He says that it was both luck and good economic performance that helped the dollar to beat historical challengers such as the Yen, Rouble and even the Euro. Kenneth Rogoff credits liquid and deep U.S. financial markets, well established laws, credible institutions and country’s military and political clout for the dollar’s total dominance. The dollar’s status provides a huge advantage to the US in form of lower interest rates than they otherwise would be. Rogoff estimates that losing this status will cause long-term rates to be 0.5-1.0% higher. He explains that the “Exorbitant privilege” is a direct result of US risk taking appetite, strong legal system, post WWII reconstruction efforts and leading role in Bretton Woods system, immigration friendly policies, and global political and military influence.

He blames the weaponisation of dollar and its use in financial sanctions against U.S. opponents, irresponsible fiscal policies of successive U.S. governments leading to ever rising deficits and ballooning debt, repeated attempts by the U.S. politicians (including the current President) to influence the Fed and curtail its independence, and U.S. government’s anti-globalization strategy for creating fears among both friends and foes, leading to a gradual shift away from the dollar to alternatives, including both fiat currencies (CNY and Euro) and decentralized instruments (crypto). Rogoff views that the real threat to the dollar is internal due to its rising level of public debt and failure to address growing deficits, coupled with a serious risk of the White House’s influence and interference in institutions such as the Federal Reserve.

Rogoff’s explanations of various technical concepts such as convenience yield on US treasuries, financial repression, Triffin dilemma and exorbitant privilege are extremely helpful and clear. He has dedicated a full section on currency regimes such as fixed exchange rates and their challenges giving examples of European and Asian currencies in the 90s, managed floats and flexible exchange rates. Another section is dedicated to the working and structure of alternative currencies - Crypto, stable coins and central bank digital currencies, and how these alternatives pose a challenge to dollar supremacy.

Kenneth Rogoff in the final section of his book has stated that dollar dominance is not under an imminent threat, but this does not mean it will prevail forever. He sees a gradual erosion mainly driven by internal policies that will cause higher interest rates (losing part of the exorbitant privilege), and diversification away from the dollar in global central bank reserves and global trade. He believes the era of dollar dominance has peaked and failure to address economic challenges such as burgeoning debt and higher inflation will bring an end to the reign of king dollar within a couple of decades.

Overall, an extremely well written, informative and comprehensive book by Kenneth Rogoff, who has used his extensive personal experience (in both Economics and Chess) in highlighting key issues, explaining complex theories and relationships, defending valid points and arguments while debunking spurious theories and hypotheses. There are times when he has engaged in blatant self-praise, but the readers could overlook these acts of boasting - Mr. Rogoff can afford to do that as he has proved multiple times that his advance warnings were correct well ahead of time. A must read if you want to understand the history of dollar dominance and what lies ahead in global finance.

[Igor Pejic · Rating 5 out of 5]

Kenneth Rogoff’s Our Dollar, Your Problem is a masterfully written and deeply insightful exploration of the United States dollar’s status as the world’s dominant currency.

Drawing on his five decades of experience as a leading economist, Rogoff combines rigorous analysis with policy insights to create a book that is both intellectually compelling and accessible to a broad audience. The book thoughtfully traces the evolution of global finance from the collapse of Bretton Woods through significant historical moments such as the fall of the pound sterling, Japan’s asset bubble, the rise of the euro, and the emergence of China’s renminbi. Rogoff skillfully explains complex economic concepts like dominant currencies, safe assets, and exchange rate regimes in a clear and readable manner.

His insider perspective, stemming from roles such as Chief Economist at the IMF, lends the book credence and a clear-eyed and nuanced assessment of the decisions and missteps by policymakers in the U.S., Europe, and China. Throughout the narrative, Rogoff weaves in personal anecdotes - from chess tournaments in Cold War Europe to high-level IMF meetings - that add authenticity and a lively tone to the text. He candidly discusses the uncertainties of economic forecasting and addresses both the privileges and challenges of dollar dominance with balanced and thoughtful judgment.

In Our Dollar, Your Problem, Kenneth Rogoff approaches the topic of cryptocurrencies with a measured and cautious perspective. He acknowledges the innovative potential of crypto assets and blockchain technology but emphasizes their current limitations, such as volatility, lack of widespread adoption, and regulatory uncertainties. Rogoff highlights that while cryptocurrencies pose intriguing questions about the future of money and finance, they have not yet matured into credible alternatives to traditional currencies or reserve assets, and their role remains largely speculative rather than foundational in the global financial system.

Regarding Central Bank Digital Currencies (CBDCs), Rogoff presents them as a significant development in the evolution of money with the potential to reshape monetary policy and financial infrastructure. He discusses how CBDCs could enhance the efficiency, security, and inclusiveness of payment systems while also providing central banks with new tools for policy implementation and financial oversight. However, Rogoff also cautions about the challenges and risks associated with CBDCs, including privacy concerns, the potential disruption to traditional banking models, and the geopolitical implications of their adoption, which could redefine the balance of power in international finance.

The book generously highlights the slow and complex nature of shifts in global reserve currencies, emphasizing that such changes are rarely driven by economics alone but also by geopolitics, innovation, and trust. While Rogoff warns of risks related to U.S. fiscal policy and rising global instability, he refrains from sensationalism and provides a measured outlook on the prospects for challenger currencies. Overall, Our Dollar, Your Problem stands out as a crucial and timely work that combines scholarly authority with vivid storytelling. It is highly recommended for economists, investors, policymakers, students of international relations, and readers interested in understanding the intricate interplay of economics, history, and politics shaping the future of global finance.

This review is originally published within the Money Book Cirlcle in my newsletter. Sign up here for regular reviews of the hottest books on money and technology: https://igorpejic.substack.com/

[C Juckes · Rating 4 out of 5]

Reviews of ‘This time is different: Eight centuries of
financial folly’ are mixed because of concerns about mistakes in data-crunching. Which just means that people who are bothered about that should buy the book and put it somewhere very visible on a bookcase because the title says it all - a recession that is caused by folly in financial markets is likely to be much more damaging than one which was caused, say, by a pandemic. The financial crisis is testimony to that. ‘Our Dollar, your problem’ argues that the era of dollar dominance may have passed its peak, which is hardly controversial. But Ken Rogoff also argues that this may lead to more frequent and more intense debt, inflation, financial and exchange rate crises. In her curtain-raiser for this year’s IMF Annual Meetings, Kristalina Georgieva talks about undercurrents of marginalisation, discontent and hardship, as well as a surge in uncertainty. Her speech is shorter than this book, but the two work well together and ask a lot of questions. As for the book, the first chapter looks at how the dollar became the world’s dominant currency and the second at how any thought that Russia would overtake US influence melted away in the 1980s. I started work at a time when President Reagan was turning the Cold War into a financial fight (which the US won) and Rogoff’s perspective is fascinating even if there is more chess in it than I needed. The chapter on Japan asks whether the yen’s appreciation after 1985 and the Plaza Accord is the root of Japan’s economic demise - not something I’ve ever really taken seriously, but Rogoff is having second thoughts. The yen certainly appreciated from 1985 onwards, but the stock market only turned in 1989, and that was over 5 years before the currency peaked. If we attribute the long period of weak growth and low rates to Plaza, we should rethink the length of lags between exchange rate changes and economic impact, and maybe conclude that the yen’s current weakness will, (eventually and if it persists under Sanae Takaichi) deliver a growth revival down the road? If the chapter on Japan made me think, the next, on Europe, just depressed me a little. Without huge change, Europe won’t regain economic ground lost to the US, and the euro won’t threaten to become the world’s dominant currency. Indeed, if there is once conclusion to be reached, it’s that the Great Financial Crisis, which was born in the USA, was the catalyst for 26 years and counting of US economic supremacy. “Our GFC, your Long Stagnation”? The discussion of where China goes next delivered fewer insights, partly because China’s lack of growth and shift away from the dollar are so clearly major issues, right now. The book’s conclusion, written just before President Trump pushed the uncertainty index to new heights, worries about higher debt levels, reduced central bank independence and the threat of higher bond yields. If that’s what is going to be different about the next 15 years from the 2010-2025 period, there will be trouble ahead (and not just for the dollar).

[Cgallozzi · Rating 4 out of 5]

Ken Rogoff is a renowned economist, a former chief economist at the IMF.

This book is a discussion of the long-standing dominance of the U.S. Dollar in the center of Global Finance. This book has as a 'sub-theme' based upon the phrase your Mother used to say to you...."All good things come to an end....."

Rogoff mentions that while he was teaching at Harvard - he mentioned the possibility that interest rates would rise (from there then zero levels) - and was criticized by students - because they couldn't believe/hadn't experienced "high" interest rates. As a 78 year old man - I have lived through different economic cycles - "high"interest rates - Paul Volker with Reagan; zero interest rates Post 2008-2009 Financial Crisis and etc. I have witnessed a time when property values (which as a matter of faith always go 'up') - are reduced. So I am well aware that there are economic and business cycles, each with different characteristics. Rogoff and his colleagues 'point them out' to people who wish to read and understand them.

Rogoff's book has history of the U. S. Dollar dominance.

Rogoff's book also analysis THE CURRENT SITUATION with summary thoughts and comments to be summarized as follows:

* Other countries aren't overly pleased with the U.S. having Dollar dominance with the 'power' (economic sanctions; control over global payment systems) - that other countries do not have. Other countries think the U.S. has been using its economic sanctions and other powers in an arbitrary and capricious way.

* The increasing economic and financial power of China.

* Rogoff believes the high levels of Global Debt and other financial issues may mean that the era of 'stable financial conditions' (low interest rates) may be coming to an end.

* Although not a short term issue - a longer term issue challenging the U.S. Dollar as the dominant global currency - may be the rise of cryptocurrencies (Stable Coins, etc.)

* Rogoff details that the U.S. has been strong - but it has also been 'lucky' - with missteps from within the U.S.' economic competitors - Rogoff believes that this 'luck' could be coming to an end - should an economic competitor "get their act together" so as to be seen as a viable alternative to the U.S.' economic and financial powers.

Book is well written - but takes concentration - kind of mid-way between "light" and a "heavy lift" - but very well worth the read.

The average person should be understand the downsides of the risk profiles that Rogoff details.

Should be of interest to those who read economics and current politics.

Carl Gallozzi
Cgallozzi@comcast.net

[Hrishi · Rating 5 out of 5]

I thought this insider/ behind the scenes look at the Dollar Based Economy was incredibly insightful and explained more of the “way the world works” to me. Even with a job in the Financial Services (tech) industry it was remarkable how much of what it described about how big picture economic institutions worked was news to me. If I was a conspiracy theorist I’d expect a chapter on Masonic Lodge initiations or something :)

It also shed light for me on just how much the world is rigged in favor of the US/ dependent on the almighty Dollar - again, something I was vaguely cognisant of but was surprised to see described in such straightforward terms.

The explanatory/ revelatory parts of the book cover in brief the history of the rise and fall of the Ruble, the Yen, the Euro, and (maybe) the Renminbi as challengers to the Dollar. After a somewhat technical dive into interest rate mechanisms and their impact it talks about crypto with a surprisingly balanced view that I did not expect. The idea that crypto will supplant cash for the black economy rather than outright replace Fiat currency, again was one of the obvious things I was still surprised to see written down.

The final third of the book was a tour de force of the implications of Dollar Dominance and its benefits and pitfalls for the US. I must confess throughout this part of the book I had a lil DJT voice shouting “It’s rigged - the game is rigged!” - only not in the sense the real DJT would have meant. The entanglement - indeed interdependence - of being the last military and economic superpower on the planet again explains so much of how the world works.

The book closes on some predictions that few people would characterise as optimistic. All things must end, and so they may be a harbinger of things to come at some point in the future. It is clear the author hopes it is the FAR future but acknowledges that it may be sooner. Like all balanced views it says everything and nothing at the same time. I am left wondering if a post Dollar world - should it ever arrive (and it will be a surprise when it does) - is necessarily a bad thing for India and the rest of the ‘emerging’ world? Or will it be a fraught opportunity? Hurm

Great book - must read! And oh, I was absolutely delighted by how much the author’s chess experiences inform it, almost as much as his being one of the most distinguished economists of the time.

[Hunsoo Kim · Rating 4 out of 5]

In economics the questions never change, just the answers
Jon Eaton

When you read book that ends up pretty much reflecting what you had been thinking, was it good or disappointing? Anyway,

Former IMF chief economist, chess grandmaster, & current economics professor at Harvard, Rogoff discusses the US$ and the sustainability of the US’s “exorbitant privilege” (first coined by Valery Giscard d’Estaing), essentially the US$ being the key international currency, allowing the US to run trade deficits and borrow at low rates.

All the would-be-competitors are discussed: Euro, Yen, RMB, SDR, crypto, stable coins, and Central Bank Digital Currencies such as China’s e-CNY. While the US$’s share is likely to fall over time, none are seen as real threats to usurp the US$ as the key currency of the world given all have their own various limitations. For example, the RMB needs to first become fully convertible under a flexible exchange rate regime before becoming a real threat. Crypto is certainly not useless as some criticize. After all, the underground economy is about 17% of GDP for advanced nations, 32% for developing. It may turn out to be a good storage of value, much like gold. Digital currencies are likely to take away market share from the banking industry long term. But it’s not going to replace the US$ and in the end, governments control its reach.

The real key threat is seen from within, mismanagement of the US economy. As long-time IMF economist, Rogoff is a firm believer in the fragility of fixed exchange rate regimes and the need for an independent central bank pursuing inflation targeting monetary policy. Post GFC & COVID, US govt debt has grown so much that fiscal dominance is becoming a real possibility: when fiscal debt is so great that it constrains monetary policy, and the central bank effectively loses its independence. While the US$ will remain the key international currency, that doesn’t mean it will not depreciate. He warns,

“If rapidly rising debt is left unchecked, and there seems to be little political appetite to rein in massive deficits, the United States and the entire world is in for a sustained period of global financial volatility marked by higher real interest rates and inflation and more frequent bouts of debt and financial crises.”

[Vysloczil · Rating 4 out of 5]

Kenneth Rogoff comes to the exorbitant-privilege debate with IMF scars and a grandmaster’s taste for long games. In Our Dollar – Your Problem he asks a single, unsettling question: what happens when America’s reserve-currency franchise meets an electorate that no longer wants to pay the franchise fee?

Drawing on seven decades of crises, Rogoff argues that dollar hegemony rests on three fragile legs—credible inflation control, deep Treasury markets and a willingness to enforce sanctions. All three, he warns, are wobbling. In recent interviews he projects a “second-wave” inflation of 20-25 percent above target within a decade, once markets realise the debt trajectory is “unsustainable and political will is nil.”
Meanwhile, the Trump administration’s tariff-cum-sanction arsenal is teaching foreign governments “to dollar-proof their economies,” accelerating the drift to a multipolar system of renminbi swaps, euro clearing and stable-coins.

The book excels at walking readers through balance-of-payments algebra without losing them in the weeds; chapters on financial repression and CBDCs feel especially fresh. Yet the policy menu—“tighten sooner, tax smarter, print smaller notes”—is thin gruel next to the diagnosis. Rogoff is more persuasive when forecasting trouble than when prescribing how Congress might avoid it.

Pair this with Barry Eichengreen’s Exorbitant Privilege for historical context and Eswar Prasad’s The Dollar Trap for alternative futures. Readers looking for optimistic exits may leave unconsoled, but they will leave better briefed on the stakes of America’s longest-running endgame. Whoever wants to save themselves some time and only get a high-level overview from the author is advised to listen to Ken Rogoff's recent "Conversation with Tyler (Cowen)" and Ezra Klein's podcast.

[Beatriz · Rating 5 out of 5]

In “Our Dollar, Your Problem,” Harvard economist Kenneth Rogoff explores the paradox of the U.S. dollar — a currency that grants the United States immense economic power while leaving much of the world dependent on it, yet without a viable alternative.

Although talk of de-dollarization has intensified in recent years — especially among BRICS countries and nations affected by Western sanctions — Rogoff argues that replacing the dollar as the world’s dominant reserve and transaction currency is far more difficult than many believe. The United States continues to offer the world’s largest, deepest, and most transparent financial markets, with U.S. Treasuries serving as the ultimate “safe asset,” unmatched in scale and liquidity. Because global trade, commodities, and finance are overwhelmingly conducted in dollars, every participant in the system has an incentive to keep using it, and rebuilding that vast infrastructure would take decades rather than years.

Alternatives to the dollar also fall short. The euro, despite its global significance, lacks a unified fiscal and monetary framework capable of stabilizing the eurozone through diverse economic cycles. The Chinese yuan remains constrained by capital controls, limited convertibility, and a lack of financial transparency. Even central bank digital currencies and cryptocurrencies, while attracting attention, remain too volatile and too small in scale to pose a credible challenge to the dollar’s dominance.

Rogoff concludes that while the world may gradually diversify its reserves over time, there is no quick or credible substitute for the dollar’s unique combination of stability, liquidity, and trust — qualities that have anchored the global monetary system since it replaced the pound sterling after World War II. His analysis offers a clear and compelling explanation of why de-dollarization may be inevitable someday, but not anytime soon.

[Laura · Rating 5 out of 5]

I am excited to write the first Goodreads review of this book (which is not published yet). Ken Rogoff is one of my PhD advisors (and gave me a copy in advance of publication), and while I was a big fan of his before reading this book, I am an even bigger fan of Ken (and Natasha) Rogoff's after reading it.

Ken is the perfect author for this book about the international financial system, the dollar, government debt, and monetary policy, not just because of his decades of experience in research and policy on these issues (e.g., as chief economist of the IMF), which also supply a lot of the personal stories taken from conversations with other policymakers, but also because of his very broad understanding of the world, from the literary references, to his (and his wife's) expertise in Russia, and his experiences traveling in Europe as a high-school student playing competitive chess in Yugoslavia.

Some points I particularly liked:
1) The fact that Ken played chess in a neon-blue suit in high school and that the Yugoslavians LOVED it because they had only ever seen one (boring, gray) suit material in their lives, while Americans thought it was weird
2) The reference to the book Thank You, Mr. Nixon
3) The idea that immigration helps reduce Baumol cost disease as countries get richer
4) The idea that banks undo central bank interventions via their own balance sheets, because they are involved in the same two-sided markets that central banks generally intervene in

[Bruce R.Lasker · Rating 5 out of 5]

A great read

The first few chapters were disappointing, too autobiographical, and too much solpsisism. The last half of the book really hit on the quidity of what drives the value of the dollar and its threats. Although I may have political disagreements with Rogoff, I admire the fact that he is able to separate politics from economics. He takes us on a journey through the rise of Japan and China as well as the foreign debt crisis around the turn of the last century. He was able to discuss failed theories of secular stagnation of Hansen and Summers and put them in their proper place. He also issues caution in regard to cryptocurrencies. He also correctly identified our rising debt and aging population as a major threat to our economy and the exorbitant privilege of the dollar as the worlds reserve currency. In general, the book is highly readable and engaging, and the fact i agreed with most but not all it did not hurt either. If you are worried about the value of the dollar, please read the book, but you may lose sleep in a time of high tariffs, an aging US population, and rising debt. If you read this book carefully, you will realize that if Trump badgers the Fed to lower short term rates we may paradoxically see higher long term rates. How long the dollar will remain king nobody knows, not even Rogoff, but reading this book will give the reader more insight.

[Gabriel Petek · Rating 5 out of 5]

I enjoyed this book a great deal. Rogoff keeps it lively by interspersing some personal asides from his travels as a chess Grandmaster and later from his perch as an economist at the IMF and Federal Reserve. While some of these stories provided a touch of memoir quality to the book, they also helped keep the human side of these topics at the fore, thus preventing the book from delving into a textbook-like treatment of currencies, global finance, and monetary policy. Rogoff avoids hyperbole and describes the risks to the dollar as ones that are amassing over time, reflecting various secular trends. Speaking of “secular”, one quibble I have was his description of Larry Summers’ secular stagnation hypothesis. Rogoff points out that real interest rates were always unlikely to remain low forever. He sets Summers on the other side of his argument by describing Summers as positing that secular stagnation was here to stay, as essentially eternal. I never understood Summers to be making such an argument and, in fact, the type of fiscal shock that came in response to the pandemic was, according to Summers, I thought, what would bring us out of secular stagnation (perhaps even going too far, if one accepts Summers’ other views on the cause of the 2022 inflation spike.) This was not enough to detract from my enjoyment of the book, however, which I thoroughly enjoyed and found highly engrossing from beginning to end.

[Rick Malzyner · Rating 4 out of 5]

At times, the book felt like an extension for Rogoff's CV. The words "Harvard", "MIT", "my paper was proven right the following year", etc.. could probably fill 40 pages. Rogoff reminded me of why I left academia and why academics often miss critical insights of the true reasons certain things happen.

Completely misses on why bitcoin is gaining and will continue to gain marketshare. People for the first time ever have an option for a truly neutral, decentralized, P2P payment rail with no counterparty risk, and Rogoff thinks bitcoins success is primarily based on the amount of usage it has in the shadow economy.. Like cmon dude.

"After all, if stateless bitcoin can carve out a substantial market, why not a digital currency backed by a well-funded state actor?"

You are so close to getting it Rogoff! This quote is the perfect example of how a brilliant academic can at the same time completely misinterpret something. Let me help you out Kenneth.. Bitcoin is carving out substantial market EXACTLY BECAUSE it is not backed by a well-funded state actor LMAO.

If you can ignore his ego and misinterpretations regarding CBDCs and bitcoin, then the rest of the book is solid. He provides a lot of excellent knowledge on real interest rates, how floating exchange rates operate and much more.

[Myles · Rating 2 out of 5]

I only gave this book two stars not because it's poorly written, or irrelevant, or just wrong.

I found a lot of "I told you so!" in it, a lot of references to lectures he gave, a lot of name-dropping, and, quite frankly, too many references to his earlier book "This Time is Different", a book which I found outstanding and very enlightening.

Do I need to be reminded again and again that Rogoff was a chess Grandmaster? Not really.

I read his wife's recent book about making Sesame Street in Moscow (after an interview he gave praising it) and quite enjoyed it. No need to plug her book in this one.

I think he underestimates the damage this President of the United States can and will do.

I also found his introduction to the impact of AI on the financial system pretty facile, pretty facile for a bigshot economist, that is.

He gets the two stars for a pretty important discussion of how and why the US dollar holds up the international financial system and why that isn't likely to change anytime soon, and also why military might isn't to be taken lightly, even though that military is seriously undermined by developments in AI.

[Omikun · Rating 4 out of 5]

Having read Varoufakis' books on economics it's interesting to see how someone from within the establishment sees the US dollar world. Varoufakis is more concerned with systemic inequality, class wars, and the struggles of the people vs Rogoff thinks of the economy more abstract and mathematical, divorced from the livelihood of the masses. I was going to summarize the book from both of their perspectives but you know what, ChatGPT did such a good job of it I'll just paste the mock Varoufakis review of the book followed by a mock Rogoff's rebuttal:

⸻

Review of Kenneth Rogoff’s Our Dollar, Your Problem by AI Varoufakis

Kenneth Rogoff’s latest book, Our Dollar, Your Problem, is a timely reminder that the dollar’s global supremacy, so often taken for granted, rests on fragile foundations. With characteristic clarity, Rogoff charts the currency’s ascent since Bretton Woods, its survival through oil shocks, the Cold War, and the euro’s brief challenge, before turning to today’s threats: America’s ballooning debt, rising inflation, and the corrosion of political institutions.

On this much we agree. The dollar’s reign is precarious, and Washington’s profligacy courts danger. Yet Rogoff, like so many of his colleagues in mainstream economics, stops at the surface. He writes as though the dollar were simply a financial instrument whose stability depends on prudent housekeeping at the Fed and fiscal restraint in Congress. In truth, the dollar is a weapon — a means by which the United States projects power, extracts tribute, and disciplines the world’s majority.

Consider the crises of 1997, 2008, or 2020. Each time, capital fled to the safety of U.S. Treasuries, strengthening the very system that had spawned instability. Rogoff calls this “luck.” I call it imperial design. So long as Washington commands the machinery of sanctions, the aircraft carriers, and the IMF, the dollar is not a neutral medium but an instrument of domination.


Rogoff is right that China cannot yet dethrone the dollar. But he misreads Beijing’s strategy: not to replace the greenback, but to weave parallel circuits of settlement, slowly insulating itself and its partners. De-dollarisation will not come with a bang, but with the patient construction of alternatives.

Thus Rogoff’s history is valuable but timid. He diagnoses the symptoms — debt, inflation, fragile institutions — yet misses the deeper pathology: the dollar is not in danger of collapse. It is in danger of becoming more oppressive still.

⸻

Here’s a hypothetical Rogoff rebuttal to the Varoufakis-style critique, written in a way that captures Rogoff’s mainstream, technocratic tone and his tendency to defend institutional orthodoxy:

⸻

AI Rogoff’s Rebuttal to AI Varoufakis

Yanis Varoufakis is right about one thing: the dollar is inseparable from American power. No serious historian or economist would deny that military might, diplomatic reach, and institutions like the IMF have reinforced the greenback’s primacy since 1945. But to reduce the dollar’s role to “imperial design” is to miss the far more prosaic — and enduring — foundations of its strength.

The world turns to the dollar not simply because of aircraft carriers, but because U.S. financial markets remain the deepest, most liquid, and most transparent in existence. When crises strike, investors seek not empire but safety — and they find it in U.S. Treasuries. To describe this as “tribute” is colorful rhetoric, but it obscures the truth: trust, not coercion, underpins the dollar’s global role.

Varoufakis also overstates the inevitability of de-dollarisation. Yes, China is experimenting with alternative settlement systems. But the yuan’s global prospects remain sharply limited by Beijing’s refusal to allow capital freedom or establish rule-of-law institutions. Until those barriers are lifted, the yuan will remain a regional adjunct, not a global rival.

Finally, Varoufakis mistakes my warning. I do not claim the dollar is about to collapse; I claim it is vulnerable if the United States undermines its own institutional credibility. A future of chronic inflation, runaway debt, and political interference in the Federal Reserve could erode the very trust that sustains the system. That risk does not come from Beijing — it comes from Washington.

If Varoufakis is correct that the dollar can endure any amount of fiscal irresponsibility simply by virtue of American power, then we should all be far more alarmed. For it would mean the dollar is destined not for reform, but for eventual crisis. My book urges us to avoid that fate.