Gee’s Reviews > Money and Empire: Charles P. Kindleberger and the Dollar System > Status Update

For Charlie, Gresham’s Law provides a way to push beyond this perennial dialectical
opposition to a higher-level synthesis. Yes, shortage of money regularly gives rise to
new forms of money, but this solution creates a new problem since inevitably users compare the new with the old and then shift from one to the other in anticipation of changes in their relative price, causing
instability that calls for management

even The Economist, while essentially
accepting Charlie’s bank-of-the-world analytical frame, viewed his article as an assertion of American primacy, and specifically of dollar primacy – “the new
nationalism.” The United States may be a bank, so the editors wrote, but banks need
to be mindful of the interest of their depositors lest they be subject to runs as anxious depositors shift their funds into better money

Currency Reserve Unit morphed into the IMF’s Special Drawing Rights and got allocated to all the members of the IMF, not just the United States. Instead of backstopping the emerging global dollar system, the SDR instead served to perpetuate the Bretton Woods myth, even as the Bretton Woods system was collapsing.

For Charlie, persistent payment deficits reflect a structural problem that needs correction not accommodation, and they are a real problem not a liquidity problem, which is to say a problem requiring real structural change in the countries affected not international monetary reform in the world as a whole