Like Peyton Manning, the U.S. may be past its prime. But so far, it’s been able to get by on past glories, a strong brand, and soft power. And America has another supreme advantage... its currency. 3. The U.S. has the dollar. As the global reserve currency, the U.S. dollar reigns supreme, and COVID-19 can’t touch that. Roughly 80% of all $100 bills in circulation are now held overseas... up from only 30% in 1980. This dramatic increase of large bills outside the U.S. is a testament to the confidence and security the rest of the world recognizes in the dollar. As the global reserve currency, the U.S. dollar reigns supreme, and COVID-19 can’t touch that.
Another legacy of American greatness that will help it emerge from the pandemic crisis in a position of strength is its enduring “soft power.” That’s a country’s ability to attract or persuade other countries and people based on cultural predominance and reputational influence, rather than guns or money. The U.S. ranks first in the Global Soft Power Index, which is based mostly on America’s clout in entertainment, media, sports, and science. And although many living in the U.S. might not realize it, the American brand has taken a serious beating... The overall score of the U.S. on the survey – which consultancy firm Brand Finance put together based on interviews with 55,000 people in 87 countries – was dragged down by poor showings in the categories of reputation, governance, and political stability. Yet despite the reputational challenges of President Trump, the U.S. still scores as the unrivaled rule-maker of the world. Finally, there’s the English language. If you’re born and bred in the U.S., you probably have one of the most coveted skills on Earth... You speak English, which is the lingua franca of the world. Almost everywhere you go, English is the assumed default if you don’t speak the local language. And everyone wants to learn English. According to one estimate, around 300 million people in China – that’s nearly the entire population of the U.S. (where around three-quarters of the population speaks only one language) – is trying to learn English. That’s soft power...
As Foreign Affairs magazine explains, ... because the U.S. Federal Reserve
controls the supply of dollars, it is, now more than ever, the world’s central bank... The dollar is also the currency that other nations overwhelmingly prefer to hold in their treasury reserves. This “reserve currency status” has been a perk of empire since Portugal was the dominant world power... A country that enjoys steady global demand for its currency – often purchased in the form of government bonds – can borrow cheaply from abroad... It helps Americans borrow
American Consequences
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