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The euro’s big chance

The dollar's reign as the world's undisputed reserve currency could be drawing to a close

By Niall Ferguson   June 2004

“The convention whereby the dollar is given a transcendent value as an international currency no longer rests on its initial base… The fact that many states accept dollars in order to make up for the deficits of the American balance of payments has enabled the US to be indebted to foreign countries free of charge. Indeed, what they owe those countries, they pay in dollars that they themselves issue as they wish… This unilateral facility attributed to America has helped spread the idea that the dollar is an impartial, international means of exchange, whereas it is a means of credit…

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