Is there any other country with both the court system and wealth required to back up being the global reserve currency? I don't think there is and I don't see a viable contender showing up in the near future.
As a counterpoint, confidence in US courts (particularly the federal courts) is rapidly declining — both among the public and among those who operate within the court systems.
As somebody who has been involved in civil actions in Federal Court, I can assure you that it deserves zero confidence and is basically pay-to-win. (Unless two billion-dollar-plus corporations are involved.) This is largely, but not only, on account of discovery taking years and costing unbounded sums of money, plus monetary penalties for not complying with expensive discovery.
I would second this. I would add that the federal court system is far ahead of the state courts, in that the federal trial courts at least put out reasonably well-written decisions on hearings, whereas the county courts generally just hand-wave everything in emotional verbal rulings.
I'd be interested to look at any studies (or even opinion pieces) that indicate either that confidence in the courts is remaining unchanged (compared either to recent or historical levels) or that it's increasing.
Agreed, that would be interesting to see if the methodology were sound. The problem is naturally that measuring "confidence in the courts" is almost inherently a methodologically difficult thing to do.
Additionally: shortage of confidence in the US Courts isn't a new thing. The reality of the US Courts system is: Money wins, and its been like this for the entire life of essentially all Americans alive today. This is, actually, rather convenient and good if you take the view that faith in the US courts system is a critical component of the US Dollar's global reserve status. If money controls the courts, and courts support the money, that's a pretty nice virtuous cycle. But, for the People; its been hit-or-miss for a long, long time.
It excludes the current administration, the separation of powers goes a long ways here to help insure things are not overly influenced by internal politics. Worst case is you stall until things change, which is not much of an issue when dealing with the amounts of money that matter in these cases.
I agree with you. I don't even think in the near future there will be a single global reserve currency. There will be multiple ones, all of which weaker in terms of power and influence than the dollar.
I suspect there will be at least two big ones on about the same level but I don't think this will be particularly near future, at least not near future in context of the global economy which is fairly young. It is the logical path for China with their role in the global economy and how much western business relies on them, but this will take decades, they have a lot of work ahead of them.
Do you even need singular global currency in modern world? Where every transaction can be in essence instant if there was desire. And everything is digital. Overall it is rather different world and things can be done different than before.
That’s not really true, or at best reductive. The Eurozone does not have a military yet has a very valuable and relatively stable currency. Yes, various counties in the zone do have strong militaries, but it’s not the same as the body backing the currency having one.
Exactly. I can’t believe there are people on HN who believe the dollar becoming de facto currency had anything to do with USA’s savoury virtues, judicial or otherwise It didn’t “become”, it was forced.
But that doesn’t mean confidence in the dollar can’t die anyway before an alternative is found. Straight up chaos and collapse is a hopefully remote but real possibility.
Remember how the 2008 crisis was stopped? Strong messages from reserve banks that they’ll backstop and people believing them. That trick doesn’t work in the world author it’s describing.
The court system is relevant for confidence in investing in an economy, and currencies are largely supported by and dependent on investment into the economy of the country. Even government debt instruments are a form of investment in the economy of the country.
It need not be a single country. Organizations like BRICS could float it's own currency, and with significant size of the economy of the members, it could pull it off. This is why Trump has been explicitly warning against that.
BRICS might have the wealth. Would you trust that it's going to be legally stable? I wouldn't.
But, in fairness, for the first time in my life I don't trust the US in that way either. I'm beginning to see it as possible that someday the president could make some arbitrary decision that takes everything I have. (Either this president or another - but it's this president who's making the precedents that make it possible.)
