Privilege of the dollar

.Strangely even as the dollar has steadily been declining for three decades now,it  lost almost half its value against other major currencies since 1985 and is down 33% in the past 11 years alone,it is still the tallest world currency. The U.S. economy  is growing very sluggishly and to top this, their Fed is pressing on with  massive Quantitative Easing, an euphemism for printing of notes by the US, for upwards of three years now .Such monetary recklessness ought to have pulled down the dollar value and yet, as other economic blocs particularly the eurozone ,are doing worse ,investors  continue to shift cash  to the U.S boosting the dollar through increased inflows,which  occur not as much by export sales as from  foreign investors who see better opportunities or seek a safe  parking for  their cash . Further,the dollar  doubling  up as the world currency as well, acts  as an  incentive .The US dollar thus has it going both ways ,in its domestic as also in the global economy. In effect every other economy has become an unwilling underwriter to the mighty dollar and this, is its " exorbitant privilege " and may well  remain so, till other economies gather sufficient economic clout over time to challenge its unique status.

Pub  --- Business Line Jun   25