US Financial Sanctions and Dollar Dominance with Daniel McDowell

The Rasheed Griffith Show

Is US Dollar dominance going away? No. Let's get that out of the way immediately. Rasheed Griffith and Daniel McDowell sit down for a much more serious and interesting conversation, grounded in the reality of economic and political history. The US dollar has been the reserve currency of the world since Bretton Woods in the 1940s. How did that come to be and what effects do sanctions have on the global standing of the greenback?
"Demise of the dollar" predictions are nothing new, often surfacing during periods of economic turmoil and on the heels of what some perceive as "dollar weaponization" via US sanctions. The status of the dollar as the world's transactional currency was not some happenstance occurrence. De-regulation in the 1970s and access to one of the world's largest markets made the US dollar a de facto choice post-gold-decoupling.
With its currency now connecting every major corner of the financial world, the Fed would need some way to keep tabs on the new Eurodollar ecosystem. They could directly intervene via swap lines but the optics in Congress could cause increased scrutiny, especially with regard to less reliable benefactors. That's why we have the IMF, a semi-autonomous organization originally created to maintain foreign exchange rates, now repurposed to extinguish monetary fires in the developing parts of the globe.
It's not the only tool the United States has on hand for maintaining stability. Sanctions, despite their unsavory connotation, may just be one of the greatest financial innovations ever devised. With sanctions, Washington can exert control over pariah states and other actors, without the use of military force. These too have evolved over the years and have become much more intricate in their execution.
Join our CEO and Dr McDowell as they unpack the finer details of this complex financial system, the various players, and the wider implications of their actions in this episode of Caribbean Progress.
Resources
Bucking the Buck: US Financial Sanctions and the International Backlash against the Dollar by Daniel McDowell
Brother, Can You Spare a Billion?: The United States, the IMF and the International Lender of Last Resort by Daniel McDowell
Contact info
Daniel McDowell on X (formerly Twitter)
Rasheed Griffith on X

Chapters

1. US Dollar Dominance, IMF Evolution (00:00:00)

2. US Involvement in Latin American Crisis (00:09:36)

3. The Transition to Floating Exchange Rates (00:14:26)

4. US Dollar Losing Reserve Currency Status (00:22:10)

5. Financial Sanctions in Foreign Policy (00:28:44)

6. Diversifying China's Reserves and Reducing Dollar Dependence (00:36:29)