I’ve never met anyone who has ever heard about the Triffin Dilemma before so this is definitely a first. I’m usually just talking to myself when I bring it up.
Do you share my impression that making the bancor/SDR the reserve currency would have been the best option at Bretton Woods? That it would have preserved the gold-dollar link and prevented the inflation that sucked the life out of the pre-1971 dollar? I haven’t run across any discussions of this what-if question so all I have to go on is my vivid imagination.
Even though I’ve read a lot about it, I can’t say that I feel any confidence one way or the other. To a certain extent, the SDR’s have been a rather unofficial peg to gold and have been used more than once to assist during financial crisis. And eventually the country of the reserve currency goes bankrupt, unless they change one of the other variables which has it’s own downside.
But I don’t know what unintended consequences that might bring. It would seem that it sure would reduce our ability to use economic clout to force some countries in line. I think the current International system is a bit long in the tooth. Maybe they have even already decided and agreed on the new plan—and we just don’t know it yet.
Regarding the past, there seems to be a lot of consensus that the deficits, fed actions, oil spike, excess money printing etc. all contributed to the double digit inflation. I never want to go through that again—and it was small potatoes compared to what other countries have endured.
Time will tell-for sure there is at present no other currency that could upset the dollar yet and not really likely any time soon-so the SDR and IMF may be it.