How Will Modern Monetary Theory (MMT), Reserve Currency Status And Central Bank Digital Currency Impact You

Modern Monetary Theory (MMT) relies on the U.S. Dollar continuing as the world reserve currency.

The reserve currency status could be challenged by the rise of the Central Bank Digital Currency. The impact on the global economy and the path forward for the USA would be interesting.

A reserve currency is a foreign currency held in significant quantities by most world governments via their respective central banks.

What Is Reserve Currency Status

The United States has been a lucky beneficiary of the two World Wars.

How Did The U.S. Dollar Become The Reserve Currency

During World War 1, countries abandoned their gold standard currencies to finance the war. The United States became the de-facto lender, supplying dollar-denominated U.S. bonds.

Is The Dollar Losing It’s Reserve Currency Status

In the last few years, there has been more talk about the U.S. dollar losing its status as the reserve currency. In 1960, the U.S. represented about 40% of the world economy, but that has shrunk to less than a quarter.

What Is Modern Monetary Theory (MMT)

MMT is a significant departure from conventional economic theory. Although American economist Warren Mosler developed MMT in the 1970s, it has recently been in the news due to some vocal voices.

Risks Of Modern Monetary Theory

If you are wondering whether MMT causes inflation; the answer is – it depends. Traditional thinking says such high deficit spending would be fiscally irresponsible as the debt would balloon, and inflation would skyrocket.

Proponents of Modern Monetary Theory acknowledge that there is a potential limit to printing money to finance government deficits.

Swipe Up to learn How Will Modern Monetary Theory (MMT), Reserve Currency Status And Central Bank Digital Currency Impact You

Stories

More

15 Good Reasons To Retire Early

Ultimate Guide To Emergency Fund Including How To Get 8%+ Risk Free Returns

What Is Forex Trading And Is It Right For Me?

See More

See More

See More