Risks to the U.S. Dollar and the Costs Associated: How do we maintain?

There is one thing that I agree with Niall Ferguson, Stanford University Hoover Institute Senior Fellow, that the US dollar will still be the primary currency. The change will be gradual until it reaches a certain point and I suspect then it will decline faster as another option becomes seen as just as stable. Consider the advantages and risks of governance on the dollar.

America sells its stability to the world and the dollar is seen as an extension of that trust in stability. It helps to be a consistently strong economy with effective governance. However, we have risks in our governance and stability now that didn't exist in full display five years ago (Some of those problems existed they just didn't rear their head yet). 

There are advantages to having the world economy use the dollar as the standard medium of exchange. Business becomes easier allowing for more international business contracts. Our costs of borrowing and exchange are less which means more business deals (I call them transactions).  Our economic and political influence is stronger. With all of that great stuff you now see why China wants their own currency to lead.

The first thing we need to do is get serious in governance. We have issues such as knock down drag out political fights (required blind button pressing), mistrust in our justice system, extremism (nearly downing our entire national government. We don't hear much about it anymore but there are still elements out there.), and a general failure to adjust due to encampment and misalignment of central values. 

Its not all over of course because there are other factors that the nations of competitive dollars face. We also are adaptive but reactive people. Meaning we wait and wait and wait to fix glairing issues and then when we finally understand the importance of a problem and begin to work together we scrape together a solution. I believe if we started proactively to solve problems we would be in a stronger future situation (ok sometimes proactive but mostly reactive.).

The news is not all bleak. We will change and we will adjust and the U.S. has a great chance to rejuvenate into the Digital Era. There is movement now to get people to work together and find solutions. That is what is going to make some of the biggest difference in our options and outcomes. To ensure we don't get into this situation again we probably should think more about what type of leadership we need and how we are selecting some of our leaders. We need the best and brightest to mix up the connected opportunity criteria. 'Integrity Is an Important Concept for Leaders and National Institutions'

A few solid pieces on the value of the U.S. dollar.

In US Dollar Share of Global Foreign Exchange Reserves Drops to 25-Year Low we find the U.S. Dollar beginning to decline as emerging economies look to diverse their holdings. 

On the bottom of the Federal Reserve report you can see some of the challenges to the U.S. dollar. 

'The International Role of the U.S. Dollar'