Many explanations I read come down to “almost everyone uses the dollar in international trade”, ” almost all energy is invoiced and paid in dollars” and “almost all international financial flows go through NY one way or the other”, but that just seems a restatement of the fact that the dollar is the reserve currency of the world. My question is: why? How did it end up that way?
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Money is a promise to allow you to redeem for goods. All gift cards are a good analogy of money in this manner. And not all gift cards are equal. A gift card for a local restaurant that you dont live near might be useless to you, while an Amazon gift card is as good as cash. The reserve currency of the world ends up being whoever has the strongest economy. This has been the US for decades, the same way Amazon’s gift cards are more valuable because it’s a strong company. Your unwillingness to accept someone’s local restaurant gift card vs cash would be the same reason why most countries cannot be the reserve currency. No one wants it.
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