The long history of world currencies shows that the global economic system has very often been characterized by an asymmetric relationship where the anchor economy has run persistent current account deficits even as it has provided liquidity to the rest of the world. Known as Triffin's Dilemma, this has often led to economic distortions, indebtedness and inflation. Nonetheless, we found that international monetary systems are far more resilient than is generally believed. This is why Roman coins, Spanish "pieces of eight" and the British sterling remained global anchor currencies long after the issuing countries had been superseded.

Despite all the pain caused by the Great Recession, there is no sign that the world is forsaking the dollar. The world is still willing to finance the US at very low interest rates and the nominal trade-weighted index of the dollar has not collapsed. History shows that once an anchor currency has established itself, it can be very resilient and often outlasts the economic and geo-political dominance of the country of origin. It is possible (albeit not certain) that China will replace the US as the world's largest economy within a decade but, we feel that US dollar will remain the dominant global currency for a long time afterwards.