Decline of the Dollar’s Supremacy

Abstract

Owing to the immense economic, political and military power and prestige of the United States the decline of the dollar’s supremacy was not widely realised for a long time after her financial power passed its peak. The world had grown used to look upon the dollar as the symbol of financial strength as a matter of course. Until 15 August 1971 there was no sudden shock comparable with the devaluation of sterling in 1967, which would have made the world realise the fundamental change in the situation. In fact, the dollar was able to live on its old reputation for a long time. Its decline was a very gradual insidious process, and even many of those who ought to have known better were reluctant to believe that it had ceased to have the strength for dominating the financial world.