Holders of dollars will see their purchasing power plummet, which is not a good thing for ordinary Americans if the US loses reserve currency status, and the fault will lie with the decades of monetary and fiscal mismanagement made possible by the dollar's status as a global reserve currency.
Earlier this month, Larry Kudlow insisted that it is "it's incumbent on the U.S. government, no matter who's in power, to maintain the reserve currency status of the dollar." Kudlow laments that a toppling of the dollar from that perch "seems to be the direction we're going in."
Kudlow's remarks came a day after Donald Trump declared that China is trying to displace the U.S. Dollar [sic] as the NUMBER ONE CURRENCY" and that if this occurs, it would be the biggest defeat for our Country [sic] in its history."
Neither Trump nor Kudlow actually explain why maintaining reserve currency status is so important. After all, it's clear that it is not necessary for a country's currency to be a r...