Mao Zedong, the leader of communist China, wasn’t an economist, but his famous quote, "Power grows out of the barrel of a gun," can help us understand why the US dollar is so powerful—and why it will likely stay that way. Just like military power, currency power is connected to a nation's strength. Throughout history, the most dominant currency has often belonged to the world’s leading military force. 

Take Britain, for example. When its empire was at its peak, controlling vast land...