The Dollar’s Unshakable Dominance and Its Historical Roots
Jerome Powell's assertion that "the dollar is always going to be the reserve currency" finds historical validation in the 1973 oil crisis. When oil prices quadrupled, Saudi Arabia's windfall profits were deposited in New York banks, languishing in non-interest-bearing accounts due to the Kingdom's lack of financial infrastructure.
The Saudi Arabian Monetary Agency's reliance on American banker David Mulford highlights the dollar's entrenched role. Mulford's team operated from rudimentary offices in Jeddah—a desert outpost without phones or trash removal—underscoring the disparity between dollar liquidity and local capacity to manage it.
This episode reinforces the dollar's structural dominance, a reality that persists despite the rise of digital assets. Cryptocurrencies like BTC and ETH aspire to challenge this hegemony, but history shows institutional inertia favors incumbents.
