Watch the dollar!

Make Me Smart

Marketplace

News, Business

4.6 • 5.4K Ratings

🗓️ 20 May 2025

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

Things aren’t looking so good for the U.S. dollar. Though it’s spent decades as the world’s reigning reserve currency, it’s been weakening lately thanks to tariffs and uncertainty in the U.S. economy.

But its declining value, has been in the making for a while, according to Harvard economist and author of the new book, “Our Dollar, Your Problem,” Kenneth Rogoff.

“The problem we’re facing is that, independent of this dollar phenomenon, interest rates are going up,” said Rogoff. “And if you’re the world’s biggest debtor, that’s tough.”

Rogoff joins Kai and Kimberly to unpack how the greenback became the world’s go-to currency, what a reserve currency actually is, why it’s been losing some of its value lately and what might take its place. Plus, how does military power tie into all this?

We’ll also get into some potential cryptocurrency regulation coming down the pipeline and discuss the troubling parallel between Trumpism and Brexit.

Then, you tell us what books help you reset – from classic literary romances to an apocalyptic sci-fi tale. And, our intern, Zoha Malik (hi!) shares her answer to the Make Me Smart question.

Here’s everything we talked about today:

“Our Dollar, Your Problem,” by Kenneth Rogoff from Yale University Press
“How Trump Could Dethrone the Dollar” from Foreign Affairs
“Why Is The US Dollar Weakening? Trump’s Tariffs Push Dollar Index To 3-Year Low.” from Forbes
“Senate advances landmark crypto bill with Democrats divided” from Politico
“Senate Advances Crypto Regulation Bill With Bipartisan Support” from The New York Times
“Senate advances a major crypto regulation bill on a bipartisan vote” from NBC News
“Brexit’s Failures Could Foreshadow Trump’s. Just Not in the Way You Might Think.” from The New York Times

Got a question or comment for the hosts? Email [email protected] or leave us a voicemail at 508-U-B-SMART.

Transcript

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0:00.0	Excellent. Here we go.
0:07.6	Hello, everyone. I'm Kimberly Adams. Welcome back to Make Me Smart, where none of us is as smart as all of us.
0:13.2	I'm Kyle Risdahl, Tuesday, 20 May today. We are going to talk about the dollar on the single subject show that we do on Tuesdays.
0:22.9	It's been in the news, mostly because people sort of kind of don't want it anymore.
0:27.3	And we're going to talk about how we got to where we are with the Greenback and what it might mean for us.
0:33.5	Yeah, and so for that, we have Harvard economics professor Ken Rogoff, who has a new book out conveniently about the dollars shifting place in the world. It's called Our Dollar Your Problem, and he's here to make us smarter about where things could be headed for our beloved currency. Welcome to the show, Dr.Goff. Thank you for having me.
0:55.3	First, can you explain briefly as you can how the dollar became the world's reserve currency and why it's been able to stay on top for so long?
1:06.1	Well, basically, after World War I, the U.K. was way down and out, as you know, anyone, you know,
1:14.8	watching period pieces of that. But it still stayed equal with the dollar. But after World War II,
1:22.3	we lost a lot in World War II, but the United Kingdom lost a lot more, and it was really just the United
1:28.5	States. And the system put the dollar on top. And to make a long story short, we've had a good
1:34.5	ride, but in the 1970s, we kind of screwed up and had a lot of inflation. The book title comes
1:41.2	from that period. And then when we stabilized, people started using it.
1:46.2	In fact, there were countries that weren't part of the global system, the communist countries, Russia, China, really India.
1:54.3	And after they sort of tried to globalize, the dollar basically colonized those countries.
1:59.9	And we got incredibly high on top and get a lot of benefits from it.
2:04.9	Well, so we'll get to the benefits in a second.
2:06.6	But what does it mean to be the reserve currency?
2:09.8	Because we, you know, those of us in the business press and economists, we talk about that a lot.
2:13.4	And I'm not sure that somebody in Sheboygan necessarily knows what that means.
2:17.3	Well, I think the person in Sheboygan probably has a better idea than a lot of the economists
2:21.5	using it. It's a very vague term. So central banks typically have vast stores of treasury bills and
	...

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