Currency War Machine

If the second monetarist revolution were to occur in the US, then the world would find itself at the dawn of a new age of dollar hegemony. No longer would international investors have to fear that their dollar assets could suddenly erode in value due to the Federal Reserve taking big gambles with monetary stability to accelerate recovery from recession. These gambles have often been an essential element in a currency war strategy forged in a sometimes decentralized fashion within the US government (including the Federal Reserve as a semi-independent agency). With such war danger no longer present, much of the diversification of recent decades, as investors globally have sought safety by introducing non-dollar currencies into their portfolios, would go into reverse.