"Will the Dollar still be the World's Reserve Currency in 5 Years?"
Interview with Menzie Chinn
By Mike Whitney
Prof. Menzie Chin: If the dollar does indeed lose its role as leading international currency, the cost to the United States would probably extend beyond the simple loss of seigniorage narrowly defined. We would lose the exorbitant privilege of playing banker to the world, accepting short-term deposits at low interest rates in return for long-term investments at high average rates of return. When combined with other political developments, it might even spell the end of economic and political hegemony. These are century-long advantages that are not to be cast away lightly." ("Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?" Menzie Chinn and Jeffrey A. Frankel http://www.ssc.wisc.edu/~mchinn/chinn_frankel_euro.pdf)