April 1980 – In a feature story, “The Search for an Alternative to the Dollar,” Institutional Investor Contributing Editor Harvey Shapiro tried to tackle a question that is at the center of debate in the financial world today. “The days when theU.S. stood alone as a towering, self-sufficient presence atop a world populated by its economic inferiors have gone the way of Pax Britannica, the Open Door Policy and Manifest Destiny,” he wrote. Yet after considering an array of options including the currencies of Germany, Japan, Switzerland and the International Monetary Fund’s special drawing rights — an option now favored by the Chinese government — Shapiro concluded that there are a great many players but no real winners in “trying to find a replacement for the dollar as the cornerstone of the international monetary system.”
With the introduction of the euro and the emergence of growing economies in China and Brazil, the answer is as elusive today as it was 30 years ago. Even as the dollar fell to record lows following last year’s crisis, it maintains its status as the world’s reserve currency. But debate on the issue, and pressure for what Shapiro dubbed a “multi-currency reserve-asset system,” continues.
