Will the dollar maintain its key currency status? Or will the euro or the yen take over until some later date when China has become a formidable economic and financial colossus?

Doubts about the supremacy of the US dollar have arisen periodically since the second world war. There was more than just a glimmer of doubt in the early 1960s when the US started to have a noticeable payments deficit. The Federal Reserve tried to allay this problem by holding up short-term interest rates. In the 1970s, questions were raised about the sustainability of the US dollar as the key reserve currency when the US abandoned the gold standard, inflation rose sharply and huge transfers of wealth took place due to the explosion in oil prices. In the 1980s, market gyrations induced the countries of the leading currencies to cobble together the Louvre and Plaza accords.