The phrase "exorbitant privilege" was coined in the 1960s by Valéry Giscard d'Estaing (then French minister of finance), to refer to the financial privileges the US has enjoyed in the post-World War II era, due to its currency being the international reserve currency.
"Serious economic and financial mismanagement by the United States is the one thing that could precipitate flight from the dollar. "And serious mismanagement, recent events remind us, is not something that can be ruled out. "We may yet suffer a dollar crash, but only if we bring it on ourselves. The Chinese are not going to do it to us."
Barry Eichengreen, professor of economics at the University of California, Berkeley, published that passage in the wake of the 2007-09 financial crisis. And it came true last week when, due to the market dysfunction triggered by Donald Trump's tariffs, traders stopped treating the United States as a financial safe haven. Donald Trump, take a bow!
According to Mr Eichengreen, "It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries have to pony up $100 of actual goods and services in order to obtain one".
This is what exorbitant privilege was all about, and it has come to an end, thanks to "genius" Trump who wrote "The Art of a Lousy Deal".
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