WASHINGTON - For years, the dollar's role as the major global currency has been termed an "exorbitant privilege" - a phrase coined by French Finance Minister and later President Valery Giscard d'Estaing.
Now it may be turning into an extravagant curse.
The United States wants export-led growth. So do most other countries. Not all can succeed; one country's export surplus must be others' deficits.
But the dollar's global role puts the United States at a special disadvantage. It's one cause of slow American growth and high joblessness.
The dollar serves as the world's money because it's used for cross-border trade and investment transactions not involving the United States. Before the Great Depression, this role was played by gold and some currencies backed by gold (mainly the British pound, French franc and dollar).
Countries abandoned the gold standard in the 1930s, and after World War II, other nations lacked the economic power and political stability for their currencies to assume a large international role.
By default, the dollar became the global currency.
In his book "Exorbitant Privilege," economist Barry Eichengreen of the University of California at Berkeley provides figures.
Government central banks hold about 60 percent of their foreign exchange reserves in dollars. About half of international debt securities are contracted in dollars.
Oil, wheat and many commodities are denominated in dollars. South Korea and Thailand invoice about 80 percent of their exports in dollars, though only 20 percent go to the United States.
They're not alone.
A global currency needs two qualities: trust and usefulness. People - government officials, money managers, business executives, consumers - have to believe the money will hold its value and that other people will routinely accept it.
The greatest threat to the dollar's international role occurred in the 1970s when high inflation, averaging 10 percent from 1977 to 1981, undermined America's commitment to a stable currency. With inflation conquered in the 1980s, confidence returned.
Dollars can be converted into most currencies. They can be easily invested in U.S. stocks, bonds and real estate or parked in relatively safe U.S. Treasury securities.
No other money offers so much. China's renminbi has one large use: buying Chinese goods. Otherwise, China regulates money flows in and out of RMB.
Although the euro is more versatile, it has drawbacks. Europe's stock and bond markets aren't as deep as America's. And the euro crisis has made European government bonds riskier than U.S. Treasuries.
The "exorbitant privilege" is that the United States can pay for imports with its own currency.
By contrast, most countries have to earn dollars or euros by exporting. If exports lag, they have to suppress economic growth to curb imports.