Revisiting the Triffin paradox

In 1960 1 , Robert Triffin warned against the risks of switching to an international monetary system centred on the dollar (this is Triffin's "paradox"). He claimed that the United States would take advantage of the dollar's position as the dominant reserve currency to borrow massively from the rest of the world. An excessive increase in US economic agents’ debt and in external debt would lead to a decline in the quality of the dollar, a decline in demand for dollars, and a US external debt crisis caused by a drastic depreciation of the dollar and a loss of its reserve currency status. Could this process be triggered at present, given the effects of the strong fiscal stimulus on the US external deficit? The reduction in the number of dollar buyers in the world points in this direction, as does the rejection of a sharp rise in dollar interest rates; But the absence of a currency that could replace the dollar as the dominant reserve currency points in the opposite direction. 1 R. Triffin, “Gold and the Dollar Crisis: The Future of Convertibility”, 1960, Yale University Press.