The US Dollar's Status As the World's Reserve Currency

©iStock/breeze393

Is the world giving up on the US dollar?  America’s national debt recently hit a new milestone of $40 trillion. It is estimated that interest payments on the national debt are now the second largest expense in the US government budget, trailing only social security. 

How was the US able to borrow so much and for so long? 

One answer, according Harvard economist Kenneth Rogoff, is the US dollar’s status as the world’s reserve currency.