Reserve Status = Price, Not Value
If the dollar were structurally declining as a reserve instrument, it would show up first in its exchange rate. Instead, DXY has held up well relative to peers despite weaker yields and global stress. What critics are actually arguing about is domestic purchasing power — which is a different question than reserve viability.
The fact that critics must leave price and retreat into abstract “value” arguments is itself revealing.
When critics pivot to:
“Well, purchasing power has declined”
They’ve quietly changed the subject.
Inflation affects every currency — often worse elsewhere.
The relevant comparison is relative erosion, not absolute erosion.
And relative to:
Europe
Japan
Emerging markets
Commodity exporters
The dollar has preserved purchasing power better than most peers under identical global shocks.
That’s not ideological.
That’s arithmetic.
If the dollar were truly “failing”
If its value were genuinely collapsing
If confidence were structurally gone