Exorbitant Privilege: What It Costs to Be the World's Currency.

There is a special prize that comes with printing the money the entire world wants to hold, and economists have a name for it. They call it the dollar's exorbitant privilege, and it describes the unique advantage the US enjoys simply from issuing the currency everyone else needs.

Here is how that privilege works.

Because the whole world needs dollars, to trade, to hold in reserve, to feel safe, there is always a line of buyers for them. That permanent demand lets the US borrow more cheaply and more comfortably than any other country, because there is always someone wanting what it is selling.

Imagine being the one shop in town that every single person has to visit. You can set your terms a little more in your favour, because you know the customers are coming regardless. That structural advantage is something most countries can only dream of, and the dollar has held it for the better part of a century.

But that prize rests entirely on one fragile thing.

The world has to keep choosing to hold the currency. And the moment the world's biggest holders begin, even slightly, to hold a little less, the ground beneath that privilege starts to move.

So when a survey shows central banks planning to trim their dollars over the next decade, it is not a dry portfolio note. It is the first signal that the most valuable financial advantage on earth is being reconsidered by the very people who grant it.

Keep that picture in your head, the one shop everyone has to visit, slowly noticing a few customers glance at the door, and the rest of this issue clicks into place.