Jamie Dimon linked the dollar's status to U.S. military power
JPMorgan Chase CEO Jamie Dimon stated that the U.S. risks losing the dollar’s status as the world’s reserve currency if, in 25 years, it does not have the strongest economy and military. He made these remarks in an interview with PBS, according to Fortune.
According to Dimon, under such a scenario, the world would become more fragmented and dangerous for the U.S. The JPMorgan Chase CEO linked the dominance of the U.S. currency not only to the country’s economic power but also to its military capabilities.
Daniel McDowell, associate director of the Moynihan Institute for Global Affairs at Syracuse University, noted that economic strength is the foundation of the dollar’s dominance, while a powerful military reinforces confidence in the currency. In his view, military might signals to foreign investors that their assets in the U.S. are secure.
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McDowell suggested that U.S. allies may have less incentive to buy U.S. Treasury bonds and invest in the country if they doubt Washington’s ability to protect them in case of need. He explained that under the current model, the U.S. government’s financing through dollar-denominated loans helps fund defense, from which allies benefit.
McDowell cited another potential risk to the dollar: a scenario in which the U.S. enters into a full-scale conflict with a major power—such as China or Russia—and suffers a decisive defeat. In his view, this could damage the country’s political and economic reputation and affect foreign investors’ attitudes toward the dollar.
Eswar Prasad, a senior fellow in the Economic Studies Program at the Brookings Institution, emphasized that for a currency to serve as a reserve currency, an institution’s stability and the dynamism of its economy are more important than its size or military strength. At the same time, he noted that a decline in U.S. economic and military power, domestic institutions, and geopolitical influence would undermine the dollar’s dominance. According to Prasad, the absence of serious competitors will prevent any other currency from displacing the dollar from its leading position in international payments and reserves.
