TODAY, KING DOLLAR REIGNS SUPREME OVER THE GLOBAL ECONOMIC AND FINANCIAL SYSTEM. IT IS THE WORLD’S PRINCIPAL RESERVE CURRENCY, USED IN ALMOST 90% OF FOREIGN EXCHANGE TRANSACTIONS.
But might the days of dollar supremacy be numbered? To assess the dollar’s future, we must first consider its past. For that, we look to the latest addition to the Ruffer collection of historic currencies – a clutch of noteworthy bills – displayed on the walls of our London office.
COINS OF THE COLONIES
The dollar’s origins can be traced back to the Joachimsthal silver mines of 16th century Bohemia. Coins minted there became known as thalers – anglicised as dollars.
The next phase in the journey to the currency we recognise today came with the Spanish colonisation of the Americas. Silver coins, like many pictured on these pages, became the default currency for trade across the vast and expanding Spanish empire. These pesos were known in English as Spanish dollars, or pieces of eight.
The success of the dollar in facilitating transatlantic trade with the Latin south throughout the 17th and 18th centuries stood in stark contrast to the North American colonies where, under British control, there was a dearth of practical means of exchange.
GEMMA CAIRNS-SMITH
Investment Specialist – UK Wholesale
