Donald Trump wants to smash the current world economic order, whose financial anchor is the dollar. If Trump’s changes erode faith in the financial anchor, where will the world go? Some analysts think we may have to return to the old gold standard.

The US has been the global stabiliser since WW2. It helped create World Bank and IMF, which act as lenders of last resort to troubled economies today. In financial crises, the US has played the lead role in organising rescues.

The dollar’s domination is resented by many BRICS countries, including India and China. Trump has threatened sanctions on BRICS countries creating an alternative currency. Yet, he is doing more than anyone else to topple the dollar’s primacy by arguing that the US has been taken for a ride by the post-WW2 system, which must, therefore, be demolished.

The dollar anchored that system. Without the guarantee that the US will ride to the rescue in global crises and hammer out solutions in concert with lesser but significant players, we may return to the situation in the 1930s, when the lack of a global anchor deepened the Great Depression.

Economic historian Charles Kindleberger wrote, ‘The 1929 depression was so wide, so deep and so long because the international economic system was rendered unstable by British inability and United States........

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