Speaking at a forum at the Council of Foreign Relations, Stiglitz noted that China and other nations have expressed fears about the reliance of the global economy on the US currency. "We will move out of the dollar system... the real question is how fast, and do we do it in an orderly or disorderly way," said Stiglitz, a former World Bank chief economist and adviser to then-president Bill Clinton.
Stiglitz said Americans see the advantage of the dollar reserve system as being able to borrow at low interest rates, but that there is "a flip side" as well. "If people are buying US dollars what we are doing in effect is exporting dollars instead of exporting goods," he said.
"When you export (Treasury) T-bills, you don't create jobs, and therefore the trade deficit contributes to the weak economy and to our problem with jobs." Stiglitz said the dollar is likely to be replaced in some manner and added that "if we do it the right way, it will increase aggregate global demand and be a benefit to the United States."