2013: What would happen if the dollar lost its reserve status?

AUDIENCE MEMBER: Thank you. Jonathan Schiff, visiting from Macau, China.

You briefly touched upon this. But on our side of the world, there’s a lot of discussion about the U.S. dollar’s status at the world’s reserve currency.

I’m sorry, there’s some feedback. It’s kind of weird.

What would be the effect upon the U.S. and the world economy if the dollar loses that status as a world reserve currency?

WARREN BUFFETT: Well, I don’t know the answer to that, but fortunately, I don’t think it’s going to be relevant.

I think the dollar bill will be the world’s reserve currency for some decades to come. I think China and the United States will be the two supereconomic powers, but I don’t see any — I think it’s extremely unlikely — that any currency supplants the U.S. dollar as the world reserve currency for many decades, if ever.

Charlie?

CHARLIE MUNGER: Well, there are advantages to a country that has the reserve currency, and if you lose that, you lose some advantage.

England had a better hand when it had the reserve currency of the world than it had later when the United States had the reserve currency of the world.

If that eventually happened to the United States, it would not be, I think, all that significant.

It’s in the nature of things that sooner or later every great leader is no longer the leader.

Over the long run, as Keynes said, we’re all dead, and over the long run —

WARREN BUFFETT: This is the cheery part of the section. (Laughter)

CHARLIE MUNGER: Well, if you stop and think about it, every great leading civilization of the past passed the baton.

WARREN BUFFETT: What do you think the probabilities are that the U.S. dollar will not be the reserve currency 20 years from now?

CHARLIE MUNGER: Oh, I think it’ll still be the reserve currency of the world 20 years from now. That doesn’t mean that it’s forever.