Triffin Dilemma, or Triffin Dilemma, is a famous thesis in the international monetary system.

On the eve of the end of World War II, the Bretton Woods Conference held in the United States in 1944 formulated the Agreement of the International Monetary Fund, establishing a parity (fixed exchange rate) system in which the U.S. dollar was pegged to gold and the currencies of other countries were pegged to the U.S. dollar. The U.S. dollar was used as an international reserve and

It is the main source and support of international solvency and serves as the center of the international monetary system.

This structure played a positive role in restoring the post-war economy and alleviating the shortage of international gold reserves and solvency, but it also had inherent flaws.

In the 1950s, American economist Robert Triffin studied the Bretton Woods system and pointed out that if there is no other reserve currency to supplement/replace the US dollar, the US dollar-centered parity system will inevitably collapse because

In this system, the U.S. dollar assumes contradictory dual functions at the same time, namely (1) providing solvency for world economic growth and international trade development; (2) maintaining the currency credibility of the U.S. dollar and maintaining the exchange ratio between the U.S. dollar and gold.

In order to meet the needs of various countries for U.S. dollar reserves, the United States can only provide U.S. dollars in the form of external liabilities, that is, a continued deficit in the balance of international payments, and a long-term balance of payments deficit will lead to excess international solvency and depreciation of the U.S. dollar ("dollar disaster").

Maintain the official price of gold; if it wants to ensure the stability of the US dollar value, the United States must maintain a balance of payments surplus, which in turn will lead to insufficient supply of US dollars and a lack of international repayment means ("dollar shortage").

This dilemma of the US dollar under the Bretton Woods system is the famous "Triffin Dilemma".

The subsequent historical development proved Professor Triffin's foresight.

The "Triffin Paradox" can also be said to be the Triffin Dilemma. It is a point of view proposed by Triffin, a professor at Yale University in the United States, in his book "Gold and the Dollar Crisis" published in 1960.

The description in the book is as follows: “Because the U.S. dollar is pegged to gold, and the currencies of other countries are pegged to the U.S. dollar, although the U.S. dollar has gained the status of an international core currency, in order to develop international trade, countries must use the U.S. dollar as settlement and reserves.

Currency, this will cause the currency flowing out of the United States to continue to precipitate overseas, and a long-term trade deficit will occur for the United States; the premise of the U.S. dollar as the core of an international currency is that the value of the U.S. dollar must be kept stable and strong, which in turn requires the United States to be a

A country with a long-term trade surplus. These two requirements contradict each other and are therefore a paradox.