Unfolding Centralized Currency

Once World War II ended, America and the rest of the victors agreed to a newly designed monetary system. After 1945, foreign central banks held their currency to become parts of the dollar, redeemable for gold stored in America. This was the start of a monetary experiment that failed in 1973. Excessive spending by the U.S federal reserve made the dollar claims on gold be more than the amount of gold available. Just like that, the dollar’s link to gold broke away.

U.S. Treasurys in the post-1971 era became a global risk-free asset, used as a reliable store value controlled by printing new money and rate hikes. The dollar became the world’s reserve currency. Other countries kept purchasing U.S. debt, earning interest on the belief that America won’t default. The trust in the dollar is now being questioned:

Foreign ownership of U.S. debt declined from 34% in 2015 to 24% at the end of 2021…To compensate for this diminishing outside interest, the U.S. looked inward for new creditors. The Federal Reserve held around 4% of U.S. debt in 2009; that figure has climbed to 19% today.––America's Quiet Default

Justifying an idea has the power to add confidence, instead of naturally measuring to reality. The dollar is being tested and the world economy is watching the problems unfold. Issues that the U.S. Federal Reserve claims they can solve.

Ideas that are true will always be criticized, weaknesses found, and errors corrected. If civilizations fail to create knowledge by fixing their ongoing problems quickly enough, long-tail attacks happen until they fail. Of the roughly 750 currencies that have existed since 1700, only about 20% remain, and all of them have been devalued.