The End of US Dollar Supremacy

History of the World Reserve Currencies and How America is Experiencing the End of Their Financial Empire

Apr 08, 2022

Brief History of the World Reserve Currency

The US dollar has been the world reserve currency since 1945 when the Bretton Woods Agreement was signed by 44 countries. The US dollar was backed by the gold reserves that these countries would store in America for safe keeping. This was following the immediate aftermath of World War II. Europe was completely devastated and had very little finances left to hold up a world financial system. England held the position as having the world reserve currency before the war. London, England was the financial capital of the world. This was due to their world hegemony through colonies around the world and navy strength. Naval strength is a vital determining factor in having a world reserve currency because the navy protects commerce on the open seas when trading happens between various countries. International trade is the primary function of a world reserve currency. The past 5 centuries have seen the world reserve currency switch nations. There is much to consider in how they attained that status as a nation, what ultimately led to them being dethroned, and how it affected their citizens lives.

The first modern world reserve currency was established by Portugal in the 1450s during the Age of Exploration when they successfully navigated around the tip of South Africa to the rich spice islands to open up trade. The Portuguese were the most advantageous explorers at the time and had the most powerful navy. They had successfully established trading routes to Africa and Asia along with building military bases throughout the route to the spice islands.
Then Spain attained the world reserve currency through the founding of the “New World” which led to them owning the majority of silver from mining in central and South America in 1530. They were in full control of all the known in this new region of the world, and therefore controlled the richest trade routes. The pope had granted the kingdom of Spain all of the New World, without knowing the vastness of this blessing. The Protestant Dutch and British didn’t respect that blessing and attempted to set up colonies in the Caribbean and North America anyway.
The Spanish currency was dethroned through war in the 1630s and was succeeded by the Dutch who dominated the commerce of world trade through the first multi-national corporation in the world, The Dutch East India Trading Company. Here is something to think about when I tell you they dominated international trade; the Dutch East India Trading company was worth $7.5 trillion dollars in today’s currency. To provide you a clearer perspective Apple Inc. is valued around $2.7 Trillion. The Dutch East India Trading company was almost triple the total value of Apple!
By 1720 France had achieved European political dominance under King Louis XIV, which made their currency, the ‘Roi Soleil,’ the world reserve currency. But due to civil war and the rise of Napoleon with the Napoleonic Wars (1803-1815) France was defeated and at the peace conference in 1815, called the Congress of Vienna Europe, they decided to crown England with the world reserve currency.
By 1922 England maintained power over 458 million people in their empire that stretched in colonies around the world. Their currency was the world reserve when England was at its most powerful state, although they’ve always maintained central bankers who financed many of Europe’s wars and a large portion of international commerce.

The history of a world reserve currency is rich with war, culture shifting, political shifting, and central bankers playing huge roles. To have a world reserve currency is an extremely blessed situation to be in because it allows that nation to determine the finances of the entire world to a large degree. But having this much power also makes that nation a target in the eyes of other powerful nations and it can lead to decadence in their ability to lead with sober minds. The leaders in these nations often get high on their own supply. They become increasingly authoritarian, lazy, and gluttonous. They lose the skillful, diplomatic, businesslike mindfulness that got them there in the first place. Like a rich spoiled child, they spend their families fortune in a matter of years in this respect. This is what is happening to America’s political class today.

To achieve this position of strength in the complicated and brutal Geo-political affairs of the past was no easy task. America had built its capitalist system so successfully following the Civil War (1861-1865) that we were the leader of innovation, standard of living, wages, technology, and, leading up to World War II, military power. Our presence alone in World War I helped the war officially come to a close and in World War II it was our military might that helped Churchill wage war in Europe in the most effective way possible to destroy Hitler’s war machine. America has achieved the world reserve currency status because of our relentless determination to grow our economy, our military (particularly our navy), and our diplomatic prowess.

What has happened since 1945 that has caused the world to begin seeking a “New Economic World Order” in 2022 are a number of historical events. All of them have occurred through the acts of our political leaders who were a fraction of the character and intelligence of American leaders from the past who gifted us this strategic position on the world stage. Let’s run through a timeline of events that have destroyed our ability to have the world reserve currency. These are just a handful of major events with very brief details. To go over all of them in detail would be a masterclass of sorts, but this brief summary of events may help develop the framework of understanding how the decisions of our political leaders and central bankers have gotten us to this point.

1950s Baby Boom

First we must acknowledge the immediate positive effect on the economy when America initially had the world reserve currency. Life was great to be an American. Credit was issued to increase people’s ability to receive financing for everything from cars, homes, appliances, and businesses. Practically everything Americans bought with the exception of international cuisine was made in America. This was a cycle of prosperity because the American people built and sold their products to each other domestically while also contributing to huge exports internationally. We had quality control in our factories to ensure the best possible outcome for our people and those abroad. American products and brands ended up exploding around the world especially from America’s position to trade with any nation due to the convenience of having the agreed upon world reserve currency. Businesses boomed here in America which attracted investment from foreigners everywhere, especially Europe. While still dealing with civil justice issues domestically, people of all colors were living better in America than in any other place in the world economically speaking.

1963 Assassination of John F. Kennedy & Major Change in Foreign Policy

The assassination of JFK triggered a series of events that weakened America on the world stage. Not to breeze over such a devastating historical moment in our nation’s history, but the successor of JFK (Lyndon B. Johnson) was instrumental in destroying the world’s confidence in America’s foreign policy decisions. With the cold war ramping up in the 1960s so too was the concept of proxy wars and color revolutions like we saw in Vietnam. This began the concept of sanctioning other nations who veered away from the globalists Anglo-American Empire agenda.

America has had the power of financial sanctions since having the world reserve currency. Sanctions are a military or economic coercive measure to force a nation to make corrective actions from what is deemed unlawful under international law or, in simpler terms, actions that are not in alignment with the globalist agenda. Our financial sanctions have the ability to halt a nations ability to trade with other nations since our currency is mandatorily used to make an international transaction. The enforcement of our sanctions has been viewed internationally as an abuse of power. They are so devastating to a nation because of their ability to cause famine, disease, and military devastation. Our sanctions can cut the food supply, medicine supply, military supply, and economic prosperity of a nation. Usually nations who don’t “obey” our rules can go into bankruptcy and collapse. This started with the Soviet Union, but extended to North Korea, Vietnam, Cuba, Nicaragua, Venezuela, Iraq, Iran, Libya, and many others throughout the past few decades.

1971 Nixon Takes US Dollar Off Gold

President Richard Nixon took the US dollar off the gold standard in July of 1971 to mitigate issues with inflation and an oil crisis that caused nations to panic in an economic frenzy. At the time gold was $35 an ounce, but as of today March 30, 2022, gold is priced at $1,944 an ounce. Nixon believed that taking the dollar off the gold standard would help alleviate inflation by allowing the central banks to manually control the supply of money. This was the birthplace of the “Modern Monetary Theory” which is a “macroeconomic framework that says monetarily sovereign countries like the U.S., U.K., Japan, and Canada, which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending.” What this basically means is that these nations, especially the US, are allowed to spend endless amounts of money without any consideration of how high the debt goes because they control their own currency, and in the case of the United States the US dollar is the world reserve currency which means they have both endless debt capacity and economic world dominance. There is no sensibility to our nation’s financial management whatsoever because of this and this is why our political class has no desire to make an attempt to balance the budget.

This marked the modern beginning of the American Empire that has been the cause of incredibly misguided foreign policy around the world thanks to the political leaders like Secretary of State Henry Kissinger. Many people can say the “American Empire” started at different times in history, but this action by Nixon was a huge highlight of that concept. When he removed the US dollar from the gold standard the world watched in horror as America took its role as a dominate country with a fiat currency. The world would remember this moment, and Americas enemies began plotting to dethrone the US dollar because of this disastrous economic policy.

Gulf War (1991), Afghanistan (2001), Iraq War (2003), Libya Revolution (2011), Syria Revolution (2014), the Ukraine War (2022), and many other International Conflicts

Each of these wars was predicated by massive sanctions imposed by the American Empire. The reasoning for these various wars on behalf of the United States has become more and more about our corrupt politicians over the past decades. Our politicians, defense contractors, oil companies, and other corporations will attempt to make deals with political leaders in other nations which may result in one party getting screwed over in one way or another. Often times these negotiations do not have the American people’s best interest at heart. What usually happens is these people in positions of power use a strong-arm approach (the US dollar) to make deals in their favor. When political and military leaders in these other nations feel that they are being taken advantage of they rebel in some way, sometimes its big and sometimes its small. This rebellion, whether economically or militarily, results in retaliation in the form of financial sanctions and in some cases military intervention on behalf of the United States and its allies. The sanctions usually are enough to change the course of a rebellion against the American Empire as mentioned earlier of the devastation they can cause, but when they don’t get the desired results the drumbeats of war begin to sound in Western media (Look at Ukraine today). Americas adversaries have watched closely as we have abused power in this manner time and time again. They’ve been patient in their desire to strike at the United States when the time was right. This is what we are experiencing today.

In each of the listed conflicts this process has occurred with precision. Some conflicts had American military directly involved, while others were dealt with economically or through subversive means like our CIA training a local population to revolt. Each conflict showed our strategic hand in the world of Geo-politics. Our enemies have played along in these various issues, while being observant of America’s mistake to overplay the same hand each time. All of this happened on the world stage as we became de-industrialized by losing our manufacturing base, shutting down our energy supply, and off shoring our jobs to our sworn enemy, the Chinese Communist Party. American elites have either directly or indirectly sabotaged our nations superpower status as the world reserve currency.

Where We are Today

With the recent political events in America the past 6 years with the rise of populism in Trump, our production ramping back up, becoming energy dominate, bringing peace to the world through smart foreign policy deal making, to the stolen election of Joe Biden, shutting down of businesses through the pandemic, stopping all domestic energy supply “for the climate,” exceeding a 30 trillion dollar national deficit, shutting off food production, and now the war with Russia we are now seeing the end of the US dollar being a world reserve currency.

Trump coming into office with the populist and nationalist policies he instilled Americans got a chance to see how good political decisions can help them live better lives. I can name a few examples, but one that seems to be trending today is energy independence. Trump’s policies on energy had America become the most powerful energy producing nation just in the 4 years he was president, so the point here is to showcase how America can achieve great things when great leadership is at the helm. Joe Biden on the other hand isn’t even running the show. Globalists have installed him to take the fall as they consciously sabotage the nations energy supply, foreign affairs, agriculture, education, and currency hegemony.

(Brazilian, Indian, Chinese, Russian, & South African Leaders Create Alliance)

The most specific assault on the US dollar we’ve seen since the war in Ukraine started has been Russia’s decision, under economic sanctions, to accept only Rubles (Russian Currency) as payment for trade with Europe and India for natural gas. This is a huge retaliation that the US hasn’t seen in the past because any government that threatened to not use US dollars for international trade transactions has been either invaded or overthrown. Why is this such a big deal you ask? Because if Russia, as a major exporter of many goods including energy, begins to accept payment in Rubles it will start a whole new economic trading system and immediately collapse the power of the US dollar. You see in America without Trump we aren’t producing anything anymore, so we aren’t trading high commodity goods like energy and manufactured products. America isn’t strong in their ability to produce much of anything because we have become decadent, corrupt, and sabotaged to rely completely on the US dollar supremacy. Our political class believed we could continue bullying the world with sanctions and our military power endlessly with no consequence, but as we see the Russians, Chinese, Brazilians, Indians, and United Emirates forming an alliance in economic partnership America’s ability to continue leading the world with the US dollar is collapsing.

What the collapse of the US dollar would look like

This is a warning to every American to begin realizing the full extent of the disaster we are facing if the US dollar loses it’s world reserve status. Because our politicians have never made an attempt to pay down the national debt we will be beholden to nations like China, Japan, and many others who have bought massive amounts of US Bonds. The US bond is basically an investment in the US dollar itself that would produce a small yield of interest after 5 or ten years depending on the term of the bond. The bonds act as “reserves” in order for nations to engage in international trade. This means foreign nations who have bought these bonds would have leverage over us if our currency were to ever collapse because we owe them their investment + interest. We could see major aspects of our nation become collateral to foreign nations as a way to “pay them back” in real assets. Our natural resources, military equipment, technology, and land could be given to foreign nations in order to pay down our debt. This would be the same actions central bankers have taken in 3rd world countries in the past, and now America would be in the same position.

Currently there is $12.8 trillion dollars of currency in the world today. 60% of it is US dollars, which is down from over 75% prior to 2000. We’ve seen an accelerated rate of countries wanting other currencies in their reserves to do international trade with nations the US has decided to sanction, including Russia and Iran. This desperation to replace the US dollar in the international world order is ramping up the alliances against the US to create alternatives, but this is really due to a lack of real leadership in America.

Inflation won’t just be a word used by economists on television anymore. It will be a horrific reality for every single American. Inflation essentially makes a currency’s buying power decrease because the value of the currency itself is depreciating due to an increase in the supply of that currency. Every time our congress votes on the budget, they print trillions of dollars which causes a steady increase of inflation.

When our dollar is no longer needed to make transactions around the world nations will dump the currency for real value like precious metals or a new currency that is on the rise like the Chinese Yuan. Inflation at that point will be hundreds of percent, not just the 3-10% we are seeing today which is already terrifying. You as an American will experience the cost of goods go so high in price that you won’t even be able to afford food, energy, or common necessities. Unless you have real assets right now you will end up in a terrible place financially. This would easily cause mass chaos and violence in the streets for survival. This would be hell on earth.

The price of real assets will go up. The silver lining in all this is that if you own a home, car, gold, silver, Bitcoin, storable food, land, agriculture, weapons, or any other kind of tangible assets then those will increase in value tremendously. At that point, if you wanted to, you could decide to sell some goods for a different currency than dollars, which will be a more effective strategy than to sell your assets for the rapidly depreciating US dollar. As they say the “rich get richer,” well in this case if you own any of the previous tangible goods mentioned then you may be rich when compared to someone who doesn’t own anything, had a large savings account of cash, or just lives paycheck to paycheck. Not the best situation in society because there will be a guarantee of violence and collapse, so you’ll still have to manage living in an apocalyptic scenario.

Either way you slice it, this will be the most devastating living situation we’ve seen in America. If you can’t believe this will happen just look at modern history. Zimbabwe, Venezuela, Argentina, etc. have all experienced this in the last decade. People living in these countries used to have a high standard of living and were quite wealthy on average, but as socialism and communism took over the functions of their economy their currency became worthless. The poverty in Venezuela is particularly insane because of how recently it happened. People were eating the zoo animals and their pets just to survive. There were mass protests and riots just to get bread to eat, when before they used to live in luxury. On the other hand, the political class lives in luxury mansions with maids, fresh food, and a high-class lifestyle because that’s what communism always creates. There are people who are in the elitist circles in America right now who are buying up all the most valuable resources and ditching their cash. This class of people will end up being better off than the average American who is blindly unaware of the economic crises they are facing. America would fall even harder because of our negligence of spending and corruption from the past 5 decades. Our political and elite class will survive because of their strategic purchase of vital infrastructure like land, large businesses, real estate, etc.

Conclusion

My message to you would be to invest in real assets NOW. Get out of the dollar in every possible way. Pay down debts and buy real assets. If you aren’t sure what to start with, I would buy storable food and as an investment I’d buy Bitcoin. If you want to learn more I’m creating a course called “Breaking Out of the Financial Matrix” which will be dropping soon to help people navigate this insanity we are living in now, and how to prepare for the coming collapse in the future. For now, we should be aware and having serious talks with our family and friends about all possibilities.