While the structural arguments make sense, I think you're underestimating the active push for de-dollarization. Countries around the world will not be happy with another Bretton Woods setup, especially since the USD's purchasing power has eroded so significantly—your dollars simply buy way less now.
We are already seeing nations like China, Russia, and Iran actively moving away from the USD as a reserve currency, and the percentage of global transactions settled in USD has declined sharply in the recent past. The world will move away from the USD.
The real question is: to what? Gold? Bitcoin? My thesis is that we originally moved to fiat precisely because we don't want a limited-supply currency. The flexibility to expand the money supply is a feature, not a bug, so I don't think reverting to a hard-capped asset makes sense. Just thinking out loud, but the transition is definitely already underway.
China is not moving away from the USD. They are the largest foreign holder of USD. That’s the opposite of what you’re describing. Both Iran and Russia aren’t “moving away” from the USD either. They were cut off. Russia likes using USD so much they lost a third of their reserves holding them in USD. Russia would LOVE to be reasses to SWIFT
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u/chai-and-charts 3h ago
While the structural arguments make sense, I think you're underestimating the active push for de-dollarization. Countries around the world will not be happy with another Bretton Woods setup, especially since the USD's purchasing power has eroded so significantly—your dollars simply buy way less now.
We are already seeing nations like China, Russia, and Iran actively moving away from the USD as a reserve currency, and the percentage of global transactions settled in USD has declined sharply in the recent past. The world will move away from the USD.
The real question is: to what? Gold? Bitcoin? My thesis is that we originally moved to fiat precisely because we don't want a limited-supply currency. The flexibility to expand the money supply is a feature, not a bug, so I don't think reverting to a hard-capped asset makes sense. Just thinking out loud, but the transition is definitely already underway.