What Has Happened So Far: The Long History of USDollar Dominance

To understand how we got into this situation, we need to revisit past decades.
July 1944
<br><br><em>The U.S. dollar system was founded at Bretton Woods on three pillars: American military supremacy, American financial hegemony, and American economic prowess. </em><br><strong>Dan Oliver</strong>
Keynes fails at Bretton Woods and the problem takes its course
Geschichte der US-Dollar-Dominanz

July 1944: More than 700 delegates from 44 nations meet at the Mount Washington Hotel in Bretton Woods, New Hampshire. Among them: the US, Canada, Australia, Japan, and some European powers. One year before the end of the war, they decide on the world’s new monetary order: the first and, so far, only monetary system based on international treaties. ...

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Triffin discovers his dilemma
Robert Triffin

In the 1960s, economist Robert Triffin warnsof the contradictions in the Bretton Woods system. According to Triffin, the use of a national currency as the main international reserve currency will eventually lead to conflict between said country’s national needs and those of the world economy. Triffin predicts that the gold peg of the USdollar will fail. ...

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August 1971
<br><br><em>It wasn’t the gold standard that failed; it was politics.</em><br><strong>Alan Greenspan</strong>
The Nixon shock and the birth of the petrodollar
Die lange Geschichte der US-Dollar Dominanz

On August 15, 1971, US President Richard Nixon ends the Bretton Woods monetary system after a quarter-century. He cancels the gold peg of the USdollar. At first, this is merely “temporary” and is intended to “strengthen” the US economy. At this point, the US has “only” about 8,000 tons of gold in its reserves. ...

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End of the 1970s
<br><br><em>In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and godlike intelligence for kings. </em><br><strong>Aristotle </strong>
The end of the 1970s and the Volcker shock
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In 1976, the Bretton Woods system is formally buried by the Jamaica Accords. In the early 1980s, all developed countries allow their currencies to fluctuate. For the first time in history, the whole world is on a pure paper money standard, with one exception: Switzerland formally keeps the franc pegged to gold until 1999. ...

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The stability of the 1980s

In the 1980s, the system stabilized. The Europeans, however, have by now long been working on their own currency, which should make them independent of the US dollar system. The advocates of the Special Drawing Rights and the IMF were not idle either. In 1984, economist Richard Cooper proposes a global single currency – with a common monetary policy and a common central bank. The US, Europe and Japan are to be the first nations to join.   ...

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December 1995
<br><br><em>It is no coincidence that the century of total war coincided with the century of central banking.</em><br><strong>Ron Paul</strong>
The introduction of the euro
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In December 1995, the EU states agree on a name for the common currency: the euro. On January 1, 1999, the euro is introduced. Gold plays an important role for the new currency from the very beginning. But under the first ECB president, Wim Duisenberg, the euro is not pegged to gold as the USdollarwas under the Bretton Woods system. ...

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September 2008
<br><br><em>The focus of policy in China is no longer creating jobs at any cost…The new focus in China is de-dollarizing at any cost… </em><br><strong>Louis Gave</strong>
The financial crisis and its consequences
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In the wake of the great financial crisis and the Lehman bankruptcy, concerns grow again that the USdollar system may have reached its end.  

In March 2009, the head of the People’s Bank of China (PBoC), Zhou Xiaochuan, speaks out for the first time. In a remarkable speech at the Bank for International Settlements (BIS), he calls for a move away from the USdollar and the establishment of a new monetary system. China’s central bank chief makes direct reference to the entire monetary history since 1944 and quotes Keynes and his bancor idea. ...

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Summer 2022
<br><br><em>Right now there are changes – the likes of which we haven’t seen for 100 years – and we are the ones driving these changes together.</em><br><strong>Xi Jingping talking to Vladimir Putin</strong>
Collapse of the international monetary order
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After the West blocked Russia's currency reserves, we see open rupture in the international currency architecture. For the first time, active resistance to the dominance of the U.S. dollar begins to emerge. Not only in Russia and China, but also in South America, Africa and Southeast Asia - and again in Europe. ...

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