“It remained clear, however, that unresolved questions about the
inherited financial system might well make a sudden and unexpected
reappearance if, at any time in the second half of the twentieth
century, shifts in world trade and the cost of imported materials place
severe forms of competitive pressure on the American economy and on the
international monetary system. At such a moment the cultural
consolidation fashioned in the Gilded Age would undergo its first
sustained re-evaluation, as the "financial question" once again intruded
into the nation's politics and issues of Populism again penetrated the
American consciousness.” - Lawrence Goodwyn, “The Populist Moment”

I have to say for entertainment value, there's not much greater than our
political and financial elite discussing the value of the dollar. Throw
in the goldbugs and it's high camp vaudeville. Americans pride
themselves on not knowing anything about the financial system, and, it
would also seem, they very much enjoy being pillaged by Wall Street and
their elected officials in the name of financial stability. Over the
last couple years, financial stability as was known in the last three
decades or maybe even the last seven decades has become a little shaky.
In response, Chairman Bernanke bet the buck, which has led to increasing
speculation on the dollar's future.

Just as most Americans know nothing about how their financial system
works, most who work on Wall Street know nothing about currency, except
that when any given currency is in play, there's plenty of money to be
made. And if you can get the dollar in play -- yahoo! Currency has no
intrinsic value. At its foundation, all money is a faith based system,
which does indeed leave it open to existential crises. However, while
having no intrinsic value, currencies represent some sort of value, and
the dollar represents the global economic system as it presently operates.

Today, the dollar's value is derived from the United States being a
fifth of the global economy, and despite the deindustrialization of the
past several decades remains the largest manufacturer on the planet. But
it gets even better, the dollar represents the last half-century's
experiment of corporate globalization. It is the world's reserve
currency first and foremost because the American military provides the
order, such that it is, that allows the system to function. This is what
gives value to the dollar. So, the next time you see an financial
analyst talking about the dollar going down, it means all those things
are going down with it, and most importantly for our global financial
elite, that means most of them too.

Now, don't misunderstand, there are so many structural problems to the
present global economic order, that an existential crisis on the dollar
might well come at any time. For example, problems with oil supplies
could immediately upset the dollar applecart, but that would bring
everyone else with it. My main point here is if the dollar were to
collapse, most of the people you hear talking about how to profit on the
dollar's demise would be flushed away with it. Such currency shifts
being so blithely bandied about are the stuff of major historical drama.
It took two world wars to dislodge the British pound from its global
position.

The question to ask our financial gurus would be in collapsed dollar
world, what would take it's place. The Renminbi? There's no country on
the planet more reliant on a strong dollar. The Euro? Well, let's see
them kick out the American military first. Or maybe for a little
nostalgia we could go back to the pound? Unfortunately, a top heavy
financial industry, depleting oil and gas reserves, and inbred German
royalty as a tourist attraction are not the things of a strong economy.
A basket of currencies? Well that makes the most sense, much more
difficult to implement than to say, and it would take decades.

Right now, the world is stuck with the dollar. The United States could
strengthen the dollar by cutting our oil consumption, consuming less on
whole, producing a little more, and bring the troops home from Iraq,
Afghanistan, Japan, Germany, Italy... go down the list. At the moment,
none of these things seem forthcoming from our political leadership or
the American people. So, my fellow Americans, in these existential times
for the dollar, follow the advise of Uncle Walt on Tinkerbell, "If you
believe, clap your hands; don't let the dollar die."

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