Since money has relied solely on it's own properties of trade facilitation in order to be of value it is this aspect of consideration most important to the use of the US Dollar as the reserve currency of the world. As the US Dollar is an established international means of exchange it is not this that I wish to question it's hegemony in world trade, but rather the risk posed to it's effectiveness of a means of exchange due to existential risks within it's economic structure.
The US Dollar itself is such a widely used commodity as a result of peoples trust in it's native economy, the deep liquid bond market that every trade partner is encouraged to participate in, and the mandatory purchase of oil with the US Dollar, which encourages all oil consuming economies to hold large US Dollar currency reserves. Although these pillars of hegemony offer the Dollar a supreme position as the worlds reserve currency, they also provide extensive critical points of structural integrity to the currency regime as a result of being utilized for the most important aspects of trade. Hence if they were to become secondary to a new dominant economy and currency it would be likely that it would cease to operate it's profitable hegemony. A new market for Chinese Yuan denominated oil purchases has been created recently which has diminished slightly the hegemony the Dollar has over international oil purchases. This is the first aspect of the Dollars means of exchange that is threatened by it's dominance. As countries have to subject their native currencies to depreciation a lot of the time to retain competitiveness against the Dollar it can make economizing difficult and costly for trade partners to deal in US Dollars due to the extent of sacrifice required for compatibility. A new denominated oil market will pose a threat to the US Dollar oil market because many trade partners may prove to be economically more proficient if no longer compliant in that regime. This problem is inherent in fiat currency to the extent that one currency can monopolise a certain market or industry due to it's economies dominance, sometimes at the economic disadvantage of a trade partner in order to ensure low import prices and a consumer culture of capitalism devoid of significant economic productivity. No currency should denominate purchases or sales received dictatorially in any market or industry as it is immoral to force such will upon any individual, especially at the disadvantage of his countries competitiveness, and especially if the denomination is intended to continue by force economic supremacy and ultimatum in the world economy a country who by financial decree deems more important their regime, agenda and economy.
The Dollar alongside all other fiat currencies succeeds as a means of exchange on the national level as a result of their populations trust in it's performance, issuance, and policy centric manipulation, even if they who use it do not understand the dynamics and apparatus utilized in the monetary sphere. This trust is severely misplaced in the institutions that dictate the issuance of worthless currency, and the ignorance to the manipulation of our most important asset of the wider populace is what has let our superiors to take advantage of the powers of money. As the monetary system is now intrinsically valueless and reliant upon it's facilitation of economizing trade for it's success it would not take long for a population to repeal a currency or lose faith in it's utility. For example, it is not granted to those who own capital to legally exchange their equity into Gold through a bank, this process of coverability is no longer ensured by them and so at a point where people decide they want something tangible and intrinsic in value in place of their currency they are mostly unable to do so. As the currency relies upon only itself in todays world it means that there would be no transitory period between a currency crisis and a barter economy. There would be no reallocation of value through precious metals in the time it takes to recover a currency allowing people to keep their wealth and purchasing power, people would go straight to using goods and services as a means of exchanging things of value as they would instantly have nowhere to redeem the diminishing value of their currency in time. As there is no redemption for the loss of value in a paper currency that is losing trust it doesn't take long before the monetary units of the supply are so devoid of purchasing power as a result of low trust that the money ceases to be valid for means of payment and exchange.
It is this trust alone now that guarantees that our money is a valid means of exchange, for if it was that the entire country uprooted their acceptance of it and the system it represents then it would remain that we have rendered it powerless and therefore invalid as a means of exchange. And this trust is wearing thin by the standards of multiple economists and economizing individuals, who recognise that the inflationary monetary dynamics employed serve only to decrease their savings value, and heighten the costs at which they pay for goods and services beyond the actual trajectory of monetary inflation. New developments in digital currencies and other application of monetary tools have allowed for us to perceive an economic model not reliant on nominal growth at the expense of notional growth in order to create consistent growth and inflation as to offset deflation of the debt burden, which is created by the very expanding monetary base they are using to diminish it! This cyclically expanding monetary base and debt burden due to moneys freedom from intrinsic value is what will erode the means of exchange in any currency, as once the financial reality is attained in prices and purchasing power the people of any given country will refuse to use a piece of paper representing an obligation to their government worth nothing more than a tokenary representation of debt. After economic tribulation significant enough it will be recognized the properties within money that have caused it's demise, and the first we will all notice will be our unconditional trust in veiled powers to control and monopolize it's governance. Until then paper money and fiat currency will remain an effective albeit inefficient means of exchange, as it still allows people to exchange a good or service for it's monetarily representative amount of value, as people still trust their currencies to the extent that they are willing to risk accepting them today in anticipation of them still being valuably viable for payments tomorrow.
If you enjoyed this post please consider contributing to my work, I am reliant on your donation to continue my investigation and my work in cryptoeconomics, so any amount is greatly appreciated! Thanks Steemians!
LTC Adress : MPwB7dWWyd1XrKwjVvkxTdQmJzRbFHhDqk
BTC Adress : 3GPNXb51HAZzxi7RcyHdEXbHVrDeda5Vpr
ETH Adress: 0x379DA9A1AC969aFfE07B61011B503501950607a3
BCH Adress: qqqlezrrhyvmxp3qpa8xz68h57j5275y5sjktvph36