Feehery: The value of money

Money can’t buy you love. But a stable currency can buy a nation relative stability for a long period of time.

Paper money is worthless without faith. Luckily for the United States, for about the last three-quarters of a century, the world has placed its faith in the full credit of the American people, its form of government, its ability to create a global rules-based system, and its economic power.

Being the world’s reserve currency is no sure thing and the American policy makers had to make tough decisions and play hard-ball in the aftermath of the Second World War.

The question today is quite simple: Can the world continue to entrust America with this tremendous responsibility? Will the American dollar continue to be safe harbor where other nations turn in times of trouble?

There are two threats to American currency hegemony. One is geo-political. The other is competition from a superior type of “money.”

The geo-political threat is well understood. Our enemies don’t want us to be on top anymore. The Chinese, especially, are tired of American supremacy and they are doing everything they can to undermine the United States and build up a military-industrial complex that can effectively compete with ours. But they are also investing in next-generation weapons, like robotics and AI, at a rate far higher than we are. Both the Chinese and the Russians are in a constant state of cold war against America and the capitalist system, launching continuous cyber-attacks, using sophisticated tactics to undermine our democracy and turn our citizens against one-another. The COVID-19 propaganda campaign was particularly effective in destroying America’s confidence in America.

The other threat to America’s reserve currency status is less well understood. Cryptocurrencies, especially Bitcoin, offer an alternative to the value of the dollar not because it is trying to undermine American democracy, but because it is a far superior type of money. Since Richard Nixon closed the gold window in the early 1970s, the world’s currency exchanges have floated, mostly pegged to the dollar, but not attached formally to gold reserves. It is an exercise in faith that the world order will continue to cooperate in delivering economic value.

Every civilization has developed a type of money as a kind of ledger of value. Instead of hauling a cow to trade for other goods, societies developed fungible money, usually based on gold or some other precious commodity that contained the following attributes including scarcity, portability, durability, verifiability and recognizability.

Bitcoin is perhaps the most sophisticated ledger of value ever developed in the history of the world. It is by its very nature scarce, with only a finite number of Bitcoins that can ever be developed. It is portable, durable, verifiable and becoming increasing recognizable and accepted the world over. Because it is open-sourced, it is a citizen of the world. And it will soon become the reserve currency of the elite, especially if American policy makers continue down the path of reckless inflation.

You can’t call the dollar scarce. Not any more. Not with America facing a $23 trillion debt. Not with the Biden administration spending like drunken sailors. Not with socialists pushing schemes to provide free money to everybody, regardless of whether they work or not.

Global policy makers saw in Donald Trump a threat to the rules-based system. He threatened to make America first, which globalists saw as a step towards dismantling a carefully constructed monetary system, developed over the last 75 years. And that is why they did everything they could to beat him in the last election.

Social unrest inevitably follows when currencies lose their value. Biden ought to be careful with his spending plans. The threats to the dollar are real and growing.

Feehery is a partner at EFB Advocacy and blogs at www.thefeeherytheory.com. He served as spokesman to former Speaker Dennis Hastert (R-Ill.), as communications director to former Rep. Tom DeLay (R-Texas) when he was majority whip and as a speechwriter to former House Minority Leader Bob Michel (R-Ill.).