Lyn Alden - MASSIVE DOLLAR CRISIS COMING!

Lyn Alden - MASSIVE DOLLAR CRISIS COMING!

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In this video, Lyn Alden digs into the history of international pacts that shaped global trade. She also narrates how the world transited from the gold-based standard to an all-fiat system.

Here is the review of the video:

Throughout global financial history, some structures and agreements that shape national trade occur, which see leading powers at the time mostly influence the direction of the treaties. So, in the past, the global financial system was mostly based on the gold standard, central banks around the world had gold in their vaults. They issued paper against the gold and the UK currency as the global reserve currency; that is, it was the most widely held and accepted. But the underlying gold was the actual kind of true reserve currency.

But during Post War I and World War II, the United States became the leading superpower as they were the least damaged by the war and emerged more powerful from it, with a very large industrial base. Also, plenty of gold was transported to the United States by allies to protect it during the war, and the US also confiscated gold from its citizens. All these put the US in a privileged position. So in 1944, countries around the world were planning how to rebound the order of the global system.

There were two competing ideas. One was the bank-core idea that there would be a neutral currency unit based on gold or based on a basket of currencies, which would be used as the unit of currencies globally. But the alternative idea put forth by the US was that the dollar would be backed by gold while other currencies would be backed by the dollar. They also maintained that the dollar would be the global unit of account. So, from 1944 to 1971, we had the Bretton Woods system which had all currencies pegged to the dollars and we had a fixed exchange rate situation.

But the problem was that the US was issuing more and more treasuries and more and more dollars while it was not accumulating more gold. And because of gold redemption by international participants, Americans couldn't own gold, and they couldn't redeem the dollar for gold, but international creditors could. So, the US gold reserves kept dropping while dollar treasuries were increasing. In 1971, European countries started calling the bluff and asked for redemption. Consequently, the world became fiat, meaning they're not pegged to any commodity

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