The Rise and Future of the World's Reserve Currency

Nearly 9 out of 10 currency trades on Earth use the US dollar. So how did one country's money become everyone's money? From the Bretton Woods deal of 1944 to the Nixon Shock and the secret petrodollar deal with Saudi Arabia, this is the story of how the dollar took over the world. In 1944, 44 countries met at a hotel in New Hampshire to design the world's money system after World War II. Britain's John Maynard Keynes wanted a brand-new world currency called the bancor. America's Harry Dexter White wanted the dollar, backed by gold at $35 an ounce. America had the gold, so America won. Then the promises outgrew the gold. France started cashing in, the London Gold Pool collapsed, and in 1971 Richard Nixon closed the gold window for good. Instead of collapsing, the dollar found a new anchor: oil. Today the dollar is still on one side of 89% of all currency trades, even as its share of world reserves slowly slips. Chapters The U.S. dollar became the world's dominant reserve currency through a series of pivotal global shifts after 1944. We examine the trajectory of this monetary dominance, beginning with the post-war strength established by the Bretton Woods agreement. By tracing the decoupling from gold in 1971 and the subsequent oil crisis of 1973, we look at how the dollar maintained its position despite significant instability in the global economy. This breakdown is for anyone interested in the mechanics of how a national currency became an international standard. It serves as a study in economic history, illustrating how financial systems adapt to geopolitical pressure rather than remaining static. Subscribe for weekly economic history breakdowns, and comment below on which financial topics you want to see covered next. 0:00 How one country's money became everyone's money 0:28 Chapter 1: The World Owes America 1:08 Chapter 2: The Battle of Bretton Woods 2:46 Chapter 3: Dollars Everywhere 3:51 Chapter 4: The French Problem 5:09 Chapter 5: The Nixon Shock 6:03 Chapter 6: Oil Saves the Dollar 7:16 Chapter 7: The Dollar Today Sources: IMF COFER (currency composition of official foreign exchange reserves), BIS Triennial Central Bank Survey (FX turnover), US Treasury TIC data, Bloomberg (2016) on Saudi Treasury holdings, Federal Reserve History on Bretton Woods and the Nixon Shock. #USDollar #Economics #MoneyExplained