Unit of Account

the language of money

Just like people in America benefit from English being the most popular language in the world, the US Dollar benefits from being the most popular unit of account in the world. If you go to a grocery store in Italy, the prices of the food will be listed in Euros, but the value of a Euro is based on the dollar. This is true for every currency because in the 20th century the world decided first that the global reserve currency would be US dollars and no longer British pounds and second that it would no longer be tethered to gold.

If you were not already seeing how all money is based on nothing but sheer belief, perhaps now that may become more clear. Everything was based on gold and then everything was based on dollars, pretty much just because the US could say so. Good for us. Bad for the world. Actually, not great for us either. Great for the US government. The whole world is basing their money off of ours as the ultimate unit of value, and the US government can print as many of those units as often as it wants, as we have seen with the trillions of dollars that have been printed in response to the pandemic this year.

Itโ€™s a glass castle, a house of cards. This is hard to realize because the people in power donโ€™t want you to know that. Many of them are in too much denial to realize it themselves. They just know that it seems to be working fine now, but one day it wonโ€™t. When that day comes, they will be fine, but common people will struggle. This has already been demonstrated in countries like India and Venezuela where certain bills have been made invalid overnight and the purchasing power of a currency can has been halved in a year. I mentioned that some believe Bitcoin will eventually become the global unit of account. For now, it is dollars. We will see if that lasts.