Money is economic energy.

Whoever concentrates energy best becomes the winner.

Tens of thousands of years ago, humans were somewhat unremarkable animals.

We’d mastered hurling stones and tossing spears fairly accurately, and had moved on to storing energy in bows that could launch arrows even more effectively.

Fire became an even better trick—a puny human could destroy a forest with the strike of flint on steel. Our next step was to concentrate fire into a tube that we called a gun and launch projectiles or blow things to bits with it.

What has this to do with the mighty dollar?

Well, concentrating energy doesn’t come cheap—there are raw materials to assemble and labor to pay to set it all in motion. Conquest to grow the economic base was expensive—kings had bled their peasants dry through taxes in these pursuits.

Coming to the end of World War 2, the nations of Europe had gone off the gold standard and printed money like drunken sailors to pay for their murders.

At this well-chosen moment, America swooped in, fresh, unmolested, and possessed of most of the world’s gold reserves stacked neatly in the vault at Fort Knox.

It was in this asymmetrically skewed environment that the soon-to-be victorious allied forces assembled at Brenton Woods to thrash out a new economic order for the world. The result was the IMF and other financial bodies. America had the concentrated economic muscle of the only actual store of value at that time—gold—to see its will done. The decree was that gold would back the dollar at the fixed rate of $35/ounce, and the dollar would be the world’s reserve currency. This meant that all other currencies would float in value against the dollar… convertible into gold.

By the late 60s, America had got into two tangles—the first with Korea and then with Vietnam—both surrogates for the arm wrestle they were having with Russia, who backed these South East Asian opponents.

Did I mention that wars are expensive?

By 1971, with gold reserves leeching away to pay for Vietnam, America needed a break. Fortunately, when you’re the world’s most nuclear-armed super-power, you get to call the shots—so, out with gold and in with paper. Nixon announced an end to the gold standard.

Remember energy concentration?

The worlds of finance and military domination had come to rely heavily on oil, the most extensive known world reserves of which were under the feet of the Saud royal family.

Uncle Sam arranged it so that the Sauds would become unimaginably wealthy so long as they quoted oil prices only in US Dollars… or else!

In return, the House of Saud family loaned their name to the kingdom and became fabulously wealthy. Any country that wanted oil—and it turns out all countries wanted the stuff—needed first to get their hands on US Dollars. This meant selling something of value for Dollars so that all trade shifted into dollars—now, you will recall, nothing but unbacked printed paper.

This kept Russia out of the middle east since they first needed to lay their hands on the currency of their arch-rival before any attempt could be made to grease the wheels of influence and conquest.

Iraq tried their hand at quoting oil in Euros currencies other than the dollar, and that went well, didn’t it?

But, for how long can this Dollar arrangement last?

The thesis is that those who concentrate energy win.

Saudi Arabia is no longer the pivot for global oil reserves, and Russia has cleared dollars from their treasury.

Bitcoin is electrical energy spun into digital gold.

I’m generally not a betting man, but I’m prepared to venture a firm opinion on what happens next.