It was the best possible example of serendipity, that gringo word that means to do something weird, but with very positive consequences.
It all started half a century ago. In 1971, Richard Nixon, faced with the harassment of speculators, put an end to the gold standard by creating the “dollar standard”, without knowing exactly what he was doing, or the positive scope of the measure for the United States. At that time, it was even feared that the nation would lose its status as the head of the West as a result of the economic collapse. I remember, as if it were today, the nervousness of John Connally, his Secretary of the Treasury and former Governor of Texas, breaking one of the sacred “Bretton Woods” agreements. The world seemed to be falling apart.
Only nothing happened. At the beginning, it was not known what would happen, but, little by little, nations were comparing their currencies with the dollar and most of the transactions that were made in the world were denominated in the American currency, even the non-sanctified trade of the drug dealers. This freed the debt capacity of the United States to limits then unsuspected, without diminishing faith in the American currency. It was not strictly a question of objective data, but of the trust, always subjective, that American society aroused.
What was judged, really, were the quality of the Armed Forces, the best 20 universities on the planet, research centers, inventiveness, imagination, comfort, superhighways, great American cinema, and, above all, the legal security of one of the largest countries in the world.
Faced with that powerful image, the other alternatives could do nothing: the Chinese yuan, the Russian ruble, the Japanese yen, the British pound sterling. Even the euro, signed by 19 nations, including Germany and France, engines of continental Europe, plus five smuggling (Montenegro, Vatican, San Marino, Andorra and Monte Carlo), has not managed to get close to His Majesty, the US dollar.
I make this story because some nations, such as El Salvador, intend to open a false door to Bitcoin and other cryptocurrencies as an alternative to dollarization and that is not possible today. First, by the amount of annual remittances. Almost 150 billion dollars leave the United States every year for Latin America (of which about six thousand go to El Salvador and constitute 16% of the national GDP). Second, because of the speculative nature of Bitcoin. It lends itself to scam. Right now there are some 32,000 people who feel ripped off and have collectively sued one of the operators. The character managed a “Ponzi pyramid.” He had thousands of clients to whom he paid hefty interest, as long as fresh money came in. When his income failed, due to the volatility of the cryptocurrency, the scam was discovered. Carlo Ponzi was the Italian who perfected this type of fraud. He learned it from Baldomera Larra, the youngest daughter of Mariano José de Larra, the columnist for “Come back tomorrow,” the best-known chronicle in Spanish journalism about a cruel feature of the national bureaucracy.
It is true that today we are going through a period of inflation, but do not panic. It is exactly 5.37% per year. It is less than half the inflation that existed in the Carter and Reagan times, despite the fact that they did not have a pandemic. In any case, what exceeds 2% for a long period of time is negative, but without going beyond that line. Japan has passed and its economy has not grown for a good number of years, although the percentage of unemployed is low: less than 4% of the workforce. In short, until the arrival of Donald Trump to power, with his lies about the “fraudulent elections”, it did not seem that anything or anyone endangered the US leadership. It is no longer known ..