Powering Money: Why Trump is Wrong About Backing the World Reserve Currency with Crypto

“A lie keeps growing and growing until it’s as plain as the nose on your face.” —Aleksandr Solzhenitsyn, The Gulag Archipelago

We are living through a historical anomaly. Unless we change course, future generations will look back on this period as Peak AI (Peak Asinine Intelligence), where one nation’s debt-backed currency was held by world governments as a store of value for international trade. A period where, for greed, people allowed lending, debt, and interest to get out of control and reverse logic. A period where people lost their minds and their money on a bluff that debt in the form of U.S. Treasuries was collateral.

From the 700 BC Lydian gold coins to the Persian gold daric, gold evolved as the backbone of early financial systems. Its intrinsic value has never relied on a single government’s stability, and it has always functioned as a de facto reserve for settling debts and trade imbalances in human societies. The gold standard, officially adopted by Britain in 1816, was a continuation of this logic, with currencies pegged to gold to ensure trust.

Enter modern-day finance, post-World War II. The 1944 Bretton Woods Agreement, made by 44 nations at a meeting in New Hampshire, established the international monetary system, the International Monetary Fund, and the World Bank. This system pegged currencies to the dollar, convertible to gold at a fixed rate of $35/oz. It lasted just 26 years before it was broken by U.S. politicians and administrators.

In 1971, the Bretton Woods Agreement was paused temporarily, and is still paused today. Jeffrey E. Garten chronicled the pivotal weekend of August 13–15, 1971, when President Richard Nixon and his economic advisors met at Camp David to address a looming financial crisis and reshape the global monetary system. The U.S. could no longer sustain gold convertibility due to balance-of-payments issues. With a dwindling U.S. gold supply, rising inflation, and trade deficits, Nixon’s team unilaterally decided to end the dollar’s link to gold.

Over three intense days, the group crafted Nixon’s “New Economic Policy,” that ended dollar-gold convertibility, imposed a 90-day wage and price freeze, and added a 10% import surcharge. These moves shocked allies, disrupted markets, and dismantled Bretton Woods, ushering in floating exchange rates. Garten portrays the personalities and tensions—highlighting how human dynamics drove this historic shift. America was forced to rely on international partners, which set the stage for modern globalization with lasting implications.

With the dollar no longer tied to gold, it needed a new anchor. So the U.S. struck a deal whereby Saudi Arabia would price its oil exports exclusively in U.S. dollars and invest surplus oil revenues into U.S. Treasury bonds. By agreeing to dollar-only oil sales, Saudi Arabia inadvertently dragged the rest of OPEC with them (Kuwait, Iran, and UAE), creating a de facto petrodollar standard for the world. This supercharged dollar demand and secured the world reserve currency for U.S. global dominance. The Saudis recycled petrodollars into Treasuries (hundreds of billions over decades), which gave the U.S. cheap borrowing power, funding deficits and military spending.

As you can imagine, this arrangement was fraught with tensions. In 2000, Brazil, Russia, India, China formed an alliance out of a desire to shift global power away from Western dominance. The first four countries created the BRIC and South Africa added the “S” when it joined in 2010. Geopolitically, the BRICS push back on U.S. hegemony, especially for Russia and China. In 2024, they added Egypt, Ethiopia, Iran, and United Arab Emirates (UAE), and Saudi Arabia is a maybe now. Over 20 countries, however, have expressed interest.

During Trump’s first presidential term, days before the 2017 BRICS summit, China announced the launching of a crude-oil futures contract priced in gold-backed yuan. Surpluses could easily be converted to gold through the exchanges in Shanghai and Hong Kong. In March, 2018, gold-backed petroyuan futures contracts began trading in China, threatening the U.S. petrodollar system. President Donald Trump spent months threatening tariffs on China for its “unfair” trade practices. In July, the trade war began until just before Covid19 swept the world, like a biological cold war.

Enter 2025, the White House Digital Assets Summit on March 7 where Trump laid out his plans to keep the dollar operating as the world’s reserve currency. “And last year, I promised to make America the Bitcoin superpower of the world and the crypto capital of the planet. And we’re taking historic action to deliver on that promise…As you know around the table, yesterday, I signed an executive order officially creating our Strategic Bitcoin Reserve, and this will be a virtual Fort Knox for digital gold to be housed within the United States Treasury,” Trump said.

He goes on to say the federal government is among the largest holders of Bitcoin, in the world, with as many as 200,000 Bitcoin obtained via various forms of law. These existing holdings, he said, will form the foundation of the “new reserve.” While the previous administration sold much of their confiscated Bitcoin for billions of dollars, Trump vows to hold these precious digits (insofar as you can hold bits) and explore new pathways to accumulate even more Bitcoin holdings, at no cost to taxpayers. In addition, Trump has directed federal agencies to conduct an inventory of all crypto assets confiscated by the U.S. government and figure out how to transfer them to the Treasury.

So, in case you’re not familiar with the narrative, Bitcoin was created by an anonymous guy with a stage name of Satoshi Nakamoto after the 2008 financial crisis. Hmmmm, I wonder who he could be? Banks were bailed out, currencies were devalued, and people were pissed about governments, banks, and regulators mishandling money. The idea was trustless money, the people’s money, that did not rely on government. It was for people who no longer believed in the dollar and debt-backed financial system, and wanted a way out of it, a way that was detached from it, money in the form of digits on a blockchain ledger.

Fast-forward to the present, and Bitcoin is suddenly a “new reserve asset” (all confiscated from people) very much attached to the dollar system. How did this happen? I found it most interesting when Trump said that David Sacks knows more about Bitcoin and AI than anybody he knows. Sacks started as part of the Paypal Mafia in the late 1990s, alongside Elon Musk and Peter Thiel. As noted by Sacks, Paypal’s original vision was to create a new kind of currency, and Bitcoin magically appeared and fulfilled his dream. It’s no wonder why Trump recruited him as AI and Crypto Czar in December of last year. Personally, I have always thought of Bitcoin as a PSYOP, and assumed it came out of a government department like DARPA.

The question I’ve been asking is are they trying to adopt a stable-coin standard in place of the petrodollar standard that replaced the gold standard, because they’ve lost petrodollar status for the world reserve currency? I got my answer when Scott Bessent spoke, “We’re going to position the United States as a leader among nations in the digital asset strategy…get ahead of the other nations in the digital age…use this authority to augment the assets side of the United States balance sheet…creating assets for the American people, while most past presidents have created debt…end the regulatory weaponization against digital assets…put a lot of thought into the stablecoin regime…And as President Trump has directed…keep the U.S. the dominant reserve currency in the world, and we will use stablecoins to do that.”

I believe this is articulated on the Tether company website. See for yourself… Tether USD₮ and US Treasury Dynamics. In February, Wall Street billionaire Howard Lutnick stepped down from his position as CEO of Cantor Fitzgerald, a prominent financial services firm, to assume the position of U.S. Secretary of Commerce. Before stepping down, he was also the primary custodian for Tether’s U.S. Treasury reserves, managing a significant portion of the assets that back USDT (ticker symbol for Tether). Cantor Fitzgerald is one of 24 primary dealers authorized to trade U.S. Treasury securities directly with the Federal Reserve Bank of New York. It handles over a quarter of Treasury trading. Isn’t this a bait and switch? Just asking. I’m no expert on manipulation but it looks like they are planning to pump crypto to sell U.S. Treasuries.

Notice the disregard for energy and its inputs like mining, labor, machinery, parts, transportation, production. Trump wants to “Drill, Baby, Drill” and get a lower oil price at the same time. Can more energy and labor inputs translate into cheaper product prices? Can he have his cake and eat it too? There is such a thing called Energy Return on Investment (EROI), which has been shrinking, not growing. Furthermore, Michael Ruppert said, “Energy, not money, is the root of all economic activity. Money represents only the ability to do work. By itself a dollar bill can do nothing. You cannot put it in your gas tank and expect your car to run. Energy is that which money symbolizes, whether it is the slave labor of centuries past which built civilizations that later perished, the food that comes to your table today, or the gasoline that goes into your car or the electricity that comes into your home. Money can grow infinitely. Energy cannot.”

I believe Ruppert was right. Without energy to run our economies, there is no monetary system and there is no reserve currency…there is the barter system and we are the energy. In this case, we’d need a lot better food, water, and health for our bodies. So the real question is what backs energy and labor? Because that’s the fuel for the economy. What backs the dollar is meaningless. The dollar’s debt-backed nature has artificially suppressed energy prices, making it seem as if energy is cheap and abundant, when it’s not. We should be backing our currency with that which guarantees energy production and good stewardship of that energy. This would shift the monetary system to reflect energy’s centrality by actively incentivizing the creation of usable energy as well as work/labor.

Think about it. Agriculture relies on energy for plowing, irrigation, and transportation. Industry needs energy to power factories and extract raw materials. Services depend on energy for computing, lighting, communication, etc. People need good healthy food and water to think and labor. Energy is required to perform work in any economy, on every scale. And if it’s valuable, people will be good stewards, careful not to waste it. The reserve currency should be in measure with how we allocate and trade the products of energy-driven processes; it should not be driven by debt which disincentivizes energy production and work/labor. If we truly want to evolve with Artificial Intelligence processes, en lieu of Asinine Intelligence and debt, then we have to reattach our money to something that cannot burn, with physical limits, that doesn’t drain the life blood from our economy.

But energy burns, too, you say. That’s true. We need something that serves as a proxy for energy, and gold is this proxy. The energy intensive process of mining and producing gold ties its value to energy costs, and never goes away. Extracting gold involves heavy machinery, drilling, and processing ore, all of which consume significant amounts of electricity and fuel. Historically, the difficulty and energy cost of mining contributed to gold’s scarcity and value. Therefore, its worth reflects the energy expended to produce it. So in a sense, gold embodies “stored energy,” making it a stable store of value compared to fiat currencies, which aren’t tied to physical constraints, deflate in value, and encourage inefficiency and waste.

Don’t be fooled by crypto. An energy-guzzling non-producing digital currency that is ultra-dependent on a myriad of real labor and energy inputs, and is inadvertently backed by a pile of debt in the form of U.S. Treasuries, is a mistake…unless, Trump backs Treasuries with gold. Without gold, it would be short-lived indeed, and would cause epic implosion and collapse of civilization when the debt behind it dies and/or the energy resources are exhausted. Civilizations collapse when they exhaust their energy resources (read Joseph Tainter’s book The Collapse of Complex Societies). It’s not something we can afford to waste, because we can’t really live in digital mansions and survive on digital food and water. If crypto were adapted as the reserve currency, it would severely deplete precious energy resources that we need to survive, and inflate the cost of everything into extinction.

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