How the U.S.-Led Global Economic Order Was Built to Collapse

The American Dream lives on in cyberspace

What happens when a nation consumes more than it produces — and is never forced to stop? The answer lies at the heart of the U.S.-led global economic system, one that has functioned for decades on imbalance and trust.

But that trust is eroding, and with it, the foundations of the system itself.

Two Countries, Two Trajectories

Let’s start with a simple comparison:

• Country A produces more than it consumes. It exports goods, accumulates foreign currency, and builds capital through savings and investment.
• Country B consumes more than it produces. It imports more than it exports, running persistent trade deficits.

Over time, Country A grows wealthier. Its industries strengthen, its savings grow, and it accumulates real assets. Meanwhile, Country B enjoys short-term comfort — living beyond its means — but it comes at the cost of long-term decline. Wealth leaks out. Industry withers. Debt piles up.

This arrangement is only sustainable if the overconsumption is temporary and directed toward investments that enhance future productivity. But if it isn’t — if consumption outpaces production indefinitely — Country B is doomed to bleed itself dry.

We can very simply understand this by looking at the fractional scale of an individual. Someone who spends more than they earn will eventually have nothing. Many assume this logic doesn’t apply to nation-states — but it absolutely does. The only difference, as we’ll explore, is that nations sometimes have the means to offload the consequences onto others.

Gold as Built-In Discipline

Historically, such imbalances were self-correcting under the gold standard (when gold was used as money). A country importing too much would lose gold reserves, forcing it to rein in spending or eventually end up broke. Gold served as an anchor —it was money that could not be cheated.

Post-WWII and Bretton Woods

After World War II, a new system was introduced: Bretton Woods. It preserved gold’s disciplining role but adapted it for a modernising world.

Under this system:

• The U.S. dollar became the global reserve currency.
• Other currencies were pegged to the dollar.
• The dollar, in turn, was pegged to gold at $35 per ounce.

This structure allowed international trade to scale using dollars instead of physical gold, which was cumbersome to transport across borders. The dollar functioned as a practical, scalable proxy for gold.

But crucially, there was still a check in place: foreign governments and central banks could redeem dollars for gold at any time. This convertibility acted as a constraint on U.S. monetary policy — ensuring that the U.S. couldn’t issue dollars arbitrarily without risking depletion of its gold reserves.

So long as the U.S. honored the peg, trust in the system was maintained.

Trusting the Issuer

But as practical and scalable as this system was, it came with an inherent flaw: it relied entirely on trust in the issuer — the United States.

The allure was irresistible. As the steward of the world reserve currency, the U.S. could now, in theory, acquire real goods, fund foreign interventions, and wage wars — not by producing value, but by simply issuing dollars out of nothing.

And over time, that’s exactly what it began to do.

At first, few noticed. But as trade expanded, foreign nations strangely began accumulating larger and larger dollar reserves. What had once been a manageable balance began to feel suspiciously lopsided…

It was like buying secondhand tickets to a concert. Each ticket claims a seat — but eventually, you start to wonder: are there more tickets in circulation than seats in the arena?

Foreign governments saw the signs. Dollar balances around the world were growing far faster than U.S. gold reserves. As a result, nations began redeeming their dollars for physical gold — calling the U.S. on its promise. By the late 1960s, gold was flowing out of U.S. vaults at an alarming rate.

The Nixon Shock in 1971

The gold backing — once a pillar of trust — had become a constraint for the United States, and increasingly, an inconvenience. Foreign nations were redeeming their dollars for gold. Reserves were draining. Trust in the system was eroding — and something had to give.

At any point, the U.S. could have acted on the early warning signs. It could have reined in spending, restored discipline, and returned to a sustainable path — producing more, consuming less, and honoring its commitment to the global monetary order.

But it didn’t.

Instead, in 1971, under President Nixon, the U.S. chose to double down on the unsustainable path. It suspended the convertibility of dollars to gold completely— thus defaulting on the very promise that had anchored the entire system.

With a signature on a paper, the gold standard was gone. The dollar was no longer a claim on anything tangible. And the global economic order was left floating — backed by nothing but trust in U.S. leadership.

However, despite abandoning gold, the system didn’t collapse overnight. Why? Because the U.S. had by then cemented overwhelming military, technological, and geopolitical dominance.

• Oil-producing nations were convinced (or coerced) into pricing oil in dollars.
• Offshore “Eurodollar” markets emerged.
• Global banks, corporations, and countries needed dollars to transact internationally.

This system — known as the Petrodollar system — institutionalised the dollar’s dominance, embedding it deep into the machinery of global trade. Oil-producing nations priced their exports in dollars, and surplus revenues were recycled back into U.S. assets.

And so, the imbalance just persisted… Neither U.S. allies nor adversaries held the leverage to challenge it. No one had the economic, military, or geopolitical weight to force the U.S. back into the agreement it had abandoned.

The Great Trade-Off

From that point forward, it was no longer a secret: the United States was playing by a different set of rules.

It could consume without producing, borrow without saving, and print without restraint. The rest of the world, by contrast, still had to produce, export, and save to earn the very dollars they needed to participate in global trade.

But this privilege came at a cost — a ticking bomb buried in the foundation of the U.S. economy.

The ability to consume without producing and borrow without saving may have extended American dominance abroad, but it had corrosive effects at home:

• Deindustrialisation. U.S. manufacturing was hollowed out and shipped overseas (aka off-shoring).
• Financialisation. Capital abandoned productive industry and flowed into speculation and leverage.
• Asset bubbles. Markets inflated far beyond the real economy.
• Debt dependence. Households and businesses replaced savings with layers of credit.
• Wealth inequality. A widening chasm opened between the financial elite and the average American.

For a time, the system worked. Earlier generations reaped the benefits — cheap goods, rising assets, global power. But underneath it all, pressure kept building. The consequences weren’t avoided. They were simply deferred — passed to the next generation like a live grenade.

Feeding on the World’s Success

While the U.S. doubled down on consumption and debt, many other nations was forced on a different, albeit more virtuous path:

• They produced and exported real stuff.
• They built real industries and infrastructure.
• They saved and accumulated dollar-based assets like U.S. Treasuries.

For eight decades, foreign nations shipped real goods to the United States — cars, electronics, oil, raw materials — and received U.S. dollars in return.

Those dollars, along with U.S. liabilities like Treasuries, were stockpiled as reserves — trusted stores of value in the global financial system.

Meanwhile, the U.S. could pay for virtually anything it wanted by issuing more of its own currency. And the very reserves held abroad could be quietly devalued at any time, simply by printing more dollars.

The world sent value. In return, the U.S. mostly sent empty promises — backed not by goods or gold, but by the illusion of stability — while retaining the power to debase those promises at will.

This dynamic allowed the U.S. to feed off the productivity of others — even its allies. And for many decades, the world accepted this bargain — under the understanding that the U.S. would uphold a certain moral order and shared values; that it would share some of the fruits of its privileged position through innovation, opportunity, and spread the mantra of freedom and self-realisation.

Even if the trade imbalance would never fully equalise, there was hope that U.S. leadership would channel its unique position toward building a better, more inclusive world. But the illusion that this could continue indefinitely eventually caught up with reality — and faster than most expected.

Major adversaries with opposing values were held at bay and found ways to shield themselves (this was good). But to the extent that the unsustainability of this order wasn’t felt at home — or was softened for allies — it was deeply felt elsewhere. The ones who pulled the short straw were vulnerable, developing nations — countries with little political leverage, forced to bear the brunt of the downstream effects of a system designed around someone else’s privilege.

But now, this entire understanding is eroding.

Not only does the U.S. continue to enjoy the extraordinary privilege of consuming more than it produces, it now appears unwilling to even symbolically stand for the principles that once justified its role at the center of the global order.

The system is fraying from within. Debt is no longer issued to fund future productivity — but increasingly just to service the debt of the past. The illusion of sustainability are too large to ignore anymore.

The dollars that once bought one ounce of gold now buys only 1/85th of an ounce — a 98% decline in value. And the rest of the world is beginning to see it for what it is.

The Empire in Decline

What we’re witnessing now is very likely the final act of a global order in retreat. Trump is the epitome of a collapsing empire — a mad king clinging to a fading illusion of control, wielding tariffs, threats, and military protection.

He and his gang of lunatics are the system’s final scream. But enforcement is all they have left — and a system based on coercion alone cannot sustain itself.

The MAGA movement has proven to be willing to disrupt every norm, bend every principle, and sow chaos wherever necessary — anything to avoid facing the one truth:

This was their own doing.

The world is now craving a new world currency. They no longer wants to finance U.S. deficits.

History on repeat — or no?

Had this been any other moment in history, the coming reset would follow a familiar script: A new superpower steps up, a new global monetary agreement is reached, and a new world reserve currency is issued — backed by a commodity like gold to once again restore trust.

But while such a reset might buy another 50–100 years of stability, it would ultimately suffer the same fate. Because once again, the system would rest on trust in the issuer — and over time, that trust always breaks.

What’s different this time is that, for the first time in history, the world has the option to adopt a neutral reserve currency — one that shares the key properties of physical gold, but exists entirely in cyberspace.

Because it lives natively in the digital realm, it can be transferred globally without intermediaries — eliminating the need for a derivative issuer to facilitate global trade. For the first time, trust doesn’t have to rest in a single superpower nation. It can rest in mathematical code.

This has the potential to unchain humanity from the destructive cycles of temporary stability followed by war, and set us on a path where global trade can flourish indefinitely — anchored in genuine fairness.

Neutral global reserve currency

Most crucially, adopting this new neutral reserve currency does not require a new global accord or permission from those in power. Each individual who opts out of the old system and chooses to build within the new one brings us closer to a sustainable, transparent, and fairer economic future — one that has the potential to break the patterns of the past and and set us all on a path where global trade can flourish indefinitely.

And the incentives align beautifully. A new economic world order where:

• you cannot systemically consume more than you produce,
• cooperation and long-term savings are rewarded
• the environment is no longer sacrificed just to sustain the illusion of growth, and
• the mechanisms that once funnelled wealth upward — from the many to the few — are dismantled at their core.

The American Dream lives on—stronger than ever—in cyberspace. This time it’s protected by incorruptible proof-of-work.

We are on the cusp of something monumental.
Don’t laugh, but stay tuned.

For more on what this shift really means, read: Satoshi’s Gift to the World: A Trojan Horse for Peace