What Stands Behind the Dollar?

by BWK ~ May 29, 2008

“A Real Fly on the Wall at Bretton Woods”

Ah yes…that age-old question…

“And, in the age where we don’t have oil, industry, or military might, ask Alan Greenspan what stands behind the dollar now.”

In an age when the US lacks energy, industry or military might… What stands behind the dollar now?

I have long tried to imagine the discussion at Bretton Woods in July 1944. US, British & Canadian troops had just landed in France. Germany was bleeding white on the Russian Front. The Japanese Empire was dying in the Pacific. Everyone knew that there was hard fighting ahead. But everyone also knew that the Axis was going to be defeated, and the Allied nations would win the war.

So 730 delegates from 44 Allied nations gathered in New Hampshire to chart the future course of the world monetary system.

There are, of course, reports and summaries of what people said for the record. But what did the US delegates REALLY say at Bretton Woods? Let’s just imagine…………

“OK, everyone. Nice to see you all. Hey, did you see the invasion force at Normandy last month? Can you do that? No? Oh. Well, we did that. And we can do it again.

“How about that industrial base back home, eh? Those Rosie the Riveter girls sure can knock out the old landing craft. How’s your industrial base? Oh. Well, that’s OK.

“And it’s a good thing we had all those bombers in the 8th Air Force in England, huh? Yep. Those bombers just turn the sky black, don’t they? And how about that steel rain when the bombs come whistling down? You want area bombing? We have area bombing. On a good day, we can do precision bombing too. Can you do precision bombing? No? Oh.

“And we have 200 submarines in the Pacific. Do you have 200 submarines? No? Oh, gee.

“Overall, we have a 2,000 ship navy, with over 100 aircraft carriers. Do you have a 2,000 ship navy, with over 100 aircraft carriers? No? Oh. That’s OK. Not everyone can have a 2,000 ship navy. Or 100 aircraft carriers.

“And have you heard about the B-29? It’s an intercontinental bomber. Yep. Takes off from the US, and bombs another continent. We’re going to build a lot of those B-29s. Do you have B-29s? No? Oh.

“And I can’t get into details, but the US has this really big program to develop the next generation of weapons. It’s all classified, so I can’t talk about it. But we have all the best physicists and chemists and mathematicians working on it. Really, there are so many brilliant minds working on it that you just can’t find a decent physicist or chemist or mathematician any more. Do you have one of those programs? No? Oh.

“And how about all that gold in the US government vaults. Back in 1933 President Roosevelt collected all the gold from every person in the US. All of it. The whole national treasure. It’s all under our control now. The Supreme Court said it was OK, so it’s even legal. Now we have just thousands of tons of gold. Do you have thousands of tons of gold? No? Oh.

“OK everyone, let’s get down to work. I propose that we make the US dollar the world’s reserve currency. Any questions? No? Oh.”

Until we meet again,

Byron King

Note: Byron King is a frequent contributor to the free e-letter Whiskey & Gunpowder. To receive daily insights into energy, oil, commodities and other natural resources sign up here!