During his 2024 presidential campaign Donald Trump repeatedly and in grave terms highlighted the possibility of the US dollar losing its world reserve currency status. This occurred at summits with business leaders at the New York and Chicago Economic Clubs.Trump occupies a rather unique position in this debate since he recognizes the real possibility of the dollar losing its world currency status, he opposes this change and wishes to prevent it, and yet he is not a paradigmatic member of the ruling class. However mainstream he is—today or in the past—he doesn’t possess the establishment credentials of a Ben Bernanke, for instance.Since Trump doesn’t want the dollar to lose reserve currency status, his acknowledgment that this is a real possibility should at least serve as ammunition

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

The monetary and banking system plays an incredibly important role in contemporary economies. Knowledge of how this system functions should therefore be spread as widely as possible, yet the education system barely instructs its students about this subject, if indeed it instructs them about it at all. This article aims to contribute to bridging this gap by giving a basic overview of how the system of money creation and banking works today. The reader may also be interested in studying the discussion of alternative systems, however, this article will focus only on describing the dominant system of the present.Open Market Operations and Fractional-Reserve Banking (FRB)The central bank has a monopoly of issuing notes, that is, physical currency. The difference between the face value of the

President Nayib Bukele of El Salvador recently spoke at the Conservative Political Action Conference, receiving a hero’s welcome in the wake of his re-election victory. Yet he also delivered some hard truths as part of his speech that conservatives would do well to consider.While conceding that high taxes are a problem, Bukele said the deeper problem is that Americans “pay high taxes only to uphold the illusion that you are funding the government, which you are not.” Related to this, he gave a brilliant concise description of how the American government is financed:…by treasury bonds, paper. And who buys the treasury bonds? Mostly the Fed. And how does the fed buy them? By printing money! But what backing does the Fed have for that money being printed? The treasury bonds themselves! So

Gross domestic product (GDP) is the most common measure of national wealth and economic growth. Yet the layman—and even many businessmen and economists—is taken aback when mainstream commentators and professionals get very excited about changes to GDP, which seem to have little to no impact on real economic conditions.

Washington is paranoid of current Chinese actions. However, it is Washington that has been the aggressor in world affairs.
Original Article: "China’s Maneuvering and the New Balance of Power"

China is taking bold actions and creating a new paradigm on the world stage. For about a decade, Beijing has been responsible for developing new trade networks; the famous Belt and Road Initiative has been analyzed extensively. Their trade networks are growing ever deeper, with new agreements to trade in renminbi as opposed to dollars.
China is developing powerful alternative institutions to those of the West, such as the Shanghai Cooperation Organisation and the BRICS countries (Brazil, Russia, India, China, and South Africa). They have adopted a more confident and assertive security posture in response to the Biden administration’s policies on Taiwan. However, new military measures have been far outweighed by fresh diplomatic overtures, with Beijing striking an impressive deal between

Although the Bank of England is largely responsible for inflation in the UK, its leaders blame British consumers and workers for the price increases.

Original Article: "Bank of England Economist: Britons Need to Accept That They’re Poorer"

Speaking on a Columbia University Law School podcast, the chief economist of the Bank of England, Huw Pill, said Britons “need to accept” that they have been made poorer by the inflation perpetrated by the central bank. Price inflation today is a result of the record money creation by central banks, especially in the West, from 2020 onward. This was rationalized and justified by the mainstream narrative on covid.

The following are choice comments from the podcast.
If the cost of what you’re buying has gone up compared to what you’re selling, you’re going to be worse off.
So somehow in the UK, someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing the energy costs through on to customers.

The story of the failure of Silicon Valley Bank is the story of nearly every bank failure. Fractional reserve banking invites the risky behavior that brings down the banking system.

Original Article: "Silicon Valley Bank and the Failure of Fractional Reserve Banking"
This Audio Mises Wire is generously sponsored by Christopher Condon.

With the apparent failure of Silicon Valley Bank (SVB) potentially causing a crisis in the American and even the global financial system, we will be treated to all manner of explanations, very few of which will accurately state the cause of these troubles: fractional reserve banking.
In modern banking there is little separation between warehouse and investment banking. The downside of investment banking is a potential loss of money since no investment can be a sure bet. The upside is the potential for a good return on money, the reward of taking on a degree of risk. In warehouse banking, such as personal or business checking accounts, the customer is not expecting any loss due to actions taken by the bank. The service rendered here is not expert investment advice; rather it is secure

As the Biden administration continues to inflate the dollar, other nations are questioning the existence of the petrodollar.

Original Article: "Saudi Arabia’s Quandary: The End of the Petrodollar"
This Audio Mises Wire is generously sponsored by Christopher Condon.

In 1971 Richard Nixon took the US off the last feeble vestiges of the gold standard, otherwise known as the Bretton Woods Agreement. That system had been a bizarre gold-dollar hybrid where the dollar was the world reserve currency but the US agreed to keep the dollar backed by gold. Henry Hazlitt’s book From Bretton Woods to World Inflation explains the consequences of this situation well.
The end of this system left a vacuum at the heart of world financial affairs, one that needed to be filled quickly. The dollar, now unmoored by gold, remained the default currency for international trade, but without the confidence derived from its former gold backing, the US needed to bolster its credibility lest other more enticing options appeared to displace the dollar’s hegemony.
During the 1973

In a market economy, prices are determined by supply and demand: how much of a quantity is being offered and how much value people place on that good relative to other goods. However, with great government power comes potential for great government irresponsibility: artificially lowering prices for some either through outright money printing or by taxing some to subsidize others.

Fundamentally, inflation is fraud. The central government or bank printing more money lessens the value of the money already in circulation. A truckload of sand isn’t particularly valuable in Saudi Arabia. An increased supply of money means ultimately that prices denominated in that money will go up.