“We require a commitment from those countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.” As readers can hopefully gather, President-elect Donald Trump posted the latter on Truth Social.
Readers also hopefully recognize that Trump governs much better than he talks, or that a separation of powers results in Trump governing much better than he talks. If the previous sentence weren’t true, then always forward-looking U.S. (and global) stock markets would have already corrected in a way that would that would make 1929, 1987 and 2008 seem tame by comparison.
The free flow of goods is the ultimate driver of economic progress precisely because it signals the humans who drive all progress doing the work that most associates with their unique skills and intelligence. Still, Trump’s demands are worth addressing as a way of making a case for a stable dollar such that Trump would never feel the need to demand such greenback fealty in the first place.
To understand money it has to be understood that no one buys, sells, borrows, or lends with “money.” Underlying every transaction with money is the movement of actual goods, services and labor. With borrowing, an individual is seeking near-term access to resources from a lender who is willing to give up resource access in the near term in return for greater access (money borrowed plus interest) in the future.
With buying and selling, the seller accepts money in return for goods, services and labor in order to attain goods, services and labor of roughly equal value. Applying the latter to Trump’s demands, he could no more force BRICS countries to use dollars as a medium of exchange than BRICS countries could force their people to use BRICS currencies like the ruble (Russia) rupee (India), real (Brazil), or rial (Iran).
Currencies don’t circulate by decree, rather production buys production. Since it does, the logical corollary to the previous truth is that trusted currencies are a global effect of production.
What this means for President-elect Trump, and crucially for his nominated Treasury secretary in Scott Bessent, is that Trump doesn’t need to nor can he demand the dollar’s usage in China any more than Xi Jinping can demand circulation of the yuan. That said, presidents get the dollar they want. Since they do, Trump and Bessent can ensure that the BRICS won’t replace the dollar by making dollar-price stability their policy.
Notable about such a policy from Trump is that it would pair well with his Administration’s public embrace of cryptocurrencies more broadly. About the latter, The Digital Chamber recently released a report indicating that stablecoins are backed by the dollar to the tune of 98%. Translated, stablecoins pursue coin-price stability through their peg to the dollar.
The above truth rates further thought in light of Digital Chamber founder & CEO Perianne Boring’s frequently moving stories about the growing ability of people in unfree locales like Afghanistan to hold onto and move wealth that is stored in crypto exchange mediums. Which is a reminder that in pursuing dollar-price stability, Trump and Bessent would be providing the rest of the world not just with a stable medium (the dollar) to measure and exchange wealth with, they’d crucially be providing that same world with a way to escape the very real theft that is currency devaluation.
In short, Trump can vivify his decree by making a stable dollar his Administration’s policy. If so, the growth he’s promised stateside will have global qualities.
