For the majority of the 20th Century, the United States dollar existed as the world’s sole reserve currency. Gold and silver were eschewed for ‘Benjamin’s', and the synthesis of a global superpower was complete. The US dollar became the only real way to purchase important commodities such as oil. Printing of dollars could go on with reckless imprudence for the simple reason that the Petro-dollar system, and America’s virtual monopoly on military power, provided a backing platform.
Americans’ standard of living has remained fairly constant because of the hegemony of the Greenback, even though the value of the US dollar has declined so markedly over the last 100 years (basically since the inception of the Federal Reserve) However, with such reckless actions as quantitative easing and vast printing of money, the game may be up for the dollar. Here is the worth of a dollar over time; the sad story of Mr Greenback, presented in convenient pictorial format:
Hardly pleasant viewing for anybody with a vested interest in the dollar. Which is everybody, because that is the currency that almost every commodity is priced in. Ever wondered why fuel, food, clothing etc are getting more and more expensive. The above picture tells you why.
Here is the US dollar index from 2000-2007 (image credits to chicotown.com)
And finally, here is the USD index from 2008-2011:
There you have it folks, the miserable worth of a dollar over time. Au revoir Mr Greenback, you have been a good friend, and we wish you all the best in the afterlife of reject, worthless currencies.
Here is a fitting image, straight from the Great Depression era, that may become altogether too real for America in this day and age: