In today’s world, the strength of the dollar isn’t just a number on a piece of paper—it’s the backbone of America’s power on the global stage. This is a tale that goes beyond mere economics; it’s about national security and how the might of a currency can shape a nation’s influence around the world. Steve Forbes recently shared insights on how a strong, reliable dollar is essential for America’s security and status among nations.
National security experts often focus on military power, armaments, and advanced technology. They fixate on intelligence gathering and military forces, especially with the buzz around artificial intelligence and the role of drones in modern warfare. However, the pivotal role of a nation’s currency is frequently overlooked. Stability and trust in a currency, like the dollar, are what allow a country to wield significant economic and military strength. A robust dollar does not just float; it anchors the U.S. economy, providing the resources needed to maintain military readiness and ensure national security.
Strong and stable currencies pave the way for economic growth and help build robust financial institutions. They create healthy domestic markets and encourage international trade by making it easier to establish supply chains. This was true in the past when the United States emerged as a financial powerhouse thanks to the trust placed in its currency. Historical examples show that the strength of a country’s financial system often correlates with its global influence.
Take, for instance, the small but mighty Netherlands, which, centuries ago, used its reliable currency to become a global economic force, even overpowering larger nations. The Dutch were so effective that they opened the world’s first stock exchange in Amsterdam back in 1602. Fast forward a bit, and you see the impact of this Dutch financial acumen in England, thanks to William of Orange. When he ascended to the throne, he brought with him that same sense of fiscal responsibility, leading to the creation of the Bank of England. This bank helped stabilize the British pound and solidified England’s financial standing for over 200 years, allowing it to finance war efforts while France struggled with its own economic system.
However, not all financial ideas are good ones. The ancient notion that hoarding gold and micromanaging the economy is the key to strength—known as mercantilism—was a significant misstep for countries like France. It was Adam Smith, with his groundbreaking ideas in “The Wealth of Nations,” who put forward the notion that trade could benefit both parties and lead to an increase in wealth and prosperity, debunking the old myths. While Britain surged ahead, France lagged behind, suffering from the strictures of its outdated economic model.
Yet, history teaches valuable lessons. The 20th century bore witness to the consequences of misguided financial strategies, such as the currency devaluations of the 1930s that led to widespread economic chaos and, ultimately, World War II. Fast forward to the 1970s, when the U.S. tried to stimulate growth through cheap money policies. This gamble backfired, bringing about rampant inflation and the perception of American decline.
Today, some officials from the Trump administration appear enticed by the siren song of a weak dollar, mistakenly believing that it can boost competitiveness. The truth, however, is stark: a weak dollar begets a weak nation. Strengthening America’s currency is not merely an economic issue; it is a national security concern and a matter of preserving the nation’s greatness. The message is clear: to remain a powerful global player, the U.S. must safeguard the trust in its mighty dollar.
