The grand halls of the Mount Washington Hotel on July 1944 buzzed with tension. Delegates from 44 nations had gathered in the shadow of World War II, their mission clear: to design a new global financial system that would prevent another economic collapse like the Great Depression.
At the center of the negotiations stood two men—John Maynard Keynes, the brilliant British economist, and Harry Dexter White, the formidable U.S. Treasury official. Keynes, with his aristocratic demeanor and sharp wit, championed a revolutionary idea: the Bancor, a supranational currency that would prevent any single nation from bearing the burden of global liquidity. White, pragmatic and fiercely nationalistic, had other plans. The United States, emerging as the world’s dominant economic power, had no intention of relinquishing control.
As the delegates took their seats, Keynes leaned forward, his voice measured but urgent. “Gentlemen, we must recognize that a system built upon a single national currency is inherently unstable. The Bancor would ensure balance, preventing chronic trade deficits and surpluses.”
White, arms crossed, responded with calculated precision. “The dollar is already the backbone of global finance. A new currency would introduce unnecessary complexity. What we need is stability—fixed exchange rates, backed by gold, with the dollar at the center.”
The room fell silent. The battle lines were drawn.
Delegates worked long hours, as the conference was expected to conclude by July 19 but had to be extended due to the complexity of negotiations. The urgency of the discussions, combined with wartime pressures, meant that many participants were deeply engaged in debates and drafting agreements, often late into the night over drinks.
This event would become known as the Bretton Woods agreement.
How White Blocked Bancor
Harry Dexter White’s opposition to Keynes’ Bancor proposal was rooted in America’s strategic interests. The U.S. held the world’s largest gold reserves and was poised to become the dominant economic force. White’s plan ensured that the dollar, rather than a neutral international currency, would serve as the foundation of the new financial order.
Keynes envisioned the International Clearing Union (ICU), which would regulate trade imbalances by requiring surplus nations to reinvest their excess reserves. This would prevent the kind of persistent deficits that had plagued Britain and, later, the United States. White, however, saw this as a direct challenge to American financial supremacy.
The ICU would function as a global financial institution where all national central banks held accounts. Instead of settling international trade in national currencies, all transactions would be conducted using a new supranational currency called the Bancor.
Key Features of the ICU:
- Bancor as the Global Currency
- The ICU would issue Bancor, a currency with a fixed exchange rate against national currencies.
- Countries would use Bancor to settle trade balances instead of relying on gold or national currencies.
- Automatic Trade Balance Adjustments
- When a country exported goods, it would earn Bancors, increasing its ICU account balance.
- When a country imported goods, it would spend Bancors, reducing its ICU balance.
- Countries with excessive surpluses would be required to reinvest their Bancors or face penalties.
- Countries with persistent deficits would receive assistance but would also face incentives to correct imbalances.
- Preventing Currency Manipulation
- The ICU would regulate exchange rates to prevent competitive devaluations.
- Countries with large trade surpluses would be encouraged to spend or invest their excess Bancors rather than hoard them.
- Eliminating the Need for Gold Reserves
- Under Keynes’ plan, gold and national currencies would no longer be used for international trade settlements.
- This would prevent liquidity crises and reduce reliance on any single national currency.
Instead, White proposed the International Monetary Fund (IMF) and the World Bank, institutions that would stabilize exchange rates and provide financial assistance—but under terms dictated by the U.S. The dollar would be pegged to gold, and other currencies would be pegged to the dollar, cementing America’s role as the world’s financial anchor.
Despite Keynes’ passionate arguments, the sheer economic weight of the United States ensured White’s victory. The final agreement, signed at Bretton Woods, established a dollar-centric system, rejecting the Bancor in favor of White’s vision.
Had Keynes’ ICU been adopted, the global economy might have evolved differently:
- Trade imbalances would have been corrected automatically, preventing long-term deficits.
- No single country would bear the burden of issuing the global reserve currency, reducing financial instability.
- Currency crises and speculative attacks would have been less frequent.
Today, some economists argue that a basket-based reserve currency or even cryptocurrency-backed trade mechanisms could serve a similar function.
The Legacy of Bretton Woods
The decision to make the dollar the world’s reserve currency had profound consequences. While it provided stability in the postwar years, it also led to the Triffin dilemma—where the U.S. had to run persistent trade deficits to supply the world with dollars. Over time, this contributed to the decline of American manufacturing and economic imbalances that Keynes had warned about.
International trade operates with the U.S. dollar at its core, serving as the world’s primary reserve currency. Most transactions, whether for oil, commodities, or manufactured goods, are conducted in dollars due to its stability, liquidity, and universal acceptance. Even when two nations trade, they often settle payments in dollars rather than their own currencies, reinforcing its dominance. Central banks worldwide maintain substantial dollar reserves to facilitate trade and stabilize their economies. The U.S. Federal Reserve plays a crucial role in shaping global trade dynamics; its monetary policy decisions, particularly changes in interest rates, directly influence the strength of the dollar. A stronger dollar makes imports cheaper for Americans but can make U.S. exports more expensive internationally.
King Petroleum
Petroleum and energy are central to global geopolitics, influencing military conflicts, economic stability, and international relations. Nations with abundant energy resources wield significant power, while those dependent on imports often face vulnerabilities. Historically, conflicts have erupted over access to oil-rich regions, such as the Gulf War (1990-1991), where Iraq’s invasion of Kuwait threatened global oil supplies, prompting a U.S.-led coalition to intervene. The Russia-Ukraine war has had profound energy market impacts, with Europe reducing Russian gas imports by 33-50% within a year, causing oil prices to surge by 60% and European natural gas prices to skyrocket by 400%. The Iran-Israel tensions have also led to oil price spikes, with Brent crude jumping 16% since early 2024.
Beyond direct conflicts, energy plays a role in economic coercion, as seen in OPEC’s 1973 oil embargo, which led to a global economic crisis by restricting oil exports to nations supporting Israel. The Strait of Hormuz, a critical chokepoint handling 15% of global oil supply, remains a flashpoint for geopolitical tensions, with disruptions threatening global markets. As nations seek energy security, diversification efforts—such as Europe’s shift to renewable sources and LNG imports—are reshaping global power dynamics. The interplay between energy access, military strategy, and economic stability underscores petroleum’s enduring influence on world affairs.
Over the past fifty years, global petroleum demand has steadily increased, driven by industrialization, transportation, and population growth. In 1975, global oil consumption was approximately 58 million barrels per day (bpd), rising to 100 million bpd by 2019, marking a 72% increase over that period. The demand for petroleum has been particularly strong in emerging economies, with China and India accounting for a significant portion of the growth.
Petroleum and natural gas remain critical to U.S. energy security due to their role in ensuring reliable, affordable, and scalable energy supply. The Department of Energy (DOE) emphasizes that the uninterrupted availability of these resources is essential for national security, economic stability, and public safety.
The Strategic Petroleum Reserve (SPR) serves as a safeguard against severe supply disruptions, allowing the U.S. to respond to emergencies and stabilize markets. Additionally, natural gas plays a vital role in electricity generation, heating, and industrial production, with liquefied natural gas (LNG) exports strengthening U.S. geopolitical influence.
Despite the push for renewable energy, fossil fuels remain indispensable due to their high energy density, reliability, and existing infrastructure. The U.S. operates seven large-scale LNG liquefaction plants, primarily along the Gulf Coast, which are crucial for maintaining global energy stability.
Looking ahead, artificial intelligence (AI) and computing are expected to further impact energy consumption. AI-driven data centers are projected to consume 606 terawatt-hours (TWh) of electricity by 2030, up from 147 TWh in 2023, representing 11.7% of total U.S. power demand. This surge in energy use is largely due to the increasing complexity of AI models and the expansion of cloud computing infrastructure.
The growing energy needs of AI and computing could create competition for consumer electricity demand on the grid. As data centers require more power, utilities may need to expand capacity, potentially leading to higher electricity costs for households and businesses. Some experts suggest that renewable energy solutions and improved efficiency measures could help mitigate these challenges, but the strain on existing infrastructure remains a concern.
Current energy grids are struggling to keep pace with the rapid growth of AI-driven electricity demand. According to the World Economic Forum, AI’s energy consumption is projected to grow significantly, with data centers expected to account for over 3% of global electricity demand by 2030, up from 1% in 2022. Utility leaders acknowledge that the infrastructure required to support AI-powered data centers far exceeds previous expansions, such as those driven by post-war industrialization or the rise of air conditioning.
One major challenge is that traditional grids were designed for predictable, steady loads, whereas AI workloads create spiky, high-intensity demand that strains transmission and distribution systems. Utilities are now exploring grid-enhancing technologies (GETs) to increase capacity, but even with innovations like smarter interconnection processes, the scale of AI-driven load growth remains daunting.
Additionally, the energy mix is shifting toward renewables, which introduces intermittency issues—solar and wind power fluctuate based on weather conditions, making it difficult to provide the consistent, high-power output that AI data centers require. While green energy and battery storage are improving, integrating them effectively with AI-driven demand remains a challenge.
Petroleum and The Dollar
One of the key pillars of the dollar based system is the petrodollar framework. The United States coordinated the petrodollar system through a strategic agreement with Saudi Arabia in 1974, following the OPEC oil embargo of 1973. This arrangement ensured that Saudi Arabia would price its oil exclusively in U.S. dollars, reinforcing global demand for the dollar. In return, the U.S. provided military protection and economic cooperation to Saudi Arabia.
Since the 1970s, oil has been priced and traded almost exclusively in U.S. dollars, meaning that countries around the world must acquire and hold dollars to purchase energy. This constant demand reinforces the dollar’s status as the world’s reserve currency, allowing the U.S. to run trade deficits without facing the same economic pressures as other nations. The relationship between oil prices and the dollar has historically been complex, with fluctuations in oil markets affecting inflation, trade balances, and monetary policy. However, recent shifts—such as the U.S. becoming a net oil exporter—have altered this dynamic, potentially changing how oil impacts the dollar’s strength. Additionally, several countries, such as China and Saudi Arabia, peg their currencies to the dollar to maintain stability, while others allow their currencies to fluctuate but remain heavily influenced by dollar movements. The demand for dollars leads to persistent trade deficits in the U.S., as it must supply sufficient liquidity to the global economy.
Foreign nations holding excess dollars often reinvest them in U.S. Treasury bonds, which helps keep American interest rates low and reinforces the cycle of dollar dependence. This structure has contributed to long-term imbalances and economic distortions, raising questions about whether alternative reserve currencies—such as digital assets or a Keynesian Bancor-like system—could offer a more sustainable model for global trade.
Had the Bancor been adopted, the global financial system might have evolved differently, with trade imbalances corrected automatically and no single nation bearing the burden of global liquidity. Instead, the world remained tethered to the dollar—a system that continues to shape international economics today.
Nuclear Energy
The U.S. has pursued a strategy to accelerate nuclear energy development by bypassing existing regulatory hurdles and streamlining approval processes. On May 23, 2025, President Trump signed four executive orders aimed at reforming the Nuclear Regulatory Commission (NRC), expanding nuclear reactor deployment, and increasing domestic uranium production. One key directive requires the NRC to complete rulemakings within 18 months, significantly reducing the time required to approve new reactor designs and construction. Additionally, the administration has sought to build nuclear reactors on federally owned land, particularly for defense-critical infrastructure and AI data centers, ensuring a reliable energy supply for emerging technologies.
The Department of Energy (DOE) has also been tasked with expediting nuclear reactor testing, with a mandate to construct at least three new reactors by July 4, 2026. While these measures aim to boost U.S. nuclear competitiveness, critics argue that reducing regulatory oversight could pose safety risks and complicate long-term waste management. The administration’s focus on nuclear energy aligns with its broader strategy to counter China and Russia’s dominance in global nuclear technology, but concerns remain over financing and industry readiness.
Nuclear power is a crucial solution to rising energy demand because it provides reliable, high-output, carbon-free electricity that can operate continuously, unlike intermittent renewable sources like solar and wind. As global electricity consumption surges—driven by AI data centers, industrial expansion, and electrification—nuclear energy is increasingly recognized as a key component of a sustainable energy mix. According to the U.S. Energy Information Administration (EIA), nuclear power generates 18.2% of total U.S. electricity and accounts for over 50% of clean energy production.
Compared to other countries, the U.S. has 93 operational nuclear reactors, with a total capacity of 95.8 gigawatts-electric (GWe). While the U.S. leads in the number of reactors, its nuclear expansion has been slower than in nations like China and Russia. China has aggressively invested in nuclear infrastructure, with plans to triple its nuclear capacity by 2050, while Russia has secured long-term uranium supplies to support its growing reactor fleet. Meanwhile, the U.S. faces challenges related to uranium supply constraints, regulatory hurdles, and aging infrastructure, which could limit its ability to scale nuclear energy quickly.
Cryptocurrency: A Modern Solution?
Could cryptocurrency offer a way out of the reserve currency trap? A decentralized digital currency, such as Bitcoin or a stablecoin backed by a basket of assets, could function as a neutral global reserve.
Pros:
- Decentralization: No single nation would bear the burden of issuing the reserve currency.
- Automatic Adjustments: Blockchain-based smart contracts could facilitate trade balance corrections.
- Reduced Political Influence: A global digital currency would be less susceptible to geopolitical manipulation.
Cons:
- Volatility: Cryptocurrencies are prone to extreme price fluctuations.
- Regulatory Challenges: Governments may resist relinquishing control over monetary policy.
- Adoption Barriers: Widespread acceptance would require significant infrastructure and trust.
The global reserve currency dilemma has shaped economic history, from Britain’s decline to America’s industrial struggles. Keynes’ Bancor proposal offered a visionary alternative, but the world chose a dollar-centric system instead. As cryptocurrency gains traction, it presents a new opportunity to rethink global monetary structures. Whether digital assets can truly replace traditional reserve currencies remains uncertain, but the conversation is more relevant than ever.
Recent U.S. economic policies have sparked debate over their broader implications beyond tariffs. While his administration has aggressively pursued trade restrictions, some analysts argue that his policies aim to address deeper structural issues related to the U.S. dollar’s role as the global reserve currency.
Rather than focusing solely on tariffs, the Trump administration has pursued policies that challenge the dollar’s dominance in global finance. Some experts argue that his administration’s efforts to reduce reliance on foreign capital and encourage domestic production are part of a broader strategy to mitigate the negative effects of the reserve currency system.
However, the administration’s approach has also raised concerns. Some economists warn that his policies could accelerate the decline of the dollar’s global influence, potentially leading to financial instability. Others argue that disrupting existing trade relationships without a clear alternative could weaken the U.S. economy in the short term.
If these policies successfully reduce the U.S. trade deficit and shift global reliance away from the dollar, it could open the door for alternative monetary systems. Some have speculated that a basket-based reserve currency or even cryptocurrency-backed trade mechanisms could emerge as viable alternatives.
A Multi-Polar Future?
The transition to a multi-polar economic world order over the next decade is expected to reshape global trade, finance, and geopolitical alliances, moving away from a single dominant economic power toward a system in which multiple regional blocs—including the United States, China, Europe, and the Global South—exert influence. The U.S. dollar’s long-standing dominance as the world’s reserve currency may weaken as nations like China expand the use of the digital yuan and other economies seek alternatives for trade settlements. Countries such as India, Brazil, and Russia are already exploring ways to reduce reliance on Western financial institutions, further diversifying global monetary flows. Meanwhile, regional trade blocs will gain strength, with China’s Belt and Road Initiative extending its economic reach, the European Union balancing security commitments with economic partnerships, and the Global South emerging as an independent player through multi-aligned trade agreements.
Supply chains are also undergoing realignment as the U.S. and China decouple their economies, leading corporations to relocate production to countries like India, Mexico, and Southeast Asia to mitigate geopolitical risks. Technological competition will intensify as nations vie for supremacy in artificial intelligence, semiconductor development, and cybersecurity, while financial innovations such as digital currencies and decentralized finance could fundamentally alter banking systems. While these shifts offer new investment opportunities in emerging markets, they also bring heightened economic uncertainty and the potential for geopolitical tensions, including trade wars and regional conflicts. The evolving world order raises critical questions about how industries such as energy, technology, and finance will adapt to the coming decade of transformation.