A brother asked me whether the Trump tariff war would lead to the collapse of the US dollar hegemony? Chain effect causing the cryptocurrency/US stock market to collapse? It's not that simple, the Spanish silver dollar, Dutch guilder, and British pound have all been world currencies before. Ultimately, it was due to missing out on a new round of technological revolution, shifting from reality to virtuality, leading to industrial hollowing out and the loss of sea control. So brothers need to understand: the decline of military strength is the end of hegemony. Below is a brief history of the development of world currencies for our brothers 👇👇 one ️⃣ The Spanish silver dollar was the first world currency. In the 16th century, Spanish colonizers discovered silver mines in the Andes Mountains. The Spanish forced indigenous people to mine for their lives, and at that time, half of the world's silver was produced here. The Spaniards built the world's first mint, using a press to create standardized currency with a silver content of 93.7%, featuring a king's portrait on the front and a cross on the back, setting a hard currency standard for global trade. Every spring, a fleet loaded with silver sets sail from the Caribbean Sea, crossing the Atlantic Ocean amidst hurricanes and pirate hunts. Tens of millions of pesos of silver arrive in Europe each year, and this silver highway makes Spain the first world central bank in history. At that time, the Ming Dynasty was short of silver, and the Spanish seized this pain point by sending American silver to China on large sailboats in exchange for Chinese silk, tea, and porcelain. Silver from the Americas flooded into various parts of the world, triggering global inflation and causing a surge in wheat prices in Europe. Spain bought up Europe's war capability with silver, and the military expenses of the Dutch Revolution and the British Navy were paid in Spanish silver dollars, just like today's cross-border transactions are mostly paid in US dollars. Until the downfall of the Armada, the Spanish currency hegemony began to crumble. Combined with the continuous decline in the grade of silver mines in Spanish colonies, mining costs have skyrocketed. The Dutch launched a currency war, and the Amsterdam Bank launched a 99.9% purity Dutch guilder to intercept global trade settlements. In the 17th century, tens of thousands of Chinese merchants were reopened in Manila, leading to a shortage of silver and the collapse of the Ming Dynasty economy. In the 18th century, Britain began to lock in the value of the pound with gold, and the world turned to the gold standard. The Spanish were also addicted to silver and could not extricate themselves. The British used pound bills to settle American silver, plundered Spanish silver carriers in the Caribbean, and emptied Spain's real economy with reverse dumping of industrial products. Spain's sovereign debt has defaulted continuously, and the Spanish silver dollar has become history. two ️⃣ The second world currency is the Dutch guilder. At the beginning of the 17th century, the Netherlands controlled 70% of Europe's seafood trade. The Dutch used assembly line shipbuilding, standardized parts, fast delivery, and low costs. The Amsterdam shipyard produced 1000 merchant ships annually, monopolizing the European shipbuilding industry. Amsterdam Bank accepts deposits from various countries and converts them into Dutch guilders based on their silver content. They have invented a cheque clearing system that allows for cross-border settlement in just three days, allowing direct transactions using deposit vouchers. This has established the world's first credit currency system, similar to the current SWIFT system. In the 17th century, the Dutch East India Company was established and the Dutch guilder began to be widely used for international trade. The East India Company raised 6.5 million Dutch guilders in its IPO and issued war bonds using stock dividend rights as collateral. The Dutch established dozens of armed strongholds in Southeast Asia, monopolizing the trade of nutmeg and cloves, and controlling 80% of the global spice trade. The Ming Dynasty in China was short of silver, so the Dutch exchanged silver for Chinese porcelain, then exchanged porcelain for slaves in Africa, and then slaves went to America to mine silver, forming a closed loop. The Netherlands monopolized the black slave trade, and the demand for trade in large ports easily gave rise to the financial industry, making Amsterdam a global financial center. The Netherlands uses currency hegemony to cut leeks, and is the master of the Americans. The Dutch central bank lowered the loan interest rate to 4%, while other countries kept it above 10%. This operation drained the gold reserves of London and Hamburg, forcing Spain to pay for military expenses in Dutch guilders. The East India Company established the world's first business intelligence network, where merchant ships brought back not only goods, but also price data from various regions. The exchange updated the real-time prices of goods at ports, predicted commodity prices three months in advance, and profited from price differences by selling high and buying low. The Dutch have developed many financial derivatives. For example, tulip futures, marine insurance options, weather derivatives to buy storm insurance for fishing boats, sovereign CDS. But the Dutch are too fond of doing business and playing finance, with insufficient investment in military power, a small local scale, a lack of strategic depth, and weak risk resistance. The four Anglo Dutch Wars dealt a heavy blow to the Dutch, and Dutch merchant ships were often attacked and suffered heavy losses in order to save money by not equipping themselves with artillery. The Dutch tulip foam burst, the shipbuilding industry declined, the industry was hollowed out, but the capital market was overdeveloped, causing systemic risks. The treasury bond bond market collapsed, interest rates soared, East India Company shares became waste paper, and people began to hoard gold and distrust financial products. Similar to the recent surge in gold prices and the collapse of US dollar credit. After the Industrial Revolution, Britain became the new factory of the world. The Dutch shipbuilding industry has been eliminated by British ironclad ships, the textile industry has been impacted by Indian cotton fabrics, and the Netherlands is addicted to the financial industry. The problem of industrial hollowing out is very serious, similar to the United States' shift from the real to the virtual. The Netherlands grew up relying on shipbuilding and financial innovation, but was eliminated by the steam engine revolution due to addiction to arbitrage. The tulip foam made the Netherlands miss the industrial revolution. three ️⃣ The third world currency is the pound sterling. In the 17th century, the British Parliament cut off the chains of royal power, and in 1694, a group of merchants took a large vote to establish the Bank of England, turning war financing into business. The British invented the treasury bond perpetual motion machine. During the Seven Year War, Britain's treasury bond soared, but the interest rate fell from 6% to 3%. Because of the endorsement of parliamentary credit, it has convinced global capital that lending to the UK is a sure bet. France, on the other hand, experienced a great revolution due to credit bankruptcy caused by war. In 1717, Newton, the genius who was hit by an apple, did a great job as the Mint Director by abolishing the circulation of silver and locking the pound with gold. British merchants traded cotton cloth for African slaves and transported them to the Caribbean to plant sugarcane, returning loaded with sugar and silver. In the 18th century, the British became rich by this set of triangular trade, and all the profits eventually flowed into London CBD. At that time, the Qing Dynasty had always had a trade surplus, and China's thirst for silver drained the European silver reserves. In order to reverse the trade surplus, the East India Company planted opium in India, sold it to China for silver, and then purchased tea and silk to return to Europe. Before Lin Zexu destructed opium at Humen in 1839, Britain earned 6 million taels of silver from China every year. After Watt improved the steam engine, British manufacturing began to take off, and cotton mills were 50 times more efficient than Indian workshops. By 1850, they controlled 90% of the global cotton trade. After the enactment of the Gold Standard Act in 1816, the pound began a global harvesting mode. The bill discounting system invented in the City of London can be regarded as the SWIFT system of the 19th century. In 1895, when Britain and the United States competed for Venezuela, the Bank of England suddenly sold US treasury bond bonds, which led to a one-day slump of 5% in the stock market in New York. The United States was forced to admit its counsel. Secretary of State Olney lamented that under the financial baton of London, we could not even keep our colony. Britain bought a 44% stake in the Suez Canal for £ 4 million, controlling the throat of East West trade. The Egyptian government expressed protest and the British fleet directly shelled Alexandria, using financial control and military deterrence to achieve hegemony. Later on, the United States followed suit and emerged victorious over the blue. In 1914, Britain suspended the exchange of gold to raise military funds, which was equivalent to abolishing its military power. At the end of World War I, Britain owed the United States $4.7 billion in debt, and New York replaced London as a global capital safe haven. American arms dealers exchanged pounds for gold at the Bank of England and directly withdrew 6500 tons of gold reserves from the British treasury. In 1944, at the Bretton Woods Conference, British economist Keynes proposed the Banko super sovereign currency plan, which was crushed by the US Treasury Secretary White's plan of using the US dollar=gold. After two world wars, Britain's national strength greatly weakened, and its colonies became independent one after another. Its industrial output value was less than a fraction of that of the United States, so it naturally lost its voice at the negotiating table. In 1956, Britain and France sent troops to Egypt to fight for the Suez Canal, but the United States froze the British pound reserves and sold British treasury bond bonds. The pound plummeted 15% in a week, Prime Minister Eden was forced to withdraw troops, and the United States avenged itself with an arrow in 1895. The underlying logic of monetary hegemony has always been aircraft carrier+capital. four ️⃣ After the British pound retreated to the second tier, the US dollar entered the historical stage. After the Bretton Woods Conference, the US dollar was pegged to gold, and currencies of various countries were pegged to the US dollar. It is equivalent to making the United States a global central bank. The Federal Reserve can issue US dollars at any time. To use US dollars, countries must reserve US treasury bond bonds. Cross border settlement must go through the New York clearing system, which is the predecessor of SWIFT. The Marshall Plan after World War II, with the United States providing aid for post-war reconstruction in Europe. The United States sent $13 billion in reconstruction funds to Europe, but with conditions that were even harsher than high interest loans. 55% of funds must purchase American goods, recipient countries must open their financial markets, Wall Street capital takes advantage of the situation to annex European banks, and countries must settle coal and steel in US dollars. In 1950, the US military landed in Incheon, and Japan became a military production base. Global funds flowed into the US dollar as a safe haven, and US gold reserves accounted for 75% of the world's total. When Nixon ended the gold standard system of the US dollar in 1971, many people thought the dollar was over, but the United States created another petrodollar. Saudi Arabia only uses dollars to settle oil, and the money earned from selling oil buys American treasury bond bonds. The United States guarantees the safety of the Middle East princes. By 1980, 80% of OPEC countries used dollars for oil transactions, and the global central bank's dollar reserves soared. In order to maintain the petrodollar, the United States launched the Gulf War in 1991 and the Iraq War in 2003, punishing disobedient agents and replacing them with obedient ones. The sanctions against Iran in 2011 were imposed because oil transactions dared to be settled in euros and gold. The United States created a global financial crisis by raising interest rates and cutting interest rates. By lowering interest rates and releasing water, hot money in the US dollar flowed into emerging markets, fattening up and then slaughtering. For example, in the 1997 Southeast Asian financial crisis, a group of white gloves went to Thailand to harvest, and after the crisis, they bought high-quality assets at a low price. For example, after the oil crisis, they acquired core assets in Latin America at a low price. The dominance of the US dollar relies on its control over the sea and air, as well as its mastery of cutting-edge technology. The military spending of the United States exceeds the total of the last 11 countries, with hundreds of overseas military bases and F-35 fighter jet production lines related to US bond yields. A 3-nanometer chip is not only a technological product, but also a physical carrier of the US dollar hegemony. Most of the world's high-end chips rely on American technology, and Huawei's Kirin chip was so user-friendly that its market share plummeted after being sanctioned. The embargo on Nvidia A100 chips directly locks in the development of AI in other countries, which is called computing power colonization. Using cultural brainwashing, creating a winning learning system, and cultivating Dartley leaders. The main purpose of developing new energy vehicles in China and Europe is to ensure energy security and reduce dependence on imported crude oil. In recent years, gold prices have surged as it is replacing the US dollar as the preferred safe haven. All financial hegemony begins with technological innovation and ends with path dependence. Previously, Spain relied on colonial dividends to establish currency hegemony by controlling silver mines, but due to the decline of the Armada fleet. The Netherlands built its hegemony by building ships and monopolizing maritime transport. It declined because of the financial foam, the hollowing out of industry, and the loss of sea power in the war with Britain. Britain rose through the Industrial Revolution and declined after two World Wars. The United States first became the world's factory and became the largest creditor country through two world wars. The fundamental reason for the decline of currency hegemony in previous countries is still the decline of military hegemony. Ultimately, it is the law of the jungle, where whoever has thicker arms is the boss. So brothers need to understand: the decline of military strength is the end of hegemony.