Periodically I’m asked to forecast when the financial system will crash, or when the U.S. dollar will self-destruct, plummet in value and be replaced as the world’s dominant currency.
Since I’m not a soothsayer with a functioning crystal ball, I consider providing a guesstimate or timeframe for collapse of the depreciating dollar and global monetary system a foolish notion.
Prognosticators who project specific dates or years for major financial or monetary events frequently are proven wrong. Even if their overall premises are correct, their precise predictions usually either are too early or too late. Some die before witnessing their prophecies comes to pass.
I stopped making date-specific financial projections in 2012 after I convinced myself the national debt couldn’t continue to rise as its exponential pace without crashing the bond, credit and stock markets. That’s when the national debt totaled $15 trillion and was approaching 100 percent of gross domestic product (GDP). Fourteen years later, with the national debt surpassing $40 trillion and 125 percent of GDP, I’m convinced the psychic in me isn’t very clairvoyant.
Last week I was pressed to provide a mechanism and timeline for failure of the fiat U.S. dollar. Coincidentally, the online individual who insisted I provide answers was wise enough not to offer his own estimate—or timetable—of when the unbacked dollar would cease to function as a viable currency.
His prodding, however, got me thinking and reading once more about the world’s failed currencies, why they decline and destruct, and how they end up on the trash heap of history unless they undergo significant monetary reform, renewal and revaluation.
Examining the Corpses of Failed & Defunct Currencies
History is littered with the corpses of hundreds of failed and defunct currencies, including those represented by tangible items or backed by physical metals such as gold and silver, and those that weren’t.
Currencies have come and gone since the dawn of human exchange, from the cowrie shells, salt and silk used in barter and trade in ancient Africa and Asia, to exclusive white stag hides mandated as credit money during the Han dynasty in China 200 B.C., to the heavy, rectangular copperplates issued as currency in 17th-century Sweden. Eventually all were replaced by metal coinage and paper currencies.
The mechanisms of currency failures and rejections are numerous, but the historical record indicates most inevitably collapsed or gradually declined in usage because they no longer were viewed as useful or valuable. They either were discarded as unnecessary or unpractical for everyday exchange, or because their purchasing power was inflated away until their actual or perceived value dissipated like puffs of worthless, unwanted smoke.
Following introduction of the first paper currency in 11th-century China, numerous government- and bank-issued notes failed when public confidence was lost in their inability to retain value and serve as reliable stores of wealth. Others vanished when their issuing regimes collapsed, dissolved, or were ousted from power and new currencies were introduced.
The Continental dollar authorized by the provincial American government in 1775 failed because it was issued in excess without sufficient gold and silver backing, as was the dollar of the Confederate States of America, which was hyper-inflated and ended up worthless after the South lost the Civil War in 1865.
Similar hyperinflations and currency fates were suffered by the German mark in 1923, the fabi and golden yuan of the Nationalist Chinese government in the 1940s, the Hungarian pengö in 1946, the Soviet ruble in the early 1990s, the Yugoslavian dinar in 1994, the Russian ruble in 1998 and the Zimbabwe dollar in 2008, not to mention the exact number of times Argentina’s peso has collapsed since the 1950s.
Debt, Default & Devaluation
While some currencies retain their official names over centuries despite severe debasement and sovereign debt defaults, excessive indebtedness and financial meltdowns often force changes in their makeup and valuation.
Debasement, devaluations and defaults are directly related with heavily indebted nations and failed currencies.
In his 2011 book, “Endgame: The End of the Debt Supercycle and How It Changes Everything,” financial analyst John Mauldin wrote that all governments eventually default on their debt, or eliminate it by devaluing or inflating their currencies.
“When people have too much debt, they typically default. When countries have too much debt, you have one of three options.
1. They can inflate away the debt.
2. They can default on it.
3. They can devalue and hurt any foreigners who are holding the debt. This really is a variant of inflating it away.”
The British pound, the world’s oldest currency still in use, has suffered multiple crashes, crises and devaluations since it was defined as a pound weight in silver in 775 A.D. After the British government removed gold backing from its currency in 1931 and eliminated the silver content in its coinage in 1947, the pound sterling remained in name only.
Currency debasement and massive debts accumulated by Great Britain during World War I and World War II resulted in the pound losing significant value, as well as its status as the world’s leading currency to the U.S. dollar.
The British Empire wasn’t the first to see its monetary unit dethroned as the dominant currency in global commerce, finance and trade. The Florentine florin, Venetian ducat, Portuguese real, Spanish real, Dutch guilder and French livre each served that role for periods spanning from 80 to 300 years. With the exception of the unbacked Dutch guilder, all of those currencies were defunct long before release of the euro in 2022.
When might U.S. debt and unfunded liabilities grow large enough to unseat the fiat U.S. dollar as the world’s top reserve and trade currency? That’s anyone’s guess, though the debasement and decline of the unbacked U.S. currency has been underway for decades thanks to President Franklin D. Roosevelt and President Richard Nixon. They removed gold backing from the U.S. currency domestically and internationally in 1933 and 1971, respectively.
Persistently high, economically crippling and stagnating inflation is proof the dollar is failing, along with the world’s other fiat currencies.
Since 1933, the dollar has suffered a cumulative inflation rate of nearly 2,500 percent, and the currency has lost nearly 90 percent of its purchasing power since 1971. The debasement and inflationary trajectory of the fiat dollar illustrates its decline and prophesies its demise.
Prettiest Pig in the Currency Pen Grows Uglier
It’s been said the U.S. dollar is the prettiest pig in the currency pen, though based on the U.S. debt clock, the nation’s financial picture and future grows less attractive—and ever uglier—each passing second, minute, hour, day, month and year.
I don’t know precisely when the fiat U.S. dollar will fail or succumb any more than I can accurately guess when the national debt will top $100 trillion or surpass 200 percent of annual GDP. I’m also hesitant to predict when the gold price will hit $8,000, $10,000 or $20,000 an ounce, which already has been projected by some financial analysts and monetary seers.
Based on the historic record, however, fiat currencies eventually falter, wither and die, while physical gold and silver—used as money for thousands of years and the only money mentioned in the U.S. Constitution—survive.
Undoubtably, that’s why China and a growing number of other nations are accumulating gold, reducing their dollar reserves and dollar-based debt holdings, and deploying alternative payment systems to circumvent the U.S. dollar in international exchange and trade.
While I’m no soothsayer and a reluctant prognosticator, I’d bet a crisp, depreciating $100 greenback that the global reign of the unbacked, fiat U.S. currency eventually will expire, even if I don’t live long enough to witness the ultimate demise of the debt-based dollar.
© 2026 Stuart Englert. All rights reserved.
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