Confessions of a Reluctant Monetary Prognosticator

Stuart Englert

From time to time, I am asked to predict when the financial system will crash, or when the U.S. dollar will self-destruct, plunge in value, and lose its place as the world's dominant currency. Because I am not a soothsayer with a working crystal ball, I regard offering a guesstimate or a timeframe for the collapse of the depreciating dollar and the global monetary system as a foolish exercise.

Forecasters who attach specific dates or years to major financial or monetary events are frequently proven wrong. Even when their broad premises turn out to be correct, their precise predictions usually arrive either too early or too late—and some die before their prophecies come to pass.

I abandoned date-specific financial projections in 2012, after convincing myself that the national debt could not keep rising at its exponential pace without bringing down the bond, credit, and stock markets. At that point, the national debt stood at $15 trillion and was approaching 100 percent of gross domestic product (GDP). Fourteen years later, with the national debt above $40 trillion and at 125 percent of GDP, I am convinced that the psychic in me is not very clairvoyant.

Last week, I was pressed to supply a mechanism and timeline for the failure of the fiat U.S. dollar. Notably, the online individual who demanded answers was wise enough not to offer his own estimate—or timetable—for when the unbacked dollar would cease to function as a viable currency. His prodding nevertheless set me thinking and reading again 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 were not.

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 the exclusive white stag hides mandated as credit money during China's Han dynasty around 200 B.C.; to the heavy, rectangular copper plates issued as currency in 17th-century Sweden. All were eventually replaced by metal coinage and paper currencies.

The mechanisms of currency failure and rejection are numerous, but the historical record shows that most currencies inevitably collapsed or gradually fell out of use because they were no longer viewed as useful or valuable. They were either discarded as impractical or unnecessary for everyday exchange, or their purchasing power was inflated away until their actual or perceived value dissipated like puffs of worthless, unwanted smoke.

After the first paper currency appeared in 11th-century China, numerous government- and bank-issued notes failed once the public lost confidence in their ability to retain value and serve as reliable stores of wealth. Others vanished when the regimes that issued them collapsed, dissolved, or were ousted from power, and new currencies were introduced in their place.

The Continental dollar, authorized by the provincial American government in 1775, failed because it was issued in excess without sufficient gold and silver backing. So did the dollar of the Confederate States of America, which was hyperinflated and ended up worthless after the South lost the Civil War in 1865.

Similar hyperinflations and currency fates befell 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 number of times Argentina's peso has collapsed since the 1950s. The recurring pattern across these episodes is that currency collapse rarely arrived on anyone's announced schedule; it unfolded through accumulated fiscal and monetary pressures rather than a single identifiable moment, which is part of why date-specific forecasts have such a poor track record.

Debt, Default & Devaluation

Although some currencies keep their official names for centuries despite severe debasement and sovereign debt defaults, excessive indebtedness and financial meltdowns often force changes in their makeup and valuation. Debasement, devaluation, and default are directly linked to 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 endured multiple crashes, crises, and devaluations since it was defined as a pound weight of silver in 775 A.D. After the British government removed gold backing from its currency in 1931 and eliminated the silver content of its coinage in 1947, the pound sterling existed in name only. Currency debasement and the massive debts Great Britain accumulated during World War I and World War II caused the pound to lose significant value, as well as its status as the world's leading currency, to the U.S. dollar. That transition is a reminder that reserve-currency status is not permanent: the dominant currency of one era has repeatedly given way to that of the next rising economic power, typically amid war debts, devaluations, and diminished confidence in the incumbent's commitments.

The British Empire was not 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 80 to 300 years. With the exception of the unbacked Dutch guilder, all of those currencies were defunct long before the euro was released 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 is anyone's guess—though the debasement and decline of the unbacked U.S. currency has been underway for decades, courtesy of President Franklin D. Roosevelt and President Richard Nixon, who removed gold backing from the U.S. currency domestically and internationally in 1933 and 1971, respectively.

Persistently high, economically crippling, and stagnating inflation is, in the author's view, evidence that 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, the author argues, and prophesies its demise.

Prettiest Pig in the Currency Pen Grows Uglier

It has been said that the U.S. dollar is the prettiest pig in the currency pen—yet, based on the U.S. debt clock, the nation's financial picture and future grow less attractive, and ever uglier, with each passing second, minute, hour, day, month, and year.

I do not 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 am equally hesitant to predict when the gold price will reach $8,000, $10,000, or $20,000 an ounce—levels already projected by some financial analysts and monetary seers.

Based on the historical 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.

Undoubtedly, that is 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. This trend is visible in official data: the World Gold Council has reported that central banks have been buying gold at historically elevated levels in recent years, purchasing more than 1,000 tonnes annually—a pace far above the averages of previous decades.

While I am no soothsayer and remain a reluctant prognosticator, I would bet a crisp, depreciating $100 greenback that the global reign of the unbacked, fiat U.S. currency will eventually expire—even if I do not live long enough to witness the ultimate demise of the debt-based dollar.

© 2026 Stuart Englert. All rights reserved.

About the Author

Stuart Englert

A self-described wannabe modern-day muckraker, Stuart Englert writes about money, metals, and whatever else interests him. Englert is the author of Rigged: Exposing the Largest Financial Fraud in History.

Source: GoldSeek