Whenever the US dollar wobbles, a familiar story resurfaces. It is usually delivered with a knowing tone, a dash of conspiracy, and a historical villain or two. The most common version goes something like this: leaders who challenge the dollar are eliminated. Cue Colonel Gaddafi, a gold-backed dinar, and the implication that Donald Trump is now walking the same fatal path.
It is an emotionally satisfying story. It is also mostly wrong.
What we are witnessing today is not a covert war against the dollar, nor a dramatic attempt to overthrow it from the outside. It is something far more mundane and far more dangerous: the slow erosion of trust caused by domestic political choices inside the United States itself.
Reserve currencies do not die by assassination. They rot.
The Gaddafi Myth and the Comfort of Conspiracy
Let’s start with the most persistent myth.
Muammar Gaddafi was not murdered because he threatened the dollar. His proposal for a pan-African currency backed by gold was never operational, never widely adopted, and never close to displacing the global financial system. Libya’s economy was not systemically important, its financial infrastructure was limited, and its currency ambitions were aspirational at best.
Gaddafi fell because Libya collapsed into civil war (although we may never be told how influential the USA… was), because regional rivals saw an opportunity, and because NATO intervened in a conflict that spiralled far beyond its original mandate. The dollar did not need to lift a finger.
But the myth endures because it flatters our instinct to believe that global finance is run like a mafia: challenge the boss, and you get taken out. In reality, global finance is colder, slower, and far more boring. It doesn’t kill you directly (although indirectly it can slaughter whole populations). It simply withdraws its confidence and watches you bleed politically.
Trump Is Not Fighting the Dollar—He Is Undermining It
Donald Trump has not declared war on the dollar. In fact, he regularly insists that the dollar is “great”. But actions matter more than slogans, and markets listen to behaviour, not bravado.
Since his return to power, the dollar has weakened sharply against a basket of major currencies. The pound’s rise to levels not seen since 2021 is not a vote of confidence in Britain. It is a vote of no confidence in American economic governance.
The reasons are not mysterious.
Trade wars conducted by threat and impulse undermine predictability. Tariffs treated as permanent policy tools rather than tactical levers distort supply chains and raise costs. Foreign policy that oscillates between belligerence and retreat unsettles allies and investors alike. And repeated attacks, explicit or implied, on the independence of the Federal Reserve strike at the heart of dollar credibility.
The dollar’s strength rests on one foundational belief: that it is managed by institutions insulated, however imperfectly, from political whim. Once that belief weakens, the currency weakens with it.
De-Dollarisation: The Overhyped Spectre
This is where de-dollarisation enters the conversation, usually brandished as proof that America’s enemies are finally toppling US dominance.
In truth, de-dollarisation is neither new nor revolutionary. Countries have sought to reduce dollar exposure for decades, often for entirely pragmatic reasons: sanctions risk, trade efficiency, or domestic political optics. But none of this amounts to a coordinated overthrow of the dollar system.
The dollar remains dominant because it is liquid, trusted, deeply embedded in global trade, and supported by vast, open capital markets. There is no realistic alternative waiting in the wings. The euro lacks fiscal unity. China’s currency lacks convertibility and trust. Gold cannot scale to modern finance.
What can happen and is happening is marginal erosion. Less enthusiasm for US treasuries. More hedging. More currency diversification. None of this makes headlines, but all of it matters.
The danger to the dollar is not replacement. It is indifference.
The Bond Market: The Quiet Enforcer
If there is a force that disciplines governments more ruthlessly than elections, it is the bond market.
The United States carries an enormous and growing debt burden. That burden is manageable only because investors believe US debt is safe, stable, and politically boring. When confidence falters, borrowing costs rise. When borrowing costs rise, fiscal space vanishes.
This is why flirtations with government shutdowns matter. This is why reckless spending without credible budget agreements matters. This is why even talk of politicising monetary policy matters.
You do not need a coup to remove a leader who destabilises a reserve currency. You simply let borrowing costs climb, asset values wobble, pensions feel the strain, and voters do the rest.
Britain, the Pound, and the Illusion of Strength
For Britain, a weak dollar is a mixed blessing.
It makes US holidays cheaper and imported commodities less inflationary. It flatters sterling without requiring any domestic excellence. But it also damages UK exporters to the US and erodes the sterling value of dollar-denominated investments, including pension assets.
The key point, however, is this: Britain’s experience underscores the global nature of the problem. This is not about one country triumphing over another. It is about uncertainty spreading outward from Washington and washing over everyone else.
How Reserve Currencies Really Fall
History offers a clear lesson. Reserve currencies do not collapse because rivals attack them. They collapse because the issuing state forgets what made them credible in the first place.
They fall when:
- Institutions are politicised
- Fiscal discipline is treated as optional
- Policy becomes erratic
- Short-term politics overrides long-term trust
Rome debased its coinage. Spain drowned in silver and debt. Britain lost primacy not through defeat, but through exhaustion and overreach.
The United States is not there yet. But the warning lights are flashing.
No Assassins, Just Arithmetic
So who “kills” a president who destabilises the dollar?
No one needs to.
Markets withdraw patience. Investors demand higher returns. Allies hedge. Voters notice. History records the outcome.
The dollar does not require secret plots or violent ends. It requires stewardship. And when stewardship fails, consequences arrive quietly, relentlessly, and without drama.
That is the real crisis hanging over the dollar, not a foreign conspiracy, but a domestic failure of responsibility.
And unlike myths, that one has consequences for all of us.
