Yesterday we talked about the 1940s playbook, and how the formula driving the current U.S. economic boom looks a lot like the formula that drove the boom out of the Great Depression and World War II.
We've had the building of defense, energy, chips, supply chains, and data centers with wartime-like intensity.
And now we have a war.
But as we discussed yesterday, the scale of mobilization is bigger than Iran (bigger than Ukraine/Russia).
And importantly, the 1940s didn't end with just an economic boom.
It ended with Bretton Woods — a new monetary system. It was designed to underpin the American economic leadership we've had since.
The IMF and the World Bank were created to support that architecture.
With that all in mind, Scott Bessent (U.S. Treasury Secretary) was on stage this week at "spring meetings" of the very institutions Bretton Woods created (IMF and World Bank).
What did he talk about?
Post-World War II Europe and Asia, when the U.S. led the rebuild. And he said: "Why can't we do that again?"
He's talking about another era of American leadership, with growth at the center, leading to the spread of prosperity around the world.
Was this a clue about another Bretton Woods moment?
The war in Iran is restructuring energy. The confrontation with China is restructuring trade. The AI buildout is restructuring technology.
And once energy, trade, and technology have been restructured, the next question is: what about money?
For that, let's revisit an excerpt from almost a year ago ...
Pro Perspectives – May 22, 2025
The U.S. is working on a solution that will create a distinct edge, relative to the rest of the world, in ensuring robust demand for its debt.
The solution: private, regulated, Treasury-backed dollar stablecoins.
The legislation on this will 1) shore up the dollar's dominance in the world, AND 2) create a brand new, and very deep source of demand for U.S. Treasuries.
Not only will this move by Congress ensure the dollar remains the world's reserve currency, but the dollar will become the world's digital reserve currency.
So, people, businesses and governments from around the world will be able to own U.S. dollar stablecoins (effectively holding U.S. dollars) without the friction of opening a U.S. bank account or going through the U.S. financial system. They get instant and virtually free (no wire fees, no spreads) access to the stability, trust and liquidity of the dollar.
Through the dollar stablecoin, exposure to the dollar becomes instant, cheap and borderless.
This has all of the ingredients to be the anchor of the new monetary regime: regulated U.S. dollar stablecoins, backed by U.S. Treasuries.
Congress passed the Genius Act last summer. Trump signed it into law a day later. After the signing, this is what the White House said: "by driving demand for Treasuries, stablecoins will play a crucial role in ensuring the continued global dominance of the U.S. dollar as the world's reserve currency."
The rules aren't finalized yet, but Fed Governor Michael Barr gave a speech on stablecoins late last month and said they're already being used in foreign jurisdictions as dollar-denominated stores of value. It's already in motion.
The war in Iran is restructuring energy. The confrontation with China is restructuring trade. The AI buildout is restructuring technology.
And the stablecoin framework is restructuring money — and the demand for dollars, globally.
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