The global dollar has been specifically designed to reflect a financial standard of value, and as a result to perform as functionally better money. National currencies fluctuate arbitrarily against each other, but the fundamental issue is that they fluctuate arbitrarily against real financial value. Even ‘home’ currencies represent an exposure to this financial currency risk. Prices become distorted and transactions complicated as a result, making conventional money a poor medium of exchange. Global dollars provide a common, meaningful measure of value to facilitate transactions.
For similar reasons, conventional money is a poor unit of account. Accounts will begin to deviate from real financial values as soon as they are made. Future financial equivalence depends on discount rates and currency values that are fundamentally unknowable. Only the global dollar incorporates international investment opportunity cost directly into the value of money itself, maintaining equivalent financial value through time without any need for estimates or adjustments. An asset that appreciates in line with this standard will maintain a stable global dollar value.
Conventional money is a terrible store of value, and bank interest is a poor substitute for a reasonable rate of return. We have come to accept a basic trade-off between liquidity and return, but this trade-off is no longer necessary. Global dollars deliver an efficient generic rate of return implicitly, without any need for explicit interest. Money itself becomes fully invested, making bank interest uncompetitive and diversified passive funds irrelevant.
The base rate of interest for global dollars is constant at zero, effectively eliminating a key element of uncertainty. Interest might be charged for transaction-specific elements of lending, such as management costs and borrower risk, but they could also take the form of simple fees. It is also important to note that conventional currencies are unable to express a ‘risk free’ rate of interest, as future interest rates and currency values will always be unknown. In other words, any fixed rate will prove to be wrong over time, and the nominal amount of the debt does not refer to any meaningful value. Even if we trust that the US government will repay the correct number of US dollars, the actual rate of return depends on the real financial value of those US dollars at the time. Only the global dollar can provide a proper standard of deferred payment.