The Empty Throne

For six hundred years, every reserve currency had an obvious heir. The dollar doesn't - and that changes everything.

When a king dies, nobody asks who’s next.

They already know. The crown prince has been standing beside the throne his whole life. The succession was settled long before the old man stopped breathing. That is the entire purpose of a crown prince - to take the most dangerous moment in the life of a kingdom, the handoff of power, and make it feel boring and inevitable.

I have written many times that the U.S. dollar will eventually lose its place at the center of the world, and I am not going to re-litigate that today. Empires end. Reserve currencies end. Anyone who tells you the current arrangement is permanent has not read much history. That part I am comfortable with.

This is not alarmist. It is cyclical.

Here is the part that I have been thinking about a lot. Who is the crown prince?

For six hundred years, the crown has always had an heir.

Portugal handed off to Spain. Spain to the Dutch. The Dutch to France, France to Britain, and Britain to the United States. Roughly a century each. And in every one of those handoffs, you could see the successor standing in the wings. By the time London’s reign was ending, America was already the largest economy on earth and the world’s biggest creditor. The crown did not leap to a stranger. It went to the next-strongest power in the room - the one who already controlled the trade routes and the resources that mattered. That is how reserve currencies have always changed hands. The understudy was already in costume.

So I did what I always do. I went looking for the understudy.

And this is where it gets strange. If we pull back the curtain, the wings are empty.

Many people have an answer to this question, but almost nobody has actually checked their work. Let me walk through a few of the candidates that often come up in conversation.

The obvious answer that isn’t

Say “the dollar is finished” at any dinner party and someone will finish your sentence for you.

“China.”

It is the reflex. China is the world’s factory, the world’s largest exporter, and the second-largest economy on the planet. Of course, it is next.

I understand the reflex. But I have learned to be suspicious of any answer the whole room arrives at too quickly. So let me give you three reasons the obvious answer is wrong - and notice that none of them are opinions. They are factual observations.

One. You cannot be the world’s banker while the doors of your bank are locked.

A reserve currency has to be something the world can hold freely - buy it, sell it, move it across borders at three in the morning without asking permission. The dollar does that. So did Sterling. So did the Dutch guilder before it. Reserve currencies require deep, liquid, trusted markets and a high degree of convertibility. That is not a feature. It is the whole job.

China has been the world’s number-two economy and its number-one exporter for decades. And after all that time, here is where its money stands: the yuan makes up roughly 2% of the savings that the world’s governments hold in reserve, and only about 3% of the payments that cross borders. The U.S. dollar is about 58%. That is not a gap. That is a canyon.

And the canyon is there on purpose. China does not let its money move freely. By law, an ordinary Chinese person can take only about $50,000 out of the country in a year, and big companies need the government’s blessing to send money abroad at all. Picture an engineer in Shenzhen who has done well and wants to move her savings into dollars and park them somewhere safe overseas. She cannot, not really. She hits the fifty-thousand-dollar ceiling by spring, and the rest of her money stays home, where Beijing can see it. China also refuses to let the market decide what the yuan is worth - every morning, the government sets the price and lets it drift only about 2% from there. Why all the rules? Because if money could leave freely, savers could pull their cash out all at once and crash the whole system - and the value of the yuan would be set by the world instead of by Beijing. That is the control China will never give up.

And here is the part that surprises people. China does not seem to want the job in the first place.

Back in 2009, the man running China’s central bank said something remarkable. He argued that the whole world had a problem: it leaned too heavily on one country’s money. His fix was not “use ours instead.” It was that the world should run on a neutral kind of money that belongs to no single nation - not America’s, and not China’s either. Think about that. He had the perfect moment to make the case for the yuan, and instead he said no country should hold this kind of power, including his own. That is not a man reaching for the crown. That is a man saying the crown is dangerous.

The experts who study this say the same thing. Eswar Prasad, a Cornell economist, laid it out in his book Gaining Currency: The Rise of the Renminbi. His point is plain: as long as China keeps its money walled off, the yuan can win a slice of the world’s trade, but it can never become the money the world saves in. And China keeps the wall up by choice. It has relaxed a few of the rules over the years - but only slightly, and only in ways where it can still track and approve every dollar that moves.

So the usual story has it backwards. China is not a hungry challenger straining for a crown just out of reach. China is the favourite who keeps refusing to enter the race - because the prize comes with a bill it has no intention of paying.

Two. To be the world’s banker, you have to send your money out into the world. China was built to pull it in.

This is the part almost everyone misses, so slow down with me.

Back in 1960, an economist named Robert Triffin pointed out a trap at the heart of being the reserve currency. If the world runs on your money, you have to supply the world with your money - and the only way to do that is to send more of it out than you take in. You have to run deficits. Permanently. The reserve issuer is the buyer of last resort for everyone else’s stuff. America has played that role for eighty years, and the trade deficits people complain about every election cycle are not a bug in the dollar system. They are the rent the United States pays to keep the crown.

Now look at China. In 2025, it ran a current-account surplus of $735 billion - a record, and on the trade side, the largest surplus any nation has ever run. China’s entire rise was built on selling to the world and banking the proceeds. It is the workshop, not the buyer. To become the world’s reserve issuer, China would have to flip that on its head: import more than it exports, run deficits for decades, and hand its currency to foreigners by the trillions. It would have to dismantle the exact machine that made it strong.

Strength is earned by playing to your advantage, not by abandoning it. Britain ran deficits to be the world’s banker. America flipped from creditor to debtor to take the throne. China has looked at that bargain and said, politely, no thank you. And I do not blame them.

Three. China is aging before it is finished climbing.

When America took the crown in 1944, it was young, growing, and the world's largest creditor. Every previous successor was the same - population on the way up, not the way down, at the moment of the handoff. Demography was wind in the sails.

China’s population peaked in 2022 at around 1.4 billion and is now shrinking. Its working-age population has been falling since 2015. The U.N. projects that China will have 1.26 billion people by 2050, roughly 40% of whom will be over the age of 60, and that its population could fall to 633 million by the end of the century. That is not a slowdown. That is a society growing old before it has finished growing rich.

But isn’t China just early?

Here is the obvious rebuttal: didn’t every great power start as a workshop? The Dutch built and traded their way to riches, then began lending their winnings to a rising Britain. Britain built the factories, got rich, and became the world’s banker just as America took over the building. America did the same, then shipped its own factories to China. The workshop becomes the bank - it has happened over and over. So maybe China is simply early, and its turn is still coming.

But look at how each of those turns actually happened, because it lines up with the three reasons above. Every one of those countries made the leap while it was opening its doors, still young, and on its way to becoming rich. China is the reverse on all three: keeping the wall up, aging fast, and not yet wealthy the way the others were. It may be the first workshop in history to grow old and stay locked up before it ever became the bank. And there is a clock problem - this kind of turn takes a generation, but the dollar’s troubles are here this decade. Even if China could one day make it, it would not be ready in time. The crown may move long before China can catch it.

The shorter conversations

Once you set China aside, the bench gets thin in a hurry.

The euro? After the dollar, the euro is the most widely held reserve currency on earth - about 21% of the world’s reserves. So it earns a serious look. But it carries a flaw the dollar does not: the euro is a currency without a country. Twenty nations share it, and each one still borrows on its own, at its own interest rate. There is no single “Europe” bond for the world to buy - you have to choose one country’s debt over another’s. When the world parks its savings, it wants one big, safe, trusted place to put them. The euro offers twenty smaller ones instead. We watched that arrangement nearly tear itself apart during the European debt crisis from 2009 to 2012, when tiny Greece almost brought the whole project down. And after more than twenty-five years, the euro’s share of world reserves has barely moved. A currency that cannot agree on a single government bond is not going to replace the dollar.

The yen? The Japanese yen and the British pound come next on the list, at about 6% and 5% of world reserves. But neither is a contender - they are warnings. Take Japan. Its government owes more than twice the country's annual output, the heaviest debt load in the developed world. To keep from drowning in interest payments, the Bank of Japan holds interest rates down by force, and it has bought up nearly half of its own government’s debt to do it. That long squeeze has pushed the yen’s value down for years. Add a population that is both shrinking and growing older, and you do not have a country reaching for the crown. You have a country showing the rest of us what the end of the road looks like. The British pound is the same story in a smaller size - a former empire carrying heavy debt and a shrinking place in the world.

A BRICS currency? This is the one I get asked about most, and history is blunt about it: monetary unions without political union do not survive.

The Latin Monetary Union, which tied France, Belgium, Italy, and Switzerland together starting in 1865, fractured and was gone by the 1920s. The Scandinavian Monetary Union of Sweden, Denmark, and Norway, founded in 1873, met the same end by 1924. And those were neighbours - shared borders, shared culture, shared history - and they still came apart at the first real shock.

Now look at BRICS. India and China fought a deadly clash in the Galwan Valley in 2020 and remain open strategic rivals. India has stated plainly that it does not want a common currency. The bloc spans democracies and autocracies, creditors and debtors, with no shared central bank, law, or treasury. A common currency is a marriage. It requires you to trust your partner with your savings for the rest of your life. BRICS is not a marriage. It is a networking event with a group photo.

What about stablecoins?

There is one more candidate people raise, and it deserves a real answer: stablecoins. Many of you are bullish on them, and you are not wrong to be - they may be the most important monetary innovation in a generation.

So let me start with what one actually is. A stablecoin is a digital token meant to always be worth one dollar. A private company issues the tokens, and for every token it sells, it holds one real dollar - or one dollar’s worth of U.S. Treasuries - in reserve to back it.

The advantage? It is as “stable” as a U.S. dollar, but as mobile as a cryptocurrency.

You can send stablecoins to anyone in the world in seconds, as easily as a text message, without a bank in the middle. That is the appeal, and it is a real one.

But the same design that makes them work carries a cost. Because private companies issue the stablecoins and keep the record of who holds them, that company can also freeze anyone’s coins - on their own or through government order.

The dollars backing those tokens still sit inside the U.S. financial system, where they can be frozen as well. So a stablecoin does not remove your dependence on the United States and its banks. It adds a second party you have to trust on top of them. If your fear is having your money switched off, a stablecoin can be switched off more easily than paper dollars, not less.

Which is why stablecoins, for all their promise, do not answer the question we are asking. A stablecoin is still a dollar - a faster, smarter way to hold and move dollars, but not a replacement for the dollar, and not an escape from depending on the country behind it.

Stablecoins may extend the dollar's lifespan, but they do not replace it.

So what is left?

This is the moment I kept arriving at, and kept resisting, because it sounds stranger than it is.

What if we have been asking the wrong question this whole time?

Every answer history has ever handed us was a country. A flag. A capital city with a mint. And so we go looking for the next flag, come up empty, and conclude that nothing can replace the dollar because no country is ready to.

But the rule was never really “it has to be a nation.” The rule was “it has to be something the whole world trusts to settle its debts.”

Because there is one asset that belongs to no government, carries no one’s promise, cannot be printed by a rival, cannot be frozen by an enemy, and has been accepted everywhere on earth for longer than any of these flags have existed. It does not need a central bank, a fiscal union, or a happy marriage between India and China.

At the end of 2008, this asset accounted for about 9% of global reserves. A single-digit afterthought. By 2024, it had risen to about 16%. And by the end of 2025, it had climbed to roughly 27% - passing U.S. Treasuries as the largest single holding in the world’s central banks.

By now, you have probably guessed what it is. It is gold. And I know the reflex - the moment a writer says “gold,” half the room rolls their eyes at the “gold bug” and stops reading.

And I get it. Because gold is useless. You cannot eat it. It pays no interest. It is a soft metal that sits in a vault and does nothing. Its entire value rests on a belief - a shared agreement that the stuff is worth something. Strip away the belief, and you are holding a rock.

But if we are going to be consistent, we have to run that same test on everything else central banks hold.

The dollar is also just a belief. So are the euro, the yen, and the yuan. You cannot eat any of them either. A dollar is worth a dollar only because we all agree it is - and because we trust the government printing it not to print too many. Every form of money is a story we have agreed to believe. Money has always been a story.

So the real question was never “which money has real value.” None of them do.

The real question is: whose story are you trusting - and what does the storyteller want?

To believe in the dollar, you must trust Washington - not to print away your savings, not to freeze your account when you fall out of favour. To believe in the yuan, you must trust Beijing. Every national currency hands the pen to a single author, and every one of those authors carries its own self-interest, its own debts, its own enemies, and its own reasons to rewrite the story at your expense.

So yes - gold is also a belief. But it is the one belief on that list that an author cannot spontaneously print more of or confiscate.

And this is not my opinion. In 2022, the U.S. and its allies froze over $300 billion of Russia’s reserves in response to the invasion of Ukraine. That afternoon, every finance minister on earth learned the same lesson: an asset held inside someone else’s system is not really your asset.

That same year, central banks bought more gold than in any year since 1950.

No central banker actually wants this. Gold is inconvenient - it must be guarded, it is costly to ship, and it settles slowly. It will never be a first choice. But as alliances wobble, trade deals tear up mid-sentence, and currencies get turned into weapons, the conversation shifts from the currency of choice to the asset of last resort.

“We’re at a unique moment geopolitically, and I could see in the next few years that we are going to have some kind of a grand global economic reordering, something on the equivalent of a new Bretton Woods or the Treaty of Versailles, there’s a very good chance that we are going to have to have that over the next four years.” - Scott Bessent, 6/6/24, prior to becoming U.S. Treasury Secretary

Global central banks may or may not be forecasting a formal new Bretton Woods, but their balance sheets show they are preparing for a grand global economic reordering.

Where does that leave us?

Not, I think, with a coronation. I am not here to tell you gold is the new king - that is the gold bug’s sermon, and it misreads what is happening. Gold is not the heir who finally steps out of the wings. Gold is what the world reaches for when it looks at the wings and finds them empty.

And the first thing an empty stage tells you is the opposite of doom. A king with no rival does not get overthrown next Tuesday. Because there is no successor currency ready, and no country willing to do the job, the dollar is likely to hold its place far longer than the loudest pundits claim. That is exactly why I am not ringing alarm bells. The dollar does not fall off a cliff. It dies by inches.

But the people who manage the world’s money see the empty stage too. They know there is no successor - but they no longer trust the incumbent either. So they are doing neither: not betting on a new currency, because there isn’t one, and not fully trusting the old one. They are stepping offstage for now. And in the language of money, stepping off the field means gold.

So let me be clear about what gold is and is not. It is not the solution, and it is not the future. Gold will never be the world’s reserve or trading currency, for one plain reason: it is slow, and the world needs money that moves in seconds. Gold is not the next act. It is the intermission.

What comes after the intermission is, most likely, a hybrid - trade priced in several currencies at once, balances settled in part by a neutral asset no government controls. The shape is already faintly visible: central banks hold dollars, euros, and gold side by side today; China’s own central banker called for a neutral money back in 2009; and “a new Bretton Woods,” the phrase the U.S. Treasury Secretary keeps using, describes exactly this - the first Bretton Woods was itself a hybrid, currencies anchored to gold. But I am not going to dress that up as a forecast you can act on. It is a direction, not a destination. Nobody is rewriting the system tomorrow.

So here is what I actually expect: not a crash, but a long intermission. The dollar slowly losing altitude, with gold held as the placeholder, until something new and concrete finally takes the stage.

For six hundred years, the question was always the same: which country is next? The strange thing we have to sit with is that this time, the honest answer might be none - at least not for a long while. No crown prince. No next flag. The throne simply stays empty, and gold is the name we give to an empty throne.

Which means the rising price of gold is not really a story about gold. It is a thermometer. And the temperature is climbing fast: gold has more than doubled since 2022, from about $1,800 an ounce to more than $4,000 today. That is not a metal becoming more useful. It is trust draining out of the system - and as long as that number keeps climbing, the world has not yet agreed on what comes next. That is the gauge to watch: not because gold is the destination, but because it tells you how far we still are from a real one.

Honest question - let me know in the comments: what am I missing?

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That’s it for today,

Jay Martin

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