America is so use to the dollar that they cannot conceive of a time when the dollar was not its currency, of which, the nationalized dollar, that is to say, the unit of money known as our dollar, was created by the National Banking Act of 1863, which essentially established the federal dollar as the sole legitimate currency of America. This meant that our currency would no longer be issued and redeemable by individual banks, but instead be issued by banks under a national charter, which allowed the United States to therefore create money so as to fund its war efforts and to keep the country solvent.
Though in the ensuing years there have been many changes and amendments to our currency, such as the fact that the dollars so printed are not redeemable in gold or silver, nor are the dollars as traded on foreign markets redeemable for gold. So too, because of the size and might of our economy, along with the stability of our republic, the dollar, in fit, form, and function has become the reserve currency of the world, despite the fact that the dollar is not actually backed by anything of value, other than the debt notes that are issued and bought by governments, foreign and domestic, as well as investors throughout the world.
All of the above is fine, to a certain extent, until such a time when it no longer is fine, by, for instance, a government consistently running massive deficits, of which America has been doing so in recent years, of which the national deficit has increased from $5.65 trillion dollars in 2000, with a total debt load as a percentage of GDP at 55.8%, to 2018's national deficit at $20.62 trillion dollars, with a total debt load as a percentage of GDP recognized at 103.81% as of the third quarter of 2017.
The reason that such a deficit does matter is the fact that currencies fluctuate day by day, and year by year, of which, the result of such fluctuation is the inflation and deflation that are the consequences of it, but that is a small inconvenience as compared to outright currency devaluation, which many countries have done, and continue to do, in order to reset and to re-anchor their currency at a new rate so as to stimulate their economy by boosting exports, while correspondingly reducing imports, as well as reducing significantly the cost of servicing their national debt, as compared to completely becoming insolvent.
Of course, currency devaluation is extremely disruptive for those that have assets in such a currency, because when that currency is devalued or replaced, the old currency loses its value at an exceedingly high rate of 50% or even far more, of which, those that are aware of such a devaluation being imminent are sure to come out far better than those that are unawares.
This then means that currency devaluations are done on a government to government basis, of which, major foreign trading partners are consulted and negotiated with, along with the fact that those that issue such currency on a national basis, most definitely are the ones that set the structure for the new currency of which the institutions that issue and set the value of the replacement banknotes are the biggest beneficiaries of the new currency for they literally write the rules of it, whereas, the mass of the public, and all those that utilize the currency for their daily transactions and pay, will find that the devaluation hits them right in the pocketbook, effectively eviscerating their lifetime of savings and earnings, overnight.