Long before the World Wars, and even long before Columbus rediscovered the Bahamas, the Aztecs used cocoa beans as currency. In Europe, metal-backed currencies were the culmination of all human empires of every epochs stripping away the entire planet of prized metals. Just how these metals moved to Fort Knox is rudimentary. During WW II, the Allies were provided with anything by the Americans—oil, steel, and munitions – once everything was paid for in gold. When the fighting ended, the American economy wasn’t only far larger, but Europe’s was far lesser.

In the Western Hemisphere, the U.S. dollar emerged as the only sensible intermediate of exchange. Moreover, the Americans had drained the very metal out of European states that would have allowed any possibility of a durable currency competitor anywhere in the Eastern Hemisphere. The Americans didn’t join WW I until three years in, and served as a creditor to the Europeans instead of debasing their currency. In August 1945, at the end of WW II, the empires of the previous five centuries were impoverished. By 1947, America had amassed 70% of the world’s gold reserves.

In the period of the post-WW I economic collapse, which was an abiding concern of Sir Arthur Lewis, it had become clear that not even the British Empire was magisterial enough to provision a currency that everyone in Europe dreadfully needed. Only the Americans had the precious metals and a single economic and military structure needed to carry an extra-national currency far and wide. It took some time, but it was eventually realized that asset-based currencies were incompatible with global peace and rapid economic growth.

In unsuccessful systems, governments issue more currency, without simultaneously securing more assets to back it.  When trust is gone and the volume of currency soars and people begin to dump it, the value falls with oversupply. The Quebecois infamously paid their soldiers with pieces of playing cards. In Imperial Japan, wartime shortages of metals forced the use of a reddish fibre currency that resembled corrugated cardboard.

Sadly, bad economic management culminates in currency collapse, and so too does good economic management. In a successful system, the stability of a real currency provides a platform for economic specialization and growth. Economic specialization and growth in turn need ever-larger amounts of currency to buttress burgeoning volumes of trade and commerce. Ever-larger amounts of currency necessitate ever-larger volumes of the stuff needed to back the currency.

In the Old Spanish World of partners and neutrals, even rivals like the Portuguese Empire had no choice but to use Spanish pieces of eight. During the late Spanish period and well into the rise of the British era, Spanish coin remained ever-present in circulation, and volume, and reliable in its purity. In fact, Spanish coin was used more in British America than the British Pound. And with the flood of Spanish coin came runaway inflation, not just in Spain, but in any territory that could supply the Spanish with goods and services. Spanish coin powered the rum-sugar-transatlantic triangular trade linking Britain’s America, the West Indies, and African possessions.

Typically, crises including the financial crisis of 2007-2008, are viewed as points of inflection. Pivots that prove to be necessary and beneficially corrective. In other cases, a crisis is a moment that is bracketed. In fewer cases, it refers to a contradiction that accelerates a transition to an entirely new and crucially better socio-political situation. But in recent times, crises have become knotty. Humans now live their lives interlaced with algorithms, AI, social media, the IoT, and data lakes.

Nothing is moored anymore. Outcomes are adrift. Fluctuations cascade. A small change anywhere has large non-linear effects everywhere. A balloon over Bakhmut and the price of bananas in Belize bellows. This is the new Permacrisis – an extended and uneasy period of instability and insecurity that is rewiring the social contract. Part of our present uneasiness stems from the phantom of digital signatures, electronic transactions, distributed ledgers, digital dollars, and smart contracts which are transaction protocols that automatically execute, control and document events and actions in an agreement.

The world has moved from rural to urban demographically. Inequality across countries is in decline. Inequality within countries is increasing. This incongruity grates against a fault line that already strains the social fabric. There is passionate intensity to move toward a lower-carbon economy. But the best lack conviction as they struggle to keep pace with what is required to reach net-zero goals.

Permacrisis is a portmanteau of “permanent” and “crisis”. Policy analysts in Europe consider this word as defining the era in which we now live. Analysts in Britain locate the genesis of this era in Brexit. Others point to the SARS-CoV-2 viral episode. Some cite the invasion of Ukraine.

David Shariatmadari has written that a “permacrisis” is a dizzying sense of lurching from one unmatched event to another, while speculating about what new revulsions lurk ahead. Beyond the bend in the river, old assumptions no longer hold. Cardinal and irreversible changes will arise that will shape and mould whatever is ahead. Already, the unbanked use stable coins to unlock banking services outside the traditional banking system.