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currency, the Deutsche Mark, gradually overshadowed even the British Pound and the French Franc, becoming the dominant currency in the region. Japan also went through a similar transition after the World War II, ascending to become the dominant economy of the Pacific Rim.

Today there are arguably three dominant currencies in the world: the US Dollar, the German Mark, and the Japanese Yen. All have risen to this status as a result of the superior strength and health of their underlying economies. The Euro, which will soon supplant many Western European currencies, including the German Mark, is promising to become a dominant currency in the world based on the strength of the economies of the many countries supporting its value.

Before we go any further, let’s step back and follow the evolution of money over the years. Centuries ago the human race created currency to replace the uncontrolled and subjective bartering system. Currency gave humans the ability to set the value of their products and services against a uniform unit, thereby stabilizing trading and creating an orderly commerce system. Originally money was made from precious elements such as gold and silver in the form of coins; therefore, the face value of each coin was equal to its actual value. The economic strength of each society (mostly kingdoms) was measured in the amount of precious metals it had in circulation. This system served its purpose well for many centuries but it was inefficient due to several reasons.

First, since precious metals provided the backing for the economies, it would have made sense for governments to keep them in their own possession rather than having them circulate. This would have given the governments more control over their economies by creating national treasuries to monitor and influence their respective economies. …