Brown Watson Institute

Does the US Really Make the Dollar? Has It Ever?

In this Rhodes Center podcast, host Mark Blyth sits down with journalist‑turned‑historian Brendan Greeley to unpack the surprising origins of the U.S. dollar, as chronicled in Greeley’s new book, *The Almighty Dollar*. The conversation traces the currency’s lineage back to the 16th‑century Joachimsthaler—a large silver coin minted in Bohemia—whose design was copied by Spanish authorities to produce the “piece of eight,” the coin that flooded the Atlantic world and became the de‑facto dollar for the American colonies. Greeley argues that the fledgling United States never truly created its own sovereign money; instead, colonial economies pegged their paper notes to the imported Spanish silver dollars that arrived via Caribbean trade. Early state‑issued shillings and dollars were eventually outlawed by the Constitution, pushing banking institutions to issue notes. This shift marked the start of an endogenous money system where banks, not the government, generated the bulk of circulating currency. The episode is peppered with vivid anecdotes—such as the tale of Stefan Schlick’s illegal silver mine that birthed the Joachimsthaler, and the post‑Civil War national banking charter that required 100 % Treasury securities backing. Greeley’s memorable line, “America succumbed to the dollar,” captures the paradox of a nation that adopted a foreign‑origin currency while striving for monetary independence. Understanding this tangled history reframes today’s debates over fiat money, central banking, and monetary sovereignty. It shows that the dollar’s dominance stems less from deliberate state design and more from a long‑running process of banks creating credit and governments adapting regulatory frameworks to harness that endogenous liquidity.