Yesterday Today Tomorrow

Inseong J Kim: Hello, this is Inseong Kim from Yesterday Today Tomorrow. Why are we at war with Iran? I am doing a three-part program, and today is part one. We're going to go over some history and connect the dots so we can understand today's war and the global issues we're hearing about.

Today, we're going to talk about the monetary system that affects our global situation. China has built infrastructure to conduct significant energy and trade transactions outside the dollar system. That infrastructure is operational today. It was built primarily as a defense against American financial sanctions, not as an immediate replacement for the dollar.

There is an honest question that matters for ordinary Americans: does that distinction change what happens to our mortgage rates, our grocery bills, or the government's ability to fund Social Security? If enough of the world decides to use that infrastructure for whatever reason, the practical pressure on dollar dominance builds, regardless of China's original intent.

To understand why that matters and why it connects directly to the war in Iran, we need to understand how the dollar became the world currency and what it has meant for every American life for the past 80 years. This is the first program in the series, Why Are We at War with Iran?

Before 1914, Britain ran the world's financial system. The British pound was the currency every nation needed. World War I changed that. Britain borrowed from America to fund the fighting and paid interest to American banks to buy American weapons and food. By 1918, Britain was exhausted in debt. America had the gold, America had the factories, and America had become, for the first time, a creditor nation. This is a very important history of where we were at that time.

In July 1944, 44 nations gathered in New Hampshire. One agreement was that the dollar would be pegged to gold. Every other currency was pegged to the dollar. The dollar became mandatory, not by market choice, but by international agreement. I'm sharing how important this international agreement is. Dollar dominance was not a strategic achievement; it was geography. America was the only major economy left standing after two world wars.

By 1971, America was spending beyond what its gold could back. On August 15, Nixon ended dollar-gold convertibility without warning allies. The system that made the dollar mandatory was gone, and dollar dominance fell sharply. America nearly lost its reserve currency status once before. We had a crisis.

What saved dollar dominance was oil. In 1974, America made an arrangement with Saudi Arabia: oil priced in dollars, Saudi revenues invested in American government bonds, and America provided military protection. Every country needed oil, and oil was priced only in dollars. Every country needed to hold dollars. The dollar had a new foundation, not gold, but energy. That arrangement held for 50 years. Many Americans have never heard of petrodollars.

In 2001, the dollar represented 73% of all foreign exchange reserves held by central banks worldwide. According to the International Monetary Fund's official data, that share is now 56.92%, a decline of 16% over 24 years. A lot went on in the recent 24 years of American history.

The Chinese yuan represents 2.12% of global reserves and 2.88% of global payment transactions. The dollar is still dominant by a very large margin. Those are the honest numbers. Things are slowly changing—not collapsing, but slowly changing at approximately two-thirds of 1% per year.

An important nuance is that the IMF's own analysis found that 92% of the recent headline decline was caused by currency exchange rate movements, not central banks actively selling dollars. Active diversification is much smaller than raw numbers suggest. The dollar is not dying, but the direction is consistent. That is the issue.

A small gap happened in 2001 in both the American economy and the Chinese economy, and that small gap has brought us to today. The same thing is happening with this monetary system. The small gap is consistently growing, and that is a potential we have to pay attention to. Something new has been added to that direction, which we address next.

For implications, America currently pays over $1 trillion per year just in interest on the national debt. That's not paying down the principal, just the interest alone. The interest bill is manageable today because the world still holds American dollars and still buys US government bonds at favorable rates.

If that demand weakens, higher interest rates on $36 trillion of debt mean a growing annual bill. That money must come from somewhere. It comes from Social Security, Medicare, or the programs ordinary Americans depend on. Our mortgage rate is lower than it would have been without dollar dominance. The world's demand for the dollar keeps American borrowing costs structurally lower.

The prices you pay for imported goods—your phone, your medication, your clothes, everything—are lower because America can run trade deficits without a currency collapse that would raise those prices. Americans have received this invisible benefit since 1944. Most were never told it exists, and most don't know it could weaken. That is what our program aims to share with and educate our audience.

The transition of this changing monetary system is very important. Through using TikTok or direct purchases from China, we are preparing for a Chinese monetary system that could soon be introduced. For decades, dollar dominance rested on one simple fact: there was no alternative. If you needed to buy oil, settle international trade, or hold your national savings, you needed dollars.

That is changing, not because the dollar has collapsed, but because for the first time in 80 years, an alternative infrastructure has been built, tested, and is processing real transactions. Here are some documented facts. Project M Bridge is operated by the Central Bank of China, Saudi Arabia, the UAE, Thailand, and Hong Kong. By late 2025, it had processed over $55 billion, approximately 95% settled in yuan.

CIPS, China's payment system, involves over 1,600 institutions across more than 120 countries. In March 2026, during the Iran war, it processed a record daily average of $134 billion. Yuan oil futures have traded on the Shanghai exchange since 2018. They are now the third most traded crude benchmark globally. During the Iran war, ship transit tolls in the Strait of Hormuz were paid in yuan, as documented by Lloyd's List and Bloomberg.

Now, this is the honest picture: the yuan is still 2.12% of the global reserve. The Chinese currency is not fully freely convertible. CIPS still relies on SWIFT for most of its transactions. The Federal Reserve, Atlantic Council, and independent economists assess that this infrastructure was built primarily as a defense against American financial sanctions, not as an immediate dollar replacement.

Ten years ago, if a nation wanted to conduct major energy transactions outside the dollar system, it had no reliable mechanism. Today it does. That is the catch; that is the difference. The infrastructure exists, it has been tested, and it's processing real transactions.

Whether China built this infrastructure to hedge against sanctions or to eventually replace the dollar, the direction of the pressure on dollar dominance is the same. That is what Americans were not told. We hear the messages in just pieces—very fractured information. Whatever happens today, we hear it and then we forget. We don't gather that information and have a full picture of what it means to me, my family, my community, and the nation.

We don't have the energy or time to really sit down and think about it because most of us are in survival mode to pay the bills. It is important for us to sit down and see the full picture and where we should stand regarding what is happening today. One hundred years ago, America was a debtor nation. Two world wars changed that. In 1944, the dollar became a mandatory world reserve currency. In 1971, that foundation was tested, and in 1974, it was saved through oil.

Because of AI, technology, and computer chips, the whole dynamic we are experiencing is changing. For 50 years, ordinary Americans have paid lower mortgage rates and lower import prices and received government services that taxes alone could not fully fund. Almost none of them knew why. Today, that advantage is under measurable, documented pressure.

The dollar is still dominant by far, and the Chinese money is under 3% of global transactions. But the exit infrastructure that did not exist ten years ago exists today. That is the question we have to ask. The question is not whether the dollar will collapse tomorrow—it will not. The question is whether America understands clearly enough what it has, how it was built, and what is required to maintain it.

It takes everyone to understand what is happening: fiscal discipline, energy independence, and manufacturing investment that ensures the dollar represents genuine productive power. These are foundations. None of them requires war, but all of them require the kind of sustained strategic attention that American political culture has struggled to maintain.

The generation that built this system understood what was at stake. The generation that inherited it deserves to understand it, too. That's what we need to understand about what's happening behind the scenes today. This is not the full story; this is just a very small part of the story.

Next week, we're going to go over the history of nuclear weapons in Iran so we can understand how, historically, Iran was able to develop its nuclear weapons and understand what is happening today. As the title of our program says, "Why are we at war with Iran?" In program one, we talked about the monetary system behind it. The dollar is still dominant, but a new system has begun as an alternative.

How we deal with these issues is not just a government's decision; American citizens have to be aware of it and apply it to our individual lives. We remember how dot-com companies flourished before the crash. A lot of us didn't know what was happening, and everyone signed up for dot-com companies. That was the frontline story, but behind it, a supply chain was prepared to build these companies through low-cost items coming through.

That was true then, so we have to know what is happening today. At that time, we didn't have much information from the internet like we do today, so the public did not know and could not prepare. Now, we have so much information that we can educate ourselves and participate in how America has to respond with a new system individually.

In the free market we talk about, it's difficult to control, but individual American citizens have to understand this monetary system and participate to protect our country. That is the nutshell of our program: be aware. Rather than binary information talking about war, there's a multi-layered aspect of this Iran war that we have to carefully discuss.

This is not just a monetary system; it relates to global power. What does that global power mean? Can we just let China run the world? Why does it matter to us? Can we just be isolated and protect ourselves? Is it possible? We are rich enough to sustain ourselves without so many different countries around us. Is that the right way of thinking?

We have many other media outlets—mainstream media and a lot of podcasters on YouTube. We are bombarded with more information than we can handle, but where is the truth that we can hear? That is something all the audiences have to pay attention to. Listen, study, back-check, and verify the information. At the end of the day, we all live here on American soil. How can we protect this country, including this monetary system?

The little device in our hand, the cell phone we have, is a very powerful tool. Money can go in and out and have a transaction every split second. You can buy and purchase, and then the item arrives at your door the same day or the next day. That's the world we're living in. You order food, and it arrives at the door. This whole monetary system we're using is still backed by dollars, but what if it changes? What does that mean to us in daily life?

As American citizens, be aware of this and also educate our children about what is happening in the monetary system and what they have to prepare for. In the beginning, I shared that China has built infrastructure to conduct significant energy and trade transactions outside the dollar system. That infrastructure is operating today. It was built primarily as a defense against American financial sanctions, not as an immediate replacement for the dollar.

There is an honest question that matters to all of us ordinary Americans: does that distinction change what happens to our mortgage rate, our grocery bill, and our government's ability to fund Social Security and Medicare? If enough of the world decides to use that infrastructure for whatever reason—against sanctions or for convenience—the practical pressure on dollar dominance builds regardless of China's original intent.

To understand why that matters and how it connects directly to the war in Iran, we need to understand our dollar. As social media educates us in different directions, we should be able to hear the truth that matters to all of us. This program is part one, Why Are We at War with Iran? I'm Inseong Kim from Yesterday Today Tomorrow. We'll be back next week. Thank you.