The value of currencies when unbacked by anything is solely a product of supply and demand. The USD being used as a standard for trade drives significant demand which helps to stabilize the value of the dollar, and also aids in things like our ability to export our inflation (as well as threaten other nations with sanctions/etc). However that demand itself is not inherent, and only maintained with significant effort - and having the USD as the standard for settlement of trade has been a major part of this game.
Even the gradual decline in the dollar dominance is causing significant issues with exporting inflation, amongst other things we used to be able to take for granted. It's also the reason that long-term interest rates on government debt are now hovering around 5%. As demand for the dollar declines, the interest the government needs to offer to make US debt enticing grows. When paired with deficit spending you get a vicious cycle: you need more money because you're getting drowned in debt, but you now pay more for that money which means you need even more money.
So for instance you know the US budget, right? Those thousands of pages Congress agrees to spend each year? Education, military, infrastructure, and all of those things we typically associate with government spending? That's only discretionary spending. Lots of other things, like interest on the debt, is considered mandatory and spent automatically. We're now reaching the point where interest payments will soon be costing us more than the entire discretionary budget. And that's in the current situation where the USD still has quite high demand. You just hand-waving away everything that sustains that demand would cause a catastrophic and rapid collapse in the US economy.
Even the gradual decline in the dollar dominance is causing significant issues with exporting inflation, amongst other things we used to be able to take for granted. It's also the reason that long-term interest rates on government debt are now hovering around 5%. As demand for the dollar declines, the interest the government needs to offer to make US debt enticing grows. When paired with deficit spending you get a vicious cycle: you need more money because you're getting drowned in debt, but you now pay more for that money which means you need even more money.
So for instance you know the US budget, right? Those thousands of pages Congress agrees to spend each year? Education, military, infrastructure, and all of those things we typically associate with government spending? That's only discretionary spending. Lots of other things, like interest on the debt, is considered mandatory and spent automatically. We're now reaching the point where interest payments will soon be costing us more than the entire discretionary budget. And that's in the current situation where the USD still has quite high demand. You just hand-waving away everything that sustains that demand would cause a catastrophic and rapid collapse in the US economy.