It is a solution to the Triffin dilemma.

He predicted the result that the system would not maintain both liquidity and confidence, a theory later to be known as the Triffin dilemma.

Freegold will solve the Triffin dilemma, as nations may opt for payment in what they perceive most valuable: currency or gold.

There was a solution to the Triffin dilemma for the U.S.: reduce the number of dollars in circulation by cutting the deficit and raising interest rates to attract dollars back into the country.

The Triffin dilemma (or the Triffin paradox) can occur when a national currency also serves as an international reserve currency, in which case a conflict can arise between short-term domestic and long-term international economic objectives.

The Triffin dilemma is usually used to articulate the problems with the U.S. dollar's role as the reserve currency under the Bretton Woods system, or more generally of using any national currency as an international reserve currency.

In the late 1960s and early 1970s the system suffered setbacks due to problems pointed out by the Triffin dilemma, a general problem with any fiat currency under a fixed exchange regime, as the dollar was in the Bretton Woods system.

While the current central role of the dollar does give the US some advantages such as lower cost of borrowings, it also contributes to the pressure causing the U.S. to run a current account deficit, due to the Triffin dilemma.

In the wake of the financial crisis of 2007-2008, the governor of the People's Bank of China explicitly named the Triffin Dilemma as the root cause of the economic disorder, in a speech titled Reform the International Monetary System.

He argued that a national currency was unsuitable as a global reserve currency because of the Triffin dilemma - the difficulty faced by reserve currency issuers in trying to simultaneously achieve their domestic monetary policy goals and meet other countries' demand for reserve currency.

In response to the accrual of negative consequences from the Triffin dilemma, President Richard Nixon abandoned the Bretton Woods regime in 1971 and suspended the dollar's peg to gold as U.S. fiscal deficits from overseas spending caused a massive drain in U.S. gold holdings.