If, say, the government abolished the IRS and demand plummeted for USD, the Fed would respond by taking money out of circulation. The Fed creates an elastic mon

If, say, the government abolished the IRS and demand plummeted for USD, the Fed would respond by taking money out of circulation. The Fed creates an elastic money supply. You cannot reason about the dollar's value by studying demand for USD in isolation. As for your "HND" hypothetical, it's very plausible that you could mint your own currency and control its value. You would not be able to control the total value of all HND in circulation. In aggregate HND would probably be a relatively worthless currency but so long as you are willing to constrain supply very tightly you will ultimately end up with a market for the few weirdos who are willing to part with $1 to obtain 1 HND. That may be a total of $1000 or less in the end, a laughable sum, but the unit price would still be controlled.