How is this a valid argument against "because it's backed up by the state's military power"? In relation to USD US can and does project military power globally to protect and or advance it's economic interests. How Venezuela's case is a valid precedent to prove this premise wrong is very hard to see.
It wouldn't make sense for Americans to stop believing in the dollar most likely... but if they were to do so, I'm sure those insurgent terrorists would find out exactly what military might is backing the dollar in short order.
Also, don't see how it would be the case that Americans or others lose faith in the dollar? Imagine tomorrow that it is revealed that the most core systems in the financial and banking industry were hacked 10 years ago and have been extensively manipulated by, say, Goldman Sachs. Or Walmart. Or whoever. Basically, any bank who says "there are 2 billion dollars in that account" fundamentally can't prove it. What then? When Walmart says 'we made $5 billion last year' and the rest of the world says 'prove it, and no we don't trust your funny-money IT systems'... what do we do then?
The cynical view on this is your currency to an extent is not only backed by your economy but also by economic resource you can take by force which in case of US is ... I obviously do not want to simplify this to a single factor of mil. power but it's definitely an important aspect.
If people believe there's a currency crisis and that the currency will crash, it becomes a self-fulfilling prophecy. They would instantly convert dollars to another type of currency or goods they think would retain value. They would take their entire paycheck every month and buy any possible physical good they can the same day to try to keep the value. You can have the largest military in the world, the currency would still crash like a rock, trust is everything for a currency.
