THE DOLLAR’S ILLUSION: Global Dependence and the Hidden Cost of Monetary Hegemony
The US dollar has reigned supreme as the global reserve currency for decades, granting the United States an unprecedented ability to finance its deficits. But this power comes with a severe hidden cost: excessive money creation by the Federal Reserve exports inflation and instability to the rest of the world, pushing millions into poverty.
In this deep analysis, we examine how the historic decoupling from **gold** in 1971 turned the dollar into a **fiat currency** backed solely by trust. We uncover the truth behind **Seigniorage** (the hidden profit) and the growing risk posed by a global economy that may no longer withstand the weight of US monetary policy.
🔎 **KEY AREAS EXPLORED IN THIS ANALYSIS:**
1. **Digital “Printing”:** How the Federal Reserve increased the **M2 money supply by 40%** (2020-2022) and why this massive liquidity injection erodes global purchasing power.
2. **Seigniorage: The Hidden Tax:** The vast profit earned by the US government from creating money (estimated at **$50-$100 billion annually**).
3. **Exporting Inflation:** Why dependence on the dollar leads to extreme instability (e.g., Turkey, Argentina) and how American overconsumption is financed by the world.
4. **The Challenge:** Why, despite the **$34 trillion national debt**, the dollar remains dominant (88% of transactions), and what the alternatives are (BRICS, Yuan).
The Crucial Question: Can the global economy withstand the weight of the dollar’s illusion? What is the biggest risk for European nations? Share your comments below!
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