Jankowski: American Dollar – not so empty

We are utilized in the countersystem to look forward to the collapse of the US dollar power as both the symbol of US dominance in the planet and its main tool. Meanwhile, until now, it was not that simple.

Departing from Gold

In 1 of the last Anti-War Debate, a joint task “Polish Thought” and Against the Censur, a colleague Sylvia Gorlicka presented an interesting fact, documenting the stableness of the value of gold. This was the price of circumstantial products expressed by its quantity. According to this thesis, it is unchanged, despite the fact that the price of gold in different currencies is constantly rising. At the same time, it does not disturb – with the usage of the US dollar – to increase the state of possession of another goods. In fact, despite inflation and devaluation, the more USD we have, the more we can buy in the world.

How does it happen that specified a “empty” value inactive persists for almost a 100 years? Departing from money based on the amount of gold, it is, however, the 1930s erstwhile resignation from this standard turned out to be in the "western world" universal. What is more, it brings economical recovery. Poland, which, as 1 of the last to hold back the gold with the mentioned rock, was incapable to cope with the effects of the large Depression, erstwhile the United States of the era was the last New Deal They seemed to be doing better already.

The standard of gold, or any another countable good, was intended to defend against the failure of the value of the currency, and actually performed this function perfectly, but he was incapable to "handle" the reality in which the quantity and value of goods in a given economy produced, which was an unavoidable property of the industrial era, and it was hard to presume that something had changed in this matter. The number of people in the planet continues to grow, their consumption needs also. If the production had stopped developing, we would have fallen into the abyss of shortages. And just – without means of payment it is hard to imagine any trade.

Money is uneven

There must have been a change in concept under these conditions. It is not entirely actual that fiducial money is "empty" due to the fact that its supply depends on respective factors, 1 of which has distinguished the US dollar for a long time. First, the value of production in a given country. The stronger the interior market, the more money it needs in circulation. Architects New Deal They concluded that since the crisis is simply a symptom of the suppression of production, it should be revived, and for this intent a celebrated "paper" is needed. They were right; inflation did not eat USD, due to the fact that the revival of production allowed for this dollar to buy more.

The second is the global request for the currency. The United States maintained the dollar's strength because, as a consequence of planet War I and planet War II, the vast influences on the full planet (especially in Western Europe, the heart of manufacture at that time) were eager to grant long-term loans to countries (and their societies) dominated by themselves (and their societies), which, through the "confession of faith" in the USD, obtained funds to rebuild their own potentials. The US dollar thus gained fresh markets and hundreds of millions of people who utilized it. Notabene: that was the overarching nonsubjective of Marshall's Plan – the spread of the dollar as a means of exchange.

Let's look at the currency a small wider. Not only as a tool we pay, but as a "good". That's the only way to realize the power of USD. The dollar has become not only a common currency thanks to loans granted worldwide, but besides as a consequence of an avalanche increase in the value of global trade, in which it was a dominant currency. If for a dollar we can buy Russian oil, African uncommon materials or Chinese phones – that means it is worth having the tool we pay for it. Thanks to a modern economy based on fast transport and inexpensive fuel, trade between countries is present as common as always and its value only increases. However, this helps to a greater degree the American currency than others, due to the fact that it is utilized in accounts.

Hegemony Fall

This is why the dollar has not been produced for years by monetary economical schools. request for the dollar kept increasing due to the fact that production and trade grew. due to the fact that a dollar was paid. So it was precisely the other – expanding the supply of the dollar served to grow American influence. Only a fool wouldn't usage it. De facto The purchasing power of USD has steadily increased. In many countries, for example, faced with inflation, it became an unofficial currency, whose autochthons began to trust more than their own.

The planet that paid itself with an American dollar was besides paying a hidden taxation for the United States. due to the fact that Washington was the only 1 exempt from the margin for currency traders. Each ‘respecting’ country collected dollar reserves, so it became a charrand of the strength of the American currency, confirming it by expressing the value of its own economy.

Therefore, it is only the fresh phase of the war in Ukraine and the associated acceleration of the "disconcentration of power in the world" that can indeed hit the dollar. Countries, representing the majority of the world's population, ostentatically depart from the USD in billing among themselves. They include fresh agreements and BRICS is reasoning about creating a currency for global exchange. This is hard to calculate, of course, but if we get to a point where the value of the dollar trade exceeds the global economical growth – for the first time in a 100 years request for USD will fall and the devaluation of the dollar will begin. Only then will the black dreams of libertarians be fulfilled, but this will consequence not so much from incorrect economical policy, but from the inability to keep the position of global hegemon. The driven bike will fall and lose its leadership in a large cycling race.

Tomasz Jankowski