In the last article, why do Americans print money at home so they can eat spicy food? This paper introduces in detail how the dollar became the world currency, so let's talk about how the United States won the world wool by using the hegemony of the dollar. At the same time, let's look at how the United States uses dollar hegemony to influence and control the world.
The full text is 2700 words, detailed and comprehensive, and it takes 7 minutes to finish reading.
0 1
As we all know, if a banknote can't play the role of currency, it is just a blank sheet of paper, and the difference between the value of a banknote and the actual casting cost is pure profit for the currency issuing country, which is called seigniorage.
Coin price difference
What is the casting cost of dollars? I went to the official website of the Federal Reserve to check.
Every year, the Federal Reserve Committee predicts the possible demand for new currency and issues orders to the Carving and Printing Bureau of the Ministry of Finance, which produces US dollars and charges the Committee the production cost. The budget for currency operation in 2020 is $877.2 million.
The following table shows the specific production costs of different denominations of dollars. It can be seen that the production cost of 100 currency is only 19.6 cents, while the production cost of one dollar is 100 cents. That is to say, the net profit of printing one dollar in the currency of 100 exceeds 99 dollars, and the profit has increased by 5 10 times.
tariff
The United States is the largest market in the world, and all countries have great foreign exchange demand for dollars. If you want to change dollars, you have to sell things to the United States, so that you can change them into dollars. If you want to enter the American market, you must pay the US government. In addition, the United States can strangle other countries through tariff cards. It is precisely this abnormal relationship between supply and demand that gives the United States the confidence to sanction other countries with tariffs.
Coin spreads and tariff income are only the basic income of dollar hegemony, and the real big head lies in the financial harvest, because the whole world needs a lot of dollars to circulate, which provides a convenient investment environment for American financial institutions.
finance
As soon as the Federal Reserve cut interest rates, the money in the bank could not be kept and began to flow out, which was equivalent to opening the floodgates to stimulate the water in the reservoir to flow out. When the dollar flows to which country, the economic situation begins to prosper, the stock market begins to rise, and house prices begin to rise. A few years later, a dollar of assets rose to 10.
At this time, the Federal Reserve began to raise interest rates again, and the dollar began to flow back. Originally, 1 USD flowed in, but left with1USD. After the capital withdrawal, the stock market immediately fell, and the economic situation immediately fell back. Dollar took the chicken away, leaving only a feather. The harvested country was full of sorrow, and an economic crisis broke out, with a very tragic ending.
The United States, on the other hand, regulates the inflow and outflow of dollars by cutting interest rates and raising interest rates. Between this inflow and outflow, the dollar has harvested the world.
Some readers may wonder, since the United States can print money to raise interest rates and cut interest rates, can't other countries learn from the model?
Of course. It is ok for the United States to eat meat and other countries to drink soup, but it is basically impossible to grab meat from the United States.
Why is it impossible? Let's move on.
02
What exactly is dollar hegemony? Encyclopedia said that dollar hegemony refers to the fact that in the process of implementing functions of money, the dollar has brought many economic benefits to the United States, but it may also bring various negative effects to the economies of other countries.
To put it simply, the dollar can become the overlord because we can print money at our doorstep and reap the wealth of the world. The key factor is that the US dollar is the world currency, which is why we should use a single article to introduce how the US dollar became the world currency.
To thoroughly understand how the United States uses the dollar to rule bonus hunter, we must know how the United States uses the dollar, and we must also understand the relationship between the dollar and other countries.
At present, in the global payment market, the US dollar is still the undisputed hegemon, ranking in the top six among the five global currency markets in 20 19 and 19:
1 USD, accounting for 40.08% of the global payment market.
2. Euro, accounting for 34. 17% of the global payment market.
3. Pound, accounting for 7.07% of the global payment market.
4. Japanese yen, accounting for 3.30% of the global payment market.
5. RMB, accounting for 2. 15% of the global payment market.
6. Canadian dollar, accounting for 1.74% of the global payment market.
From this data, we can see that the proportion of RMB in the global payment market is very small, that is to say, most of the banknotes printed in China are used for domestic circulation, while the RMB circulating abroad only accounts for a small part, and the US dollar is still the most important foreign exchange reserve currency in various countries.
Then why is the RMB share so small and the US dollar share so large? Can't other countries exchange other countries' currencies without dollars?
Let's keep talking.
03
Let's give an example: for example, the international community is a large-scale farmer's market, and each country sells vegetables as well as buys vegetables. In other words, in this market, everyone should not only sell their own things, but also buy what they need to take back.
But the money used by each vegetable vendor is different, which makes the transaction more difficult. If you just look for a vegetable vendor, some people may agree and others may not, and the business will still fail.
Therefore, this farmer's market needs a recognized currency as the main trading currency.
At this time, a vegetable vendor named Mei found one of the few butchers in the whole market, and they reached a cooperative relationship. In the future, small meat sellers will only charge US dollars. Great, if you want to eat meat in the future, you can only exchange dollars with this vegetable vendor named Mei to buy meat.
After some thinking and research, the vegetable dealer first looked at the two German shepherds in the American vegetable dealer's house, and then at the butcher's meat, and finally decided to trade in dollars.
In this way, the dollar has become the mainstream trading currency recognized by everyone in this market. Of course, there are also some savvy vegetable vendors who have joined forces to form a small group. Within this group, they use their own currency, but this group still needs to use dollars when trading with the outside world.
Therefore, if you want to do business in this big farmer's market, you must decorate your pocket with dollars, otherwise you will become a primitive man, and you can't buy anything or sell it. Besides, in order to prevent other vegetable vendors from driving up prices and affecting your business, you must save more money for a rainy day, so that even if you fight a price war, you will have a bottom in your heart.
This is why the United States owes a lot of debts, with a foreign debt of 22 trillion US dollars, but some people are still willing to lend money to the United States (foreign exchange reserves) because the United States has the most important item in this market-the US dollar.
As long as the US dollar is the world currency with the largest share of the global payment market, the US dollar will still have hegemony and capital will still be willing to trust the US dollar. The United States can still influence other economies through the interest rate and exchange rate of the dollar.
04
In many people's cognition, as long as the dollar is cut off from oil, the hegemony of the dollar can be ousted. Actually, this is a misunderstanding.
The dollar is not linked to oil, but the pricing and settlement of oil should be in dollars, and the inflation rate is the policy framework of the dollar. In other words, the dollar is linked to the inflation rate in the United States. Simply put, as long as the purchasing power of the US dollar is stable, as long as it does not exceed the warning value, you can safely print money.
Let's understand one thing. The dollar is the most complicated financial system in the history of the world. It is impossible to destroy this system by doing only one thing. The disintegration of dollar hegemony is a long process. At least for now, there is no hope.
Unless the United States is stupid enough to print money crazily, let the dollar depreciate rapidly, accelerate the collapse of the dollar credit, and give up the dollar share, it is possible to disintegrate the dollar hegemony. Otherwise, as long as the United States controls the inflation rate, no one can shake the status of the dollar.
The basis of the existence of the world currency is globalization, and the powerful military, scientific, economic and political strength of the United States is behind the US dollar becoming the world currency.
Oil is not only strengthening the hegemony of the dollar, but also a way and channel for the United States to control the world.
The disintegration process of dollar hegemony, that is, the recession process of the United States, is unified. (End)