Doesn't fiat money allow the US to steal money from other countries?
Fiat money is not tied to gold, so the government can print it at will without needing to back the new money up by anything. This devalues the money.
If the government decides to print a trillion dollars, it can then spend that trillion on a trillion dollars worth of commodities. But did it just create wealth out of thin air? No, at the same time, it must've devalued the currency itself, and in fact, devalued it a little bit for everyone's dollar so that the total devaluation adds up to that trillion.
It is thus, in some sense, a wealth transfer from the people to the government. But the US doesn't just do this to its own people. It pressures countries around the world to all trade in the US dollar. It tries to protect the US dollar as "the world's reserve currency".
Not only this, but the US is constantly printing! All the time it is printing more and more. Doesn't this mean that the US would effectively be constantly transferring wealth from the entire globe back to the US government?
Think of it this way. The US government buys $10 million worth of sugar from some poorer country, and pays for it with the US's own currency. It then prints money which devalues its own currency, so the $10 million the poor country just acquired can now only buy back $9 million worth of sugar. Where did that lost money go? To the US government, since it can now spend that money it just printed on real goods and services!
This seems like a big global scam to me!
Am I wrong?
- ZirpLv 72 months ago
Not exactly. The fact that the US $ is used as international/oil-currency means the US can go in debt deeper and faster than anybody else.
The belief that "printing" money always causes inflation is a fairytale - especially if it all lands in the pockets of people who have no reason to spend it
- OiyLv 62 months ago
No, we pay interest punctually. And the host country can use it to back up its currency. They use fiat money too.
- Anonymous2 months ago
No money, No sugar.