It explains in detail how the dollar hegemony harvests other countries, mainly by taking advantage of its own currency to dominate global trade and hot money investment. It also analyzes whether the dollar hegemony will continue and the danger of disintegration, which has aroused strong interest among foreign friends.

How to reap the US dollar hegemony

Foreign friends in the comment area said that they don’t quite understand how the dollar hegemony harvests other countries. Here is a brief explanation. In fact, to put it simply, the dollar hegemony is to use the advantages of its own currency to occupy the absolute dominance of global trade, and the most important part of this is hot money investment.

As the settlement currency for global trade, the US dollar itself does not have any pressure to depreciate or appreciate, and the money printing machine has been earning more profits for the US authorities. The currencies of other countries are different. Their exchange rates will fluctuate with factors such as the country's economic development and policy changes. Speculators can make considerable profits as long as they seize this opportunity.

So the question is, how to create such an opportunity? This depends on the friends of the United States, that is, the financial regulatory authorities of other countries. We all know that if a country wants to stabilize economic development, the most important point is to control the total amount of currency issued. However, many countries are often unable to strictly implement monetary policies in accordance with the rules due to short-term interests and political performance considerations, which creates opportunities for the United States.

It can use the advantages of its own monetary policy to attract investors from all over the world to over-invest, triggering the emergence of bubbles in the real estate and stock markets. When the bubble is about to burst, it suddenly shuts down the printing press, causing investors to suffer huge losses in their principal.

Since the initial investment funds are in US dollars, even if they are converted into other currencies for investment, they will be affected by the changes in the US dollar exchange rate. When the United States shuts down its money printing press, the world will begin to face a shortage of funds, and the most effective way at this time is to sell other currencies in exchange for US dollars.

At the same time, the US dollar is constantly appreciating, so other countries basically lose both the wife and the army. In addition, the United States has many other means to use, in short, the core is centered around hot money investment.

Will the US dollar hegemony continue?

From the above, we can see that the continuation of the dollar hegemony depends mainly on two aspects: the strictness of financial supervision in other countries and their comprehensive national strength. If other countries can stabilize their economic development and are not affected by US policies, then even if the US is powerful, it can only play tricks on itself.

It is the United States' own strength and policy changes. If the United States cannot keep the printing press running for a long time or there are major changes in other policies, it will be difficult to continue implementing the harvesting plan.

You might say, this is too idealistic, isn't it? The United States' strength and control are beyond doubt. In the past few decades, it has successfully harvested a lot of wealth from the pockets of many countries.

But you have to understand that the development of any thing is determined by both internal and external factors. When one of these aspects changes, even if the other aspect is well controlled, it may not be able to stop the trend.

The dollar hegemony is almost an inevitable product of the evolution of human society. At the time, it seemed almost impeccable. However, with the development of the times and the improvement of the awareness of various countries, cracks have appeared in its way of maintaining it.

The US dollar hegemony may face collapse

As the settlement currency for global trade, the opening and closing of the printing press will have a huge impact on the global economy. If this impact was basically within the controllable range before, it may face the danger of disintegration as other countries resist the increase of the dollar hegemony.

This rift is not caused by internal factors. After all, even the American people themselves are not satisfied with the benefits brought by the current system. Instead, it is caused by external pressure and changes in the international environment. Such changes are forcing the United States to change its previous operating methods.

Another factor that is very unfavorable to the US dollar is the acceleration of the internationalization of the RMB. As we know, the RMB has been well promoted in the past few years and has become one of the reserve currencies in many countries and regions.

Although it is still a long way to go before the RMB can compete with the US dollar or even replace it as the world's number one currency, this trend itself is slowly changing people's perception of foreign exchange reserves.

More and more countries are beginning to realize that relying solely on the US dollar is not a good option, especially in the current global situation. Especially after the further tension between China and the United States, the RMB has even become a safe-haven option.

In addition, the authorities of the major Eastern country are accelerating the process of RMB internationalization and have introduced many incentives; at the same time, the US dollar is gradually losing its appeal. Under the combined effect of various factors, the RMB may accelerate its move towards the international market.

Conclusion

Although the way the US dollar hegemony is harvested is tortuous and complex, it has also exposed some internal cracks. With the changes in the international environment and the acceleration of the internationalization of the RMB, the US dollar hegemony may face the risk of disintegration. This also allows us to see the changes and challenges of the global monetary system. The future development will be more diversified and thought-provoking. Come and leave a message to share your views on the US dollar hegemony

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