The mechanism by which the United States uses the dollar to 'harvest' the world mainly involves the following aspects:
• Global hegemonic status of the dollar: As the dominant currency in the international monetary system, the dollar enables the United States to influence the global economy through its monetary policy. The dollar accounts for a significant share of global foreign exchange reserves, allowing the United States to affect global capital flows through adjustments in its monetary policy.
• Spillover effects of monetary policy: U.S. monetary policy, such as interest rate cuts and hikes, has significant effects on the global economy. For example, when the Federal Reserve implements quantitative easing, the supply of dollars increases, and capital flows globally, possibly leading to rising asset prices in other countries. Conversely, when the Federal Reserve raises interest rates, capital flows back to the U.S., potentially causing asset prices in other countries to decline, and even triggering financial crises.
• Dollar tidal phenomenon: The United States creates artificial financial waves to harvest the world through seigniorage in the expansion and return of the dollar. This includes stimulating the economy through interest rate cuts and money printing during economic downturns, and tightening monetary policy through interest rate hikes during economic overheating, thereby affecting global capital flows and asset prices.
• Dollar linkage to commodities: Since commodities are often priced in dollars, the strength or weakness of the dollar directly affects commodity prices, thereby impacting global trade and the economy. The United States indirectly influences the global economy by controlling the value of the dollar.
• Geopolitical and economic strategies: The United States may also use geopolitical means, such as sanctions, to maintain dollar hegemony and restrict the economic activities of other countries, thereby preserving the dollar's dominant position.
• Interdependence of the global economy: Fluctuations in the U.S. economy have profound impacts on the global economy, which often requires other countries to consider U.S. factors in their economic policies, thus being constrained to some extent by U.S. economic policies.
These mechanisms collectively constitute how the United States uses the dollar to exert influence globally, which is sometimes criticized as 'harvesting' global wealth. However, this viewpoint is also controversial, as the interdependence of the global economy and the international status of the dollar result from a combination of various factors.