Dollar Harvesting the World

The mechanisms by which the United States utilizes the dollar to 'harvest' globally mainly involve the following aspects:

• The 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 holds a significant share in global foreign exchange reserves, allowing the United States to impact global capital flows through adjustments in its monetary policy.

• The spillover effects of monetary policy: U.S. monetary policies, such as interest rate cuts and hikes, have significant effects on the global economy. For example, when the Federal Reserve implements quantitative easing, the supply of dollars increases, leading to capital flowing globally, which may cause asset prices in other countries to rise. Conversely, when the Federal Reserve raises interest rates, capital may flow back to the United States, potentially causing asset prices in other countries to fall, even triggering financial crises.

• The dollar tide phenomenon: The United States exploits the world through artificially created financial waves, benefiting from the expansion and return of the dollar. This includes stimulating the economy through interest rate cuts and money printing during economic recessions, and tightening monetary policy through interest rate hikes during economic overheating, thereby affecting global capital flows and asset prices.

• The linkage between the dollar and commodities: As commodities are often priced in dollars, the strength or weakness of the dollar directly impacts commodity prices, which in turn affects 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 maintain dollar hegemony through geopolitical means, such as sanctions, to limit the economic activities of other countries, thereby preserving the dominant status of the dollar.

• The interdependence of the global economy: Fluctuations in the U.S. economy have profound effects on the global economy, which often necessitates that other countries consider U.S. factors in their economic policies, thus being constrained to some extent by U.S. economic policy.

These mechanisms together constitute how the United States leverages the dollar to exert influence globally, a power that is sometimes criticized as 'harvesting' global wealth. However, this viewpoint is also contentious, as the interdependence of the global economy and the international status of the dollar result from a multitude of factors working together.