Dollar Harvesting the World

The mechanisms through which the United States utilizes the dollar to "harvest" the globe 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 U.S. to impact global capital flows through monetary policy adjustments.

• 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, directing capital globally and potentially leading to a rise in asset prices in other countries. Conversely, when the Federal Reserve raises interest rates, capital flows back to the U.S., which may cause asset prices in other countries to fall and even trigger financial crises.

• The dollar tidal phenomenon: The U.S. creates artificial financial waves, utilizing seigniorage to harvest the world through the expansion and contraction 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 booms, thus affecting global capital flows and asset prices.

• The dollar's link to commodities: As most commodities are priced in dollars, the strength or weakness of the dollar directly affects commodity prices, which in turn impacts global trade and the economy. The U.S. indirectly influences the global economy by controlling the value of the dollar.

• Geopolitical and economic strategies: The U.S. may also maintain dollar hegemony through geopolitical means, such as sanctions, to limit 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 far-reaching impacts on the global economy, which often requires other countries to consider U.S. factors in their economic policies, thereby being constrained by U.S. economic policies to some extent.

These mechanisms together illustrate how the U.S. leverages the dollar to exert influence globally, which is sometimes criticized as "harvesting" global wealth. However, this perspective is also contentious, as the interdependence of the global economy and the international status of the dollar result from a multitude of factors working in concert.