<\/p>\n
Paul Craig Roberts<\/p>\n
US power since World War II has been based on its financial dominance stemming from the dollar being the reserve currency held by central banks in place of gold.\u00a0\u00a0<\/span>As the dollar was the currency used to settle international trade accounts, every country needed dollars.\u00a0\u00a0<\/span>That ensured a large demand for dollars to absorb the supply of dollars from the growing US budget and trade deficits.\u00a0\u00a0<\/span>In effect, the dollar as world reserve currency allowed the US to pay its bills by printing money.\u00a0\u00a0<\/span><\/p>\n In recent years Washington\u2019s abuse of US financial power, such as sanctions on Russia and other countries and the theft of Russian central bank reserves, has taught the world that Washington uses the dollar-based system for coercive purposes to deny other countries independent, foreign, economic, and trade policies.\u00a0\u00a0<\/span>Consequently, as Pepe Escobar explains, there has been a rapid move away from the use of the dollar as reserve currency.\u00a0\u00a0<\/span>In other words, the demand for dollars is shrinking.\u00a0https:\/\/www.lewrockwell.com\/2023\/04\/no_author\/de-dollarization-kicks-into-high-gear\/<\/a>\u00a0<\/span><\/p>\n But not the supply. The supply is exploding.\u00a0\u00a0<\/span>Budget deficits are running in the trillions of dollars while the Federal Reserve shrinks economic growth and the tax base, and nothing can be done about the US trade deficit. The decision to offshore US manufacturing was an economy-wrecking decision.\u00a0\u00a0<\/span>The goods that Apple, Nike, Levi, and all the others make in China and Asia enter the US as imports when they are marketed in the US.\u00a0\u00a0<\/span>The US, having moved its manufacturing offshore, has little to export to cover the trade deficit resulting from imports. By using their trade surpluses with the US to purchase US Treasuries, foreigners financed the US budget deficit and US wars.\u00a0 As countries increasingly settle their trade imbalances in other currencies,\u00a0<\/span>\u00a0foreign demand for US debt is declining.\u00a0\u00a0<\/span><\/p>\n The consequence is that the supply of dollars is increasing, but the demand for them is falling.\u00a0\u00a0<\/span>This means a drop in the exchange value of the dollar, which means a rise in import prices.\u00a0\u00a0<\/span>The worst inflations are caused by the decline in the exchange rate of a currency.\u00a0\u00a0<\/span>It is an inflation that the central bank cannot fight by throwing people out of work.<\/p>\n This is America\u2019s future, and I don\u2019t mean in ten years.\u00a0\u00a0<\/span>I have been warning of this development, but the presstitute media does not report any facts unfriendly to the official narratives, everyone of which is a lie. The US can hold on for a while longer by having the Japanese, European, and British central banks print their currencies with which to purchase dollars, thus cushioning the dollar\u2019s decline. \u00a0But the consequence is that these currencies also will fall in value relative to those outside the dollar system. In other words, the plight of the dollar will spread throughout the empire.<\/p>\n Wall Street, greedy corporate executives and boards, and incompetent policymakers in Washington offshored US manufacturing and made the US import-dependent.\u00a0\u00a0<\/span>Next they destroyed the dollar as world reserve currency and thereby doomed the dollar to devaluation against other currencies, and this will destroy US power.<\/p>\n