Dedollarization Must Continue For the Good of the US and the Entire World

Donald Trump complains about de-dollarization and sees it as a threat to the US, but he is greatly mistaken: The way it is now, the dollar is a threat to the US itself.

What the dollar now is an abomination that was created through 40+ years of financial voodoo. An abomination that has been staying at the absurd value it had only through its now-lost status of reserve currency and having been almost the exclusive global currency used in international trade. This allowed the US to print dollars without suffering inflation and made the US end up with a cash-awash economy that had almost infinite levels of free cash.

One would think that such an economy is a good thing. But it is not.

It caused immense levels of bloat in the economy.

The real estate sector got bloated to an immense economic size mainly on the overpriced land and housing values, ending up in absurdly priced real estate. The situation has gotten so out of hand that 90% of Americans will never be able to buy a house in their lives.

The real estate sector thus ended up becoming a parasite feeding on the American economy, sucking money out of it in enormous amounts through exorbitant real estate prices and rents — the money that could have been used for investing in physical goods and services — the things that create actual value.

The same happened with the stock market: It got bloated to the point that some shares were mathematically overvalued to 60 or more times the value they should have had, literally becoming assets that America parked its cash on without producing anything proportional to the amount of money parked there. Again, that is money that could have been used anywhere else to produce actually usable goods and services.

Both of those enabled something even more parasitic: The financial sector that makes money off of thin air by juggling the financial instruments created based on the assets in those sectors and the free cash that was inundating the economy. Fast-trading computers were juggling stocks, derivatives and other financial instruments ‘backed’ by something else and making enormous amounts of money through speculation without producing anything tangible or actually usable.

So the bloated sectors created their own parasite that financialized the economy even further and made the US economy bleed money that could be used elsewhere.

This parasitic economy running on hot air had even further effects on the US as a society: The immense amounts of free money they generated on top of the freely-printed dollars has sucked the educated American workforce away from all the other sectors, draining it of the brain power those sectors needed. Even the free money that the tech sector enjoyed thanks to the zero-interest economy and the bloated stock values it had did not help make it more productive: Endless numbers of large companies, many gigantic companies kept producing so little actual value compared to the enormous valuations they had and the amount of top-tier educated workforce they monopolized — evidenced by how they are now having to lay off legions of tech professionals to float their stock valuations.

As a result, the American society started collapsing.

American infrastructure is collapsing. Sometimes literally, actually while people are using that infrastructure. Neglected to prevent the corporate tax breaks from getting disturbed by infrastructure spending.

The privatized hell of American healthcare is killing people to bloat stock prices even further.

Education went way above being expensive, it has become a luxury that has gotten out of reach of even white-collar families.

The military is having underpaid personnel use overpriced, new equipment that fails without even moving an inch because defense corporations gouge the government to boost their profits while delivering half-assed products for the sake of their shareholders.

In every facet of American life, the situation is the same. Corporations with bloated stock values try to boost their values even further by collectively causing a collapse of American society through price gouging and underdelivering.

This is what the zero-interest, free-cash economy based on the reserve currency status of the dollar created.

For This To Change, Dedollarization Must Happen

The only way out of this financialized hell that bloats everything while not producing anything is making the dollar a currency dependent only on the US economy, or a currency backed by a value like gold — or both.

The world’s countries must reduce their dollar reserves to reasonable levels and start using other currencies in international trade so that the dollar won’t get bloated and won’t enable a parasitic financial landscape. Only in this way, the escape of American GDP to instruments that don’t produce any value or produce little value compared to their bloat can be avoided.

So that the American GDP can return to being invested in things that create actual value again, and create an economy that produces as much actual, physical value as the valuation it has instead of being a bloated balloon that can pop at any time.

This would also prevent destructive crises caused by bubbles like the ones before. It’s harder for stocks and other instruments to lose their value greatly when backed by actual goods and services that can be traded.

It goes without saying that this is also beneficial for the entire world as this way all the world’s economic regions will be able to avoid speculation, crises caused by bloated assets crashing down, and financialized economies that suck away money and brain power from much-needed sectors.

Therefore, Donald Trump is mistaken on this one: De-dollarization must continue for the benefit of everyone including Americans.

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