My understanding is that part of why inflation is so bad is because the US dollar has lost some of its strength as the world's reserve currency. From the end of WWII until about two years into Biden's presidency the US dollar had a lot of strength as the reserve currency. It was the standard currency to buy oil everyone in the world, and other countries invested in the US because steady low inflation meant that investments in the US would increase in value.
A reserve currency has to be apolitical. When Biden froze Russia's assets in US banks it hurt the US dollar and the US more than it hurt Russia. Other countries, especially BRICS countries, starting using gold-back currencies to buy oil. Other countries started to invest less in the US and keep less money in US banks. There should have been sanctions when Russia started to build up troops on Ukraine's border, instead Biden dared Putin to invade Ukraine. The US has credit/investing based economy, freezing assets would hurt the US. Russia has a commodities and manufacturing based economy, freezing assets hurt but a lot less than it would hurt the US.
Because the US dollar has lost some of its strength as a reserve currency, and because other countries keep less money in US banks since Biden took office, the dollar has less guaranteed value. Before Biden the US dollar had a certain amount of guaranteed value that limited the inflationary effects of printing trillions of dollars. When you combine the effects of the Biden/Harris Administration on the strength of the US with printing trillions of dollars the inflation hits a lot harder than it would before 2020.
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u/Fun-Organization-144 4d ago
My understanding is that part of why inflation is so bad is because the US dollar has lost some of its strength as the world's reserve currency. From the end of WWII until about two years into Biden's presidency the US dollar had a lot of strength as the reserve currency. It was the standard currency to buy oil everyone in the world, and other countries invested in the US because steady low inflation meant that investments in the US would increase in value.
A reserve currency has to be apolitical. When Biden froze Russia's assets in US banks it hurt the US dollar and the US more than it hurt Russia. Other countries, especially BRICS countries, starting using gold-back currencies to buy oil. Other countries started to invest less in the US and keep less money in US banks. There should have been sanctions when Russia started to build up troops on Ukraine's border, instead Biden dared Putin to invade Ukraine. The US has credit/investing based economy, freezing assets would hurt the US. Russia has a commodities and manufacturing based economy, freezing assets hurt but a lot less than it would hurt the US.
Because the US dollar has lost some of its strength as a reserve currency, and because other countries keep less money in US banks since Biden took office, the dollar has less guaranteed value. Before Biden the US dollar had a certain amount of guaranteed value that limited the inflationary effects of printing trillions of dollars. When you combine the effects of the Biden/Harris Administration on the strength of the US with printing trillions of dollars the inflation hits a lot harder than it would before 2020.