Changes

When the United States left its [[gold]] monetary standard in 1971 by ending the convertibility from dollars to [[gold]], the U.S. sold dollars needed for international transactions by issuing Treasury debt, which is a universally fungible international medium of exchange. Oil is the world’s most valued internationally-traded commodity, and virtually all transactions for oil globally were conducted in dollars until late 2022 [[Saudi Arabia]] began accepting [[Chinese]] yuan.  Previously, all nations needed dollars to engage in international commerce and purchase oil. This gave the U.S. an “exorbitant privilege” in that it could unlimited stream of Treasury debt to the world.  One of the consequences of this arrangement is that it has allowed the U.S. to spend far beyond its means, by 2022 running up $32 trillion of debt since 1980, when its [[national debt]] stood at a mere $1 trillion.

When the United States left its [[gold]] monetary standard in 1971 by ending the convertibility from dollars to [[gold]], the U.S. sold dollars needed for international transactions by issuing Treasury debt, which is a universally fungible international medium of exchange. Oil is the world’s most valued internationally-traded commodity, and virtually all transactions for oil globally were conducted in dollars until late 2022 [[Saudi Arabia]] began accepting [[Chinese]] yuan.  Previously, all nations needed dollars to engage in international commerce and purchase oil. This gave the U.S. an “exorbitant privilege” in that it could unlimited stream of Treasury debt to the world.  One of the consequences of this arrangement is that it has allowed the U.S. to spend far beyond its means, by 2022 running up $32 trillion of debt since 1980, when its [[national debt]] stood at a mere $1 trillion.

When the [[Federal Reserve]] raised [[interest rate]]s to take care of U.S. needs, it made [[capitalism|capital]] flow out of other countries, and  the exchange rate of their currencies fall, forcing [[inflation]] on them. Not a single country in the world was left untouched.  

When the [[Federal Reserve]] raised [[interest rate]]s to take care of U.S. needs, it made [[capitalism|capital]] flow out of other countries, and  the exchange rate of their currencies fall, forcing [[inflation]] on them. Not a single country in the world was left untouched. Many countries did not want be held hostage to the implicit and explicit negative consequences of dollar [[hegemony]], and wanted to remove the “exorbitant privilege” that they believed the U.S. abused to their individual and collective detriment.  

[[Category:Finance]]

[[Category:Finance]]