Questions:
How would the US devalue the dollar?
Aren’t currencies devalued against other currencies?
What you have to recognize is that gold is money. It is the benchmark by which the Central Banks ultimately measure and devalue their currency. The US is devaluing against gold to reduce the debt burden. You can go as far back as Rome to see how this is done and the consequences. Don’t be mislead, devaluation is NOT a good thing. I expect you understand how inflation has impacted the USD. That is what devaluation is. It is a theft of savings, purchasing power and standard of living.
It is true that global currencies are not independent of each other. Although run independently, the exchange rate reflects the overall state of the Balance of Payments of each country. The bulk of global currencies ‘encourage’ their exchange rates to retain the global competitiveness of that currency through the adjustment of interest rates and more directly occasionally by the buying and selling of that currency in the foreign exchanges. Unless other nations retaliate by devaluing their currencies by a similar amount, they will find their Balance of Payments skewed as though they revalued their currency by that amount against the US Dollar.
This is where the currency crisis gets interesting. Until now, China has devalued to gold at the same pace as the US. In the near future China may cease to peg to the USD at the current rate, therefore rise against the USD. Some will tell you that this is just another shift of power from the West to the East. It is true that power has shifted from empire to empire throughout history, but our new Emperor has not a country.
Off on a tangent now-
Since WWI, the US has artificially kept the USD high to promote a strong dollar. This was used as a tool (along with other methods) to grab natural resources and the wealth of many underdeveloped nations. Straight out of the British Empire’s playbook, Americans benefited from the enslavement of the developing world.
The same tools of financial warfare have now turned on us. We are now the victims. Maybe we should have said “no” when they came for the others. because now they are coming for us and no one is left to speak out.
