Let’s start with a simple calculation. Suppose you do backbreaking labor all day and earn 10 rupees. But before the year even ends, you see the value of your saved 10 rupees has dropped to 9 rupees. Or going to the market, you feel like 2 rupees of your income have just vanished into thin air! It may sound surprising, but this is exactly what happens to us every day. And the biggest player behind this invisible theft is—the US Dollar.
Many of us think the dollar is just America’s currency. But in reality, it is a global weapon that is enriching developed countries with zero effort, while making ordinary, hardworking people like us poorer day by day. How is this game being played? Let’s dive a little deeper and analyze.
1. Invisible Tax on Income (Imported Inflation)
Even though we do not transact directly in US dollars, the price of almost everything in our daily lives depends on the US dollar. India imports a massive portion of its required fuel oil from abroad, and the bill has to be paid in dollars. Whenever the value of the dollar rises in the international market, we have to spend more rupees to buy oil.
When the price of oil goes up, transportation costs rise, and that impact trickles down to your daily necessities—from rice, lentils, and vegetables to medicine. That means you are earning in rupees, but your expenses are being controlled in dollars. This artificial rise in the prices of goods is what economists call ‘Imported Inflation‘. This is how the structure of the global economy snatches away 2 rupees from your 10-rupee income as an invisible tax.
2. Unequal Exchange: Their Luxurious Life Built on Our Sweat
A brutal truth in the global economy is “Unequal Exchange”. We are not wrong at all in feeling that we are doing bone-breaking hard work while they are getting rich with less effort by strangling us.
Behind this, some harsh realities of economics are at play. Here are the main reasons why it feels like they are taking our money “with less effort” by choking us:
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The Magical Power of Printing Dollars (Exorbitant Privilege): America is the only country in the world that can print dollars whenever they need to. If they need something in their country, they can just print money (dollars) and buy real goods (like garments, tea, medicine, minerals) from countries like ours. They don’t have to sweat physically for this privilege, but we have to put in a massive amount of labor to produce those goods.
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Control over Brands and Technology: Developed countries primarily focus on intellect and technology. For example, a famous brand’s shoes or mobile phones are manufactured in Asian factories, with the sweat of the workers here. But the lion’s share of the profit from selling those goods goes to American or European companies because the technology, design, and brand belong to them. Even though they put in less physical labor, they control the entire market through intellect and technology.
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The Power of Capital (Capitalism): Developed countries possess massive capital accumulated over many years. They invest that money in our country’s stock markets, banks, or large businesses. The people of our country work hard to grow those businesses, while they take crores of rupees back to their countries as profit (dividends). This is called “making money with money.”
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The Maze of International Rules: The rules and regulations of institutions like the World Bank, IMF, or World Trade Organization (WTO) are mostly created by developed countries. These rules are designed in a way that indirectly favors their own businesses the most.
The Reality Is: It’s not that they don’t work at all, but their labor is not physical like ours; rather, it is strategic and intellectual. They have created a Global System where the price of the sweat of people in developing countries like ours is much cheaper than the price of their intellect or brands. Meaning, they are tactfully snatching our money away.
At the end of the day, people in Western countries can live a luxurious life cheaply precisely because of the low income of the people in our country. We are indirectly funding their family expenses! It might give you goosebumps, but this is the deepest truth of the global economy! Economists call this “Unequal Exchange.”
3. Rebellion Against the US Dollar and Its Terrifying Consequences
If we look at history, those who have challenged this absolute dominance of the US dollar have had to pay the ultimate price. The true source of America’s power is not their military, but their ‘petro-dollar’ system.
When Iraq’s Saddam Hussein announced that he would accept Euros instead of Dollars for oil, or when Libya’s Muammar Gaddafi dreamed of introducing a Gold Dinar for the whole of Africa—what their fates were is no longer a secret to anyone today. Going against the dollar in the global economy seems to be an unwritten crime, the punishment for which is war, destruction, and economic sanctions.
4. The Fight to Bounce Back: BRICS and De-dollarization
But times are changing. Realizing that it is impossible for any single country to stop this American ‘bullying’ (hegemony), the emerging economies of the world have now formed an alliance. Russia, India, Brazil, China, and South Africa (BRICS)—these countries have jointly started looking for an alternative to the dollar.
They haven’t introduced a new currency overnight, but they have started the process of ‘de-dollarization’ or bypassing the dollar:
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Trade in Local Currencies: India is now trading with Russia or the UAE in Rupees or Dirhams. China and Brazil are also trading in their own currencies.
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Alternative Payment Systems: Work is underway to create independent payment gateways outside the US-controlled SWIFT system.
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Gold Reserves: To reduce dependence on the dollar, the central banks of these countries are buying massive amounts of gold and storing it in their vaults.
Conclusion: Does the Fall of the US Dollar Mean the End of American Hegemony?
The short answer is—yes. America’s biggest advantage is that they can print money whenever they want and buy whatever they need from the whole world. Because of this ‘Exorbitant Privilege power, they control the world without effort.
If this dominance of the dollar in trade ends, their backbone will be broken. And America’s days of ‘borrowing for free’ will be over. Then they too will have to spend according to their income, just like other ordinary countries. They will also lose the power to arbitrarily impose economic sanctions on other countries. The world will no longer run on the orders of any single country but will turn into a multipolar world, where all countries will have equal rights.