The US has printed 20% of all dollars ever existed since 2020. Check the exchange rates with any other currency, EUR, British sterling, Chinese RMB. Did it become cheaper? Of course not.
We will always buy USD, because it has as a collateral 8billion lives.
The reason it hasn't fallen against those other currencies is that the other currencies' supplies have increased more during this period. The printing was global, and the US not a leader on it.
Against everything else than other unlimited supply currencies, fiat money has fallen dramatically. It's a simple fact, not an endorsement of anything.
Everyone knows the basic mechanics of supply and demand on price, but somehow when it comes to fiat money, many manage to swap common sense with a number of convoluted theories.
You're cherry picking the top of the previous inflation scare-fueled gold bullrun (it's up 7x since the year 2000), and the one asset that's heavily manipulated to the downside (demonstrated by the huge premiums in physical delivery during the GME mania which weren't arbitraged away).
Convenient straw man to try and classify anyone exposing the intentionality behind today's inflation levels as a crypto shill. Almost all assets have exploded in fiat values since the start of Covid printing, not just crypto. Supply chain issues didn't affect Rolex watches and metropolis housing markets, money printing, QE and low interest rates did.
The world buys dollars because it needs them to fulfill oil and other commodity contracts, that are priced in dollars, which are then typically reinvested in US Treasuries by commodity exporters (because why not?).
> 10% over the exchange rate between Pentali Marcograms and US dollars. You know oil producers trade in dollars, right?"
You are off by three orders of magnitude, which is pretty amazing.
Forex markets have incredibly tight spreads measured in pips, say 1-4 pips, where 1 pip = 0.0001.
The reason why dollars are important is that people store the results of their oil sales in USD assets. What a good is purchased with means nothing. Where you store the proceeds of the sale is what counts.
This goes to that oh-so-tired phrase 'petrodollar', which many autodidacts misuse to signal a lack of understanding of both forex markets and oil economics. What "petrodollars" means is the dollar holdings that oil exporting states maintain. It does not refer to the currency oil is purchased in. It comes from eurodollar, which signifies dollar holdings in Europe, and not the purchasing of European goods with dollars.
Once we get that definition right, we understand it as a synecdoche for US hegemony in reserve currencies -- e.g. where foreign central banks store their wealth. The actual currency oil is priced in - or anything is priced in - means nothing. What is the point of saving a pip in the forex markets if you are going to be losing .1% in bid/ask spreads when you try to store your wealth in an illiquid bond market? No one -- absolutely no one - optimizes for reducing forex costs when deciding in which nation to park their wealth. They are much more concerned with questions like "Is it legal for me to purchase these bonds? will my wealth be confiscated in the future? What kind of fees do I pay when I buy these bonds?"
The reason the world wants to store their wealth as dollar assets is because the US has a reputation for openness to foreign investment, rule of law, political stability, upholding foreign investor rights, and amazingly deep capital markets that can absorb large foreign inflows with very low spreads. So the bid/ask spread when trying purchase a few billion worth of U.S. bonds is much more important to explaining US financial hegemony than what some random country demands as payment.
I think the no. 1 reason why people get this all wrong is they still want to think we live in a world of specie flows. But there are no bearer assets in international trade - you can't take it with you back home. Your foreign trade profits are going to be stored in some custodial account in some other country. So trusting that country is a big deal. People who think trade is conducted with gold nuggets don't see this custodial account problem, and that's why they don't understand why the U.S. is a global reserve currency. That's when all sorts of conspiracy theories about oil sales, or aircraft carriers, come into play as they try to understand the U.S. role using the ideas they are comfortable with.
If we're talking about a country that's attempting to (or has no choice but to) cut USD out of its foreign trading, I don't think we're talking about a standard, highly-liquid currency pair.
And what currency a good is purchased in absolutely means something!
Your claim is that people store the proceeds of sales in dollars because of the trust factors, volume, and tight spreads. But I'd say that 2/3 of those (volume and tight spreads) are consequences of its utility and use as an international settling currency. Catch 22.
Yet are those things worth enough that international exporters would continue to trade in / hold in (effectively the same, if we collapse the goods trader and forex trader into a single entity) if the dollar ran 5% inflation and low central bank rates for years?
I suppose we'll see, but that's an atypical situation in the last 50 years of pure fiat international finance.
> If we're talking about a country that's attempting to (or has no choice but to) cut USD out of its foreign trading
For some small country -- and it would need to be a small country, like Sierra Leone, that cannot access the Forex markets, then they need foreign reserves ahead of time. This is true. But if they don't want to hold their reserves as USD they can hold them in EUR or YEN if they like, and then when they need to buy oil, they sell the EUR for USD and buy oil with USD.
While the USD is the largest foreign reserve, it's like 60%, there is also EUR, British Pound, Yen, and some other currencies that are ubiquitous enough for Sierra Leone to hold. These can readily be sold on the spot for whatever a nation wants as payment.
The US has printed 20% of all dollars ever existed since 2020. Check the exchange rates with any other currency, EUR, British sterling, Chinese RMB. Did it become cheaper? Of course not.
We will always buy USD, because it has as a collateral 8billion lives.