Exporting Dollars and Prosperity

On the Structure of the American Empire and Tribute, and Contradiction Between Trade Deficits and Imperial Dividends

Paper money has no intrinsic value. We all know that. The original value of the U.S. dollar came from its peg to gold. Once the United States abdicated its responsibility as the steward of global finance in the Nixon Shock and, like other nations, began engaging in competitive currency devaluation, anything became possible. Inflation and the export of dollars in exchange for prosperity became an alluring temptation.

At precisely this moment, the Soviet Union collapsed—which left a massive mess in its wake. After the Cold War, the USSR resembled Germany after World War I: it had a massive industrial system and an educated populace capable of economic development, but the national economy had completely collapsed and could only be salvaged through money injection from the victors - namely, the United States.

So, the U.S. had to step in—just like in the Dawes Plan era—to fix the mess that’s the former Soviet economy. But how?

Our beloved Alan Greenspan chose a method we’ve become very familiar with: exporting dollars and prosperity. Such is the reality of the world: after the fall of the USSR, all global currencies have become subordinate to the dollar. Economic recovery and prosperity could now only happen in one way: via dollar exports.

Foreign currencies lacked the credibility of the dollar. Only by receiving dollar inflows could their economies be revived. And as long as the U.S. exported dollars—even if it printed more money—domestic inflation would not occur. In fact, due to the expansion of the global trade system, products from even the remotest corners of the world—like bananas from Ethiopia and Tanzania—flooded into the U.S. market, keeping prices not only stable but slightly lower than before, with greater variety. Nowadays, it’s cheap clothes made from uighur slave cotton in Xinjiang, bizzare sex toys that fuel the multifarious and ever-evolving sexual lifestyles of the alphabet people, all selling at prices that crush any competition on Wish, Temu, Amazon.

People in small American towns and rural areas saw this before their eyes and felt its impact most drastically . Supermarket prices were roughly what they were in 1920, except now they could buy exotic goods from the Third World that weren't available back then. They didn’t realize that what they were enjoying was, like Roman bread and circuses, the dividends of empire.

As an empire, the U.S. had global responsibilities—it couldn’t repeat the mistakes of the 1920s–30s and allow parts of the world (like post-Soviet countries) to slide into fascism due to economic collapse, ultimately leading to war. It was America’s duty to provide prosperity. Inflation of the dollar and prosperity were the same thing. Other currencies could only thrive because of their connection to the dollar. And as long as the U.S. exported dollars, it didn’t need to produce goods—it only needed to produce dollars to sustain its economy.

A country that exports dollars is, in accounting terms, said to have a trade deficit. So Trump got furious: “What the hell? We’re the victors, and yet we have this massive trade deficit. That’s unacceptable. Give me my trade balance back!” But those two ideas—exporting dollars and avoiding trade deficits—are mutually contradictory.

Keynes once sarcastically said that if French ministers truly wanted to restore the franc as they promised, it would mean mass unemployment for the French people. So they just shouted slogans instead.

If Trump wants to eliminate the trade deficit, then he must also eliminate all the benefits America gets from exporting dollars—including funding the Iraq War, maintaining global order, paying generous benefits to U.S. veterans, and letting Americans live leisurely lives while still dominating the world.

Let’s be clear: this money doesn’t come from rednecks in McConnell’s Kentucky. If the entire U.S. were like those folks in rural Alabama, America couldn’t afford any of this.

This money flows back into America via Wall Street’s financial system, through dollar exports and is extracted from the entire world, especially globalization’s biggest beneficiary—China.

Indeed, no financially responsible Chinese finance minister would let these dollars they’ve earned in their glorious trade surplus sit idlely. Selling them for Chinese renmenbi would push up the price of the Chinese currency and hurt their manufacturing competitiveness, so the best course of action is to buy US assets - treasuries, hotels, land, stocks, anything financial in the United States. As a result, US assets balloon, and the rich become unfathomably richer, while the blue-collared classes, now having lost their manufacturing jobs to China, now face the prospect that they shall never be able to buy a home. As cheap Eygptian grain and Oriental slaves flooded into Rome, the proletariat and plebecians found themselves financially decimated while the patricians started to gorge themselves silly on the Red Mullet.

When America fights wars around the world, the funds are delivered by Chinese sweatshop profits from reform and opening, which are used to buy U.S. Treasury bonds—funneling money straight into American military budgets.

China’s reform-era economy, based on sweatshops, holds the same structural role in the American empire as the Suzhou Weaving Bureau and the Grand Canal did for the Manchu empire. Manchu and Mongol warriors conquered the world; the obedient Jiangnan populace paid for it. Both were indispensable. Hence the talk about Chimerica. Naturally, China, having the most thoroughly systematically and bureaucratically enslaved population in the world, is perfectly suited to this role. The question is, as America begins to withdraw with this marriage, what will happen to the Chinese lower classes, until now enslaved in factories to work to the death? What will happen when they run out of work?