Opinion: Global reserve currency—how America extracts wealth printing dollars

Every global event flows through the dollar system, through the rupee exchange rate, and lands — silently, without announcement — in our kitchen

By Chandu Kumar Potti

Why does your life get harder every year — even when you work harder?

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Lakshmi wakes up at 5:30 every morning in Karimnagar. She makes coffee for her husband. Packs lunch for two children. Starts cooking by 6. Her kitchen runs on a rhythm she has maintained for fifteen years — same oil, same dal, same routine.

She is not poor. Her husband drives a goods vehicle. They own their home. One child is in college. The other is in Class 10. By any measure, they are doing fine. But something has been quietly bothering her for five years.

The same 1-litre bottle of sunflower oil.

2020 — Rs 90.

2026 — Rs 170.

Almost double. In five years. Without anyone asking her permission. She hasn’t changed her brand. The brand hasn’t changed its oil. The sunflower hasn’t changed. She blamed the shopkeeper. The shopkeeper blamed the wholesaler. The wholesaler blamed ‘rates.’ Nobody could explain it fully. Nobody connected it to anything beyond their own shop, their own city, their own season. But there is an explanation. A complete one. And it begins not in Karimnagar — but in Washington D.C. In a room Lakshmi will never enter. With people who will never visit her kitchen.

The Water Tank Next Door

Imagine you and your neighbour share a large water tank on the roof. The tank has one tap. Your neighbour controls it. Every month, your neighbour quietly adds more water to the tank — water that belongs to everyone — but also quietly takes a larger share for himself before opening the common tap. Your tap produces less. Your bucket fills slower. You blame the weather. You blame the pipes. You buy a smaller bucket to make it feel fuller. Your neighbour calls it ‘water management policy.’ This is the global monetary system.

The water is the world’s money supply. The neighbour is the United States of America. The tap is the US Federal Reserve — their central bank. And the water they quietly take for themselves is called the US Dollar — the currency the entire world uses to buy and sell almost everything. Oil. Gas. Wheat. Sunflower seeds. All priced in dollars.

When America prints more dollars — and they have printed trillions in the last five years — each dollar becomes worth a little less. And the Indian rupee, measured against that dollar, weakens automatically. India imports nearly all its sunflower oil. From Ukraine. From Russia. From Argentina. That oil is priced in dollars.

When the rupee weakens, India pays more rupees for the same dollar-priced oil. When a war in Ukraine — a country most people in Karimnagar cannot locate on a map — disrupts sunflower supply, global prices spike. When ships reroute around conflicts in the Middle East, freight costs rise. Every one of these events flows through the dollar system, through the rupee exchange rate, and lands — silently, without announcement — in Lakshmi’s kitchen.

Rs 90 becomes Rs 170.

No one sent her a notice. No one took her vote. No one explained the mechanism. That is the invisible tax.

The Day America Broke Its Promise

This system has not always existed. Until 1971, there was a rule. Every US dollar in circulation was backed by a fixed quantity of gold — $35 per ounce. Any country holding dollars could walk up to the US Treasury and exchange them for gold. The dollar was not just paper. It was a promise. A redeemable one.

On August 15, 1971, President Richard Nixon went on television and cancelled that promise. Unilaterally. Without a vote. Without consulting the 190 countries that held dollars as their reserve currency. He said it was temporary. It was not temporary. From that day, the dollar became pure paper — backed by nothing except America’s word, America’s military, and America’s ability to ensure that the world’s most important commodity — oil — was priced only in dollars.

Every country now had to hold dollars to buy oil. To hold dollars, they had to sell real things — goods, services, resources — to America. America, in return, could simply print the dollars they needed. It was the most elegant extraction mechanism in the history of human civilisation. And it has been running for 54 years.

Chanakya Knew This 2,300 Years Ago

Chanakya — the strategist who built the Mauryan Empire — wrote in his Arthashastra: “The enemy who weakens your treasury without drawing a sword is more dangerous than the enemy who attacks your border.” He was writing about kingdoms. About coins being secretly debased — mixed with copper while appearing to be gold. The king who diluted his coins collected the same taxes but paid out less real value. His people worked just as hard. They just received less.

America did not invent this. Every empire in history has done some version of it. Rome debased its denarius. The British extracted from their colonies through rigged trade. America perfected it — made it invisible, made it global, made it look like a neutral market mechanism rather than a political choice. Lakshmi is not paying for sunflower oil.

She is paying a tax — to a system she never agreed to — that was designed by people who will never meet her — in a currency that is not hers.

So What Can Be Done?

That is the question we will explore. Not with outrage. Not with ideology. With the same simple logic Lakshmi uses when she checks if a tomato is fresh before buying it. If you are accepting something as valuable — shouldn’t you be able to verify that it actually is? There are people in the world — economists, historians, statesmen — who have asked this question seriously. Some of them had answers. Some of those answers were rejected — not because they were wrong, but because the powerful had too much to lose from the right answer.

(The author is Founder & Chairman, Versatile Auto Components Pvt Ltd, Versatile Electric Automotive Private Limited, Former Chairman, Pashamylaram Industrial Park and Founding Secretary, Society for Sangareddy Security Council)