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The other major factor: exporters from foreign countries don't want to exchange real goods with Zimbabwean dollars. However, all countries in the world want to
by raincom 5y ago
The other major factor: exporters from foreign countries don't want to exchange real goods with Zimbabwean dollars. However, all countries in the world want to exchange real goods with American dollars or Euros. That's the advantage the EU and the US have. Hence, the US can face less risks with printing money (or adding zeros in electronic account) than, say, a third world country like Zimbabwe, India, Ghana, etc.
Lets call a properly measured inflation I. Let I_z, I_usa be inflation of Zimbabwe and USA respectively. The first derivative of I increases faster in third world countries than in those countries with world reserve currency status: d(I_z)/dt >> d(I_usa)/dt. That's why the US likes to project military power, that's why the super wealthy class in the West support wars to project the power in order to control the first derivative of I.