Saifedean Ammous discusses the role of the U.S. dollar in global finance and its economic implications. He explains that the U.S. has built a financial system where it can control global transactions by making other countries rely on the U.S. dollar. This allows the U.S. to “export its inflation” by printing more dollars, while the rest of the world must accept them because the dollar is the primary currency for international trade.

Ammous highlights how the U.S. has used this power to impose sanctions on countries like Iran, North Korea, and, more recently, Russia. After 2014, the U.S. began using this leverage more aggressively, especially against Russian banks. The most dramatic example, he points out, is the U.S. decision to freeze Afghanistan’s central bank reserves after the Taliban took control in 2021. This action created a financial and humanitarian crisis in Afghanistan, as the country lost access to the reserves it had held in the U.S. Federal Reserve. Ammous argues that while this may have been framed as a response to 9/11, it’s a stark example of how the U.S. can decide to confiscate the financial assets of any nation it chooses, showing how vulnerable countries are when they rely on the U.S. financial system.

He critiques this approach, arguing that the U.S. is acting in a shortsighted and reckless way. By freezing assets and using its financial dominance as a weapon, the U.S. is sending a message to the rest of the world that if you don’t follow our rules, we can take away your financial resources.

Ammous warns that while this may seem like a temporary victory for U.S. interests, it could ultimately backfire. Countries will eventually look for alternatives to the U.S. dollar and the financial system the U.S. controls. The more the U.S. uses its power to punish other nations, the more likely it is that the world will seek ways to bypass the dollar. In the long run, this could undermine the dollar’s position as the world’s reserve currency and weaken the U.S.’s economic influence.