Anytime your pet economic theory results in some asset spiraling to infinite value it’s inevitably wrong. There’s always a point where people say no and do something else because they simply can’t spend infinite money on anything. Instead there’s always some factor not included in your model that moderates the impact you simply aren’t including it.
Until recent times, keeping inflation up was difficult in spite of all of this - which is why we've had 0 interest rates desperately trying to devalue the currency. The big inflection point was 1971. That was the end of the USD being 'hard backed' (fixed exchange rate) by gold. The 'soft backing' (unfixed exchange rate) of oil would begin in 1974, organized by no less than Kissinger. You can see many of the measures we took here [1]. A critical table [2] that site is missing is the trade deficit.
Ultimately the test for all of this will come imminently. BRICS has been developing a new backed (presumably 'hard backed') currency, set to be announced as early as August of this year. And IMO, BRICS as a whole is making their move at this exact moment precisely because the USD is in a situation where this will have maximum impact. Something to keep your eyes on if you're at all genuinely interested in these things!
[1] - https://wtfhappenedin1971.com/
[2] - https://www.macrotrends.net/countries/USA/united-states/trad...
You can use the same physical 20$ dollar bill to buy a soda several times over a year. You hand it to the 7-11 on Monday, they take it to the bank on Tuesday, the bank puts it into their ATM on Wednesday, you get out of the ATM on Thursday, and then take it back to that same 7-11 on Friday.
Digital currency can cycle the same way just faster. Mexico Joe trades peso’s for OilBucks from Dubai Bank at 9:00AM, use them to buy oil from someone in Bolivia at 9:01. At 9:02 Frank in France trades Euros to Bolivia Co at 9:02 to get those same Oil Bucks for a trade at 9:03 with someone in Saudi Arabia…