It is the exorbitant privilege. It is a bit hard to find good discussions of the mechanism because it gets political very quickly. But in essence if the US prints the whole world absorbs it, if Japan prints it stays in Japan.

What you say is that there is more demand for the Dollar. That does not change the fact that the price halves when the supply doubles.

Price = demand/supply.

When a central bank expands the money supply (by changing their interest rate or doing QE) it doesn't spread linearly in the economy. There is a much more complex pattern. And the dynamics of the dominant currency which has all other curencies subordinate to it are completely different from that of a mostly local currency.

But as I wrote. This is a controversial subject. And there are economists out there who will tell you that the special status of the US dollar makes no difference at all and this de Gaulle guy just was upset about losing some colonies.

You somehow think that the demand/supply curve is linear.

Why? It would be quite odd. Certainly Japan has generated far more currency and debt over the last 35 years while inflation stayed low (and the relative value of Yen stayed high). I don't see any explanation for that here any more than the yearly gyrations of other currencies crypto or fiat.

Demand can be a function of supply, so no it's not that simple.

Economics 101: the supply curve is not a linear relationship. https://en.wikipedia.org/wiki/Supply_and_demand

The term you're looking for here is 'exporting inflation' - a quick web search will give about a million hits. This takes many forms, but here are a couple of the most impactful ways we do it:

#1 - Being the largest consumer economy. The economy of many countries depends on exporting stuff to the US. Now imagine the US prints a lot of money so its currency becomes weaker, relative to yours. This is a real problem because it means Americans aren't able to afford as much of your country's stuff. And if there are other countries whose currency has not strengthened as much (relative to the dollar), then their stuff becomes even more desirable, relative to yours. But there's actually a simple and happy solution - print money. Devaluing your own currency not only fixes this problem by 'importing' US inflation, but it also gives you lots of money to spend as well. The only problem is ever-mounting debt, but hey - if modern economics is about anything, it's about kicking the can to the next generation!

#2 - Being the global reserve currency. Until extremely recently, if China and Russia were going to go trade some goods between each other, they'd have settled the balance in USD! And nearly all oil was sold in USD. As the USD weakens, this obligates these countries to start increasing their reserves of it to continue ensuring the same level of real liquidity. But this also has the side effect of taking more USD out of general circulation which drives the price of the USD up, which also simultaneously makes your own reserves worth even more!

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It's also for these sort of reasons that, for instance, China is accused of being a currency manipulator for weakening their currency. We kind of intuit "strong = good" but in international economics, that's definitely not the case. It depends on the exact composition of your economy, and your role in global trade. China thrives because of a weak currency. But for Japan this is not the case. They are, amongst other things, the world's largest single importer of both natural gas and food. So their currency weakening is likely to be very damaging for a country that's already been suffering economically for decades, and is only getting worse due to an increasing demographic collapse.

>very damaging for a country

Depends on if it offsets their exports, which has increased last few years due to weak yen despite switching to "premium" energy pricing. Might also make a lot of their ASEAN/foreign infra tenders more competitive. I think there's gains for JP with weak yen, but can't happen faster than businesses can adjust.

> When the US doubles the supply of the Dollar, its value halves

This linear model isn't predictive of purchasing power. (The missing variable is velocity, which is itself a multi-dimensional beast.)

But it takes way more to double usd.

Nope, you print more dollar we keep buying more dollar. No other currency has the backing of the US military.

Your container is in danger from Houthis? SBF is not coming for help, neither the Chinese. The US navy comes.

You wanna operate you business in a failed state? Guess what, the CIA is there for you.

So yes, the value of US dollar is infinite.

The US navy has failed miserably against the Houtnis though.

> US navy has failed miserably against the Houtnis

With the benefit of hindsight it was a damned clear success. At the time it looked limited. But strikes have subsided [1]. And the Houthis’ situational awareness is so poor they’re potting the Russians [2].

[1] https://en.m.wikipedia.org/wiki/Red_Sea_crisis

[2] https://maritime-executive.com/article/houthi-missile-damage...

As per your link, they've struck 3 ships in the past week and targeted but missed another, and the US is now trying to achieve a diplomatic solution with them.

> they've struck 3 ships in the past week

The article says they struck one, the one carrying Russian oil, and targeted (but did not strike) two others. No strikes the U.S. would care about.

It looks like the U.S. is pursuing a counterbattery strategy in Yemen. Keep assets remote. Watch for enemy fire. Use their revealing their locations by firing to counterstrike. It's a safe, effective but slow strategy.

I was premature to call it a success--the Red Sea hasn't re-opened. But the risk to global trade has been sidelined to the extent that the entire debacle is a negigible sideshow.

From the Wiki page: "In April, Tim Lenderking, the United States special envoy for Yemen, stated that he hoped to achieve a diplomatic solution with the Yemeni Houthis in regard to their attacks, and that the US would consider removing the Houthis from its designated terrorist list if they ceased their attacks."

You can check the status of the blockade here. [1] Scroll down to the bottom, and they have a regularly updated graph of traffic through the Suez. US airstrikes started January 12th.

[1] - https://portwatch.imf.org/pages/c57c79bf612b4372b08a9c6ea9c9... (be sure to change the date range. it defaults to 3 months which misses the impact of the blockade, given it began more than 3 months ago)

> status of the blockade

Blockade means blockade. This is a traffic rerouting. It's a bit nutty to say the U.S. vs Houthis is in any way a policy failure for the U.S. The threat was reduced and then it ceased to be pressing.

Contrast that with the oil markets before the U.S. intervened.

> the United States special envoy for Yemen, stated that he hoped to achieve a diplomatic solution with the Yemeni Houthis

Sure, this was never contested. Again, they're an irrelevant fighting group. What's desired is for the missiles to stop so they can go back to threatening the Saudis and we can reposition naval assets from playground patrol duty.

On the linked graph, be sure to expand the date out to "all" or at least the past year. It defaults to a 3-month window, which obviously misses the impact, since the blockade began more than 3 months ago. Not only has the threat not been reduced whatsoever, but there are substantially fewer ships traversing the Suez today than when the US began its air strikes! The nice thing about this military intervention, relative to most, is that the results are objectively and quantifiably measurably.

> Not only has the threat not been reduced whatsoever, but there are substantially fewer ships traversing the Suez today than when the US began its air strikes

I am seeing statistically fewer strikes on friendly ships after the intervention versus before. And less oil-price volatility. The goal wasn’t to bail out the Suez, it was to calm markets—ships circumventing the Red Sea does that as cleanly for American purposes as the Houthis packing up.

Hahahah, you're something else buddy. No, obviously the goal of "Operation Prosperity Guardian" was to "end the blockade and counter threats by Houthi forces against international maritime commerce in the region." [1] Ships could happily sail around the entire African continent without a multi billion dollar military operation and invasion. "The region", the Red Sea, is an area you have to purposefully seek out and sail into during this voyage.

Obviously there's been less strikes, because the blockade has been completely successful, meaning Israel linked ships aren't even trying. What was probably tens of billions dollars wasted trying to stop it has been a complete failure and waste of money, like usual.

[1] - https://en.wikipedia.org/wiki/Operation_Prosperity_Guardian

The Houthis’ effects on global shipping markets, specifically prices, has ended. Their effect on oil prices has ended. Their technical capability to target ships has degraded to the point that they’re potting Iran’s allies all while their firing rate is markedly down. They were a front-page nuisance, now they’re another regional mischief.

Some won’t be happy with anything short of America removing the Houthis from power entirely, but fortunately there are adults in the room who know when to call a win.

Lol, no it hasn't. Shipping rates are about twice what they were before the blockade started. [1] The actual cost for Israel linked ships is of course far higher - that table just gives you an average global shipping price index, which the Israeli linked ships alone have sent skyrocketing. Even oil is indeed up, though it was never a motive to begin with.

You are literally just making up random things to try to convince yourself of what you want to believe, to the point I can't even tell if you're being serious.

[1] - https://www.drewry.co.uk/supply-chain-advisors/supply-chain-...

The US has shown only shameful inaction with the Houthis.

Other currencies devalue more and the USD devalues less, because of the function of the USD as a reserve currency.