What is the Real US Inflation Rate? 

Before gold and silver, ancient traders used whatever items of perceived value were lying around to conduct business.

Call it the ultimate free market for money.

Obsidian was used for barter in Anatolia 14,000 years ago before formal trade was even a concern. 

As time went on, traders throughout the region adopted obsidian as a form of barter. Sardinians mined the stuff from several different deposits around their territory, and obsidian served alongside everything from livestock to sacks of cereal grain.

However, by the third century BC, metals like copper and silver had replaced these more primitive means of exchange in much of the world.

That system, based on objects deemed valuable by their end users, worked for thousands of years.

The Rise of Paper Money

Then, four hundred years ago, the idea of paper money caught on.

Of course, paper money started in China in the seventh century AD, when Tang Dynasty merchants used a system of receipts to track balances owed to each other. 

Paper money in a more national form came about under the Song Dynasty four hundred years later.

The guys who concocted paper money in its modern origins in Europe weren’t exactly doing anything groundbreaking.

​​US Dollar Dominance and its Aftermath

Fast forward to the modern era.

After World War II, the US government saw an opportunity to do what it does best: totally dominate the world.

Being the only world power to have won the war and not be left in crippling debt, the United States got to call the shots. 

This meant that global trade would be priced in US dollars, and money would flow through the US financial system.

That system has brought financial imperialism with laws like the Foreign Account Tax Compliance Act (FATCA), which have made it next to impossible for US persons to move their own money out of US banks and into offshore jurisdictions. 

Nomad Capitalist founder Andrew Henderson ran into this issue when he wanted proceeds from a US asset sale sent to Singapore, only to be told the title officer had no idea where Singapore was!

Today, the FATCA system has created a situation whereby millions of Americans living legally overseas face a tough time opening bank accounts.

All the while, the United States has used its position as the 800-pound gorilla of the financial system to force the rest of the world into poverty – thanks partially to the unspoken real inflation rate on US dollars.

That’s because, as foreign buyers raced to buy the ‘strong dollar’, the US government decided to print more of them, eventually abandoning the gold standard and beginning the printing of worthless dollars with wanton abandon.

The result is a 93% decline in the value of the dollar since World War II.

What cost US$1 back then now costs at least US$14.

​​The True Cost of Inflation

During the Baby Boom of the 1950s, the average house cost less than US$16,000, the average car was US$1,480 and the average American made US$2,700 a year.

You know what else costs less? World War II itself. The Defense Department spent roughly US$350 billion fighting one of the bloodiest wars in history.

That’s pocket change compared to the more than US$1.1 trillion spent on the comparatively small wars in Iraq and Afghanistan.

Yet, the US government’s ability to dominate the world financial system by controlling the US dollar allowed it all.

Today, the government hides the truth from its citizens and the world as it further devalues its money with runaway spending.

For example, the world markets bought up US dollars on the news that inflation in The Land of the Free hit ‘new lows’. 

Basically, the government has devised a creative method of cooking the books to convince the sheep that inflation is really very low in the US. 

It uses things like the Consumer Price Index, which calculates the cost of living of retirees and people on food stamps, to pretend that prices aren’t going up.

While the media may report that consumer prices rose a fraction of a per cent, the reality is that food prices are up nearly 20%.

Ever since the US rigged the game in their favour 70 years ago, no one could stop them – until now.

Consider the implications of what’s really happening in the currency markets.

In Hong Kong and all around the world, countries that have hitched their wagon to the US dollar are suffering, and they’re tired of it.

Countries like Panama are suffering massive increases in the cost of living because their economies are tied to the US dollar. Singapore, which pegs its dollar to a basket of currencies, including the US dollar, has said doing so has cost them dearly.

Even the outrageous property prices in Hong Kong are tied to the Hong Kong dollar’s peg to the US currency. This has led many in Hong Kong to call for a new peg to the renminbi in order to stop cost-of-living increases.

In fact, the BRICS nations of Brazil, Russia, India, China and South Africa met in Brazil to discuss dumping the US dollar as their transactional currency. They’ve already taken steps to do so, and France has expressed its interest in doing the same.

When that happens, things like oil would be priced in another currency, such as the Chinese renminbi.

If you think 22% inflation on food is bad, just wait until the rest of the world realises that the US no longer holds the power to control the entire planet’s monetary system the way it once did.

That’s when the floodgates will really open, and the hurt will come down with a sonic boom.

US Inflation Rate: FAQs

The US Dollar’s Uncertain Future

The US dollar’s position as the world’s dominant currency is facing a formidable challenge. 

However, recent events, including the BRICS nations’ development of a new reserve currency and France’s consideration of alternatives, signal a potential shift in the global financial landscape. ‌

While the dollar’s role may not disappear overnight, its influence could diminish as other currencies gain traction.   

The latest data from the International Monetary Fund (IMF) shows that the US dollar’s share of global foreign exchange reserves has declined from over 70% in 2000 to under 58.1% in 2023. 

This trend reflects a growing desire among nations to ‘upgrade’ their holdings and reduce reliance on the dollar.    

The reasons for this shift are wide-ranging. Concerns over US inflation rates, the weaponisation of the dollar through sanctions and the desire for a more multipolar financial system all contribute to the movement away from the dollar.    

While the future remains uncertain, one thing is clear: the US dollar’s unchallenged reign may be drawing to a close. 

The world is witnessing a potential turning point in the global financial order and the implications for the US economy and its influence on the world stage could be profound.

This means that now is the time to proactively assess your financial strategy and consider a ‘Plan B’. At Nomad Capitalist, we specialise in helping people and businesses do just that and more. 

Don’t wait for the future to happen to you. Take control of your financial destiny and explore the possibilities with Nomad Capitalist.