I'm not fully convinced about a hyper inflation along the lines of Weimar Republic or Venezuela or even Argentina levels inflation for that matter.
However, I understand that this is only and only because of US dollar being the global reserve. The real outcome of this is that all countries that handled covid better and are back on track economically, now are richer, because the US dollar is poorer. They can either choose to provide more liquidity in their system, thus raising their GDP or just stay rich with higher currency values.
Either way, Americans are poorer. And maybe deservedly so given the mismanagers that have been running the country.
> However, I understand that this is only and only because of US dollar being the global reserve.
No, historically it's because the US dollar supply is actively managed with moderate inflation as a key goal. Now, the range of other policy options enabled consistent with that, yes, has benefited from the US dollar being a global reserve currency.
The Fed has recently made announcements that seem to indicate that it is weakening focus on the price side of it's mandate to do more on the employment side (to, in effect, compensate for Congress’ failure to marshal fiscal polict to deal with that.) If there is unusual inflation, that active choice of monetary policy priorities—not debt or deficits—will be the proximate cause.
But even in that scenario, hyperinflation is unlikely unless the Fed completely abandons the price level side of it's mandate in setting monetary policy.
What makes you think other countries with rapid inflation don't manage currency supply?
If the monetary base suddenly doubles, the money will trickle down soon enough.
In US dollars case, it will trickle down to people and almost all other countries. Those countries will have more dollars in reserve, thus raising value of their currency or giving them low interest rates or ability to print even more.
This is extremely evident in the case of emerging markets like China. They will now get even more printed dollars in reserve and the only way to absorb it all is to print more yuan and allow more money to flow through China's economy, thus increasing wealth of the hundreds of millions still in poverty.
> What makes you think other countries with rapid inflation don't manage currency supply?
They do. But on the (fairly rare) occasion of hyperinflation, they aren't managing it focussing on price levels, but some other objective, usually one or both of juicing short-term economic performance without regard to price levels or monetizing debt.
However, I understand that this is only and only because of US dollar being the global reserve. The real outcome of this is that all countries that handled covid better and are back on track economically, now are richer, because the US dollar is poorer. They can either choose to provide more liquidity in their system, thus raising their GDP or just stay rich with higher currency values.
Either way, Americans are poorer. And maybe deservedly so given the mismanagers that have been running the country.