Sooo, you wanna know what I learned this week?
Well, let’s split it up into a few sections:
- US–China power scale
- The history of printing money out of thin air
- The economy of fortune telling – the stock market
1. US–China Power Scale
The first part is everything I learned about China, since I’m writing my Bachelor’s thesis on their dominance in the tech world — mainly 5G.
As you start reading into it, you quickly find countless articles about the rivalry between the US and China — the “Chip War,” “Technical Standards War,” or “Trade War.”
Lots of talk about war — essentially discussing how both sides want the same thing, while the rest of the world tries to decide whose motivation they prefer.
The problem is that neither side’s motivations are simple.
Are the US trying to stay on top both economically and morally — or just economically? That makes a huge difference.
Are China’s motivations truly about balancing the global scales for everyone — or are they simply trying to tip the scale in their favor?
If the latter is true, how are they different from the US?
And that’s where the moral part comes in — it seems to guide the whole discourse, but it’s also debated whether morality is truly the guiding map, or just a road sign along the way.
Many (or maybe some) Western countries say: “We can’t be dependent on China. If our core values and statecraft are so different, how can we trust them not to use that dependency against us?”
Coming from Western cultures, the first thought is: “Yes, of course, we can’t be dependent on key infrastructure” (let’s talk later about what key infrastructure even is).
Any kind of dependency is viewed negatively — even though, not even a decade ago, “Globalization” was the buzzword everywhere.
But what is globalization if not global interdependence?
It only seemed acceptable when there was a guiding power — one that was, to use Weber’s term, legitimized — to hold the structures of that process together.
And what are those structures?
2. The History of Printing Money Out of Thin Air
Well — money, of course. It’s the only currency we seem to measure “progress” in, while ignoring all the side effects that supposedly make it so positive for everyone.
Globalization was only possible because we could trade goods (of any kind) across borders.
And to do that, we needed a system to calculate how much your currency is worth in mine, and vice versa.
If my economy is based on apples (so one loaf of bread in Country A costs 10 apples), and yours on bananas (one loaf in Country B costs 10 bananas) — how do we decide what one of my loafes costs you?
We’d need something both of us can trade into — something of agreed universal value. That used to be gold.
Money was bound to an exchange rate in gold, different for each country (10 apples = 1 ounce of gold; 20 bananas = 1 ounce of gold).
If we traded, we traded in gold — I didn’t care how many bananas you needed; gold was gold for both of us.
How they calculated that? No idea. But stick with me.
The system sounds great — until a crisis hits.
If my economy struggles, I can’t just print more money because I don’t have more gold.
If I import too much, I lose gold, which means I have less money, which lowers my prices for you — good for exports, bad for my own people.
Add in resource privileges, military power, colonial expansion, and the race for influence, and you’ve got a complex power grid underlying the calculation of gold exchange.
Most of these tensions contributed to World War I, after which no one had enough apples or bananas left to buy from anyone.
So most countries abandoned the gold standard and started printing money out of thin air.
And once you’ve tasted that kind of imaginative power — it’s hard to go back to fixed limits.
After the war, power dynamics shifted — the US was rising as the new global economic leader, lending money to Europe.
The problem? There was no gold guiding the exchange anymore, so, let’s be honest — the numbers were being made up (we just called it “monetary policy” and “inflation”).
Meanwhile, the US built massive industries producing war materials and new consumer goods, and held the world’s largest gold reserves.
They wanted stability in global trade — and thus came the Gold Exchange Standard:
Only leading economies like the US and UK had to bind their currency to gold.
Everyone else held US dollars or pounds as reserves, knowing they could be exchanged for gold anytime.
How did those countries get US dollars?
By selling goods, taking loans, or receiving investments — usually the first two, because they had little to trade.
3. The Economy of Fortune Telling – The Stock Market
And then, as if international trade wasn’t complicated enough, the stock market went global.
We tend to picture it as a world of serious men in suits making important decisions — but they’re basically just gambling on the future.
They invest in fragments of potential futures, trying to make them real through belief and money.
They bet on success and talk it into existence — until reality proves otherwise.
Originally, it started small:
Loans for ships or expeditions, where investors didn’t charge interest but took a share of profits instead.
At that scale — when you know the sailor, trust his journey — it doesn’t feel like gambling. It’s almost social.
But expand it to a scale where you don’t even know what you’re funding, and it becomes pure fortune telling.
In the 1920s, everyone wanted a slice of the American dream and took loans to invest in US stocks.
But gambling with money you don’t have never ends well.
The collective imagination outpaced reality — like betting on a horse that isn’t even in the race.
When the US raised interest rates to cool speculation, people didn’t stop dreaming — and on Black Thursday, 1929, the dream collapsed.
(Who would’ve thought that nearly 100 years later, we’d use “Black Friday” to shop with money we don’t have — the irony.)
Stock prices fell, panic spread, banks went broke, and people lost everything.
The US economy — built partly on imaginary money — imploded.
Banks had promised the same “written-down” dollars to multiple people.
And when everyone wanted to exchange them for real printed money, it turned out neither truly existed.
The crash pulled the US out of global markets, dragging others down too — and, among many other factors, the world spiraled toward World War II.
After the war, did we learn from it?
Nah. Too easy.
We went all in on trust — in the US dollar.
The dollar became the global backbone; all exchange rates were fixed to it, and the US backed it with gold.
The world believed in the throne — and trade flourished.
But problems soon followed.
How did other countries get dollars? Mostly by exports or loans.
And as they produced more, they had to exchange dollars for their local currencies to pay workers — inflating their money supply.
They wanted to revalue their exchange rates, but the Bretton Woods system blocked them to keep postwar losers in check.
Meanwhile, the US couldn’t keep up its gold reserves.
Confidence fell, the system collapsed — and that’s how we got the floating, gamble-based global market we live in today.
4. China’s Rise and the Echo of US Hegemony
The reason I dove into all this is because China’s economic rise essentially followed the US’s old playbook.
They strategically expanded exports to the West, hoarded US dollars as reserves, and gained leverage.
Holding that much US currency means they could, theoretically, devalue the dollar by exchanging it all back — a classic power move in today’s “financial warfare.”
Why could they export so much?
Because after Bretton Woods, the Renminbi (Yuan) was undervalued compared to the dollar — making Chinese goods incredibly cheap.
Instead of exchanging their dollars for yuan, they kept them — maintaining that imbalance.
So how did they pay domestic workers without inflation?
Roughly like this:
Company A sells goods → earns dollars → gives them to the national bank → the bank prints yuan to pay workers → but keeps the dollars.
Essentially: printing money out of thin air.
Why doesn’t that lead to inflation?
Because most of that money flows straight back into production — or infrastructure, especially real estate.
Workers earn little, but expect to earn more later, so they take out loans to buy property — gambling on the future again.
Sound familiar?
5. The Problem for the US
China is now challenging the US’s reign by giving loans to the Global South (again, using that imagined money) — gaining interest, influence, and access.
This creates incentives for many countries to keep the yuan stable — much like they once did with the dollar.
Meanwhile, the US suffers from a strong dollar, which makes its exports expensive and imports cheap — fueling trade deficits and stagnation.
So yes, the US would love a weaker dollar, but as long as it remains the world’s main reserve currency, that’s nearly impossible.
So now, the US struggles on its throne, trying to limit its rival’s climb.
At least that’s what I understood.
Other things I learned this week (to get into next time):
• The whole conversation about renewable energy — how we’re “producing more” — doesn’t mean we’re replacing old sources, just expanding the total pool to power all the “amazing” new technologies (looking at you, ChatGPT et al).