Chapter Thirteen - Inflation, Recession, Repeat

CHAPTER THIRTEEN

Inflation, Recession, Repeat

AFTER THE PETRODOLLAR pact, the dollar didn’t just stabilize.
It surged.

Money flowed into America like it had magnetic pull.
Foreign capital.
Oil revenue.
Trade surpluses parked in Treasury bonds.

The U.S. could print, spend, borrow — and the rest of the world would just absorb it.

It should’ve felt like winning.

But instead?

It felt like whiplash.

Because if your money is everyone else’s foundation…

Then your mistakes become global events.

And the 1970s had plenty.

Stagflation.
A word economists invented because nothing made sense anymore.

Unemployment was high.
Inflation was high.
Growth was flat.

And the usual fixes didn’t work.

Raise rates? Kill jobs.
Print money? Fuel inflation.
Do nothing? Watch it all burn slowly.

The dollar was supposed to anchor the world.
Instead, it was spinning it.

Then came Paul Volcker.

Federal Reserve chair.
Tall, calm, ruthless.

He walked into the mess and did the one thing no politician ever wants to do:

He broke the cycle.

Jacked interest rates to the ceiling.
Crushed inflation with force.
Choked credit like it was a fire that needed starving.

It worked.

But it hurt.

Recession hit.
Businesses folded.
Homes were lost.
But inflation bent the knee.

The dollar stood tall again.

This became the new religion:

When in doubt, raise rates.
When things boom, brace for the bust.
And whatever you do — protect the dollar.

1980s.
Reaganomics.
Tax cuts.
Trickle down.
Military buildup.

Debt balloons.
Markets soar.
The dollar is everywhere — loud, confident, wearing aviators and talking about morning in America.

It’s not based on anything but swagger.

And somehow, that’s enough.

1990s.
The Cold War ends.
Tech explodes.
Clinton balances the budget (barely).
Globalization peaks.

And the dollar?
Still king.

Not because it’s flawless —
but because every alternative is worse.

The euro is new.
The yen is cautious.
The yuan is caged.

So when crises hit —
whether in Mexico, Asia, Russia —
everyone runs to the same lifeboat:

The dollar.

And it never breaks.

By now, the boom-bust rhythm isn’t just tolerated.

It’s expected.

Grow. Inflate. Crash. Recover.
Rinse. Repeat. Remember nothing.

It’s not a flaw in the system.

It is the system.

And the dollar?

It’s the drumbeat that keeps the whole thing marching.

But there’s a cost.

Every boom stretches the gap.
Every bust pushes the fix further down the road.
And each time, the dollar comes back stronger, but more distorted.

Because it’s no longer just a tool.

It’s a shield. A brand. A myth. A trap.

And the more the world relies on it?

The less honest anyone can afford to be.