Monetary Colonialism: When the Power to Print Money Becomes Class Power

Calling it "monetary colonialism" sounds extreme. But if you strip the moral charge out of the phrase, the mechanism underneath is cold: one group has access to new money, cheap credit, and collateral, so it buys real assets first; the rest receive money later through wages, transfers, or small business revenue, after housing, stocks, tuition, healthcare, and living costs have already risen.

It doesn't just happen between America and the rest of the world. It happens in every country with a modern credit system: the state issues debt, banks create money when lending, central banks control liquidity, and people with assets use those assets as collateral to borrow new capital. New money does not fall evenly on society. It follows the power pipeline.

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The Money Creation Rights Loop

The core of the system does not lie in a secret conspiracy. It lies in a very public loop: assets generate credit, credit drives asset prices, higher asset prices generate more credit.

Roughly stated but true to its essence: the system rewards people who already own assets with the ability to create more money through credit. People without assets can only sell their labor time and receive money later. In a cheap-money cycle, assets take the elevator while wages take the stairs.

National Level: Printing Money Does Not Flow Evenly

At the national level, the ruling class does not need to own the money printing machine. They just need to control monetary policy, fiscal policy, banking laws, land markets and relief structures. When the M2/M3 money supply increases, when credit is cheap, when banks are encouraged to lend, the first person to benefit is often not the person receiving the monthly salary.

People with assets see low interest rates and understand immediately: borrow more, buy more land, buy more stocks, buy more businesses, refinance old accounts, and extend the debt term. People without assets see low interest rates but banks ask where the collateral is. With the same cheap money policy, one side receives leverage, the other side receives higher house prices.

St. Louis Fed recorded US M2 increasing at a yearly rate 26.9% in February 2021, a very unusual level in modern history. Then came goods and services inflation, but before CPI hurt everyone, asset markets had a party: stocks, crypto, real estate, private assets, startup valuation. Property owners see net worth increase. People who do not own assets see their future pulled away.

This is the "Cantillon effect" in modern language: those who receive new money early can buy at the old price; People who receive money late have to live with the new price. In the 18th century, it might have been gold, silver, and merchants near the royal court. In the 21st century, it is banks, investment funds, landowners, large businesses, people with collateral and people with policy relationships.

Collateral Is a Private Money Printer

In everyday life, the phrase "rich people use money to make money" is not accurate enough. The correct mechanism is: Rich people use assets to borrow new money. Real estate, stocks, bonds and corporate cash flows are revalued; The higher the price, the larger the loan limit; The larger the loan limit, the stronger the ability to buy additional assets.

The ECB defines collateral very simply: it is an asset that the lender can seize if the borrower does not repay the loan. But in an asset-based economy, collateral is not just insurance for banks. It is a class passport. If you have a house, you can borrow. If you have stocks, you can margin it. If you have bonds, you can repo. If you have a business, you can issue debt. With nothing but salary, there is only consumption paid in installments with higher interest rates.

Fed Z.1 shows US net assets reaching approx 168.8 trillion USD by the end of 2025, of which household real estate is approx 52.1 trillion USD. When monetary policy pushes up asset prices, the benefits are not evenly distributed. It goes towards those who already have large balance sheets.

International Level: USD Is the Imperial Version

USD is not the whole story, but is the strongest international version of the same logic. At the domestic level, people closest to banks and assets receive money first. At the global level, the country issuing the reserve currency receives the real goods first, while the rest of the world holds the debt notes, foreign exchange reserves and fiat assets denominated in that currency.

BIS recorded global foreign-exchange turnover of 7.5 trillion USD per day in April 2022, and the USD appeared on one side of 88% of transactions. IMF COFER shows that the USD still accounted for about 56.3% of allocated foreign-exchange reserves at the end of Q2/2025. According to the U.S. Treasury TIC table, by the end of March 2026 foreign holders owned about 9.35 trillion USD of U.S. Treasury securities.

In other words: emerging countries sell real goods, accumulate USD, and then part of that USD goes back to finance US public debt. The seller actually receives the financial asset. The issuer of the financial asset receives the real goods. This is not an exception, but the same asset-credit-power loop at the planetary level.

When the majority of trade bills, corporate debt, central bank reserves and foreign exchange transactions revolve around the USD, a small country cannot simply declare: "From tomorrow I won't play anymore." If you don't play, you can't pay. If you cannot pay, you cannot import. If we cannot import, factories, gasoline, components, medicine and food will all be affected.

When the Fed Pushes the Button

The problem does not stop with who uses which currency. The bigger problem is that the monetary cycle of the center becomes the financial cycle of the periphery. The Fed is the biggest example, but this logic also holds true for the ECB, BoJ, PBoC or any central bank large enough to cause asset prices and capital flows to change direction.

When the US economy is in crisis, the Fed lowers interest rates and expands the balance sheet. After 2008 and especially after 2020, QE caused the Fed balance sheet to swell to approx 8.9 trillion USD in 2022. Cheap money seeks yield, flowing into stocks, bonds, real estate and emerging markets. Asset prices increase. Businesses borrow easily. The government thinks it is good.

But when inflation returned, the Fed raised interest rates and sucked up liquidity. Hot capital flows turned around. USD strengthens. Domestic currencies of emerging countries lose value. Once cheap USD debt suddenly became a burden because revenue was in local currency but debt repayment obligations were in USD.

That's why names like Sri Lanka, Argentina or many African economies often appear in debt crises. Domestic governance errors are real, but the bullets that pierce the system are usually a strong USD, high US interest rates and closed capital markets.

Vietnam In The Vortex

Vietnam is neither a passive victim nor a bystander. Vietnam's growth model relies heavily on exports, FDI and exchange rate stability. The IMF recorded Vietnam's economic growth 7.1% 2024, supported by strong exports, sustained FDI and supportive policies; But the IMF also warned that the export model faces trade uncertainty and tightening global financial conditions.

World Bank said that in the first 9 months of 2024, Vietnam had a current account surplus 17.5 billion USD, equivalent 5.4% GDP, but the overall balance of payments is still negative due to large capital outflows and capital errors/losses. The same report noted that SBV had to intervene to sell reserves and use open market operations to reduce pressure on VND devaluation.

Speaking in everyday language: Vietnam can sell goods and still earn foreign currency, but when the interest rate difference and strong USD sentiment appear, money can still run out. Workers do not need to know what "financial account deficit" is. They only see gasoline, milk, medicine, international tuition, imported components and goods priced in USD more expensive.

A Bowl of Pho, Housing Prices, and a Policy Click

When the center loosens monetary policy, some of the liquidity spills out into the world and pushes up asset, commodity, and energy prices. When the center tightens, part of the liquidity withdraws to a safe place and pushes emerging countries into a defensive exchange rate position. In both directions, workers often don't have a seat in the meeting room but their name is on the bill.

In the morning, a worker in Binh Duong saw the price of a bowl of pho increase, the price of a gas tank increased, and the price of a room rent increased. A young couple sees apartment prices running faster than savings. An office worker saw his salary increase by 7%, and the house he wanted to buy increased by 20%. No one tells them that their purchasing power is partly determined by M2, bank credit, land prices, bond yields, DXY and risk appetite of capital flows.

That is the subtle side of monetary colonialism: it turns exploitation into macroeconomic fluctuations, turns privilege into "markets", turns the power to create money into the capacity to invest, and turns the decisions of the asset-holding class into the living costs of the class living on wages.

When the Exploited Fight Back

When people no longer believe that the domestic currency can retain its purchasing power, they do not write an economic manifesto. They act very pragmatically: exchange to USD, buy gold, buy land, buy crypto, keep foreign currency in cash, quote prices in another unit, or find ways to take assets out of the system that they no longer trust.

This is the demonetization of trust. The local currency still exists legally, but people silently downgrade it: they use it to pay wages, taxes, and small bills, while large assets are anchored to gold, USD, real estate, or another benchmark. The state can force people to use the official currency on invoices, but it is much harder to force them to believe in it.

In market language, this is when the public starts to short the domestic currency. They do not need to open a derivatives account or place orders on a terminal. They only need to sell VND to buy USD, gold, land, durable goods, or foreign assets. Every small action is a vote against monetary dilution.

This resistance makes sense at the individual level, but it has side effects at the social level. Dollarization reduces the central bank's policy power. Goldization leaves capital idle outside the productive system. Assetization turns housing into a vault, making it even harder for young people to buy homes. Capital flight weakens the domestic currency further, leaving those who stay behind with more imported inflation.

At the global level, resistance takes a different shape: countries want to reduce their dependence on the USD, reduce the risk of financial sanctions, reduce the power of the Western payment system and reduce the need to hold too many USD-denominated assets. BRICS is the political symbol of this trend, but the real story is not "tomorrow there will be a BRICS currency replacing the USD". It is a series of smaller experiments: local currency payments, increasing the role of development banks, expanding CIPS, testing cross-border CBDCs, buying more gold, and building parallel payment infrastructure.

The Atlantic Council noted that after 2022, especially after the G7 increased the use of financial sanctions against Russia, many countries signaled that they wanted to diversify away from the USD. But the same source also pointed out that BRICS is still in the formative stage: the 2025 communiqué talks a lot about local currency financing and payment systems, but is still more about discussion than complete implementation.

Still, heavy central-bank gold buying is a notable signal. The World Gold Council says central banks were net buyers of gold for 15 consecutive years through the end of 2024; Brookings cites WGC estimates that they bought about 1,092 tons in 2024 and 863 tons in 2025. Gold does not pay interest, but it has one quality bonds do not: it is not someone else's debt.

So currency resistance has two layers. Ordinary people fight back by protecting their purchasing power: USD, gold, land, assets. Countries fight back by diversifying their reserves, building their own payment systems, signing local currency agreements and buying gold. They both said the same thing through their actions: "I don't want to let my entire future rest in money that others have the power to dilute."

Conclusion

Old-style colonialism took gold, rubber, rice, oil and labor with guns and bullets. Monetary colonialism doesn't need to do that every day. It uses the power to create money, the power to distribute credit, collateral, payment systems, debt and interest rate cycles to pull real value from those far from the source of money to those standing near the source of money.

The danger is that this system is not completely wrong, not completely fake, and not easy to replace. Credit is needed. Banking is necessary. Fiat money is needed. USD is useful because the US market is deep and has great liquidity. But just because a system is useful doesn't mean it's fair.

For individuals, the lesson is not to hate money or hate banks. The lesson is to understand why owning assets is more important than saving cash in a system that continually dilutes the measure. For the country, the lesson is not to shout the slogan of abandoning the USD tomorrow. The more practical lesson is to reduce foreign currency debt without natural cash flows, develop domestic capital markets, control asset bubbles, maintain fiscal discipline and understand that in every cycle of cheap money, there are people who are saved first and people who pay the bills later.

Modern empires do not necessarily wear military uniforms. Sometimes it's a balance sheet, a line of credit, a refinancing, a revalued mortgage, and a society taught that rising asset prices equal prosperity.