Chapter 03 The Dimensional Strike of the Money-Printing Era

Financial Aggression Under Globalization

In a modern society interwoven with mass money-printing and globalization, the form of warfare has long since shifted from live ammunition to a silent, invisible financial contest. Emerging nations and their peoples often fall, without ever realizing it, into a systemic trap designed by dominant capital. This chapter leads the reader to see through the essence of this dimensional strike, moving from the currency aggression at the level of the macroeconomy to the compounding trap at the level of personal wealth, and lifting the veil on the cruel truth of how wealth is redistributed in the money-printing era.

Money is debt, and once you accept US dollars you become the creditor. So he prints money, and you are the creditor. (Video 00166)

The central bank has the power to print money without limit. It prints American IOUs, and paper money is the right to immediate redemption. (Video 00184)

The West uses its dominant currency to enslave the whole world. (Video 00527)

The Palace That Never Falls

Many people, watching the United States print money without cease, will instinctively ask: if it keeps printing like this, will America collapse? The answer is this: whether it collapses has, in fact, no direct connection to whether it prints money. The key lies in whether the money that is printed has real value growing behind it.

We can understand this through the metaphor of a palace. A king takes the houses in his kingdom and his own palace as collateral, prints IOUs (issues government bonds), and then uses that money to build railways and roads and to support his officials. Once the money flows into the market, the houses of the common people rise from one thousand to two thousand, to three thousand, and the palace’s valuation likewise climbs from one hundred thousand to one hundred and fifty thousand, to two hundred and fifty thousand. And so the value the king can pledge is padded ever higher, and naturally he can print ever more IOUs. This is the “palace that never falls” — so long as value keeps growing, he can keep printing.

Whether America falls has, in fact, no direct connection to whether it prints money. America will keep building, so it keeps printing and value keeps increasing, and this is the palace that never falls. But if it prints beyond its building, beyond its economic growth, then in the end it will corrupt, and everyone will stop believing in it. (Video 00184)

Hidden here is a critical guardrail: the palace does not fall not because it “can print,” but because it “keeps building, and real productivity truly grows along with it.” The moment the pace of printing exceeds real growth, the IOU loses its backing, and trust collapses in its wake — the people begin to refuse this slip of paper and switch to pricing things in something else. The American palace has not fallen to this day precisely because its technology and productivity have never stopped filling in real value for each newly printed dollar. This also explains that what ought to be held is not the fiat currency that will be diluted, but those top-tier enterprises standing at the very core of the palace’s construction.

Central Bank Balance-Sheet Expansion Revalues the Entire Market

Every round of quantitative easing (QE) after a crisis is, in essence, a rapid expansion of the central bank’s balance sheet: market liquidity is injected in massive quantities, and the valuations of risk assets are pushed back up. And when policy turns toward quantitative tightening (QT) or a high-interest-rate environment, the cost of capital rises, and valuation compression and heightened volatility appear in tandem. This means that the violent swings in asset prices are, much of the time, not merely a matter of corporate fundamentals, but the result of changing monetary conditions.

To put it plainly, QE is like a massive blood transfusion in the emergency room, first keeping the system from going into shock; QT is like halting the transfusion and recovering the liquidity, letting valuations that had been propped up return to a more brutal reality-based pricing.

Looking back at how the 2008-to-2009 financial crisis was handled, the core of the policy was first to stabilize the financial institutions, then to use liquidity to prop up the credit market. Once the market gradually formed the expectation that “the central bank will provide liquidity in a crisis,” the valuation framework for risk assets was rewritten too. This is precisely the institutional backdrop for the asset revaluation of the money-printing era.

The same logic also appears in a rate-cutting cycle. When the total scale of debt is large enough, every small downward step in interest rates releases a considerable amount of liquidity in interest burden. Calculating on the United States’ current total debt of nearly US$35 trillion, a mere 0.5% cut in interest is equivalent to releasing about US$175 billion in liquid funds directly into the market! This kind of funding release pushes the entire market to reprice assets, and this too is the most merciless dimensional strike the money-printing era inflicts on those who hold no assets.

In an environment of low interest rates and a flood of capital, another revaluation channel appears on the corporate side: share buybacks. Top-tier enterprises use cheap capital (financing costs lower than their return on equity) to buy back their own shares in large quantities, passively pushing up earnings per share (EPS). Market investors follow the trend and pile in, forming the “corporate-side driver” of asset revaluation.

This pathway reveals the underlying mechanism of rising stock prices in the money-printing era — not because fundamentals suddenly improve, but because the cost of capital is so low that buybacks become the most efficient use of capital. What needs to be clarified is this: the description of “dividend yields converging toward government bonds” is used to explain “the flow inertia of hot money in the market,” and it does not mean that the awakened investor should also fixate on dividend yield to judge the highs and lows of stock prices. The first principle of the CLEC system remains “hold quality assets that generate capital gains, and do not time the market for the sake of a dividend rate.” This passage is about understanding the macro direction of capital flows, not a basis for individual valuation judgment.

Many people’s understanding of inflation stops at “prices getting more expensive,” yet they overlook the financial system’s “M2 growth-rate baseline.” Under the modern monetary system, global M2 (the broad money supply) has expanded over the long run at an annualized pace of about 7% (global broad money has grown from around US$26 trillion since the year 2000 to over one hundred trillion, and during peak printing periods can even reach double digits). This means that if the annualized return on assets fails to outrun this pace of monetary expansion over the long run, you are not slowly growing richer — you are continuously growing “poorer” as a proportion of the world’s total wealth. Deposits are merely treading water hard in the fiat torrent, unable to stop themselves from being swept by the current toward the bottom.

Since the pandemic-era balance-sheet expansion began in 2020, in the face of the additional issuance of currency, the price of gold has risen about 48%, and the NASDAQ index, once adjusted for the money supply, has risen about 90% in real terms. This is not pure value growth, but the truth of assets being forced to revalue after the purchasing power of fiat currency vanished.

Money-printing carries a cruel “time-lag effect” in how it distributes wealth. When the printing press starts up, the newly created purchasing power flows first to those nearest the press — that is, the capitalists who hold quality assets — causing asset prices to undergo an abrupt, “gapping-up” surge. What the ordinary laborer feels, by contrast, is the lagging, drawn-out rise in the prices of daily necessities. By the time you have toiled for a year and finally saved up a sum of money, asset prices have long since gapped up to a height beyond your reach. This time lag is precisely the structural chasm that makes the wealth gap so hard to cross.

The force of money-printing’s expansion is not entirely without an opponent. Over the same period, the AI wave is giving rise to a countervailing “productivity J-curve” — in the first few years, enterprises spend enormous sums buying GPUs, training models, and overhauling processes, and their financial statements look like nothing but a bottomless pit of spending. This is the bottom of the J-curve. But once these investments cross the inflection point, once AI truly permeates the processes of coding, customer service, administration, and legal work, corporate labor costs and operating costs will fall at an astonishing speed. This is the vertical blast-off phase of the J-curve.

This force of technological deflation is quietly offsetting the inflationary pressure created by the central bank’s money-printing. Even if external prices rise because of geopolitics, tariff wars, and supply-chain restructuring, the internal cost reductions brought by AI can allow top-tier technology enterprises to maintain, or even expand, their profit margins.

For holders of indexes such as QQQ (Invesco NASDAQ-100 ETF) and 00662 (Fubon NASDAQ-100 ETF, Taiwan-listed), which are heavily weighted toward the AI giants, this is precisely the underlying logic of why “money-printing accelerating inflation” and “holding top-tier technology stocks” can coexist and complement each other — money-printing lifts all nominal prices, while AI simultaneously lowers real production costs, and after subtracting one from the other, the real productivity premium of technology stocks will keep expanding.

The Fiat Trap of Emerging-Nation Contract Manufacturing

The high-technology manufacturing industries that many emerging nations take pride in in fact conceal a deep logic of capital exploitation. In order to maintain export competitiveness, the governments of these nations often adopt policies of suppressing their exchange rates and subsidizing utilities, creating the illusion of low inflation and low interest rates. Yet the price of this practice is footed by the entire population; in substance, it sacrifices the wages of local laborers and the nation’s resources in order to subsidize America’s multinational corporations.

What the laborer receives for working hard is a currency that will depreciate, which I call garbage. This garbage must be exchanged for assets, and only then are you making the stronger financial move. (Video 00490)

Viewed from the data and the industrial structure, this is an extremely lopsided transaction. Take the world’s top-tier chip industry as an example: America’s Nvidia enjoys a gross margin as high as 75%, while TSMC, which handles the contract manufacturing, sees its gross margin stall at about 55%. When a senior designer or artist in the United States can draw a high salary of US$180,000, and even a frontline street cleaner earns an annual salary of US$80,000, the salary of Taiwan’s top-tier semiconductor engineers, when converted, turns out to be not far off from that of America’s frontline laborers.

This model of emerging-nation contract manufacturing is called the “slave-dollar” trap. According to a trial calculation using The Economist’s Big Mac Index, the real purchasing power of the Taiwan dollar has long been undervalued by nearly sixty percent, which means that Taiwan’s laborers use a sixty-percent loss in purchasing power to exchange for that meager stockpile of US-dollar foreign reserves. This is not just one person’s rat cage; it is the rat cage of an entire nation.

Under such a system, what the laborers of emerging nations exchange their lives and their labor for is a fiat currency in perpetual decline. When America prints money on a grand scale, the real purchasing power of the foreign reserves that emerging nations have painstakingly accumulated shrinks in step. Without the financial intelligence to convert this fiat currency into core assets, the laboring class will forever remain mired in the contract-manufacturing trap of “the more you work, the poorer you get; the poorer you get, the more you work.”

For the individual investor, this structural exploitation has two exits: either keep fighting the “labor war,” keep working overtime and churning inward, keep exchanging low added value for depreciating fiat currency; or switch to fighting the “financial war,” and put the investable Taiwan dollars that remain after setting aside living reserves and a risk buffer into QQQ / 00662. Teacher James’s verdict on this is bluntly direct:

Emerging nations can only churn inward, because your resources have all been snatched away by others, so you can only grow poorer the more you work, poorer the more you work, and the poorer you get the more you work, and that is that, so there is no way to break it. We cannot change the government, we cannot change an industrial structure premised on the government enslaving its people, so all we can do is awaken the awakening of capitalism, saving one person at a time. Only by all of us buying, in great quantity, the American NASDAQ-100 index fund and becoming the masters of the Americans can we, the emerging nations, reverse our fate. (Video 00540)

The key mental key is to “be the master of the Americans” — when an investor owns shares in these multinational technology giants such as Nvidia, Apple, Microsoft, and Google, it is equivalent to turning the very top talent of America and of the whole world (including their R&D teams, CEOs, marketing departments, and global operations) into employees laboring on your behalf. Under this architecture, overtime and inward churning are no longer a necessary option — the efficiency of letting capital work for you far exceeds the ceiling of exchanging personal labor for a salary. An ordinary person in an emerging nation who wants to break the contract-manufacturing trap cannot, as an individual, change the government’s industrial policy, but he can change his own asset allocation — and this is the true path by which the CLEC system can let Asian readers cross the class divide.

In other words, if an export-oriented economy remains stuck for the long run in the division-of-labor position of “exchanging long working hours for low added value,” then even if nominal exports increase, they may still be diluted in tandem by exchange rates, inflation, and capital-reflux mechanisms. On the surface it earns foreign exchange, but in substance it keeps falling behind on purchasing power and on the pricing power of assets.

The Erosion of Fiat Cash’s Purchasing Power

Viewed through the lens of long-term asset returns, the disadvantage of fiat currency in an age of inflation is extremely cruel. According to more than two hundred years of asset-return data in the United States from 1802 to 2025, the real annualized return of stocks after deducting inflation is about 6.9%, whereas the real annualized return of currency (the US dollar) is a negative -1.4%! Fiat currency has been depreciating all along; holding cash is equivalent to watching, wide-eyed, as your purchasing power silently vanishes at a rate of 1.4% a year.

▲ Figure 3-1 More than two hundred years of US real annualized returns, where stocks appreciate over the long run while the purchasing power of cash fiat currency is eroded by inflation over the long run

Source: Jeremy Siegel, "Stocks for the Long Run" (US$1 in stocks compounds over more than two hundred years from 1802 to about US$2.987 million in real terms, while US$1 in cash is left with only about US$0.04)

We must see fiat currency’s destiny clearly through the wide-angle lens of history: over the past several thousand years, no fiat currency has escaped the fate of ultimately returning to its intrinsic value of “zero.” Fiat currency is, in essence, an IOU issued by the government carrying an “invisible expiration date.” It offers convenience in the short term, but over the long term it is a meat grinder for wealth. Only by exchanging this “finite-life” IOU for asset units of “eternal production” (such as productive equity) can one achieve true immortality of wealth.

The IOU Parable of the American Village and the Taiwan Village

In the earlier “island economy,” trade was originally barter: chickens exchanged for rice, fish for corn. But it soon runs into the problem of mismatched needs: when you want to exchange for rice, the other party may not necessarily want your chicken. So people invented the IOU mechanism. Suppose a mark is pledged on a seashell, promising it can be redeemed in the future for five sacks of rice; this shell is then no longer merely a shell, but a certificate of credit. When the whole village is willing to accept it, it takes on the function of money.

This is the most core essence of money: money is a commonly acknowledged IOU (I Owe You). And this kind of money has an obvious geographic limitation: it is valid within the same village, but may become void once you leave the village, because outsiders do not know the issuer and do not acknowledge his credit.

Scale this model up to the modern day, and you see the “American village” version: originally the villagers bartered, until a gun-toting thug forced everyone to accept a sheet of paper called the “US dollar” as an IOU, ruling that US$1 exchanged for one sack of wheat. When the thug discovered that printing paper money was far easier than producing goods, he began printing frantically, so that it took US$2 to exchange for the same sack of wheat — and this is the birth of “inflation.” Many people worry that the US government’s debt is too high and it will go bankrupt, but this is really a failure to understand the first principle of finance: the debt of the US government is, in essence, the savings of the private sector of the whole world. So long as someone is willing to accept US dollars, this “IOU” remains forever valid.

Casting our eyes across the globe, the “Taiwan village” produced semiconductor chips of tremendous value and sold them to the American village, but what it got back in exchange was only the “IOUs” that America printed in massive quantities. After Taiwanese enterprises receive US dollars, they must convert them into Taiwan dollars in order to pay salaries, which forces Taiwan’s central bank to print Taiwan dollars in step, forming a vicious cycle of an oversupply of Taiwan dollars and a continuously weakening exchange rate. The more fiat-currency IOUs one holds, the more one is, in essence, reduced to the party bearing the brunt of this financial colonization; conversely, if one converts these IOUs into core productivity assets, one leaps from being “a servant doing contract manufacturing for America” and turns into “a master who sits back and enjoys the dividends of corporate growth.” This is the most powerful means of self-liberation for the ordinary person, after understanding financial aggression.

Behind this also corresponds the “Triffin dilemma” so often seen in economics: when a single nation’s currency simultaneously shoulders the roles of both domestic currency and global reserve currency, there is often a long-term tension between domestic balance and the world’s demand for liquidity.

The Dollar Cycle and the Triffin Dilemma

The dollar cycle can operate over the long run because the world continuously remains willing to accept dollars, use dollars, and then reflux those dollars back into the US Treasury system. This mechanism lets America export currency and import goods, and it also keeps global liquidity in motion. But the contradiction lies here too: if the dollar is undersupplied, the world will run short of liquidity; if the dollar is oversupplied, the dollar’s purchasing power and credit will be eroded. This is the core tension of the Triffin dilemma under the modern financial order.

For emerging markets, this tension is directly embodied on the funding side and the exchange-rate side. When US-dollar assets offer more attractive interest rates, capital refluxes to America, and external markets face a contraction of liquidity; when the dollar expands once again, asset prices are forced to accept yet another round of revaluation. Many nations are not for want of trying; rather, they endure passive pricing over the long run under the global clearing architecture.

After 2025, the market began to discuss a more aggressive geopolitical policy conception — the so-called “Mar-a-Lago Accord.” It is not yet a formally signed international agreement, but a set of ideas resembling a “new Plaza Accord.” On the surface it is about tariffs and a trade war, but its deeper logic is to use powerful political pressure to force non-US currencies to appreciate and to compel various nations to buy back more US Treasuries. This mechanism lets the dollar depreciate in an orderly fashion relative to other currencies, so as to rebuild the competitiveness of American manufacturing. For investors holding non-US currencies, this means that the purchasing power of their assets will face a more complex risk of shrinkage under the twin squeeze of “passive exchange-rate appreciation” and “US-dollar liquidity siphoning.”

▲ Figure 3-2 A schematic of the dollar cycle and the closed loop of global liquidity

Stablecoins Strip Central Banks of Seigniorage

Beyond the exploitation of the real-economy industries, another wave of financial aggression in the money-printing era is sweeping the globe through the spread of “stablecoins.” America knows full well the importance of dollar hegemony, and so, facing the rise of digital currencies, it chose the strategy of “if you can’t beat them, join them,” by pushing forward the “Genius Act,” a stablecoin law that requires the issuance of stablecoins to be backed 1:1 by US short-term Treasuries and US-dollar cash as reserves.

You know, the American stablecoin has stripped many countries of their seigniorage. When many countries take up stablecoins fast, the currencies of many countries will be abandoned. (Video 00515)

This kind of US-dollar stablecoin — digitized, cross-border, and possessed of extremely high liquidity — constitutes a dimensional strike against the sovereign currencies of emerging nations. In the past, cross-border remittances had to go through the traditional Swift system and pass through each nation’s central bank; now stablecoins let funds flow directly into the digital accounts of enterprises or individuals. In nations deeply afflicted by inflation or economic turmoil, such as Venezuela, the Philippines, and Mozambique, the people and enterprises, to protect themselves, will swiftly embrace US-dollar stablecoins for transactions and savings.

When a nation’s citizens no longer trust and use their own fiat currency, that nation’s central bank has in substance lost its seigniorage and its ability to regulate through monetary policy. The US government need only issue Treasuries for institutions to buy, and the institutions then use these as collateral to issue stablecoins that circulate globally. This not only enlivens the liquidity of US Treasuries, but also lets the dollar’s aggression penetrate into every corner of the world, completing a silent, invisible financial colonization.

Viewed mechanically, this amounts to adding another layer of digital leverage to the dollar cycle: first establish reserves with US Treasuries, then convert those reserves into on-chain dollars that can circulate globally. Nominally it is a payment innovation, but in substance it embeds the dollar’s settlement power more deeply into cross-border transactions, and keeps expanding the squeeze effect on other currency systems.

Once transactions, savings, and cross-border clearing all gradually shift toward the same on-chain dollar instrument, the proportion of the local currency demanded in the everyday economy will decline, and the efficiency of monetary-policy transmission will be weakened too. This is not merely a technological upgrade, but a redistribution of settlement power and financial dominance.

For Taiwanese investors holding US-dollar assets (such as QQQ, 00865B, and BOXX), this “silent quantitative easing” carries two direct practical implications:

Right now there is a huge transformation of the entire financial industry, an enormous one. So you need not worry about 00865B; the dollar will be extremely strong, so the Taiwan dollar cannot rise very far even if it wants to, and even if it wants to rise it does not have the ability, because the dollar is just too formidable. (Video 00515)

Once the Genius Act passes and stablecoins are issued, stocks will shoot through the roof. Because it is equivalent to quantitative easing. Originally one dollar was taken by the government and put to use, but then the bank issues one dollar of stablecoin as well, so does that not become two dollars? This is truly igniting a revolution, this is a great revolution. (Video 00515)

The first implication is the “structural lock-in of a strong dollar” — when banks buy US short-term Treasuries to lend money to the government, and at the same time issue 1:1 equivalent stablecoins to the world, the originally single US dollar in the market gives rise to a double layer of liquidity. The world’s demand for dollars and US Treasuries is maximized, its velocity of circulation is accelerated to the split second, and the dollar can be foreseen to remain strong on the payment and settlement network (even if on the exchange-rate price there may separately be downward pressure due to policy, which is a different layer from the strength on the payment network); the room for the relative appreciation of non-US currencies such as the Taiwan dollar is structurally compressed. Many investors worry that “Taiwan-dollar appreciation will eat into the profits of US-dollar assets” and so sell off 00865B or 00662, but from the standpoint of this macro architecture, that is unnecessary panic.

The second implication is that “stocks will meet a hidden quantitative easing” — according to CLEC’s macro view, this layer of digital liquidity will expand the scale of the dollar’s circulation and the demand for US stocks, and capital will tend to pour into the core assets of the US stock market, with QQQ and the NASDAQ-100 continuing to benefit. Once these two lines are seen clearly, Taiwanese investors can remain unmoved in the face of short-term news of Taiwan-dollar appreciation, and continue to execute CLEC’s disciplined allocation.

Stablecoins are only the first step in the digitization of dollar hegemony. The next step is the tokenization of RWA (real-world assets) — BlackRock and JPMorgan are moving US Treasuries, commercial paper, and even mortgage-backed securities directly onto the blockchain.

Once the three are combined, they form an on-chain closed loop: stablecoins handle liquidity, RWA provides Treasury-grade safe yield, and DeFi amplifies leverage. The circulation channel for US Treasuries thereafter bypasses the traditional central bank, and the traditional line of defense of foreign-exchange controls will utterly disintegrate.

▲ Figure 3-3 A schematic of the double-liquidity mechanism of stablecoins

In summary, in this global financial war that wields fiat currency as its weapon and inflation as its means, both labor power and second-rate assets will face the fate of being mercilessly harvested. Only by seeing through the underlying logic of emerging-nation contract manufacturing, staying alert to the cross-border aggression of dominant currencies, and converting the fiat currency in your hands into the world’s most dominant core assets can you survive this dimensional strike of capitalism and, riding the momentum, stand on the wealthy side.

For the individual, the countermeasure lies not in emotion, but in allocation:

Understanding monetary conditions and adjusting the structure of your assets — this is the truly executable line of defense for the ordinary person in the money-printing era.