Recently, there have been some opinions about the printing of US dollar banknotes, which has caused global wealth to shrink. This involves some fairly complex knowledge of money and finance. The author’s analysis is this: 

The U.S. Government needs to cope with the large amount of capital demand caused by the crisis, and therefore issues more national debt. The Fed uses printed US dollars to purchase these treasury bonds, allowing the US dollar to flow into the market (Recently, policies have been introduced to allow the Fed to purchase corporate bonds directly, so that companies can directly obtain US dollars and avoid money stuck in the government).

But in fact, these printed dollars are not necessarily enough. Because the total amount of money we usually say (that is, M2) is printed currency, plus the coefficient of amplification when banks/financial institutions lend. In the case of an economic crisis, the coefficient is greatly reduced because of fewer loans and fewer deposits.

Many investors, companies, and governments all over the world want to exchange their assets for U.S. dollars during a crisis, which has led to a large demand for U.S. dollars. Therefore, the funds released by the Federal Reserve are not enough to meet these needs. That's why the Federal Reserve announced that it is willing to purchase an unlimited amount of Treasury bonds issued by the US government to ensure sufficient currency.

In fact, after the crisis, the dollar index has increased. And after every crisis, it will be the case, that is, the US dollar is in short supply and the US dollar is increasing.

This is the dollar index for the past few months.

Then, the main debt bearer is the US government, that is, the US government borrows money from financial institutions around the world (mainly the US) in the form of issuing national debt, and must pay interest.

For the Fed, this means a substantial expansion of its balance sheet. What's the problem?

The problem is that because the Fed is willing to accept a large or even unlimited amount of treasury bonds, it will cause many treasury bond holders to sell treasury bonds to the Fed and lower the price of the treasury bonds itself. Once a large number of investors follow suit, in extreme cases, it may lead to the collapse of the national debt market.

The collapse of the national debt means that the US government cannot borrow money. But this situation is difficult to happen, because holding US Treasury bonds is a means used by many countries to ensure the stability of their currencies.

Of course, what actually rivets here is the ability of the U.S. government to pay off debts and to keep promises, or the ability of the American people to create wealth and fulfill promises. If the United States cannot do this, its national debt will naturally be worthless.

The above is my superficial understanding of this issue.

Add the comment of Teacher Feng Weidong:

After the U.S. government issues bonds, it will repay the principal and interest of the national debt through future fiscal revenue, which is mainly tax, and there is no looting in form. However, after inflation, the nominal tax will increase, the principal and interest paid will also be the nominal amount, and the actual purchasing power will decrease. Therefore, seigniorage exists. Since the U.S. dollar is the de facto world currency, the U.S. government collects seigniorage from the world, which other countries cannot imitate.

In addition, when the central bank issues additional currency, the subject who first obtains the currency can buy assets at a price that has not risen, and then the subject who receives the currency will face the already rising price. This is the mechanism by which inflation plunders wealth. Obviously, the U.S. government and U.S. companies will get the additional USD before foreign investors.