Well, here's how it works step-by-step. Could be slightly long, so bear with me:
The Great Satan’s first instinct (as holder of the world reserve currency) whenever handed a hot-potato of self-inflicted inflation, is to hand it off to the rest of the world—i.e., to export his inflation to friends and foes alike.
Global energy importers in Europe, emerging markets, India, China, and Japan, for example, are facing what accountants call a balance of payments crisis, but what I’ll bluntly call by its real name: A currency crisis.
That is, under the current, but potentially dying petrodollar system, these countries will need more USDs to buy oil.
But that’s where the problem lies.
Why?
Simple: Those USDs are drying up (unless more are printed).
Regardless of whether you believe in the perpetual hegemony of the USD as a payment system or not, we can all agree that USD liquidity is drying up (whether it be from the milk-shake theory absorption in euro-dollar and derivative markets or from post-sanction de-dollarization).
Nations facing the double whammy of needing more USDs to pay for inflated oil prices and inflated USD-denominated debts around the globe are going to be groaning under the pressure.
What can these nations do in the face of that bullying hot potato known as the USD? How can they service these increased USD payment (oil and debt) burdens?
Well, short of turning their backs on the USD (still a little too soon), the only current option other nations have
is to devalue (i.e., inflate and debase) their own currencies at home, which is how The Great Satan makes his problem just about everybody else’s problem.
Did you notice that? There's the answer to the question of the link between exporting inflation and "investing" in other nations. The Federal Reserve is a private incorporation and is the driving force behind the corporate takeover of governments.
The Federal Reserve’s private owners work thus:
1) after exporting inflation to other nations and
forcing them to debase their own currencies, they then "invest" in those countries like China at a grand scale,
being able to now purchase Chinese assets at rock bottom prices.
2) paying money market funds holding trillions NOT to invest in the US economy every business day (reverse repos).
3) shorting US treasuries, betting that America will fail
As I often say, with friends like the Great Satan who needs enemies?
Something, however, has to give.
This clearly broken system of the Great Satan exporting its inflation upon a world forced since the 1970’s to import oil under a broken and inflationary Greenback has a genuine potential to implode.
Already, countries like Ghana have realized that it’s better to trade oil in real gold rather than fake fiat dollars.
Long before the petrodollar became the mad king, for example, history recognized that physical gold was a far better instrument of payment to settle stable oil pricing.
See for yourself.
As more and more of the world recognizes the currency crisis slowly in play now, and then steadily in greater pain tomorrow, this “Balance of Payments” (i.e., currency) crisis can easily evolve into a “change of payments” reality in which gold re-emerges as a superior payment system for oil.
As of this writing, the physical oil markets are greater than 15X the size of the physical gold markets on an annualized (USD) production basis.
If the world turns slowly (then all at once?) toward settling oil in gold (partially or fully) to avoid a global currency crisis, gold will have to be repriced at levels significantly higher than current pricing.
In fact, a recent poll of over 80 central banks holding greater than $7T in FX reserves indicated that 2 out of 3 polled strongly believe that central banks will be making more, not less, purchases of physical gold in 2023.
The graph below, is thus worth repeating, as the world is clearly turning away from The Great Satan’s drunken bar tab of debased dollars and IOUs toward something more finite in supply yet more infinite in duration.