Financial Repression and Currency Debt

Financial repression through inflation has historically been used by governments to inflate away debt. The US dollar is expected to outperform other fiat currencies due to the US having debt only in US dollars, unlike other countries with debt in both local and US dollars. This dual debt situation hinders countries from simultaneously inflating away both local and US dollar debts. If the US dollar weakens, it becomes easier for other nations to service their US dollar debt but harder to service local currency debt and maintain export competitiveness. Conversely, if other countries repress their currencies, it becomes difficult to service US dollar debt and impacts their export economies against the stronger US dollar.