A Plausible Oncoming Financial Storm

So, the economic situation might end up pretty dire if the following is correct. I'm posting this line-of-thought in case someone wants to sanity check it.

"To boost the British economy, I'd tax all foreigners living abroad."
-- Monty Python's Flying Circus

My read on the current economic order is that America is an empire. Now empires are supposed to extract tribute, and America might at first glance not appear to do that. But I claim it does. Instead of direct taxation the mechanism seems to be:

* Use a combination of diplomatic carrots and military sticks to make the dollar the world's reserve currency.
* Inflate the dollar by "borrowing" from the federal reserve (read: printing more dollars but with extra steps).
* Spend the printed money to subsidize American citizens in a bunch of ways to haphazardly offset the effect of the inflation being a pretty regressive taxation regime by default (medicaid, social security, food stamps, government jobs, etc.)

Now my fear is, if the Trump administration messes up our foreign policy badly enough (e.g. by unnecessarily hitting allies with the tariff stick, and showing signs that they will not in fact defend countries like Ukraine that the US had agreements with) the dollar might lose its reserve currency status. If this happens, we might be in for some pretty nasty levels of inflation (because, what happens if all those foreigners and corporations start dumping their dollar reserves?)

Anyway, I'm curious what people think of this line of reasoning.

#deeptakesonhottakes