When you have a global currency that all other currencies are measured in and all oil is bought in, what happens to a country that has economic surpluses? They have to buy dollars.
What happens if countries want to buy dollars? The U.S. government (well, the Fed) has to print them. If you look at the balance of trade and look at the dollar as a printed thing, the US is very good at getting the rest of the world to buy their dollars (that can be just printed or magically made on a computer screen) and getting real stuff in return. I wish I could print money and get boxes of nice shiny iphones, shoes and other trinkets.
I think this is a pretty successful exploitation model. The dollars printed to go overseas to buy oil and other stuff don't come back to cause inflation. Apart from anything else, if another country decides to dump its dollars then if that did cause inflation in the US then that would devalue their remaining holding.
Meanwhile the US can spend as much as it wants on gunboats and the like to enforce this hegemony.
If you benefit from this system, i.e. by being an American, then the dollar is far from toxic. If you are a farmer in a developing nation trying to sell wheat then your view of the dollar may be different.
"The dollars printed to go overseas to buy oil and other stuff don't come back to cause inflation."
I think this part is wrong. When overseas oil companies get the dollars they are going to spend them, otherwise they wouldn't sell in the first place. If the economy worked the way you suggest I think we would see inflation from those dollars sent overseas for oil etc.
This article introduces a new term 'structural' for describing the US trade deficit.
Essentially if a country is to have their currency as the world's reserve currency then they have to run at a deficit.
Since all those extra dollars that get printed go overseas they are not in the US economy to cause price inflation, i.e. too much money chasing too few goods.
