- No more trade deficiencies causes a lack of dollars in the world instead of letting it float freely ( and available)
Because of the dollar as reserve currency, the US can have debts without anyone protesting. But as soon as this advantage disappears, the debts become a problem => collapse?
The relatively "bigger picture" would be countries that carry and trade US debt in the form of Treasury bonds (which does not equate to cash reserves) and other debt-related instruments.
If you need examples of how this plays out in the grand narrative(s) of finances, look at the top holders by country of US debt, the memes/arguments of the Fed's "money printer goes brrrrr", as well as possible geopolitical risks.
The risk, I think, is that US debt is in the currency the US controls. So there is the temptation to get out of the debt by inflating it away. If it becomes perceived that this will happen it could set off the collapse. And this could happen sooner than one might think.
The end game is the federal debt has been inflated away, the dollar is much lower, and dollar denominated assets have been wiped out. So (if you think this is going to happen) get your investments into equity and the like and load up on dollar denominated debt that will also be wiped away.
> U.S.'s position as the world's largest economy and perceived political stability.
One can tell it’s October article. I doubt anyone views the US as politically stable now
things happen slowly, and then happen all of a sudden.
TFA agrees:
> Paraphrasing Ernest Hemingway's line in "A Sun Also Rises" about bankruptcy, such catastrophes happen "gradually, then suddenly."
AKA "The Seneca Effect". There's a book written on that: https://terebess.hu/keletkultinfo/seneca.pdf
thanks
Biff Tannen only cares about his personal empire, there is really no plot twist here.
Without the US as reserve currency
- Less western support because of Trump
- No more trade deficiencies causes a lack of dollars in the world instead of letting it float freely ( and available)
Because of the dollar as reserve currency, the US can have debts without anyone protesting. But as soon as this advantage disappears, the debts become a problem => collapse?
The relatively "bigger picture" would be countries that carry and trade US debt in the form of Treasury bonds (which does not equate to cash reserves) and other debt-related instruments.
If you need examples of how this plays out in the grand narrative(s) of finances, look at the top holders by country of US debt, the memes/arguments of the Fed's "money printer goes brrrrr", as well as possible geopolitical risks.
The risk, I think, is that US debt is in the currency the US controls. So there is the temptation to get out of the debt by inflating it away. If it becomes perceived that this will happen it could set off the collapse. And this could happen sooner than one might think.
The end game is the federal debt has been inflated away, the dollar is much lower, and dollar denominated assets have been wiped out. So (if you think this is going to happen) get your investments into equity and the like and load up on dollar denominated debt that will also be wiped away.
This is golden, keep it for the children.
I feel sorry for those who cannot diversify out of their 401(k)s …
Is your 401(k) in USD? Or am I missing something?
It has to happen.