The argument that the erosion of the dollar’s global status could benefit the US is gaining traction in Washington. That move would be a needless act of self-harm.
The argument that the erosion of the dollar’s global status could benefit the US is gaining traction in Washington. That move would be a needless act of self-harm.
Obviously the Trump administration is dominated by economic morons.
I’m sure China and EU would gladly take that “burden” off USA. And while that makes the USD decline, it will increase inflation in USA, both because imports are more expensive, but also because American goods will be worth more on export markets and be more favorable to American companies to sell outside USA, again increasing prices in USA to compete with the more attractive export market. So the result is to either export, or sell at home at higher prices.
The selling off of USD will also increase interest rates, making it more expensive to pay interest on federal and other public debts.
Together with a less attractive home market this will cause investments to drop. We actually saw that already 2 days after the insane tariffs were announced, and they had only been in force for a few hours!!!
But yes I can see how it must be confusing to the morons in the Trump administration whether the reserve currency is more a burden than an advantage. Because everything is confusing to them, but somehow they still manage to always make the wrong decisions. If it was mere stupidity, it should be closer to 50/50!! So maybe something else is going on too?
Russians whisper this shit into their pea brains and they believe it. They think these ideas are their own. It works on normies and it works on high-status people as well.
Pfft…
They don’t need Russians…
They have Ron Vara. The only so-called “economist” in the world that agrees with Mafia Don Mangolini’s ideas on tariffs.
🙄 🤡 🖕 🖕
https://en.wikipedia.org/wiki/Exorbitant_privilege
China yes but I can’t see other countries picking it up, broadly because they have a closed capital account so the inability to freely move CNY is a massive hurdle. EUR doesn’t have that problem but there aren’t enough EUR around to satisfy demand (you need to run consistent deficits to be a reserve currency).
You’re right though about being a reserve currency. It actually is both a blessing and a curse, but clearly until this point the US thought it more a blessing…
Yes and of course the advantage depends on how that is managed. If you don’t use it to invest, the advantage isn’t as great. But it creates a huge amount of
surplusinflux to the economy, that stimulates economic development.