How Washington plans to defend the dollar

7 comments

1. SS: Trump plans to reinforce Washington’s global dollar-hegemony through enticing outside parties to continue trading using and maintain the status as the global reserve currency using a ‘carrot-stick’ method of enticement, and backing the creation of dollar-backed ‘stablecoins’ forwarded to the global financial market.

2. As a European, we should definitely stop using their currency as much as possible.

3. As an American, please stop using the dollar. We must collapse to rebuild to finally teach all the idiots.

4. American debt is a widely-held and extremely desirable asset in the global economy. Whatever debt China does sell is simply purchased by other countries. For instance, in August 2015 China reduced its holdings of U.S. Treasuries by approximately $180 billion. Despite the scale, this sell off did not significantly affect the U.S. economy.

   Furthermore, China needs to maintain significant reserves of U.S. debt to manage the exchange rate of the renminbi. Were China to suddenly unload its reserve holdings, its currency’s exchange rate would rise, making Chinese exports more expensive in foreign markets. As such, China’s holdings of American debt do not provide China with undue economic influence over the United States.

5. The current world order based on the dollar hegemony is highly beneficial for the core members, the US, UK, EU members. So it will be economically highly damaging to decouple. I agree that we have to, its a question of survival now in light of the newly forming autocrats united axis.

   But I’m afraid it will be a very hard sell in europe politically, and might result in even further surge towards the far right parties, who already highly benefit from the populist demagougery playing on peoples economic fears and whipping up their nationalist fervour. The UK only damaged itself by leaving the EU.

   My nightmare is a few years from now, a Germany governed by an openly Pro putin Afd, or a France taken over by Le Pen/Bardella will be the end of the european experiment.

6. Does Washington really plan on defending the dollar? Everything that comes out of Trump and Elon’s collective mouth is projection and foreshadowing. My worry is this: Elon claims there’s no gold in Fort Knox, then goes to see it, with *no neutral third party there to actually record it,* claims it’s gone, the dollar plunges to zero, and in the resulting chaos – as he has full executive authority behind him – he makes off with it. Or worse, convinces Trump that it is safer somewhere else, and – as he has full executive backing – does exactly that, and moves it to somewhere only he knows, maybe even to Putin (who has the Spanish treasury and Romanian treasury as well). It becomes Schrodinger’s gold.

7. Trump says two things. One, that your trade with US should be balanced i.e. you shouldn’t be earning excess dollars. Two, that you should keep trading with other nations in dollars. These two things don’t reconcile.

   It is a choice between one or the other. If you want dollar to be the reserve currency, you need to make it available to people. If you don’t want dollars leaving your country then outside world will find another median of exchange.

Comments are closed.