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>The USA could probably use a decade of double digit inflation It's a very thin ice to walk on. High inflation threatens USD's global reserve currency status a
by fuoqi 5y ago
>The USA could probably use a decade of double digit inflation
It's a very thin ice to walk on. High inflation threatens USD's global reserve currency status and it's in addition to using financial control for political pressure of opponents (e.g. threats to ban countries from SWIFT). When (not if) this status will be lost you will get serious additional inflationary pressure from foreign governments and private investors dumping USD-denominated assets. In the best case scenario it will be a prolonged multi-decade process as with GBP, but in the worst case scenario unwinding can be quite fast, especially considering China's reserves (i.e. it can start selling USD-denominated assets as a form of financial attack).
- lamontcg 5y agoI think the depression we hit due to austerity could also severely threaten the global reserve currency status. Although that's another good argument as to why policymakers are going to panic over inflation.