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UK is nearly having a currency crisis. Part of issue for US is having twin deficits, trade and fiscal. Means we source much of our actual consumption from exter
by PKop 4y ago
UK is nearly having a currency crisis. Part of issue for US is having twin deficits, trade and fiscal. Means we source much of our actual consumption from external sources who finance our economy.
The debt has to keep growing for the system to keep functioning, but there are diminishing returns of real growth from this increase in debt, plus if there is de-globalization where does the surplus come from externally to be the creditor to finance these deficits?
It's true that many countries are having these problems and US probably has crisis last. But historically it is definitely special.
- henryfjordan 4y ago> if there is de-globalization There will not be de-globalization without a devastating WWIII and the US might as well take what financing they can get before then because afterwards it will be meaningless.
- PKop 4y ago"some degree of it". Trade wars, repatriation of manufacturing, and questioning extended supply lines due to geopolitical factors are all signs of this trend. Not a complete mass isolationism of course. Perhaps also a better frame is some degree of shift away from extreme uni-polarity towards more multi-polarity, a shift that would have similar effects even if it wasn't an absolute shift. Europe severing energy ties to Russia, regulating US tech cos, West sanctioning Chinese 5G and chip producers, confiscating Euro/Dollar reserves, China, Russia and Japan years ago stopping increasing their holdings of US debt and recently selling them, Europe re-assessing the belief they could have such extreme dependence on US military for security and Russia for energy....all signs of some degree of de-globalization (towards more autarky) >a devastating WWIII I don't think it necessarily requires a devastating war, but some war is not that unlikely (we already have it.)