3 ms·
Reading my earlier comment, it's too black and white. It'd be another straw. Is it the one that breaks the back? I have no idea. But I don't think it's wise to
by ericd 4y ago
Reading my earlier comment, it's too black and white. It'd be another straw. Is it the one that breaks the back? I have no idea. But I don't think it's wise to start nationalizing companies.
If trust in foreign currency holdings declines (say, if we decide to unilaterally cancel other countries' holdings in our currency when we want to punish them), then I'd assume that creditor nations would start looking at replacing some or all of their US treasuries holdings with real assets that carry less counterparty risk. If we start nationalizing onshored assets, then the field of suitable assets starts narrowing a whole lot to portable things like commodities.
We should work very hard to maintain a reputation as a trustworthy counterparty if we want to be able to continue running large deficits.