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They might stop holding dollars for that reason, but they would definitely also stop holding dollars if inflation was high and the Fed had nothing to sell to br
by OscarCunningham 4y ago
They might stop holding dollars for that reason, but they would definitely also stop holding dollars if inflation was high and the Fed had nothing to sell to bring it back down.
- hindsightbias 4y agoWhat non-inflationary currency would they go to?
- OscarCunningham 4y agoIn this hypothetical the dollar has inflation higher than its 2% target, but there are still other major currencies whose central banks haven't gone bankrupt.
- AnimalMuppet 4y agoCentral banks don't go bankrupt. And, even in that hypothetical, it would still depend on what interest rate you can get in dollars vs. what interest rate you can get in, say, Swiss Francs.