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It may be backed by the US but there is no guarantee of it holding its value especially when the government has become extraordinarily reckless with monetary po
by dkrich 4y ago
It may be backed by the US but there is no guarantee of it holding its value especially when the government has become extraordinarily reckless with monetary policy. While we’ve never experienced a serious crisis of confidence in the dollar and there are many who have predicted hyperinflation since the 70’s, I do not believe you can exponentially increase the supply of something and not see its value diminish. The pace and looseness of monetary easing over the last decade and especially the past few years cannot be overstated.
- carlosjobim 4y agoThe guarantee is that the USD will _not_ hold its value. And if you don't trade your natural resources in USD, the other guarantee is that your country will get bombed.
- samus 4y agoThe USD actually has to always inflate to stay relevant since it drives much of the world's markets. Over time there has to generally be an increased supply of the green bills because other countries become more affluent. It is one of the reasons why the Nixon Shock happened - the gold standard became too restrictive, and since the USD was tied to it, it became unsustainable. Countries like France were considering exchanging their USD with gold, which would have seriously depleted the US gold deposits.