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That's a big assumption. If dollar payments to settle intl trade is interrupted, the consumption growth of goods and services in the US will stop and begin fal
by vivegi 3y ago
That's a big assumption.
If dollar payments to settle intl trade is interrupted, the consumption growth of goods and services in the US will stop and begin falling. The trading partners have been servicing this consumption growth for several decades only because of the relative safety of the dollar. Hoping that would continue regardless of the degradation of the safety of the dollar is wishful thinking.
Thinking that this won't impact the purchasing power of the dollar has no basis in logic.
- neilwilson 3y agoThere is no basis in logic for what you are saying. The disaster doesn’t happen because even Treasuries beyond their payment date are discountable. Even more so at the lender of last resort. You are talking about the Fed refusing to do its job. How long do you think the people in charge of the Fed will stay in charge in that situation? The Fed is not God. It is the agent of the Treasury and it does what Treasury tells it to do - just as Bernanke said when he testified to Congress.