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Donald Trump once addressed this by saying "So long as oil is traded in US dollars, debt doesn't really matter." And I kind of have to agree with him. So long a
by NovaDudely 3y ago
Donald Trump once addressed this by saying "So long as oil is traded in US dollars, debt doesn't really matter." And I kind of have to agree with him. So long as the hemoglobin of the global economic engine is still there, the debt can keep being issued with out concequence.
But this only holds while oil is still relevant and/or available.
So it works short term but over the course of decades it is a big problem.
The market will remain solvent and irrational far beyond all logic.
- thworp 3y agoHonestly I can't see any candidates to actually replace the dollar. To become the world reserve currency the issuing country has to be very stable, make their capital markets as open and transparent as the US, accept running a large trade deficit and issuing government bonds to almost anyone no matter the geopolitical situation. China is stable, but without a regime change they are not at all interested in opening their financial markets. India is large and a little more open, but the big question mark is stability (both external wrt Pakistan/China and internally). The EU could do it but first they'd have to get buy-in from the export giants which seems unlikely and they'd also strain the relationship with the US.