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It would be helpful to explain what you mean by effectively bankrupt. Like say that Ukraine prevails with current levels of US involvement (so essentially no i
by maxerickson 3y ago
It would be helpful to explain what you mean by effectively bankrupt.
Like say that Ukraine prevails with current levels of US involvement (so essentially no impact on the debt). What does that imply for "the US"?
Perhaps some entitles stop transacting with "the US"? Which ones?
- rcarr 3y agoDalio explains it better than I'll ever be able to, I've timestamped the video to the relevant part here: https://youtu.be/xguam0TKMw8?si=j1n3nJqbsX2YJHLj&t=1921 https://youtu.be/xguam0TKMw8?si=j1n3nJqbsX2YJHLj&t=1921 The general gist is that the dominant country is in so much debt, and the scale of the devaluation through money printing to get rid of the debt is so great, that it can no longer afford to maintain the global infrastructure necessary to keep its dominant super power status and simultaneously service it's debts so the countries who are buying the debt (which is what grant it it's reserve currency status) look for a safer country to invest in and that becomes the new reserve currency. If it's just the Ukraine war, the US is probably fine and can get it's debts down if it makes the necessary moves to resolve internal problems. If the war extends to more fronts, then it could feasibly end up exactly like the UK where it wins the war but loses the status as dominant currency.