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> If they wanted, they could mint a few $1 trillion USD coins and whoosh the money exists. of course this is true - that's what sovereign power means. And yet
by chii 3y ago
> If they wanted, they could mint a few $1 trillion USD coins and whoosh the money exists.
of course this is true - that's what sovereign power means.
And yet, other entities have trust that the US gov't doesn't just do it. Thus, the 'general trust' as you said. And this special status as being a reserve is mainly due to this trust - no amount of coersion is going to make an untrustworthy currency a reserve.
- flagrant_taco 3y agoIs it any different in your opinion when $1T is created and deposited into bank accounts rather than minted and released as coins?
- chii 3y agoIt depends on the mechanism of said creation. If it is created as debt, then there's a due date for which it is repaid, with interest. In which case, it works out OK, if the interest is lower than actual economic growth.