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> Everyone holds long term USD instruments. Nobody wants to lose their money. The US is still the world's largest economy - by a lot. Sure US share of world gd
by mayama 1y ago
> Everyone holds long term USD instruments. Nobody wants to lose their money. The US is still the world's largest economy - by a lot.
Sure US share of world gdp is hovering around 25% for decades. But, world gdp share of what I would call US adjacent economies, like EU, JPN, UK etc., is decreasing with rise of chinese economy. US could comfortably run petrodollar and global reserve currency with the help of these adjacent economies by exporting US deficit, by forcing these adjacent economies to make concessions like plaza accords when running deficit dollar becomes tough.
China on the other hand is making moves to make maintaining deficit dollar impossible in long run, non-floating yuan, export dumping, belt road etc. We are running in to situation where deficit dollar and global economy decoupling could happen from both sides US and other countries. This is one way triffn dilemma could get resolved.