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Unless you can name another currency with even a moderate likelihood of stability owing to the issuers ability to underwrite it with something like, say, having
by transcriptase 1y ago
Unless you can name another currency with even a moderate likelihood of stability owing to the issuers ability to underwrite it with something like, say, having the Navy that keeps shipping lanes unimpeded across the entire planet… the thesis stands.
- scoofy 1y agoI have no idea why you think military might will force people to buy debt. Other nations have armies. Other nations have nuclear arsenals. The denomination of the debt has little to do with whether or not shipping lanes stay open, and a lot more to do with the nation being able to demonstrate that they can return a greater value of capital to the lender.
- transcriptase 1y agoYou don’t see a connection between military power and stability? You really don’t see how a single country guaranteeing freedom of navigation worldwide for the 80% of global trade that happens by sea might have something to do with other countries having a vested interest in the stability of that currency? Or how that same Navy being the one that sits where the resources that drive the global economy flow like the Persian Gulf might mean it’s not comparable to… the nations that can’t do that (see: any)
- scoofy 1y agoNo, I don’t. Gold doesn’t have an army, and it was the currency of the world for centuries.
- transcriptase 1y agoUntil the nation holding the most gold and the biggest stick decided it wasn’t. Care to guess who that was, and what it was replaced with?
- scoofy 1y agoYou’re the one arguing it must be this way. I’m just saying there are functional alternatives. When you have a powerful trading partner, by all means, use their currency. When they start threatening debasement or default, there are alternatives.