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The entries in a database are IOUs. The US will have to return something at some point, but as we have complete control over our own currency, the terms of the
by AnIrishDuck 1y ago
The entries in a database are IOUs. The US will have to return something at some point, but as we have complete control over our own currency, the terms of the deal are... very flexible on our side.
It's effectively a bet on China's part that (1) it's worth it to build their own industrial base and (2) the US won't renege, at least severely, because of the consequences.
Worth noting that the current proposals to further blow up the deficit may actually accelerate this dynamic, regardless of tariffs, because somebody has to buy these IOUs.
- JackYoustra 1y agoIt's a lot more than this, right. People want dollars because people want dollars, their motives we can guess at but don't know with certainty. With all likelihood it's to buy US G&S (which is very similar to investing in the US) but it could also just be to have dollars to trade amongst each other.