4 ms·
It’s one ingredient that does help prop up the US, but really similar fiscal means are available to countries that fulfil all these conditions: 1. Have their ow
by stephen_g 1y ago
It’s one ingredient that does help prop up the US, but really similar fiscal means are available to countries that fulfil all these conditions: 1. Have their own central bank and currency, 2. Have flexible currency exchange rates and not peg to a commodity or other currency, and 3. Exclusively issue bonds in their own currency (that their own central bank exclusively issues).
Apart from the US several countries meet this threshold, including the UK, Canada, Australia, New Zealand and Japan. On the other hand, the Eurozone countries do not, and this helps some of the member states, but only at the expense of some of the others.
- robocat 1y agoNew Zealander here. Our stock market (businesses) are nothing like the US market. It isn't a relative size thing - there really is worse choice here. Last I looked I recall 39% of the US stock market is owned by foreigners. Fair enough since say Apple revenue I'd say 60% from foreign sources.
- disgruntledphd2 1y ago65% of world equity values come from the US, which is a crazy, crazy amount. Like, maybe that's sustainable but it's certainly not sustainable in a world where you're pissing your trading partners off on a daily basis.
- Havoc 1y agoThose criteria you list make for independent monetary policy making. Not at all the same thing as world reserve currency. You don’t see oil markets trading in New Zealand dollars. Or half the world holding large amounts of Aussie dollar in their forex reserves. Or a bunch of Canadian gov bonds. Or benchmark their rates against the US in reporting. If the US prints more half the world carries the pain but US gets all the benefit. Lose reserve currency status and that so called exorbitant privilege goes up in smoke. Along with the financial system built on it