4 ms·
Sorry for my potential ignorance, didn't you just say "no" then go on to agree with the previous commenter in your explanation? A volatile currency and less in
by suprjami 1y ago
Sorry for my potential ignorance, didn't you just say "no" then go on to agree with the previous commenter in your explanation?
A volatile currency and less investment in treasury securities is what a decline in a reserve currency looks like, isn't it?
- JumpCrisscross 1y ago> volatile currency and less investment in treasury securities is what a decline in a reserve currency looks like, isn't it? Not particularly. Modern currencies segregate their transacting and store-of-value components. Dollar hegemony was established on the basis of store of value strength. It is now maintained through transactional superiority. The historic default was for an exporter to America to have comfort they could keep their excess dollars in Treasuries over the long term. Today, there are a broader set of options for safe assets, depending on one’s views. (There are more securitised assets, period, today than there were in the 1960s.) Treasuries being defaulted on could undermine the dollar’s reserve status. Treasuries just becoming more volatile, probably not—the relevant buyers hold to maturity.