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> to be invested in the US to invest in US (i.e. to buy a piece of US) one has to sell something to US to get dollars while not buying US products in return, i
by trhway 1y ago
> to be invested in the US
to invest in US (i.e. to buy a piece of US) one has to sell something to US to get dollars while not buying US products in return, ie. an US trade deficit is needed. And that at the same time while US is introducing tariffs to reduce the said trace deficit.
- kronicum2025 1y agoYou assume that the current admin is not simply asking for gifts.
- Yoric 1y agoWe live in an economy that is highly virtualized, where the same unit of currency can be used several times simultaneously to borrow, lend, re-borrow, etc. so I'm not sure it's that simple.
- trhway 1y agoIf the US gets invested with such "virtual" ("out-of-thin-air", newly issued, etc.) dollars i guess it would be even worse as it would only inflate prices in US while not doing anything else.
- Yoric 1y agoMaybe? What we're discussing is clearly beyond my ability to grasp (macro-)economics.
- sharpshadow 1y agoIt is inflating prices but also doing a lot more contrary to nothing.
- overfeed 1y agoBeing the biggest reserve currency has a little-discussed perk where the reserves lower the average velocity of money, which blunts the inflationary pressure of money-printing. Eroding trust in the US will deplete these deep pools of USD and will result in a more direct linkage with domestic inflation in the future.