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He already has. Firing Jerome Powell and pushing rates lower, in spite of reality on the ground, is effectively a form of soft default. (That, plus the laundry
by mlsu 1y ago
He already has.
Firing Jerome Powell and pushing rates lower, in spite of reality on the ground, is effectively a form of soft default. (That, plus the laundry list of other things, which is too long to fit into a single HN comment)
The US will never stop paying its obligations. But driving away investment by breaking promises abroad and eroding political stability at home very much will cause the trust in the USD as an ongoing institution to evaporate. Sure, the US still pays its bonds on time in USD, but what is USD worth when the US cannot honor its trade obligations, cannot honor its diplomatic obligations, cannot be relied on as a stable partner?
It will be very scary when the US stops being the dominant financial system. So much of the US political economy (and more fundamentally, our way of life) depends on it.
- testing22321 1y agoDo you mean Americans way of life, or everyone’s?
- mlsu 1y agoYes, speaking from USA perspective. For everyone else, some win some lose I'm sure.
- mainecoder 1y agoas long as the military is there there is no need to worry because who decides which debt gets paid who enforces this financial rule, who makes the rule by what power?
- overtomanu 1y agoThis is what is happening a bit now, USD is being sold and gold is being brought by various central banks