3 ms·

The US will be able to keep issuing as much debt as they like as long as the Dollar is the global reserve currency. Its when that stops being the case they'll b

The US will be able to keep issuing as much debt as they like as long as the Dollar is the global reserve currency. Its when that stops being the case they'll be in trouble with hyperinflation being the most likely outcome.

Jensson 9mo ago
British pounds were the global reserve currency, then when they took too much debt it stopped and it was very bad for them. People will stop using your currency as a reserve currency if you abuse it too much.
jfengel 9mo ago
The US will keep issuing debt as long as people are willing to buy its debt at a reasonably low price. Which people keep doing. For a long time that was because people were justifiably convinced that the US would honor those debts, which it could do because it kept producing even more stuff every year, and would never even think about threatening to default. Here in 2026 I cannot imagine why they are continuing to, except inertia.
- hshdhdhj4444 9mo ago
  > in 2026 I cannot imagine why they are continuing to, except inertia. Because there is no where else for that debt to go. No one else wants to take on so much debt. Meanwhile there are a bunch of asset managers who are paying the mortgage on their beach home in the Caribbean with the bonuses they earn by investing in US debt. If the US defaults on that debt 10 tears from now that means they still earned 9 years of million dollar salaries, and anyways they won’t be blamed for something the entire industry suffered from at that point. If they do the prudent thing and ask for a higher price they will end up investing fewer dollars which reduces their 2% commission on invested capital, money that might go to their international equity golfing buddy instead. Entities where the money is managed by the investor itself (for example, foreign national governments) do indeed appear to be cutting back.
- drumhead 8mo ago
  Because everyone has a lot of dollars and they need to earn a return, so its either the Eurodollar market or US debt. US debt is safer. But its true to say that people are more and more reluctant to buy longer dated bonds and are turning to shorter and shorter maturities which is another problem for the US government.
returnInfinity 9mo ago
look at gold price
SanjayMehta 9mo ago
Don't know about other countries but India has reduced exposure its peak by 26% down to USD 174B in the last few months. https://thecradle.co/articles-id/35568 https://thecradle.co/articles-id/35568
thisislife2 8mo ago
And that's the interesting question - how long will the dollar remain the global reserve currency? Apparently the recent spike in Gold prices is partly because of de-dollarisation: - Gold and De-Dollarisation: Is the US Dollar Losing Its Safe-Haven Status? - https://www.royalmint.com/invest/discover/market-news/gold-and-de-dollarisation-is-the-us-dollar-losing-its-safe-haven-status/ https://www.royalmint.com/invest/discover/market-news/gold-a... - Is the gold boom a sign of de-dollarisation? - https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-dollarisation/?set_edition=us https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-do...

Jensson 9mo ago

British pounds were the global reserve currency, then when they took too much debt it stopped and it was very bad for them. People will stop using your currency as a reserve currency if you abuse it too much.

jfengel 9mo ago

The US will keep issuing debt as long as people are willing to buy its debt at a reasonably low price. Which people keep doing. For a long time that was because people were justifiably convinced that the US would honor those debts, which it could do because it kept producing even more stuff every year, and would never even think about threatening to default. Here in 2026 I cannot imagine why they are continuing to, except inertia.

hshdhdhj4444 9mo ago
> in 2026 I cannot imagine why they are continuing to, except inertia. Because there is no where else for that debt to go. No one else wants to take on so much debt. Meanwhile there are a bunch of asset managers who are paying the mortgage on their beach home in the Caribbean with the bonuses they earn by investing in US debt. If the US defaults on that debt 10 tears from now that means they still earned 9 years of million dollar salaries, and anyways they won’t be blamed for something the entire industry suffered from at that point. If they do the prudent thing and ask for a higher price they will end up investing fewer dollars which reduces their 2% commission on invested capital, money that might go to their international equity golfing buddy instead. Entities where the money is managed by the investor itself (for example, foreign national governments) do indeed appear to be cutting back.
drumhead 8mo ago
Because everyone has a lot of dollars and they need to earn a return, so its either the Eurodollar market or US debt. US debt is safer. But its true to say that people are more and more reluctant to buy longer dated bonds and are turning to shorter and shorter maturities which is another problem for the US government.

returnInfinity 9mo ago

look at gold price

SanjayMehta 9mo ago

Don't know about other countries but India has reduced exposure its peak by 26% down to USD 174B in the last few months. https://thecradle.co/articles-id/35568 https://thecradle.co/articles-id/35568

thisislife2 8mo ago

And that's the interesting question - how long will the dollar remain the global reserve currency? Apparently the recent spike in Gold prices is partly because of de-dollarisation: - Gold and De-Dollarisation: Is the US Dollar Losing Its Safe-Haven Status? - https://www.royalmint.com/invest/discover/market-news/gold-and-de-dollarisation-is-the-us-dollar-losing-its-safe-haven-status/ https://www.royalmint.com/invest/discover/market-news/gold-a... - Is the gold boom a sign of de-dollarisation? - https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-dollarisation/?set_edition=us https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-do...