Quote:
Originally Posted by redpoint5
Do we blame the POTUS in office when the USD ceases being the de facto currency, or how far back should we attribute the continuous catastrophe?
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The USD is not going to stop being "the" reserve currency because it's the only currency for which there's a massive supply (hello deficits). It'll just be massively devalued and its usage will decrease as barter transactions or transactions in other currencies will increase. Dollar invoicing will still be common, just not as universal.
Fundamentally, the Triffin dilemma is to blame and the system was kind of doomed from the start. It could've been workable with some persistent long term policy guidance but that's just not realistic to expect, especially from the US government.
The way the dollar system was supposed to work is the USD and US assets gain value in exchange for the US markets being "open". If US foreign policy were truly "neutral" so that everyone continues to feel good about buying US assets, and the government had some kind of plan for distributing some of the benefits of the capital influx to the average person, then it would be stable.
What has happened instead is that the federal government is short sighted and looks at the cheap rates they can borrow at, and decides that they are omnipotent and have infinite money to spend, and then they blow all the money while letting wealth inequality and other social problems fester over a few decades, and now everything is blowing up but no one is willing to say "maybe we don't have infinite resources and need to cut back and make smart, economically productive investments".