Reserve currency status.

in american •  2 years ago 

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It's difficult being bearish on the dollar given my nationality but it is also difficult to reject the reality of what is playing out and has been playing out for decades. To ignore, or write this off as nonsense is going to inevitably yield being on the wrong side of the trade. (A figure of speech, not actually necessarily about shorting the dollar right here, right now!)

I see two main views of the US Dollar as global reserve currency since World War 2.

  1. Americans have been able to print money, and operate at debt levels beyond their own productive output and thus live at a higher standard of living than the rest of the world for quite some time.

  2. The excess was mostly absorbed by exporting this inflationary force abroad. Think of it as a tax of importing western (mostly American) culture to the rest of the world.

Problem is, once the rest of the world enjoys the same middle class American culture that exists in the States, the era of Americans benefiting at the expense of other nations will end.

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