| ▲ | ahnick 5 hours ago |
| I'll tell you what is going to happen, b/c it is happening as we speak. The U.S. Government is soft-defaulting on the debt by devaluing the currency. (The debasement rate is somewhere in the 7%-8% range) There will never be a real default, but it is likely that the USD will lose reserve currency status. The U.S. Government has $114+ Trillion in total debt. (Something like $325,000 per person in the US) We are never paying that off. The only way we can do anything about it is to grow the economy and devalue the debt via inflation. |
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| ▲ | matwood 4 hours ago | parent | next [-] |
| > but it is likely that the USD will lose reserve currency status To what though? Even if we accept the US and USD have issues, there is no other currency even close to be able to step in. |
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| ▲ | mikewarot 24 minutes ago | parent | next [-] | | It doesn't matter who/what gets it next, what's important is that we're about to take a 60-80% haircut on our standard of living. It's what happened to the British when the lost it with the Pound Sterling, and now it's our turn. Most people don't remember what hard money is, and why it's important.[1] [1] https://en.wikipedia.org/wiki/Hard_money_(policy) | |
| ▲ | cjs_ac 4 hours ago | parent | prev [-] | | To all the other currencies that are currently used as reserve currencies, other than the US dollar. There has never been a single reserve currency in the world. |
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| ▲ | _ink_ 5 hours ago | parent | prev [-] |
| But who will take over world reserve currency status? |
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| ▲ | upboundspiral 3 hours ago | parent | next [-] | | World reserve currency was solved by Keynes and Joan Robinson in the 1940s.
What you do is have a currency no country controls that acts purely for exchanging one national currency for another. Give it to the united nations or something. If you take a national currency and make it a world reserve currency then the nation that does do has problems with balance of trade, deficits, and mathematically screws themselves over. This is because you currency becomes overvalued compared to those of over countries, meaning your domestic manufacturing has problems competing, among other things. We already made the mistake of one national currency becoming the world currency post WW2. I hope its not a mistake the world chooses to repeat. | | |
| ▲ | ahnick 3 hours ago | parent [-] | | This is what cryptocurrencies do, but remove the need for an intermediary and codify the rules in software, so it is much harder (near impossible?) for politicians to manipulate the money supply. |
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| ▲ | ahnick 4 hours ago | parent | prev [-] | | It will likely be a cryptocurrency or perhaps a basket of cryptocurrencies. You essentially want a way to store wealth directly on the Internet as it is the fastest and easiest way to reassign ownership of money or collateral. The nice benefit too, then is the U.S. (and no other country as well) is subject to the Triffin Dilemma. | | |
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