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Question to FOA
The rest of the world could have just "eaten" their loss, just as creditors always do when a debtor goes bankrupt, and accepted no more US dollars as settlement. That didn't happen. The question being: Why not?, and why should it be different now?
The rest of the world could have just "eaten" their loss, just as creditors always do when a debtor goes bankrupt, and accepted no more US dollars as settlement. That didn't happen. The question being: Why not?, and why should it be different now?
( FOA basically got this one wrong. The world -mostly China + gulf oil producers- did double down on dollars once again , this time in the form of Wall St. junk mortgage paper/ the whole "investment banking" industry. Which blew up suddenly in 2008. Then the Fed >>
bailed them out of that trash heap (see chart) & they -mostly China- rotated the remaining $ & new recycled $ into sovereign UST bonds. Which gets us to today.)
His answer :
The world did begin to walk from the dollar. It plunged and remained on a downtrend for several years. But oil was the major problem link. Every oil person in the US knew we were running out of local reserves at the old "gold backed" dollar price. >>
The world did begin to walk from the dollar. It plunged and remained on a downtrend for several years. But oil was the major problem link. Every oil person in the US knew we were running out of local reserves at the old "gold backed" dollar price. >>
As long as gold could remain in some form of ratio to oil )for conversion purposes), the dollar oil settlement was assured. At least until another reserve system could come along.
Me: and that's what the Euro with gold MTM was supposed to be. But it didn't happen in 2000-2001.
Me: and that's what the Euro with gold MTM was supposed to be. But it didn't happen in 2000-2001.
And it didn't happen in 2008. FOA also says "They would have completely wrecked their entire local economic / money system if they did walk from $"
I'm not a fan of this whole answer. As of Nancy Pelosi & Donald Trumps spending whims are a good proxy for other countries local >>
I'm not a fan of this whole answer. As of Nancy Pelosi & Donald Trumps spending whims are a good proxy for other countries local >>
monetary supply. It's insane. Last I checked , Russia is off the Nancy Pelosi monetary standard. It has open trade accounts & a floating Ruble. And its out of the US tsy business.
And to this day , the suckers in Beijing still want to pay the US to have the privilege of painting it's fence for them. I don't think the Chicoms have a clue what capitalism even is. https://twitter.com/HuXijin_GT/status/1205139816242765824?s=19
Why plunge your country into world trade and the global economy if you have no choice but to surrender your surplus to these people ? Or have your financial pipelines running strictly at the consent of these people ? I'd say the gulf could keep it's oil if that's the terms.
