Close Trump allies like Steve Bannon say "the president is pissed every time he looks at the BRICS dedollarization effort". The US fears the Global South challenge to the dollar's exorbitant privilege
Explain how Trump can order the federal reserve to simply print infinite money? That seems like a total lack of checks and announces. I don’t see that happening at all. But it sounds good online.
They simply do press a button and numbers appear in a federal account. There is some bureocracy involved but that’s how it works in a nutshell.
The US can do this freely without much repercussions because of the US role as an intenational reserve currency, the inflation that comes with printing dollars is offloaded to the rest of the world while the US increases it’s amount of dollars.
basically when the federal government goes into debt, that basically means that the federal reserve which you can imagine like a big bank hands out a loan to the government.
the government doesn’t really have to pay back that debt, ever. (it technically has to but that can be avoided by simply taking out a new loan at a later time).
It does have to pay interest on that debt to all the bond holders, if it doesn’t then the bonds lose value and everyone that owns them trys to offload them.
if the interest is just as high as the general inflation, then the government can just take out extra loans to serve the interest without actually increasing the real total debt, because the nominal increase in debt is just eaten by the inflation.
Explain how Trump can order the federal reserve to simply print infinite money? That seems like a total lack of checks and announces. I don’t see that happening at all. But it sounds good online.
They simply do press a button and numbers appear in a federal account. There is some bureocracy involved but that’s how it works in a nutshell.
The US can do this freely without much repercussions because of the US role as an intenational reserve currency, the inflation that comes with printing dollars is offloaded to the rest of the world while the US increases it’s amount of dollars.
basically when the federal government goes into debt, that basically means that the federal reserve which you can imagine like a big bank hands out a loan to the government.
the government doesn’t really have to pay back that debt, ever. (it technically has to but that can be avoided by simply taking out a new loan at a later time).
i hope i explained that correctly.
It does have to pay interest on that debt to all the bond holders, if it doesn’t then the bonds lose value and everyone that owns them trys to offload them.
Which they print too.
if the interest is just as high as the general inflation, then the government can just take out extra loans to serve the interest without actually increasing the real total debt, because the nominal increase in debt is just eaten by the inflation.