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
It’s also interesting for California and other blue states.
Since Trump is attacking the blue states especially, there’s a form of warfare there. As we all know, wars are really expensive and are often decided by who can stay solvent longer.
Normally, that would be California and other blue states, because they have the better economy. If they stopped paying taxes, that would severely harm Trump.
However, through the federal reserve, Trump can just print infinite amounts of dollars, and that effectively overrides the blue states’ strong economy.
So the blue states have a serious interest in de-dollarization, sothat Trump’s money-printing federal reserve becomes meaningless.
Increasing supply (printing) without increased demand (taxes) will cause the price (dollar value) to go down. If it goes down too fast, then nobody will want dollars until tax season, and the dollar will hyperinflate.
Conspiracy theory: that’s exactly what Trump wants because he takes crypto bribes.
it all fits together really nicely, somehow. i’m not sure whether trump actually has a plan or things just randomly fit, though:
texas wanted to secede from the US for centuries (i believe this is actually a big point that people give too little weight to)
the US realizes that the US is not simply going to “allow” texas to secede
conservative thinktanks realize that the only way that blue states are gonna be ok with texas seceding is if they themselves dramatically understand the relevance of state’s autonomy and self-responsibility
trump attacks california and new york to make blue states understand the importance of having greater independence from the federal government
blue states are gonna demand greater independence from the federal government in the next months (2025-2027)
texas can then comfortably also claim greater autonomy for itself
Explain how Trump can order the federal reserve to simply print infinite money? That seems like a total lack of checks and balances. I don’t see that happening at all. But it sounds good online.
Not in disagree with that statement to some degree. But going full authoritarian, and I mean full to the point if mythical scenarios that some people online are spouting. I just don’t see that happening. Sure there’s a shit load of injustice, imbalance of power, overreach, all sorts of adjectives, adverbs, etc. But I think some of these what ifs or scenarios are far fetched and the internet loves to reach.
There’s been loads of cover ups, breaches of power, scandals, you name it. But printing infinite money because trump says so and crashing the global economy is not high up on the bingo card. Anything is possible. I’m just saying it seems highly unlikely is all.
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).
the federal reserve which you can imagine like a big bank hands out a loan to the government.
No. Debt goes directly to markets. Federal Reserve QE operations are acts of imagining new money to buy bonds from the market. You are describing QE operations, not debt. Past QE operations have forgone interest on Federal reserve holdings, gifting it to Treasury such that the bonds that Fed holds become interest free. The accounting magic is that when the bond is finally due, the Federal reserve does get paid in order to erase the imaginary money they created to buy the bonds. But a given QE balance sheet level, they just buy a new bond from the market with new imagined money.
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.
It’s also interesting for California and other blue states.
Since Trump is attacking the blue states especially, there’s a form of warfare there. As we all know, wars are really expensive and are often decided by who can stay solvent longer.
Normally, that would be California and other blue states, because they have the better economy. If they stopped paying taxes, that would severely harm Trump.
However, through the federal reserve, Trump can just print infinite amounts of dollars, and that effectively overrides the blue states’ strong economy.
So the blue states have a serious interest in de-dollarization, sothat Trump’s money-printing federal reserve becomes meaningless.
Increasing supply (printing) without increased demand (taxes) will cause the price (dollar value) to go down. If it goes down too fast, then nobody will want dollars until tax season, and the dollar will hyperinflate.
Conspiracy theory: that’s exactly what Trump wants because he takes crypto bribes.
it all fits together really nicely, somehow. i’m not sure whether trump actually has a plan or things just randomly fit, though:
Explain how Trump can order the federal reserve to simply print infinite money? That seems like a total lack of checks and balances. I don’t see that happening at all. But it sounds good online.
Where have you been
Not in disagree with that statement to some degree. But going full authoritarian, and I mean full to the point if mythical scenarios that some people online are spouting. I just don’t see that happening. Sure there’s a shit load of injustice, imbalance of power, overreach, all sorts of adjectives, adverbs, etc. But I think some of these what ifs or scenarios are far fetched and the internet loves to reach.
There’s been loads of cover ups, breaches of power, scandals, you name it. But printing infinite money because trump says so and crashing the global economy is not high up on the bingo card. Anything is possible. I’m just saying it seems highly unlikely is all.
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.
No. Debt goes directly to markets. Federal Reserve QE operations are acts of imagining new money to buy bonds from the market. You are describing QE operations, not debt. Past QE operations have forgone interest on Federal reserve holdings, gifting it to Treasury such that the bonds that Fed holds become interest free. The accounting magic is that when the bond is finally due, the Federal reserve does get paid in order to erase the imaginary money they created to buy the bonds. But a given QE balance sheet level, they just buy a new bond from the market with new imagined money.
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.