Russia! Russia!! Russia!!!

[kybkh]

[SuburbanFarmer]

So right out of the gate Catface has a fundamental misunderstanding of the nature of the reserve currency, it's not about treasury bonds, as with all Catface blabbering, he simply spreads misinformation because he doesn't know what he's talking about.

You're going to tell me that it's all about cash reserves. That's a very old-school way of looking at it, but ok. Have a look at the chart in here:
https://en.wikipedia.org/wiki/Reserve_currency
Notice a trend?

Total US dollars out there? Currently running around 3.9 Quadrillion. https://tradingeconomics.com/united-sta ... -supply-m0
Zoom that chart out to 10 years, and tell me what you see. 2008 = 500 Trillion. That's a 7x increase in US dollars over 10 years.

The US dollar is effectively worthless. It only holds value in relation to the T-bill. We printed the economy out of business a decade ago.

[Smitty-48]

The bulk of treasuries are held by Americans and American institutions, and holding debt is not spending, so it doesn't increase the flow of US dollars in the world, treasuries are actually the opposite, parking money rather than moving it.

[SuburbanFarmer]

The bulk of treasuries are held by Americans and American institutions, and holding debt is not spending, so it doesn't increase the flow of US dollars in the world, treasuries are actually the opposite, parking money rather than moving it.

Correct. And what do you suppose happens when those treasuries lose value? Say... I dunno. Maybe the interest rates go up?

[Smitty-48]

Has nothing to do with the reserve currency, this is the part where, once exposed as having no clue what you're blabbering on about, you proceed to changing the subject, non sequitur fallacy.

[SuburbanFarmer]

Has nothing to do with the reserve currency, this is the part where, once exposed as having no clue what you're blabbering on about, you proceed to changing to subject, non sequitur fallacy.

Ok. Now, once the rates go up, and bond-holders start to sell (which the Fed is doing this year, to the tune of $50 billion/month), and all that currency hits the global economy, what happens to the value of the dollar?

And once that happens, what do you think happens to "reserve" status?

I'm really being nice about this, but if you refuse to think about it, then I'll just start calling you names as well.

[Smitty-48]

Still has nothing to do with why the US dollar is the reserve currency, again, you're blabbering on about another issue, trying to square a circle which is not there.

[SuburbanFarmer]

Still has nothing to do with why the US dollar is the reserve currency, again, you're blabbering on about another issue, trying to square a circle which is not there.

Right on. Why don't you explain for us why it's the reserve currency then, and why none of this matters.

[Smitty-48]

The reserve currency is a function of spending, the United States is the largest economy in the world, which spends exponentially more than any other economy, consuming 25% of the worlds goods and services, the net result is the world markets are flooded with US dollars, taken as IOU's to be redeemed in the world largest and most dynamic economy, and traded as the transferable option to do so.

Has nothing to do with treasury bonds, treasury bonds is fixed income, it's the opposite of spending.

[SuburbanFarmer]

The reserve currency is a function of spending, the United States is the largest economy in the world, which spends exponentially more than any other economy, consuming 25% of the worlds goods and services, the net result is the world markets are flooded with US dollars, taken as IOU's to be redeemed in the world largest and most dynamic economy, and traded as the transferable option to do so.

IOU's to be redeemed on what, exactly? What do we sell that's worth 20+ trillion in debt?