Over time the US abused its responsibility to control the supply of dollars, the world's premier reserve currency for settling international trade accounts among nations. This abrogation of its duties is leading to the likely adoption of a new reserve currency, commodity based and controlled not by one nation but by members, all watchful that the currency is not inflated
Supply and Demand
- When demand for dollars drops, its price must drop unless and until its supply drops.
- Through irresponsible use of the magic checkbook, you have obligated yourself to funding a free-for-all of entitlements such as Social Security, Medicare, and the military-industrial complex, the largest of which being the largest by far.
The US and the UK: A Lack of Political Will and Economic Understanding
- The seeming lack of adverse consequences (all in the long term) and advantages of money printing in the short term have led to a knee-jerk response by the US Treasury and the Federal Reserve Bank to increase the money supply and lower interest rates in the face of any economic problem, even higher prices.
- Hyperinflation is a real possibility.
What Happens on the Ground
- Where does government get its money?
- State and local governments get money from state and local taxes
- Social Security recipients must be compensated, of course, so payroll taxes are increased
- American products become less competitive on the national and world market
- Price spirals continue to destroy all in their path until the dollar loses all purchasing power and society descends into chaos
https://mises.org/wire/end-world-dollar-hegemony-turning-usa-weimar-germany
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