| > No one wants the U.S. to pay all of its debt, the structure of the global economy today requires these debts to function. They’re basically cash equivalents. That is an entirely valid point. But that is not what Graber is alluding to: > American imperial power is based on a debt that will never-can never-be repaid. Its national debt has become a promise, not just to its own people, but to the nations of the entire world, that everyone knows will not be kept. They are cash equivalents exactly because nobody believes the US will default. Basically, the exact opposite of what Graber is saying. > The U.S dollar as a reserve currency is America's greatest strength (maybe not greatest but it’s up there) and weakness. People keep saying that but I am yet to hear a compelling explanation of the tangible benefits the US actually derives from this arrangement. Graber points to seigniorage or tribute as he likes to call it. Ben Bernanke, obviously not a neutral source, claimed in 2016 that this is on the order of $20 billion a year[0]. The highest, albeit unsourced claim I could find puts it around $100 billion[1]. Either way, in the larger scheme of things, it is chump change. > Anything that impedes the dollar as a global reserve currency is a significant risk to the U.S. Even assuming that is true, it's hard to link it to the invasion of Iraq. Iraq started selling oil for Euros in 2000. This wasn't some rouge act of defiance, the switch happened under the aegis of the UN's food-for-oil program. If it actually was a significant risk, the US could have simply vetoed it at the Security Council. > Grabers comments on Europe, Korea, China, etc. you mention- again not an unusual thing to say in my view. Debatable certainly, but not obviously wrong. So, is a foreign county holding huge reserves of US treasuries a) The act of a vassal paying tribute to the US or b) The machination of a rival intended to turn the US into a client state? Certainly, they both can't be true. |