[eric-hu]

You’ve just connected the hypothetical question to the current behavior in play on the global scale. USD is still technically the worlds reserve currency, meant to be the base unit of all petroleum transactions. Countries have been motivated to keep USD on hand for decades for that reason.

In 2009 and 2021, the USD’s “board and leadership” has shown it’s willing to massively inflate its existing liabilities to help it solve its severe problems.

It’s very questionable why any country with large trade surpluses would want to hold US treasuries at this point. That’s precisely why China has brokered energy deals denominated in RMB, and BRICS is exploring a basket of their currencies to act as a new reserve.

[lxgr]

> It’s very questionable why any country with large trade surpluses would want to hold US treasuries at this point.

Fair point – then maybe they shouldn't!

But I'm not a large country; I need to pay for rent and food in USD, and my highest priority for the USD accordingly is short and medium term price stability for those two things. For long-term savings, there's other assets.

If the USD continues falling short on short term price stability as well, I agree that that would be a major problem.