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by overfeed 451 days ago
> Losing reserve status will be damaging to some parts of the american economy and create a boom in others.

Which parts will benefit from higher inflation?

The only reason the US has been spared from >20% inflation after engaging in what would be called "money printing" by American press when practiced by a 3rd world country is that there are deep pools of unused reserves slowing the overall velocity. Americans don't know how good they have it.
1 comments
psychlops 451 days ago
> Which parts will benefit from higher inflation?

All domestic producers which produce products that cost less than imported competitors.

I agree with you. The question to be answered is what kind of economy do americans want to have going forward. It's great to be in America at present, but what happens if global relations continue to deteriorate and fracture?

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overfeed 451 days ago
> All domestic producers which produce products that cost less than imported competitors

Who will afford to buy their expensive products? Cheap imports are what is making minimum wage-earners circumstances bearable. Full-on reshoring is untenable without reforging the entire economy for higher salaries at the bottom. The whole system has feedback loops (higher wages -> higher product prices) which will cause pain for a long, long time before things stabilize. I don't think Americans have the stomach for it now, moreso with the threadbare social safety nets being shredded. Any politician or political group pushing for this will not survive long enough to see it through. The task is impossible for leaders incapable of considering second order effects, and beyond.

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psychlops 451 days ago
> Who will afford to buy their expensive products?

Fewer and fewer people. Yes, a shrinking of the consumer economy. It will work, just not like it has in the past. As I see it, you are absolutely correct in your assessment. Absent a proactive approach, the alternative (which I think we will live to see) will be watching the system break.

Perhaps a lame duck president rebalancing tariffs can slow the slide, but I think the end result will be the same.

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