| A national currency being used as the international reserve and trade settlement currency affords the US quite a few unique perks, doesn't it? And has so for decades, indeed. The USD being the international "yardstick" other currencies are measured in, "valued" against allows for a surprisingly large trade deficit. Why have inflation at home when you can just "export" your fresh paper for real goods the world over? This is not lost to the rest of the world, but for the sake of the lesser evil they've played along as necessary. All the while creating a new supranational currency (EUR) and central banks the world over turning into net gold buyers. I agree, the US should milk this situation for all it's worth while it lasts, which is incidentally exactly what they've been doing for the last few decades. Global US debt is not a worry to them as it's denominated in the same currency that the US can "print" (to use the simplified wording here). Austerity (delevering) is not a worry, they'll rather buy failing debts with more freshly produced notes --- this way, no one loses their "savings" in nominal terms, no cascading defaults etc. Shouldn't this lead to (hyper)inflation? Not as fast as you might think --- if/as long as the rest of the world still takes them as viable reserves and for settling international trade.. |