Nostr Web Client

“it encompasses all American potential GDP, future growth and labour endeavors”

Not clear on this point.

so the dollar is less about it's gold reserves, but more so about ALL reserves, from military, oil, gas, technology, open markets etc.

It is also based on the future production of goods and services; in other words, there is a premium on the dollar because the future labours of the US citizen will be used to repay the debt. It's a high labour class and product class too.

You're taking a dollar for the potential of a US worker to pay you back on that dollar that they borrowed from you

Does this make sense? Don't worry - it took our class a few good sessions to understand this concept too.

Reply to this note

Please Login to reply.

Discussion

S!ayer 8mo ago

The US worker in this case, in comparison to other workers i.e. education, skills, labour etc. but I suppose that has changed in the past ten years

CitizenPleb 8mo ago

The demand for stacking US Treasuries has definitely changed in the past ten years. I don’t think it’s a debate that it has been a desirable asset to hold, that’s a fact.

With regard to holding US treasuries, all that matters is the debt can be repaid and in most cases it’s the ability to print money that has kicked that can down the road.

You're taking a dollar because it’s a currency that’s universally accepted and in most cases because it’s being debased far less than an unstable currency, and yes this gets us back to what underpins that global reserve currency status but I wanted to at least set the table on a few of those points.

Creating massive amounts of debt to rebuild Europe happened because there was a war that reached the levels of mass destruction it did from creating massive amounts of debt to finance that destruction.

S!ayer 8mo ago

yeah that gain in value from the potential future labour seems to be eroding as people are less and less confident that the USA can maintain it's economy.

The US has shifted to move it's debt into USDT and basically offload it to others via USDT

OceanSlim 8mo ago

The dollar is about proof of violence. The dollar has power not because of any reserves. I has value only because of the full faith and credit of the US government and their ability to pay back their loans.

S!ayer 8mo ago

basically so, but the "pay back the loan" is just printing more dollars. That's why the US is in a position where it's reserve currency of the world, at the detriment to every other country.

OceanSlim 8mo ago

Which is why the "full faith" part becomes less trustworthy every day. This nation will collapse for the same reason every other economic powerhouse failed. Loose fiscal policy.