While we all feel like dollars will go to zero over the long term, we don’t often think about how scarce dollars actually are.
While it is true USD must go to zero to avoid US default, the value of dollars can go wildly up in the short term…
Why? Rehypothecation…there are far more debts denominated in dollars than there are dollars.
exactly. So long as there is demand, there will be supply. And until all dollar debt is gone, which I do not see as even remotely possible in my lifetime at least, the dollar will carry on. It certainly will continue to be devalued, no doubt about that, but its here to stay for now.
Exactly. And they can f people real bad by making their debt harder to pay, at least temporarily.
