The Triffin Paradox
For the dollar to be the global reserve currency, all countries need to sell more to America than they buy in order to hold a US dollar surplus in order to buy goods from other countries.
Thus America must be a net importer of goods from all other countries, thus reducing its production output.
The means US production decreases over time.
Don’t you know that line just goes up indefinitely?
No formulas, or science to understand, just pure magic, & capitalism.
(This is a joke)
Joking aside, I just discovered this today and found it fascinating.
Another example showing the importance of balance and the consequences of changing this balance.
Or, for every yin, there is a yang.
If you’re interested in reading more on the subject, this book provides a fascinating history of how and why it came about, among other things 🙂 
Not necesserily i would say. That is also why we were talking about petrodollar. What it made a global reserve currency was the fact that countries needed to use it for payments.
Now reconcile that to non-US countries trying to protect domestic industries through tariffs vs. current administration stance on tariffs, and you’ll know what’s coming next.
It is particularly interesting at this point in time 👀
Fully agree—I don’t normally make predictions but if the path continues competitive currency devaluation will become more pronounced.
> Thus America must be a net importer of goods from all other countries, thus reducing its production output.
Or, they can give USD to poor countries in the form of USAID, so those countries can spend it on US goods and services rather than suffering the problem of decreased production to reach an equilibrium. The more money you give away, the more you subsidize your own industries rather than letting them wither away.
For example, give money to a third world hospital so they can buy US made medical equipment. Or giving money to a third world farmer so he can buy a US made irrigation system. It's US workers and companies that benefit from this generosity.
Because the government just prints the money it gives away, it doesn't cost taxpayers anything. The money still comes back to the US into the hands of farmers and manufacturers. It might be grain to feed livestock or guns for their army, it's still the US economy that benefits without reducing production.
The US government doesn't give away billions in aid money because they're nice people. It's done to keep millions of Americans employed producing and growing the shit the people receiving the money are going to buy.
