1 upvotes, 1 direct replies (showing 1)
I thought most people knew this, but I guess it is now lost knowledge to the generation that can read books. So people don't hold USD because they like looking at George Washington's face. They hold it because they need to conduct transactions that are denominated in USD.
One of the major reasons you end up holding lots of USD turns out to be maintaining your trade surplus into America. Countries often try to make their currency *weaker* relative to USD in order to make their exports more attractive to American consumers. This results in them getting dollars and finding ways not to send them back to us. This makes the dollar stronger, not weaker. Strong currency = more imports, weak currency = more exports. I know that you guys just go off vibes, so "dollar stronk" means "trade surplus big burly man job stronk" in your imagination. But that's now how it works.
The reason this policy is so stupid is because de-dollarizing if it ever happens will have to go hand in hand with a *weaker* USD, and therefore hand in hand with US trade *surpluses.* It's showing that Trump has no grasp of economics. His opening "leverage" is a threat directed against himself. He is threatening to do the thing that they are asking for.
Comment by GateTraditional805 at 02/12/2024 at 18:10 UTC
2 upvotes, 1 direct replies
Every conservative and liberal economist living in the US is about to have a massive collective seizure spanning the next four years.