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Comment by fonosip | Hacker News Reader

that sounds bad. but the US is nowhere near 200% GDP public debt. and has the world's reserve currency which is a key thing Japan did not have.

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As soon as you start counting on things like having the world's reserve currency, or house prices never declining, etc. etc., you lose it. Economic history is replete with that theme. Will we ever learn?

One well-known fact is that nearly every petroleum producer trades petroleum in US dollar. Rumour has it that if some major producers attempt to switch to another currency, she hurts US economy and will be retaliated by US.

Printing more money does not benefit Americans in general. Much of money is taken by US financial firms to overseas for speculation instead of going to manufacturing sector when the devaluation of US dollar is foreseeable. Sudden flux of speculation hurts the economy of other nations.

I know how it works, but the trend to replace the US dollar as the world reserve currency is already happening, being driven primarily by China and Russia. Be it a currency basket, IMF SDRs, 'petro', or something else, they're working on alternatives. It won't happen overnight, and the effort may ultimately fail, but it would foolish and complacent of the US to count on having the world reserve currency forever. A multi-polar world eventually won't accept it, both b/c of the Triffin dilemna and balance of power games.

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