Boy, I feel like you have read a lot into Trump's election promises. unquestionably, his goal is to repatriate business, especially manufacturing capacity. if that is successful, along with tariffs it does seem likely to reduce the trade deficit. Ask yourself how the rest of the world will behave if there are less dollars sprayed all over the place. my take is the dollar will soar as those desperate to service and repay USD debt will be forced to pay up.
But will that really serve to remove the reserve status of the dollar? in the end, TINA and there is nothing on the horizon that comes even close. dollars will still be used for payment, as the unit of account for most commodities and will still be the preferred currency for all those people who live in places like Argentina, Turkey and Egypt, for example, who fear their local currencies will continue to depreciate.
I agree he would like to see the dollar decline because he thinks it will help the trade story, but I would contend that alongside tariffs, the dollar need not fall very far to bring home more basic manufacturing activity and achieve his ultimate aims.
it will certainly be interesting to see how things evolve.
Well, I think we'll have to wait and see. I'm not sure it will remove the reserve status, but it certainly seeks to rebalance the impact of dollar on the way US economy works. That will entail downgrading the 'reserve asset' role and increase the industry role. Given the fragility of the financial system this has huge risks - and potential benefits.
Boy, I feel like you have read a lot into Trump's election promises. unquestionably, his goal is to repatriate business, especially manufacturing capacity. if that is successful, along with tariffs it does seem likely to reduce the trade deficit. Ask yourself how the rest of the world will behave if there are less dollars sprayed all over the place. my take is the dollar will soar as those desperate to service and repay USD debt will be forced to pay up.
But will that really serve to remove the reserve status of the dollar? in the end, TINA and there is nothing on the horizon that comes even close. dollars will still be used for payment, as the unit of account for most commodities and will still be the preferred currency for all those people who live in places like Argentina, Turkey and Egypt, for example, who fear their local currencies will continue to depreciate.
I agree he would like to see the dollar decline because he thinks it will help the trade story, but I would contend that alongside tariffs, the dollar need not fall very far to bring home more basic manufacturing activity and achieve his ultimate aims.
it will certainly be interesting to see how things evolve.
Well, I think we'll have to wait and see. I'm not sure it will remove the reserve status, but it certainly seeks to rebalance the impact of dollar on the way US economy works. That will entail downgrading the 'reserve asset' role and increase the industry role. Given the fragility of the financial system this has huge risks - and potential benefits.