WCP: The Bretton Woods Moment, Digital Fiat and Bitcoin

When the dollar strength peeks it breaks other economies  (80’s South America; 90’s Asia economies’ 2000’s Turkey et.al., currently Lebanon example)

Dollar denominated debts are what’s hurting “weaker” countries. If they can’t get dollars, they resort to selling US assets in order to get dollars (e.g. Treasury Bonds). 

When we were the creditor nation (owner of more foreign assets versus them of ours). However, the trend has flipped in the favor of other nation’s (e.g., China) due to their trade deficit against the strong dollar and their import supremacy over the US as well as their ownership of $7trillion in treasuries which they sell when it’s in their interest to do so.

The Fed also would make arrangements with creditor nations that precluded their selling treasuries [but they would lend dollars to those nations for the treasury bonds, so that those nations wouldn’t have to sell them]. So the Fed can avoid “tanking” the US Treasury like what would happen if someone dumps stocks on the market. 

There is also a structural problem with US Debt-

Baby Boomer entitlements (Social Security and Medicare); Debt as a percentage of GDP has increased was 60% of GDP before 2008 and in 2020 100%+ of GDP 

FS Illustration: Car note, House note, Credit Cards maxed out to pay (Car Note and House note) and you lost your job. How do you keep the house and the car and the credit cards?