It seems to me that the USA is heading for trouble.
It has huge debts that are currently sold to places like China and Japan but the interest rates are now very high. In Japan you can get competitive rates within Japan so there’s no good reason to buy US debt. Also China is reducing its holdings of US debt.
The danger is this leads to a fall in the value of the dollar and people deciding to trade in a new reserve currency instead. This could take years but the signs are there.
Caveat Emptor.
Since the end of WW2, the US dollar has been the reserve currency of world trade, but recent events have brought that into question. In the short-term this may continue, but what about the future?
Way back during WW2 Keynes suggested a neutral "currency" called the Bancor that clearing banks only could use in world trade.
BRICS countries have suggested something else in place of the US dollar.
I do not know the future, but it seems clear the USA under President Trump is moving away from world trade, so the US dollar no longer makes sense as the world's reserve currency. Also, if the US dollar loses value what then?
Maybe it is time to reconsider the Bancor?
