Media whirlwind or legitimate threat to average people?

  • knfrmity
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    1 year ago

    The Yanks can shit on the entire world, but I don’t think this particular method of global defecation would benefit their oligarchs. Just as two examples, cratering the dollar via debt default would also crater all their beloved asset price bubbles, and it would pull the plug on all their military occupations and invasions.

    I’m not even sure if it would be valuable to the oligarchs as a big red button to stop competing economies in their tracks. Sure it was years in the making, but Russia and trade partners were pretty quick to switch their transactions off the dollar after the first wave of financial and monetary sanctions last spring. That tells me that even if the US ruling class were threatened to the point where they’d accept the damage to themselves in order to blow up everything, the rest of the world would figure out alternatives pretty quickly.

    • Shrike502
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      1 year ago

      would also crater all their beloved asset price bubbles

      Wouldn’t popping the bubbles be profitable for some at least? Same way banks and whatnot made a profit after 2008 crash

      • knfrmity
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        1 year ago

        It’s possible, but I’m not sure if that sort of “short selling” or snapping up “discounted” assets applies when it’s not just a single sector crashing, but all of them plus the basis currency simultaneously. It could even be that you can’t even get out of the dollar and into a “safe” currency once it all goes down, because the IOU that’s been backing the dollar for generations will have been voided. Nobody will want to trade their valuable currency for dollar toilet paper.

        Then again I’m not an economist so I’m really just guessing as to how this would play out. But my understanding is that this debt, which is used as a political football stage prop every two years, is basically the thing which has kept the global economy relatively stable over the last fifty years. Without it, everything comes crashing down.