“For years, we lived in a world where there was basically zero risk premium on U.S. debt,” Jared Bernstein, the former head of Joe Biden’s Council of Economic Advisers, told me.
“In four short months, Team Trump has squandered that advantage.”
“For years, we lived in a world where there was basically zero risk premium on U.S. debt,” Jared Bernstein, the former head of Joe Biden’s Council of Economic Advisers, told me.
“In four short months, Team Trump has squandered that advantage.”
The relevant context is first Bretton Woods, then Nixon abandoning the gold standard, and the petrodollar arrangement.
Clearly the US dollar needed, and needs, international acceptance if it is to be global reserve currency. This is changing of course, and perhaps the US could abandon the late 20th century economic order entirely in one move as you suggest (more than they already are), but good luck buying stuff from other countries with dollars in that circumstance. What is North Korea’s currency worth these days?