Alex Svanevik 🐧|Apr 08, 2025 23:13
1/ Trade deficits allow the US to export the Dollar.
2/ Countries invest those Dollars in US government bonds.
3/ Many buyers of US bonds = lower financing cost for US government.
(This is called the “exorbitant privilege”.)
Now reverse it:
1/ Less trade deficits.
2/ Less money to invest in US bonds.
3/ Higher government financing costs.
What am I missing?
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