Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "How the Dollar is Sparking a Hidden Global Crisis" video.

  1. The US doesn't guarantee anything. The markets choose to use USD and USD-demoninated assets, but the supply of both cannot meet the demand for safe haven assets. So, you can't blame the parachute that the pilot needs to use one to stay alive.
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  2. The Debt Ceiling was introduced in 1917 supposedly to give Congress the power to establish a limit on the growth of US sovereign debt. In practice however, the debt ceiling has never fallen. So go figure. The pessimism about US sovereign debt is questionable, because the ability to service the debt is there, even after sustained QE. However, the burden isn't evenly spread across the population, because the ALICEs - the asset limited, income-constrained employees - are getting hit now, and their children's prospects are worsening too. However, it's Congress who has turned the Debt Ceiling into an elevator, because the process is a consequence of the political will of Congress. All what will happen is that the debt will be rolled over, and as the majority of UST purchasers are US citizens, corporations, or institutions, Uncle Sam's debt is inescapably most of the savings of Americans. So, nothing will be done to change the status quo, unless there is a revolution in American Political Economy. And that's quite unlikely, because, at least for now, nobody is grabbing their pitchforks. The overwhelming privilege of being the global reserve currency is that USD or it's safest proxy - US Treasuries - are always in demand at home or abroad. That's the economic reality, and Congress keeps it that way. The only people who aren't happy, are those who think government debt is the same as personal or business debt. It's not. Having access to USD or USTs is the lubrication that keeps the global financial system running as capital and collateral. When there aren't enough to meet demand, the whole world gets uncomfortable. And the crises we've been having come about because there not enough to meet demand. That's why securitisation was a game changer. But, it means there are bottlenecks building up right now, because the AI bubble has been pricked by the possibly realities of Trump's trade and tariff war. If Trump gets his way, let's say the horses will be spooked, because his plans are naturally inflationary, which is perceived by the financial markets as an issue, because despite all the money thrown at the banks, they're trying to complete a tightrope walk. It's just crazy, but it also means, whatever happens in the future, right now USD is still the king of the hill.
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