We ignore him at our peril!
“Now we’re in a different situation with a country, but I would borrow knowing that if the economy crashed you could make a deal. And if the economy was good it was good so therefore you can’t lose.”D.J. Trump — CNBC squawk-box interview with Andrew Sorkin 5/5/2016.
Thus spoke the man who is now in charge, by his reckoning, of everything. When questioned by an incredulous journalist, he then suggested that he might reduce the national debt by persuading creditors to accept “something less than full payment.”
Section Four of the 14th Amendment to the U.S. Constitution states, “the validity of the public debt of the United States, authorized by law, …, shall not be questioned.”
With one interview in 2016, Donald Trump signaled that that might change.
Now it’s 2020, we have been ravaged by COVID-19 and he needs a scapegoat.
The recent round of belligerence directed towards Beijing is not only counter-productive in the fight against the virus, but it could also prove to be calamitous for the U.S. empire.
Currently, the U.S. Dollar holds a special place in the world of finance as the world’s reserve currency. This exalted position called “exorbitant privilege” by the former French Finance Minister, Valery Giscard d’Estaing, affords us the privileges previously enjoyed by past empires from the Roman to the British.
The U.S. enjoys having hard assets such as gold, platinum and oil priced in dollars. It enjoys the benefits of seigniorage, which means approximately $600 billion in actual bills are being used to purchase goods outside the U.S. or is sitting under the mattresses of Russian oligarchs and South American drug lords. Having printed and spent that money, the U.S. Treasury needs never to worry about those billions.
Having monetary and fiscal policy set in a currency that most central banks, corporations and pension funds want to hold as reserves, gives the U.S. enormous advantages in shaping its monetary and fiscal policies and deficit spending. It has used that advantage to finance disastrous wars and continues on its ruinous spending binge since the last world war.