Hello Joan, <<I wonder how currencies of other countries will trade in US dollars if Washington gets tariff happy?>>
We can never be sure before the fact, but I am guessing that bad things will happen.
Placing the military/geo-political considerations aside for a moment, then the USD is useful because it is a reserve currency, and it is a reserve currency because it is a trade currency.
Less the trade utility, in a global exclusive protection and mutual competitive devaluation scheme, the USD then becomes less useful, and thus less needed, and so presumably becomes ever cheaper, because the US has little to sell that is genuinely necessary, especially now that the US is close to becoming a net importer of even food.
Considering the military/geo-political factors, the USD is a burdened currency, obligated money, and heavily margined economy, imbalanced in favor of consumption and leverage against saving, and so it is a construct best steered clear of, except for its utility as a trade currency.
Chugs, Jay |
