Normal countries, countries with “exorbitant privilege”, and the threat of the loss of same. For even for those those with “exorbitant privilege” cannot be confident the privilege will stick. For...
You once gifted me a short but very interesting book titled, "The End of Influence: What Happens when Other Countries have the Money?" written by Stephen Cohen and some other guy, I can't recall at the moment. Anyway, this post about "countries with 'exorbitant privilege'" and that book's discussion of the end of such privilege ... Where is the US today vis-a-vis that book's prediction in 2010?
"an independent central bank that has credibly committed to controlling inflation and ensuring liquidity,
Read "FAIT" that guarantees only sufficient inflation to allow relative prices to adjust to natural and policy shocks, but not more. That could still be quite a bit with this Administration.
Maybe it amounts to the same thing, but protecting the dollar as the world’s safe asset/transaction currency? Clinton’s policies were just garden variety good government: low deficits from taxation, not reducing activities with NPV>0, freer trade, growth talk.
There is also the threat from Germany. German bonds don't enjoy as much exorbitant privilege as they could. Their credit is great, but the issuance is too small to support a really deep market. If the German debt brake goes off, the market will become deeper, at little cost to credit. Treasuries--watch out!
You once gifted me a short but very interesting book titled, "The End of Influence: What Happens when Other Countries have the Money?" written by Stephen Cohen and some other guy, I can't recall at the moment. Anyway, this post about "countries with 'exorbitant privilege'" and that book's discussion of the end of such privilege ... Where is the US today vis-a-vis that book's prediction in 2010?
"an independent central bank that has credibly committed to controlling inflation and ensuring liquidity,
Read "FAIT" that guarantees only sufficient inflation to allow relative prices to adjust to natural and policy shocks, but not more. That could still be quite a bit with this Administration.
Maybe it amounts to the same thing, but protecting the dollar as the world’s safe asset/transaction currency? Clinton’s policies were just garden variety good government: low deficits from taxation, not reducing activities with NPV>0, freer trade, growth talk.
There is also the threat from Germany. German bonds don't enjoy as much exorbitant privilege as they could. Their credit is great, but the issuance is too small to support a really deep market. If the German debt brake goes off, the market will become deeper, at little cost to credit. Treasuries--watch out!