There’s a limit to everything: why doesn’t a dollar bothering everyone collapse

Once the "ecumenical" ruled Rome, and the whole world around us with pleasure calculated sisters and denarius. But nothing lasts forever under the moon, and the Roman currency has long been forgotten. Someday, this will happen with the US dollar, but many financial experts are convinced that this will have to wait a long time.




The thing is that the United States managed to create such a global financial system in which they solve their internal problems at the expense of all other countries. A striking example of this is the monstrous US government debt.

11 years ago, during the first term of Barack Obama, public debt amounted to "some" 10,6 trillion dollars. Just 8 years later, by the time of the election of Donald Trump as president, this figure was already 19,8 trillion. The new head of the White House vowed to take control of the public debt, but failed. Now the United States owes over 23 trillion dollars.

By the end of the year, the States will have to spend almost $ 600 billion to service this debt. This is more than Washington collectively spends on agriculture, housing, transportation, and the education system. It is estimated that with an increase in the country's GDP for each dollar, a debt burden of $ 1,85 is added. All this looks from the side, like a giant financial pyramid, which is only growing, despite the attempts of President Trump to curb it. Financial expert Narek Avakyan explains the situation as follows:

This is due to Trump's tax reform, due to which the budget will receive less than $ 700 billion this year (at the same time, the Obamacare program has not been canceled, because of which it was not possible to save almost 300 billion), as well as the growth military expenses. This year alone, the US Army will spend $ 770 billion, another $ 130 billion will be spent on intelligence and intelligence.


But why doesn’t the colossus fall on clearly clay feet?

Financial analysts explain this with the seeming lack of alternatives to the dollar and US government debt bonds. At one time, the European Union tried to create its own currency as a replacement for the "American", but the euro remained largely derived from the dollar, and could not fully fulfill its purpose. It is very significant that at present many countries are reducing the share of the euro in their international reserves, and increasing the number of assets denominated in US currency.

Everyone understands that this is not very good, but they can’t do anything. Economy The United States is the largest in the world. And most importantly, the Federal Reserve at any time can turn on the machine and print a bunch of green papers. That is where the US-centric financial system stands.

However, as in any pyramid, and in it there is a certain ultimate strength. All this works, while the global economy is growing along with debts. But it cannot grow indefinitely within the framework of capitalism; recessions and crises are components of its development cycles. In the foreseeable future, a recession is possible both in the USA itself and in countries with which Washington is waging trade wars, for example, in China. The economies of the two rival countries are so closely related that systemic problems in one will inevitably come across in the other.

Understanding all this, the American authorities can refuse the next increase in the ceiling of the public debt and begin its restructuring. Some experts believe that this can happen when the debt level reaches 200% of GDP, as in Japan. Recall that now in the US it does not exceed 110% of GDP.

In the event of a restructuring of the US public debt, there will clearly be frankly losers from this. Therefore, it is not bad that Russia is actively reducing its investments in "treasuries" and reducing its dependence on the use of the dollar as a means of settlement.
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  1. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 6 November 2019 11: 38
    +1
    Maybe first with hurray dreamers do something ???
    1. Sake Offline Sake
      Sake (Sake) 7 November 2019 19: 04
      +1
      I heard from N. Khrushchev in the 60s about "decaying" capitalism, respectively, the dollar should have collapsed with decay, but the opposite happened, the USSR and the ruble collapsed, and the dollar conquered the whole world. Here they would not touch this shameful topic, where, apart from shame and shame, there is nothing to be proud of.
  2. Mihail55 Offline Mihail55
    Mihail55 (Michael) 6 November 2019 11: 49
    +3
    And the calculation for the purchase of the right tool, tooling, machine tools, etc. NOT OUR ??? In wooden ???
  3. Igor Pavlovich Offline Igor Pavlovich
    Igor Pavlovich (Igor Pavlovich) 6 November 2019 15: 45
    +2
    I have already written on this topic - how to submit material ... - The United States is neither poor nor greedy, and the budget deficit of 19% is comparable to the budget deficit of, for example, China's - 17%. Nobody screams about Japan's threatening 34% budget deficit ... These are all "horror stories" for the poor ...
  4. Arkharov Offline Arkharov
    Arkharov (Grigory Arkharov) 6 November 2019 15: 50
    0
    An interesting question in the title. Is this a recognition of defeat? So easy and give up?
  5. gorenina91 Offline gorenina91
    gorenina91 (Irina) 6 November 2019 16: 48
    0
    - Yes, everything is clear ... like a day ...
    - The author can cite "as an example" and harness the USA, Japan, China into one cohort ... it's all in vain ... - Ha ha ha ...
    - It won’t work out ... -Quod licet Iovi, non licet bovi ... (What is permitted to Jupiter is not allowed to the bull) ..
    - The entire world economy relies on the American dollar ... - Therefore ... - please ... - not to be confused with one another ...
    - That, when they talk about Russia, they have already started to constantly mention "Russia and China" .., i.e. the whole business world, when it talks about the world economy and possible world political upheavals, it always sounds like "Russia and China" ... - When the whole world scolds Russia, no one mentions China .., everything is clear and definite, and specifically Russia ...
    - And China itself in the whole world has long been no one scolds at all ... - Such are the world associations ... What can you do ... - since Russia itself has achieved such a "world perception" by its servility to China ...
    - And, despite the fact that the economies of the two rival countries of the United States and China are closely connected ... - anyway, the United States no one and never associates with anyone ...

    But why doesn’t the colossus fall on clearly clay feet?

    - Yes, because ... it is not one colossus, but a whole forest or an "architectural ensemble" of such "colossus" ... which the whole world cares for and cherishes ...
    - By the way ... if Trump wins the trade war with China, or reduces it to a victorious "draw", then he wins the elections and ... and ... and ... and Americans themselves forget about this eternal American national debt for a long time ; and there, you see ... - maybe the United States will actually "stir up" something with the restructuring ...
  6. YUG64 Offline YUG64
    YUG64 (Yuri) 7 November 2019 10: 38
    0
    While the United States is a kind of monolith, something can hardly threaten the dollar. But if the struggle between democrats and republicans - more precisely, between globalists and industrialists - goes very far - the idyll may end. For

    A house divided in itself will not stand.
  7. I give a tooth - at the moment the dollar will collapse like snow on my head, as it was in '29.