Re:Businesses are in for a mighty debt hangover
by nine_zeros on Tuesday May 16, 2023 @07:39PM
(#35969286)
The debt does matter because it is a source of inflation.
But US never experienced that inflation because of the dollar being the reserve currency. So all the debt created in the US just becomes assets for lenders worldwide. This doesn't happen with other currencies. No one is running around to buying Indonesian Rupiah denominated debt.
If the demand for US dollars declines, one can imagine all the debt not finding buyers, causing inflation to go through the roof.
All that said, the US is very privileged but it's not likely to last as other countries are actively hunting for alternatives.
But US never experienced that inflation because of the dollar being the reserve currency. So all the debt created in the US just becomes assets for lenders worldwide. This doesn't happen with other currencies. No one is running around to buying Indonesian Rupiah denominated debt.
If the demand for US dollars declines, one can imagine all the debt not finding buyers, causing inflation to go through the roof.
All that said, the US is very privileged but it's not likely to last as other countries are actively hunting for alternatives.