my understanding of monetary policy is extremely shallow but hypothetically speaking, if the US decided to devalue the dollar by like an order of magnitude to escape its public debt, wouldnt the fed basically lie their asses off the whole time it's happening?
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i figure theyd maintain a 2% nominal inflation target and pretend they were hitting it the whole time then once it's done, theyd be like "woopsie yeah that happened" there is probably a reason this is unfeasible - but i dont know what it is
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there is lots of advantage in controlling the world's reserve currency if US devalues its currency on purpose, it loses credibility and reserve status so if the US was ever going to devalue its currency dramatically, they'd want to make it look like a fluke accident
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"wooops MMT turned out to be bullshit and the dollar has fallen off a cliff, but dont worry, we didnt do it on purpose and we definitely wont do it again"
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no idea what the fed would do i think it might be pretty path dependent like if we get to this point the fed is probably gonna be pretty compromised already
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