Currency exchange -> Reserve Currency (USD swap line) Reserve currency comes from US trade + military superpower Also legal regimes ultimately mean nothing w/o force to back them, particularly if you have habitual line-stepping regimes who fancy themselves hegemonshttps://twitter.com/vgr/status/1006315868660224000 …
I’m in over my head on this topic, but doesn’t seem to me that dollar power is absolute, or that US alone determines fate of dollar, let alone on the basis of military power. Sure other entities depend on dollar, but reverse is also true. Interdependence.
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There’s two absolutes: If Japan or EU facing economic crisis, they call the US Fed. If Japan or EU facing security crisis, they call the Pentagon. Yes there is interdependence, but the US would be hurt less and recover quicker. Since 2012, ECB/EU banks subsidiary of US banks
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I don’t think either is true anymore under Trump
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