[psychlops]

Consider that this is the point of all the machinations. The US having the reserve currency is a liability in many ways and the direct reason why it's a consumer not producer economy.

Losing reserve status will be damaging to some parts of the american economy and create a boom in others.

Take a look at what current tariffs are across the world. The US isn't necessarily bullying as equalizing.

[overfeed]

> Losing reserve status will be damaging to some parts of the american economy and create a boom in others.

Which parts will benefit from higher inflation?

The only reason the US has been spared from >20% inflation after engaging in what would be called "money printing" by American press when practiced by a 3rd world country is that there are deep pools of unused reserves slowing the overall velocity. Americans don't know how good they have it.

[psychlops]

> Which parts will benefit from higher inflation?

All domestic producers which produce products that cost less than imported competitors.

I agree with you. The question to be answered is what kind of economy do americans want to have going forward. It's great to be in America at present, but what happens if global relations continue to deteriorate and fracture?

[rayiner]

And also think about which industries and constituencies are helped by the U.S. having the reserve currency, and which ones are hurt by that.

What would it take for America to have more of a German-style economy than the current American one? Who would that hurt and who would that help?

[psychlops]

I could be wrong, but think the German economy just broke last week when they blew the cap off their debt ceiling and kicked current day payments to future generations. Note that Germany protects its production with tariffs and VATs, the rough average I've found is 19-21%.

I think China is the one to watch. They have double the energy output of the US and are basically the production capital of the world for the foreseeable future unless something changes.

[jaredklewis]

> Losing reserve status will be damaging to some parts of the american economy and create a boom in others.

The primary effect of losing reserve currency status would be on the government's ability to borrow money. That's going to be a problem since US government debt to GDP ratio is >100%. We have no fiscal discipline now and neither party shows interest in making cuts or raising taxes. DOGE hasn't changed anything yet unfortunately, as daily government outflows are still roughly inline with where they were under Biden. Even if DOGE cut all discretionary spending (obviously impossible), we'd still have a budget deficit and massive existing debt burden.

If we lose reserve currency status, my guess is we'll go full Argentina with hyper inflation as the government prints money to pay debt and fund the government.

[psychlops]

Oh, I think that's inevitable for the reasons you listed. DOGE would need to do way more to actually matter. Observing the current upheaval due to minimal cutting guarantees the future will be Argentina.

The upside is the debt decreases in value as the currency inflates. So there's that.