The dollar has no risk, the demand for dollars is massive.
As is the supply of dollars. To say it has no risk is absurd; the dollar is created out of thin air by trading its future value.
As is the supply of dollars. To say it has no risk is absurd; the dollar is created out of thin air by trading its future value.
It’s just human nature to fear these events.
The us economy is rock solid and is basically the only economy innovating at all. This doesn’t mean that wages aren’t stagnant or that wealth inequality isn’t a problem.
The US economy is strong, however its fiscal discipline is not. Federal debt to GDP ratio is at an all time high, and will only go higher. Abstract this graph out at current trends:
https://fred.stlouisfed.org/series/GFDEGDQ188S
Public debt growth is outpacing GDP growth, so its only a matter of time.
Do we anticipate that politicians will suddenly become conservative and start paying down debt? Unlikely. The pressure to keep the economy going and win elections is too strong. The power to create money (or artifically low interest rates) is a heroin addiction, impossible to wean your economy off of.
If you had to lock your wealth in over the next 10-25 years, you're not buying US government bonds. You're hiding out in gold, housing, and stocks. The dollar is not an asset you want to be part of.
It is powerful, but not apparently healthy and experienced quite some scary events in recent years so "rock solid" is a very weird characterization. The U.S. capitalist system is inherently instable, it undergoes periodic crashes and extraction schemes that make people lose their property or get collectively more indebted. This makes people angry and willing to consider radical changes - see violence and rising popularity of socialism in U.S. It is hard to predict when it happens, but the outlook is not good. For economic/political stability, E.U. looks much better.