What happens if US becomes insolvent? Is USD going to be inflated? hyperinflated? Will other currencies appreciate or just devalue their own currency by the same percentage to keep up the exports and continue to earn USD for oil?
In short, if the US becomes insolvent, the rest of the world will largely ignore what happens in the (at that point) 8th economy in the world, and mostly try to untie their economy from it.
I believe this is wrong? USA is the largest oil producer in the world, and also one of the 5 largest oil exporters.
That is already happening.
The rest of the world is finding the likes of China to be more stable and predictable trading partners than the USA.
Just consult Google. All a country has to do to find itself on the receiving end of punishing Chinese trade actions is being mildly critical of China in the wrong way, and next thing they know their exporters to China report being held up for months. The EU has taken offense at how China kicks around smaller EU members, Australia has been on the receiving end of it more than once.
If you'd said the EU might be seen as a relatively more stable trading partner, that may be true, the EU does seem to be fairly happy deindustrializing itself. Though it's fueling a rise in the fractured politics there too.
LOL!
Follow where the money is going my friend.
If Donald Trump feels personally slighted by a country, he will put massive tariffs on them or threaten to invade them. At least China doesn't have an erratic mad king.
There will never be a real default, but it is likely that the USD will lose reserve currency status. The U.S. Government has $114+ Trillion in total debt. (Something like $325,000 per person in the US) We are never paying that off. The only way we can do anything about it is to grow the economy and devalue the debt via inflation.
To what though? Even if we accept the US and USD have issues, there is no other currency even close to be able to step in.
Most people don't remember what hard money is, and why it's important.[1]
The Depreciation of the Dollar - https://www.morganstanley.com/insights/articles/us-dollar-de... - August 6th, 2025
Key takeaways:
* The value of the U.S. dollar against other currencies dropped about 11% in the first half of this year, the biggest decline in more than 50 years, ending a 15-year bull cycle.
* Morgan Stanley Research estimates the U.S. currency could lose another 10% by the end of 2026.
* Despite a recovery of 3.2% in July, the delayed impact of tariffs on growth and unemployment – besides policy uncertainties – are likely to keep negative pressure on the dollar.
* Foreign investors have been adding hedges to their exposure to U.S. assets, which will likely further weaken the dollar.
Doesnt surprise me at all that there is shadow debt beyond the ~$40 Trillion regularly advertised but I've never seen that figure.
If you take a national currency and make it a world reserve currency then the nation that does do has problems with balance of trade, deficits, and mathematically screws themselves over. This is because you currency becomes overvalued compared to those of over countries, meaning your domestic manufacturing has problems competing, among other things.
We already made the mistake of one national currency becoming the world currency post WW2. I hope its not a mistake the world chooses to repeat.
Seems to me a basket of Euros, Yen and MAYBE US dollars is better than relying on the USD.
Think sht would get very real for everyone fast both inside and outside the US.
Global economy can’t even deal with a ship stuck in the suez without wobbling…
Sure, there's a precedent for what's happening, the Late Bronze Age collapse.[1] Instead of the Sea People, we've got rogue actors with drones.
Iraq started taking Euros for oil. Shortly after that, they were invaded. Venezuela started selling oil for Yuan. Shortly after that, their president was kidnapped by American troops. Iran is selling oil in Yuan. Shortly after that, American bombs started falling on them.
There is a very strong incentive for oil producing nations to only accept USD.
In fact, is China or Russia involved in similar planet-scale military enforcement?
Any American who ponders this out loud is quickly silenced with "America! Love it or leave it!".
https://en.wikipedia.org/wiki/Thought-terminating_clich%C3%A...
Given their track record and interest in other forms of currency, I could see them going too far.
It’s scaremongering nonsense.
All treasuries will be swapped back into dollars on maturity and interest settled
/s