we hope Trump fails

Wednesday, March 06, 2019 Francisco 0 Comments


From Wikipedia
The Triffin dilemma or Triffin paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was identified in the 1960s by Belgian-American economist Robert Triffin,[1] who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.
The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an outflow of dollars from the United States, while others require an overall inflow. 

This requirement for a chronic deficit in the world’s major reserve and transaction currency means that the
natural desire of U.S. government leaders to run a balanced trade and current-account, if not a surplus to
spur domestic growth, would be disastrous for the rest of the world if achieved. This conflict, known as the
Triffin Paradox, was first identified by Belgian-born economist Robert Triffin, who taught at Yale.
A Gary Shilling

If trump manages to shrink the trade deficit of the USA the world would be in big trouble

we hope Trump fails otherwise it's better to be long USD

0 comentários: