Note: This post was first published on the CFA Institute Enterprising Investor blog. How much would the US government be worth if we valued it using a discounted cash flow (DCF) model like any other firm? A new paper by Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, and Mindy Z. Xiaolan
There is a third and possibly killer advantage. Global reserve currency. We had a US fund manager tell us more than 10 years ago that the because the US is the global reserve currency the US can make the world pay for the US's sins. Everything in the last 10 years leads me to see that this is the truth.
Crypto, yuan, Euro....bahahahahaha. No chance. The USD will die as the global reserve probably as a global digital depository receipt becomes universally accepted. Not likely in the next 10-15 years!!
Until then trading whilst insolvent (ie bankrupt) is possible for the US as they can continue to export their financial sins as they are the global reserve currency.
The end game of this period will be bloody indeed!!
There is a third and possibly killer advantage. Global reserve currency. We had a US fund manager tell us more than 10 years ago that the because the US is the global reserve currency the US can make the world pay for the US's sins. Everything in the last 10 years leads me to see that this is the truth.
Crypto, yuan, Euro....bahahahahaha. No chance. The USD will die as the global reserve probably as a global digital depository receipt becomes universally accepted. Not likely in the next 10-15 years!!
Until then trading whilst insolvent (ie bankrupt) is possible for the US as they can continue to export their financial sins as they are the global reserve currency.
The end game of this period will be bloody indeed!!