The dollar’s problems are the inevitable result of fiat money, chronic deficits, and interventionist policy. Twin deficits signal fiscal excess that can only be sustained through inflation or debt monetization, while attacks on the Fed miss the deeper issue: discretionary central banking itself erodes trust by distorting prices and misallocating capital. Tariffs further weaken the dollar’s international role by restricting trade and shrinking real demand for the currency. From this perspective, foreign skepticism toward the dollar reflects rational doubt in U.S. institutions, and no amount of rhetoric can restore confidence without genuine fiscal restraint and an end to monetary manipulation.
Beautifully done, as always. The policy and reg drivers for de-risking even from low risk environments like Pacific Islands are something so hard to grapple with from a US interest perspective. Brings into focus that our tools are not cost-free or permanent. I think you’re ahead of the curve in tradeoff between using tools of economic coercion and nurturing the systems that allow power projection when it matters most. Can’t wait to hear more ! 💰
The dollar’s problems are the inevitable result of fiat money, chronic deficits, and interventionist policy. Twin deficits signal fiscal excess that can only be sustained through inflation or debt monetization, while attacks on the Fed miss the deeper issue: discretionary central banking itself erodes trust by distorting prices and misallocating capital. Tariffs further weaken the dollar’s international role by restricting trade and shrinking real demand for the currency. From this perspective, foreign skepticism toward the dollar reflects rational doubt in U.S. institutions, and no amount of rhetoric can restore confidence without genuine fiscal restraint and an end to monetary manipulation.
Solid writing and impressive insight
look forward to following this conversation, thanks for getting it (re) started.
Morgan @ NFX (ex Libra) spoke to something similar in 2024.
https://www.nfx.com/post/stablecoins-defense
Beautifully done, as always. The policy and reg drivers for de-risking even from low risk environments like Pacific Islands are something so hard to grapple with from a US interest perspective. Brings into focus that our tools are not cost-free or permanent. I think you’re ahead of the curve in tradeoff between using tools of economic coercion and nurturing the systems that allow power projection when it matters most. Can’t wait to hear more ! 💰