Comment by hshdhdhj4444

It’s rapidly declining as the world reserve. Thats part of the over 10% decline in the value of the dollar last year (it still amazes me that those prattling on about the rise in the S&P last year dont realize that of the 16% increase, over 10% was eaten up by the USD falling, so the real increase was closer to 6% which is remarkably average if not below average, when considering higher than normal inflation).

The other part that Americans aren’t seeing coming is a reduction in the reduced willingness of the rest of rhe world to finance American debt. The last few rounds have seen a much higher percentage of corporate debt purchases as opposed to sovereign purchases. Which is fine for now, but if a slowdown hits, corporate purchases of U.S. debt will reduce in a way sovereign purchases never did (in fact those tend to increase).

That would severely impact the ability of the Fed to goose a slowing economy by lowering interest rates.