- Dec 4, 2017
@Nilgiri @randomradio can u explain this?
Its typical reductive hot take (doom and gloom if X happens).
Like people will get into one-sided look (depending largely on their own confirmation bias) at which side is benefiting more from say China lowering its reliance/exposure on USD (and thus selling some large % of its holdings to world market at some point this decade for argument sake) ...when really there are two sides to look at (China will hurt itself too in various ways doing this too quickly if it does).
But the key is if someone is selling, it means some one else is buying it ....and the system of trust is still there in larger sense....and then it just boils down to your take on whether any transaction benefits the buyer more or seller more (or near equally).
It is when someone doesnt pay (as agreed on something one takes off the shelf) that we have a real problem. Things like loan or bond defaults.
Or if you want to buy something, but there are no sellers of it (scarcity)....or vice versa you want to sell something, but there are no takers (overabundance)....i.e for whatever reason the (larger) market is completely out of concert with you.
But those are very different matters to simply proposition of buying/selling within market norms.
It is hard to argue USD is near any extreme (scarcity vs overabundance in world forex market) given its a large dominant reference to begin with, hindsight is 20/20 for lot of these things. Certainly US default pressure is very low (even with its terrible debt driven fiscal policy of late) as a whole..... given large world acceptance of that reference to begin with.