USD shortage
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Started by wglassfo - Sept. 25, 2018, 5:15 p.m.

Something that I don't understand

Not that this may be a concern to the USA, but I was just wondering

If Trump is successful in the tariff war and china cuts the trade deficit with the USA to equal = equal dollars, plus some other things

But my thought is world access to USD

If trade is equal in dollars with china, this would mean less dollars flowing into china coffers, which they in turn, use to buy USA treasuries and invest in other parts of the world, thus helping the circulation of USD

If this excess out flow of USD is stopped, in the amount of billions/yr., what happens to USA treasury sales, if china has no excess of dollars to invest in treasuries or other countries have less access to USD to make settlements in USD

It seems to me there would be a shortage of USD circulating in the world, or at least billions less dollars per yr. which adds up over time.

If there are less USD circulating in the world, would this not bring on a world recession as nobody has enough USD, due to less out flow of USD, assuming trade with china is equal in dollar amounts

Trump has said the USA will no longer be the piggy bank to other countries. I take this to mean trade equality in dollars, plus no way does the Fed print money and then hand it out to Canada for instance, so we can pay our foreign payments in USD.

If other countries don't have funds in their piggy bank, due to less money from the USA piggy bank, then doesn't it seem logical that economic activity slows down drastically. Less money ,means less spending in any thing I work with.

Where does the money come from, to make settlements of int'l trade when it is no longer available from the UDA piggy bank

Does everybody else print money to make payments

That doesn't sound very good to have excess printing of money from several sources to make up for less USD circulating in the world. I know gov't.s print money but would they not be forced to print even more??.

I thought available funds was the reason why the reserve dollar was able to exist, by way of trade settlements in USD. So why the rush to have less dollars in the world system.

I know something had to be done, but might a world recession be unintended consequences.??

During the depression I was told nobody had any money. Money just sort of disappeared.

I doubt more and more world bank credit or debt is an alternative, but if that happens then we are doomed

Comments
By metmike - Sept. 25, 2018, 5:49 p.m.
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Thanks for making this great post Wayne,

I moved this to the trading forum for you

By Lacey - Sept. 25, 2018, 7:17 p.m.
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We will never have equal trade in dollars with China. Trump is stopping the negative slide, hopefully two thirds comes back if he is lucky over 15 years. But it will never be a one for one. I don't know what the demand for dollars will be.  I have been hearing about the demise of the dollar for twenty years, hasn't happened yet.  The dollar will become one of a basket of currencies that runs trade and will remain so unless Yellowstone goes off.