I was thinking about the recent commentary on the debasement trade and how that compares to Brent Johnson’s dollar milkshake theory. How does that shake out for us? On the one hand the current US administration wants a weaker dollar to boost manufacturing and global competitiveness, and to fund the AI race. On the other, the dollar is the (relatively) most desirable fiat currency around the world, and even though it’s printed constantly, it still can be scarce in foreign countries, making it artificially strong and countering the Trump administration’s efforts.
Without a crystal ball, I tend to think domestic inflation will continue rising, while manufacturing and industry will be sluggish to start up if the status quo dollar reserve currency system is in place. Dollar dominance may be delcining, but it still gets a boost from decades of entrenched strength. This will probably hinder manufacturing in America. If countries move to a sound money system with gold and botcoin flowing freely, then the US trade deficits can reflect in a weaker dollar and boost domestic industry. This would require governments to be more fiscally responsible, so I wouldn’t bet on that happening any time soon. My two cents #bitcoin #nostr