Is Kingsgate (KCN) Preparing for a Potential Share Buyback Program ?, page-17

I'm uncertain which is more alarming: regional instability or the fact that the United States is printing a trillion dollars every ninety days. If the debt continues to rise, which it likely will, they may eventually devalue their currency to manage the debt, potentially triggering global stagflation. The U.S. Debt/GDP ratio is approaching 122%. As the U.S. begins to devalue its base rate, it could compel other economies to do the same.

Impact on the United States:

1. Inflation: Devaluing the base rate would likely lead to higher inflation as the cost of imports would increase¹.
2. Borrowing Costs: The U.S. government might face higher borrowing costs as investors demand higher interest rates to compensate for the increased risk¹.
3. Trade Balance: While exports might become cheaper and more competitive internationally, the cost of imports would rise, potentially leading to a trade deficit¹.

Impact on Other Nations:

1. Currency Valuation: Other countries might see their currencies appreciate relative to the U.S. dollar, making their exports more expensive and less competitive¹.
2. Global Trade: Countries heavily reliant on trade with the U.S. could experience economic disruptions due to changes in trade balances and currency fluctuations¹.
3. Financial Markets: Global financial markets might experience increased volatility as investors react to changes in U.S. monetary policy².

Broader Economic Effects:

1. Investment Flows: There could be shifts in global investment flows as investors seek more stable or higher-yielding assets².
2. Debt Servicing: Countries with significant U.S. dollar-denominated debt might find it more expensive to service their debt due to the devaluation³.