WES
Participant
Yesterday, I posted about 1933-4 being rather interesting years.
These years signaled the end times for the British pound sterling as the world’s reserve currency.
Britain’s political miscalculations regarding the cost of fighting WW1 nearly bankrupted her.
However, Britain still had her empire to draw upon.
However, WW2 finally bankrupted Britain and she then loss world reserve currency status and then quickly losing her empire as a result.
Years 1933-4 also signaled the rise of the USD as the world’s new reserve currency.
In the post 1933-4 years Britain lost massive amounts of gold and capital to the US.
It is in this time frame that Britain’s interest on her debt began to limit her spending on defense/offense.
What is interesting about this “interest on debt limiting defense/ offense spending” turning point is this same fate befell Spain, the previous world reserve currency.
Today the US now faces this same turning point where interest on the debt now exceeds defense/offense spending.
Of course US gold has long since left the country, mostly to Asia.
Interestingly, China wants everyone to use their currency for trading but not as a central bank world reserve currency.
China doesn’t seem to want the mantle of owning the world’s next reserve currency.
China wants the benefits of being the world’s reserve currency without the costs that come with owning it.
I guess China has studied history and didn’t like the outcomes of previous reserve currency owning countries!
One of these costs of owning the world’s reserve currency are the never ending wars creating more debt!
In time rising debt dooms the world’s reserve currency owner.
The signs are visible to see for the US.
Ukrainian War funding.
Israeli War funding.
The US spent $2-3 billion defending Israel but has said no more pissing Iran off!
The US can print dollars but not weapons!
Going forward expect US defense/offense spending to be capped as the government struggles with paying for the interest on it’s debt and growing deficit spending.
Nobody now wants to buy more US government debt.
This is steadily forcing the US to absorb more of the costs of defense/offense spending.
Before the US could basically force the rest of the world to pay for it’s military.
This is also forcing the Fed to monetize more and more of the US gov debt by creating USD out of thin air to buy the debt nobody wants!
The days of the US military going around the world banging heads to enforce usage of the USD will come to an end.
Recently we have seen the US trying to use Russia sanctions to force usage of the USD by it’s vasselsl
So yes things are changing ever so slowly.
