This could cause insane hyperinflation. A key part of American hegemony is that we print dollars to bribe every country on the planet. This doesn't have any real effects because they all bury the it in a hole in the hope that it will retain it's value better than their own currency.
There are now strong incentives for people with large amounts of Russian trade to start dumping dollars, and once one country does everyone else has to follow suit to avoid getting screwed. This also means people will start calling in US debt. One way around this for the US is to simply delete those digital dollars and not pay any of the debt. There is nothing any country could do about that other than invade to physically take resources as compensation, and good luck with that.
we had inflation during nixon because of spending on vietnam war and other worthless govt spending, so nixon stopped the bretton woods gold convertibility as other countries wanted their gold back which we didn't have. This won't cause inflation in russia unless they spend too much.
it doesn't matter how much gold there is it's all relative, it's just better than fiat based on nothing. You can use dollars to buy gold but the dollars are really IOUs that nations could use to get their gold back from where it was stored, that's what convertibility means here
This could cause insane hyperinflation. A key part of American hegemony is that we print dollars to bribe every country on the planet. This doesn't have any real effects because they all bury the it in a hole in the hope that it will retain it's value better than their own currency.
There are now strong incentives for people with large amounts of Russian trade to start dumping dollars, and once one country does everyone else has to follow suit to avoid getting screwed. This also means people will start calling in US debt. One way around this for the US is to simply delete those digital dollars and not pay any of the debt. There is nothing any country could do about that other than invade to physically take resources as compensation, and good luck with that.
we had inflation during nixon because of spending on vietnam war and other worthless govt spending, so nixon stopped the bretton woods gold convertibility as other countries wanted their gold back which we didn't have. This won't cause inflation in russia unless they spend too much.
There was no convertibility to gold since the 1870s. And there simply isn’t enough gold in the world to conduct global trade in any meaningful scale.
it doesn't matter how much gold there is it's all relative, it's just better than fiat based on nothing. You can use dollars to buy gold but the dollars are really IOUs that nations could use to get their gold back from where it was stored, that's what convertibility means here