pr – I think the only problem with the argument of “what are the alternatives” are quite US centric. I would argue that a country like say China would say the alternative is the yuan or reminbi.
It is perfectly logical to assume (and in reality I believe it is happening) that China wants a bigger slice of the economic pie. I would say it is pretty much central to Beijings strategy. It doesn’t happen fast but over time, say 10-15 years…
Second and just as important, the US has a history and capacity of honoring its obligations. More then anything else this is why we are “safe haven” status. However there can (and I think) will be a tipping point. The spiraling debt service or a strategy of inflating our way out will be recognized and other currencies will be recognized as safe haven status. Agreed with you that is not the Euro but the yuan is looking pretty darn good.
I think that if there were tangible solutions on the horizon I would feel more confident but all I see on the horizon is 65T… I may be gone but my kids will not and that will suck for them.
