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You're the global reserve currency if you have 50% of world GDP and are the exporter of last resort.

This doesn't seem to be the case, given that the dollar is the global resver currency.

As for issuing bonds internationally, this has to do with the expectation that sovereign default won't happen, not only because you're a net exporter but also because the principle of free contract is deeply ingrained in your country's laws and mores.

More like being so important that if you default, nothing else is secure and anything might happen. Which is why the price of gold (=hedge against systemic financial breakdown) surges when the US weaken.


Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Oct 7th, 2009 at 07:08:06 AM EST
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