Thread by @TheSuperBubble

THREAD
:

Coronavirus is accelerating what had to happen anyway:

Devaluation of the US dollar, and the end of its role as world reserve currency.

2 days ago @realDonaldTrump was asked about a German news report about China getting a $160 bill for Covid’s impact:

1/

Trump said:

"Well we can do something much easier than that. We have ways of doing things a lot easier than that … And we’re talking about a lot more money than Germany’s talking about.”

So what is this easy thing that the US can do to make China pay?

Does it exist?

2/

PROBLEM:

Behind the virus there has been a bigger US/China conflict brewing for years.

From 2001 to 2010 China helped fund a large % US deficits by purchasing US treasury paper.

Then they stopped.



Ouch.

3/

That forced the fed to directly monetise US govt spending by printing billions of dollars a day to give to commercial banks to buy the USTs that China (and others used to buy). monetize

blog.superbubble.money/2020/01/repo-b…

4/

United States has a YUUGE trade deficit with China.

• China exports stuff to the US (collecting dollars/US paper/jobs/factories/control of supply chains)

• The US exports IOUs to the world (becomings a de-industrialized, financialized, consumption-based economy).

5/

#DJT has long wanted to fix the US trade deficit.

But aside from tariffs, he is vague about how to do it.

Exporting more stuff to China won't work. As #decoupling accelerates:

• China won't to run a trade deficit w US
• Will take yrs to bring industry back

6/

A solution most don’t see is deliberately devaluing the US dollar.

The mainstream view is that it would be crazy, impossible, unthinkable, mad etc

washingtonexaminer.com/opinion/op-eds…

7/

But momentum is building.

People in Trump’s orbit are talking about devaluing the dollar to punish China for the virus.

(Like I said. The virus is a perfect excuse for what had to happen anyway.)

For example Senator Lindsay Graham:
mediamatters.org/coronavirus-co…

8/

Looks like a media campaign is setting the table for US default/devaluation:

Hedge fund manager Kyle Bass talks about 4 wars being fought against China

His idea on how to win? Default on USTs:

9/

Prominent Trump supporter @ScottAdamsSays tells a half-remembered tale of China defaulted on debt to the US decades ago. He suggests the US look at doing the same;

10/

@JkyleBass, @LindseyGrahamSC and @ScottAdamsS are connected to Team Trump

If there talk of default to punish China the top of the Iceberg?

Given Trump’s aggressive negotiating style,
the fact that he doesn’t threaten default, could be
#TheDogThatDidntBark

11/

Even before Coronavirus conquered the planet, I wrote that default / dollar devaluation would be a logical, plausible and positive outcome for the US and the World.

blog.superbubble.money/2020/01/wwtd/

12/

Sudden US default/ devaluation has happened quite regularly in the last 100 years.

13/

I cannot know the future.

And do not have the connections to Team Trump that people mentioned in this thread have.

But I think it smart to be prepared for all eventualities.

Joke product. Serious point:

gumroad.com/l/buygxxd

End/

Extra #1:

https://twitter.com/LukeGromen/status/1255915805495230474

@threadreaderapp unroll

Extra #2: Officially denied (Again).

“It's a good question to say, 'Well oh gee, we owe you a certain amount of money, we're going to keep it'.

But when you start playing that game you hurt the sanctity of the dollar. That’s a rough game.”