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The fuse is already burning.
This isn’t empire. This is captivity masquerading as privilege. For decades, the dollar system was sold as sovereign strength. But behind the curtain, it was scaffolding, a fragile architecture supporting global imbalances that no one dared to fix.
China floods us with goods. We print the debt. They hoard the collateral. This isn’t trade. It’s a hostage exchange. America supplies the deficits; the world returns them as liabilities. The Fed isn’t king. The Fed is janitor.
QE wasn’t stimulus. QE was retaliation. It crushed real rates, drained foreign rentiers, and exposed the parasitic model for what it was: tribute disguised as liquidity. The pegs were never anchors, they were fuses waiting for ignition. A conduit for sovereign retaliation.External price fixed. Target domestic prices. A massive property bubble. Chinese Metropolises flaring incandescently.
China’s yuan weakens not to grow, but to survive. Devaluation at the bottom isn’t stimulus. It’s deflationary warfare. Japan faces its own reckoning. The yen’s collapse is no longer unthinkable. The credibility of their collateral is evaporating. The capital flow reverses. The bid on Treasuries vanishes.
And so the Fed faces its final choice: defend equities or defend the sovereign bond. There will be no third option. Duration is destiny. The safe asset becomes the kill switch.
This is no longer a functioning market. It’s a monetary knife fight. AI roars forward. Capital misallocates. Asset bubbles swell as wages stagnate. Consumption shrinks. Inflation morphs into impoverishment.
We stand at the ledge: one step from euphoria, one step from collapse. A new 1990s or a new 1930s. The myths are dead. The structures brittle. The old rules obsolete.
Exorbitant privilege? That era has closed. The dollar remains but not as a throne. As a contract. As a negotiation. As the final line holding the system together.
The park opens in five minutes.
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