Inflation, Debt, and The Fed (Part 2) with Scott Sumner and Lyn Alden
Village Global Podcast
00:00
Is the Dollar Special?
The united states borrows money very cheaply by selling treasury bonds to foreigners at one or two % interest rate. And then when we invest overseas, we're earning much higher rates of return on our multinational corporations that invest around the world. Because of the difference in rate of return from what we earn on foreign investments versus what foreigners are earning on treasury bonds, we're able to run budget deficits after, i'm sorry, trade deficits, year after year without any sort of day of reckoning. Now there may be a day of reckoning in the future if that process doesn't continue to play out that way.
Transcript
Play full episode
