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Trump's Tariffs Reveal Dollar Fragility
- Trump's tariffs have exposed the fragility of the current global monetary system tied to the US dollar.
- This crisis signals a potential historic shift away from dollar hegemony toward a new global system.
Trade Deficits Demand Reserve Currency
- Large trade deficits require a liquid reserve currency for recycling surpluses but balanced trade does not.
- Future systems may not need a dominant reserve currency if trade is roughly balanced worldwide.
Dollar Assets as Claims on Wealth
- U.S. equities and bonds are claims on wealth that can be overvalued or based on speculative bubbles.
- Dollar assets, though tradable, are ultimately "worthless paper chasing worthless paper" in a financialized system.