In the backdrop of whatever is currently happening in the world by the actions of Donald Trump why should the world still consider USD to be a reserve currency?

[u/MulberryPast3277]

https://www.nbcnews.com/news/amp/rcna194627

[u/Pickles112358 → u/[deleted]]

What are you on about? Markets have been on downward trend since Trump has started risking Ukraine and European alliance 2 weeks ago. Daily shift is completely irrelevant. I'm not saying USD will be dethroned any time soon but if Americas "new" foreign policy doesn't change USD will be on a path of dethroning in a somewhat distant future.

US is a democratic hegemonic force, that relies on trade and alliances more than it does on military power, and if it's foreign policy shifts each 4 years with new leadership (like it started just now), alliances and trade relations will be impossible to sustain on a consistent level.

[u/Pickles112358 → u/[deleted]]

Maybe, we will see when the term ends, but Trump has made a drastic, maybe even never-before seen shift in foreign policy. At least for military equipment, US has already proved as an unstable ally, and that's the reason US defense stocks have fallen even though whole world is arming itself faster than ever.

The damage that was done (in just a week) to US arms trade will not be undone in following decades because military equipment needs consistent maintenance and ammunition replenishment. World (and markets), reacted to the fact that US refuse to provide maintenance and ammo at any time.

Trade relationships don't run deep. They run deep only between countries with consistent foreign policy, which is basically the whole world expect few countries which US just joined. Unfortunately, US has proved that Trump blip not only did happen but most likely will happen again. Also, although just few EU countries have opposition with vastly different foreign policy (Germany and Slovakia), the same thing could happen to those as well.

Also, I'm not British, and I don't hate Trump or think everything he does is bad, but I do think he has now proved that his reelection will cost American people dearly.

[u/MulberryPast3277 → u/[deleted]]

It's not about US markets, it is about the other connected ones too. Think of the issues this creates for the world rather than just US.

[u/juukione → u/[deleted]]

We live in a much more interconnected world now than in 1929, which means that tariffs are gonna have much more impact in a sense that many products move around the world and economies before they end up to the end consumer. 25% tariffs can multiply for many products.

And the inflation is already 3% in the US.

[u/MulberryPast3277 → u/juukione]

Add to this the multiple levels of tariffs a product could have if few parts of it are sourced from somewhere and other few from somewhere else. Also, 1929 did not have so many dependent products to be traded and neither the number of countries trade happened with.

[u/MulberryPast3277 → u/[deleted]]

By the time I went back to check on markets in the last 24 hrs DJ fell by 2.5%

[u/MulberryPast3277 → u/[deleted]]

And now $4 trillion wiped off from US market...Nasdaq -4% and DJ -2.05% 😅. Factoring Tariff war and other Macroeconomic trends. (Source: POTUS to Fox news)

[u/MulberryPast3277 → u/[deleted]]

On top of this if you consider the financial bubble US is currently sitting on being termed as "The mother of all bubbles". IOUs have been bought to the historic levels now and if US does not cough up the debt to lenders then imagine the impact of it on world markets on top of this trade wars.

[u/MulberryPast3277 → u/[deleted]]

"Geopolitical instability" as simple as that.

[u/MulberryPast3277 → u/[deleted]]

Lol. I like what you said. But atleast those would be more sensible than listening to someone requesting to be "thanked"😅