A fair response. There have been a lot of broken clocks out there for a long time. But eventually a broken clock is right and we're approaching that time.
There has always been debt, that's true. The last time the debt was at all close to our present levels was just after WW2, but the unique position of the U.S. with the dollar as the reserve currency and little competition from the war-torn developed world made for a swift recovery and retirement of much of that debt. America was in the driver's seat.
When Nixon closed the gold window in '71, the dollar floated free of any constraints and began to fall. The saving grace was when America cut a deal with the Saudis--they agreed to only sell their oil in dollars and we guaranteed their security. This forced foreigners to use dollars if they wanted to buy oil. America essentially switched from backing the dollar with gold to backing it in oil.
The reason America can print so much money with so little inflation is basically that we're making foreigners share the burden. But they're growing weary of this abusive relationship and seeking ways to escape the system. We see this in the currency swaps and non-dollar trading relationships cropping up in countries previously content to accept the dollar system.
The Saudis have begun to explore selling oil in other currencies like the Chinese Yuan. It's alarming. Should they turn away from us, foreigners won't need dollars as much and will instead return dollars to America by selling American debt. The American government will be faced with defaulting on their debts or printing money to cover them. They'll choose to print money.
This will lead to run away inflation and the death of the dollar. It's not the end of the world but it will seem like it for awhile.
We have faced two very heavy shocks to the economy recently--Covid and now these heavy and unwise sanctions against Russia. The sanctions cut both ways and their serious consequences will be felt soon. Europe is in trouble and American inflation is just getting started.
I believe the endgame to all this is in sight. You should brace for impact. Denial ain't a river in Egypt.
