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15 Oct 2018 01:23AM
Ricky Lim
Wonder how Trump service their $21 trillion debt where :-
(1) a big chunk are external debt (not domestic debt) - there are real transfer of resources out of the Country where there is real burden of debt unlike domestic debt - where it is only rotation of resources within a Country without losing resources from the Country where there is no real burden of debt.
(2) where tax are drastically cut - wonder how to repay debt, finance its government spending - where this will lead to more borrowing and even heavier burden to service the debt interest
(3) where interest rate keep increasing - and bring about heavy burden on the coffer to service its huge debt
(4) where business investment stagnant due to ongoing trade war that dampen business investment sentiment due to uncertainty in trade and economic climate
(5) where more Countries are doing bilateral currency swap - than using US$ as currency for trade - reducing US$ importance as medium of exchange in bilateral trade.
Thus Countries keeping US$ as foreign reserves will also be reduced.
If US got into financial crisis, Countries with bilateral currency swap need not get caught by wild fluctuation in US$ - because these Countries are not using US$ as medium of exchange for trade.
All these phenomenon - is a sign of "Boom and Bust" Economy that will threaten US ---- which trigger a big fall in the Wall Street running for 2 days.
That is why Trump's runway is getting shorter and shorter.
(1) a big chunk are external debt (not domestic debt) - there are real transfer of resources out of the Country where there is real burden of debt unlike domestic debt - where it is only rotation of resources within a Country without losing resources from the Country where there is no real burden of debt.
(2) where tax are drastically cut - wonder how to repay debt, finance its government spending - where this will lead to more borrowing and even heavier burden to service the debt interest
(3) where interest rate keep increasing - and bring about heavy burden on the coffer to service its huge debt
(4) where business investment stagnant due to ongoing trade war that dampen business investment sentiment due to uncertainty in trade and economic climate
(5) where more Countries are doing bilateral currency swap - than using US$ as currency for trade - reducing US$ importance as medium of exchange in bilateral trade.
Thus Countries keeping US$ as foreign reserves will also be reduced.
If US got into financial crisis, Countries with bilateral currency swap need not get caught by wild fluctuation in US$ - because these Countries are not using US$ as medium of exchange for trade.
All these phenomenon - is a sign of "Boom and Bust" Economy that will threaten US ---- which trigger a big fall in the Wall Street running for 2 days.
That is why Trump's runway is getting shorter and shorter.
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