> in the past 2 years alone the US has printed nearly 80% of USD in existence
Often cited and incorrect metric. The fed changed how the count M2 I believe because they started paying interest on reserves during their response to the COVID crisis. Either way the chart often cited showing an increase in M2 is not telling the whole story, namely that not nearly enough USD has been “printed” to satisfy world hunger and needs. (Think, if dollar was a plenty then why is DXY at the close to the second highest in history. Demand outpaces supply.)
You can Google it. Have fun! While you’re at it also Google Triffin Paradox. Read about trade deficits as they relate to a country who’s currency is a global reserve currency.
I am no money master but I’ll take a shallow stab at it.
Triffin explains the trade deficit perfectly. I’ll quote from Wikipedia:
“…that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfil world demand for these foreign exchange reserves, leading to a trade deficit.”
We basically have to keep feeding the world with dollars. Or at least collateral that can be trusted to be turned into dollars so that banks around the world can create those dollars. How? Create more government debt.
The part about debt to GDP growth is I think exactly that problem of balancing your domestic short term needs vs the long term needs of the currency on a global scale.
When the world is starved for dollars and the dollar becomes stronger this isn’t a measure of US economic strength it’s a measure of how much the system is choked. Less dollars to go around less global trade is able to function less goods and services produced all around.
In a globalized system if one country isn’t able to produce as much (think China), the effects ripple to all countries like dominos. Causing secondary and tertiary effects further down the chain.
Often cited and incorrect metric. The fed changed how the count M2 I believe because they started paying interest on reserves during their response to the COVID crisis. Either way the chart often cited showing an increase in M2 is not telling the whole story, namely that not nearly enough USD has been “printed” to satisfy world hunger and needs. (Think, if dollar was a plenty then why is DXY at the close to the second highest in history. Demand outpaces supply.)
You can Google it. Have fun! While you’re at it also Google Triffin Paradox. Read about trade deficits as they relate to a country who’s currency is a global reserve currency.