Loading ...Bessent Calls For ‘Reforms’ Among ‘Bretton Woods Institutions’ To Rein In Global Trade Imbalances
And so, it begins. First general broad steps towards realignment and replacement of the current failed fiat monetary system. Of course, Bessent is spinning it as China and the rest of the world’s fault, when it is mostly the US who has done this to themselves. The key point is that a series of steps will be negotiated and rolled out bedore the year is over. Gold price revaluation and likely trade agreements including many nations committing to holding US Treasuries as part of their reserves. Whether just part of a favorable trade arangement or whether gold backed bonds(may come later) not yet clear. The Mar A Largo Accords will join Bretton Woods and other previous monetary arrangements, in the history books. https://www.zerohedge.com/political/watch-live-bessent-discuses-tariffs-global-financial-system
Read up on Triffin Dilemma/Paradox.
The only way to fix the US trade deficit is to fix the budget deficits. They go hand in hand.
Ie, limit then end use of the $ as the world’s reserve currency.
THEY can’t save in $ via T’s, without the US exporting T’s.
We export T’s by importing goods (we also import services via foreign travel).
(Their goods for our paper)
A better US trade balance means others stop financing our budget/trade deficits.
The budget and trade deficits are not identical, but they do run in parallel.
“First general broad steps towards realignment and replacement of the current failed fiat monetary system.” They aren’t going to fix the current system and aren’t going to eliminate the trade deficit. There will be a new global monetary system. Possibly fragmented, possibly coordinated, we can lead or not. Someone(maybe all) will adopt a gold backed system which will force everyone else to adopt as well.