Sometimes I look back in significant historical events and think to myself how didn't people see this coming, it's obvious almost unavoidable, surely they thought that it would eventually happen.
Well, I am starting to think that the US will completely abandon the USD and it's completely unavoidable.
History of the USD being tied to globalization is well established. It's the oil that lubricates the engine that is the global economy, in return, the US is supposed to spend up the whazoo and keep the peace in the world. That's the historic context we currently live in.
Well, the US seems hell bent on deglobalizing, and scaling back its role as the peacekeeper.
Now, I don't think other countries really have an option other than to use USD, there is simply no alternative.
However, lack of spending and deglobalization puts US in a tight spot.
The Problem:
The demand for USD is so high, that it's almost impossible for US to compete in the exports market.
The Solution:
Do a China style internal and external currency where you can decouple your economy from the world.
Overnight, the US banks can roll over all USD in domestic accounts to NewUSD, while all international accounts (reserves of other countries) can stay in USD. With strict controls of import and export of USD and NewUSD, the US can entirely avoid the inflationary collapse that is inevitable. It could even go back to a commodity backed system in the short run to stabilize the new currency.
I feel that this is really the only path forward for the US. Am I crazy?