npub1pv…kdx8c on Nostr: $2T wiped out in an hour is wild. Would be kinda scary if Japan stops buying US’s ...

$2T wiped out in an hour is wild. Would be kinda scary if Japan stops buying US’s debt (given it owns abt 15% of US treasury securities?) - interest rates will shoot up, borrowing cost increases. financial market suffers. And if countries go to war right now, say Iran attacks Israel. US will struggle to fund the war as it can’t print money. And given China is the second largest debt owners and both China and Russia are pushing for Brics, the risk of demonetisation is high, risk of world war is high.

But likely the above won't happen.

In the short run there will be many stoppages. But in the long run it helps to understand why innovation is crucial for long-term economic productivity and resilience. It is not practical for a country to self sustain through military intervention to extract other country's resources (oil, opium). It backfires quite a bit in terms of debts and elite's control.

Excessive capitalism - i.e decisions of several elites in the 80s - both in the UK and the US led to much innovation and productivity leaving the country. Those that benefited from globalization established expensive cities and capital within the country, whereas the rest of the country suffered - creating inequality and regional disparities.

There has to be some balance of economic policies in the world. And if countries don't innovate, they will suffer and get left behind.