At the start of 2020, there was almost $17 trillion in U.S. government IOUs in public circulation. These are backed by the most powerful state with the biggest tax base, and they trade in the deepest and most sophisticated debt market.3 You buy U.S. Treasury securities because the market is so big that in an emergency you can sell them without your sale affecting the price. There will always be someone who wants to buy your Treasuries. And there will always be important bills you can settle in dollars. When we say that the U.S. dollar is the reserve currency of the world, what we are talking
...more
