this post was submitted on 17 Feb 2025
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I kinda believe this one. Occam's razor and all. Doesn't mean he's going to pull out army bases from those countries that we were previously providing aid for.
I also don't think he realizes these countries need USD to absorb America's surplus. Well he does to some extent, but doesn't realize it's because we give them loans and "aid" in USD that allows them to do this.
Why do those countries need USD to absorb America's surplus what does that even mean?
I was thinking in the sense that America creates surplus value from its workers and because domestically they cannot "absorb" that surplus (e.g. workers do not make enough to buy the goods/services) they need to export it abroad. Somewhat similar with what happened with Intel, where the Biden government gave them billions in subsidies, but there was no market that could buy all the chips they produced (because of the sanctions on China). However now that I kind of thought about it more, that might be an incorrect understanding of what is going on (or an outdated one).
America does flood the world with USD through its trade deficits and their aid programs which makes it function as a sort of global reserve currency that the US benefits off of in seigniorage. And I do think programs like USAID encourage use of USD. However the contradiction from Trump I see is that he doesn't want deficits with these countries, but also doesn't want them to get off of USD.