The crisis scenario laid out is uncomfortably plausible, it feels almost inevitable.

I have long thought that the notion of the US losing its dominant role was a little over-hyped. But of course, events sometimes make one revise one's certainties. Quite a few of them, this year.

I think a key point in the article is that around 1/6 of all outstanding US bonds are held by individuals (not institutions) outside the US, a group that "cannot be cajoled by diplomacy or threatened with tariffs" (or changes in military alliances). If they don't want to be invested in the US dollar or the US economy, they can sell, as I did.

That by itself won't change the centrality of the dollar's roles, but if they do sell it could have pretty major effect on the US dollar level and US treasury yields. Those could have knock-on effects: all kinds of trust have eroded, but there is a special kind of pecuniary trust afforded to an asset that hasn't plunged in market value in living memory.

Jim

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