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Originally Posted by woj
people have been saying the same since we started running a deficit... things are not great, but far from bad in my opinion...
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Emerging economies (e.g. China) have been financing America's deficit so far by accumulating vast dollar reserves. This will, however, not go on forever. If America doesn't reduce its deficit before it stops (and it will stop, eventually, because continuing to finance the deficit would eventually cause them hundreds of billions of dollars in losses and because their capital markets are becoming ever more capable of handling assets themselves), the American economy and indeed America as a whole will get fucked hard.