Because of the dollar’s status as the world’s reserve currency, the yield on US Treasuries – US government bonds – is perhaps the most important benchmarks in global financial markets.
The sheer insularity of the Trump administration’s approach was illustrated on Friday, when Bessent – supposedly one of the more sensible figures in the administration – said: “The US has a strong dollar policy, but because we have a strong dollar policy, it doesn’t mean that other countries get to have a weak currency policy.”.
The suggestion was that opening up the US Treasury’s data to Elon Musk’s “department of government efficiency” team had identified a money-saving wheeze: why not walk away from some of America’s debt obligations – a “selective default”, as economists call it.
Elon Musk’s crazed takeover of America’s financial plumbing risks shattering confidence in US institutions and in turn global financial stability.
Yet as a result of Musk’s crazed takeover of the financial plumbing of the state, the US is already welching on its obligations – moral and financial – all over the world.
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