20-03-2025, 08:31 PM
The first person to use the term was reportedly the economist Zoltan Pozsar, who proposed a “Bretton Woods III” agreement which would replace the dollar-based global monetary system with a system based on central bank digital currencies (CBDCs), together with gold or other commodities.
Yet that is precisely what Miran seems prepared to do. He proposes making foreign central banks hold 100-year US bonds without coupon payments instead of the T-bills they now hold. (This would amount to restructuring US debt, which is equivalent to default.) Alternative – or additional – provisions include the introduction of “user fees” charged to foreign central banks that hold US debt and a more general tax on foreign investment in the US (reminiscent of the Tobin tax on short-term currency transactions that was proposed in the 1970s).
Why would the world’s central banks and other investors accept 100-year bonds – which would pay no interest for a century – in place of good old T-bills? Why would they swallow new fees and taxes on their US debt holdings or investments?
Trump might say that the answer is simple: so they can avoid punitive tariffs.
If Trump pushes too hard, the trickle may well turn into a stampede away from the dollar.
Yes, in the 1960s, Germany agreed to cover the costs of stationing American soldiers on its territory, in order to preserve the Bretton Woods system. And in 1991, Kuwait and Saudi Arabia covered a large share of the costs the US incurred fighting the Gulf War.
The coercive Mar-a-Lago Accord – which harks back to the Roman Empire’s demand for tribute from territories its legions occupied.
https://www.project-syndicate.org/commen...el-2025-03
Yet that is precisely what Miran seems prepared to do. He proposes making foreign central banks hold 100-year US bonds without coupon payments instead of the T-bills they now hold. (This would amount to restructuring US debt, which is equivalent to default.) Alternative – or additional – provisions include the introduction of “user fees” charged to foreign central banks that hold US debt and a more general tax on foreign investment in the US (reminiscent of the Tobin tax on short-term currency transactions that was proposed in the 1970s).
Why would the world’s central banks and other investors accept 100-year bonds – which would pay no interest for a century – in place of good old T-bills? Why would they swallow new fees and taxes on their US debt holdings or investments?
Trump might say that the answer is simple: so they can avoid punitive tariffs.
If Trump pushes too hard, the trickle may well turn into a stampede away from the dollar.
Yes, in the 1960s, Germany agreed to cover the costs of stationing American soldiers on its territory, in order to preserve the Bretton Woods system. And in 1991, Kuwait and Saudi Arabia covered a large share of the costs the US incurred fighting the Gulf War.
The coercive Mar-a-Lago Accord – which harks back to the Roman Empire’s demand for tribute from territories its legions occupied.
https://www.project-syndicate.org/commen...el-2025-03
