Reference News Network July 9 report: The World Press Syndicate website published an article titled "The End of America's Super Privilege" on July 7. The author is Desmond Laihman, a senior researcher at the American Enterprise Institute. The following is a translated excerpt:

French former president Valéry Giscard d'Estaing once made a famous complaint. He said that the dollar as the main global reserve currency gave the United States a "super privilege." He would never have imagined that the United States would eventually let these advantages slip through its fingers.

Since returning to the White House in January this year, US President Trump has been systematically undermining global financial markets and the trust of governments and central banks around the world in the US dollar.

First, Trump has placed the US public finances on a more unsustainable path than when he took office. The ratio of public debt to GDP has risen to about 100% and will become even worse. Instead of restoring order to the US fiscal system, Trump and his supporters in Congress pushed through the "Big and Beautiful Act," which is estimated to increase budget deficits by about $3.4 trillion over the next decade.

By 2030, the ratio of US public debt to GDP will be much higher than it was at the end of World War II. Unlike the post-war period, today's US economy does not have the capacity to alleviate the debt burden through growth. No wonder major credit rating agencies are downgrading the US rating.

Trump clearly shows no concern for curbing inflation, which further undermines confidence in the dollar. Inflation rates have already exceeded the Federal Reserve's 2% target and there is a risk of further increases, mainly due to Trump's radical tariffs on foreign goods imported into the US. Tariff levels have reached the highest in a century.

Even worse, Trump's actions continually cast doubt on the US's commitment to fulfill its debt obligations. Considering Trump's clear disregard for the rule of law, there is no reason for the market to trust the US. This explains why the dollar has depreciated by over 10% since early 2025, marking its worst performance in the first half of the year since 1973.

Another sign of the collapse of market confidence in the US is that gold prices have risen by more than 25% over the past six months. The crucial 10-year Treasury yield surged after Trump announced "Liberation Day" tariffs in early April and remains at a high level.

It is clear: the market is dissatisfied with the direction of Trump's economic policy. The problem Trump faces is that the market is different from politicians, neither subject to political pressure nor willing to compromise under primary threats. If he refuses to heed investors' warnings - which seems highly likely - then the US should prepare for a possible crisis in the dollar and bond markets before next year's midterm elections. The era in which the world tolerated the US's financial privileges is rapidly coming to an end. (Translated by Qing Songzhu)

Original: https://www.toutiao.com/article/7524896243223495203/

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