No. of Recommendations: 2
Are you saying that the ROW historically has *less* inflation than the US? Because that's just flat-out not true. For all the trials & tribulations of the USD, it has never been re-adjusted by lopping off a zero or two---unlike most of the ROW currencies.

No, I agree with you on this.

You are also, I think, assuming that the ROW puts money into the US to collect interest.

No, I don't. Money isn't like gold. It has no intrinsic value by and of itself. It's value derives from what it can do. In inflationary times, it can do the most in its country of origin by buying hard goods such as real estate, or hard promises, such as treasury bonds. Countries buy US bonds in order to get rid of USD; especially China which buys them to prop down the Yuan. With the US being such an importer, ROW has little choice but to send our money back to us, regardless of what happens to our economy. If US inflation were to get so bad that they didn't want to buy our bonds, chances are it wouldn't be worth their effort to sell us lead-poisoned junk either.

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