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I think to make the whole thing work it relies on the U.S. dollar being the World's reserve currency. I could be wrong or I might have the debt thing criss-crossed in my mind with something unrelated but which concerns the Dollar as World's reserve currency.

Exactly. Just how long do you suppose the world will use the US dollar as the reserve currency? Right now, Russia, China, and perhaps India, are dumping US treasury bonds and putting their reserves into physical gold (and silver in the case of India). They no longer trust the US dollar as a store of value (i.e., purchasing power). Now this change cannot happen overnight, but over a period of 10 years, a lot can happen.
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