I’m not sure if either is a good long-term strategy. It only encourages currency manipulation as though we don’t have enough of it already.
Many of the countries that the U.S. has had military interaction with or are at aggressive political odds are countries that have wanted to use a different exchange currency than American dollars in regard to oil. For many years ( basically since the 1950’s) the U.S. has had a lock on the exchange currency related to oil and oil products. Many countries are beginning to balk at this and want to have more control over their resources. This doesn’t end with oil. Oil is a focal point, because for right now it makes the world go around. However, it is much deeper than this. Losing control in such a major area means it is not only oil, but it then extends into many other areas of world commerce if such a move takes place in this very important commodity. This could be very detrimental to the value of the U.S. dollar and its economy. Worse case scenario is the U.S. economy falls like a house of cards as they are less able to exert influence in world commerce.
China owning so much US debt could be used against us too.
There is the doctrine of ‘ethical oil’, which proposes exactly those kinds of measures.
Indeed. Makes the US very vulnerable.
And the taxpayer is on the hook for the interest payments.
But then the taxpayer will be on the hook for all those QE purchased by the Fed while $4 T just sits there with the 12 district banks.