There is a lot of truth in this. That's why the U.S. has to act responsibly if it wants to maintain the reserve status of the dollar. Our Federal reserve regularly cooperates with all the other major Central Banks around the world. It is highly respected, and that's why Yellen expressed great reserve when it was first proposed that Russia's dollar foreign exchange account be impounded. This childish debt ceiling business raised every year by Republicans is not helping. It is completely normal for the so-called "debt" to increase over time, which in truth is nothing but the aggregate of all net deficits. The net deficit (the ""national debt") must grow so long as our economy grows. Its through deficits that new outside money is created which forms the Money Base that provides the seed for inside or "credit money". Therefore the Money Base must grow in concert with the economy to prevent deflation; hence deficits must grow as long as the economy grows. No economy that depends on fractional reserve banking and credit can withstand significant deflation as that is equivalent to raising interest rates on private sector debt.
Its true that in 2008, there was no bitcoin yet, so there would be nothing else to go to. In some ways though, this just blew up the bubble bigger, so when the crash happens, it will be even worse. The only saving grace will be if enough people accumulate bitcoin and so many won't suffer a total wipeout.
Although you're not wrong with what you describe, it also doesn't have to be like this. There is a totally different way to run an economy and a monetary system. It doesn't have to be fractional reserve, or always require debt, and it doesn't have to require growth at all costs.
What's funny, trading-wise (futures in particular), is how scary, scary it is thought of by the ignorant. Yet fractional banking is similar - keeping only a margin-al amount of money on hand to satisfy daily current needs. But I'm not going to trade them, what if I get a margin call? And I could lose more than the balance in my account. It happens but then so do banks go belly-up but no one is afraid to put their money into a bank. You say, but they provide FDIC insurance. And trading provides hedging "insurance". One is scary, scary. The other safe and secure. If you listen to the Wizard behind the curtain.
(SEMAFOR) 5/16/24 US’ overwhelming debt load The US spent more servicing the interest on its debt over the past seven months than it did on national defense or health care for the elderly — and more than education, support for military veterans, and transportation combined. The figures were highlighted by a bipartisan Washington, DC, think tank, which noted that interest payments were the fastest-growing part of the US federal budget, and based on current trends would form the largest single line item by 2051. The US’ mammoth debt burden is increasingly a threat to its superpower status, experts say: “Any great power that spends more on debt service … than on defense,” the historian Niall Ferguson wrote, “will not stay great for very long.”
(BLOOMBERG) 5/16/24 Need for bond speed The growing unpredictability of government bond markets is causing old-school fixed-income managers to retool their trading strategies. Volatility in bond markets has overshot other assets consistently for the past two years, and long-term yields are swinging more violently than the average of the last decade. Hedge funds have been quick to embrace the volatility — another bout of which was seen in Treasuries after the US inflation data yesterday — and now traditional players are doing the same.
I'm of course talking about bitcoin. On bitcoin standard, we will see that deflation is not to be feared, and that there is no need for fractional reserve banking. The world works how it does currently because its designed to steal from the citizens. So this system needs to be turned upside down.