...discussing the unique characteristics of U.S. debt relative to the alternatives currently available. This is precisely what I have been arguing with respect to the Date Rating Agencies. There is no more unique "currency" in the world than U.S. debt and the following snippet from the paper echoes points made here for the last 5 years:
My only addendum would be that the author understates the soft power of U.S. debt and its coercive effects.
From Hamilton’s time to the present, the U.S. national debt has been viewed as much more than a means to finance the government beyond the means offered by taxation and money printing. By creating a class of creditors dependent on the federal government for debt payments, it became a cement of the American union of states. It was a currency that could be used to pay for shares in the first central bank as well as for the purchase of the Louisiana territory. It attracted foreign capital to an initially capital-poor nation. It furnished an outlet to return federal budget surpluses to the nation’s capital markets. It was used to back currency issues of national banks. It could be tailored to provide investors with appealing types of assets, to their own and the government’s advantage.
In our own time, the U.S. debt is once again held widely around the world. Perhaps it could become a cement of the world economy, as it once was a cement of the American union. Such an outcome depends, however, on whether it is managed as carefully and creatively
as it was during the first two centuries of U.S. history.