Joel@J2 Partners

I wrote the below-linked post (link at bottom) in a cavalier way and realize now it could have been worded more thoughtfully. So let me reiterate the thrust of my argument (which is still in the process of being refined!). 1. US dollar dominance is not just an “exorbitant privilege,” but a unique global public good that the U.S. manufactures and exports — effectively at cost, since it's backstopped by fiscal deficits the U.S. must pay interest on. 2. Other nations benefit from exposure to this “good” for free — and often exploit the arrangement to their own advantage. 3. If you think of the dollar as a powerful “trust technology” that America produces and exports, it starts to seem wild that the U.S. doesn’t charge more explicitly for this service. The dollar doesn’t just facilitate global trade — it reduces transaction costs, enhances global financial stability, and anchors the entire offshore financial system. And no one has built a better alternative. 4. The fact that U.S. Treasuries and dollars don’t price in this “trust premium” for foreign holders incentivizes both free-riding and excessive hoarding — not for trade and commercial purposes, but for currency suppression, rent extraction, or capital storage. The result: a global imbalance that disadvantages U.S. taxpayers. 5. In effect, America is renting out its sovereign balance sheet — just like banks rent theirs in financial markets — except it’s doing so for free. 6. This mispricing means U.S. goodwill is routinely abused by countries seeking to maintain trade surpluses or engineer competitive devaluations — distorting fair trade and reducing productive dollar use. 7. This is bad for America and the world. It leads to the overproduction of dollar assets for non-productive rentier purposes. And since U.S. taxpayers still fund this overproduction, it amounts to a misallocation of public resources. Worse, it risks collapsing the entire “dollar-as-a-service” model. It’s unsustainable. 8. The U.S. can counter this by recognizing its role as a provider of global trust infrastructure — and begin charging appropriately for it. 9. One way: tax interest/coupon payments to foreign holders of USTs. This would act as a kind of demurrage fee (inverse Regulation Q), discouraging passive dollar hoarding and rent-seeking behavior. 10. This would fundamentally shift the incentive structure around holding dollar-denominated assets in a risk-free way abroad. In the long run, it would make it uneconomical to passively accumulate or hoard USTs for purposes other than generating additional returns through more productive channels such as trade, investment, or commercial activity. In essence, the practice of holding dollar assets purely as a store of value — or using them as idle collateral to underpin trust without active circulation — would become financially disadvantageous. To conclude: It’s entirely reasonable that the U.S. should charge for access to its "trust-generating" dollar technology. This would transform global dollar float from “rentier capital” to working capital, in service of actual commerce and mutual prosperity. Would the U.S. still need to run a fiscal deficit under this model? Probably — but the quality of that deficit would change. Instead of subsidizing unproductive global hoarding, the U.S. would be financing a system that pays rent, disciplines freeloading, and channels trust toward growth. It’s not about ending deficits. It’s about earning returns on them and creating a positive sum financial system that generates growth. teapawt.net/izakaminska/status/190…

🧵Here's a special Black Friday FATF Thread to complement @pmarca 's explainer on the Joe Rogan show about how the USG's "control mechanism" was applied to Big Tech by emulating the way it already controlled the banking system.