Re: The Fed\'s Secret Weapon
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Large holders of cash would suddenly find their stockpiles worthless. Citizens holding currency in domestic banks would suddenly find themselves holding equivalent new dollars and all that funny money being hoarded by foriegn governments would be completely useless.
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Unless I am mistaken, most of the "money" being held by foreign govs are in T Bills.
But anyway, the strength of the dollar has been its attractiveness because foreign banks could redeem it for gold up till the 70s, and traded for oil since then. Reissuing that you would destroy the economies of saudi arabia which uses Dollars as reserves, and China who holds masses of debt. The new dollar would be as worthless as the old dollar had become.
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