The KrugMan Speaks

There are plenty of smart guys who talk in high-blown language because they're kinda desperate to make sure everybody thinks they're as smart as they need everybody to think they are.

But the really smart guys are the ones who can take the densest, most impenetrable content and turn it into words that fit nicely into just about anybody's brain - anybody who's willing to do his part in actually learning one or two things anyway.  You can't expect it to be spoon-fed to ya - because it does, after all, take some effort on the part of the listener.

(Always remember: for every problem that's gnarly and complicated and difficult, there's a solution that's simple and elegant and fucking wrong - are ya paying attention here, wingnuts?)

Paul Krugman:

The dollar is, first of all, a vehicle currency (mainly in the interbank market) thanks to thick markets: if a bank wants to convert bolivars into zlotys, it will generally trade the bolivars for dollars, then the dollars for zlotys, rather than try to find someone wanting to make the reverse trade. It is the currency many though by no means all international transactions are invoiced in. And to some extent people hold dollars or dollar-denominated assets because the dollar is more liquid than other currencies.

Meanwhile, governments trying to prop their currencies up or hold them down often do so with trades against the dollar, even if they’re trying to affect some other exchange rate, again because of those thick markets. Some countries peg to the dollar, although not too many these days. And governments hold dollar-denominated reserves.

I won't pretend I understand the whole thing, but if I take the gist, then I have to look at the wild-eyed panic of "conservatives" running around screeching about the Debt and the Deficit and Fiat Currency and Hyper-Inflation etc, and I just have to wonder what purpose it serves for them to kick up such a fuss.  It's never really about what they say it's about, so what's it about?