"This is kind of a revelation. It means that the special power that the US has in printing dollars is only special in that it can never default on the dollars because it can, in the end, print them for real."
This is true - but it is true of any sovereign currency. The ECB can't default in euro-denominated loans, etc.
The real special power of the US Dollar is that it is the only thing that is accepted to pay US taxes.
No matter what you have and no matter how valuable it is - gold bars, Monets, diamonds, Malibu beachfront - you cannot use it to pay US taxes: you must sell those assets and buy dollars to pay them.
That's not a minor detail or a quirk - that's the point of the whole system.
That is also true of all sovereign currencies, for their own taxes. But not all countries get to borrow their own currency from foreign lenders. Hyperinflation in Germany and Zimbabwe happened because they owed money in other countries' currency.
This is true - but it is true of any sovereign currency. The ECB can't default in euro-denominated loans, etc.
The real special power of the US Dollar is that it is the only thing that is accepted to pay US taxes.
No matter what you have and no matter how valuable it is - gold bars, Monets, diamonds, Malibu beachfront - you cannot use it to pay US taxes: you must sell those assets and buy dollars to pay them.
That's not a minor detail or a quirk - that's the point of the whole system.