[HN Gopher] De-dollarization: Is the US dollar losing its domina...
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De-dollarization: Is the US dollar losing its dominance? (2025)
Author : andsoitis
Score : 542 points
Date : 2026-01-20 16:03 UTC (6 hours ago)
(HTM) web link (www.jpmorgan.com)
(TXT) w3m dump (www.jpmorgan.com)
| jacquesm wrote:
| It's not losing it so much as that it is being destroyed on
| purpose.
| andsoitis wrote:
| The decline has been gradual.
|
| The dollar's portion of global forex reserves has fallen from
| over 70% in the late 1990s to around 60%.
|
| The Supreme Court's ruling on Fed independency is to be
| watched.
| blurbleblurble wrote:
| Gradual isn't nearly profitable enough for some people.
| softwaredoug wrote:
| It may also point not just to decline in US stability but
| other areas of the world with stable monetary policy compared
| to the 90s
| TSiege wrote:
| You're also forgetting BRICs and the EU's efforts to create
| their own banking systems that would make it easier to do
| trade and finances without the dollar as an intermediary. The
| dollar being the reserve currency is going to be come more
| sudden once mass adoption of those platforms takes hold. Who
| can blame them with how the US is behaving
| JumpCrisscross wrote:
| > _BRICs and the EU 's efforts to create their own banking
| systems_
|
| One of these exists. The other is bluster.
| blibble wrote:
| "at first you go bankrupt slowly, then all at once"
| marcosdumay wrote:
| Does your data include 2025? Because it was the only year
| with any international pushback at all, so we shouldn't
| expect the previous trend to stay unperturbed.
| mkoubaa wrote:
| When the debt gets this big and fixed obligations can't be
| changed devaluation becomes the only workable solution. Yet
| it's still robbery.
| quantum_state wrote:
| Would second what you said. Election has consequences. We
| better correct course soon before the country is made bankrupt.
| rvz wrote:
| Always has been.
| nish__ wrote:
| True. Good way to pay employees less.
|
| Edit: to the downvoters, did I lie?
| tclancy wrote:
| You seem to be talking about an alternative universe where
| employers are being paid in a different currency.
| nish__ wrote:
| It's a conspiracy!
| lavezzi wrote:
| It's being destroyed on purpose, with backing from the crypto
| industry who stand to have the most to gain at the expense of
| everyone else.
| 827a wrote:
| The decline has been steady since ~2000.
|
| The US dollar being used less across the world has both
| negative and positive consequences for the US and USG. This is
| the Triffin Dilemma, and dates back to the 1960s; the USD's
| dominance over-values the currency relative to other
| currencies, which hurts exports and thus domestic
| manufacturing. It also conflicts USG/UST priorities between
| making decisions that are best for the US people, versus best
| for international customers of the dollar. Triffin covered this
| at length in his address to the Joint Economic Committee of
| Congress in 1959, but in short, the USD acting as world reserve
| currency creates demand for the dollar, which the US has to be
| able to supply, which pre-1971 meant extreme strain on her gold
| supply, and post-1971 means greater monetary inflation.
| sneak wrote:
| By whom, for what purpose?
| snovymgodym wrote:
| The international value of the dollar as a reserve and trade
| currency is inherently tied to the behavior of the US Government
| and the Federal Reserve.
|
| The behavior of the US Government has been very unusual lately,
| and the independence of the Federal Reserve is actively being
| challenged.
|
| So draw from that whatever conclusions you wish.
| omgJustTest wrote:
| Currencies fundamentally relate to some trust.
|
| I believe that the near-term de-dollarization isn't as much
| trust erosion as it is a tool to provide monetary penalty for
| behaving in unpredictable ways.
|
| However it will provide incentive to move away from the dollar
| in the long-term, ie as Fareed Zakaria says "recent actions are
| accelerating the world to the multipolar future".
| tigerlily wrote:
| Multipolar? So kind of like Europe before the beginning of
| World War 1, with major powers all competing with each other?
| Espressosaurus wrote:
| Yes, though I expect there to be a European block, the US,
| and a Chinese block. Russia there as a wildcard. I doubt we
| see Germany in competition with Britain.
| kspacewalk2 wrote:
| Russia firmly in that second tier along with better
| behaved peers that have brighter demographic futures and
| an actual economy, like India, Indonesia and Brazil.
| jacquesm wrote:
| Russia is self destructing as we speak.
| holoduke wrote:
| As far as I can see they have a massive uprise in
| industrial capacity and reformation in general. People
| underestimate countries in war.
| schmidtleonard wrote:
| The trouble with thinking in terms of blocs is that they
| don't solve the foundational economic problem: who is the
| sin-eater who is trusted and willing to run the deficits
| so that everyone else can run surpluses? Without a clear
| answer, you just have the same question repeated within
| and between blocs, so the same beggar-thy-neighbor
| incentives that exist without blocs exist within and
| between blocs, so the fighting continues within and
| between blocs until the question is answered. Blocs don't
| solve the problem at all.
| kledru wrote:
| "world of fortresses" -- Carney today.
| schmidtleonard wrote:
| The interwar era between WWI and WWII is most instructive
| for what a multipolar currency world looks like. The Pound
| Sterling still mostly worked before WWI and the Dollar rose
| in the wake of WWII.
|
| The absence of a currency hegemon caused "Kindleberger
| problems," named after the economist who described them,
| and will cause them again. The big issue is that everyone
| wants to pump exports to pump their real economy, they
| can't all succeed because the world is a closed system, so
| they fight. First with tariffs, eventually with guns.
|
| These Kindleberger Problems will get worse until the US
| gets its shit back together or China assumes the throne.
| Note that assuming the throne will destroy the export
| sector that they love so much (Triffin Dilemma), so not
| only are they not ready today, they don't even clearly want
| to be ready. Much like the US between WWI and WWII.
|
| Buckle up, because the tariff wars, Great Depression, the
| economic driving force for the imperialism of Imperial
| Japan, and other awful things that you've heard of before
| all fall in the category of "Kindleberger Problems," are
| all downstream of not having a global currency hegemon, and
| are likely to rhyme with what comes next.
| omgJustTest wrote:
| This is a complicated and evolving subject that probably
| isn't well described in a comment, wiki has a good article
| https://en.wikipedia.org/wiki/Polarity_(international_relat
| i...
| dbuxton wrote:
| > I believe that the near-term de-dollarization isn't as much
| trust erosion as it is a tool to provide monetary penalty for
| behaving in unpredictable ways.
|
| How is that different from trust erosion?
| andix wrote:
| The difference is emotionally based retaliation vs.
| reassessing risk. And it's about money, so it's for sure
| not about emotions. The financial world isn't run on anger
| and emotions, like the White House.
| salawat wrote:
| Finance is run on two emotions. Greed/avarice and fear.
| Three if you count confidence/trust.
|
| Finance is as rational under the hood as the Vatican's
| books.
| omgJustTest wrote:
| Monetary penalties are different from trust erosion in that
| they are the test of whether trust can be restored, ie you
| are acting very unpredictable => I am going to show you I'm
| paying attention and hit you with a penalty and watch your
| response. If you continue to show you are unpredictable =>
| I plan an exit so that I don't _have_ to trust you, ie
| trust erosion.
|
| Ultimately if there's too much unpredictable behavior the
| pain endured will become higher than the pain of eroding
| trust... which if trust was truly eroding would be signaled
| by establishment of monetary systems independent of the US,
| probably with the International Monetary Fund as a base,
| backed by at least India, China & Europe.
| andix wrote:
| > I believe that the near-term de-dollarization isn't as much
| trust erosion as it is a tool to provide monetary penalty for
| behaving in unpredictable ways.
|
| Sure, everyone else is also acting based on childish emotions
| now, not just the US president. It's not about retaliation at
| all, it's about reducing suddenly very imminent risks.
| seanhunter wrote:
| > Currencies fundamentally relate to some trust.
|
| A quant partner at Goldman said to me once that the thing
| that's different about currencies relative other normal
| financial products is whereas you might buy JPMC or oil or a
| bond because you like JP Morgan or oil or think rates are
| going to move in a particular direction or whatever whatever,
| you never just buy the dollar. You are always trading one
| currency for another eg selling GBP to buy USD. What that
| means is currencies are always about the value of one
| currency relative to other currencies.
|
| In that sense they do fundamentally relate to trust and in
| particular specifically in this case about trust of the US
| economy and financial system's stability as opposed to other
| economies and financial systems.
|
| So there have been times (eg during the financial crisis)
| where people think all currencies are bad but you can't just
| sell all of them so typically they would sell the other ones
| for dollars. For me, de-dollarization is about the choice of
| central reserve banks to hold dollar assets but also about
| other financial players changing their "default currency
| denominator" when they're doing this kind of trade.
| softwaredoug wrote:
| It's not just that
|
| This is a gradual decline. From 70% in the 90s to 60% today.
| Today there are more options like the Euro that didn't exist in
| the 90s. People can argue over EU economic stability, but it's
| there as reasonable option.
| munk-a wrote:
| There is a very sudden shift though - those options have
| existed but not generally been seriously considered. The US
| was seen as a bastion of stability and while sanctions could
| drastically impact a country's ability to trade due to the
| reliance on US currency exchange it has arguably been used
| relatively scarcely.
|
| The change is that suddenly the US isn't a bastion of
| stability and having an independent trading currency could
| ensure more internal stability for other nations.
| chrisco255 wrote:
| The U.S. is as stable as it gets. It has been one
| continuous republic and has 250 years of legal stability
| and a history of paying its debts. It has 4.2% GDP growth,
| with the largest economy in the world and growing.
| Spooky23 wrote:
| "Faith and credit" means trust, and there's an elephant
| in the room impacting trust. Worse, what comes next?
| RealityVoid wrote:
| > The U.S. is as stable as it gets
|
| Past returns are not indicative of future performance
| throwaway888666 wrote:
| I am pretty sure the US has not 4.2 percent growth
|
| Source?
|
| I live in the US and I have lived in countries with 4-5
| gdp growth
| mschuster91 wrote:
| They are likely referring to Q3/25 numbers [1].
|
| The problem is the AI bubble, without it it is speculated
| that the US economy might actually be in a recession [2]
| - effectively, that web of investments, deals,
| ownerships, purchase contracts and god knows what is
| nothing more than wash trading that _will_ come crashing
| down hard.
|
| That is why for the 99%, the economy doesn't "feel" like
| 4.3% of growth. If you're not in AI directly or at least
| adjacent (e.g. datacenter or utility construction), you
| don't feel any of that money.
|
| [1] https://tradingeconomics.com/united-states/gdp-growth
|
| [2] https://www.cnbc.com/2025/10/14/ai-infrastructure-
| boom-masks...
| missedthecue wrote:
| The latest US GDP print is the Q3 2025 Initial Estimate,
| showing real GDP grew at a 4.3% annual rate
|
| https://www.nbcnews.com/business/economy/us-economy-grew-
| thi...
| dukeyukey wrote:
| That is an annualised figure, which means they took the
| Q3 figure by itself and multiplied it by 4. US annualised
| growth in Q1 would've been -2%.
|
| Between Q1/2/3, US growth has been about 1.6%.
|
| Wait until the whole year figures come out.
| jacquesm wrote:
| And you have to wonder: if they do come out, are they
| truthful or are they fabricated.
| WarmWash wrote:
| Holiday spending was up 6.8% YoY and the highest spending
| on record. About 67% of GDP comes from consumer spending.
|
| It's very unlikely the US doesn't have strong GDP numbers
| for 2025.
|
| K-shaped economy and all that
| DowsingSpoon wrote:
| There more to stability than continuity of government.
| Though, that definitely is important.
|
| It's bad enough that America's foreign policy lately
| swings wildly every four years. More recently, it's been
| acting aggressive toward allies, and making very strange
| and unpredictable moves.
|
| The USA's tariff policies are, frankly, utterly insane.
| Yes, I do mean the tariffs are irrational and incoherent.
| The approach to the tariffs has been overly aggressive.
| They've been changing almost daily, at times. Now,
| tariffs are specifically a thing that must be stable and
| predictable on a multi-year horizon. This must be, at
| least, off-putting to other governments, and to any
| companies wishing to do business in or adjacent to the
| USA.
|
| Monkeying with the Fed is dangerous and basically
| unprecedented. This is going to make people nervous
| because it marks the end of an era of stability in
| monetary policy. We may be at the start of a new era
| where interest rates, much like the tariffs, change
| frequently for bad reasons or for no reason at all. Who
| can say?
|
| And THAT is the problem.
| nubg wrote:
| Why is this getting downvoted? Everything said here is
| true.
| pbhjpbhj wrote:
| Your ruler is no longer following the rules of law, nor
| the foundational constitution. USA ended with their
| declaration of dictatorship and the failure of your
| houses/legislature/military to act against that and
| defend the Constitution.
|
| I can't see how, since the end of _habeas corpus_ , you
| can claim legal stability.
|
| Your leader is World renowned for reneging on debts and
| is demanding bribes for companies to operate.
|
| Isn't borrowing through the roof to pay for things like
| your stasi?
|
| Daily those stasi are murdering and disappearing people
| seemingly attempting to foment an excuse to escalate the
| violence.
|
| I don't know how that knife edge can look anything like
| stable to you.
| nubg wrote:
| Why is this getting downvoted?
| RealityVoid wrote:
| My money is that influence campaigns are active on HN and
| try to mold the discourse. The whole internet is
| manipulated to hell, and HN is a prime target, you have a
| bunch of smart people that probably have oversized
| influence, how could you NOT try manipulating this place?
| microtonal wrote:
| This is most certainly happening. A lot of US-critical
| articles also get flagged to death, even when they have a
| lot of upvotes and healthy, civilized discussion.
| ahmeneeroe-v2 wrote:
| Yes to manipulation.
|
| But also it asserts factually a lot that isn't true,
| which is why I downvoted.
| jacquesm wrote:
| Because it makes people uncomfortable.
| spookie wrote:
| Mostly an US audience here. A deeply divided country on
| politics. The wording doesn't help matters either.
|
| It's unfortunate the same division tactics the US has
| been facing are working elsewhere too, however.
| microtonal wrote:
| _Mostly an US audience here._
|
| I don't think _mostly_ is true? Obviously it depends a
| lot on the time of day, but there are also a lot of
| Europeans on the site. Also, most comments here seem to
| be critical towards current US policy. So, I think there
| is quite a lot of manipulation going on, since the
| downvoting /flagging does not really match the comment
| section.
| munk-a wrote:
| I think it's true. There is a significant audience here
| from other areas but this being an english language forum
| and one focused on tech means that the US is always going
| to have a dominant presence[1]. The US dominance also
| means that the news is highly focused on US events when
| it wanders out of tech which further reinforced the
| audience.
|
| 1. I believe Canada does have an outsized presence
| though!
| microtonal wrote:
| From dang themselves:
| https://news.ycombinator.com/item?id=16633521
|
| So, 32-56% US, so not _mostly US_.
| 9x39 wrote:
| It's hysteria in the addictive, viral, breathless, and
| self-indulgent social media flavor that permeates
| everything.
|
| The excitement being blown out of proportion is
| hyperlocal. The system grinds on.
| apublicfrog wrote:
| It's a very grandoise (or alarmist, depending on your
| perspective), but this isn't super new. The US has been
| "unstable" with rulers breaking their own laws
| domestically and internationally for many decades.
| tmountain wrote:
| The U.S. chose to abandon the rules based international
| order that has made it a bastion of stability since WW2
| when they decided they wanted a return to the monroe
| doctrine and that it was okay to arbitrarily invade
| countries and take their resources based on the impulses
| of a single person. The same person outwardly stated,
| "Considering your Country decided not to give me the
| Nobel Peace Prize for having stopped 8 Wars PLUS, I no
| longer feel an obligation to think purely of Peace". If
| you think this is "as stable as it gets", then we're
| living on different planets.
| kmeisthax wrote:
| > 250 years of legal stability
|
| America was never a stable country. That 250 years
| includes:
|
| * A decade of chaos under the impotent Articles of
| Confederation.
|
| * The deliberately engineered election of George
| Washington to create the illusion of political stability,
| a reign which only ended because George stepped down
| voluntarily.
|
| * An immediate constitutional crisis the moment a
| competitive election happened, causing the election of a
| President and Vice President from opposing political
| parties (imagine a Harris - Trump presidency). The
| ensuing chaos resulted in SCOTUS unilaterally declaring
| itself the final arbiter of the law.
|
| * The Thomas Jefferson presidency, which in many ways is
| the alpha release of Trump.
|
| * The Civil War, started specifically because the losing
| faction of slaveholders was angry at losing, and ending
| with the losing faction losing so hard the counter rolled
| back into flawless victory. They surrendered, then
| assassinated the President and got his party to give up
| on everything he stood for.
|
| * Economy-destroying Smoot-Hawley tariffs, which are
| basically what Trump is doing now.
|
| * A _spectacular_ near-miss in which the country 's
| business elites attempted to assassinate a Progressive
| president and only failed because the Marine they
| selected as their Hitleresque dictator ratted them out.
|
| * Widespread civil unrest deliberately created to force
| America to reckon with its racist past and undo what the
| South had managed to convince the North to allow them to
| do after Reconstruction.
|
| * The Richard Nixon presidency, which in many ways is the
| beta release of Trump.
|
| * Too many foreign invasions to count.
|
| In the entire history of America I can think of maybe 3
| brief moments of political stability that weren't
| outright engineered fantasies. The two that are relevant
| to modern times are the 1950s and the 1990s. Both of
| these were the result of America winning a war of
| conquest.
| pizlonator wrote:
| That's not as bad as what a lot of nations have dealt
| with
|
| Consider the turbulence that China experienced over the
| same 250 years, for example
| ahmeneeroe-v2 wrote:
| Really love this, seriously great analysis (even though
| I'd quibble on a few points).
|
| Stability is a relative thing though. It's hard to judge
| this except in relation to what other countries were
| doing.
|
| >Various Euro nations
|
| _Suicided in 1900s and destroyed everything they built
|
| >China
|
| _Collapse, civil war, famine, poverty
|
| *pretty good for ~30 years
| tirant wrote:
| For 250 years that sounds very stable compared to many
| other countries
| parsimo2010 wrote:
| As time goes on, fewer people are alive that predate the EU
| and more people will perceive it as a lasting institution.
|
| Additionally, we've now seen the EU survive the departure of
| a major economic power (the UK). More people are certainly
| willing to believe in the stability of the EU now.
|
| Another major currency is the Yuan, and some countries may be
| as willing to trade in Yuan to improve relations with China,
| so perhaps we won't see one single reserve currency but two
| spheres of influence with most countries maintaining reserves
| of multiple currencies.
| selectodude wrote:
| The major benefit of the US Dollar is that you can do
| things with it. Between export controls, currency controls,
| laws on foreign ownership, etc, china can pay me all the
| RMB in the world. I still can't do a whole lot with it.
| parsimo2010 wrote:
| This is part of the same reason many people don't use
| Bitcoin- you can't actually do much with it because
| retailers don't accept it. But China is definitely
| thinking about how to fix that problem, and soon they
| will make it possible to pay directly in CNY in other
| countries. Once you can buy things with it, the CNY is
| attractive from a practical perspective. A lot of your
| stuff is already manufactured in China, once/if using CNY
| makes your purchase easier then it's going to gain ground
| on the USD.
|
| https://www.atlanticcouncil.org/blogs/econographics/what-
| to-...
| mothballed wrote:
| Retailers don't accept crypto not because of the
| technology so much as the fact it is a capital gains
| event every time you transfer crypto, which means both
| the buyer and seller are now forced to keep a log of
| their gains/losses against the dollar everytime they buy
| a pack of gum.
|
| Obviously that's extremely impractical and at best you're
| hiring a 3rd party to streamline that for you. It's a
| clusterfuck at tax time (edit: stable coin doesn't help
| here -- you must still report gains on stable coins as it
| is still a $0 capital gain which is different than no
| capital gain).
|
| Retailers already dealing with capital gains and with
| high chargeback rates love it though. For instance, it's
| usually the cheapest same-day clearing way to buy
| precious metals online since credit card rates are high
| (chargeback), ACH takes days, and wires tend to cost $15+
| with many banks.
| linkregister wrote:
| Reticence among retailers predates the capital gains
| policy of the IRS. The volatility of Bitcoin's value
| induces excessive exchange risk. However, we don't see
| capital gains nor exchange risk with stablecoins. I
| assume that network effects are insufficient to drive
| retail demand for stablecoin support.
| buckle8017 wrote:
| > Reticence among retailers predates the capital gains
| policy of the IRS. The volatility of Bitcoin's value
| induces excessive
|
| The IRS policy is irrelevant, the law always required
| payment of capital gains. It's consistently been the
| hardest thing about accepting Bitcoin for payment.
|
| Foreign currency payments are largely exempted.
| jermaustin1 wrote:
| The volatility of bitcoin is why there is capital gains
| on every trade, it has nothing to do with the IRS's new
| crypto policy.
|
| If a bitcoin rises or falls by a calculable amount
| between when you received it vs when you spent a portion
| of it, you have gains/losses. That has always been
| required by the IRS to be reported, whether that is a BTC
| or chicken feathers.
| Sargos wrote:
| You do not need to report a $0 capital gain when using
| stablecoins. Sure crypto can seem like the wild West with
| CPAs having different opinions on what little official
| guidance is out there but that one is simply absurd.
| mothballed wrote:
| CPA Miles Brooks claims you do[] You are
| required to report capital gains and losses from
| stablecoins on your tax return (though it's likely that
| your gain will be close to 0).
|
| [] https://coinledger.io/blog/stablecoin-taxes
| selectodude wrote:
| Paying Chinese companies in RMB isn't the issue. If I
| sell something and a Chinese company pays me in RMB, I
| can't really do anything with a billion yuan. Can't buy a
| company (limitations on foreign ownership), can't buy
| property (99-year lease that can be canceled on the whims
| of the government at any time), can't buy Chinese debt
| (terrible yields, very small foreign market access,
| incredibly opaque laws and accounting), and nobody else
| in the world wants it so I have no choice but to sell it
| back to China in exchange for a real currency at whatever
| horseshit exchange rate they've concocted.
|
| It's worthless money and I don't see anything out of
| china that would cause that to change.
| mullingitover wrote:
| > Can't buy a company (limitations on foreign ownership)
|
| This is quickly going away[1].
|
| [1] https://www.nortonrosefulbright.com/en/knowledge/publ
| ication...
| jama211 wrote:
| I mean, you can buy goods and services within china, and
| you can sell those goods and services. The "horseshit"
| exchange rate can't deviate too far from the real value
| or it incentivises laundering too much. The exchange rate
| isn't _that_ bad as a result.
| throw310822 wrote:
| I guess this is naive, but can't you use it to buy (or
| sell it to people who want to buy) Chinese products? It's
| not like China doesn't have an enormous amount and range
| of products on offer.
| KaiserPro wrote:
| Thats a feature not a bug.
|
| The Chinese government spend a lot of money keeping the
| value of the RMB low.
| irishcoffee wrote:
| This is actually an interesting point. Wouldn't it be bad
| for China if the US isn't the reserve currency/the RMB
| gains a lot more in value relative to the USD? It would
| proportionally, negatively, affect their export profits,
| no?
| qwytw wrote:
| Germany did relatively fine though? Despite the German
| mark being the second largest reserve currency and their
| economy being heavily reliant on exports.
| HWR_14 wrote:
| What about buying rare earth metals or containers of
| electronics or purses? It's a bit more work, but it's not
| impossible to solve the problem.
|
| Also, it's not like a 99-year lease has no value. That's
| your entire lifetime+.
| woodruffw wrote:
| I think OP's point is that a "99 year lease" isn't worth
| very much without a firm guarantee that the least _in
| fact_ lasts that long. I don 't really have an opinion on
| land leases in the PRC, but it doesn't seem facially
| unreasonable to suspect that a foreign lease holder's
| land value wouldn't be a priority for China's leadership
| during an economic crisis.
| XorNot wrote:
| This is on full display with the US's Venezuela problem:
| no one believes the US will hold it, so oil companies
| don't want to invest because last time exactly this
| happened - they had everything seized.
|
| Imagine if you'd invested in lithium mining in
| Afghanistan 15 years ago: you'd likely have paid a lot,
| made little money, lost employees and then lost it to the
| Taliban.
| terminalshort wrote:
| Because if I am running a business I just want to be paid
| in money that I can pay my bills in. I don't want to have
| the additional task of managing rare earths and
| electronics inventory. That's not "a bit more work." It's
| running an entirely different business that I don't know
| how to run.
| kevinak wrote:
| Funnily enough you can use Bitcoin at most merchants that
| use a Square PoS device, which is like 25% of merchants
| in the US. It just takes time for folks to change their
| behaviors. And why would they, if they're getting X%
| cashback on all purchases using their credit cards?
| slongfield wrote:
| The other thing about Bitcoin is that it's deflationary,
| which leads to people holding the currency rather than
| spending it, as predicted by Econ 101.
| throwaway7644 wrote:
| We've witness deflationary forces in computer hw for
| decades and no one is holding off their purchases. Time
| is scarce and it ultimately forces consumption because
| otherwise, what would you be saving for?
|
| Don't need Econ 101 to understand this basic reality.
| XorNot wrote:
| Computer hardware actually does things - it is an
| economic value producer.
|
| Bitcoin is an economic value consumer just to hold it. It
| does nothing if you have it.
| qwytw wrote:
| Well there is a difference between people not buying
| anything at all and being significantly less than they
| are now. Consumer goods and services is only the tip of
| the iceberg.
|
| How much do you think debt would cost and how easy would
| it be for businesses to get credit?
|
| Combining a deflationary currency with a growing (or at
| least non static) economy is bad a everyone who has a
| basic understanding of history prior to the 1930s can see
| that. Something like bitcoin would be even much worse
| than the gold standard.
| throwaway7644 wrote:
| You're forcing business to produce something valuable in
| real terms instead of nominal terms and you're making
| that calculation easier to do for economic actors because
| the measuring stick is now controlled by an algorithm as
| opposed to charlatans.
|
| Having less of that garbage fiat short-termism is a good
| thing for society.
| qwytw wrote:
| > Having less of that garbage fiat short-termism
|
| Yet having more of endless boom and bust cycles with
| major economic depressions lasting for years (outcomes of
| the gold standard was a good idea).
|
| > You're forcing business to produce something valuable
| in real terms instead of nominal terms
|
| I don't quite understand what does that mean. Pricing
| goods in oil or grain? (coincidentally either of which
| would function better as a currency than bitcoin).
| tayo42 wrote:
| Don't we already pay in foreign currency? I do this
| online with foreign websites and credit cards.
| fakedang wrote:
| You can buy with RMB in a lot of countries outside the
| West, if they have integrated UnionPay or AliPay into
| their payment processors.
|
| But more importantly, you can buy a lot of stuff from the
| factory of the world. Which is why a lot of countries
| don't mind holding the RMB. Just not enough for it to
| become a reserve currency, and certainly no one wants it
| to become the petroyuan.
| Beretta_Vexee wrote:
| It's more of a payment processor issue than a device
| issue.
|
| If you are in a country or area with a large Chinese
| population, you can usually pay easily in RMB with
| Alipay.
|
| If you use Visa and Mastercard, you are subject to US
| regulations, sanctions, and embargoes. Many alternative
| payment processor exist, PIX in Brazil, UPI in India,
| etc.
|
| There are several systems in the EU: Wero, Bizum, BLIK It
| is urgent that Europeans coordinate to ensure the
| interoperability of these systems and reduce the
| influence of Visa and Mastercard.
|
| In the event of conflict, this will be the first service
| to be cut in order to disrupt European countries.
|
| The US already use it for coercing European politicians :
| https://www.courthousenews.com/eu-strongly-condemns-us-
| sanct...
| tdrz wrote:
| An integrated European payments system should be very
| high up on the priorities list of the European Commision.
| I believe every EU country already has its own version of
| a QR code payment, I don't know why can't they connect
| "easily" connect them.
| Beretta_Vexee wrote:
| It's complicated, there are two types of applications and
| networks.
|
| 1) Direct payment systems via mobile phone, generally
| designed initially for payments between friends and
| family. They have been set up in several countries by
| neobanks, generally based on the Mastercard network (very
| common among neobanks). A Latvian neobank may expand into
| the Baltic countries, but is unlikely to succeed in
| Portugal. These systems are not interoperable with each
| other.
|
| 2) Systems promoted by banking networks, such as Bizum in
| Spain, which has expanded to the Iberian Peninsula, and
| Wero, which is supported by BNP Paribas (France, Belgium,
| Germany). These networks are independent of Mastercard,
| Visa, etc., but they seek to favor their members and do
| not seek to become widespread.
|
| Discussions have been ongoing for years to achieve
| interoperability. The idea for the moment was to let the
| market structure itself naturally without too much
| intervention, other than to say "we must move towards
| interoperability at the European level." This approach
| has worked very well for bank transfers, which have
| become simple, fast, and relatively secure, but it has
| taken a long time (Europe, consensus, etc.).
| evertheylen wrote:
| Here in Belgium I have the impression there's steady
| progress towards such a system: https://wero-wallet.eu
| parsimo2010 wrote:
| And to add on (rather than edit my comment), I think the
| saving grace that keeps USD around for a while longer is
| the last section of the article, "Deposit dollarization in
| emerging markets"
|
| A lot of growing economies don't/can't trust their local
| currency and they overwhelmingly use USD instead of EUR or
| CNY. As those economies grow the USD gets a boost that will
| sustain it for a while over the increasing competition of
| CNY. But this can't sustain it forever and the US is not
| doing anything to offset the lost ground in global trade
| and forex reserves.
| lostlogin wrote:
| > Additionally, we've now seen the EU survive the departure
| of a major economic power (the UK).
|
| I don't really understand the impact of Brexit on the euro,
| as Britain wasn't on it. But clearly they were a key part
| of the EU. It'll be interesting to see which side regrets
| the move more.
| pavlov wrote:
| The answer is already clear: Britain regrets the move
| more.
|
| In June 2025, 56% of people in Great Britain thought it
| was the wrong decision:
|
| https://www.statista.com/statistics/987347/brexit-
| opinion-po...
|
| It's hard to imagine this number would be going down
| after recent events like USA suddenly threatening
| arbitrary new tariffs on the UK.
| Winblows11 wrote:
| But only 56% in a poll? Is that enough for another
| referendum and guarantee rejoin? EU politicians have made
| it clear, ALL UK opt-outs will be gone if UK rejoins,
| whether it is UK opt-out regarding budget (like paying
| billions less in annual EU fees like UK did before), to
| special fishing rights pre-Brexit, to forced to adopt
| Euro currency and drop Pound sterling.
| tialaramex wrote:
| Rejoining is seen as politically too risky in the short
| term. As you observe, the UK would not get back its
| privileged position, there are probably some bargains to
| be struck but a track to the Euro currency is almost
| certainly mandatory and that'd be unpopular because
| people really like our banknotes for some reason and the
| Euro deliberately just looks like play money, the
| illustrations deliberately don't show real structures to
| avoid associations with the nations where those things
| were built.
|
| But while "Leaving was a bad idea" isn't enough to
| seriously push for actual re-entry to the EU it's
| certainly a good sign _for_ the EU and for the Euro. The
| EU is a massive bureaucracy, and I think we
| underestimated how much "a massive bureaucracy" might be
| the thing we wanted in this role..
| rdtsc wrote:
| > Rejoining is seen as politically too risky in the short
| term. As you observe, the UK would not get back its
| privileged position,
|
| Just curious, what privileges did it have? I can think of
| keeping it currency only.
| Macha wrote:
| Opt outs for Schengen, the Euro, all police and justice
| policies, and the charter of fundamental rights
| pavlov wrote:
| Also a multi-billion pound rebate on what Britain
| contributed to the EU budget. Thatcher negotiated it in
| 1984 and it's never coming back.
| garblegarble wrote:
| >In June 2025, 56% of people in Great Britain thought it
| was the wrong decision
|
| It's not so clear when you consider that 48.1% of the
| original referendum voters wanted to stay in the EU. I'm
| honestly very surprised by this poll, 8% change is pretty
| minimal considering the turmoil the country has gone
| through since 2016.
|
| How much of this can be explained by older voters dying
| in the intervening 10 years, I recall that demographic
| skewed much more heavily Leave in 2016
| lostlogin wrote:
| Half the issue is the definition of 'voter'. Turn-out is
| abysmal and polling has been crap in major ways. Calling
| someone eligible to vote a 'voter' is probably only right
| 50-60% of the time.
|
| https://commonslibrary.parliament.uk/general-
| election-2024-t...
| rdtsc wrote:
| > In June 2025, 56% of people in Great Britain thought it
| was the wrong decision:
|
| How many thought it was the right decision at the time?
|
| https://en.wikipedia.org/wiki/2016_United_Kingdom_Europea
| n_U...
|
| Remain was 48% so it's actually not that large of a swing
| in total. It's not like it was 5% remain and now it would
| be 56% or something.
|
| But it does indicate if the referendum was taking place
| today it might swing the other way.
| lostlogin wrote:
| Note the turn out too. 72% isn't great for a major change
| like this. The non-voters would easily swing it either
| way as a landslide.
| rdtsc wrote:
| Agree, that's a good point. Perhaps many who would have
| voted remain just didn't think it was a chance it would
| pass so sort of stayed home because of that.
| lostlogin wrote:
| I was there about 8-10 years ago and again for a few
| weeks just recently.
|
| Perception is hard to measure objectively, but the UK
| does not feel like it's on an upswing when compared to
| last time I was there.
| tick_tock_tick wrote:
| That's crazy it's not even moved 10% from the vote guess
| by and large people are pretty happy with their vote.
| GnarfGnarf wrote:
| The UK was not part of the Euro economy.
| cjejfjdj482858 wrote:
| While similar to Denmark and Sweden it retained its own
| currency, and was also not part of Schengen, It was part
| of the Single Market.
| ViewTrick1002 wrote:
| Sweden does not have an opt out for the euro.
|
| Sweden just haven't completed the stabilization and
| alignment criteria to formally switch over, arguing that
| it is voluntary.
|
| We had a referendum on the euro back 2003 with a clear
| mandate to not adopt it and the politicians don't want to
| poke the sleeping tiger that is the euro question.
| jacquesm wrote:
| It is not counted as such but it is very much tied to it
| and for the most part goes up and down with the Euro
| economy barring some own goals.
| dnautics wrote:
| the yuan has major currency controls. there is a real
| threat of capital flight destabilization if policies change
| which is why nobody sane would peg tp the yuan as it is
| now. that said, countries definitely make bad choices.
| Y_Y wrote:
| The IMF seem to think it's good enough to peg their
| special not-a-currency currency to.
|
| https://www.imf.org/en/topics/special-drawing-right
| linkregister wrote:
| All IMF participating states have allocations of SDRs. By
| your definition, the IMF is "pegged" to the currency of
| Afghanistan.
| spookie wrote:
| The euro has been gaining ground ever since the financial
| crisis in terms of share of currencies held in global
| foreign exchange reserves. Less than a third of the US
| dollar, but still a distant second. Nevertheless, I'm still
| concerned about the Russian invasion of Ukraine, and how
| intertwined the EU economy is to countries which it has
| shaky relations with at best.
| pendenthistory wrote:
| Interestingly, there seems to be more good will and amiable
| vibes between EU nationalities than within the US even.
| Even being enemies for a thousand years, I don't doubt that
| Swedish and Danish men would go to war for one another, or
| French and German. It's complicated yes, but the continent
| is more unified in spirit than it may seem to an outsider.
| lpcvoid wrote:
| German here: I'd go to war (and likely will, with how
| it's looking currently) for any country that shares our
| values and is an ally or friend, that's being attacked by
| an evil force such as russia. And that of course includes
| my french brothers to the west.
| samiv wrote:
| Finnish reservist here in Germany. Ready to go. Prost!
| cft wrote:
| American expat here in Spain. I do 11 pull-ups every two
| days and run 7 miles uphill. Ready to go! Salud!
| samiv wrote:
| See you on the battlefield.
| card_zero wrote:
| Rarely have prime numbers been so macho.
| lpcvoid wrote:
| Prost, my friend. May we never have to meet.
| comonoid wrote:
| ... such as usa?
| lpcvoid wrote:
| I have many moral problems with that scenario. I used to
| live in the US a long time ago. The US is sick; there's a
| mad king at the top who doesn't have the well being of
| the nation in his interest, and he is driving the world
| towards war with every passing day while dividing his own
| people. War with the US isn't a clear cut "good vs evil"
| situation as the EU vs russia would be, it would be a
| utter tragedy, not wanted by neither the populace of the
| EU, nor the US.
|
| That said, yes, I would defend Europe against the US,
| even though I think that fight would be short, deadly and
| decisive if it really came down to it.
|
| What a fucked up world we live in, just because idiots
| voted for a convicted felon.
| jyounker wrote:
| The rot is much deeper. Donald Trump was impeached twice,
| and both times the Republicans voted to acquit him.
| gowld wrote:
| I don't know why you believe that a decades-long strict
| dictatorship like Russia has more democratic support for
| its "evil" government than a country whose leader was
| elected just 1 year ago with approximately 50% of the
| vote.
| lpcvoid wrote:
| Russians are lining up to go to war under the promise of
| money, around 30k a month last time I checked. Americans
| not so much, in particular not against Europeans. It's
| different in my view.
| ubertaco wrote:
| As an American, a sizable number of Americans are lining
| up to join ICE under the promise of money.
|
| And also, our whole military recruitment strategy here
| outside of drafts has been "the GI bill" - paid tuition
| in exchange for lining up to go to war.
|
| I don't know that the gap in morals is as wide as you
| think.
| mothballed wrote:
| Americans don't need money to fight. I was paid $0 with
| the YPG and had to bankroll my own time. Lots of
| Americans there. I met a lot of them that didn't even
| really give a shit about the sides of the war, they just
| needed to fight something. We're a savage people.
|
| Which historically has worked more for us, than against
| us.
| lpcvoid wrote:
| But is it 30k people a month, for years on end (or rather
| 75k considering US population is around 2.5x the size of
| russias population)?
|
| Russians are much, much worse than Americans in terms of
| their eagerness to kill others, in my opinion. I wish it
| were not so.
| yodsanklai wrote:
| > War with the US isn't a clear cut "good vs evil"
| situation as the EU vs russia would be
|
| I don't think EU vs Russia would be a "good vs evil"
| situation. Russia/US seem pretty similar to me,
| dictatorship/propaganda with a majority of the population
| being regular people not in favor of any war, and 30% of
| indoctrinated people.
| watwut wrote:
| Russians were and are pro war by all reports.
| yodsanklai wrote:
| not my Russians friends or colleagues. I also don't trust
| any poll coming from Russia.
| nkmnz wrote:
| You seem to have very little contact to Russians living
| in Russia or Germany. Their version of "not in favor of
| any war" is a very strange one - it's more a stance of
| indifference than disfavor.
| blell wrote:
| Spanish here: I wouldn't go to war even for my own
| country, imagine for the likes of France or Germany.
| lpcvoid wrote:
| 80 years ago we were the bad guys, and far more brave
| people than me, from other countries, stepped up to curb
| the evil. This time us Germans need to be on the right
| side.
| ahmeneeroe-v2 wrote:
| Enjoy extinction!
| modzu wrote:
| most humans share the same core values. values
| antithetical to war.
| yodsanklai wrote:
| Thanks German brother :) I think our main issue in Europe
| is the lack of a common language. It makes it harder to
| build strong ties and realize how close our values are.
| ffsm8 wrote:
| Agreed, there is always this little story to remind us of
| our unity - at least from the perspective of the
| draftees/workers back in ww1, where everyone was
| basically forced to fight each other by the elites
|
| https://en.wikipedia.org/wiki/Christmas_truce
| lpcvoid wrote:
| Which is why I long for the day where a European
| federation supersedes the weak and fragmented national
| states we have now.
|
| Adopting English as legal secondary language in every EU
| member state would maybe be a good first step.
| blackoil wrote:
| Vat hapened tu ze komon English I got mail abaut 20 yers
| ago?
| coryrc wrote:
| Are you posting from Ukraine?
| ahmeneeroe-v2 wrote:
| That's pretty caveated. Not exactly a ringing war cry
|
| Shares values AND Ally AND Being attacked AND Attacker is
| evil
|
| I think you'll continue to be safe posting on HN
| lpcvoid wrote:
| People place individual, stringent conditions on life
| threatening responses? Keep going, you're on to something
| there.
| ahmeneeroe-v2 wrote:
| Very funny you got me there.
|
| I think you'll find that threats of violence (which is
| what your comment is) need to be much more unhinged to be
| effective deterrents. Remember you're warning off
| barbarians (eg us Americans or the Russians), not
| civilized folk.
| Saline9515 wrote:
| You should define what "our values" is when making such
| bold statements.
| lpcvoid wrote:
| Freedom of speech, democratically elected
| representatives, protection of minorities, religious
| freedom, to name a few.
|
| I can already hear people storming out of the woods,
| ready to write how the EU itself is undemocratic, or how
| free speech isn't real in western European countries. I
| disagree with you.
| jll29 wrote:
| The great minds that - after WWII - built the new Europe
| had in mind that there should never be war again, which
| is best realized when former enemies become friends and
| closer bonds are established at multiple levels:
| politically, economically, culturally (unions, trading
| exchanges, visits/open borders/teaching common European
| values in schools).
|
| There is a strong political and cultural foundation in
| geographic Europe for the political EU: some exemplary
| giants/EU co-architects:
|
| Jean Monnet/Robert Schuman
|
| European Coal and Steel Community (ECSC) Schuman
| Declaration (1950) [It is only right that the R. Schuman
| Roundabout
| https://en.wikipedia.org/wiki/Robert_Schuman_Roundabout
| Rue houses the European quarter in Brussels.]
|
| Konrad Adenauer
|
| Promoted reconciliation with France pro-European
|
| Alcide De Gasperi
|
| Integrated Italy into Western Europe Advocated
| supranational institutions
|
| Paul-Henri Spaak
|
| institutional designer, key role in the Treaties of Rome
| (1957) helped design the European Economic Community
| (EEC) Advocated supranational institutions
|
| Walter Hallstein
|
| 1st President, European Commission. Built EC into
| powerful, independent institution Championed the
| supremacy of European law
|
| Altiero Spinelli
|
| Wrote the Ventotene Manifesto (while imprisoned by
| Fascists) Advocated a federal Europe
|
| Winston Churchill
|
| A paradoxical but crucial figure: called for a "United
| States of Europe" (1946 speech) Influenced Europe's post-
| war direction despite UK distance
|
| Francois Mitterrand
|
| Drove Maastricht Treaty with Helmut Kohl Pushed for the
| EUR Symbolized Franco-German partnership
|
| Helmut Kohl
|
| Franco-German friendship exemplified by Mitterand-Kohl
| personal friendship "Architect of modern Europe" German
| reunification Key figure behind the EU and monetary union
|
| It's ironic that the name "U.S.E." (United States of
| Europe) was first proposed by a Brit, alas a smart one,
| and I'm sure Sir Winston Churchill would have had the
| oratory abilities to convince his countrymen that his
| idea had merit, but he did not live to see it. The
| Federation of Europe or United States of Europe is the
| logical end-point of the joint vision of all these
| foundational leaders.
| joe_mamba wrote:
| _> Franco-German friendship exemplified by Mitterand-Kohl
| personal friendship_
|
| Ironic to call this a "friendship", when Mitterand along
| with Thatcher were working behind the scenes with the
| soviets to sabotage and stop Kohl's reunification of
| Germany. It was anything but a friendship, but more of a
| concession.
|
| Politics is full of such examples that look friendly to
| the public, but hide a lot of sabotage and back stabbings
| in the background. In fact, the later is the norm in
| politics.
| mmooss wrote:
| Maybe you can be friends without always agreeing, and
| even when competing.
| joe_mamba wrote:
| Not when the competition is a zero sum game over critical
| resources. This isn't a game of table tennis, it's about
| competition over dominance.
|
| Friendships are just the media facing image. In reality,
| if a country can gain an advantage over the other they
| see as an economic adversary, and has the means to
| enforce it without repercussions, they'll do it. Then
| they'll meet up in front of the media, shake hands and
| gaslight the peasants on how this benefits everyone.
|
| The true friendships in between countries are made over
| decades/centuries over shared blood, heritage and culture
| because humans are tribalistic and have own group
| preference. Forcing friendships via political
| declarations doesn't work.
|
| Let me explain with examples. If Portugal would get
| attacked a lot of Spaniards would go fight for Portugal
| voluntarily because of shared history and culture. But if
| Bulgaria would get attacked, most Spaniards wouldn't
| volunteer to go die for Bulgaria, even though they're
| both EU members.
|
| Austria kept torpedoing Romania's Schengen entry just to
| extract some monetary concession, not exactly something
| friends do. So if Austria were to hypothetically get
| attacked tomorrow, a lot of Romanians would cheer rather
| than want to go help since karma is a bitch. These kinds
| of petty squabbles are the norm in the EU.
|
| People aren't gonna want to die or sacrifice themselves
| for the EU flag since it's an artificial construct, kind
| of like the corporation they work for, not something they
| feel a sense of belonging and allegiance to like a
| specific group of people.
| Beretta_Vexee wrote:
| French here: If we can send French soldiers to fight and
| die in Mali for years, only to end up with a military
| junta that prefers the Russian Africakorps, I think we're
| ready to send our soldiers to die defending a European
| ally.
|
| Plus, with global warming, this may be the last chance
| for the Alpine hunters to shine.
| samiv wrote:
| I think the people on this continent have a lot more in
| common than they might first realize. We certainly have
| our own cultures and language but beyond that I think we
| all share a certain European heritage, core culture and
| values.
|
| There's a certain stigma especially in Germany caused by
| the WW2 and the the leadership has been complacent to
| rely on Bretton Woods agreement. But as we're seeing now
| the geopolitics are doing a 180 degree turnaround and
| given these circumstances I expect sooner or later Europe
| will collectively understand the utmost importance to com
| together and to regrow and redevelop the military to
| support independence and not having to bow down to any
| master in the East or int he West.
| kaffekaka wrote:
| Absolutely. "Finlands sak ar var." Finland's problem is
| our problem, same for Denmark and Norway. We must stand
| together, we have no choice.
| nonethewiser wrote:
| I partially agree. But the EU is in a pretty unstable state
| as incomplete government structure over a collection of
| peers. "Unstable" does not mean it's going to fall apart.
| It means it's going to fall apart or coalesce into a single
| thing (a new country). Or maybe a little of both (a new
| country with some fringe members leaving).
|
| It might not be in 5 or 10 years but it's inevitable. It's
| not going to operate like this for 50, 100 years.
|
| Just run a mental simulation of WW2 playing out except
| Europe had the EU.
|
| So while I agree the EU is becoming more an more normal and
| important to the average citizen, there will come a time
| when it has to either solidify further or break apart, and
| I think it's basically a crapshoot to predict how that will
| go now when we have basically zero info.
| pegasus wrote:
| I wouldn't describe integrating further to the point of
| becoming more like the US as "unstable". And that's the
| most likely outcome, which should make the EU more
| trustworthy as a partner, not less.
|
| EDIT: by "like the US" I mean federalization. This video
| explains it well:
| https://www.youtube.com/watch?v=HnarX3HPruA
| zarzavat wrote:
| > And that's the most likely outcome
|
| The recent electoral success of AfD in Germany and the
| National Front in France seem to point in the other
| direction.
| terminalshort wrote:
| Yeah, there are already major opposition parties
| advocating EU exit in many countries already. Try to
| centralize further and their support will increase.
| Contrast that with the US when it unified. George
| Washington won the election 69-0 in the electoral
| college. And that's not even getting into any of the
| other massive problems with EU unification.
| nonethewiser wrote:
| >I wouldn't describe integrating further to the point of
| becoming more like the US as "unstable".
|
| More like the US, as-in a country? So also more like
| Germany, China, South Africa, etc. You are making a false
| equivalence - being like the US in one extremely non-US
| specific way does not mean you must be like the US in
| every other way.
|
| I'm not sure you even understand what I'm saying - this
| has nothing to do with the US vs. the EU or if the US is
| reliable.
| pegasus wrote:
| I was referring to the possibility of the EU becoming a
| federal union which acts like a country. Yes, like the US
| and Germany, but unlike China and of South Africa I don't
| know enough to say.
| nonethewiser wrote:
| It doesnt have to be a federal union. Probably a logical
| step but I didn't prescribe it. Regardless, I dont see
| how it could persist in its current form through lots of
| conflict.
| joe_mamba wrote:
| _> integrating further_
|
| What does that mean exactly?
|
| I meet a lot of people do enjoy their nation's
| sovereignty especially as a shield from EU's poor and
| unpopular decisions that they don't get a vote in, and
| see the common currency and freedom of movement as just
| the right amount of integration. Making english an
| official language would be even better IMHO, but that's
| about it. I enjoy different countries having different
| politics and takes on topics, as it would be shit if all
| EU was a just a homogenous groupthink.
|
| And I've never met anyone who thought the likes of Ursula
| and Kaja should be trusted with even more power and
| control over nations.
| terminalshort wrote:
| I would argue that not only is it not the most likely
| outcome, but that it's practically impossible. When the
| colonies united they all spoke the same language and
| shared the same culture as the descendants of recent
| British colonists. Furthermore, they had just fought and
| won a war of independence together. The first
| presidential election was unanimous with every single
| electoral vote backing George Washington. Do you think an
| EU presidential election would play out like that?
|
| Also, when the colonies united, the government they
| agreed on was by today's standards extremely small and
| decentralized and there was absolutely no welfare state.
| Revenue was mostly from tariffs on imports with zero
| income tax. Merging modern European governments would be
| a massive undertaking in comparison. And the wealth
| levels between countries are so lopsided that any such
| merger would mean massive transfer payments out of the
| rich countries to the poor. And what about tax rates? Low
| tax countries will not like this one bit. When the US
| colonies merged under the constitution, you could very
| truthfully go to the average citizen of any colony and
| say "basically you won't even notice any changes."
| Whereas for the EU, you have to say to the voters "your
| taxes will go up and we will now be sending $100 billion
| Euros per year to people in other countries."
| jyounker wrote:
| There are still, to this day, massive wealth disparities
| between US states.
| terminalshort wrote:
| And until the first entitlement programs during the New
| Deal it made no difference because it was entirely the
| poor state's problem. Only after the country had been a
| political union for over 150 years did they have any sort
| of welfare transfer program. If New Yorkers had been told
| in the late 1700s that joining the union would mean taxes
| coming out of their paycheck to send money to people in
| Georgia, they never would have joined.
| pegasus wrote:
| Sure the contexts are different, and you can also look at
| the federalization of German states as yet another
| example with a different context, but not all of the
| factors are unfavorable. For example, the countries of
| the EU are already more integrated than the colonies
| were. Plus it's a very different time now, we've had the
| UN for a long time already, etc.
|
| Also, I was surprised to learn how heterogenous the
| different regions of the US were from the very beginning,
| in origin, character and motivations. The Puritans,
| Quakers, Cavaliers, French nobles and traders etc.
|
| This video explains why it's very likely to happen:
| https://www.youtube.com/watch?v=7yHJehbWiNo
| nothrabannosir wrote:
| Just re taxes: why would anything need to change on that
| front in the event of federalization of the EU? There
| already is a union, it already has money, money already
| flows from richer countries to poorer countries--what
| would federalization change?
| terminalshort wrote:
| The Yuan is not a freely convertible currency, so not
| really an option here. The Euro isn't terrible, but it has
| structural issues in that member states all must take out
| debt in what is for monetary policy purposes a foreign
| currency. This generated a debt crisis 10 years ago, which
| has been papered over, but the structural issues remain
| unresolved. Also, the Euro has been around now for 25
| years. That's not long enough to convince anyone of long
| term stability.
| fakedang wrote:
| Saudi Arabia was privately discussing de-dollarization way
| back in summer last year, when the irrational tariffs were
| imposed, followed by the Israeli-US strikes on Iran. Make
| of that what you will.
| throw0101a wrote:
| > _Another major currency is the Yuan_
|
| Is it? CNY seems to be about the same as CHF:
|
| * https://en.wikipedia.org/wiki/Template:Most_traded_curren
| cie...
|
| In a similar range as AUD and CAD.
| FrustratedMonky wrote:
| when do we reach a tipping point for rapid decline?
|
| seems like once it starts falling, it would accelerate.
| plaidthunder wrote:
| There's an excellent and eerily prescient novel that
| attempts to portray what such a "tipping point" might look
| like, and when it could arrive:
| https://en.wikipedia.org/wiki/The_Mandibles
| jacquesm wrote:
| There is a pretty good chance you're right on top of it.
| storus wrote:
| EU can easily pull the plug on Euro as a reserve currency if
| they confiscate the money of a certain country and give it to
| another one. That would be the "front fell off" moment for
| Euro.
| microtonal wrote:
| Except they didn't and instead borrowed money for the other
| country. But more importantly, there seems to be a process
| in place, where a collective of rational actors makes
| choices, rather than someone who states he can go to war
| because he didn't get the Nobel Peace Prize.
|
| (Still disappointed that the winner of the FIFA peace prize
| wants to go to war /s.)
| qwytw wrote:
| > Today there are more options like the Euro that didn't
| exist in the 90s
|
| Yet the Euro peaked back in 2009 and has been declining ever
| since.
|
| At this point its share is not that massively higher than
| that of the German mark back in the 90s.
| llmslave wrote:
| did you forget about all the money the fed printed during
| covid?
|
| fed independence is important, but literally irrelevant in the
| face of rampant money printing
| altcognito wrote:
| Why did the fed raise interest rates? To soak up some of that
| cash. It was too slow, but this is exactly the sound money
| policy that everyone expects. You loosen cash (what you
| mistakenly call printing money), when you need investment,
| and tighten cash when inflation and risk taking is out of
| control.
| llmslave wrote:
| a sound response to some of the worst fed decision making
| in US history. they essentially ruined the housing market,
| priced out a generation of younger buyers, which is now
| crushing fertility rates, savings, and more
| spiderfarmer wrote:
| It's almost like pandemics have consequences.
| pempem wrote:
| Was it them that did that or employers freezing wages and
| losing R&D credits/facing tarrifs / wild instability?
| DaSHacka wrote:
| Well, seeing is how that happened before the tariffs,
| yeah, I'd have to agree with GP.
| marssaxman wrote:
| Strict zoning ruined the housing market, and this is a
| multigenerational problem:
|
| https://www.sciencedirect.com/science/article/abs/pii/S00
| 941...
| IX-103 wrote:
| Investment real estate ruined the housing market. All of
| a sudden housing prices are expected to grow year over
| year as an investment. As more and more growth
| expectations were applied to housing, public policy
| (including zoning) changed to protect those expectations.
| Is it any surprise that there came a point at which it
| became too expensive?
|
| Once problem we need to solve is how to unwind housing
| prices without financially ruining honeowners whose house
| is their primary/only wealth. Of course this problem is
| even more severe in areas of the country that are
| becoming uninhabitable due to changes in climate as it
| drives down demand.
| altcognito wrote:
| * fertility rates have been dropping for a long time.
| While this article is focused on "it's not about the
| teens", it isn't tied to housing, or after covid:
| https://ifstudies.org/blog/the-us-fertility-decline-is-
| not-d...
|
| * housing market was already quite bad before covid (see
| sibling comment)
|
| * Savings rates have hovered around 5% for almost 25+
| years - https://fred.stlouisfed.org/series/PSAVERT
| FrustratedMonky wrote:
| was money printing because of a lack of independence, and
| manipulation by the executive? or the fed trying to keep
| things afloat.
|
| this president is trying to money print during non-crisis, to
| ramp up economy to "20% GDP".
|
| why downvote? Trump literally said he wants a GDP that goes
| to 20% or 100%. Shoot to the moon.
| llmslave wrote:
| covid money printing was some of the worst fed decision
| making in US history. they essentially ruined the housing
| market, priced out a generation of younger buyers, which is
| now crushing fertility rates, savings, and more
| FrustratedMonky wrote:
| everyone complains, nobody has alternatives.
|
| what would have been the correct actions in that
| situation?
|
| really the government should tax in good times.
|
| and
|
| spend in bad times.
|
| and be a counter weight to private sector
| llmslave wrote:
| no they literally just kept printing money for no reason
| FrustratedMonky wrote:
| Its the 'kept printing' that is the problem with the
| story.
|
| There was a surge and a pull back.
|
| Post-COVID Tightening: After this historic surge, the
| Federal Reserve began "quantitative tightening" in 2022
| to combat inflation, slowing M2 growth to near zero and
| eventually reversing it.
| weberer wrote:
| >slowing M2 growth to near zero and eventually reversing
| it.
|
| The M2 money supply went from 15.4b at the start of 2020
| to a peak of 21.7b, before slightly reversing to 20.7b.
| Then they just continued printing. Now it currently
| stands at a record high of 22.2b. The dollar is more
| diluted than ever.
|
| https://fred.stlouisfed.org/series/M2SL
| FrustratedMonky wrote:
| its a tight rope. shrinking the money supply also has
| downsides.
|
| Summary of the Policy Reversal Period Policy Action
| Balance Sheet Impact
|
| June 2022 - Nov 2025 QT (Tightening) Shrank from ~$9T to
| ~$6.5T
|
| Dec 1, 2025 QT Ends Runoff stops; maturing assets
| reinvested
|
| Dec 12, 2025 - 2026 Reserve Management Expansion begins
| via T-bill purchases
|
| By December 1, 2025, the Fed officially halted QT after
| reducing its balance sheet by approximately $2.4
| trillion. The following factors forced the reversal to
| expansion: 1. Liquidity Squeeze and Repo Market Stress As
| the Fed drained cash from the system, bank reserves fell
| toward "critical thresholds". This caused stress in the
| overnight repo market, where banks lend to each other.
| Spiking Rates: Key short-term lending rates, such as the
| Secured Overnight Financing Rate (SOFR), spiked above the
| Fed's target range, indicating cash was becoming scarce.
| kipchak wrote:
| This was arguably largely offset by the actions of the
| treasury's increased short duration issuance (>1 Trillion
| in t-bills) combined with draw-downs of the reverse repo
| facility[1] instead of from banks. It's difficult to tell
| exactly how much money winds it's way into the economy
| without using proxies - for example credit spreads[2] or
| NFCI[3] which indicate loose conditions, which don't show
| much evidence of post 2022 QT's impact.
|
| Or in other words the data seems to show the loosening
| effects were more powerful than the tightening ones. Now
| that the RRP has been drawn down balance sheet growth
| will likely occur.
|
| [1] https://fred.stlouisfed.org/series/RRPONTSYD
|
| [2] https://fred.stlouisfed.org/series/BAMLH0A0HYM2
|
| [3]https://www.chicagofed.org/research/data/nfci/current-
| data
| AtlasBarfed wrote:
| And directly funneling it to the rich
| WarmWash wrote:
| The government acted as if the pandemic was happening in
| 1990, when everyone either worked in person all the time,
| or nothing worked.
|
| Instead, the golden geese of the American economy (the
| actual golden geese), simply stayed home and worked from
| their laptop.
|
| This created a situation where people were getting their
| regular paycheck, plus getting a multitude of stimulus on
| top of that. There were many making $100k+ salary, not
| paying rent (rent moratorium), not paying student loans
| (student loan moratorium), and not going out to do
| anything, resulting in having huge pools of cash laying
| around. If you had a mortgage, you got to refi at 3% and
| dramatically cut your mortgage bill. I won't even get
| into PPP loans either, everyone knows the story there.
|
| I could write pages and pages about this, but the short
| of it is, we thought we need a wheelbarrow of money, but
| technology meant we only needed a jug of money. But we
| still got the full wheelbarrow.
| velcrovan wrote:
| actually, llmslave, it was a very good decision. It's
| better to have mild inflation than widespread
| unemployment. But also, the fed's actions contributed
| comparatively little to the inflation we experienced.
| Globally there was a huge drop in supply, which caused
| prices to jump everywhere, not just in the US.
| Aunche wrote:
| We were in a lockdown, and Congress voted for multiple
| trillion dollar stimulus' financed by debt. Refusing to
| "print money" in those circumstances is just asking for a
| worse Great Depression.
| nubg wrote:
| Our of curiosity as I know nothing about economics, how
| would not printing miney lead to a Great Depression?
| okanat wrote:
| A crisis prevents people from earning money. No money
| means nobody buys anything. Nobody buys anything means no
| company can now sell stuff, so no revenue. Companies
| start closing down, so there are even more people who
| cannot earn money.
|
| The government can print money and inject into the
| system. Some people have money so they continue to buy
| stuff but maybe at a slower pace or less amount. Things
| also can get expensive but it is not a total collapse.
| KaiserPro wrote:
| one of the big problems of the great depression was banks
| went bankrupt left right and centre, and took everyone's
| life savings with them. Also as a lot of banks generally
| hold mortgages in their portfolio, so when a bank
| collapses it means that mortgages all get fucky too.
|
| So the mass printing of money meant that banks didn't
| collapse.
|
| It also meant that a fucktonne of cash went into the
| hands of the uber rich.
| jacquesm wrote:
| This is one of the reasons safety nets on savings exist
| in both the USA and in Europe (and probably other places
| as well about which I'm less informed). Even so, the
| tacit understanding is that this is more about preventing
| bank runs than about the practical effects on the
| currencies involved because it could very well be that
| that insurance will pay out in money that is worthless.
| throwaway173738 wrote:
| Who signed the front of those checks?
| diordiderot wrote:
| Various civil servants at the Treasury Department?
| thehumanmeat wrote:
| The Fed and largely US policy has absolutely no effect on the
| real reserve currency: https://en.wikipedia.org/wiki/Eurodollar
| alex7o wrote:
| Didn't know that was a real term Mike Pondsmith used for
| cyberpunk
| jjoonathan wrote:
| It is, but he got the macroeconomics backwards so enjoying
| it on an aesthetic level rather than a mechanical level is
| still the right choice.
| m00dy wrote:
| Few people actually know how Eurodollar system works under
| the hood.
| mrcwinn wrote:
| This is an article about multi-decade trends but you're
| associating recent current events with the behavior. Consider
| reading the article.
| the_real_cher wrote:
| Our federal deficit interest rate is like 15% of government
| expenditures.
|
| The dollar being the reserve currency which leads to demand for
| the dollar keeps the dollar from deflating.
|
| But as people no longer demand the dollar because they don't
| want to support a imperialistic government what happens?
| Barrin92 wrote:
| The US would no longer be able to export the cost of its
| spending on other countries which is the so called
| 'extraordinary privilege' of running the world's reserve
| currency and the US population would feel the consequences of
| its out of control spending.
|
| Which is to say, that is a fairly traditional way of how
| empires go the way of the dodo. First losing their financial
| dominance, which loses them their international power, which
| then causes internal rupture.
| hopelite wrote:
| That is true, but it also goes well beyond that. Much of the
| "US Gov't behavior" is largely related to trashing and panicked
| frantic moves because the consequences of its prior and long
| tailed actions over decades has now not only started bearing
| rotten fruit, but a previous strategy of world domination
| through "globalism" has also turned against those who control
| the Wizard of the USA from behind the curtain.
|
| On the face of it the Greenland situation makes no sense on a
| national security level regarding a non-existent, fabricated
| Chinese or Russian threat, nor related to the fantastical grift
| of the "Golden Dome" that is even more useless against what
| Russia has recently developed, than it was for things prior to
| about 3 years ago.
|
| What we are looking at here (you can tell your children that
| you heard it here first) is a strategic move to essentially
| take Canada and all of the NA continent, and eventually all of
| the Americas. Yes, Canada, you are indeed in danger as well as
| Mexico. I don't see how it could be any other way in the face
| of current developments; remember Trumps USMCA, i.e., a de
| facto North American Union?
|
| Biden stated that he wants the USA to have 300 million more
| "immigrants" before he let in about 15 million in 4 years.
| Annexing Canada is about 40M by the time we do it, Mexico would
| add another 150M plus however many people would flood into
| Mexico to become "Americans". That bring us to a total of
| around 550 million by the time the North American Union comes
| around. Perhaps if the UK joins, we will just call it Oceania
| already.
|
| It does not address the fact that China has 1.4 billion and
| India another 1.4 billion, but it puts us in contention,
| especially as Europe has about 700 million by that time if/when
| the EU absorbs most of Europe.
|
| That also doe not take into account the Wizard of the USA
| wanting to take over all of South America for positive control
| eventually... another ~480 million by that time, putting the
| American Union of Oceania at about 1 Billion, +-100M.
|
| These are real tabletop calculations and how things are seen at
| the top and discussed amidst cocktails.
| stuffn wrote:
| This is quite obviously written by someone with no
| intelligence experience.
|
| > On the face of it the Greenland situation makes no sense on
| a national security level regarding a non-existent,
| fabricated Chinese or Russian threat, nor related to the
| fantastical grift of the "Golden Dome" that is even more
| useless against what Russia has recently developed, than it
| was for things prior to about 3 years ago.
|
| Power projection in the arctic is weak. Russia has made
| multiple tactical movements towards soft projection in the
| arctic. You have zero idea what submarines are on station.
| Taking greenland is arguably stupid, boosting it's defense to
| prevent a Russian incursion is not.
|
| > What we are looking at here (you can tell your children
| that you heard it here first) is a strategic move to
| essentially take Canada and all of the NA continent, and
| eventually all of the Americas. Yes, Canada, you are indeed
| in danger as well as Mexico. I don't see how it could be any
| other way in the face of current developments; remember
| Trumps USMCA, i.e., a de facto North American Union?
|
| No evidence. Unless you're arguing while NAFTA was around
| this was a way to create a "United America".
|
| > That also doe not take into account the Wizard of the USA
| wanting to take over all of South America for positive
| control eventually
|
| No evidence. Most think-tanks have recognized that
| maintaining positive control of south america would be
| disastrous. If anything, Maduro and his friends were probably
| happy the US decided to black bag him. It is well known that
| whoever was going to attempt control over Venezuela in
| particular was going to be responsible for spending the money
| to rebuild it.
|
| > These are real tabletop calculations and how things are
| seen at the top and discussed amidst cocktails
|
| No.
| scelerat wrote:
| >> Yes, Canada, you are indeed in danger as well as Mexico.
|
| > No evidence. Unless you're arguing while NAFTA was around
| this was a way to create a "United America".
|
| Trump recently posted an image on Truth Social of a White
| House meeting in which a map is displayed, of north america
| with the US flag superimposed on Canada, Greenland, and
| Venezuela. [1] He has repeatedly suggested that Canada is
| the 51st American state. [2]
|
| [1] https://www.wsj.com/livecoverage/greenland-trump-
| tariffs-tra...
|
| [2] https://www.pbs.org/newshour/politics/trumps-remarks-
| on-cana...
| KaiserPro wrote:
| I'm struggling to understand what you are trying to say?
|
| That biden wanted to grow the USA to 600 million people?
|
| That trump is also trying to do that?
| hopelite wrote:
| It seems you are clearly understanding? You are likely just
| confused because you do not understand that the overarching
| objectives of the "uni-party" or "deep state" system hold
| fast, it's just that each political sporty ball team has to
| play things different and tell different lies in different
| ways to different cohorts in order to keep the system
| operating. So, e.g., Biden says we need 300M more
| immigrants and his team fans cheer because they support it,
| wile deporting more people than Trump; while Trump tells
| his team fans that he will deport people and does this
| whole theatrical ICE stuff to give the impression of
| deporting people to drive down costs and retain their
| support, but in fact barely moves the needle on
| deportations and committing to 600,000 more Chinese
| students and wanting to "staple citizenships to diplomas"
| for millions of Indians, etc.
|
| You have to understand that there is the theater of the
| political sport ball arena where the different sides are
| set against each other like WWE/Football, etc. but in the
| background it's just actually all more or less rigged and
| the truth is written in policy and strategic papers that
| are implemented over 20+ years, across presidents and their
| wrangling and herding of their constituents in this charade
| called "democracy".
| scelerat wrote:
| When did Biden say the US needs 300M more immigrants?
| scelerat wrote:
| When did Biden say the US needs 300M more immigrants?
| nospice wrote:
| > The international value of the dollar as a reserve and trade
| currency is inherently tied to the behavior of the US
| Government and the Federal Reserve.
|
| I think this oversimplifies things. The dominance of the dollar
| emerged chiefly because most of the alternatives were worse,
| for a combination of military, political, and economic reasons.
|
| There is a positive feedback loop at the core of it, because
| the US economy benefits greatly from being able to issue
| foreign debt in their own currency. But that doesn't matter: as
| long as the US faces little risk of getting invaded by any of
| its neighbors or defaulting on its obligations, everyone is
| happy.
|
| What's been changing - and it started long before Trump - is
| that the US is also increasingly willing to use its control of
| USD (and thus the Western banking system) to pursue sometimes
| petty policy goals. This is giving many of our partners second
| thoughts, not because of the fundamentals of USD but because
| they imagine finding themselves at odds with the US
| policymakers at some point down the line.
| nonethewiser wrote:
| They are related but I think the lack of de-dollarization
| already shows there are other, more raw mechanics that are
| operative. Namely, liquidity and lack of alternatives.
| onlyrealcuzzo wrote:
| > The behavior of the US Government has been very unusual
| lately, and the independence of the Federal Reserve is actively
| being challenged.
|
| This is mostly due to the behavior of the country being
| unusual.
|
| The US had grown at a healthy clip for a long time.
|
| Due to the amount of boomers exiting the workforce, and
| withdrawing rather than adding to their savings - the US is
| going to be in a very different position for the next 10-20
| years before things start to level out.
|
| If something like AI doesn't save us with a pretty sizable
| productivity boost, we're in for uncharted territory.
| BatteryMountain wrote:
| The bro's in the whitehouse is using their mouthpieces to
| create a volatile market, thus gaming the system with pump &
| dumps. They are stealing from everyone in a sense.
| jyounker wrote:
| This is a pretty astute interpretation.
|
| Here's a write-up of Trump's grift so far: https://www.nytime
| s.com/interactive/2026/01/20/opinion/edito...
| GoldenMonkey wrote:
| Why is the independence of the Federal Reserve sacrosanct? For
| one, they should have oversight and they should have
| accountability.
|
| Not ever passing an audit of any kind. And the FED chairman
| spending $2.5B on renovations to an office complex. While
| misleading congress about the kinds of renovations.
|
| There should be less 'independence', if it means zero
| accountability.
| MattGaiser wrote:
| > Why is the independence of the Federal Reserve sacrosanct?
|
| Then the value of the USD is entirely at the whim of whoever
| is elected and should be priced accordingly.
| elAhmo wrote:
| I can't believe you are making an office complex renovation
| argument.
|
| FED has been instrumental is keeping the monetary policy sane
| in the recent years, unlike some pushes from the orange
| person you are taking talking points from.
| dhosek wrote:
| Do you realize that you've digested a whole bunch of
| misinformation uncritically?
| jazzyjackson wrote:
| It's not sacrosanct, it's just a 14 year term for the Fed
| chair so that they don't give in to political pressure to be
| re-appointed.
| darkarmani wrote:
| > they should have oversight
|
| Congress provides oversight and accountability of the Fed.
| The GAO does audits as well. Frank-Dodd provides more windows
| into the Fed. Why did you think the Fed doesn't have
| oversight?
|
| > Not ever passing an audit of any kind
|
| It might have been hard for you to find because it is hidden
| under the "audit" page on their website:
| https://www.federalreserve.gov/regreform/audit.htm
|
| > Why is the independence of the Federal Reserve sacrosanct?
|
| It's never been completely independent. It's independent from
| short-term (4 years) political influence. It's audited and
| has congressional oversight and the President nominates
| people to the board.
|
| What else do you want? Interest rates set by Presidential
| tweets?
| bastardoperator wrote:
| Unusual? That's one way of putting it. I think unpredictable,
| erratic and criminal paint a more a realistic picture. The fact
| we're threatening Greenland is absolutely insane.
|
| If the goal of this administration is to destroy America,
| they're doing a fine job.
| TacticalCoder wrote:
| > So draw from that whatever conclusions you wish.
|
| Sure but replaced by _what_? The abysmal failure that the EUR
| is? Or a chinese currency?
|
| What other options are there besides either a Chinese currency
| or the EUR?
|
| Chinese. EUR.
|
| Seen these twho choices, everybody understands why the USD
| isn't anywhere near losing its dominance status.
| seasongs wrote:
| I love the complete lack of argumentations this comment has
| dyauspitr wrote:
| Trump is destroying it intentionally.
| touwer wrote:
| Without a good strategy of course...
| 4fterd4rk wrote:
| Compromised people and useful idiots within the Trump
| administration are being persuaded by Russia to destroy the
| dollar and break up NATO.
| outside1234 wrote:
| Where persuaded is probably "bribed"
| DetectDefect wrote:
| Are you certain inflating the money supply with trillions of
| dollars by prior administrations did not have an effect?
| hluska wrote:
| How exactly is QE related to all this bullshit? You're going
| to need some sources before you start randomly claiming that
| QE is leading to the collapse of NATO.
| 4fterd4rk wrote:
| Well, yeah. Because there hasn't been any significant
| fluctuation in exchange rates. You can also see the decline
| in the velocity of money that's offsetting the increase in
| the money supply metrics (numbers checked on FRED). It's very
| clear that we haven't had unprecedented inflation. So the
| burden of proof is on you... why would the increase in the
| money supply matter when all metrics are saying otherwise?
| InitialLastName wrote:
| It assuredly did. For example, the first Trump administration
| is responsible for ~25% of the current money supply, with the
| second Trump term only contributing about 6%.
| ezst wrote:
| So, "let's have Trump burn the house down just to make the
| point nobody was arguing against that fireplaces can be
| hazardous"?
| utopiah wrote:
| No idea how those things work but surprised the $/EUR exchange
| rate stabilized.
| torlok wrote:
| You had a year of flip-flopping on tariffs, and a lot of noise.
| Serious threats are coming out just now, and may get cut
| abruptly closer to November. It's going to be a while before
| this presidency gets reflected by the market.
| StephenSmith wrote:
| If the goal is to make US goods attractive to other countries and
| to decrease our trade deficit (not saying I agree with this
| goal), either the dollar has to become fundamentally weaker or
| the goods have to become more valuable. The latter feels more
| difficult than the former at this point. However, the side
| effects of a weaker dollar may not be worth weakening it.
| andsoitis wrote:
| > decrease our trade deficit (not saying I agree with this
| goal), either the dollar
|
| A direct link exists between a nation's status as the world's
| primary reserve currency and its tendency to run persistent
| trade deficits.
|
| This relationship is often described by the Triffin Dilemma, a
| paradox where the global demand for the reserve currency
| necessitates that the issuing country consistently supplies the
| world with its currency, primarily through importing more than
| it exports.
| notahacker wrote:
| The flip side is if you weaken the dollar by appearing unstable
| and displaying hostility to your main trade partners, you get
| the drawbacks of the weaker currency (reduced purchasing power)
| without commensurate improvement in the attractiveness of goods
| to other countries. Some devaluations are more strategic than
| others.
| usrusr wrote:
| But the broligarchs don't need purchasing power. All their
| wealth is in assets, leveraged many times over. Currency
| collapse is the best that can happen to them.
| RealityVoid wrote:
| Don't worry, assets collapse as well when a lot of the
| market of the US becomes unavailable.
| TSiege wrote:
| It depends on how this happens. Labor would still be more
| expensive here than developing economies. We could easily just
| end up with a weaker dollar and floundering manufacturing,
| which means more inflation.
| rvba wrote:
| USA exports services (tech, culture, r&d) and will lose all of
| that for the unclear manufacturing that might never come.
|
| It's like watching the fall of Rome.. on TV
| krupan wrote:
| This is the most important comment here. The US rebuilt
| nations' economies after World War II by printing dollars and
| buying goods from those countries. In return, the dollar became
| the world reserve currency and did not suffer massive inflation
| despite printing so much of it. It's a supply and demand thing,
| just like any good or service. There was a ton of demand for
| the dollar, so printing more (increasing supply) did not crash
| the "price" of the dollar (inflation is the price/value of the
| dollar decreasing). We printed a ton of dollars during covid
| but it didn't result in hyperinflation like what happens with,
| say, Iran or South American currencies because the demand for
| dollars was still so very high.
| outside1234 wrote:
| If Trump announces some toady lunatic to run the Fed, watch out
| below, because the dollar is going to crash. I know I have moved
| a bunch of money into international stocks and currency and I
| suspect when the right leaning crowd finally catches on it will
| be a stampede.
| HWR_14 wrote:
| What's the difference between an international stock and a US
| based multinational in your analysis?
| corimaith wrote:
| The export driven economies like China or the EU rely on the
| dollar to weaken their own currencies for competitive trade.
| Without it, natural FX mechanisms would naturally begin to
| appreciate their currencies and make their exports uncompetitive.
| FpUser wrote:
| >"The export driven economies like China or the EU rely on the
| dollar to weaken their own currencies for competitive trade"
|
| I have about zero clue how finances really work but it looks to
| me as the statement is only true if the dollar is the
| predominant currency for international trade. This looks to be
| slowly changing for various reasons.
| corimaith wrote:
| >This looks to be slowly changing for various reasons.
|
| Well, not really, because obviously that deprecation via
| buying government treasuries is balanced by the appreciation
| in the other currencies. But if everybody (large enough to
| matter) dosen't want their currency to appreciate, if
| somebody buys Japanese bonds for example to weaken their own
| currency, then Japan will buy somebody else's treasuries to
| offset the increase in Yen, and if we go to the long chain of
| musical chairs of people offsetting each other's behaviours,
| it just leads back to the USA as the only ones both large
| enough and willing to take in those capital inflows.
|
| That's not a interpretation mind you, that's a description of
| what central banks are doing right now. If that has to
| change, you need somebody willing to take the mantle of the
| absorber of global deficits, and nobody wants to do that.
| the_duke wrote:
| According to USTR data the EU had a 200bn goods surplus, but a
| 100bn services deficit in 2024.
|
| So a 100bn deficit out of 800bn total US imports.
|
| The deficit is there, but it's not nearly as lopsided as some
| reporting would have you believe.
| diego_moita wrote:
| The biggest problem of all social sciences is that they measure
| only what can be measured or is easier to measure. Sorry for the
| redundancy, but they don't see what is hard to see and,
| therefore, think it doesn't exist.
|
| I suspect there might be a lot of "de-dollarization" going on in
| realms that might not be easy to measure. To be specific: it is
| interesting that crypto-currencies have emerged as the currency
| of choice for illegal activities.
| hluska wrote:
| The article is talking about reserve currencies. Cryptocurrency
| isn't relevant.
| retrocog wrote:
| The gold :: oil ratio tells quite a tale
|
| https://www.macrotrends.net/1380/gold-to-oil-ratio-historica...
| almusdives wrote:
| Definitely says something, but I'm not sure what. How are you
| interpreting this?
| Aloha wrote:
| not the OP - That gold is rarer than oil, and the supply is
| lower when compared to demand.
| almusdives wrote:
| I appreciate that this figure is showing that the relative
| scarcity of gold compared to oil increasing, but I'm not
| sure what it's saying, or is interesting beyond that? Is
| this reflecting a global shift towards natural gas rather
| than oil, or reflecting investors are particularly nervous
| since covid, for example?
|
| Obviously, you can't drawn any hard conclusions, but I was
| wondering what the OP was thinking narratively when
| posting.
| mmaunder wrote:
| The dollar has lost 13% vs the South African Rand in the past
| year. Thats an interesting metric for me given how South Africa
| has decoupled from the US in favor of China and Russia, with a
| strong anti-Israel stance. And also taking into consideration how
| the country is still struggling with crime, corruption and
| uncertainty.
|
| It's doing to be interesting to see how this plays out as the
| producers and makers of the world unite, and the EU turns away
| from the US.
| mothballed wrote:
| Dollar has also lost like 99% vs the South African Kruggerand
| since 1967.
| einpoklum wrote:
| But is the exchange rate really the right metric for the
| "weakening" due to de-dollarization? Especially since world
| states decoupling from the US would try avoiding both
| transactions which gain them USD and which require paying USD?
| Havoc wrote:
| >given how South Africa has decoupled from the US in favor of
| China and Russia
|
| That's the party line & there have been some eye catching
| military exercises and statements to this effect, but daily
| life is still very much western aligned. It exports a ton of
| ore to china and imports a bunch of things from there
| certainly...but that's kinda just every country these days
| isn't it.
| blurbleblurble wrote:
| What if the goal is to crash/burn and consolidate ownership? This
| time with the money system?
|
| I mean, it sure looks like the goal.
| codesnik wrote:
| it'd sound reasonable, if that ownership wasn't already
| overconsolidated. But who says people doing that are
| reasonable.
| blurbleblurble wrote:
| It might be over-consolidated in the aggregate but I don't
| think the greed is too worried about that.
| fzeroracer wrote:
| I don't think there is a single concrete goal, when you look at
| how flabbergastingly stupid most of the oligarchs are (just
| scroll through Elon Musk's most recent posts) it's hard to
| imagine there being any real master plan. It's a bunch of dumb
| assholes that were raised with infinite money and where nobody
| ever told them no.
|
| If you've ever had the unfortunate opportunity to interact with
| your average CEO at a mid-level business it's the same thing
| but on a much smaller scale. They can't fail, only be failed.
| 7777777phil wrote:
| At the risk of sounding like shameless self promotion, I recently
| wrote about how Zoltan Pozsar predicted this over three years
| ago: https://philippdubach.com/posts/pozsars-bretton-woods-iii-
| th...
| neom wrote:
| Interesting related read:
| https://www.chathamhouse.org/2025/04/us-dollars-role-interna...
|
| And if you feel like something long (pdf):
| https://www.atlanticcouncil.org/wp-content/uploads/2025/05/A...
| weslleyskah wrote:
| The world is rich and getting richer. The quality of life outside
| of the US is rising.
| FpUser wrote:
| Europeans might disagree
| amanaplanacanal wrote:
| There is more to the world than Europe.
| anon291 wrote:
| Which is why the euro will not be a reasonable reserve
| cirrency
| konnekshin wrote:
| Bitcoin fixes.
| beeflet wrote:
| 7 tps
| tasuki wrote:
| layer 2
| kayamon wrote:
| How many bars of gold get moved round the world every second?
| jyounker wrote:
| Talk about moving the goalposts.
| kayamon wrote:
| Ain't no football game son. Bitcoin clears faster than
| any other world reserve candidate. Every ten minutes,
| electricity gets traded. Tick tock.
| beardyw wrote:
| Patently. The current situation in the USA doesn't inspire
| confidence.
| throwaway5752 wrote:
| Yes, of fucking course it is. The US elected a convicted con
| artist who is incontrovertibly violating human rights law,
| breaking treaties with allies, militarily threatening neighbors,
| and in general making a global outcast of themselves.
|
| The US is making an absolute mockery over the honor and
| responsibility granted to in the post-WW2 world. It has
| sophisticated rivals that are predictably and effectively making
| use of the self-inflicted crisis. So far the ruling class of the
| US has been happy enough to let this go, and has been too busy
| making rocket ships, fake computer currencies, and large estates
| in south Florida to deal with real world problems.
|
| If you are in the US, buy some gold or a house so your savings
| aren't destroyed - utterly predictably - by the man who declared
| Chapter 11 bankrupcy at least 6 times.
| einpoklum wrote:
| > The US is making an absolute mockery over the honor and
| responsibility etc.
|
| The US was a rather empire without many scruples before WW2 and
| after it. It engaged in genocide in Vietnam, and was complicit
| in several others, including the ongoing one in Gaza - which
| was sanctioned, funded and facilitated first and foremost by
| the Biden-Harris administration.
|
| So, without detracting from Trump's crimes and jingoist
| rhetoric and action, his deviation from US foreign policy
| tradition is not as far as one might imagine.
| throwaway5752 wrote:
| I'm afraid I completely disagree with you and am not
| interested in arguing further than this.
|
| Vietnam, Korea, Iraq, Gaza, and so many others are atrocities
| but they are well understood by anyone with a casual
| understanding of 20th century geopolitics.
|
| Anything you could list is awful but still respected the
| norms and rules that exist between nation states. There is
| not a high bar for these things, but some people within a
| specific flavor of the Republican party reject these rules
| and norms. By a quirk of history they were able to gain
| power. I could describe this in more technical and impressive
| sounding language, but "FAFO, and we are in the find-out
| stage" goes by many names and is accurate.
| einpoklum wrote:
| > Anything you could list is awful but still respected the
| norms and rules that exist between nation states.
|
| It absolutely did not. Perhaps the elites and the mass
| media in the US tell this to each other, but in (most of)
| the rest of the world, that doesn't fly.
| hnburnsy wrote:
| Also JPM in April 2025... JP Morgan see gold
| prices crossing $4,000/oz by Q2 2026
|
| https://finance.yahoo.com/news/jp-morgan-see-gold-prices-192...
| nish__ wrote:
| It's $4700/oz today which is crazy.
| postalrat wrote:
| And silver is $95 per ounce.
| nish__ wrote:
| I know. Bring back silver currency!
| rvz wrote:
| TLDR: Yes.
| pammf wrote:
| Trump will go down in history as the clearest marker of the
| United States' decline.
| add-sub-mul-div wrote:
| And you could have said that during The Apprentice.
| thuridas wrote:
| Having dollars was useful to trade with US. But the trade has
| been reduced by tariffs.
|
| Also. Any attack to the independence of the federal reserve
| damages whee vale of the dollar
| blackoil wrote:
| Current Trade with US is a small percentage of the reserve.
| It's the trade with everybody else and trust that it will hold
| value for all the future trade is where it matters.
| touwer wrote:
| The US century is already over. It's just that a lot of US
| citizens don't see that. De-dollarization will happen when one is
| a traitor to it's allies
| Jtsummers wrote:
| Many of us see it, but many others seem to be embracing it and
| trying to hasten it for reasons unknown. They pine for the
| glory days of post-WWII US hegemony but are actively undoing
| the institutions that were instrumental in US economic and
| political power at that time. They have no coherent world view,
| they are severely confused, but unfortunately numerous.
| Waterluvian wrote:
| I actually have a greater disgust for those who see it but
| don't act. I think this line from an incredibly relevant book
| is precisely this:
|
| _> "Your 'little men,' your Nazi friends, were not against
| National Socialism in principle. Men like me, who were, are
| the greater offenders, not because we knew better (that would
| be too much to say) but because we sensed better._
|
| Those who act on behalf of evil are not free from guilt, of
| course. But the truly damned are those who _sense better_ but
| look the other way. They walk in the footsteps of the
| millions who tacitly supported the last time this evil took
| hold of the world, by not acting.
|
| This entire book, but especially this exerpt, is a must read:
| https://press.uchicago.edu/Misc/Chicago/511928.htm
| FrustratedMonky wrote:
| "What happened here was the gradual habituation of the
| people, little by little, to being governed by surprise"
|
| Wow, seems on point.
|
| Wow
|
| "kept us so busy with continuous changes and 'crises' and
| so fascinated, yes, fascinated, by the machinations of the
| 'national enemies,' without and within, that we had no time
| to think about these dreadful things that were growing,
| little by little, all around us."
| scottyah wrote:
| I think it's fair to say that neither ideology is free from
| evil, and choosing the "lesser evil" is still choosing
| evil. Every good or well-meaning movement I've seen has
| been taken over once it reaches a certain size.
| chmod775 wrote:
| The US wasn't exactly "friendly", but comparing US hegemony
| to Nazi Germany is a bit much, don't you think? /s
| Waterluvian wrote:
| Y'know, yeah I think you're right. It's not like they're
| dressing the part and marching through the streets like
| some sort of secret police agency.
|
| https://ibb.co/qMynfBBW
| hommelix wrote:
| Thanks for sharing this except of the book.
| qaq wrote:
| Well people pushing for this have a world view. They see a
| bipolar world with China dominating Asia, US dominating it's
| hemisphere and Europe fending for itself. They also have
| major crypto holdings so instability of both major currencies
| benefits them financially.
| outside1234 wrote:
| Except that Crypto is also falling with the stock market
| (and faster), so if anything, it is correlated the wrong
| direction
| qaq wrote:
| I am not arguing it's a sane world view
| ericmcer wrote:
| I feel like many are going to upvote this because they think
| it is an indictment on the current administration but it
| isn't exactly.
| Jtsummers wrote:
| > I feel like many are going to upvote this because they
| think it is an indictment on the current administration but
| it isn't exactly.
|
| Is it not? Quoting myself:
|
| >> are actively undoing the institutions that were
| instrumental in US economic and political power at that
| time.
|
| Who is undoing those institutions? That'd be the current
| administration.
| ericmcer wrote:
| Ah I was seeing a parallel between:
|
| 1. Our post WW2 neocolonial activity and the current
| admins push to sort of blatantly get control over
| Venezuela and Greenland.
|
| 2. Our WW2 manufacturing and export based economy that
| made us wealthy. Is similar to the current admins push to
| reform us from importers to exporters using tariffs and
| rebuilding manufacturing (at least on the surface the
| execution of this has been terrible).
| slibhb wrote:
| The reverse is true: people who say things like "The US century
| is over" almost always dislike the US or wish its global
| influence would decline. Their commentary is wishful thinking.
|
| There is some probability that US global influence does
| significantly decline but I wouldn't hold my breath.
| adamc wrote:
| Not true. Some, like myself, love the _idea_ of the shining
| city on the hill, although we often find the behavior of the
| actual city less than shining.
|
| I would like for the US to continue being a beacon of freedom
| where people can come and build great lives.
|
| But that is not the direction we are going, and one might
| reasonably forecast that no country can maintain indefinite
| dominance. Paul Kennedy wrote "The Rise and Fall of the Great
| Powers" almost 40 years ago. Regression to the mean and all
| that, but also, great powers tend to overstep.
| slibhb wrote:
| > Not true. Some, like myself, love the idea of the shining
| city on the hill, although we often find the behavior of
| the actual city less than shining.
|
| Your first sentence says "not true". Your second sentence
| says "true".
|
| Your dislike of the current US regime/behavior causes you
| to forcast the decline of US influence. I'm not saying you
| should like current US behavior, just that there isn't good
| evidence for any decline.
|
| These things are hard to predict. The most likely situation
| is not decline: it is continuity, where the US retains its
| global influence for the time being.
| peder wrote:
| Yep, and nobody ever goes on these types of threads and
| says the EU is collapsing, even though there's
| demonstrable evidence that things are not going great for
| the EU (the UK left, there is virtually zero economic
| dynamism or tech investment, Russia has seized 1/3 of
| Ukraine who was trying to join the EU, and the continent
| has no money, no navies and terrible demographics to
| compete globally in the next century). People gloss over
| issues about the EU because it aligns more closely with
| their political beliefs.
| adamc wrote:
| Ignores the totally exceptional nature of some of the US
| changes/instabilities of this administration. I say "not
| true" because that is my read of where things are going,
| regardless of preferences.
| jyounker wrote:
| I believe the recent line from a US ally at a recent security
| summit was, "We will never fucking trust you again."
|
| https://www.readtheline.ca/p/matt-gurney-we-will-never-
| fucki...
| tsunamifury wrote:
| Hopes or morality do not strictly dictate power as much as we
| might wish it to be true.
| athrowaway3z wrote:
| The number of Trump apologists lunatics who do not seem to
| understand what MAD was about is staggering.
|
| Industrial scale warfare isn't some secret forgotten by
| accident.
|
| The current American power-trip fantasy delusion is
| rightfully scaring the shit out of people, and the scary
| thing is the people who aren't scared.
|
| It's reaching the point that I think the best thing is for
| Germany to detonate a nuke between the US and Greenland just
| to wake up the idiots who think it would be unreasonably
| difficult.
|
| --
|
| Edit: I see people are misunderstanding me as saying they
| should use the US bombs stationed there. I'm saying they
| should build their own - to have people remember that It's
| not really that hard if you have a functioning industrial
| sector.
| renewiltord wrote:
| Germany is a non-nuclear-weapon state. Our bombs are there
| yes, but if you use one of our bombs without our approval
| there will be hell to pay. An invasion of Greenland will be
| all but guaranteed. Whether Germany will retain its
| military the next day is questionable.
| athrowaway3z wrote:
| I see you don't want to understand my point.
|
| Why exactly do you think Germany is a non-nuclear weapon
| state?
| renewiltord wrote:
| Because we muzzled the wolf.
| watwut wrote:
| It is ok for Germany to detonate nukes on someone who
| attacked NATO. The approval of the aggressor is not
| necessary.
| renewiltord wrote:
| Indeed. People are actively trying to repair something which
| cannot be fixed. Now that the US century is over, the only way
| forward is for the US to use present military power as a
| cudgel.
|
| Given that the multipolar world is nigh, the only path forward
| is through. If America and her erstwhile allies are no longer
| aligned, then any attempt by America to repair this is doomed.
| Consequently, Trump's approach is the only way forward.
| echelon wrote:
| > Consequently, Trump's approach is the only way forward.
|
| It's the DoD.
|
| Prior to Trump's actions, the American-led "world order"
| seemed to work, even if we couldn't get China to agree to a
| "Bretton Woods 2.0".
|
| Biden tried diplomacy with the EU. He tried to get them to
| agree to a renewed US-led world order, but it wasn't working.
| The EU decided to play the US and China against each other to
| improve its own standing, which is why the US is now moving
| away from the EU.
|
| I think the US could seriously pull out of NATO and leave the
| EU to fend off Russia by itself. It'll have to start spending
| enormous tax dollars on defense and war.
|
| Meanwhile, if the world is truly becoming multi-polar, then
| the US wants to consolidate power in its own hemisphere. This
| is why there's all the rhetoric and action on Venezuela,
| Cuba, Greenland, Canada, etc. The US will keep Chinese ports,
| basing, and trade completely out and secure the trade routes
| for when the Arctic opens up. It recently changed control
| over the Panama Canal, and the DoD is dead serious about
| taking Greenland and maintaining complete hemispheric
| control.
|
| With whatever energy the US has left, it will dedicate to
| Asia. It will strengthen alliances and project power there
| instead of dealing with Europe.
|
| The world is going to be a much more violent place without
| hegemony. Free trade doesn't exist in that type of world. The
| US realizes this and is playing 50 years ahead. None of the
| nice words matter when the energy, trade, and economic lines
| are redrawn.
|
| People like to say the US is led by lawyers and China is led
| by scientists and engineers. This is wrong. The US is led by
| war generals and intelligence. The career DoD folks are the
| ones impressing upon the administration to make these moves.
|
| To be clear: I hate this. I loved the world I grew up in. I
| think we're headed for a violent world that could easily
| erupt into war. I don't like it.
| RealityVoid wrote:
| > The EU decided to play the US and China against each
| other to improve its own standing, which is why the US is
| now moving away from the EU.
|
| This is sanewashig this whole thing. The fact is, the US is
| moving away from the EU because Trump doesn't like
| democracies. It's that simple. You have a large percentage
| of your population in what is essentially a cult and you
| have givem them the reigns.
| echelon wrote:
| > This is sanewashig this whole thing.
|
| This was being called back during the Biden admin and
| before Trump even ran again.
|
| Back during the Obama admin, even!
|
| https://www.atlanticcouncil.org/blogs/new-atlanticist/no-
| piv...
|
| https://www.gisreportsonline.com/r/us-pivot-asia/
|
| https://www.project-syndicate.org/commentary/europe-
| biggest-...
|
| If the US can't build strong coalitions with Europe, it
| wants to spend its energy elsewhere.
|
| Even pop-geopolitik wonk Peter Zeihan was pointing this
| out during Covid. I can't find his videos, but this has
| been top of mind for a lot of people for a very long
| time. These are anti-Trump people, too.
|
| Multipolarity means instability, violence, fights over
| resources, fights over trade. Post-WWII was unusually
| (relatively) stable.
|
| The US can turtle up, just like it did before WWII. It
| doesn't share a land border with any other major powers,
| unlike European and Asian countries. It commands the two
| oceans on its sides (and soon Arctic), and doesn't need
| anyone else - this was the US' defense posture since its
| founding.
| renewiltord wrote:
| You're right. It was in the book _Disunited Nations_ by
| Zeihan.
| RealityVoid wrote:
| Honestly, the idea of Trump making geopolitically
| informed decisions is so out of the realm of my
| perception of reality I don't even know how to engage
| with you. Trump is a narcissistic idiot that you voted
| into power. Your geopolitical direction is dictated by
| his narcissistic whims. "National security reasons
| Greenland" or "EU collaboration with China" or whatever
| is exactly what I initially said - sane washing a
| lunatic.
|
| But, anyway, good luck. You'll need it.
| echelon wrote:
| I have a great interest in geopolitics. I didn't vote for
| Trump, and I already told you this is coming from within
| the DoD.
|
| These are military decisions. These are 50-year plans.
|
| Here I was 10 months ago and two years ago saying the
| same thing:
|
| https://news.ycombinator.com/item?id=43505524
|
| https://news.ycombinator.com/item?id=36896699
| RealityVoid wrote:
| I am not saying you're stupid or misinformed, I'm saying
| you're missing the point. Understanding what Trump wants
| doesn't require you to understand geopolitics, it
| requires you know clinical psychiatry.
| echelon wrote:
| Trump doesn't want this. He didn't come up with the idea.
|
| Trump was told and encouraged to want this by the little
| birdies at the DoD.
| ncruces wrote:
| What do you expect (e.g.) Norway to do except
| disentangle, when their PM sends this text and gets back
| this response? And note that Finland's president (Alex
| there) has been one of the big proponents of continuing
| to engage with Trump. So, honest question, what should
| Finland, Norway, etc, do?
|
| https://archive.ph/rjEtm
| RealityVoid wrote:
| Trump absolutely drives this. You're deluded if you think
| this whole thing comes from the DOD. He is in effect a
| king at this point and he rules by posting in social
| media.
| cbolton wrote:
| > Biden tried diplomacy with the EU. He tried to get them
| to agree to a renewed US-led world order, but it wasn't
| working.
|
| Can you elaborate on that? It seems to me it "wasn't
| working" mostly in the sense that Trump got elected again.
|
| > The EU decided to play the US and China against each
| other to improve its own standing, which is why the US is
| now moving away from the EU.
|
| Seems like confusing cause and effect. The EU is drifting
| away from the US towards China because the US pushed them
| away.
|
| > The world is going to be a much more violent place
| without hegemony. Free trade doesn't exist in that type of
| world. The US realizes this and is playing 50 years ahead.
| None of the nice words matter when the energy, trade, and
| economic lines are redrawn.
|
| This is happening largely _because_ of the US, although
| they stand to lose by replacing a world order that benefits
| them with a world order that benefits China and Russia.
| Well maybe the US will become sufficiently like China and
| Russia that they can benefit too. But even with a gradual
| loss of hegemony there was nothing inevitable about a
| transition to the law of the jungle and it 's doubtful that
| the net result will be positive for the US.
|
| > People like to say the US is led by lawyers and China is
| led by scientists and engineers. This is wrong. The US is
| led by war generals and intelligence.
|
| I think the relevant distinction is that the US is
| democratic while China is authoritarian. But the current US
| government wants to be authoritarian.
|
| > The career DoD folks are the ones impressing upon the
| administration to make these moves.
|
| Again a reversal of cause and effect? I doubt old career
| DoD folks like the current developments. But the current
| government might give a bigger role to the war generals.
| pbhjpbhj wrote:
| >The EU decided to play the US and China against each other
| to improve its own standing, which is why the US is now
| moving away from the EU.
|
| How so? What actions did the EU take?
|
| You don't think the declaration of himself as dictator and
| the immediate threats against EU allies might have changed
| EU attitudes at all?
| dandellion wrote:
| Except all of that will be for naught because the US is
| making the fatal mistake of doubling down on oil and coal.
| It's pointless to play 50 years ahead if you won't make it
| even the next 20.
| liuliu wrote:
| > I think the US could seriously pull out of NATO and leave
| the EU to fend off Russia by itself. It'll have to start
| spending enormous tax dollars on defense and war.
|
| Disagree. If US pulls out of NATO, most likely scenario is
| EU continue to concede to Russia. I think EU will concede
| on Greenland too, but likely won't do it without any
| military action (unclear whether that will trigger nuclear
| escalation and how that can end).
| silasjohnson123 wrote:
| This is a self fulfilling prophecy. It may only be over
| because the administration is actively trying to create the
| multi-polar world. It could absolutely be fixed by Congress
| re-asserting its power.
| renewiltord wrote:
| Something that is "already over" cannot be "un-over".
| That's not how "is already over" works. It means it's done,
| finito, not a prophecy but a historical fact. We have to
| move on. And that means less interference in internal
| European affairs like Ukraine-Russia and more protection of
| our interests like consolidation of power over the
| Atlantic, the Arctic, and the Americas.
| s4i wrote:
| You do realize Denmark/Greenland is (well, at least used
| to be before this circus act) your ally?
| jazzyjackson wrote:
| We already have power over greenland tho :/
| ijidak wrote:
| Mankind has never seen the collapse of a nuclear powered
| empire.
|
| What makes us think this is possible?
|
| It may not be possible for a nuclear powered empire to fall
| without the death of billions.
|
| Mankind is in uncharted territory.
|
| Even Russia never fully fell after the USSR collapsed.
| Whoever kept the nuclear weapons continued to be a first tier
| power.
|
| Nothing in human history compares to the present question of
| how the current empires fall. And if they can even do so
| safely.
| ferguess_k wrote:
| Not so fast, though. A state can be a "killer", or a "giver",
| or both, to gain followers and sell its currency to other
| states. The US was both back in the 40s as well as the late 80s
| when Germany and USSR crumbled. So hail to Pax Americana.
|
| However, the US is more of a "killer" nowadays. The "killer" is
| usually more efficient than the "giver", because people value
| their life more than their wallet. So that's why I think she
| still has some time left. I don't blame it on Trump though.
| Being a "giver" is a lot more trouble than being a "killer",
| and I think the US elites gradually rolled back from the role
| of "giver" since many years ago. Trump is just here to remind
| other states that the US can and will be a very efficient
| killer.
|
| And this is probably the most dangerous time for other states
| because she cannot afford to lose.
| fnordsensei wrote:
| Is it more efficient though? It just looks like burning long
| term prospects for short term ones. Which is on brand with
| the current regime to be fair.
| ferguess_k wrote:
| Yeah it's more short term, I agree.
| lbrito wrote:
| >The US was both back in the 40s as well as the late 80s when
| Germany and USSR crumbled. So hail to Pax Americana.
|
| This is the historical equivalent of selective memory, and
| only really applies to a tiny slice of the planet - western
| Europe.
|
| A lot happened in the world between 1945 and 1989. Outside of
| Europe and Japan, most people would probably not be so
| sympathetic of the US actions during those times. An abridged
| list:
|
| * Iran 1953 - US and UK overthrow democratically elected PM,
| install brutal dictator
|
| * Guatemala 1954 - US via CIA overthrows democratically
| elected president, install brutal dictator
|
| * Brazil 1964, Chile 1973, Argentina 1976 - US supports
| brutal dictatorships replacing democratically elected
| governments
|
| * Iran/Iraq 1980s - US funds both sides in the war
|
| etc. This is a very resumed list.
| ferguess_k wrote:
| Yeah that's the killer part I think. For EU and Japan/SK
| it's mostly the giver but there were also killer events
| like Operation Gladio.
| netbioserror wrote:
| There are also many Americans who have always desired de-
| dollarization, since the dollar has been the foundation of our
| imperial system and abuses of state power. Say what you will
| about how dated a gold standard is, but it forces immediate
| fiscal responsibility upon governments; fiat currencies defer
| responsibility, turning it into a Sword of Damocles that
| catastrophically falls upon future generations. You trade
| geopolitical dominance now for guaranteed future withering. Of
| course, fiscal responsibility and the rejection of imperial
| ambition were core principles of the Anti-Federalists,
| Democratic-Republicans, and Whigs. It's baked into our history
| and tradition to _not_ want to be the unilateral arbiters of a
| global trade and alliance system.
| JumpCrisscross wrote:
| > _Say what you will about how dated a gold standard is, but
| it forces immediate fiscal responsibility upon governments_
|
| We were on metal standards for millenia. Governments
| routinely spent beyond their means, including for imperial
| aims. This is like four centuries of Roman history.
| cheeseomlit wrote:
| Yes, but there were practical limits to currency debasement
| when the currency was a physical commodity with intrinsic
| value. People notice when their coins start getting filled
| with lead, and there were serious political repercussions
| for it. You cant just conjure a trillion gold/silver coins
| out of nothing like you can with fiat, and the ability to
| do so is 100% guaranteed to be abused.
| JumpCrisscross wrote:
| > _there were practical limits to currency debasement
| when the currency was a physical commodity_
|
| "In the second century, a modius of wheat (approximately
| nine liters), during normal times, had sold for 1/2
| Denarius.... the same modius of wheat sold in 335 AD for
| over 6000 denarii, and in 338 AD for over 10,000" [1].
|
| Note that inflation can also occur with zero debasement
| if the economy around the fixed money supply collapses.
| This happened in Rome when Pompey and later Augustus were
| trashing trade routes. It may have even led to the
| collapse of India's ancient democracies.
|
| > _there were serious political repercussions for it_
|
| There weren't. The state historically borrowed from the
| hilt of the sword. Economic collapse constrained kings
| and emperors. Not politics.
|
| [1] https://etedge-insights.com/featured-
| insights/analysis/how-h...
| netbioserror wrote:
| What @cheeseomlit said, plus: During the Age of
| Exploration/Colonization, competing European powers each
| minted metal currencies and couldn't reasonably debase
| their metals without immediately being out-competed (which
| is why the trusted purity of Spanish gold and silver
| coinage slowly dominated). The primary mode of failure for
| those empires was bankruptcy via war. The impossibly high
| cost of fielding armies around the globe was laid bare
| during that era. Paper money lets us (funnily enough) paper
| those costs over and live with the illusion that it's all a
| free lunch. But what we're actually doing today is
| debasement, and _eating_ , vociferously, all of the
| deflationary efficiency gains won by 20th century
| technological progress.
| JumpCrisscross wrote:
| > _During the Age of Exploration /Colonization, competing
| European powers each minted metal currencies and couldn't
| reasonably debase their metals without immediately being
| out-competed_
|
| You're hitting the nail on the head. Metalness didn't
| matter. It was competition in money supplies (and
| strength of private property).
|
| The fact that a banker in Italy could finance (or not) a
| war by Great Britain is what restrained governments. Same
| as in the 1990s, the bond market was king.
|
| The historical record simply does not support the
| hypothesis that metal-based economies are more peaceful
| or inflate less than modern fiat-based ones. I'm open to
| revising that opinion if someone has re-run the data. But
| everything I've seen comes from blogs that start with the
| conclusion, itself reached from assumptions from first
| principles that rarely contemplate how armies were
| _actually_ financed in antiquity. (Hint: they take your
| shit. Marketing campaigns sharing the martial term isn 't
| a coincidence. If you're a general in the olden times,
| you got wealthy through your commission because your army
| took the enemy's shit. If you needed help getting there,
| you paid a 'friendly' visit to your nobles.)
| JumpCrisscross wrote:
| > _US century is already over_
|
| Maybe, maybe not. We're currently the Soviet Union in the
| 1970s. Gerontocratic. Sclerotic. Hyped up on a new mythology.
| And economically uncompetitive on several levels, with the
| future (then computers, now elecrification) sweeping past us to
| our applause.
|
| Unlike the Soviets, however, we can see it happening and debate
| it. If '26 and '28 change course, the damage will still be
| done. But the America Empire is still young. And Trump's
| stupidest policies-the tariffs, fighting the Fed, Greenland and
| raising a _Gestapo_ -don't have the support of most Americans.
| That leaves hope for reform through electoral pressure.
|
| It will take work. But it's as incorrect to assume indefinite
| American hegemony as it is to preemptively concede the game.
| mlindner wrote:
| I'd agree with most of what you said, but there is no
| "raising a Gestapo". ICE has existed for 25 years. And the
| laws that give it permission to act haven't changed. It has
| gradually grown over the decades but what it fundamentally
| does has not.
|
| What's new is finally the federal government pushing back
| against locales that refuse to allow local police to
| cooperate with federal law enforcement by means of massive
| influxes of federal officers to offset the lack of local
| support.
|
| Also ICE has widespread support for what they are actually
| doing. Only when you ask manipulative questions that presume
| something is happening that isn't, do you get poll results
| that support a widespread dislike for ICE.
| mythical_39 wrote:
| > ICE has widespread support for what they are actually
| doing
|
| Minnesota would like to have a chat with you.
| 9x39 wrote:
| https://www.kttc.com/2026/01/20/americas-pulse-current-
| ice-a...
|
| About 40-50% are in support, so the parent's accurate.
| That roughly matches the political divide across the
| states.
| PsylentKnight wrote:
| The first sentence says that that's a national poll, not
| a Minnesota poll
| jazzyjackson wrote:
| ICE has not been disappearing people to meet quotas for 25
| years.
|
| _" Terrible things are happening outside. At any time of
| night and day, poor helpless people are being dragged out
| of their homes. They're allowed to take only a knapsack and
| a little cash with them, and even then, they're robbed of
| these possessions on the way. Families are torn apart; men,
| women and children are separated. Children come home from
| school to find that their parents have disappeared. Women
| return from shopping to find their houses sealed, their
| families gone."_
| _verandaguy wrote:
| My outsider's POV: the fact that there's a Gestapo-analogue
| in place already tells me that an electoral solution alone is
| almost certainly no longer sufficient (or at least, unlikely
| to be effective) at this point.
|
| The Democrats have also had _very_ weak messaging ahead of
| the midterms. Like, pathetically weak in the current context.
|
| This is to say nothing of the hypothetical where the US makes
| moves against allies' territories before the midterms.
| JumpCrisscross wrote:
| > _the fact that there 's a Gestapo-analogue in place
| already tells me that an electoral solution alone is almost
| certainly no longer sufficient (or at least, unlikely to be
| effective) at this point_
|
| Read up on the American Whig Party and President Andrew
| Jackson. Or, more recently, Poland. This is absolutely
| still in a reversible field.
|
| > _Democrats have also had very weak messaging ahead of the
| midterms_
|
| Utterly leaderless. In part because a _lot_ of the party is
| compromised in having covered up Biden.
| jazzyjackson wrote:
| How do you suppose we change the minds of the third of
| Americans who _like_ having a _Gestapo_
| throwaway132448 wrote:
| Most people aren't empathetic enough to learn from other
| people's mistakes. So the answer is, you don't. Hard luck.
| At least you had it good for a while.
| JumpCrisscross wrote:
| > _How do you suppose we change the minds of the third of
| Americans who like having a Gestapo_
|
| You don't. You work around it.
|
| 10 to 20% of Americans will agree with just about any
| stupid proposal. It's idiosyncratic, however, so even if
| you shut off that position, they still find representation
| on other issues. (Unless they're single issue. In that case
| they're either incredibly powerful, but only when it comes
| to that issue, or worthless.)
| throwaway132448 wrote:
| > Unlike the Soviets, however, we can see it happening and
| debate it.
|
| I think you're severely underestimating how much public
| discourse has already been chilled. There are a lot of things
| leaders across business or government won't say any more for
| fear of being targeted. And let's be honest the people who
| rise to the top in America aren't the selfless kind.
| diordiderot wrote:
| > raising a Gestapo
|
| If they were really Gestapo you wouldn't see people tailgate
| them in a Subaru or scream in their faces
| JumpCrisscross wrote:
| > _If they were really Gestapo you wouldn 't see people
| tailgate them in a Subaru or scream in their faces_
|
| Fine. Brown shirts [1].
|
| [1] https://en.wikipedia.org/wiki/Sturmabteilung
| ijidak wrote:
| Something to think about....
|
| Mankind has never seen the collapse of a nuclear powered
| empire.
|
| Sadly, it may not be possible for a nuclear powered empire to
| fall without the death of billions...
|
| Mankind is in uncharted territory.
|
| Even Russia never fully fell after the USSR collapsed. Whoever
| kept the nuclear weapons continued to be a first tier power.
|
| Nothing in human history compares to the present question of
| how the current empires fall, and if they can even do so
| safely.
|
| Very sobering times ahead.
| andix wrote:
| > Mankind has never seen the collapse of a nuclear powered
| empire.
|
| Open your history book and read about what happened in 1991.
| throwerxyz wrote:
| This is a hilarious take. Which ally is the US a traitor to or
| will be a traitor to again? You sound emotionally invested in
| the fake drama and propaganda of Trump.
| hypeatei wrote:
| Gold front-runs monetary policy, meaning central banks and people
| use it as a hedge against currency devaluation or other
| uncertainty (e.g. the U.S. Federal Reserve being taken over by
| the executive)
|
| Now look at the gold chart over this past year. Yeah, people are
| uneasy and we're likely to see a lot of printing.
| falcor84 wrote:
| As a big nitpick, I found the y axis in that chart ranging
| between 40%...90% to be horribly misleading.
| drumhead wrote:
| It's not going to be replaced any time soon, there's no realistic
| replacement at the moment, but there is a slow movement away from
| it. We've already seen a stampede into gold from central banks.
| And pimco have said they're going to relocate funds out of dollar
| debt.
|
| After the nonsense with Greenland no one really wants to give
| anymore financial power to the US so we'll see more assets kept
| in local currency or different reserves currencies like the Euro,
| Yen, Sterling, or ChF.
| thedangler wrote:
| Dollar milkshake theory
| quadyeast wrote:
| uhm, they need to proof thier article "This increased demand has
| in turn partly driven the current bull market in gold, with
| prices forecast to climb toward $4,000/oz by mid-2026."
| minkeymaniac wrote:
| Article is from July 2025, Gold was 3362 at that time
| AnimalMuppet wrote:
| So gold is up 50% in six months? That's... quite a bit.
| bee_rider wrote:
| They were off, it is going so much faster.
| hnburnsy wrote:
| For those who are not bothering to read this,the article
| essentially states that de-dollarization is happening in pockets
| (e.g., reserves down to ~58-60%, Treasuries foreign ownership at
| 30%), but the dollar's core dominance persists.
|
| What would replace it? I guess the options are Yuan, Gold, Oil or
| maybe BRICS in the future, none of which are safe, stable, and
| liquid.
| FpUser wrote:
| As a long term Gold and Oil pretty much are
| blackoil wrote:
| Oil price is highly volatile for it to be reserve currency. A
| mix of Gold, Yuan, Euro, Dollar makes more sense.
| demosito666 wrote:
| Euro?
| tsunamifury wrote:
| The harsh reality is that a federated state system with a
| very weak governing body economically and politically is
| extremely unlikely to be the global trade currency.
| stickfigure wrote:
| Let's what-if a scenario where the Fed is made subservient
| to the President and the President wants the dials turned
| to 11, let the next guy deal with the consequences.
|
| The dollar isn't indestructible. If not the Euro, what?
| adamc wrote:
| Probably a mix of things, including commodities like
| gold.
| rlt wrote:
| Bitcoin
| krupan wrote:
| People downvote this but Bitcoin has some very nice
| properties:
|
| - easy to verify/impossible to forge (as opposed to gold and
| paper currency)
|
| - fixed supply (as opposed to paper currency, oil, and even
| gold)
|
| - easy to transfer from one party to another (as opposed to
| gold, oil, and physical cash)
| adamc wrote:
| Suffers from no government having a stake in it. If it
| causes them problems, it can easily become illegal.
| RealityVoid wrote:
| Precisely this makes it attractive. If it can't be _your_
| currency let it at least be a currency no other nation
| controls.
| JumpCrisscross wrote:
| > _If it can 't be _your_ currency let it at least be a
| currency no other nation controls_
|
| At that point just hoard resources. Holding a bunch of
| Bitcoin in a crisis is useless for a country if no other
| country will buy them off you in exchange for tradeable
| hard currency.
| RealityVoid wrote:
| You are right. My point is that if you have international
| trade of even mild complexity, having a currency is very
| convenient so trade will end up being denominated in one.
| No reason it can't be some crypto that is not backed by
| any nation.
| JumpCrisscross wrote:
| > _No reason it can 't be some crypto that is not backed
| by any nation_
|
| There is a great reason: a state-backed currency should
| always be accepted by that state. If the world is in
| crisis, you may wind up stuck with your Bitcoins.
| RealityVoid wrote:
| I thought we were talking about World reserve currency
| here i.e. international trade.
|
| I agree that you need the currency to be accepted by the
| state for good local trade support. But that was not the
| point.
| JumpCrisscross wrote:
| > _thought we were talking about World reserve currency
| here i.e. international trade_
|
| Yes. If you're a random country, you can use your dollars
| to buy shit from America. Countries hold reserves for
| basically two direct reasons: to intervene in FX markes
| and protect their imports. The latter is the main one. At
| the end of the day, your ideal reserve composition
| matches your import portfolio because you want currency
| you can send to the people who are selling you shit.
| engineer_22 wrote:
| Is it a conspiracy theory that Bitcoin was developed by
| the US military as a hedge against US dollar
| hyperinflation? I've heard that argument made somewhere
| but maybe it was just a rumor to try to legitimize
| Bitcoin?
| JumpCrisscross wrote:
| > _Is it a conspiracy theory that Bitcoin was developed
| by the US military as a hedge against US dollar
| hyperinflation?_
|
| Yes, none of that makes an iota of sense. If a military
| wants to take inflation into its own hands, it has far-
| better options. From hoarding to, you know, taking shit.
| krupan wrote:
| "just hoard resources" really has nothing to do with a
| world currency to replace the dollar, which is what we
| are talking about here. In a crisis you can't eat
| dollars, gold, oil, or bitcoin, so yeah, you kinda have a
| point, but an orthogonal one.
| JumpCrisscross wrote:
| > _In a crisis you can 't eat dollars, gold, oil, or
| bitcoin_
|
| But you can easily trade dollars for stuff Americans will
| sell you. That's the advantage of a national backer. In a
| crisis, they'll welcome the influx of capital in exchange
| for goods and services. Precisely what you need it you
| want to spend it.
|
| This is why sanctions fuck up reserve calculations. If,
| in a crisis, America will sanction you, you might as well
| have held gold or Bitcoin.
| krupan wrote:
| Lots of countries outlaw other country's currencies. This
| is nothing unique to Bitcoin when we are talking about a
| world currency to replace dollars.
| krupan wrote:
| Several countries do now have a stake in Bitcoin. See:
| https://bitbo.io/treasuries/countries/
| philipwhiuk wrote:
| > easy to transfer from one party to another
|
| "Let me just set up my P2P connection to the Bitcoin
| network and pay mining fees and hope a miner validates the
| block"
|
| vs
|
| "Here's a bar of gold mate"
|
| Sure, real easy
| RealityVoid wrote:
| > "Here's a bar of gold mate"
|
| Yeah, super convenient. Well worth it. I'll just go with
| gold bars on me to the market to buy lettuce.
| throwaway132448 wrote:
| Nobody is talking about using Bitcoin or gold for
| transactions. For which nobody does anyway. The whole
| discussion is about reserves.
| RealityVoid wrote:
| OP was literally comparing payments in gold and in
| crypto. For which kind of transactions? I admit, it was
| unspecified, and it might have read too much into it.
|
| By it sure does sound simpler to type some numbers that
| to cut up pieces of metal.
| krupan wrote:
| OK, how do I know that gold is pure and real? What if you
| live on the other side of the world and I want to buy
| that gold from you?
|
| And there isn't any "hope" involved in bitcoin
| transactions. Connecting to the peer to peer network is
| super simple (way, way easier than creating a brokerage
| or bank account, and no ID or approval is required).
| Miners will pick up your transaction (and yes fees will
| help speed that up, as with any financial transaction)
| and it will be included in a block. Bitcoin has been
| doing this non-stop, flawlessly since 2009.
| nitwit005 wrote:
| Bitcoin doesn't really solve the trust issue, because it
| covers half the transaction. If I send you a bunch of
| bitcoin in exchange for oil, how do I ensure the oil
| shows up?
|
| There are fixes to that problem, of course, but it's not
| bitcoin itself that's the solution.
| krupan wrote:
| 50% of a transaction verified is a whole lot better than
| 0%
| postalrat wrote:
| It has at least one fatal flaw: the math it is based on. I
| feel like it won't be too long before a few major
| weaknesses are found and bitcoin will lose all security.
| krupan wrote:
| Bitcoin has been running since 2009 with plenty of
| incentive for hackers to find flaws in it and they
| haven't found any. It uses standard cryptography that is
| used by all our computer systems. If a flaw exists it's
| not just bitcoin that will be damaged but _everything_ we
| use.
| throwaway132448 wrote:
| It's dumb because it requires uninterrupted access to an
| incredibly complex system. The cognitive dissonance of
| people who see bitcoin as resilient is hilarious.
| krupan wrote:
| It's a peer to peer system that has had 100% uptime since
| around 2009. I think maybe you have cognitive dissonance?
| throwaway132448 wrote:
| Because it's geopolitically irrelevant, not because it's
| robust.
|
| Split the user base along geopolitical axes and see how
| long the consensus algorithm lasts.
|
| Gold bars don't have this problem.
| krupan wrote:
| Huh? Sorry, I don't understand any of what you are saying
| now.
| shimman wrote:
| If a sovereign government declared bitcoin illegal, it
| becomes illegal. There is nothing unique about any asset
| to stop this because the rules are all made up and can
| change anytime.
| throwaway132448 wrote:
| The context of my comment was Bitcoin as an alternative
| to traditional reserves. I'm saying that in a domain as
| lawless as international law, gold bars make sense in a
| way that bitcoin does not.
| toephu2 wrote:
| But Bitcoin is backed by nothing. At least the USD is
| backed by the sole superpower in the world (at the moment).
| krupan wrote:
| What does "backed" mean to you here?
| eigenspace wrote:
| Just because frivilous money printing is bad does not mean
| that a fixed supply is good. A fixed supply is a terrible
| property to have in a money system. It's very beneficial to
| have a money supply that can grow or shrink according to
| demand.
| krupan wrote:
| This is a tough argument to engage with. Define
| "frivolous" when it comes to money printing. Define
| beneficial, and define beneficial to whom. Talk about who
| decides how much money to print. And you said it's
| beneficial to have the supply grow or shrink. We know
| "printing more" is how you grow the supply, but how do
| you shrink the supply?
| jollyllama wrote:
| Nothing. The Dollar is antifragile. The worse it gets, the more
| entrenched it becomes. [0]
|
| [0] https://en.wikipedia.org/wiki/Gresham%27s_law
| horsawlarway wrote:
| Your linked page doesn't actually appear to render any sort
| of compelling argument for this.
|
| In fact - the entire argument seems to more accurately hinge
| the conditional left off the main saying, so the full
| description is:
|
| "Bad money drives out good if they exchange for the same
| price."
|
| But that requires a legal structure that enforces the
| disparity, and the summary of the whole thing basically boils
| down to:
|
| ---
|
| If given the choice of what money to accept, people will
| accept the money they believe to be of highest long-term
| value and not accept what they believe to be of low long-term
| value. If not given the choice and required to accept all
| money, good and bad, they will tend to keep the money of
| greater perceived value in their own possession and pass the
| bad money to others.
|
| ---
|
| But if anything - this is _exactly_ an argument for the value
| of soft power to the US, because we can 't enforce how other
| nations transact, except through soft power.
| jollyllama wrote:
| In practice, everyone wants to spend their dollars, not
| their gold, or their bitcoin, or their Euros, and so
| dollars it will be. What else is there that anyone both
| with pay with and will be accepted by the other party?
| dybber wrote:
| Soon dollars might not be accepted if US companies wants
| to buy things in the EU, they will have to pay in euros
| (part of the anti coercion instrument that Macron and
| others have been talking about the last couple of days)
| jollyllama wrote:
| I don't think it will happen. 10% of EU bank loans that
| are dollar-denominated [0]. If they cut the flow of
| dollars into the EU, the debtors of those loans would
| wind up offering a premium for their goods and services
| to non-US companies, making them uncompetitive. It would
| be a roundabout tariff that would hurt the EU countries
| too much.
|
| [0] https://www.ecb.europa.eu/press/financial-stability-
| publicat...
| Qem wrote:
| > The Dollar is antifragile.
|
| Apparently the guy that invented the concept disagrees:
| https://x.com/nntaleb/status/1914633020671246352
| kipchak wrote:
| Couldn't you make the same case for every other former
| reserve currency which has had something replace it?
| marcosdumay wrote:
| Countries _are_ replacing it with Yuan, Euro, Yen, Gold, Oil,
| and more stuff.
| g-mork wrote:
| the BRICS Unit was proposed to resolve the "Triffin dilemma",
| which is that the structural deficit necessary to maintain
| reserve status inevitably erodes trust in the currency over
| time. China's economy also relies on exports which would not be
| helped by reserve status. which is to say an eventual
| replacement may not be the yuan or any other single currency
| kelseyfrog wrote:
| Or the Bancor[1], like how Bretton Woods was originally
| envisioned.
|
| 1. https://en.wikipedia.org/wiki/Bancor
| elAhmo wrote:
| I can't believe people actually bring BRICS in serious
| discussions.
| troad wrote:
| HN is great for technical discussions, but is below average
| for political or macroeconomic discussions. A HN comment
| thread on those topics is essentially indistinguishable from
| a NYT comments section, which I mean as an unfavourable
| comparison.
|
| Turns out that being good at SQL does not make one good at
| the subtle social art / science of power and governance. If
| anything, the correlation is inverse. This shouldn't be
| surprising.
| drinkzima wrote:
| The issue is that there isn't a great alternative.
|
| The euro is difficult to manage because of the diffuse control,
| pound an even smaller economy, RMB just not global enough (and
| tough argument to see that happening), gold/bitcoin/whatever not
| the same inherent stability.
|
| Indeed the dollar weakening, but nothing really to take it's
| place.
| RGamma wrote:
| The ECB is not diffusely controlled.
| ahnick wrote:
| Literally cryptocurrencies are the single greatest alternative
| ever made. Opt out of the system where the government can just
| print money into thin air and old guys drawing dots on a plot
| set interest rates in closed meetings. If you want to hedge USD
| exposure just buy a Bitcoin ETF or if you really can't stomach
| cryptocurrencies b/c you don't want to be ostracized from the
| orange site, buy Gold. We are not going back to the way the
| world was and if you have all your money in USD realize you are
| on a leaking boat.
|
| It is entirely possible to manage funds in crypto for growth
| and move some amount into more liquid USD denominated assets or
| MMFs when you need liquidity.
| throwaway132448 wrote:
| Right up until you lose your internet access.
| kayamon wrote:
| It'll all still be there when you get it back.
| throwaway132448 wrote:
| Why would you get it back?
| kayamon wrote:
| --You don't want the bank to give you your money back?--
|
| edit: I misunderstood, or do you mean why would you get
| your internet back? If you're not getting your internet
| back, I can only offer you're not getting your money back
| either.
| graykey31 wrote:
| CHF?
| weirdmantis69 wrote:
| If Something Cannot Go on Forever, It Will Stop
| BowBun wrote:
| Just last week, I was accused on HN of "not knowing what I'm
| talking about" when sharing data showing, and my interpretation
| of, a declining US dollar globally.
|
| It is so obvious in the context of globalization: countries
| seeking power will chip away at fiscal dominance of others with a
| thousand cuts. Why wouldn't they? Especially after years of
| getting bullied.
|
| So many people are so dependent on this reality that I think it's
| going to happen long before any Americans accept it has happened.
| shevy-java wrote:
| HN may not have the best experts - people are kind of quick to
| downvote. Almost in a reddit-like fashion.
| therobots927 wrote:
| Plenty of Elon musk types / admirers who think that because
| they're good with computers they know everything about
| everything.
| SV_BubbleTime wrote:
| Oh, that's not entirely fair. I feel like the self appointed
| experts almost have more pretentiousness than Reddit.
| therobots927 wrote:
| Similarly I was downvoted for pointing out that the developed
| markets index returns (30%) doubled US market returns (15%)
| over the last year. Simultaneously the value of the dollar has
| dropped 10%. I simply stated that we're seeing capital flight
| from the US. Ray Dalio said the same thing this morning.
| maerF0x0 wrote:
| And if you look at pricing as a proxy for capital flows, SMMD
| which is Russell 3000 minus S&P500 has had a heck of a run in
| 3 months. IMO People are retreating the mag7
| therobots927 wrote:
| I hadn't noticed that , that is interesting. Makes sense to
| me. That's not good for the S&P considering that ten stocks
| make up 40% of the index.
|
| And since the wealth effect is really the only thing
| keeping the US out of a recession, if the MAG7 fail then
| we're looking at serious economic problems.
| RealityVoid wrote:
| Yes, people are in denial about these things. I'm still salty
| for the time I posted I believe the covid money printing will
| lead to inflation and I was down-voted for it.
| maerF0x0 wrote:
| China is intentionally undermining the dollar in order to try to
| make the Yuan the world currency[1,2,3]. My current hypothesis is
| that the growth in the _price_ of the US Stock market (eg S&P
| 500) is actually devaluation of the dollar. Compared to real
| money (Gold) the S&P500 is down over the past 10 years. [4]
|
| 1 -
| https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s...
|
| 2 - https://www.economist.com/china/2025/09/10/china-is-
| ditching... ( https://archive.is/aNRmm )
|
| 3 - https://www.amazon.com/dp/B006JAM3UU/ "Currency Wars" by
| James Rickards (2011)
|
| [4] - https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
| IshKebab wrote:
| Gold is not "real money", come on.
| maerF0x0 wrote:
| It's a lot less Fiat than USD.
| hagbarth wrote:
| How so?
| maerF0x0 wrote:
| I guess because gold isn't created by decree?
| BlarfMcFlarf wrote:
| Supply is only one half of value. The demand for gold is
| almost entirely speculative, whereas dollars can be
| directly used for almost anything.
| PlatoIsADisease wrote:
| The analytical philosopher in me says:
|
| "Define real money"
|
| I think everyone can agree if you specify your definition.
| znnajdla wrote:
| A goat or a sheep cost roughly the same in gold today as it
| cost 2000 years ago during the Roman Empire. Gold is the only
| "real money" in the sense that it is the only stable measure
| of the value of basic needs over centuries.
|
| https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb.
| ..
| spicyusername wrote:
| First link to ChatGPT as a "source" that I've seen in the
| wild.
|
| Times they are a-changing.
|
| I can't say that anyone is going to find that very
| convincing, even if it's a compelling idea to consider gold
| inflation over the centuries.
| gamacodre wrote:
| Yeah, I saw that link and had a few thoughts immediately
| collide in my head: - Wait, WTF?
| Really?? - But but but it's a *chatbot*, not an
| authority - We're doomed
| duskwuff wrote:
| Unless there's something I'm missing, there isn't even a
| response at the link - just a question.
|
| (And if that was how the user posed the question, I'd be
| concerned that priming the chat with "is it true that..."
| biased the response towards "yes, it's true".)
| RealityVoid wrote:
| Ahh, yes, gold and the speed of light in a vacuum - the
| only real constants in the real universe.
| tyuu wrote:
| A goat costs exactly (not roughly) the same in goats today
| as it cost 2000 years ago. So by that measure a goat is the
| only stable measure of the value of basic needs over
| centuries.
| MengerSponge wrote:
| That's why new stablecoin is backed by goats: Capracoin
| tdb7893 wrote:
| Goat production is overall much cheaper now so wouldn't we
| expect the "real" price to be less? That it tracks the
| price of goats and sheep makes me think it's not a
| particularly stable unit of value since I don't expect goat
| or sheep to be valued in a stable way, especially across
| millenia.
| tyuu wrote:
| That chart is also really weird. With log scale turned off
| and expanded to all time...
|
| https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
|
| Makes it look like the US peaked at Sep 2000 and has been
| downhill ever since. Doesn't track at all with GDP which has
| almost doubled since 2000. I.e. it doesn't track with growth,
| but does track with dollar index somewhat, which makes sense
| because it's tracking a dollar value intermediate when
| considering "how much gold it takes to buy S&P 500", which
| means it really ends up tracking something else entirely.
|
| > Compared to real money (Gold) the S&P500 is down over the
| past 10 years. [4]
|
| Isn't this the real chart to look at for that? Completely
| different story when you select max on the timeline.
|
| https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD
|
| Personally I am about $10M USD poorer for listening to people
| on the internet. I wish people would not spread falsities
| about finance that can actually ruin lives. (Albeit to be
| fair, the trend is towards conservative advice...my life was
| uniquely affected in terms of limiting upside, so I am at
| least grateful that most online posts work very hard to limit
| downside.)
| dcl wrote:
| S&P gets you dividends though, so the interpretation of
| that chart is tricky. Holding the S&P, you can still do
| better than holding gold, even when the GOLD/S&P ratio is
| positive.
| ericmay wrote:
| I don't think that's feasible because China's capital markets
| aren't secure for foreign investors and never will be unless
| China changes the very thing that they want to be. They'd have
| to open their markets, be open to direct foreign investment, no
| more China-only ownership of companies, and no more artificial
| devaluation of the Yuan.
|
| Also the US capital market is huge. Surprisingly huge, even,
| and there is very little that can change that for the
| foreseeable future.
| epistasis wrote:
| Does using the Renminbi require investing in securities?
|
| It's a very different thing to trust that China will maintain
| the value of its currency, than to trust that investment in
| Chinese companies will remain liquid and not be arbitrarily
| cut to a price of zero.
|
| I'm not saying you're wrong, but I also don't fully
| understand the need to have grander access to capital
| markets. Perhaps access to the equivalent of US Treasury
| auctions?
| vatsachak wrote:
| China is notorious for not maintaining the value of it's
| currency though.
|
| That's why do many Chinese people buy assets in the Anglo
| world; assets are much better protected here
| epistasis wrote:
| Yes, it would be a big change. But if Europe needs to
| bring out the Anti-Coercion Instrument against the US, an
| economic weapon it invented to be used _against China_ ,
| the world is in a very different place in belief of what
| _could_ be safe.
|
| If China signals that it is changing its attitude on its
| currency, that it _wants_ to be the reserve currency and
| establish a consumer economy, it wouldn 't take much for
| people to shift these days. Nobody needs to adopt the
| Renminbi 100% right away, they can transition to multiple
| currencies for a while as a hedge against the US, and the
| situation will evolve. Dedollarization won't happen in a
| month or a year, it will be a multi-year process once it
| kicks off. But once it kicks off, it will be because of
| such a loss of confidence in the US that it probably
| won't be possible to stop it.
| ericmay wrote:
| > I'm not saying you're wrong, but I also don't fully
| understand the need to have grander access to capital
| markets.
|
| Well if you use the renminbi or yuan as just a medium of
| exchange, well, why bother when you already have the
| dollar?
|
| To answer your question better, what is the point of access
| to capital markets of a country and how does that stabilize
| or strengthen its currency, or make it more highly sought
| after?
| epistasis wrote:
| That is an excellent point! My intuition is that the yuan
| could be viewed as more reliable than the dollar, when
| the dollar is propped up precisely on the good will that
| gets destroyed by threatening invasion of allies. China
| _does_ threaten plenty of invasions, but not in Europe or
| most of the rest of the world yet.
| ericmay wrote:
| Reliable how? How would you obtain the currency, and what
| would you do with it?
|
| > when the dollar is propped up precisely on the good
| will
|
| The dollar isn't valuable because of good will. Central
| banks in Europe, or Japan, or elsewhere don't hold
| dollars because they want to be nice to the United
| States. They hold them because the United States is
| incredibly wealthy, has incredibly deep capital markets,
| high liquidity, and because the dollar is a great medium
| of exchange.
| epistasis wrote:
| Unless China _wants_ it to happen, it won 't have the
| reserve currency. It would require big changes in China's
| part to make it happen. I fully agree with you that they
| wouldn't open up things like equities markets in a way
| that could be trusted by outsiders. But I do think they
| could open up access to the currency.
| ericmay wrote:
| Right, but what I'm arguing is that the currency isn't
| going to be that valuable without doing things like
| opening their markets to outside investors. You could
| just go with the Euro even if you didn't like the dollar.
|
| That's the thing I keep coming back to. What are the
| specific features of the currency that make it more
| valuable than the other reserve currencies that exist
| today? I don't think China is willing to do what they
| would need to do add those features, because it requires
| CCP to loosen control and they can't do that.
|
| If China "democratized" it would unlock a ton of
| potential and go on to dominate the globe. But doing that
| requires untenable changes for the CCP so it won't
| happen.
|
| Plus everyone is going to be mad and distrustful once
| they invade Taiwan.
| mythical_39 wrote:
| not even P/E ratios resetting back to historic norms? Or have
| we finally entered a new age where highly elevated P/E are a
| permanent feature of markets?
| maerF0x0 wrote:
| "This is the new normal" is basically the sign of a bubble
| about to pop.
| toephu2 wrote:
| > no more China-only ownership of companies
|
| They already allow this somewhat. Tesla's Gigafactory in
| Shanghai is fully owned by Tesla, and is the first wholly
| foreign-owned car manufacturing plant in China, operating
| without a required local joint venture partner.
| ericmay wrote:
| I don't think one small example matters here. The other
| thing is, actual foreign-ownership of companies. It matters
| a lot.
| baxtr wrote:
| Yes, the S&P rose only 4% last year for EUR investors.
| PlatoIsADisease wrote:
| >China is intentionally undermining the dollar in order to try
| to make the Yuan the world currency
|
| The constant devaluation makes it unappealing.
|
| > My current hypothesis is that the growth in the _price_ of
| the US Stock market (eg S&P 500) is actually devaluation of the
| dollar.
|
| I generally agree. But economic orthodoxy says 'Inflation is
| only 2%', despite precovid, it seemed more like 4%.
| JumpCrisscross wrote:
| > _constant devaluation makes it unappealing_
|
| If this is the complaint the dollar is safe. And
| international holders of dollars aren't idiots. They hold
| Treasuries, which more or less preserve their purchasing
| power. (Nobody outside the poor, who have to, and nutters,
| who don't know better, hold cash as an asset. It's so
| thoroughly assumed that in finance, cash refers to cash and
| cash equivalents.)
| weberer wrote:
| The insidious thing about inflation is that it compounds.
| Even just a 7% inflation rate will halve your currency's
| value in just 10 years.
| wasabi991011 wrote:
| > Compared to real money (Gold) the S&P500 is down over the
| past 10 years. [4]
|
| There's such large fluctuations though, especially compared to
| the S&P 500 in USD [5] or even TFA's USD shares of FX reserves.
|
| [5] https://www.macrotrends.net/2324/sp-500-historical-chart-
| dat...
| evilfred wrote:
| I don't think China is forcing the US president to do crazy
| stuff every day
| snarf21 wrote:
| I keep wondering what would happen if China and the EU came
| together and agreed to move all trade to the Euro as a pushback
| of all the current insanity. I don't think the Yuan can ever be
| the global trade currency given China's current structure.
| elAhmo wrote:
| > My current hypothesis is that the growth in the _price_ of
| the US Stock market (eg S&P 500) is actually devaluation of the
| dollar.
|
| You mean devaluation is causing the growth of SP500, or the
| other way around?
| maerF0x0 wrote:
| the S&P is only growing when the denominator is USD. Not Euro
| or Gold.
|
| It's kinda like saying during "My bread appreciated!" during
| hyper inflation.
|
| IMO we're in one of the cases where "Number go up" is
| actually bad.
| anon291 wrote:
| How can that be? Maybe gold, but the euro has fallen
| relative to the dollar.
| chippiewill wrote:
| In the UK we have a convenient way of observing this
| phenomenon.
|
| The FTSE100 is mostly multinational companies valued in
| pounds. The FTSE250 is mostly British companies valued in
| pounds. If the FTSE100 goes up while the FTSE250 stays flat
| or falls then it means the currency got devalued and
| there's no real growth.
| arbuge wrote:
| > Compared to real money (Gold) the S&P500 is down over the
| past 10 years.
|
| Speculation can always drive the price of gold way up past its
| real value.
| throwaway5752 wrote:
| Yes. They are playing chess while the US is playing "shoot
| yourself in the dick".
| howmayiannoyyou wrote:
| USD remains and will remain dominant. Trillions in dollar
| denominated debt and derivatives, insurance products and assets
| exist globally. No other country willing to run prolonged &
| massive deficits required for a reserve currency. No other
| country, of sufficient size, has as predictable legal and
| regulatory dispute resolution environment. No other country
| currently has capabilities to protect overseas shipping - a key
| component of global trade.
|
| USD dominance isn't going anywhere despite hurt feelings over
| Trump or US policies.
| incomingpain wrote:
| Obama during affordable healthcare act discovered they were very
| dependent on other countries. This was very visible during covid
| and the 'supply chain' breakdown.
|
| Obama started a process, Biden and Trump are in lockstep. They've
| reduced this issue by about 1/3rd by 2024. Trumps' tariffs are
| almost certainly going to be upheld by the supreme court.
|
| This has led to a reshoring boom and trillions of new investment
| in the usa. Estimates seem to suggest only a marginal improvement
| of about 3%, so roughly another 20% improvement.
|
| But fixing the very broken trade balances for the USA has long
| term benefit but it will result in a strong USD, but weaker
| reserve currency. Obviously the USA is rapidly moving away from
| bretton woods and being the world police.
|
| They will drop below 50%, but nobody else is there to pick up the
| reserve currency crown. They get all the benefits of seignoiorage
| and very little of the downsides for decades.
|
| Their dominance is over but they clearly saw that the cost-
| benefit was not worth continuing into the future.
|
| Meanwhile, since they stop being the world police and reshored
| the important things. They dont care about the stability of
| global trade. Instead their super carrier groups will move to
| poke their nose only in their own business. You're going to see a
| fast shift from the usa being hated to being loved over the next
| 10-20 years.
| shevy-java wrote:
| Let's hope so. The USA has become very aggressive under the
| TechBro rule.
| mythical_39 wrote:
| many of whom are jacked on testosterone supplements.
|
| The aggressiveness might be related to that.
|
| https://www.them.us/story/testosterone-parties-silicon-valle...
| https://stand.ie/stand-newsroom/political-power-testosterone
| glemion43 wrote:
| Hope so.
|
| It's time.
|
| Who is so stupid, racist and ignorant shouldn't be the world
| leader.
|
| At this point we have the EU with the dollar and values and real
| freedom and don't forget the Chinese.
|
| They might control there people and also do other shitty things
| but they are at least doing this for their people
| adamc wrote:
| Not really relevant to why there is de-dollarization. And I am
| not a Trump fan.
| Waterluvian wrote:
| I'm hopeful that any loss in dominance translates directly to
| economic pain for all Americans. Nothing will rose those
| sleepwalking through the rise of fascism faster than not being
| able to make ends meet.
| shigawire wrote:
| I'm not sure that is true at all. I think the sleepwalkers are
| just as likely to blame immigrants, foreigners, <insert out
| group> and continue to hand the current regime more power.
| Waterluvian wrote:
| Yeah, on second evaluation I think you're right. People are
| less likely to be motivated to act, and more likely to be
| more easily manipulated.
| libraryatnight wrote:
| Part of the strength came from trust and participation in a
| community. The US has become untrustworthy and hostile toward
| community.
| mannyv wrote:
| De-dollarization is one of those things economists love to talk
| about.
|
| The chance of the dollar losing its reserve currency status is
| slim-to-none. No matter how bizarre the US is, nobody trusts the
| Chinese Communist Party (CPP). And although the US can manipulate
| the value of the dollar, its tools are limited compared to the
| CPP.
|
| Plus, the US is still the only country that's willing and able to
| prop up the world financial system with no immediate benefit (see
| Argentina). The US can and will intervene when necessary. And as
| history has shown, the Euro Zone can't really make decisions
| quickly and effectively. How many times has the Euro been on the
| verge of collapse in the last 20 years? And is proximity to
| Russia is, well, risky.
|
| In any case there is no currency big enough to take the dollar's
| spot at this point in time. Trillions of dollars flow through the
| financial system every day.
| usrbinenv wrote:
| It's far from slim - it's very likely USD and EUR hegemony will
| be challenged. Western financial systems are ultimately and
| inherently discriminatory towards any non-western countries.
| Where for westerners using those systems enjoy reliability and
| predictability, the same systems implicitly (and recently, more
| explicitly) punish non-westerners with excessive compliance and
| scrutiny. So, basically, if you're from a non-western country,
| good luck not having your money confiscated or fronzen at some
| point - and this applies both on state-level and individual
| level. Of course sensible countries will seek alternatives and
| will create ways to bypass this elitist bullshit. The whole
| thing is literally nothing else but inertia at this point and
| over time both USD and EUR systems are destined to become
| merely regional.
| vablings wrote:
| When you say non-western what do you mean in this context?
| From what you describe it just sounds like China, Russia and
| North Korea
| usrbinenv wrote:
| I mean literally any country outside of Europe, North
| america, Australia, New Zealand and maybe some non-western
| exceptions like Singapore.
| vablings wrote:
| I don't think that's exactly fair; there are plenty of
| other places that do not suit these criteria that get
| along fine with the dollar. it is on an exclusion basis
| not an inclusion basis
| hintymad wrote:
| Honest question: isn't it just a matter of time before US dollar
| loses its dominance, given that US has been losing its
| manufacturing business? I mean, can people really keep investing
| in the US market if they need less and less stuff produced by the
| US?
| stickfigure wrote:
| Why is manufacturing so special? As opposed to something like
| software?
|
| Also, manufacturing in the US is _growing_ not shrinking. For a
| long time.
| marcosdumay wrote:
| > Also, manufacturing in the US is growing not shrinking. For
| a long time.
|
| Well, at least up to 2024...
|
| I think when people run the next number, there will be a
| surprise there.
| pessimizer wrote:
| Software can leave your country in a fraction of a second.
| Manufacturing is infrastructure. This is also basic.
| Manufacturing in the US is shrinking, _comparatively_ with
| other countries that actually make things. People just think
| they can just play with numbers, categories and dollar values
| to hide it.
|
| The US has been playing a currency game since 1980 to make up
| for the loss of the free money it got for reconstructing
| Europe and Japan, and using that money to buy things from
| impoverished workers in China. And as China got on its feet
| through careful planning and management, it moved to India,
| Pakistan, Mexico, Indonesia, the Philippines, anywhere that
| was willing to stomp on its workers and pollute its air and
| water.
|
| Now China has gotten to the point that it is a viable
| alternative to the US, so the US can't unilaterally set terms
| anymore for its _suppliers._ It 's dumping US treasuries.
| It's competing for natural resources in countries that the US
| just tried to topple and steal their natural resources
| through _sieges_ that ironically served to cut the US 's legs
| from under them, giving China a huge discount. The game is
| up.
|
| China going from nowhere to the greatest economy on the
| planet in 50 years is what happens when you manage and
| cultivate manufacturing. US real estate and an economy run on
| luxury consumption is what you get when you outsource
| manufacturing and play word games to cover it up. We
| literally can't tariff China significantly, they could crush
| our economy just by embargoing us like we freely embargo
| everyone else. That's the power of a manufacturing base. We
| might want to fix our bridges, too.
| hintymad wrote:
| Case in point, it's news that Canada leaned toward
| partnering with China when having dispute with the US, but
| it would be a joke 20 years ago. It's a humiliation that
| the US brought upon itself: you can't produce things that
| people need, then don't blame that people will have
| leverage in other places.
| kagakuninja wrote:
| If The US goes to war against China, we are screwed, because
| we outsourced our manufacturing to China. We cannot quickly
| ramp up our manufacture of ships, tanks, aircraft or
| ammunition. Not only do we lack manufacturing capacity, the
| entire supply chain is in China / Asia.
|
| In addition, China leads in the critical technologies need
| for drone oriented warfare, like we are seeing in Ukraine.
| hintymad wrote:
| In particular, the pentagon has so many suppliers in China.
| Oh, the KPIs (key pharmaceutical ingredients) are produced
| by China too. We even had shortage of saline solution when
| China was having a supply crunch. So when a conflict, let
| alone a war, broke out with China, what do we do? We ask
| China to supply us the war logistics?
|
| A fun story, China has the best automated seafood
| processing factories that meet all kinds of regulations in
| the world. It's cheaper, a lot cheaper, for Japan and
| Alaska to send their seafood to China to process, and then
| sell back to the domestic market. And it has nothing to do
| with cheap labor but deep R&D of China. So, when war broke
| out, many people won't be able to enjoy cheap seafood
| either.
|
| I don't understand how people can ignore a simple fact (is
| it Milton who pointed that out?): Manufacturing is a
| "doing" business, not a "knowing" business. Our expertise
| is forged on the shop floor, not dreamed up in a boardroom,
| and certainly not bought through outsourcing. There is so
| much tacit knowledge that manufacturing capability is a
| living system. It lives in the collective experience of the
| workforce and the rhythm of the line, not in static
| documents.
|
| Oh maybe this is the time to quota Thomas Joseph Dunning:
| With adequate profit, capital is very bold. A certain 10
| per cent. will ensure its employment anywhere; 20 per cent.
| certain will produce eagerness; 50 per cent., positive
| audacity; 100 per cent. will make it ready to trample on
| all human laws; 300 per cent., and there is not a crime at
| which it will scruple, nor a risk it will not run, even to
| the chance of its owner being hanged.
| hintymad wrote:
| > Why is manufacturing so special? As opposed to something
| like software?
|
| I assume that dollar will be strong if people want to buy
| stuff from the US, which requires using the US currency.
| Software indeed is a strong sector. I'm just not sure (as due
| to my ignorance) if they compensate sufficiently the trade
| deficit. For instance, if advertisers use Instagram in
| Europe, they wouldn't need the US dollar to pay for the
| service, right? If there's no virtual export happens, I'd
| assume there won't be any need for the US currency either.
|
| > Also, manufacturing in the US is growing not shrinking. For
| a long time.
|
| What about market share? I remember that the US had more than
| 65% of the manufacturing marketshare 25 years ago. Actually,
| I'm more concerned about the long-term national security and
| prosperity of the US, and I think they are tied to a robust
| manufacturing sector. But that's different topic.
| wvenable wrote:
| A weak dollar is good for manufacturing and a strong dollar is
| bad for it. China tightly controls to the Yuan to purposely
| keep it's value low to benefit it's manufacturing. The current
| US administration wants to something similar for the US to
| boost manufacturing.
|
| I think that's foolish and backwards thinking. The US doesn't
| really need more manufacturing; it had relatively low
| unemployment, a healthy economy, etc. The US is a service
| country. Apple is one of the richest companies in the world and
| does none of it's manufacturing in the US. Why wouldn't people
| invest in Apple?
| hintymad wrote:
| This too. Many people argue that if we weaken the dollar
| enough, the manufacturing will come back.
| WarmWash wrote:
| Trump is a populist president who sees the value of US exports
| (on the back of blue collar work) being more important than
| global dollar dominance. This plays hand in hand with his
| championing of tariffs (foreign goods become more expensive) and
| hostility towards immigrants (apply upwards pressure on domestic
| wages).
|
| If you cannot see this, or cannot believe it, you should probably
| check if you are in a ideological bubble.
|
| Is the world going to de-dollarize though? Probably not, shy of
| an EU independence, which is about as likely as Europeans
| adopting an American work culture. Although, I won't rule out the
| possibility of the EU moving it's eggs to China's basket either.
| What a world that would be, a Sino-Euro axis and an North
| American axis. Whew
| AnimalMuppet wrote:
| The EU is not going to move into China's basket, not if you
| mean using the yuan as a reserve currency. There's too much
| political risk - the value is at the control of political
| decisions by the CCP.
| WarmWash wrote:
| The EU is going to have to (very painfully) grow legs then.
|
| The fact that the US provided the majority of weaponry, and
| half the money to Ukraine should have been shocking wake up
| call to every European. But instead the vibe seems to be
| "Americans are so dumb to live the way they do".
| pessimizer wrote:
| > Trump is a populist president who sees the value of US
| exports (on the back of blue collar work) being more important
| than global dollar dominance. This plays hand in hand with his
| championing of tariffs (foreign goods become more expensive)
| and hostility towards immigrants (apply upwards pressure on
| domestic wages).
|
| It has nothing really to do with populism. It's the US's only
| rational option. You can't just run trade deficits forever, no
| matter what the people who make money from trade deficits tell
| you. A parasite that gets so big that it disables the host is a
| dead parasite.
|
| People act like this is the how the US always worked. We just
| started this with Reagan, and _every moment since then_ has
| seen the rise of finance, the victory of unproductive capital
| and speculation, and the decline in domestic manufacturing and
| standard of living that you would expect.
|
| There's never been a moment where there's been anything to
| point at for a finance capitalist to feel vindicated that his
| success would lead to the US's greater good, so he resorts to
| claiming that it is simply impossible to be any other way. At
| best this is sunk cost fallacy, but at worst, it's just
| propagandistic gaslighting from a bunch of people who don't
| have any connection or loyalty to anyone in the US, don't care
| when it's people suffer, don't care how its children will live,
| and will just leave if their houses start to feel insecure.
| There's your populism.
|
| I agree with your assessment, but Europe is in unique trouble
| that the rest of the world has no need to relate to. The US
| will simply have Europeans jailed or killed who steer Europe
| counter to US interests. Right now the US is on a slow road to
| peace with Russia, while trying to cultivate and maximize
| European animosity and estrangement from Russia. The world in
| which the US is mocked in Europe by NATO (a device to carry out
| US interests) for trying to appease Russia is a world that no
| one but a realist could have predicted.
|
| Everybody else will de-dollarize, and the US will threaten
| Europe and the UK with tariffs if they don't peg the Euro and
| pound to the dollar. The US will be trading freely with Russia
| and China, while sanctioning Europeans for buying energy from
| Russia and bribing European governments to harass Chinese
| companies.
| wvenable wrote:
| > Is the world going to de-dollarize though?
|
| I think they already are -- it's just not going to happen all
| at once overnight. The shift has happened already and the
| consequences will take decades to come forward. But it's still
| possible that the US will do something to reverse course and
| everyone will be happy to not have to think about finding an
| alternative to the US dollar.
| jmyeet wrote:
| The most important thing to understand is where the value of the
| US dollar comes from. It's the US military. More generally
| speaking, it's US foreign policy. The US military is the force
| that enables foreign policy.
|
| Understand this and you'll avoid falling into various traps and
| conspiracy theories. For example, there are people who believe
| that the US invasion of Iraq was caused by Iraq wanting to sell
| oil in euros instead of dollars.
|
| This is a nonsen theory because every oil transaction could be
| denominated in euros tomorrow and it wouldn't change anything.
| The same demand for US dollars would still exist so people would
| simply convert to euros, buy oil then convert back.
|
| This same understanding debunks the "threat" of a BRICS alliance.
|
| The real problem, if you can call it that, is we have an
| administration who is both incredibly inept AND intent on
| destroying the post-WW2 world order. Wealth inequality is getting
| so bad and the deficit is so bad. Worse, nobody expects either to
| improve anytime soon. I'm not saying the budget needs to be in
| balance. It doesn't. A country doesn't work like a business when
| you can print your own money. But at some point, crippling public
| debt (in terms of GDP) will devalue the dollar.
|
| Put another way: the illusion of "safety" is at risk. It's just a
| question of when the vibes shift.
| mythical_39 wrote:
| Your first paragraph is close to correct, but have you thought
| of the difference between supportive vs coercive power?
|
| If the Russian army is the force that enables Russian foreign
| policy, they why do some people in Ukraine think that they
| don't want to do things the Russian way?
|
| Likewise, I wonder how helpful the US military will be at
| forcing our former allies to do things they don't want to do?
| jmyeet wrote:
| It's a fair question but the answer is fairly simple: the
| Russian military simply isn't strong. The only reason they
| haven't been bombed back into the Stone Age is because they
| have a nuclear arsenal. That has limited the West's response
| to being "proportionate".
|
| The Russian-Ukraine front is kinda like WW1. There's no real
| air power to speak of. The front is dominated by artillery
| and infantry and fortifications like trenches.
|
| Russia cannot project military power anywhere like how the US
| can and the US has decades of projecting that power to force
| countries to capitulate, essentially. Europe outsourced their
| security to the US, for example. But make no mistake: NATO is
| a protection racket. It projects American power into Europe.
|
| This is one reason why I call this administration inept
| because they seem intent on splintering NATO, which actually
| diminishes American power. Just like disbanding USAID
| diminished American soft power, and quite cheaply at that.
|
| The lesson since at least the (W) Bush administration is that
| only nuclear weapons can guarantee your survival.
| belter wrote:
| Key Takeaways from the JP Morgan Research:
|
| * Despite a smaller share of global trade and output, the dollar
| still dominates in transactions like trade invoicing.
|
| * Dedollarization is advancing in central bank reserves, with USD
| share at a two decade low.
|
| * Foreign ownership of US Treasuries has declined for 15 years,
| signaling reduced external reliance on the dollar.
|
| * The shift is most visible in commodities, where an increasing
| share of energy is priced in non USD contracts.
| lvl155 wrote:
| Up until about a month ago, I'd have argued it's overblown.
| However, I think this time it's a real possibility and perhaps
| even certain. This country is absolutely going down the toilet
| and China is using this opportunity to strengthen its position.
| Things will get far worse as the economy rolls over this year and
| AI bubble pops. It's a perfect storm.
| codr7 wrote:
| Empires are very adept at dethroning themselves by way of greed.
| legitster wrote:
| It's no secret that our current US administration is envious of
| China. So in no small part they probably want to model the US
| Dollar after the Renminbi. Drop the value internationally to
| incentivize American exports, and manipulate the hell out of it.
| (Hence why they have dropped inflation as a political issue -
| some in the administration are essentially rooting for inflation
| to get much, much worse).
|
| It should go without saying that this would be shortsighted -
| China made it work because they were able to take advantage of a
| strong international market denominated in USD. The US cannot
| destroy our own common market and currency and expect to take
| advantage of it.
|
| Furthermore, we know what a de-dollarized world looks like -
| imperialism. If you need to secure oil/mineral/food for your
| economy but you need expensive foreign currencies to acquire it,
| it suddenly becomes much more economically appealing to take the
| resources.
| chrisco255 wrote:
| Nobody is cheering for inflation to get worse, they are
| celebrating it being held down to 2.7% after higher inflation a
| few years ago.
|
| The U.S. is a net exporter of oil and food and self-sufficent
| for majority of its mineral needs as well.
|
| There is no need for U.S. to crash its currency to incentivize
| domestic production, it can just impose tariffs on imports to
| do so.
| thatguy0900 wrote:
| The problem with tariffs is really just trumps complete
| instability. Why would anyone invest in domestic
| manufactoring when Trump wildly flip flops on all tariff
| policy using it as a diplomatic punishment and reward system?
| Especially when his tariffs in general are legally
| questionable at best and the other half of us politics are
| against them just in principal. Imagine investing millions in
| a domestic factory and then trump gets a personalized jet
| from some random nation so the tariffs you were depending on
| for your profit margin are gone. Or Trump loses the midterms
| and now tariffs as a policy are gone. Unless Trump both
| becomes a dictator and sets the tariffs in stone without
| changing them too much, or democrats come out in wide support
| of tariffs themselves, I don't see how you could use them to
| invest your money.
| Terr_ wrote:
| Also, anything companies build inside the US (factories,
| supply lines, etc.) just becomes an economic hostage for a
| Trump to use for _further_ rounds of extortion.
|
| So it's not _just_ that the policies are (A)
| counterproductive and foolish and (B) changed on a whim and
| (C) have no long-term foundation and (D) are changed for
| corrupt reasons... but even after all that, (E) the corrupt
| person "making deals" is incapable of honoring them.
| legitster wrote:
| > Nobody is cheering for inflation to get worse, they are
| celebrating it being held down to 2.7% after higher inflation
| a few years ago.
|
| Trump is actively fighting the federal reserve to drop the
| interest rate to 0%. Members of his team regularly do
| interviews where they say "it's going to get worse before it
| gets better". Inflation is being held down _despite_ this
| administration 's best efforts.
|
| > The U.S. is a net exporter of oil and food and self-
| sufficent for majority of its mineral needs as well.
|
| And has been for a while. But the current conservative
| rhetoric is specifically about bringing manufacturing jobs
| back.
|
| > There is no need for U.S. to crash its currency to
| incentivize domestic production, it can just impose tariffs
| on imports to do so.
|
| I don't think autarky is this administration's only stated
| goal. They specifically see an export-led economy as being
| more important or even "legitimate" and are pushing for other
| countries to import our goods. Devaluing currency is a strong
| way to incentivize exports and China's currency manipulations
| were the key to their rise as a manufacturing power.
| chrisco255 wrote:
| > Trump is actively fighting the federal reserve to drop
| the interest rate to 0
|
| The interest rate was near 0 for years, it did not cause
| inflation. Fighting for low interest is not same as being
| pro-inflation.
| legitster wrote:
| The reason it was 0 for so many years was because the Fed
| was trying desperately to _create_ inflation during this
| time. (Which was chronically low for other reasons).
|
| Lowering interest rates to create inflation is literally
| one of the core tenants of the Federal Reserve:
|
| https://www.clevelandfed.org/center-for-inflation-
| research/i...
| JumpCrisscross wrote:
| > _it can just impose tariffs on imports to do so_
|
| This is how you grow a sclerotic, internationally-
| uncompetitive domestic industry. See: shipbuilding.
|
| Where tariffs work is as a nursery policy. Give firms a safe
| haven to grow in. Then let competition hone them. South Korea
| has pioneered this playbook; China copied it. We were sort of
| doing it, but the current administration blew up our nascent
| new energy industry.
| legitster wrote:
| It's also debatable how important tariffs even are for
| "infant industries". In most situations, if you ever remove
| the tariffs, the native industry is just as likely if not
| more likely to die out to any serious foreign competition.
|
| For South Korea and China, tariffs were not a very key part
| of their industrial policy. Which is not to say that the
| government didn't have a massive hand in the success of
| their native industries. Case in point: shipbuilding for
| South Korea. The government was key in securing the capital
| investment in the _massive_ drydocks the entire world
| depends on.
| JumpCrisscross wrote:
| > _For South Korea and China, tariffs were not a very key
| part of their industrial policy_
|
| Cars were absolutely incubated by Seoul. In part through
| drastic trade protections.
| engineer_22 wrote:
| > the current administration blew up our nascent new energy
| industry.
|
| Which industry is that?
| margalabargala wrote:
| Solar, wind, and grid-attached battery.
|
| In the late teens, China was dominating all of these
| industries.
|
| Under policies of the Biden administration, these
| industries were growing domestically in the US and we
| were increasing our share of the global market.
|
| Over the last year those domestic industries have been
| destroyed. They are barely surviving and have stopped
| rapidly expanding. All gains made against China's
| dominance in these technologies has been lost, and then
| some.
| chrisco255 wrote:
| Any links to data on these claims?
| JumpCrisscross wrote:
| Which part?
| margalabargala wrote:
| Plenty. Which specific data are you looking for?
| peder wrote:
| Precisely. People in this thread almost seem mad that the
| economy didn't crash in Trump's first year.
| ActorNightly wrote:
| Hope and wishing aside, if you think anything Trump is
| doing is gonna benefit the economy, you really show your
| ideological side.
|
| For example, businesses are hesitant to invest in domestic
| manufacture because the tarrifs can be undone by next
| president. But the reputation that US is building right now
| cant be undone. Investment in manufacturing takes years,
| not to mention that its not like America has lots of people
| wanting to go work in mines and factories. Meawhile as
| countries with sane leaders adjust, US is gonna be less and
| less relevant.
|
| So in 5 or so years when your house value and investments
| are way down and there is a Dem president and you think
| about complaining about economy is bad under liberals,
| remeber who cause it all. Most of the current economic
| problems that existed in late 2020s have origins with
| Reagan era economics.
| masijo wrote:
| >we know what a de-dollarized world looks like - imperialism
|
| Is this some kind of joke? Or is it only imperialism when other
| countries besides the US do it?
| legitster wrote:
| I know it's pretty common shorthand to describe American
| post-war interventions as "Imperialism". But Imperialism
| before Bretton-Woods was a very specific and intentional
| international policy - literally conquering and/or colonizing
| land to secure resources. Which is a bit different than
| America's "spheres of influence" thing today.
|
| The two are very linked - the tacit agreement of the postwar
| order was for America to use its might to expand a common
| market on behalf of the shared benefit of NATO members. But
| the collapse of today's "American empire" does not mean the
| end of empires. If anything, the opposite: instead of one
| common international market, we will return to a 19th century
| scramble for land.
| buellerbueller wrote:
| Venezuela would like a word
| legitster wrote:
| Well, that's just it. America has not so brazenly claimed
| territory for such selfish reasons in well over 100
| years. Which is proof enough that America is pulling up
| the ladder on Pax Americana.
| adhamsalama wrote:
| Are you familiar with a country named Iraq?
| legitster wrote:
| Obviously, but we're comparing apples and oranges here.
|
| - Iraq was never a major oil concern _for the US_.
| Perhaps maybe stabilizing global oil prices - but the
| primary beneficiaries were actually our European and
| Asian allies.
|
| - We never just "took" the oil for our domestic market
| (which is what we are basically doing in Venezuela)
|
| - Even policymakers who have publicly admitted that Iraq
| was a massive intelligence and political failure all
| agree that regional stability was always the main goal.
|
| Similarly we were in Afghanistan for-freaking-ever which
| had no clear resource benefit or even clear goal.
|
| I would even go so far as to say that for most of the
| 20th century, America's foreign policy interventions are
| more easily attributed to our failed role as "World
| Police". We were brought into Iran because of the
| British, we were in Vietnam because of the French. Kuwait
| because of Saudi Arabia. Korea and Lebanon directly.
|
| So while yes you could paint a broad brush and say all of
| this indirectly was to expand America's "empire", but as
| an international alliance where America carries the big
| stick, the US actually carried out a lot more on behalf
| of the overall alliance than one would realize.
|
| That alliance that the US is now trying to dissolve.
| roenxi wrote:
| > - Even policymakers who have publicly admitted that
| Iraq was a massive intelligence and political failure all
| agree that regional stability was always the main goal.
|
| And in their spare time they pretend to sell bridges to
| people? Nobody sane would believe that invading a country
| promotes regional stability. The idea is absurdist, the
| point of invading a country is destabilising it and
| disrupting any power that the locals might have.
| Forcefully toppling governments and killing large numbers
| of people has never been a credible path to stability.
| glompers wrote:
| The Assad dictatorships in Syria and the Hussein regime
| in Iraq were proponents of Baathism. The former had
| occupied Lebanon and invaded Israel while the latter had
| invaded Iran in 1980 and annexed Kuwait in 1990.
| buellerbueller wrote:
| >America has not so brazenly claimed territory
|
| No, just sovereign resources. Totes not imperialism. At
| all.
| russdill wrote:
| We print money, send it around the world, and the world sends
| us goods. It was a great thing.
| saulpw wrote:
| For us individually. For us collectively it was a horrible
| thing. We lost the means and incentive to produce anything
| durable, including a healthy, educated, sustainable society.
| RealityVoid wrote:
| Yeah, I've heard this interpretation before that this is
| the US trying to wean itself off the resource curse
| bestowed by a strong dollar. I think it's a fun idea, but
| there is no reason or strategy to this, I'm afraid. Just
| stupid people doing what they do best, doing stupid things.
| saulpw wrote:
| I agree, the whole thing is stupid. But, when you don't
| have a healthy, educated society, they wind up being
| easily conned into electing stupid greedy people. So it
| seems that the resource curse may lead inevitably to
| systemic failure. Good times make weak men.
| mullingitover wrote:
| People planning the post-WWII system wildly overestimated
| how how disciplined Americans could be.
|
| The whole point of the US transitioning to a service
| economy was that it would upskill the workforce into the
| world's Delta Force team of highly educated scientists,
| engineers, researchers, etc. The rest of the world would
| handle the boring stuff like actually manufacturing the
| beautiful inventions designed by the US.
|
| The problem is that a lot of the US populace is gung-ho
| patriotic and willing to die for their country, but
| absolutely refuses to learn math or generally do their
| homework for their country, which is what's actually
| required for this whole scheme to work.
|
| I'm paraphrasing the shockingly astute observations of this
| guy[1].
|
| [1] https://www.instagram.com/reel/DD-MPWAPoaT/?hl=en
| djeastm wrote:
| >People planning the post-WWII system wildly
| overestimated how how disciplined Americans could be.
|
| We had the post-WWII optimism and then the post-Cold War
| optimism clouding the judgment of an entire country.
|
| I kind of wish we'd been more curmudgeonly like the
| Europeans.
| ActorNightly wrote:
| Yes... so lets vote someone in that does all the things
| towards creating a less healthy, less educated and less
| sustainable society.
|
| US was doing just fine btw. I know this because people like
| you blow the small issues way out of proportion, and the
| reason this haplens is that there is no real issues to
| worry about.
| legitster wrote:
| Something that weirdly both Milton Friedman and Karl Marx
| would equally agree on.
|
| The point of an economy is not to make a profit or collect
| currency. The point of an economy is to provide ourselves
| with goods and services.
|
| Focusing all of our efforts on making things so that we can
| send them to other countries in exchange for pieces of paper
| is backwards.
| KaiserPro wrote:
| > probably want to model the US Dollar after the Renminbi.
|
| I don't see that. Given trump's history, he thinks that going
| back to tariffs will allow massive tax cuts. As he trades in
| real estate, tariffs are inconsequential for him
| Workaccount2 wrote:
| Trump is a populist.
|
| He supports tariffs for the exact same reason Bernie Sanders
| does. There is a reason so many bernie bros jumped to camp
| Trump in 2016 when (globalist) Hillary won the nomination.
|
| There is no secret or conspiracy going on here. Trump is a
| populist president and is unsurprisingly doing populist
| things, elected because of his populist stances. At this
| point you have to have stabbed your eyes out and shoved
| spikes in your ears to not know that all he does it gush
| about bringing back 1950's factory worker dad.
| clutchdude wrote:
| There's a difference between Trump says populist things and
| Trump does populist things. Much like "saying things I want
| to hear" and "saying things I need to hear."
|
| For your factory worker example, at exactly a year into his
| presidency, we've yet to hear populist points on:
|
| - a comprehensive overhaul to address medical costs for
| workers
|
| - point-by-point implementation of tariff revenue in
| reshoring and subsidizing of industry
|
| - how AI is going to support manufacturing gains to the
| degree we can become competitive with China
| ppqqrr wrote:
| yeah, he's a real populist with the <15% that wants the
| federal boot on everyone else's neck. i think there's a
| name for that specific type of "populism".
| Workaccount2 wrote:
| Don't come to me if you weren't aware that populism is a
| left/right spectrum.
| cloverich wrote:
| Fascism always wears populisms clothing, but they aren't
| therefore directly equivalent. Bernie and Trump both
| support tariffs but for different reasons (and to different
| degrees). Likewise you can gush about 1950's factory
| workers for different reasons. One is purely to do with
| economic power of the lower class, the other is to do with
| supposed Golden age of American history. They have
| overlapping bases but that's merely a part of their Venn
| diagrams.
|
| Also Trump already passed the massive tax cuts based off
| the assumption of income from Tariff's, and those tax cuts
| disproportionately benefit the rich. I don't think we
| really need a conspiracy to explain the likely motivations.
| andy_ppp wrote:
| They are envious of most dictatorships...
| kaycebasques wrote:
| How do people hold yuan? I was surprised at the lack of ETFs in
| this space. There's of course a lot of Chinese equity ETFs. There
| used to be a pure currency ETF but it was liquidated a couple
| years back. CBON seems like a good way to get exposure via bonds,
| but its AUM is quite low.
| SV_BubbleTime wrote:
| > How do people hold yuan?
|
| Actual answer? In global real estate. So... they don't or "it's
| complicated".
| CrzyLngPwd wrote:
| The dollar is a weapon, and when the US can print as much as it
| likes, the odds are always stacked in favour of the US.
|
| Trouble will really come when the US tries to get out of its
| ridiculous debt trap. What will they do, wave a wand and their
| debt goes away?
| RealityVoid wrote:
| A large amount of the debt is owed to the US population. I
| doubt that the debt trap is that large of an existential
| problem, but having trade alliances break down is much more of
| a big deal.
| mempko wrote:
| The reason de-dollarization should be concerning to US citizens
| and many don't understand is that having the dollar as a reserve
| currency is a huge asset to the US. The US has control over how
| many dollars are created and where they are spent. If countries
| are willing to sell to us for dollars, then the world becomes a
| friendly market for raw materials and products to be vacuumed up
| here.
|
| Losing the dollar as a reserve currency is losing the empire.
| kshri24 wrote:
| India will be chairing BRICS this year. And Trump decided to fuck
| with the wrong country, especially when India-US relations were
| at its peak. This year will mark the beginning of the end of USD
| as a global reserve.
| trash_cat wrote:
| The former IMF chief Kenneth Rogoff has been talking about this
| and appeared on NYT Ezra Klein's podcast that I highly
| recommend[0]. He also talks about China and the role of the
| dollar at the end with Dwarkesh Patel[1]. A lot of the discussion
| I see here is adressed by him.
|
| [0] - https://www.youtube.com/watch?v=pT2cohNt6a4 [1] -
| https://www.youtube.com/watch?v=P2b4TjQa4gk
| yalogin wrote:
| The event has been in motion with every action from the
| administration just cementing it more. Forget about the dollar's
| dominance, at this point I am not forked that he will usher in
| ww3, or at the very least a war between Europe as the US seems
| very likely
| tartoran wrote:
| There's no point in a war between US and Europe, it's not gonna
| happen. However bad a war would be, the current situation isn't
| much better. There's definitely a rift going on and will cause
| irreversible changes to the US - EU partnership. Oh well, not
| only EU, it seems like US is losing friends at a very fast rate
| with Trump at the whelm of the country.
| jorblumesea wrote:
| I'm surprised that people are so surprised by this. Funds operate
| with risk management models and practices. As the US becomes more
| unstable, politically, these will weigh in on how much money
| people keep in US markets. US threats to annex Canada and invade
| greenland. US kidnapping foreign heads of state. Actively using
| federal agents as shock troops against blue cities. All of this
| has true economic impact, either real in terms of losses but also
| USD as a stable currency run by legitimate people.
|
| Would they implement capital flight controls? if you invest in
| the US, can you get your money out? No one knows but it seems
| increasingly less likely. Red lines are being crossed weekly.
|
| The country is heading towards a decline into a developing world
| style authoritarian dictatorship.
| epistasis wrote:
| With the pace of news these days, especially economic news, I
| think this deserves a (2025) in the title.
| maxglute wrote:
| Well the real question: Is the US losing interest in reserve
| dominance?
|
| Contrary to popular opinion, IMO PRC doesn't want reserve
| currency trade off (triffin / trade deficits etc). What PRC wants
| is to secure her own interests with RMB, which is mostly
| happening, energy contracts, lots of bilateral trade happening in
| RMB now. What PRC also wants is to make maintaining reserve USD
| onerous, i.e. high rates, high debt servicing... which already
| indirectly limits US in real ways like reduced defense
| acquisitions in last few years.
|
| PRC wants USD exorbitant privilege to be just exorbitant.
|
| Then US incentivized to dump system (etc debasing) which will
| fuck over global USD users and tank US reputation even more. A
| lot of US actions make sense when you realize Trump doesn't want
| to deal with an increasingly unprofitable global utility. PRC
| doesn't want to step in to build new pipelines, they want to see
| US (mis)manage existing US owned plumbing that everyone is using
| so poorly it fucks up things at home and for everyone else,
| meanwhile PRC has comfy off the grid setup for herself and her
| guests.
| gyanchawdhary wrote:
| I usually read piaeces like this as bullish for the US .. the
| truth is .. neither the author nor anyone else can really call
| how this plays out .. but what is clear (and f***g obvious) is
| that there's still no country as economically dynamic or creative
| as the US .. and if not the dollar .. then what realistically
| takes its place ... the euro, RMB, rupee? None come close yet in
| terms of depth, liquidity, or trust ... these type of de
| dollarization makes for an interesting news cycle and discussion,
| but it's a super long road from theory to reality ..
| Esophagus4 wrote:
| In the short run, I agree.
|
| But what I do worry about are the long term consequences of US
| behavior. Even the largest empires aren't on top forever (even
| before Trump, China was investing heavily in tech and has made
| significant inroads. India is developing, too. Who knows?).
| There may be no country as economically powerful _today_ , but
| tomorrow is a new day. These shifts don't happen in the short
| term, but over decades, this could be a big problem for the US
| if our approach continues this way.
|
| A business goes bankrupt slowly, then all at once. I worry that
| we are speed running the "slowly" part of our journey.
| blackoil wrote:
| Is World in immediate trouble? I see three posts discussing
| collapse of US currency and market on homepage, and this site
| actively avoids anything political.
| seanieb wrote:
| The US has had an economic wind at its back for a long time, but
| there's perfect storm of debt, trade, inflation and de-
| dollarization brewing.
| consumer451 wrote:
| Related is the PM of Canada's speech at Davos today. I don't
| think that I have heard such a blunt assessment of the past and
| future from a politician, ever.
|
| This may be a historically significant speech.
|
| https://www.youtube.com/live/dE981Z_TaVo?t=100
| baxtr wrote:
| "If we're not at table, we're on the menu"
|
| Good speech indeed
| throw310822 wrote:
| Mark Carney is a great orator, I was impressed just a few days
| ago by his speech after meeting Xi Jinping in China:
|
| https://www.youtube.com/watch?v=TLasfU4l__A
| porkbrain wrote:
| He quotes Vaclav Havel:
| https://en.wikipedia.org/wiki/The_Power_of_the_Powerless
| czhu12 wrote:
| The ultimate check and balance was always supposed to be the US
| consumer. It seems any major disruption to purchasing power will
| result in a backlash large enough to undo any policy and
| administration.
|
| I'd still bet that any sudden movements in this direction will be
| checked
| jorblumesea wrote:
| I wouldn't count on the people that elected trump, twice (!),
| to come to their senses. The American voter cannot be trusted
| to do what is right for the country.
| Havoc wrote:
| >It seems any major disruption to purchasing power will result
| in a backlash large enough to undo any policy and
| administration.
|
| That assumes it can be undone. Reversing course and hoping the
| damage done heals isn't a sure bet. Especially with timing
| delays.
|
| There is definitely real risk here
| tencentshill wrote:
| More and more of the people actually spending money in the
| economy are concentrating in the top 10%. They don't NEED the
| millions of everyday consumers to maintain the status quo.
| AbstractH24 wrote:
| As they say about bankruptcy. First it happens slowly then
| quickly.
|
| I suspect were about to see that pivot
| nubg wrote:
| Do i need to stop investing in msci world? what else would i
| invest in?
| parf02 wrote:
| Curious how HN is using this information to plan your investing
| approach. Does the typical approach, broad market globally
| diversified still hold assuming dedollarization?
| Havoc wrote:
| You do get World excluding USA ETFs yes - including denominated
| in say EUR.
|
| It does risk missing out on AI though (or AI crash depending on
| your perspective).
| orsenthil wrote:
| This was written in July 01, 2025, and lot has happened since
| then. Is there any update to this report?
| mlindner wrote:
| There's one of these articles it feels like every month. And as
| usual, Betteridge's Law of Headlines is at play here.
|
| There's no replacing the US dollar until a better option comes
| along. You need a currency that's open (which rules out Yuan), a
| currency that is backed up by a strong government (which rules
| out places like Russia, India, Japan, and the UK), and you'd want
| something that isn't subject to the same geopolitical rules as
| the US dollar (which rules out the Euro).
| yieldcrv wrote:
| so nobody read the article and instead regurgitated pre-existing
| sentiment, while forgetting the golden rule of journalism:
|
| if an article ends in a question mark, the answer is no.
|
| > the greenback dominated 88% of traded FX volumes -- close to
| record highs -- while the Chinese yuan (CNY) made up just 7%,
| according to data from the Bank for International Settlements
| (BIS).
|
| > Likewise, there is little sign of USD erosion in trade
| invoicing. "The share of USD and EUR has held steady over the
| past two decades at around 40-50%.
|
| there is currently no other alternative to meet the global
| liquidity demands
| ptx wrote:
| That first sentence starts with "In 2022,", so presumably the
| numbers are different now, but I couldn't find anything in the
| article about how things have changed in the last four years.
| glitchc wrote:
| The USD's status as a reserve currency is directly linked to it's
| trade deficit with the rest of the world. Because all other
| entities (individuals, corporations, organizations) want to keep
| their wealth in USD, there's a strong incentive to sell (goods,
| services, infrastructure) to the US and obtain USD in return.
| Conversely, there's a strong disincentive to buy from the US
| because goods have to be paid for with USD, which means parting
| with the very currency one is trying to accrue.
|
| One of the most effective ways to ease the trade deficit is to
| reduce USD's status as a reserve currency.
| stronglikedan wrote:
| Betteridge (correctly) says "no".
| christkv wrote:
| Have people completely missed the stable coin move that will
| ensure there is a massive continuing market for USD. The
| prognosis is 2 trillion USD around 2028. Thats a lot of bonds
| that will need to be purchased to back the coin.
| mullingitover wrote:
| I remember studying pre-WWI history, and particularly how
| carefully Bismarck arranged German foreign policy like he was the
| diplomatic equivalent of Bobby Fischer. Everything was situated
| perfectly and Germany was totally content.
|
| Then along came the absolute moron Wilhelm, and he managed to
| Leroy Jenkins Germany's beautifully arranged relationships into
| an aggressive, tactless nightmare where all Germany's allies were
| turned into enemies, and everything turned out exactly like you'd
| expect.
|
| As the saying goes, history doesn't repeat but it often rhymes.
| arbuge wrote:
| Who would you say the Bismarck equivalent for the USA is/was?
| mullingitover wrote:
| I wouldn't put it on one person, it was basically everyone
| between Roosevelt and Obama. Not that any of them were
| exactly geniuses, but we've gone from mostly sober drivers to
| someone blowing a 0.5 BAC.
| tonymet wrote:
| do you mind qualifying this? it sounds like you mean dollar
| hegemony, which I might accept, but if you mean foreign
| policy in general, I can think of many invasions ,
| financial crises, cold wars, lost prosperity for most of
| those Presidents.
| arduanika wrote:
| I think we're talking less about the aspect of Bismarck
| where he won 3 big wars and lost none, and more about the
| part where he set up a delicate system that was maybe too
| complex for his successors to maintain, especially under
| idiosyncratic leaders. We're not talking about financial
| crises. Bismarck did not stop the Panic of 1873 (in fact,
| you could wave your hands and argue he indirectly caused
| it).
|
| As far as "who set up the US empire, in all its
| complexity?", I'd argue for the 4 guys I named in my
| other comment, but your list might differ. And if you're
| just interested in the dollar system per se, I'd probably
| go with Harry Dexter White, who strangely enough turned
| out to be a Soviet spy.
|
| Oh, and if you want a pretty clear analogy from
| Bismarck's system to earlier US monetary history:
| Benjamin Strong got the Federal Reserve System up and
| running and figured out a bunch of the right tricks, but
| he died in 1928 without getting his successors up to
| speed on how to run things. They failed miserably in next
| couple years. Bad timing!
| snikeris wrote:
| Joe Biden.
| arduanika wrote:
| JQ Adams, Elihu Root, George Kennan, and Henry Kissinger.
| mkoubaa wrote:
| What were the political commitments of the writers of the pre-
| WWI history you read? Could they have an incentive to
| characterize things this way?
| aerhardt wrote:
| Margaret MacMillan is a modern historian with a liberal world
| view and no ideological incentive to defend Bismarck, and in
| her phenomenal work _The War that Ended Peace_ (2013) she
| largely supports this view.
| jyounker wrote:
| The summation aligns with everything I've ever read from
| anyone about Bismarck and Kaiser Wilhelm.
|
| Behind the Bastards has a pretty good couple of episodes on
| this little corner of history:
| https://podcasts.apple.com/ke/podcast/part-one-kaiser-
| wilhel...
| ifwinterco wrote:
| You can also draw a comparison with the late imperial stage of
| other empires, most recently the British.
|
| The British Empire actually reached its greatest territorial
| extent in the 1920s and 30s, but it was overextended,
| policymaking was becoming increasingly erratic and in hindsight
| we can see the writing was already on the wall
| mullingitover wrote:
| The British didn't really make unforced errors like Germany
| did, though. They mostly were forced into a fire sale
| situation as they were fighting for their lives. Even with
| everything they sold off, they were still within an inch of
| surrendering. The French story is similar. They may have been
| in a slow decline, but the war threw them off a cliff.
|
| It's hard to look at what the US is doing and not become
| extremely angry, because historically the dumb hubristic
| nationalism _always_ leads to crushing misery. It 's so
| utterly predictable, and yet we're forced to watch the idiocy
| play itself out again.
| ifwinterco wrote:
| I agree but the difference between the French and the
| British is the French really didn't have a choice (they got
| physically invaded).
|
| You could make a very good case that for Britain entering
| into WW1 was a catastrophic and ultimately unnecessary
| decision. And you could make a (much more controversial but
| I think also true) case that entering into WW2 was also not
| necessary and ultimately fairly catastrophic.
|
| Yet the British elites chose to do both. Pride, hubris,
| stupidity, maybe well deserved, call it what you want, but
| in the end British power was given away cheaply. I think
| what the US is currently doing is foolish but as you say
| there's also a sort of inevitability about it.
|
| Edit: You could also add the Soviet Union to this, an even
| more recent example of the end of an empire. Towards the
| end during the Gorbachev era policymaking went from
| relatively "normal" (by Soviet standards) to extremely
| bizarre in a short space of time
| jmyeet wrote:
| I don't think you can compare pre-WWI Germany to the US for
| many reasons. In the colonial era, Germany as a fairly new
| state and unlike the UK, Spain, France, even Portugal or the
| Netherlands, they didn't have colonies to exploit. Worse, in
| the industrialization era they didn't have access to oil.
|
| This created a paranoia in Germany, an insecurity that were
| between Great Powers and were dependent on imports and poorer
| than their neighbours. They felt like they'd eventually get
| swallowed unless they did something and the end result was WWI.
| And WW2 if you think about it.
|
| The cost of victory against Germany (twice) was huge. All those
| Great Powers lost their colonies and they impoverished
| themselves with war economies while enriching the United States
| who, at times, sold arms to all sides.
|
| The US is that Great Power now, complete with colonies. It's
| energy independent too. So it's nohting like Germany. In fact
| it's turned Europe into a client state (ie through NATO). These
| aren't colonies in the British Empire sense of occupying India,
| for example. It's economic colonialism. The Global South is
| controlled via the IMF and World Bank. The developed world is
| controlled with security gurantees.
|
| But where I agree with you is that an absolutel moron has come
| along and threatens to dismantle this entire system. That's
| what's happening. Splintering NATO, abolishing USAID, etc all
| diminish American soft (and hard) power.
|
| China's foreign policy has become to sit and wait while the US
| destroys itself. They don't have to do anything anymore. It's
| why i laugh when people predict China will invade Taiwan. No
| they won't. Why? Because they don't have to. As a reminder, One
| China is the official policy of the US government.
|
| My problem is that empires don't die quietly. They die
| violently. And we're going to see a wave of fascism. Things are
| going to get much, much worse before they get better.
| prennert wrote:
| > They felt like they'd eventually get swallowed unless they
| did something and the end result was WWI. And WW2 if you
| think about it.
|
| I think this exactly how the US administration _feels_.
| Alexandr Dugin proposed spheres of influence. Russia starts
| acting on those. China is getting more powerful. Its now or
| never.
| sebastianconcpt wrote:
| India pays one 1.4 GW nuclear power plant in yuan and they start
| talking about global de-dollarization as if people can't think in
| proportions anymore?
| jijji wrote:
| The article is written by JP Morgan which is a little odd but
| even stranger is they mention of all places China as being a
| great investment place to put your money, when in reality they
| can literally take your money away from you and nationalize your
| business under their current laws.
| jeron wrote:
| I'm glad you're one of the few to call this out. JPM has hedged
| its bets against American interests and holds a ton of crypto.
| Of course they'd put out an article like this
| vishnugupta wrote:
| Title needs to be updated when the 1 July 2025 date. For a moment
| I thought JPM put it out in sort of a response to criminal
| charges against Jerome Powell, fed chair. It's probably
| unprecedented? Wild times.
| fumo_lover wrote:
| What world do you guys live in? The dollar is not held by some
| mythical rules and polices. It has it's status because of
| aircraft carriers and 30000+ fighter jets US has. No other
| country is even remotely close to that level of offensive
| military power.
| a115ltd wrote:
| Is the US dollar losing its dominance? The answer is both A) yes
| and B) it doesn't matter.
|
| Yes, US dollar is losing a bit of power and influence. This is
| likely to continue.
|
| Making inferences about the US global dominance based on this
| fact is misguided. US global dominance is as strong as ever and,
| if anything, getting stronger. US has very successfully managed
| to move the game a level above currency, to direct governance via
| financial, legal, political and military means. It has made any
| meaningful competitors either entirely irrelevant (e.g. Russia),
| pretty well aligned (e.g. India) or pretty well contained (e.g.
| China) It's blue skies ahead.
| hashstring wrote:
| As strong as ever...
|
| The US has a strong military but its dominance position is
| declining rapidly. It's going around threatening the whole
| world.
|
| It's failing to effectively address their problem with China
| and Russia.
|
| Domestically, 60% of Americans live paycheck to paycheck, you
| have ICE running around and Medicaid being slashed to afford
| that.
|
| All the leaves are brown...
| warkdarrior wrote:
| > direct governance via financial [means]
|
| This is going to disappear if USD is no longer _the_ dominant
| currency.
| a115ltd wrote:
| The exact point I'm making is that this is NOT the case! US
| has super strong financial control over most of the world in
| a way which is NOT connected to the strength of the US
| currency.
| watwut wrote:
| USA is doing everything in its power to make Russia great
| again. It was in great position to make it irrelevant, but it
| has choosen to make itself Russia like and snatch defest out of
| the jaws of victory against Russia .
| markhydra wrote:
| It's a small relief to have emerging markets holding dollars.
| Hopefully their economies will continue to grow and that could be
| a long term benefit to offset the slow de-dollarization across
| the rest of the world. It would be in US interest to invest into
| those emerging markets.
| RRRA wrote:
| When is everyone going to dump their US bonds? Will Groenland be
| the redline, finally?
| robinsoncrusue wrote:
| Contrary to what everyone thinks - Dollar losing its reserve
| currency _canbe_ a good thing.
|
| https://www.lynalden.com/fraying-petrodollar-system/
| epistasis wrote:
| I can't figure out what in that article is supposed to be a
| good thing, and the article doesn't seem to hold an opinion of
| that sort.
|
| My first question is: good for whom? Second question is: how?
| It's definitely good for holders of whatever replaces the
| dollar, but it's disastrous for everybody in the US, as far as
| I can tell.
| robinsoncrusue wrote:
| > As applied to the United States, the current account
| version of Triffin runs as follows. The global accumulation
| of dollar reserves requires the United States to run a
| current account deficit. Since desired reserves rise with
| world nominal GDP, which is growing faster than US nominal
| GDP, the growth of dollar reserves will raise US external
| indebtedness unsustainably. Either the United States will not
| run the current account deficits, leading to an insufficiency
| of global reserves. Or US indebtedness will rise without
| limit, undermining the value of the dollar and the reserves
| denominated in it.
| epistasis wrote:
| Can you be a bit more explicit about what the benefit is,
| and who benefits? It's not clear what your thinking is.
| wesapien wrote:
| Blackrock released a document you can download that outlines
| their 2026 outlook. A key point there was: "We go underweight
| long-term US Treasuries." A sign of bearishness on USD due to
| fiscal policy.
|
| https://www.blackrock.com/corporate/insights/blackrock-inves...
| buellerbueller wrote:
| One can only hope.
| toephu2 wrote:
| Interesting how gold hit a record high today of $4700+/oz.
| treebeard901 wrote:
| Yes
| evklein wrote:
| I would imagine U.S. foreign policy, particularly the prolific
| use of sanctions contributes to this wane as well. There was some
| discussion about this a while ago - effectively as the U.S.
| continues to rely on a strategy of imposing sanctions against
| foreign adversaries, those adversaries increasingly reorient
| their economy towards non-U.S. economies such as Russia or China.
| The more the U.S. utilizes sanctions, the less effective they
| become.
| mikewarot wrote:
| My understanding is that the standard of living in Britain
| _dropped about 75%_ when Britain lost the reserve status of the
| Pound Sterling.
|
| I expect it to be worse here in the US.
|
| I wasn't expecting us to try to speedrun it, though. I thought we
| had a decade or two left, now I think it'll happen before the end
| of the year.
| holoduke wrote:
| The US is losing respect in general. Its foreign policy which was
| never really friendly, now is really really bad. Many countries
| on Africa genuinely prefer countries like Russia. That's
| something unheard of 20 years ago.
| jollyllama wrote:
| Betteridge's Law strikes again. As of Q2 2025 (roughly the time
| that TFA was published) there is more dollar-denominated debt
| than ever before [0]. And its value relative to other currencies
| (as of this month), while subject to cyclical fluctuations, is on
| par for the post-Covid cycles and higher than pre-2020 levels
| [1].
|
| [0] https://fred.stlouisfed.org/series/FDHBFIN [1]
| https://fred.stlouisfed.org/series/DTWEXBGS
| gastonmorixe wrote:
| Interesting the wikipedia article of the Mar-a-Lago Accord has
| been deleted https://en.wikipedia.org/wiki/Mar-a-Lago_Accord
|
| Last archival I've found
| https://web.archive.org/web/20251110042359/https://en.wikipe...
| howenterprisey wrote:
| > This appears to be an AI-generated draft with severe
| hallucination problems bordering on WP:HOAX. For one, it calls
| it the "Margo Largo Accord" -- a name that is not and never was
| real. The draft also claims the accord was already introduced,
| and goes into detail about its supposed contents, effects, and
| reactions to it; the problem is, no actual accord was
| introduced at the time (or now), so pretty much all of that is
| made up. The sourcing gives an impression of WP:SIGCOV
| [significant coverage] but almost all of it appears to be
| background information about various topics that aren't the
| accord.
|
| From https://en.wikipedia.org/wiki/Wikipedia:Articles_for_delet
| io..., the discussion that concluded with the article's
| deletion
| gastonmorixe wrote:
| Yeah, I've read that and find it a little sus. The article
| for me was fine even if not perfect.
|
| It's the first time in my internet life (20y+) that I go find
| a wiki article to share to a friend because the US keeps
| weakening and I found it gone.
|
| Didn't know it was that easy to remove a wikipedia article by
| just hinting it was AI generated.
| StealthyStart wrote:
| I have been interested in this topic for a while now, and have
| run different scenarios. What is everyone's thought on Chinese
| Yuan or Euro as the reserve currency?
| tim333 wrote:
| The Yuan isn't free floating enough. Banks will probably hold a
| mix of currencies including the Euro and others.
| h4kunamata wrote:
| Countries are learning that the USA is no longer what it used to
| be, on the surface they are trying to please Trump to avoid
| getting more tariffs but on the ground they are no longer
| depending on the dollar.
|
| Wait until Greenland drama goes sideways, then you will see the
| dollar getting washed out as the international currency.
| cco wrote:
| I strongly encourage interested folks to read Miran's "A User's
| Guide to Restructuring the Global Trading System" (I won't link
| directly since it auto-downloads a PDF).
|
| Miran, and his thinking, clearly have this admin's ear and
| they're following many of the prescribed steps in his white
| paper. To the T frankly.
|
| So if you're surprised by the USD devaluing by 10% last year or
| the immense pressure to drop the fed rate to under 2% by next
| year, well the reasoning and strategy is all laid out very
| clearly in the above whitepaper.
|
| No confusion necessary! They explain every (terrifying) bit of
| their plan in that paper.
|
| What is left out, and why I say it is terrifying, is that the
| whitepaper is academic and basically leaves uncovered any of the
| _political_ ramifications of these economic changes. And of
| course, those political ramifications can be immense.
| cogman10 wrote:
| Peter Navarro is the idiot whose mostly pushing the Trump
| economic policies. I say idiot, because he is really a complete
| and total crackpot. He's written a couple of papers where he
| cites himself on uncited principles as if they were ironclad
| economics. A flat earther to an astronomer is what Navarro is
| to an economist.
|
| He is anti-trade and pro-isolation. He actually wants the US
| dollar to lose it's status as a world currency. His thought? If
| it does, then we'll better address national debt. Basically
| "Let's light the house on fire so we finally address the
| upstairs draft."
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