Suddenly Everyone Is Hunting for Alternatives To the US Dollar (bloomberg.com) 221
King Dollar is facing a revolt. Tired of a too-strong and newly weaponized greenback, some of the world's biggest economies are exploring ways to circumvent the US currency. From a report: Smaller nations, including at least a dozen in Asia, are also experimenting with de-dollarization. And corporates around the world are selling an unprecedented portion of their debt in local currencies, wary of further dollar strength. No one is saying the greenback will be dethroned anytime soon from its reign as the principal medium of exchange. Calls for "peak dollar" have many times proven premature. But not too long ago it was almost unthinkable for countries to explore payment mechanisms that bypassed the US currency or the SWIFT network that underpins the global financial system.
Now, the sheer strength of the dollar, its use under President Joe Biden to enforce sanctions on Russia this year and new technological innovations are together encouraging nations to start chipping away at its hegemony. "This will simply intensify the efforts in Russia and China to try to manage their part of the world economy without the dollar," said Paul Tucker, a former deputy governor of the Bank of England in a Bloomberg podcast. Writing in a newsletter last week, John Mauldin, an investment strategist and president of Millennium Wave Advisors with more than three decades of markets experience said the Biden administration made an error in weaponizing the US dollar and the global payment system. "That will force non-US investors and nations to diversify their holdings outside of the traditional safe haven of the US," said Mauldin.
Now, the sheer strength of the dollar, its use under President Joe Biden to enforce sanctions on Russia this year and new technological innovations are together encouraging nations to start chipping away at its hegemony. "This will simply intensify the efforts in Russia and China to try to manage their part of the world economy without the dollar," said Paul Tucker, a former deputy governor of the Bank of England in a Bloomberg podcast. Writing in a newsletter last week, John Mauldin, an investment strategist and president of Millennium Wave Advisors with more than three decades of markets experience said the Biden administration made an error in weaponizing the US dollar and the global payment system. "That will force non-US investors and nations to diversify their holdings outside of the traditional safe haven of the US," said Mauldin.
Not stronger (Score:5, Insightful)
The dollar isn't stronger. It's just "less weak" than the alternatives.
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The dollar isn't stronger. It's just "less weak" than the alternatives.
^THIS^
Re: Not stronger (Score:4, Insightful)
A number of countries, like the UK, kept their Central Bank interest rates so low, perhaps even ZERO, for too long.
They missed opportunities to raise their rates. And when the UK increased some rates they almost collapsed their finance markets.
The US screwed up in a different way. Yes, the printing of money...driven by egregious spending packages foisted on Americans by it's central government for many decades now.
And recently, America's Central Banking System was too "politically controlled" (compared to being "economically driven") to raise interest rates to counter the inflationary effects of dollar printing & deficit spending.
Now the American Central Banking System is raising rates. Better late than never. The effect of increased rates is an expected slowdown in the economy, and that is starting to appear in many places.
Interest rate increases tend to take 3 to 6 months to trickle through the American economy before they begin to produce measurable results, and that's only after rates reach levels where they will have impact.
The point of my THIS is to suggest many economies outside of the US are weaker than the US economy for a variety of reasons, and printing banknotes is only 1 of them.
Foreign investors tend to fallback on the American Dollar because it is backed by a stable government; it might look like a wacky or even unethical government to some, but it's been more stable than just about any other country in the world for 200+ years.
UK might be stable, but economically it is smaller, especially after leaving the EU. The EU could be economically strong, but tthe EU members spend so much time & energy fighting amongst themselves rather than promoting their "unified economy". China is a large economy, but the world has learned that associating with China can come with "strings attached"; you are left to your own imagination regarding those "strings".
Stability is NOT: When some non-US countries change governments like people change their yearly calendars. Or the "in fashion" ruling party of the year takes charge from the previously "in fashion" ruling party. Or some top-most elected official is slowly promoted to a "Leader For Life" level by their country's "legislative bodies".
If other countries want to look elsewhere for a common currency to underpin international transactions...that could be an interesting process to watch.
Re: Not stronger (Score:4, Insightful)
They missed opportunities to raise their rates. And when the UK increased some rates they almost collapsed their finance markets.
They couldn't raise rates because doing so would break the supply side economics model. The high rates of the late 60s through the early 80s were largely a function of how wages used to be tied to gains in productivity, as productivity went up so did wages and because of this people not only had lots of discretionary income to spend, they also had lots to save. Banks could afford to give high rates to entice people to save, they'd then loan that money to businesses who'd use it expand their operations.
Once "supply side" trickle down economics were implemented thus breaking the link between productivity and wages, letting the businesses and their wealthy owners now keep a great share of company profits, the government had a problem. The rich weren't spending the money like they promised they would and, if everyone else kept saving at those high rates, the economy was at risk of a crashing - the rates had to come down to make saving less attractive. Over 40 years they kept having to play catch-up to lower rates to ensure people kept spending and keeping the economy moving. Eventually though it reached a point where, if they kept going, they were going to have to pay us negative interest (UBI anyone?) to keep it up.
They've been able to hide the cost of living increases by taking advantage of changes in social attitude... remember when a single income could provide a good life, whether you were married or not? Mention that now though and people will look at you like you're crazy, entitled, or even misogynistic because that dynamic was bad for women (for the record I want to be the stay at home spouse while my wife betters her career). Everyone has been conditioned to accept the impossibility for anyone to afford a decent life on a single income.
We're nearing the end of the road, though I'll admit I have no idea how long before the "end of road" sign hits I just know that the pandemic hit accelerator on that. But it's coming because, when adjusted for inflation, wages have been flat for most of everyone's adult life across the last 40+ years while the cost of living has reached a point where even two incomes can't afford it anymore and we'll have to start looking at legalizing polyamory to ensure families have enough income to keep going.
Re: Not stronger (Score:2)
One of the major issues occuring during the low interest rate period was that property prices skyrocketed in many places.
This because many countries excludes property prices from the calculation of inflation.
Re: Not stronger (Score:5, Informative)
That came with some flip sides. Average house size in 1950 was just under a thousand square feet. That's with an average household size of 3.5 people. Now the average house size is over double that, even though the average household size has dropped to 2.6 people.
Note in 1950, about one in three women were in the workforce. About half of those were married women. (About 65% of adult women were married in 1950, so married women were only slightly less likely to be working than unmarried women.)
In 1950, a household having multiple cars was not the norm. Now, it's the majority. In 1950, about a third of households lacked indoor plumbing. About a fifth of farms lacked electricity. Only 62% of households had a telephone. Cable TV and internet was, of course, unheard of. Only about one in ten homes even had a television. Most though did have a radio (95%).
One could argue about the year I picked (1950), but it was the start of some of the "best" times for an American housewife. By 1950, the rise in modern appliances did result in a significant reduction in the amount of time women spent working in the home. Processed foods being sold at the supermarket also had a big impact on the amount of time women spent preparing meals. Go back a few decades earlier, and there's a pretty good reason why women tended not to work outside of the home - to keep a home running was a full time job.
But anyways, I digress. My point is, some of the drive behind a two income household is that our costs have gone up. A home double in size is going to be more expensive to purchase and to upkeep. Two cars are more expensive than one. Phone, internet, and TV are bills that either didn't exist at all, or existed for far less households.
Try living like a person in the 1950s, and I suspect a one-income household becomes achievable for more people. But the downside is living like a person in the 1950s.
Re: Not stronger (Score:3)
Things are much pricier even adjusting for inflation.
Re: Not stronger (Score:3, Informative)
Re: Not stronger (Score:4, Interesting)
Things are much pricier even adjusting for inflation.
Not true. If you look at the number of hours to buy "things", most are more affordable today. Food, clothing, and cars are all cheaper.
Even houses are about the same price in hours-worked per square foot as in 1950. What changed is that houses today are a lot bigger.
When I was a kid, I shared a bedroom with three siblings. Today that would be considered child abuse.
The good ole days were not so good.
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The UK also has a specific problem with housing costs. Property is so insanely expensive compared to wages that low cost mortgages (and help from their families) is the only way a lot of people can get on the ladder.
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And when the UK increased some rates they almost collapsed their finance markets.
Raising interest rates actually saved the economy. What wrecked the markets, and permanently damaged Britain's credibility as a safe haven was borrowing to give tax cuts to the rich. This might have 'worked' if debt wasn't already 101%, the deficit 6% and a staggering 15 month recession forecast. Truss was humiliated and kicked out after 44 days by her own party. The recession is now forecast for 24 months thanks to her grossly underqualified attempt to 'change economics'.
the EU members spend so much time & energy fighting amongst themselves rather than promoting their "unified economy".
That's not really how things wor
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Back around 1980 the prime rate was over 19%. We lived with it. What's upsetting people now is we're seeing the return to something like normal interest rates, after decades of ultra-low rates. Food more expensive? Well, it's now returning to long-term norms, after decades of being under-priced.
And we'll adapt to it. We always do. Otherwise, we don't deserve our position at the apex.
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People's biggest expense is housing. Back in the 80s, it was much more affordable. The cost relative to wages was much lower, so high interest rates were less of a burden then than even low interest rates are now.
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Can't comment on the US but in 1980 in the UK an average house was around 4-5x average income. Now it's 13-14x.
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First, your argument:
https://www.forbes.com/sites/b... [forbes.com]
https://www.investors.com/news... [investors.com]
https://en.wikipedia.org/wiki/... [wikipedia.org]
Agriculture is a major industry in the United States, which is a net exporter of food.
So if we export our food, then we have excess, therefor your argument holds no water at all
Second, the actual cause:
https://en.wikipedia.org/wiki/... [wikipedia.org]
Which can be summed up as gas price increase and price gouging.
Not a good argument either... (Score:3, Interesting)
I'd say that you didn't address his points very well.
First, he was talking about "local" food. You know, stuff where it can be on the table the day after it is picked, without involving planes and such?
I've seen workups for this stuff, mostly involving greenhouses these days. The result is that while the expense of growing is normally higher, the ancillary costs - delivery, processing, waste, and such tends to be lower. For example, up to 50% of "fresh" fruits shipped from South America to the USA can en
Re:Not a good argument either... (Score:5, Informative)
I think you sort of allude to it, but food imports into the USA are more a function of people wanting year-round availability of the same "staple" fresh foods than any lack of ability to grow food. People in the US in particular, but I think in developed nations more generally, just don't like to vary their diet seasonally anymore as would have been normal any time before the advent of refrigeration.
The biggest issue for agriculture and the "fresh food" movement in the USA is that people don't want to pay for it. There simply isn't enough room in the budgets of anyone with less than an upper middle class income to afford fresh local food routinely. That has nothing to do with a lack of land: even in the more expensive parts of the USA you don't have to get too far outside any given major metro area to find arable land at a reasonable price. But the cost of labor and inputs relative to the small output of non industrial agriculture means the food costs many multiples of the industrially farmed equivalent. Now lump on top of that the issue that all the locally grown food is going to mature at roughly the same time, flooding any local market, and it just becomes infeasible to produce food like that outside of very small scale as a luxury item. There are stories related to how certain cultivars of berries came to be, where by pushing the growing season ahead a couple of weeks a farmer could make 10 times the money of someone that harvested "on time" with everyone else. This is why a global rotating export market came to exist, it sidesteps that problem.
Right now, if you live in a western nation you pay between 5% and 10% of your income on food, depending on how you do the accounting. In the developing world that's closer to 50%, and historically that number would have been even higher (the vast majority of your income). People in the west just aren't prepared to go back to food making up tens of percent of their spending, and that's what it would take to do small scale local organic agriculture. Probably the best hope for fresher food in the US in the near future is from local greenhouses using advances in indoor growing and robotics, but make no mistake these will still be industrial operations making heavy use of monoculture. And only certain highly perishable crops will command enough premium and reduce enough waste to even be in the ballpark of being affordable.
Again, it has basically nothing to do with the suburbs building over all the farm land. Half the east coast of the US was at one point farmed, and now has been allowed to return to swamp and forest. It was abandoned because people didn't want to pay 10 times as much for a local potato.
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Re: Not stronger (Score:4, Interesting)
What alternatives are you referring to?
Re: Not stronger (Score:2, Troll)
Everything he needed to know about economics he learned from Fox News.
Community College is good (Score:2, Interesting)
Do yourself a favor and take an econ class down at your local Community College.
or you can check out “50 economics ideas you should really know”. I torrented mine but a quick search shows you can have a copy under $10 so you won’t even need to print money to get a legal copy!
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IOW, the exact opposite of a weakened dollar due to inflation from printing USD.
Re: Not stronger (Score:3)
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I'm thinking what if we tied the currency to some kind of physical commodity. Like maybe some kind of rare metal, but not to rare. Maybe something that doesn't tarnish and looks very pretty, a nice yellow color. I wonder if such a metal exists, and maybe might have been used for thousands of years as a medium of exchange. Just a idea.
Re: Not stronger (Score:2)
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We didn't "print money"
No, we didn't, but it's a very useful analogy for the process that does take place. One that makes things a bit more clear to the finance illiterates in this country (so very many, thanks US education systems).
Actually we exactly did "print money" but it's a terrible analogy. "Printing money" now happens at an electronic level on computer systems; actual paper money is a tiny fraction of what circulates. Printing money in the modern sense is exactly what the government did. However, when you "print money" normally, that money goes out and, by analogy it causes inflation by increasing the money supply which can be used for simple passive investment. Since the government matched the printed money with loan liabilit
Re: Not stronger (Score:2)
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Also, the Russian Ruble is NOT going to become a viable alternative, that's just ludicrous. Not even the Russian mercenaries want to be paid in that.
The problem with Russian and Chinese currencies is that there is distrust of those governments. Of course, everyone distrusts governments, but Russia is essentially now run by criminals, and China is seen more as a place to sell to rather than invest in.
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Read The Black Book of Communism [wikipedia.org].
Russia has been led by criminals since the days of Lenin.
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-1, uninsightful
There is no definition for "strength" of a currency other than relative purchasing power.
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The Taliban happened.
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Uh, the EU was a much bigger factor in kicking Russia out of SWIFT than the USA was...
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I would suggest that the USD is preferable not because of manufacturing but because of rule of law.
So, with apologies to Churchill, the USD is bad, but less bad than all the others.
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> Since the US has long dismantled most of it's manufacturing base, there will be no more demand for the US dollar, and it will lose the position of the world's reserve currency.
The problem in the original article is that the US dollar is too strong (not weak), meaning there is too much demand for dollars for investing in bonds, and that makes it harder for their own economies.
The reason for the dollar dominance is the relative stability and regulation of the dollar based financial system, not manufactur
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I guess I should have included the previous sentence to the quoted one.
My point was that the demand for the dollar will go away because of these two reasons:
1) The US is not a manufacturer any more and
2) The US has made the USD/SWIFT system not trustworthy by confiscating sovereign funds.
The dollar became the reserve currency because the US was both an important manufacturer, creating strong demand for their money, and because they proved over time that they were a trustworthy keeper of your money, therefor
Re:Not stronger (Score:5, Insightful)
The US HAD to leave the gold reserves. There was not enough gold to back up the growing economy. Nixon had no choice but to leave because at the time there literally was not enough gold to cover all the dollars if the holders had asked for their gold. The US had a boom in population, and also a boom in the economy. What are you going to do, tell the kids that sorry there just aren't enough dollars to go around for you because we want to be stuck in the 1950s GDP forever?
And don't capitalize FIAT. It's a stupid pro-crypto term that is stupid even when said in lower case. It's a term used in conspiracy circles, the pro-gold crowd, the "they just print money whenever they like" crowd, etc.
Re:Not stronger (Score:4, Interesting)
We are now more than a dozen years into the Bitcoin era, and people still haven't figured out what Caesar knew more than 2000 years ago - the value of the currency, even a hard metal currency like gold, is not fixed. The same number of dollars, the same mass of gold, a constant fixed (or even declining) number of bitcoins can support an arbitrary amount of economic activity as long as the value of the currency is allowed to float with supply and demand.
Every scheme to manipulate the value - to prevent it from floating - is an artificial transfer of wealth. And our economic literacy is so bad (LOL, petrodollar nonsense above, even in the age of millisecond forex) that most people can't see it and don't believe the people who can.
Let me be the first ... (Score:4, Funny)
[ducking and running]
Re: Let me be the first ... (Score:3)
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If you're going to suggest Crypto, then at least suggest a stablecoin.
Perhaps a coin backed by Multiple fiat reserves; instead of one Fiat currency?
Say 100 Fiat currencies each weighted to represent 1% of the coin's backing.
Re: Let me be the first ... (Score:2)
Hey wait. I know! Instead of Bitcoins, lets give exchanges Bitcoin and let them hold onto it. Then, we just own a promise of Bitcoin. It's not like will lend it out for others to gamble with in some sort of margin-market/musical chairs collapse, right? Guys?
Re: (Score:2)
Gold is an extremely difficult currency to deal with
Another example are bearer bonds. You can put a stack of them in your safe and have millions of dollars of value sitting there (it's not uncommon for companies to do this to appear liquid.) Now go try to offload them for cash. It's not impossible, but you can't walk into a random Citibank branch and convert them directly into cash.
Re:Let me be the first ... (Score:4, Insightful)
Bitcoin has all the properties we value in gold, with the added properties of portability and trivial transferability. By this measure alone, it should grow to compete directly with gold.
Bitcoin will never complete with gold for anything, in fact bitcoin is useless as a long term currency. By its very nature bitcoin is flawed from conception. There are only so many bitcoins that can exist, and when they are gone they can never be recovered.
If I drop a gold coin, that coin is lost to me. Someone else can find it and use it. But if a bitcoin is lost it is gone forever. No one can ever recover it and reuse it. Over the years we have seen bitcoins lost, a drive tossed to a landfill, a forgotten password; those coins are forever lost. An as time goes by more and more bitcoins will be lost in similar manner, till there is simply not enough of them left to sustain the system
Simple solution (Score:2)
Get the Sudis and all the world's commodity traders to accept payment in something else.
I'll not hold my breath.
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Wow, narcc has a hardon for something that's make believe. Sick burn bro.
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It's about sports teams. You back your team, paint your face in their colors, and deep in your heart you know the opposing team;s players are all gang members and wife beaters. In some countries you get riots from the fans over a game. Now you take that team based adoration and translate that to politics. Now it's your political team versus their political team, rawr! Remember the old "USA, Right or Wrong!" jingo mentality? That used to be a minority of guys drunk at the bar, but it's becoming a signi
Re: (Score:2)
There's also a lot of strong arm pressure on smaller nations to accept those currencies. Ruble has lost tons of value due to the misguided war and it's value is not coming back anytime soon (maybe 2 or 3 decades). China right now appears to be a dictatorship, not even single party rule like it used to be it's single president-for-life. That means a single person's whims can change the value of a yuan. Just look how well he did at the covid crisis. Is that single person someone a third world country woul
What good is it anyway (Score:2)
The cost of buying dollars is also way too far out of control.
I used to source components for networks and high performance computers from the U.S. but thanks to unreasonable prices in the sense that the dollar is not worth anything anymore and somehow it costs too much to buy, I moved my procurements to Asia.
My department is currently looking to move a $2billion procurement out of America and likely w
Re:What good is it anyway (Score:4)
What kills me is how obvious this outcome was to those of us not deemed "monetary/financial experts." There was a nicely developing global economy where America was the gorilla standing on top of the universe with a big smile. We wanted more, letting our greed take the best of us, and our leaders thought the best way of doing that was by saying, "If we're number one? We'll take our ball and go home! Fuck everybody else."
As I said when it was proposed and being batted around as a concept, with a world economy built on the US dollar, if the US starts pulling back the rest of the world will continue to move forward, while we stagnate or even regress, all while professing how amazing we are.
And here it's happening. And the dumbest part of all is, we aren't moving manufacturing back to America as promised. Most of us are still buying foreign, even with the silly tariff nonsense that pretty much did nothing but increase prices for Americans and make the rest of the world pull away from us faster.
What a well laid and executed plan. It's almost like our leaders are too dumb to see the obvious, or they were manipulated into doing the worst by somebody that wanted to take us down. Sadly, it could legitimately be either. It's not like we lack proof of corruption up at the top. Our entire government is based on bribery and lies. Any attempt to change it is met with the brick-wall of "but, but, but, like, some people are happy, man. You can't hurt them. The rest of you should just keep suffering because we got a few corporate sponsors that dig the status quo."
Well, that went cheerful.
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It's almost like our leaders are too dumb to see the obvious, or they were manipulated into doing the worst by somebody that wanted to take us down. Sadly, it could legitimately be either.
Why choose? The two aren't mutually exclusive, and in my mind it's likely that both are true.
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The tariff nonsense was so stupid. The Republicans abandoned that back in the early 19th century and were for free trade for so long, with mostly Democrats being protectionist. But protectionism is a bad idea. So the tariffs go up, local US businesses start losing money and are told by the orange man to suck it up and be "patriotic" because he had an ego beef with the rest of the world.
And economists have long known that a strong currency is good for imports but terrible for exports and usually governmen
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My department is currently looking to move a $2billion procurement out of America and likely will send it to China for networking equipment in Q1.
Hope none of it is Huawei or Hikivision.
Re:What good is it anyway (Score:5, Insightful)
Everything in the US has skyrocketed in price so badly that traveling to the US is an utter waste of money.
You're a moron. Or liar. Probably both.
Inflation is global, and it's not nearly as bad in the US as it is everywhere else in the world.
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Proof: gas is now below $4 a gallon in LAS VEGAS
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I've been surprised at the prices lately, too. Oil prices drove the last big inflation in the 70's, and they stayed high. I never expected them to go down.
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That's not what happened. Get a clue.
LOL (Score:2)
That's not what happened. Get a clue.
Well, according to the federal reserve bank of the US, that's *exactly* what happened. Perhaps you know better?
https://fred.stlouisfed.org/se... [stlouisfed.org]
Re: What good is it anyway (Score:2)
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Ribbed, for your annoyance.
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The criminal world did switch, thank you very much oh wise Anonymous Coward!
Just like nuclear fusion (Score:5, Interesting)
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The oft predicted collapse of the dollar hegemony is always 'within the next decade'
Indeed, but this time it's not just doom-sayers, this time there's mitigating geo-political reasons why it not only may happen, but why it is actually a good idea for the coutnries involved (rather than some fever dream by some anti-gubbmit AC who failed economics 101).
The current global upset spurred on by Russian and Chinese international relations should only be written off at your peril. Remember the story of the boy who cried wolf? What happened in the end? The sheep got eaten.
Investment opportunities (Score:2)
Company debts denominated in dollars? BAD idea (Score:2)
Third world corporations were supposed to have learnt that lesson last time that the dollar strengthened and lots of small countries currencies caught a cold. Sadly too many didn't, and we're here again.
Until the American economy collapses - perhaps because the Congress critters fail to pass a debt increase motion, perhaps because the Big one finally hits California, or indeed elsewhere, the dollar will always tend to remain stronger than the rest of the world's currencies. This is because it is relatively
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This is because it is relatively well insulated against external shocks - certainly compared to most serious countries.
This is a good point that all the tankies and financial "experts" on this thread miss. The US economy is less dependent upon foreign trade that any other economy in the world by a wide margin. If the US tomorrow decided that it didn't want to trade with anyone outside of North America, it might create a lot of political complains but nothing of any consequence would happen. Between the US and Mexico, we have everything we need. The same can't be said for any other country in the world. If global trade
Suddenly? (Score:5, Insightful)
That word does not mean what you think it means.
There's been consistent demand for an alternative, but nothing has cropped up.
For all its ills, the USD has been remarkably stable.
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Not really. Demand for alternatives have been pitifully low for much of the 20th and the start of the 21st century. The past 2ish years has really seen an unprecedented change in geo-political relations between some of the wealthiest and most influential countries on this topic. Yeah the change is "sudden" in terms of what it takes to move the needle here.
Hyperbole Much? (Score:5, Insightful)
Nothing to see here. This is just more of the mountain of propaganda for countries too weak to compete in open markets.
Re:Hyperbole Much? (Score:5, Funny)
The alternative (Score:2)
Yeah, sure, what alternative? (Score:5, Insightful)
Russia
China
A crypto system.
I’m not claiming the the US is awesome. But those alternatives are just plain awful.
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You're begging the question. Why does the monetary system need a global control? The reason smaller players have tied their economy to the USD is they were trying to game the system. There's no reason they can't trade themselves.
Interesting you mentioned Evil-1, Evil-2 and Crypto on your list and ignored a currency run by an economy with a higher GDP than the US. It's a bit dishonest to suggest Russia, China, Crptyo but ignore the likes of the EU.
Russia is fcuked (Score:2)
"Countries" (Score:2)
What countries? The link is paywalled and the summary reads like some whacked out libertarian screed. My guess is that these "world's biggest economies" are just China and a bunch of other small frie bad actor countries trying to skirt repercussions of their actions.
Re:"Countries" (Score:5, Insightful)
I did RTFA and yeah, aside from Russia and China the other countries mentioned are:
"Bangladesh, Kazakhstan and Laos"
Plus this gem:
"Myanmar’s junta spokesman said the dollar was being used to “to bully smaller nations.”
So blah, blah blah America is a bully, but honestly, who in their right mind would trust China over the USD for global currency. And Russia will soon become even more irrelevant as an economy if Europe can successfully wean themselves from the gas and oil. Let Russia and China share a bed together and see who is the bigger cheater/liar/bully.
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Article contains stupid logic (Score:5, Interesting)
From the article:
Premise: "Tired of a too-strong and newly weaponized greenback, some of the world’s biggest economies are exploring ways to circumvent the US currency."
Reason why: "And corporates around the world are selling an unprecedented portion of their debt in local currencies, wary of further dollar strength."
Support: "Now, the sheer strength of the dollar (1), its use under President Joe Biden to enforce sanctions on Russia this year (2) and new technological innovations (3) are together encouraging nations to start chipping away at its hegemony."
1 is true. 3 isn't even remotely true nor is it supported in the article.
2 doesn't make sense. The US used the Dollar and SWIFT transactions to encourage political support? So as a result people are exploring trade in RMB? Give me a break, China is way more overtly political with it's use of economic leverage, just look at how China uses it's loans via Belt and Road to influence countries, and the Chinese government has way more control over their own economy and policies than the US government has over it's economy. The RMB has not become a large part of the global economy precisely because of wariness of the authoritarian control of the Chinese government, it's currency manipulation and its opaque financial system. That hasn't changed at all.
"While all these measures may have a limited market impact short term, the end result may be an eventual weakening of demand for the dollar."
Ok, but the primary issue is a strong dollar, which is strong because there is high demand for the dollar. Weakening demand makes the dollar more attractive and the problem goes away, stopping any exploration of alternatives. A slightly weaker dollar doesn't change the fact that the US economy is where everyone wants to do business, so... these efforts driven by a strong dollar may make the dollar weaker thus eliminating the need for these efforts?
This whole article and supposition is stupid. The US is an open economy. It's consumer market is enormous with a high spend rate. Everyone wants to do business there. The US government and it's financial system are far more fair, transparent, and easy to do business in if you're from another culture than Russia or China or Europe. A strong dollar right now is making people explore alternatives, sure, but the US dollar's position is built on basic foundations that still exist and are unshakeable by any other nation and will make the dollar still dominant for the vast foreseeable future.
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Russian subversion tactics from the cold war only took a break they never stopped.
The article seems like classic KGB tactics to me; get an agent placed in an editor position to promote subtle cultural damage and the people who propagate it. Hell, they seem to practically run Faux News now... and by run I mean they heavily influence it but let it somewhat take it's own course (with subtle guidance... a lot of it in this case.) Murdock doesn't need to be involved.
I'm not even getting into the issues present
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I agree the premise seems nonsense.
I propose a simple hypothetical. You have a giant pile of cash you need to convert into a currency for the next 10 years and you want to make sure it doesn't lose a bunch of value, where are you going to put it?
The British Pound? Maybe, though after leaving the EU I'd be worried about their prospects.
Japan? South Korea? I think they're both fairly stable.
Euros? The EU is pretty big and stable, but also kinda new and the whole multi-country currency thing is still kinda new
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Gold and Silver (Score:2)
If countries are concerned, they can always go back to the old standbys of gold and silver. Those are time honored currencies that, well, hold their literal weight in gold and silver. The U.S. still has nearly all the gold it stole from U.S. citizens ~90 years ago over in Fort Knox and isn't going anywhere very fast.
Guess the US is going to be busy (Score:2)
Dollar is needed for trading with the West (Score:2)
Simply using some currency besides the dollar for trading is extremely easy. The challenge is avoiding the dollar while at the same time selling to and buying things from the Western world. If Russia and China wanted to form their own trading block that had absolutely no trade with the West, they could ditch the dollar today. Unfortunately for them (even for China), their economies are still dependent on the West. China has been trying to decrease dependence on the West by encouraging domestic consumpti
John Mauldin is hardly objective (Score:2)
He likes to pretend he is above the political fray. Yet, he is a reliable water carrier for the GOP, and seems to be entirely unperturbed by their descent into fascism.
Summary: US Dollar = stability (Score:2)
This is what everyone wants. Oh, Russia? Destabilize everything so they come out on top of a giant cesspool of debt, sure, why not. China? Want that stable currency? Two options: massive economy + massive totalarian control of your citizens...good luck expect a revolution; OR massive economy + transparent controls.. good luck it ain't easy but we are doing it (barely).
Wait, which is it? "Inflationary" or "strong"? (Score:2)
I think the "end" is pre-planned.... (Score:2)
When you look at the spiraling debt in America and the fact that nobody really seems to care, in either major political party? It's been clear to me for a while that "the powers that be" realized that without the dollar pegged to anything tangible anymore (ended the gold standard to be able to borrow enough money for the Vietnam War, and decided it was more useful just making money out of thin air)? The plan itself seems to be seeing how much can be spent with "debt dollars" before it all implodes. At that
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Some BRICS members are vested in the dollar. [cambridge.org]
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Your first sentence, good, normal answer. Second sentence, drug-addled conspiracy blather. Sure, like the Federation is not an empire. They even have colonies (trigger!!).
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Sure, like the Federation is not an empire. They even have colonies (trigger!!).
In the beginning, it pretty much is. Towards the end, it pretty much isn't. The difference is how many different planets are involved.
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I'm from the Terran Empire, you insensitive clod!
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China is on the ascent socially, politically, culturally and militarily.
Some of China's banks are at the point where authorities are arresting depositors for protesting the fact that they can't withdraw any of their money for months on end.
Their economy is burdened with huge ghost cities - whole empty, never-lived-in cities built on sheer speculation.
The country is in the first stages of a demographic collapse that the government's newly-relaxed policies regarding number of children per couple have virtually no hope of reversing. That means fewer and fewer people to man the fac