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America’s aggressive use of sanctions endangers the dollar’s reign

economist.com

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Re: America’s aggressive use of sanctions endangers the dollar’s reign

#51

Post by gsich »

jariel wrote: post #43
sschueller wrote: post #2

For the rest of the world this is a good thing. Why would the United States be the one to decide if Germany is allowed to build a pipeline to Russia or not? Image if it was Germany that used sanctions to prevent the US from building a pipeline to Mexico. Would you be ok with that?

"Why would the United States be the one to decide if Germany is allowed to build a pipeline to Russia or not?" Because America provides defence for Germany, and Russia has 1000 nuclear warheads pointed at Germany, the US and others, and they are an antagonising state, actively trying to disrupt the governments in Lithuania, Estonia, Latvia, Ukraine, etc. All these issues are quite fundamentally related, so it matters…

>Because America provides defence for Germany, and Russia has 1000 nuclear warheads pointed at Germany, the US and others, and they are an antagonising state, actively trying to disrupt the governments in Lithuania, Estonia, Latvia, Ukraine, etc.

Those have been there for a long time, even before the "disruption". Besides France has nukes too, so not much win there.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#52

Post by taurath »

jariel wrote: post #43
sschueller wrote: post #2

For the rest of the world this is a good thing. Why would the United States be the one to decide if Germany is allowed to build a pipeline to Russia or not? Image if it was Germany that used sanctions to prevent the US from building a pipeline to Mexico. Would you be ok with that?

"Why would the United States be the one to decide if Germany is allowed to build a pipeline to Russia or not?" Because America provides defence for Germany, and Russia has 1000 nuclear warheads pointed at Germany, the US and others, and they are an antagonising state, actively trying to disrupt the governments in Lithuania, Estonia, Latvia, Ukraine, etc. All these issues are quite fundamentally related, so it matters…

What is this protection that the US provides other than ensuring the US would be drawn into a war between the EU and Russia? France has enough nukes to provide MAD protection.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#53

Post by mark_l_watson »

toohotatopic wrote: post #38
mark_l_watson wrote: post #10

James Rikard (author of Currency Wars) in his newest book Aftermath predicts that the dollar's reserve currency run may soon be over, and special drawing rights (SDR) reserve currency might only be 1/3 dollars. I think he is probably correct on this prediction but maybe not on another prediction: currencies like China's and Russia's might soon be 20% backed by gold. He makes the point that there is no need for 100% b…

>since a smaller percentage would still prevent a country from printing new currency out of thin air. When people argue against bitcoin, they say that limiting the supply is a source of deflation and that deflation is risky for a currency. Money can be used to store value but first of all, it is meant to exchange value. Don't you kill your economy with such a supply-limited currency since your economy cannot grow bey…

New gold is being mined constantly.

I never liked the idea of a 100% gold backed currency, but 20% sounds OK.

If new money is not printed out of thin air, it seems like prices for things would adjust. Slowly increasing money supply, faster growing productivity/goods/services would mean that prices would go up to keep things balanced. I am not an expert in this subject but it interests me.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#54

Post by mark_l_watson »

thaumasiotes wrote: post #32
mark_l_watson wrote: post #10

James Rikard (author of Currency Wars) in his newest book Aftermath predicts that the dollar's reserve currency run may soon be over, and special drawing rights (SDR) reserve currency might only be 1/3 dollars. I think he is probably correct on this prediction but maybe not on another prediction: currencies like China's and Russia's might soon be 20% backed by gold. He makes the point that there is no need for 100% b…

> currencies like China's and Russia's might soon be 20% backed by gold. He makes the point that there is no need for 100% backing from gold since a smaller percentage would still prevent a country from printing new currency out of thin air. What is the conceptual difference between a currency that is 100% backed by gold and one that is 20% backed by gold? Or rather, what is the difference between a currency that is…

I think that his point is that 100% gold backing would make the price of gold very high, and a partial gold backing would be easier to accomplish with many of the same benefits like better long term stability (if some shorter term pain).

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#55

Post by ApolloFortyNine »

LatteLazy wrote: post #14
aazaa wrote: post #11

The lack of any viable alternative has kept the dollar in its current dominant position. That alternative won't exactly announce itself so that US policymakers can rationally decide to change course about the weaponization of money. It will instead, sneak up on the country in the form of weird little experiments that don't seem worth the time and effort to track or regulate. By the time one of them becomes the obviou…

Isn't the answer the euro? Stable, inflation proof, light or no sanctions. As brexit proceeds and more financial services move to mainland Europe, you won't even have to worry about the brits messing with it... I seem to remember the EU agreeing to setup a psudo bank to deal direct with Iran so they can bypass restrictions on trade? Edit: here it is! https://www.google.com/amp/s/amp.dw.com/en/eu-mechanism-for-...

Didn't the whole Greece debt situation show why that could be a problem? One country's debt crisis caused the euro to tank 30% in a very short time. It ended up rebounding, but pretty much forced the EU to handle the situation (write off debt and provide low interest loans for the rest) or risk the whole thing exploding.

It seems like your betting on 5-10 countries not failing, when with most currencies you just have to deal with 1.

Which is probably why it's not currently the reserve currency, one would assume.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#56

Post by incompatible »

philwelch wrote: post #23
zozbot234 wrote: post #17

Earlier quoted context omitted.

> There's no such thing as a rules-based, open world. You're living in one right now. Anarchy need not be synonymous with chaos, especially if disputes and conflicts are relatively unimportant (due to easy defense making 'rights' self-enforcing). The point of courts is then to arbitrate disputes in a publicly-visible way, enforcement is relatively less important.

No, I’m living in a world dominated by American hegemony. International institutions like the UN are valuable but when the other Western countries tried to set up a rules-based international order after WWI it only lasted 20 years.

It's world full of multilateral agreements: World Trade Organization, United Nations, Bern copyrights, Paris Agreement on climate, Geneva Conventions, nuclear non-proliferation treaty, Antarctic treaty, etc.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#57

Post by senderista »

tjenkinsqs wrote: post #47

I prefer sanctions a thousand times over war. Don't we have enough of the endless wars (Afghanistan, Iraq, Libya, Syria, etc. from the last 2 administrations?

Sanctions kill innocent people too, especially children and the elderly.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#58

Post by thaumasiotes »

mark_l_watson wrote: post #54
thaumasiotes wrote: post #32

Earlier quoted context omitted.

> currencies like China's and Russia's might soon be 20% backed by gold. He makes the point that there is no need for 100% backing from gold since a smaller percentage would still prevent a country from printing new currency out of thin air. What is the conceptual difference between a currency that is 100% backed by gold and one that is 20% backed by gold? Or rather, what is the difference between a currency that is…

I think that his point is that 100% gold backing would make the price of gold very high, and a partial gold backing would be easier to accomplish with many of the same benefits like better long term stability (if some shorter term pain).

So, in these two scenarios:

1. The currency is 100% backed by gold.

2. The currency is 20% backed by gold.

How much gold does it take to purchase 200 apples? You are saying that it will take more gold in the second case, right? Why?

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#59

Post by UncleSlacky »

tjenkinsqs wrote: post #47

I prefer sanctions a thousand times over war. Don't we have enough of the endless wars (Afghanistan, Iraq, Libya, Syria, etc. from the last 2 administrations?

Sanctions can be just as deadly as warfare, though, and they almost exclusively affect civilians, and don't get nearly as much media attention as warfare. From https://caitlinjohnstone.com/2019/06/23/starvation-sanctions...

"Starvation sanctions kill people. Tens of thousands of Venezuelans have reportedly already died as a result of this administration’s relentless assault on their economy; those human beings are no less dead than they would have been if the US had killed them by dropping cluster bombs on Caracas. Yet these deaths have received virtually no mainstream media coverage, and Americans, while they strongly oppose attacking Iran militarily, have had very little to say about Trump’s attacks on the nation’s economy. The economy which people use to feed their children, to care for their elderly and their sick.

I’m titling this essay “Starvation Sanctions Are Worse Than Overt Warfare”, and I mean it. I am not saying that starvation sanctions are more destructive or deadly than overt military force in and of themselves; what I am saying is that the overall effect is worse, because there’s no public accountability for them and because they deliberately target civilians.

If the US were to launch a barrage of Tomahawk missiles into an Iranian suburb with the goal of killing civilians, there’d be international outrage and the cohesion of the US-centralized power alliance would take a major hit. Virtually everyone would recognize this as an unforgivable war crime. Yet America will be able to kill the same number of civilians with the same deliberate intention of inflicting deadly force, and it would suffer essentially no consequences at all. There’s no public or international pressure holding that form of violence at bay, because it’s invisible and poorly understood."

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#60

Post by rayiner »

taurath wrote: post #52
jariel wrote: post #43

Earlier quoted context omitted.

"Why would the United States be the one to decide if Germany is allowed to build a pipeline to Russia or not?" Because America provides defence for Germany, and Russia has 1000 nuclear warheads pointed at Germany, the US and others, and they are an antagonising state, actively trying to disrupt the governments in Lithuania, Estonia, Latvia, Ukraine, etc. All these issues are quite fundamentally related, so it matters…

What is this protection that the US provides other than ensuring the US would be drawn into a war between the EU and Russia? France has enough nukes to provide MAD protection.

We had 200,000 US soldiers in Germany until reunification, and still have 40,0000. Germany saves money maintaining a significantly smaller military force. The benefit to Germany is such that US presidents use the idea of moving US troops to, say, Poland as a prod to encourage the German government to spend more on defense: https://www.euractiv.com/section/defence-and-security/news/w...

In response to Trump’s threats to pull out of NATO, Germany’s reaction was not “oh, good, those useless Americans will leave.” It was: https://www.dw.com/en/merkel-vows-to-hit-2-nato-spending-tar...

> Chancellor Angela Merkel on Wednesday underscored her commitment to NATO, pledging to raise Germany's defense spending to the alliance's 2% target "by the early 2030s."

> "The preservation of NATO is in our own interest, more than during the Cold War," Merkel said while addressing lawmakers in German parliament.

> "At the moment, Europe is unable to defend itself," she added, urging the bloc to stay together.

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