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The fraying of the U.S. global currency reserve system

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Re: The fraying of the U.S. global currency reserve system

#101

Post by nine_zeros »

est31 wrote: post #7

Which country would benefit from a weaker dollar? Germany wants to sell their cars. China their phones. If Americans can't afford them any more, then a big market would disappear.

US self sufficient manufacturers who don't rely on commodities would benefit with a weaker dollar.

US consumers will get fucked with a weaker dollar. Imagine having to pay $7 a gallon for oil instead of $3.

There is another consequence. A lot of other countries will become "rich" all of a sudden. Which means they won't use US dollar as a medium of exchange and America would have to "earn" by exporting. Which means people will have to work a lot more to produce more for exports without consuming ourselves.

Re: The fraying of the U.S. global currency reserve system

#102

Post by arminiusreturns »

recursivedoubts wrote: post #69
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

There was a recent youtube of a Chinese professor discussing how china has gotten along so well with the US while the great migration of manufacturing occurred. It boiled down to wall street being fine with moving manufacturing abroad, as they don't identify with, and in fact despise, the American working class. Pretty depressing.

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." - Napolean Bonaparte

"I sincerely believe with you, that banking establishments are more dangerous than standing armies; & that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale" - Thomas Jefferson

"I have two great enemies, the southern army in front of me and the financial institutions in the rear. Of the two, the one in the rear is the greatest enemy" - Abraham Lincoln

Re: The fraying of the U.S. global currency reserve system

#103

Post by birdsbirdsbirds »

FpUser wrote: post #45
jboydyhacker wrote: post #31

Economists writing about the end of the dollar as a reserve currency is not a new thing. With the Fed printing money tho at record rates this would be the time for a shift to happen. The problem is there is no alternative. The Euro has it's own structural issues and as we saw in March when folks got scared they sold alternatives like Bitcoin down hard. In short, there is no alternative without international cooperati…

Everything we produce can be measured in / has energy cost. So maybe some kind of energy units should be the universal currency.

Energy will become much cheaper in the future. Every time a new solar cell improvement happens, your money would be worth less. Having those disruptions baked into your currency would make it almost useless.

Re: The fraying of the U.S. global currency reserve system

#104

Post by pbourke »

lettergram wrote: post #49
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

I am surprised that no one has mentioned punitive taxation of companies that engage in offshoring/higher taxes on foreign direct investment as an alternative to tariffs.

Re: The fraying of the U.S. global currency reserve system

#105

Post by selectodude »

RobertoG wrote: post #75
selectodude wrote: post #23

Earlier quoted context omitted.

None of them. It's a constant battle. I always hear the trope that we "owe" China money because they buy bonds but the entire reason they're buying bonds is to keep the Renminbi weaker than the USD. Germany is a weird corner case where the entire reason for the Euro is to allow them to keep their currency artificially weak by using the rest of Europe's economy as a place to dilute their export power. The DM was getti…

China buy bonds because they have a lot dollars and they have a lot of dollars because the trade deficit. What would you do with that money, buy a bond with interest or keep the cash under the mattress? You can spend them, I suppose. The article mention they doing it now with the Belt and Road program. You are right about the Euro. It's not the reason of the existence but it's the result.

China could spend them, yes. Or they could float the currency and allow places to purchase goods in their currency. Or they could allow people in the mainland to hold their own reserves of dollars and not set a fixed dollar buyback peg. The trade deficit between private corporations between the US and China doesn't need to have any bearing on the Party's dollar holdings. Saudi Arabia doesn't hold many treasuries and they receive a whole lot of dollars.

Re: The fraying of the U.S. global currency reserve system

#106

Post by RhodoYolo »

elevenoh wrote: post #94
RhodoYolo wrote: post #90

The collapse of the dollars strength and rise of crypto being thought of as 'a store of wealth' may lead to the next financial revolution. Imagine a world where etheruem has enough market cap where it's volatility decreases, smart contracts for services are wide spread, everyone works free-lance giving the economy a inherent conflict of interest problem that rockets innovation forward while at the same time of having…

I like the open, competitive, low-middle-man economic vision. I'm not sure whether the volatility of ETH price matters much when stablecoins are readily available. Generally: I'll switch to ethereum for daily spending when I can spend through a proxy that allows revert an erroneous transaction (e.g. a overcharge or wrong recipient), perhaps necessarily arbitrated by a 3rd party. It's just a little too stressful sendi…

I don't think crypto will ever be used on daily spending, but could be better for 'contractual spending'. It won't ever be used for buying a coke, or anything like that (not saying it won't, just not it's actual purpose'. Things like employment, insurance, reccuring subscriptions, etc. It can A.) sometimes insure anonymity when wanted, complete visibility of reccuring spend and contract in place but employment is going to be the big transition is causes. Imagine upwork, but decentralized and written in airtight contracts to ensure performance.

But tbh your whole second blurb goes over my head.

Re: The fraying of the U.S. global currency reserve system

#107

Post by schemescape »

lettergram wrote: post #49
CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

> To compete, you really do have to cut minimum wage

The article points out other ways to reduce the cost of domestic labor: namely, shifting away from high payroll taxes and severing the link between health insurance and employment.

Re: The fraying of the U.S. global currency reserve system

#108

Post by [deleted] »

hedora wrote: post #26
User23 wrote: post #22

Earlier quoted context omitted.

Trump was the first president in my lifetime to even admit gutting our manufacturing base is a problem. Neither Democrats nor establishment Republicans did anything but line up for their shockingly paltry share of the loot while mouthing platitudes about efficiency.

True, but he said he said that simply because Bernie did, and it played well against Hillary in the primaries. He didn’t do anything that actually slowed the loss of our manufacturing base while president.

[deleted]

Re: The fraying of the U.S. global currency reserve system

#109

Post by SilasX »

paulpauper wrote: post #82

>This article places an emphasis on where the bottlenecks and problems have been forming in the system, explains why a continued weak dollar over a 3-5 year period remains my base case, and shows why some of these growing pains seem to be leading to a new re-ordering of the global monetary system over this decade. 3-5 years isn't really saying much especially given that the US dollar does not have much movement, and…

The dollar has fallen ~10% this year against other currencies.

https://www.marketwatch.com/investing/index/dxy

Example: the Swiss franc, but you see the same with GBP, EUR, and JPY:

https://finance.yahoo.com/quote/CHF=X?p=CHF=X&.tsrc=fin-srch

Re: The fraying of the U.S. global currency reserve system

#110

Post by RhodoYolo »

birdyrooster wrote: post #98
RhodoYolo wrote: post #85

Earlier quoted context omitted.

Do you think the 19th century is a good anecdote for what would happen nowadays? Setting minimum wage seems to create this standard that may do more harm than good. Increasing the 'standard' harms the 'middle-class' and this 'standard' may set the wages lower than entitled per job.

Wealth inequality is a problem you can’t fix by reducing the income of the poor.

I never said that or really proposed a solution, simply stated a problem as i saw it - Which makes sense why i got downvoted. I don't really know the answer with minimum wage but i tend to lean more 'darwinistic' in my philisophies. I wish there was more inherent economic incentive, where everyones salary was more closely tied to their contribution and efforts but I guess thats too much to ask for in this world where non performers and non-productive members of society are given this 'unalienable right' to live off the products of society just for being human.
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