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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

#161

Post by southeastern »

cloudinshape wrote: post #138
namdnay wrote: post #67

Earlier quoted context omitted.

Without a very strong (and therefore expensive) social security net, “Letting people work for whatever wage they can achieve” is slavery. See 19th century Britain Germany still has a strong industrial base, without a race to the bottom and with strong unions. So it is possible :)

You have to square the circle. Wages in the US are artificially high because of the dollar's position, but the US needs to either a) match the wages of the countries producing similar stuff or b) increase productivity and value to the levels of countries like Germany. Since b) requires decades in factories, supply chains, trade agreements and most importantly training in actually producing things which means science…

>keep forcing the rest of the world to pay for the US standard of living while they themselves live beneath their means, but that is the actual problem now so how much longer can it last

Our entire society is built on this, though. Silicon Valley wouldn't exist if electronics couldn't be produced for comparatively cheaper overseas. You bring up an interesting moral point, but if you're serious about that there's a lot of reckoning society will have to deal with. It's not just going to affect minimum wage lol. It'll affect wages across the board. You're really talking about totally reforming the economy

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

#162

Post by nemothekid »

AnthonyMouse wrote: post #136
nemothekid wrote: post #126

Earlier quoted context omitted.

I agree with your view wrt to regulations, but doesn't the article paint a different story? I'm wondering if I understood the article wrong - As I understand it, the US status as a global reserve currency requires us to maintain a perpetual trade deficit - other countries need dollars and we must give it to them. This is done by buying goods from overseas which has eroded our manufacturing base, as the foreign demand…

The status as a reserve currency requires dollars to flow into other countries, but that doesn't mean it has to be in exchange for manufactured goods. Example: US individuals or businesses buy real estate or stakes in local businesses in foreign countries with US dollars, causing US dollars to flow into those countries. Rents collected from the properties or businesses are used to buy more properties or businesses ra…

Labor is likely the most plentiful asset any developing country has as well as it's a system that doesn't require much legal overhead. Manufacturing goods would be the easiest asset any country could produce - trying to own an asset in a foreign nation is an expensive endeavor that requires military might (the middle east probably being the most pertinent example). Trying to collect rents requires the maintenance of an international legal system that will rule fairly. I'm not saying it's impossible, but that manufacturing requires way less overhead to maintain.

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

#163

Post by defterGoose »

howmayiannoyyou wrote: post #141
JumpCrisscross wrote: post #95

> At this stage, instead of just blue-collar labor in America being hurt by the system, the geopolitical ambitions of United States hegemony are also subverted. As far as Americans were concerned, for 40+ years the petrodollar system used to work for the top half of the income spectrum but not really the bottom half, and now it neither particularly works for the top half nor the bottom half. It’s now a system without…

I'm here to tell you that Democrat controlled Congress will NEVER support the regulatory reforms necessary for domestic manufacturing to flourish in the US. At best, they will enact protectionist legislation that will result in a modest increase in US MFG, but nothing on the order necessary to make the US a major player in the global supply chain.

This doesnt gel with the (widely shared) idea that we're supposed to lead the world in terms of innovation and environmental protection. Why is it so hard to explain to people that if you lead the world by continuing to discount the value of having a livable environment, that where it gets you negates any benefits reaped from getting there?

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

#164

Post by michaelyoshika »

JohnJamesRambo wrote: post #66
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…

Bitcoin broke all time high a few weeks ago. :) Rats leaving the sinking ship that is the US dollar and all fiat currency seems to be happening very quickly. I hear almost everyone talking about it now, it isn't the loonies anymore. Money that isn't tied to whatever stupid policies your government has implemented will always be attractive. No one asked me if I wanted to prop up the stock market by printing ~25% of al…

I really don’t understand why a hacker community would consistently downvote crypto currency related comments. Can anyone explain it to me? Like, folks can build their own cpu so not to be controlled by big companies, but they all like using money controlled by some big banks?

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

#165

Post by raziel2701 »

cheaprentalyeti wrote: post #153
cheaprentalyeti wrote: post #152

Earlier quoted context omitted.

Since China actually manufactures stuff they'll accumulate debt slower. The US is more likely to be eaten by the bear.

Postscript: the abandonment of manufacturing, among other things, has really impacted race relations and class relations and pushed the US into a pre-revolutionary condition, which outside actors can use to further damage what's left of US manufacturing. I think the US Dollar is going to crash. You can't say this in polite society, or silicon valley, but you can say to invest in Bitcoin because it's a superior ponzi…

China may devalue their currency in order to achieve inflation (their CPI is falling). Doing so would strengthen the dollar. I'm honestly not sure about about the dollar bull/bear case, situation is not very clear to me.

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

#166

Post by southeastern »

alex_anglin wrote: post #56
lettergram wrote: post #49

Earlier quoted context omitted.

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…

Competing in a race to the bottom ought to beg the question about what alternatives and options are. Focusing on efficiency and quality are two examples that would probably be a better long-term bet, with fewer negative secondary effects.

I don't know why more people aren't saying this. Is it really a majority opinion on this site that a race to the bottom is a good, or even tenable idea?

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

#167

Post by ekam »

silexia wrote: post #143
kqr2 wrote: post #70

Earlier quoted context omitted.

If so, assets such as global equities, quality residential real estate, precious metals, industrial commodities, and alternatives such as Bitcoin, are likely to do well. Do you plan on shifting your investment strategy?

I don't like Bitcoin and I disagree with Alden on that in investment. I am also not a fan of precious metals. I currently have the majority of my portfolio in stocks in Australia, Sweden, Japan, Switzerland; in residential real estate, and in puts on overvalued tech stocks and TLT.

What’s wrong with Bitcoin?

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

#168

Post by jtbayly »

mbesto wrote: post #39
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…

> the last LCD panel manufacturer in the US closed around then and we could no longer manufacture LCD for our military vehicles And funny enough our gov't (I'll let you guess which political party) struck a deal with Foxconn to produce LCDs in Wisconsin. It has failed miserably: https://www.theverge.com/2020/4/12/21217060/foxconn-wisconsi...

So an attempt was made to bring back manufacturing, and that’s so terrible? Let’s all roll our eyes at the Republicans.

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

#169

Post by jfim »

AnthonyMouse wrote: post #144
jfim wrote: post #121

Earlier quoted context omitted.

> It's hard to argue that tariffs on goods from China don't make it less attractive to buy goods from China. It's true that tariffs will make buying goods from China less appealing, but if you look at the outcome, it's not really a win. Consumers are paying more for the same goods, companies are scrambling to move their production to India and Malaysia, and there's not a significant increase in US manufacturing. A pr…

> It's true that tariffs will make buying goods from China less appealing, but if you look at the outcome, it's not really a win. Consumers are paying more for the same goods, companies are scrambling to move their production to India and Malaysia, and there's not a significant increase in US manufacturing. If you look at the actual outcome, it was that China devalued their currency or otherwise lowered prices to eat…

> Tax cuts and subsidies are equivalent.

They're not. One can't cut taxes below zero, for starters. Some industries need more than just having negligible taxes to get started, especially in capital intensive businesses.

Furthermore, the idea that the only lever that the government has to induce people to do things is lowering taxes is completely absurd. Tax cuts didn't build the Hoover dam, the interstate highway system, nor send a man to the Moon.

The government can use targeted investments, messaging, procurement, tax cuts, and so on in order to move people towards certain outcomes.

The day that the US government announces that they'll buy 100 million masks a month for a strategic reserve or replace all of the mobile devices for all federal employees, as long as they're at at most a 50% premium over the cheapest option and are fully traceable from raw materials to finished product as being fully built in the US and allied countries, is the day that people will start investigating if it's possible to do so, and start trying to do so if it's possible.

> This seems like something you need Democrats to do rather than something you need Trump to do.

It takes two to tango. Many other countries are able to pass laws and make progress, even in complex multiparty negotiations during minority governments.

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

#170

Post by momokoko »

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…

Banning or taxing out of existence foreign investment on real estate and pegging the fed rate to zero will accomplish the same thing without needing to care about minimum wage. Shenzhen minimum wage currently provides workers in China with a higher standard of living than US minimum wage does in the US.

Only difference is that the wealthy in the US will carry more of the burden instead of the working class.

And that’s why we don’t have many advocates for it even though it will solve the manufacturing problem almost overnight

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