The fraying of the U.S. global currency reserve system • Hacker News Board

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

#231

Post by phkahler » Sun, Dec 13, 2020, 10:15 PM UTC

readams wrote: post #229

AnthonyMouse wrote: post #76

Earlier quoted context omitted.

> To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn…

The problem here -- and perhaps the main problem in all our politics -- is that large swaths of the electorate do not understand the concept of second order effects. Regulations are always good because they consider only the first order effect. That is, the goal of the regulation is usually a laudable one that everyone would support. But you have to look at the costs and unintended consequences of the regulation to r…

They think you can legislate outcomes. The reality is they need to design a system to produce that outcome.

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

#232

Post by dv_dt » Sun, Dec 13, 2020, 10:20 PM UTC

readams wrote: post #229

AnthonyMouse wrote: post #76

Earlier quoted context omitted.

> To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn…

The problem here -- and perhaps the main problem in all our politics -- is that large swaths of the electorate do not understand the concept of second order effects. Regulations are always good because they consider only the first order effect. That is, the goal of the regulation is usually a laudable one that everyone would support. But you have to look at the costs and unintended consequences of the regulation to r…

The long term studies say our political leadership largely ignores the desires of the electorate. This make the problem more likely that our political leadership likely understands the second order effects, but ignores the long term effects chasing short term gain.

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

#233

Post by yalogin » Sun, Dec 13, 2020, 10:22 PM UTC

I have wondered for quite some time what the impact of unlimited QE is on the economy but never found a good answer. I think I found it now. QE will be one parameter in the large equation that is the global currency system. With eroding grip/leadership in the world, the US is ceding the leadership position to either China or creating a vacuum. This accelerated in the last four years which unfortunately led into the pandemic too. So on the whole QE is just facilitating the case for the dollar to become less powerful.

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

#234

Post by EricE » Sun, Dec 13, 2020, 10:25 PM UTC

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.

Oh really? I'm sure it's just a coincidence that after getting repeatedly browbeat Apple dramatically ramped up iPhone production in India and Brazil? That's just one example.

I guess we will know for sure - if they slow or reverse (especially in India) under Beijing Biden that will be confirmation Trump was successful at least at moving manufacturing away from China. It was a start. I don't expect it to continue with the establishment Democrats and Republicans back in charge. Yippie.

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

#235

Post by alasano » Sun, Dec 13, 2020, 10:26 PM UTC

michaelyoshika wrote: post #164

JohnJamesRambo wrote: post #66

Earlier quoted context omitted.

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?

Probably a mix of things.

People who appreciated the technology initially but changed their minds seeing it being driven by what people often consider a toxic community who hides behind the pretense of technology to make money.

People who think Bitcoin itself, despite the technology, is no good for it's stated initial purpose of being a peer to peer electronic cash system. Whether that's true even with additional layers like lightning remains to be seen perhaps.

People who either missed out on the rise, sold early or lost money trading it in the past. Frustrated or bitter perhaps, wanting to be right about Bitcoin so much that they've shut out any possibility that it will succeed.

And I guess people who don't quite understand the technology, purpose or possibilities Bitcoin and other cryptocurrencies bring to the table.

And obviously all the "tether scam" people.

There is positive and negative to cryptocurrencies, same as there is with the internet itself. Do we wish for the internet to fail (if somehow that were even possible) because it enabled mass manipulation of people through social media? Well maybe some people do but I think the vast majority take the good with the bad and some are working to try and solve these problems.

Will Bitcoin fail? I don't think it can at this point to be honest. Genie is out of the bottle, interest is there and it's getting more legitimized every day, whether it's through the direct actions taken by individuals, companies or institutions to further the entire space or through the inaction of governments who don't want to stifle innovation or possibly don't see it as the threat to the monetary system it could (potentially)_be.

Time will tell!

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

#236

Post by ruuda » Sun, Dec 13, 2020, 10:29 PM UTC

One thing I don't understand:

> The COVID-19 pandemic hit in early 2020, which halted global trade and contributed (along with a structural oil oversupply issue) to a collapse in oil prices. The dollar quickly spiked, foreigners began outright selling Treasuries and other US assets to get dollars

Earlier on the article explains that in the petrodollar system, foreigners need dollars to buy oil. If they can now buy oil for less dollars, then why do they want to get more dollars?

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

#237

Post by [deleted] » Sun, Dec 13, 2020, 10:30 PM UTC

cloudinshape wrote: post #217

momokoko wrote: post #201

Earlier quoted context omitted.

> Banning foreign investment will force them to dump dollars and treasury bonds and will accelerate the development of an alternative to it for international trade. How does this harm a working class American that derives all of their income from working wages as opposed to assets? > it will not be 6% but closer to 30 Cite and example where a country did not default/print money for their debt payments and inflation w…

> How does this harm a working class American that derives all of their income from working wages as opposed to assets? Their wage-dollars will now buy less stuff. > Cite and example where a country did not default/print money for their debt payments and inflation went to 30% The US has the world reserve fiat currency, so there are no examples because a fiat reserve currency has never existed before, but we know hype…

[deleted]

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

#238

Post by tastyfreeze » Sun, Dec 13, 2020, 10:31 PM UTC

SubiculumCode wrote: post #230

tastyfreeze wrote: post #199

Earlier quoted context omitted.

That steering wheel is driving us off a cliff. If the result of having a steering wheel is a loss of trust in the currency and ultimately the collapse of that currency I would rather be blown by the wind.

But it hasn't happened to our currency. The only thing that's happening to our currency right now is our political instability, which frankly is a little unsettling at the moment with all the talk of secession martial law, suspension of the Constitution, and religious fervor for Trump that we are seeing on the far right at this moment in time.

Yet...

1970 $1 is equal in purchasing power to $6.71 today. There is no indication from the Fed that this is going to turn around. With the rate the Fed is pumping out dollars, runnaway inflation is a near certainty.

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

#239

Post by tw8f969ae5b6f4 » Sun, Dec 13, 2020, 10:32 PM UTC

It seems to me that those taking the position that the minimum wage should be lowered/abolished and those taking the opposite position are both accepting the premise that absent the minimum wage, wages would fall. Is there any real-world basis for that premise?

From basic supply and demand:

1. a downward pressure on wages emerges from workers competing with workers (competition among suppliers of labor)

2. an upward pressure on wages emerges from employers competing with employers (competition among consumers of labor)

And, ceteris paribus, some equilibrium wages emerge.

The minimum wage ostensibly exists to interfere with #1 (though usually framed as protecting workers from employers), assuming the minimum wage is set above the would-be equilibrium wage.

But what if the minimum wage is set below the would-be equilibrium wage? Perhaps the minimum wage instead serves to interfere with #2 by allowing a point of collusion among employers, and thereby keep wages artificially low.

Is anyone aware of any research on this?

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

#240

Post by momokoko » Sun, Dec 13, 2020, 10:35 PM UTC

cloudinshape wrote: post #217

momokoko wrote: post #201

Earlier quoted context omitted.

> Banning foreign investment will force them to dump dollars and treasury bonds and will accelerate the development of an alternative to it for international trade. How does this harm a working class American that derives all of their income from working wages as opposed to assets? > it will not be 6% but closer to 30 Cite and example where a country did not default/print money for their debt payments and inflation w…

> How does this harm a working class American that derives all of their income from working wages as opposed to assets? Their wage-dollars will now buy less stuff. > Cite and example where a country did not default/print money for their debt payments and inflation went to 30% The US has the world reserve fiat currency, so there are no examples because a fiat reserve currency has never existed before, but we know hype…

> Now, from the experience we do have, ~30% inflation like in the 70s is the best we can hope for

https://fred.stlouisfed.org/series/FPCPITOTLZGUSA

You are now outright lying.