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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

#351

Post by te_chris »

kamaal wrote: post #347
te_chris wrote: post #206

Earlier quoted context omitted.

Tesla has done some reverse Chinese equity investment swap thing and is now at least somewhat a Chinese company building manufacturing capacity and innovation in EVs. Musk is a lot of things, and one thing is clear: he’s an opportunist more than a US economic nationalist. He will not be the saviour of American industry.

>>one thing is clear: he’s an opportunist more than a US economic nationalist. He will not be the saviour of American industry. Reading this as a non-American. Isn't 'opportunity' the whole reason behind immigration? If your country relies on continuous supply of heroes and not sound systems and policies, no one single person can save you.

Hey I’m a non American too, and Musk himself is South African, which is kind of my point.

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

#352

Post by CountSessine »

sudosysgen wrote: post #327
CountSessine wrote: post #284

Earlier quoted context omitted.

The average operating margin for the S&P 500 is 10.53% (although that may have been 2018). And economists are worried that even that is high - traditional manufacturers like Ford typically manage operating margins of ~5%. Workers are already getting 95%. And then everything after that like R&D, marketing, and capital amortization has to come out of that 5%. And then finally a bit is left over for earnings for the own…

This isn't a correct way of looking at it. You're assuming that the sum total of profit generated is in that one manufacturer. It isn't the case. You have subcontractors that also make an additional ten percent, then materials coming from a supplier that takes another ten percent, which comes from raw material suppliers that make yet another 10%, and then you're going to have consultants in R&D and marketing that mig…

Possibly - although if your suppliers have operating margins that are as wide as yours, or wider, it might actually make sense to just buy them and take those earnings for yourself. I wonder how many of Ford's suppliers have an operating margin as wide as Ford's 5%?

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

#353

Post by slaw »

ldng wrote: post #342
slaw wrote: post #336

Earlier quoted context omitted.

Sweden's hospitals were never saturated despite no lockdown. Italy's hospitals are saturated every flu season. Hospitals are saturated, because we want to keep these people alive for few more months. Younger people don't need hospitalization. You are in car crash, too bad hospitals are only admitting people with covid. This is current situation in Poland.

Sweden did not need lockdown because, like Asia, people there were more disciplined. Numbers show road traffic dropped significantly during the first semester : people stayed home without being ordered to. Some culture will never do that by themselves. Youngers are less affected but some absolutely do need hospitalization. Reality is not as black or white as you're making it. The situation is like that in Poland ...…

Belarus didn't do lockdown just like Sweden and had the same result. Are Belorussians also disciplined?

Correct solution is to treat covid like very strong flu.

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

#354

Post by AnthonyMouse »

BoiledCabbage wrote: post #343
AnthonyMouse wrote: post #211

Earlier quoted context omitted.

> 40 people coming from Mexico is highly unlikely to lead to 230,000 US cases/day. Contagions have exponential growth. 40 people coming from Mexico after you've lifted the lockdowns means you need to continue them to keep the 40 from turning into a thousand and then hundreds of thousands. Which means lockdowns of the severity Australia used are useless here because you can never get below the floor necessary to lift…

> The point is that they weren't missteps. Calling out someone for not actually doing something wrong in order to stir up controversy and ratings and politicize a public health issue is contemptible. Defending yourself against a baseless personal attack is not. What a straw man. You realize there were photos of daily meetings with large groups, bill signings, news reports on how masks were barely worn in the white ho…

> Yes he didn't wear masks as press conferences because they entire administration was lax about mask usage. And then for you to argue and only mention the press conferences is extremely disingenuous.

You're missing my point. They would follow him around with a camera and any time they could show him without a mask there would be another story, regardless of the facts or the context. They would write the same story whether or not he was doing anything wrong in that instance.

That's a recipe for creating partisan conflict. They write the story when he's not doing anything wrong and then people correctly defend him. The existence of true instances are not a defense to reporting false ones. Because this is basic psychology; once people start defending something they keep doing it. So they created a large population of people willing to defend not wearing a mask. It was totally irresponsible.

It's the old saw about how the best way to discredit an idea is to defend it loudly with transparently erroneous arguments. That's what CNN were doing throughout.

> And that's separate from the Mexico argument. To me, it's incredible how little responsibility certain groups of people take for their own actions.

Please pay attention to context.

The argument I'm making is that the severe lockdowns as used in Australia could not have been as effective here because they only work if you can close your borders in practice, which Australia can do and the US can't. We're not even talking about "low effort, low cost" methods -- the argument is that higher cost efforts, of the sort that could actually get the number of cases to zero, couldn't have worked here. Even if the US put everyone in solitary confinement for a month, attempting to reopen the day after that would have still seen dozens of new cases.

That is a different argument to the one that more severe extended lockdowns would have saved lives. Which might very well be true (though against some grisly trade offs), but it's no support for claiming that it would have been better for US manufacturing in 2020, which is ridiculous.

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

#355

Post by 908B64B197 »

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…

It's a bi-partisan issue. Hell, I would agree it's not even a exclusively US issue but is pretty much generalized throughout the west.

Shifting manufacturing to China makes absolute sense when you look and care about the the quarterly/yearly performance. And if you decide not to do it well tough luck because your competitor is and will have better results than you.

If you look at it with a 20/30 years perspective then it becomes obvious that outsourcing is completely the wrong move. You basically get rid of your local expertise, train your replacements, slim down your middle class (the folks buying the products!). Then your manufacturing partner starts vertically integrating and designing it's own competing products and you are pretty much left out of the equation. It's almost as if, thanks to support from the party, Chinese businesses can plan for 20 years ahead but western companies can't because they HAVE to maximize the quarterly results!

> I argued that, even in the presence of free trade, a country should have the ability to tariff imports to the extent that that country could maintain a 25% (or something) domestic market share.

Tariffs and trade wars seem completely useless to me when done between G7 countries because we're all in the same situation regarding China. To achieve any sort of paradigm shift we'd need to stop each having a 1:1 relationship with China and start negotiating as a block.

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

#356

Post by AnthonyMouse »

stjohnswarts wrote: post #292
omgwtfbyobbq wrote: post #149

Earlier quoted context omitted.

More aggressive lockdowns initially could have limited the initial spread, and from there reasonable precautions could have been effective. Disparaging mask use is also generally considered to be harmful. Cutting funding to certain CDC programs may also have been detrimental. https://fortune.com/2020/02/26/coronavirus-covid-19-cdc-budg...

His followers hang on his every word. If he had simply said "yes masks are a good thing" 90% of his followers would have preached it from the mountaintops and things could have been much better. Instead we have almost 300K people dead and a lot of those are deceased as a result of his policies.

> If he had simply said "yes masks are a good thing" 90% of his followers would have preached it from the mountaintops and things could have been much better.

https://www.youtube.com/watch?v=hdgkdLSwh88

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

#357

Post by SubiculumCode »

tastyfreeze wrote: post #308
SubiculumCode wrote: post #266

Earlier quoted context omitted.

This argument fails. Dollars are to be used, not hoarded. Modest inflation encourages use of the currency. This is good. As far as an argument from authority, I'll take the Fed than random HN commenter. In any case, inflation is well controlled, perhaps over controlled, except for certain products with very real limits to production and supply (i.e. housing).

In any other field we see the same thing happen exactly the same way 20 time we assume it to be a hard rule until proven otherwise. For some reason with economics every government comes along and thinks they can guide the beast when no one has ever done so in history. I refuse to believe that a currency having 1/6 the buying power over 50 years is a good thing. Yet, under 150 years of gold standard the dollar maintai…

History is not a controlled experiment. The context changes with each iteration. We understand more about how currencies work than ever before.

If you want a long term store of value, choose a commodity, or gold I guess.

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

#358

Post by birdsbirdsbirds »

FpUser wrote: post #262
birdsbirdsbirds wrote: post #218

Earlier quoted context omitted.

(2) actually remains constant. If you use energy to pay for energy, then one unit always costs one unit. But if the world energy production doubles, do you think that scarce resources cost the same? Prices of e.g. concert tickets or art pieces will adjust.

Some of scarce will become not so scarce as their availability limited by energy. Other will increase in price as they're limited by other factors. Same way as with inflation. If you do not like it you're always free to by gold or whatever resource does not depreciate long term.

>Some of scarce will become not so scarce as their availability limited by energy.

Then those resources will cost the same in units of energy

>Other will increase in price as they're limited by other factors.

So why use energy to store value and not those resources? Of course I am free to choose gold on a personal level, but shouldn't it be the default strategy of every investor to not store value in energy?

Going back to your first comment:

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

I can imagine that energy can be used as the unit for value transactions. For value storage however, it's the other way round: I think value has to be stored in assets that don't depend on energy.

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

#359

Post by tastyfreeze »

SubiculumCode wrote: post #357
tastyfreeze wrote: post #308

Earlier quoted context omitted.

In any other field we see the same thing happen exactly the same way 20 time we assume it to be a hard rule until proven otherwise. For some reason with economics every government comes along and thinks they can guide the beast when no one has ever done so in history. I refuse to believe that a currency having 1/6 the buying power over 50 years is a good thing. Yet, under 150 years of gold standard the dollar maintai…

History is not a controlled experiment. The context changes with each iteration. We understand more about how currencies work than ever before. If you want a long term store of value, choose a commodity, or gold I guess.

All I hear with your argument is "its different this time" and "we know better than everybody before". Anyway, I have been divesting my savings from USD to prepare for the coming dollar collapse.

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

#360

Post by jtbayly »

mbesto wrote: post #350
jtbayly wrote: post #340

Earlier quoted context omitted.

The discussion was about manufacturing and whether it was a good idea to bring it back and if so how. I don’t think your comments have added anything of value to that discussion, just bringing politics in for the sake of mocking.

The parent comment mentioned he is a registered republican, so its relevant. I was merely making a joke about that since they referenced that in their comment. They also mentioned: > the last LCD panel manufacturer in the US closed around then and we could no longer manufacture LCD for our military vehicles Where did they say it was a good idea or a bad idea? Where did I say it was a bad idea? My reply was commenting…

> Where did they say it was a good idea or a bad idea?

The entire comment made the case. But if you want specifics, how about the sentences immediately prior to the one you pulled out of context: “I argued vociferously to a Dem friend in 2000 that our inability to manufacture critical components was going to kill us. Kind of literally:”

But yeah, I’m sure the problem here is that I’m “triggered.”

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