211–220 of 407 posts
Interesting the pressure is increasing. More and more countries questioning why they need to base their foreign transaction on the US Dollar. Could this mounting unrest be as a result of the seeming inability of the US Federal bank in checking inflation of the US Dollar. Also, some of these Nations can no longer determine what benefit it is to them is using the US Dollar as their reserve currency and trading currency…
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> Ghana is shouting out loud I can’t get my hands on USD. That doesn't make sense - just take some gold, and buy USD. Is there some physical shortage of paper or something?
If you’re referring to the paper USD is printed on, it’s cotton rather than paper. But even if there was a shortage, I doubt that on a country level USD (or any currency, for that matter) is bought in physical form - it’s just credited to the country’s bank account.
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For two parties to transact in dollars they need either to physically hold large amounts of dollars. Or have access to some shared ledger that is accounting system where transactions can happen. Say A, B, C account. A sells gold and get dollars from account B to account A. And now they can buy oil from owner of account C. But who owns and runs these accounts or the transactions between them? One option is SWIFT syste…
> One option is SWIFT system. Which Russia got excluded in some capacity from. As such it is clear that system cannot be trusted. That is quite a leap. Russia was also excluded from the NY stock exchange due to the ongoing sanctions; does that mean we can no longer trust stocks bought and sold there?
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Ahh yes, small changes never preclude larger shifts in large geopolitical entities. But also if anyone tells you they know the future, they're probably trying to sell you something. If I were in charge of Ghana's finances, I'd be pretty cautious of standing in front of any windows for the next few years.
Brexit was supposed to be the end of the EU.
Regime change in 3... 2...
Don't necessarily even need to plan for a new regime. Libya tried this and now they are a failed state with open air slave markets.
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If you’re referring to the paper USD is printed on, it’s cotton rather than paper. But even if there was a shortage, I doubt that on a country level USD (or any currency, for that matter) is bought in physical form - it’s just credited to the country’s bank account.
It is paper. Paper made with cotton.
Linen comes from the flax plant and cotton comes from the cotton plant.
Linen versus cotton have a great history. Linen was used on WW1 era airplanes as outer skins because it didn’t run like cotton canvas when the material was shot through.
This has nothing to do with USD dominance as many are suggesting. Ghana is running out of USD reserves and has to resort to buying with gold. Nothing suggests they wouldn’t use USD if they had it.
It has everything to do with USD dominance. Countries have resources thus commodities. Commodities have value. Real value. Trade in local currencies can be backed by these commodities. Necessity will force countries to find USD alternatives.
You're misunderstanding the fundamental problem. It's not about a "shortage" of USD for Ghana, where they ran out of USD suppliers and no one is willing to sell them USD so they will need to switch to RUB.
You get USD by exporting stuff and you can import stuff when you spend USD. The fundamental problem for Ghana is that they need to import valuable stuff but they are running out of valuable stuff to export in exchange, hence their USD reserves are dwindling. You can't solve that problem by changing the currency. If someone is to give you their RUB, they'll still want valuable stuff in exchange.
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I downvoted you because you complained about your downvotes. Don't watch the score and, especially , don't complain about it.
I did not complain. Maybe you should revisit your downvoting principles. I inquired why I was being downvoted for asking a question. I was genuinely curious about how that was bad.
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I suspect it's a prerequisite, though perhaps not the only one. I also suspect that political stability is more likely to favour China than the USA over the next few decades — it is very human for success to be followed by the assumption of indefatigability and that to be followed by fighting over who leads the nation, rather than continuing to focus on what actually made a nation dominant and how to keep it that way…
The UK lost its literal empire because of the costs of two wars that devastated the continent - not domestic politics. On the other hand, the PRC is turning back on itself. It has been unable to produce a successor to Xi - making it very hard to change direction. Under Xi, it has actively cultivated hostility against itself and only manages to exercise influence others through force. It also has much less stable demo…
That’s the story the British like to tell themselves.
I don’t think it fits the counterexample that Germany was able to rebuild itself enough after the first to be a world-scale threat by the second (and might have won the second in the alternative timeline where they had not been so anti-communist to attempt to conquer the USSR before the UK, and possibly also in the hypothetical alternative timeline if they had not been anti-Semitic — even before all the horrors of Holocaust became known, they were bad enough to make a significant number of Jewish scientists run away, in particular the ones went to the USA and helped with the Manhattan Project); and again after WW2 and being divided by the Allies, that Germany went from having their industrial base punitively dismantled in 1949 to The Times referring to the its reconstruction as a Wirtschaftswunder by 1959. (Yes I do know they got help, but it’s important to also know why the UK didn’t get that help, and I think part of that is the USA while part is internal domestic UK politics).
It also doesn’t fit that the observation that empire, which was worldwide, had been bringing riches to the UK before the war. One thing that might have changed the cost/benefit ratios was all the locals finally getting their hands on sufficient firearms to make it expensive to suppress independence movements. Given what else the British government was busy doing with local industrial policy at that point, and the honours granted to those directly involved in war crimes during the Mau Mau uprising, I don’t think they were that self-aware. (Could also be that the USA was putting pressure on the old powers to drop their imperialism, but I don’t feel confident about the dynamic there given British cultural attitudes to the USA vary from it being “one of us, even if they don’t realise it” (no, I don’t get it either, but I’ve seen it) to “if they say jump, we ask how high”).
It also doesn’t fit that the Commonwealth’s GDP is now about $11 trillion, about 3 times the UK itself; although I would regard the end of Imperialism as a morally good thing and correct all by itself, I don’t think “money” is a reasonable justification for giving up on that potential. Morally, sure. Politically, it is “gave up an empire to gain a continent… hang on, why isn’t the continent doing what we say? That must mean they are dictating to us!”
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It has everything to do with USD dominance. Ghana is shouting out loud I can’t get my hands on USD. They’re echoing what the global market in general has been pricing. Now true, having your product be a hot commodity everybody wants is good for business but there’s only so much of that before your competitor starts offering a more readily available product. Pepper that with some morally objectionable stances the US h…
Are you advocating for printing more USD? edit: not sure why I'm being downvoted for asking a relevant question