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Gold overtakes U.S. Treasuries as the largest foreign reserve asset

economictimes.indiatimes.com

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Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#71

Post by ETH_start »

SilverElfin wrote: post #8
consumer451 wrote: post #6

The fact that this all happened by choice is really something. It's like witnessing a self-decapitation.

It’s not a self decapitation exactly. I think Trump, his family, his corporate donors, and other friends are all willing to sacrifice everyone else - including the lead America had - to make themselves rich and powerful. Every single decision to spend - defense, ICE contracts, AI, approvals of anticompetitive acquisitions, changes to regulations, etc - is making that circle richer at our expense. They don’t care if A…

The US lead over the EU in per capita productivity has massively grown over the last 20 years. There's no indication of waning American power.

America has produced 70 times more stock market wealth if you look only at companies created within the last 50 years than the EU. And this is not all paper wealth. If you look at technological sophistication, whether that's frontier AI models, leading-edge pharmaceutical drugs, total amount of compute, or the space industry, the U.S. has grown its lead over the EU over the last 50 years.

It's because the EU has largely fixated itself on reducing wealth inequality by punishing those who succeed. It's safety-maximalist approach to private industrial action has also hamstringed industry — see Germany closing all 17 of its nuclear power plants. The US doesn't really need to do much except not sabotage itself to maintain its lead. Like in all nations, laissez-faire (French for "leave it alone") allows the private sector to do the rest.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#72

Post by Larrikin »

hax0ron3 wrote: post #70
IAmGraydon wrote: post #63

Earlier quoted context omitted.

The fact that he has done countless things that are harmful to the US and not a single thing that is in the country's best interests tells me all I need to know. Either he's aligned with an enemy or he just hates the country and wants to destroy it.

I disagree with probably the majority of Trump's main policy ideas, but I think a strong case can be made that his immigration policies are in the country's best interests. Not all of them, but as a whole.

Why do you think that?

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#73

Post by cmcaleer »

BobbyJo wrote: post #55
ejoso wrote: post #48

Earlier quoted context omitted.

Say more

Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when t…

It's as much a gun to adversaries' heads if they hold lots of your bonds (China used to hold over $1T in USTs) so they would have an interest in not having that blow up by not annoying the US so much they refuse to pay foreign bonds.

It's also kind of neat as a financial MAD instrument, because China obviously can't just get everyone to go into their brokerage and market sell a trillion in USTs so they get a lever to pressure the US with but they can't go nuclear without also vaporising their own value. So it works as a melting ice block on which diplomacy is forced on both sides.

The death of the UST as a reserve instrument would be a catastrophically bad loss, the only silver lining is that the melting ice block might still be enough by the end of this admin that the new admin might have enough to stand on to rebuild it should they realise the value of it.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#74

Post by fc417fc802 »

fnordpiglet wrote: post #62
BobbyJo wrote: post #55

Earlier quoted context omitted.

Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when t…

As someone who lives a day to day life, I’m pretty happy for things that are good for my day to day life. Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch. I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate. Effectively most technology, especially software, but hardware as well, is concentrated in the…

I'm not going to take a side in the broader discussion here, however your response fails to engage with what was previously written.

> Some abstract quasi moralistic reason

What was presented was neither abstract nor moralistic. The argument was one of driving towards a cliff and taking preemptive action before reaching it.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#75

Post by hax0ron3 »

Larrikin wrote: post #72
hax0ron3 wrote: post #70

Earlier quoted context omitted.

I disagree with probably the majority of Trump's main policy ideas, but I think a strong case can be made that his immigration policies are in the country's best interests. Not all of them, but as a whole.

Why do you think that?

Illegal immigration brings masses of people from more corrupt, disordered, and perhaps lower average intelligence societies into the US in conditions that make it hard for even the ones who are capable of assimilation to assimilate. It also constitutes a massive flouting of the law for the benefit of business, which sets a bad precedent and lowers public trust in institutions. It also contributes to rising racial tensions that encourage the growth of ethnic tribalism and weaken trust in liberalism.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#76

Post by ZeroGravitas »

rapind wrote: post #42
aloha2436 wrote: post #26

America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe...

> someone too stupid to understand That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.

One less conspiratorial but more pernicious angle, is that attacking things that are good but complex is a great strategy for troll politicians who don't care about the success of their country but just like the attention.

See Brexit, and free trade in general.

It's a good way to get "the establishment" to gang up on you and defend something complicated while you present simple but wrong alternatives and promise the world.

I also think he's up for sale (as are all the other similar politicians) to a multitude of buyers, foreign and domestic.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#77

Post by BobbyJo »

fnordpiglet wrote: post #62
BobbyJo wrote: post #55

Earlier quoted context omitted.

Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when t…

As someone who lives a day to day life, I’m pretty happy for things that are good for my day to day life. Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch. I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate. Effectively most technology, especially software, but hardware as well, is concentrated in the…

> Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch.

I don't see how any of those descriptions fit what I've said. Also, note, things should indeed not be tougher. A consequence of our economy being so focused on financialization of overseas productivity is that the wealth created from that activity tends to be much more concentrated than that produced from manufacturing, at least historically. Though, who knows if that would hold if onshoring took off in earnest.

> I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate

Never said either of those things. I only stated that it makes domestic production harder/less profitable. Though, I'd also like to point out that that the largest companies in our economy are wholly dependent on the output of an island with grave geopolitical risks hanging over its head. China could collapse our economy overnight due to unchecked offshoring. That's not quasi, abstract, or moralistic, just a state we've created.

> No, we are taking our advantages and lighting them on fire for no obvious reason. Backing into a rationale doesn’t make it rational. Its Christian nationalism fueling raging narcissism made malignant due to senility.

I mean, I have named several, and all of which were put forth prior to Trump's term starting. I'm not a fan of Trump, but it would seem to me you are creating a narrative for yourself that doesn't fit history.

> Theres no experts, no adults, no experienced people - they’ve all be fired and replaced with sycophantic photogenic personalities.

I think Bessent is pretty good.

> This is not good, there is no upside, it’s Nero hosting UFC while the empire burns. The only out I see is nature helping end this or a total seismic change in Congress and removal from office. Then rebuilding can start and maybe there’s something to salvage. But I doubt it, and I expect the next generations will exist in the rubble of the colosseum.

Idk about rubble, but corruption does need to be curbed IMO. The current administration has not been good for the rule of law, in spirit. I do think some level of that is unavoidable however, as the judicial branch and executive branches have been sucking power from the legislature for going on 50 years, which also needs correcting.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#78

Post by heavyset_go »

refurb wrote: post #22
SilverElfin wrote: post #8

Earlier quoted context omitted.

It’s not a self decapitation exactly. I think Trump, his family, his corporate donors, and other friends are all willing to sacrifice everyone else - including the lead America had - to make themselves rich and powerful. Every single decision to spend - defense, ICE contracts, AI, approvals of anticompetitive acquisitions, changes to regulations, etc - is making that circle richer at our expense. They don’t care if A…

How does sacrificing America's lead make American oligarchs richer? That doesn't even make sense.

Look at post-USSR Russia

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#79

Post by fc417fc802 »

vincnetas wrote: post #41
dpb001 wrote: post #34

Earlier quoted context omitted.

The union of states arrangement has the side effect of putting the states in competition with each other for things like new/expanding businesses and residents. It's relatively easy to relocate (or even remain in a state while legally "residing" elsewhere). So there are diminishing returns to raising the tax rates significantly on the upper brackets at the state level. I'm not a believer in the trickle down theory bu…

this somehow excludes such human concept as sense of belonging. might be in usa it has atrophied already but sense of home is really important in some places. place where you spend most of your life, where you have you real social network, neighbors and childhood friends. sometimes its lower tax is not worth loosing it all. its not everything about money (for some) ps im talking about real persons here, not corporati…

You're talking about people who aren't ultra wealthy there. Once the tax bill gets high enough relative to elsewhere it doesn't make sense not to jump through the hoops to change your place of residence.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#80

Post by fakedang »

cmcaleer wrote: post #73
BobbyJo wrote: post #55

Earlier quoted context omitted.

Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when t…

It's as much a gun to adversaries' heads if they hold lots of your bonds (China used to hold over $1T in USTs) so they would have an interest in not having that blow up by not annoying the US so much they refuse to pay foreign bonds. It's also kind of neat as a financial MAD instrument, because China obviously can't just get everyone to go into their brokerage and market sell a trillion in USTs so they get a lever to…

> by not annoying the US so much they refuse to pay foreign bonds.

The problem with this is that a country can only refuse to pay their foreign bonds once. But the buyer can always dump them and scoop them up later for cheap when shit hits the fan.

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