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USD share as global reserve currency drops to lowest since 1994

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Re: USD share as global reserve currency drops to lowest since 1994

#111

Post by detourdog »

doctorpangloss wrote: post #81
detourdog wrote: post #72

Earlier quoted context omitted.

Early 90’s during the Clinton administration (and the dot com boom) appeared to be the best run US budgeting process I have ever seen.

another POV is he was extremely lucky Pfizer decided to NOT commercialize its GLP-1 drug ( https://www.statnews.com/2024/09/09/glp-1-history-pfizer-joh... ) in 1992. What if it had commercialized GLP1s? The law that prevented Medicare from paying for weight loss drugs like GLP1s, the MMA, was passed in 2003. So Medicare would have to pay. YEAR NOM. ADJ 23 NET NET ($B) ($B) 10% 100% 1998 69.2 129.4 102.6 -138.6 1999 1…

I don't doubt he was lucky which is why I parenthetical referred to the dot com boom. I don't quite understand the relevancy of GLP1s to his luck. I think obesity wasn't what it is today back in the 90's.

I think the saying is Luck rewards the prepared.

Re: USD share as global reserve currency drops to lowest since 1994

#112

Post by BobbyJo »

doctorpangloss wrote: post #81
detourdog wrote: post #72

Earlier quoted context omitted.

Early 90’s during the Clinton administration (and the dot com boom) appeared to be the best run US budgeting process I have ever seen.

another POV is he was extremely lucky Pfizer decided to NOT commercialize its GLP-1 drug ( https://www.statnews.com/2024/09/09/glp-1-history-pfizer-joh... ) in 1992. What if it had commercialized GLP1s? The law that prevented Medicare from paying for weight loss drugs like GLP1s, the MMA, was passed in 2003. So Medicare would have to pay. YEAR NOM. ADJ 23 NET NET ($B) ($B) 10% 100% 1998 69.2 129.4 102.6 -138.6 1999 1…

I mean, luck is always a part of it, but you need responsible policy too. The US was lucky from 2010 to 2020, with the the economy growing basically that whole stretch, and we still ran a massively growing deficit the entire time because we decided to try and reform the middle east while lowering taxes.

Re: USD share as global reserve currency drops to lowest since 1994

#113

Post by [deleted] »

brianwawok wrote: post #87
messe wrote: post #80

Earlier quoted context omitted.

> For without the us [sic] guarding europe Those words hit harder when you've an executive that isn't beholden to Russia or threatening to fucking annex part of an ally, and a Europe that isn't investing heavily into rearmament. But please, continue in your delusion.

That’s great, I’d love a strong European military. Can you help Ukraine enough so it can win? If not you can’t defend your own countries alone.

[deleted]

Re: USD share as global reserve currency drops to lowest since 1994

#114

Post by notahacker »

JumpCrisscross wrote: post #92
messe wrote: post #91

Earlier quoted context omitted.

Ah yes, because the US has been sooooo fucking supportive recently. Give me a fucking break. Your GDP is bigger than ours, and you claim to give more aid to Ukraine, but you haven't even remotely matched it. The sheer fucking arrogance of you. > Can you help Ukraine enough so it can win? Can you (the American executive) stop collaborating with Russia[1]? > If not you can’t defend your own countries alone. Are we talk…

> only one is relevant to the Euro The Baltics are in the Eurozone. If Russia invaded the Baltics tomorrow, Europe would be dependent on America to stay intact. That isn’t really a risk one wants to take with a reserve asset.

Do central banks really asses the risk of total collapse of the Euro (only) in response to Russia's currently frazzled military launching an invasion against NATO borderlands which NATO fails to mount any effective defence as higher than than the risk the current US administration freezes assets for arbitrary and capricious[1] reasons?

In practice, of course, most countries are willing to accept both risks.

[1]a lot of states that can be reasonably confident that they won't provoke the US in the manner Saddam Hussein or Putin did whether they're friendly or not can be rather less confident the current president won't take extreme measures in response to something completely innocuous like jailing someone for domestic corruption, being a source of emigrants to the United States or maintaining a trade surplus...

Re: USD share as global reserve currency drops to lowest since 1994

#115

Post by mupuff1234 »

ur-whale wrote: post #10

Highly unpopular opinion here and I'm going to get downvoted into the ground (who cares), but ... this has been a very long time coming and has very much been a self-inflicted change. My bet is that it will end up being a very good thing for the world at large. China has recently started to buy Arabian oil and paying with yuan. Major countries (India, China) are starting to buy Russian raw materials and paying direct…

Russia is a joke, India is somewhat irrelevant and doesn't seem like that will change soon, China is a different story, although they also have their share of demographic and economic issues.

And Putin and Xi are 73 & 72, and I doubt they will give up power as long as they're living which may result in significant turnmoil for both countries.

> US to being a simple country instead of the has-been empire it currently is.

The US isn't going anywhere for now, although it is trending in the wrong direction, but it's not yet a lost cause, not to mention that its still basically a fortress with endless natural resources and relatively good climate.

And then you also have the AI race which might be a dud or might be a winner takes all scenario. So gonna be an interesting next decade.

Re: USD share as global reserve currency drops to lowest since 1994

#116

Post by detourdog »

JumpCrisscross wrote: post #104
detourdog wrote: post #3

Earlier quoted context omitted.

My understanding is that it has happened. The oil market was tied to the USD. The BRICS have now implemented a payment system as robust as SWIFT system. Oil is now being paid for using that system.

> Oil is now being paid for using that system The petrodollar hypothesis has been a myth since the 1990s. With America a net oil exporter , it’s an entirely stupid model to keep running.

I wish you would elaborate how being a net exporter relates to it being a myth. I don't see the connection. My point is that global trade of which oil is a major component needs to settle the books nightly. If the books aren't reconciled in an efficient manner trade has to slow down.

Re: USD share as global reserve currency drops to lowest since 1994

#117

Post by detourdog »

JumpCrisscross wrote: post #105
gigatexal wrote: post #63

Earlier quoted context omitted.

The steady building up of alternatives will happen until one day the reserve currency status will change hands all of a sudden. I think the Fed could stem the whole thing by just issuing a stable coin itself pegged to the dollar and re-assert itself as the dominant currency/arbiter... but who knows. Maybe then it'd have insight into every transaction and be able to stem things with even more power than it can now. No…

> steady building up of alternatives will happen until one day the reserve currency status will change hands all of a sudden This is not how it has ever happened. Instead, we’ll see a gradual erosion as the world switches to multi-polarity and spheres of influence. (And, with decreasing international trade, every country’s reserve mix will vary.)

I agree that the next wave may not be dominated by a single currency. I also think that is a superior system. I think the BRICS system is based on honoring multiple currencies rather than using a single currency for settlement.

Re: USD share as global reserve currency drops to lowest since 1994

#118

Post by BobbyJo »

JumpCrisscross wrote: post #106
pandaman wrote: post #103

Earlier quoted context omitted.

Not sure what your links are supposed to prove but here is the link[1] to the actual yield on the 10 year bond, higher yield means the bond is sold at higher discount i.e. cheaper. 1. https://fred.stlouisfed.org/series/DGS10/

> higher yield means the bond is sold at higher discount i.e. cheaper Yes. The Fed set a policy of higher rates. It did that by selling bonds and driving the price up. Then it set a policy of reducing rates, and was able to do that by just selling fewer bonds. Not buying them. That implies strong demand for these assets. (You can’t use price as a proxy for demand in Treasuries since it’s an explicitly manipulated pri…

Long bond rates have somewhat decoupled from short term rates set by the fed. For instance, they just slashed short term rates 25bps, but long bond rates (10+ years) have actually gone up a few basis points since the cut.

This is exactly what we'd expect if demand for treasuries wasn't keeping pace with US debt issuance. I mean, if you look at the debt, and the USD's current position, there really is no way out for the US government other than inflating the currency and cashing in that reserve status for a reset. The obviousness of that reality is why precious metals are going nuts.

Re: USD share as global reserve currency drops to lowest since 1994

#119

Post by doctorpangloss »

BobbyJo wrote: post #112
doctorpangloss wrote: post #81

Earlier quoted context omitted.

another POV is he was extremely lucky Pfizer decided to NOT commercialize its GLP-1 drug ( https://www.statnews.com/2024/09/09/glp-1-history-pfizer-joh... ) in 1992. What if it had commercialized GLP1s? The law that prevented Medicare from paying for weight loss drugs like GLP1s, the MMA, was passed in 2003. So Medicare would have to pay. YEAR NOM. ADJ 23 NET NET ($B) ($B) 10% 100% 1998 69.2 129.4 102.6 -138.6 1999 1…

I mean, luck is always a part of it, but you need responsible policy too. The US was lucky from 2010 to 2020, with the the economy growing basically that whole stretch, and we still ran a massively growing deficit the entire time because we decided to try and reform the middle east while lowering taxes.

would his policy have been to pay for GLP1s? Yes. And is that a little more than a hypothetical? yes. People who don't know US budgets don't know what drives faster-than-GDP growth in expenses (it's real estate, biotech and college).

Re: USD share as global reserve currency drops to lowest since 1994

#120

Post by laterium »

llmslave2 wrote: post #68
daedrdev wrote: post #34

Earlier quoted context omitted.

No, physically backed currencies will not return because physical goods do not correlate with the size of an economy, especially the amount of gold

I know you mean it as in governments won't return to a system that doesn't let them inflate the money supply, but that doesn't mean it's a bad thing...

Being able to conduct monetary policy is valuable, even if it can be misused. Otherwise all other countries would just be using USD.
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