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USD share as global reserve currency drops to lowest since 1994

wolfstreet.com

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

#121

Post by detourdog »

blibble wrote: post #74
detourdog wrote: post #43

Earlier quoted context omitted.

Nobody is panicking. BRICS has gotten steadily larger and is gaining as an alternative banking system. This is competition. This just requires more thoughtful strategies.

> This just requires more thoughtful strategies. US not in a good place then?

I would say it's a mystery. The US has corporations that are better funded than many nations. These corporations are also rationally managed and operate globally. As a patriot I hope that the US starts to utilize rational thought.

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

#122

Post by detourdog »

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.

A really important detail that I don't think gets enough mention is that the second gulf war was paid for off the books. The war was not part of the federal budget.

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

#123

Post by carlosjobim »

RealityVoid wrote: post #83
GenerocUsername wrote: post #31

Earlier quoted context omitted.

Imagine how red 100 years of economists faces will be when the world ends up back on a gold backed currency. Probably only takes 2 years before they start inventing abstractions on top of it and this kicking off the eventually next economic disaster.

I'd rather go back to crypto than be chained to a piece of stupid metal.

You take that back now. Gold is the best thing which has ever existed. Name one thing in the world which can even compete.

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

#124

Post by dredmorbius »

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…

https://news.ycombinator.com/item?id=9160121>

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

#125

Post by pandaman »

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…

>It did that by selling bonds and driving the price up.

No, the yield went up and price went down. Prices usually don't go down if demand remains unchanged.

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

#126

Post by detourdog »

doctorpangloss wrote: post #119
BobbyJo wrote: post #112

Earlier quoted context omitted.

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).

I'm unable to follow the point of the significance of GLP1s. I also wouldn't describe the expense as biotech I think healthcare is a better description.

Finally the US's current healthcare system is truly broken. Our elected officials choose to ignore the issue and act as if we are fortunate to have this system. Which must be the least efficent way to deliver healthcare.

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

#127

Post by lumost »

kibwen wrote: post #99
JumpCrisscross wrote: post #92

Earlier quoted context omitted.

> 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.

It's worth emphasizing this: without the US Navy, the remaining European powers don't have the naval force to stop Russia from blockading the Baltics. And without the ability to break such a blockade, there's little hope in aiding the Baltics against a land invasion from Russia and Belarus. Russia wants a land route to Kaliningrad, and they'll take it at this rate.

My understanding is that European Air and Ground forces have been able to deter or destroy Soviet/Russian Naval operations in the North and Baltic Seas since the start of the cold war. Land based anti-ship missiles have more than enough range to cover the entire water way on their own.

This was a major reason the Soviet Union and now Russia never invested in a large navy outside of Submarines.

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

#128

Post by [deleted] »

seg_lol wrote: post #22
_blk wrote: post #19

Earlier quoted context omitted.

Ooooh that must've struck a nerve. Seems we can't post that here without massive loss of reputation. Progressivism != liberalism. That stuff just doesn't fare well, even as sarcasm.

Dude is giving what many have wanted for years, the largest of which is a massive reduction in US hegemony. Restarted militarization of Europe, accelerated the expansion of China into Africa. Causing Five Eyes to curtail the flow of intel. But at the same time, utterly burning US soft power with the shuttering of USAID and most likely causing 14M excess child deaths world wide. Shutting down USAID was a bigger "mista…

[deleted]

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

#129

Post by drivebyhooting »

fspeech wrote: post #82
OutOfHere wrote: post #56

Earlier quoted context omitted.

All the arguments against gold are completely bogus because there is nothing stopping the price of gold from climbing to meet the economic need. The price of gold was suppressed for a long time by institutions, but this active suppression is increasingly difficult to continue. As for verification and transfer, that's what electronic shares are for, distributed across a few key physical asset holders.

Price of a commodity metal can do whatever they want without causing a big problem. It is just a resource allocation signal. However if you base your currency value on it suddenly you are forcing debtors into bankruptcies if the value shoots up. Credit relationships aka investments are what make an economy run and grow, not some arbitrary commodity price.

Debtors who roll their loans also go bankrupt when the fed raises interest rates. Rolling loans is par for the course for many capital intensive businesses. This is because in a low interest rate environment if you act prudently you’ll get outcompeted.

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

#130

Post by lumost »

KaiserPro wrote: post #47
duttish wrote: post #4

I'm not an economist so someone please correct me / expand on this; I'm guessing this is kind of a "It's not a problem until it's a crisis" situation? So far other central banks haven't begun selling treasuries, they've just stopped buying them. But once one starts selling it could become self reinforcing? What could replace it? There doesn't seem to be any new hegemonic power on the same level. Could we enter a worl…

Its only really a crisis for people who are dependent on the US for protection. The whole compact is that you use the dollar, and the US will look after you (ie House of Saud, Europe, taiwan, south korea, etc) But that isn't really certain anymore. You need to make tributes to the suntan king, and he is most capricious and likley to tariff the fuck out of you. So alternative destination for your goods is a necessity…

The printing of dollars by the Fed comes with a secondary effect - the dollars are not evenly distributed amongst the population. They are printed via market action, and the ones who are closest to the market action are free to capture as large of a share as markets allow.

Over time, it's natural that actors will optimize the above system to capture as many dollars from the printer as they can.

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