I think this argument suffers from the same problem as many arguments of similar kind. It goes like this: if A then B. If B then C. If C then D. It all makes sense. Every single one of these steps makes sense. Except, if you have a chain with five steps and every one of them has a 90% likelihood, the whole chain has only 60% likelihood. And it’s probably less the 90% for each step, in reality. So, you can come up with an entirely plausible reasoning chain, where each step is highly likely to come true, and yet be completely wrong with your overall conclusion.
The Dollar Is Dead
131–140 of 367 posts
Re: The Dollar Is Dead
#132Earlier quoted context omitted.
Growth is over globally except India and Africa due to demographics [1]. Developed countries and unions will compete for the last of the world’s young, prime age workers over the next century. Financial stability will be a function of who manages this situation to the best of their circumstances. Can you attract and retain these workers and leverage that for economic success? If so, that’s where investment will flow…
Having billions of low-skill "prime age workers" is not a good thing in the AI era. Africa's population surge is a liability as much as it is a benefit, especially considering they already have to import a large portion of their food supplies. Africa is 20% of world population but just 2% of world GDP... Maybe they will turn into China at some point, but I wouldn't bet on it yet.
AI era remains to be proven to not be bullshit. If it turns on to be something of value and not pets.com and webvan 2.0, prime age workers should be provided training and hiring pipelines for jobs AI cannot do: healthcare, construction, infrastructure, housing, agriculture scaling, etc. Knowledge/white collar jobs are most at risk with LLMs, not work building society up and operating it in the physical world.
Re: The Dollar Is Dead
#133Meh… it’s easy for someone to string together a few charts and make a dramatic prediction. It’s telling that he hasn’t disclosed his positions or portfolio.
If “Skin in the Game” has taught us anything, it’s that if you want to know what a person really believes, don’t read their blog, look at their investment portfolio.
Ok… you think the dollar is going to “melt away in a fire”? How much do you believe that? Enough to put your own money on the line and place your bets? Is your money in real estate, then? Gold? BTC?
Because if you don’t believe a financial projection enough to put your own money into it, do you really believe it?
Re: The Dollar Is Dead
#134Earlier quoted context omitted.
The issue is that all governments are in roughly the same situation, so there is no alternative other than maybe gold. The US doesn't need to be great or even good, it just needs to be better than the alternatives. The issues facing China and the EU make America's spending problem look mild. (And I agree by the way: America has a massive spending problem.)
EU government debt to GDP ratio is 81.8% with a deficit of 2.9%. US current debt to GDP is 124%, and Trump’s big beautiful bill is projected to increase the deficit to 7% next year. America has long benefited from a more dynamic and attractive labor market than Europe, but the current administration is actively trying destroy that advantage by driving out the immigrants that were fueling it.
Now look at economic growth rates.
To be clear, I think US spending is too high. But I would take a bit more debt and thriving economic growth vs a bit less debt and zero economic growth every time.
Re: The Dollar Is Dead
#135The country is getting forced by markets into realizing pain for overspending, and only congress can manage this pain. Manage the pain, not remove it is key here. Manage it. Conrgess is totally inept and ridiculously politicized, so it's unlikely they will do anything except make the problem worse. That leaves only the natural fall out of refusing to acknowledge a financial injury before going out on the field to pla…
There is no "overspending." There is only undertaxing. The debt is literally just the accumulated difference between spending and taxation. If extreme wealth was taxed, the debt would be zero. The point isn't even to "pay for spending" but to enforce a functional social contract, and to limit the political and democratic distortions created by extreme inequality. "Markets" should not have a veto on policy in a democr…
Well, I argue with your point with mine then: there’s no under taxing, only over spending.
If extreme spending was cut, the debt would be zero.
Re: The Dollar Is Dead
#136Earlier quoted context omitted.
Biden is competent and chooses competent people. Trump is NOT competent and hire incompetent people and fires competent people.
I'm curious what you think were the most extreme demonstrations of competence during the biden admin.
Not the op, but I think the IRA and to a lesser degree the IIJA were important bills that tackled big, important problems -- climate change, protecting security critical domestic manufacturing, building domestic energy production capacity. I am also impressed that Biden managed a soft landing from covid-era inflation. I expected a recession
Re: The Dollar Is Dead
#137The country is getting forced by markets into realizing pain for overspending, and only congress can manage this pain. Manage the pain, not remove it is key here. Manage it. Conrgess is totally inept and ridiculously politicized, so it's unlikely they will do anything except make the problem worse. That leaves only the natural fall out of refusing to acknowledge a financial injury before going out on the field to pla…
There is no "overspending." There is only undertaxing. The debt is literally just the accumulated difference between spending and taxation. If extreme wealth was taxed, the debt would be zero. The point isn't even to "pay for spending" but to enforce a functional social contract, and to limit the political and democratic distortions created by extreme inequality. "Markets" should not have a veto on policy in a democr…
Federal receipts as a percent of GDP:
https://fred.stlouisfed.org/series/FYFRGDA188S
Basically unchanged for 70+ years, and far lower historically. Meanwhile significant growth in real GDP per capita and therefore real government receipts per capita.
The change isn't that the government is collecting less money. They get more than ever. But growth in government spending has outstripped it, and it has been getting worse rather than better.
Re: The Dollar Is Dead
#138Earlier quoted context omitted.
As a counterpoint, confidence in US courts (particularly the federal courts) is rapidly declining — both among the public and among those who operate within the court systems.
That depends on what kind of media you consume. Feeling isn't really a good indication of reality.
The economy and markets of made of people with feelings. Perception is an important part.
Re: The Dollar Is Dead
#139Earlier quoted context omitted.
Europe has repeatedly tried to soak the rich, and the results are always the same: the rich move their wealth somewhere else and you end up breaking even or even reducing your tax revenue. France: https://www.theguardian.com/world/2014/dec/31/france-drops-7... UK: https://obr.uk/box/effect-of-the-additional-rate-of-income-t... Sweden: https://eml.berkeley.edu/~saez/course/seimAEJ17wealth.pdf It's interesting to note…
The US is a long way away from trying to "soak" anyone. We have a top rate on long-term capital gains of 20%.
That's pretty average (which is a good thing).
Japan: 20%
China: 20%
India: 13%
UK: 24%
Italy: 26%
Germany: 26%
France: 30%
Then there's Canada of course... 50% with a proposal to make it 66% in 2026. Let's see how that works out!
Re: The Dollar Is Dead
#140Earlier quoted context omitted.
That depends on what kind of media you consume. Feeling isn't really a good indication of reality.
I'd be interested to look at any studies (or even opinion pieces) that indicate either that confidence in the courts is remaining unchanged (compared either to recent or historical levels) or that it's increasing.
Agreed, that would be interesting to see if the methodology were sound. The problem is naturally that measuring "confidence in the courts" is almost inherently a methodologically difficult thing to do.
Additionally: shortage of confidence in the US Courts isn't a new thing. The reality of the US Courts system is: Money wins, and its been like this for the entire life of essentially all Americans alive today. This is, actually, rather convenient and good if you take the view that faith in the US courts system is a critical component of the US Dollar's global reserve status. If money controls the courts, and courts support the money, that's a pretty nice virtuous cycle. But, for the People; its been hit-or-miss for a long, long time.