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72% of the dollar's purchasing power was destroyed in just four episodes

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Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#131

Post by Booktrope »

Whoever wrote this article seems to think a strong dollar is fundamental to a strong economy. But, notice where it is on this timeline the only prolonged strengthening of the dollar that shows up. Yep, you've got it, the depth of the great depression. And, notice where the WWII and postwar weakening of the dollar led -- that's right, to in many ways the most prosperous economy the world has ever seen.

Because we try to figure out how things like "strengthening" and "weakening" of the dollar fit in, and we actually have policies much more intelligent than, weaking of the dollar! Collapse is imminent!

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#132

Post by znnajdla »

preommr wrote: post #77
znnajdla wrote: post #13

This supports my hunch that the current Iran war creates a lethal trifecta that could potentially cause a dollar collapse. 1. Massive military overspend. 2. Petrodollar squeeze (Strait of Hormuz). 3. Allies pulling out: Europe and the Gulf diversifying both their investments and defense purchases. #1 creates oversupply of dollars and #2 and #3 lower demand. This study supports the idea that wars can indeed destroy pu…

> Europe and the Gulf diversifying both their investments and defense purchases. With what? The euro, yuan? Or weapons from france? I hate to admit it, but it's much less that the US is great because it's the reserve currency, and much more that the world reserve currency is the dollar because the US is what it is. Weapons are expensive, and it only makes sense to buy them from a country that specializes in them. And…

The US is defaulting on military orders to Europe and Germany just announced a 1 trillion euro rearmament plan. Europe is manufacturing big time. The Gulf states as of yesterday are now buying from Ukraine for fucks sake.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#133

Post by anal_reactor »

prox wrote: post #110
lostlogin wrote: post #94

Earlier quoted context omitted.

In Uno, you're supposed to say ‘Uno’ as you play your second to last card (indicating you are close to winning).

I think the internet use is usually “reverse uno (card)” which means the tables are being turned, aka what you tried is being reflected back at you.

I really don't think that HN would ace a card game knowledge test.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#134

Post by soperj »

steveBK123 wrote: post #5
SpicyLemonZest wrote: post #4

Earlier quoted context omitted.

I'm not really convinced this data falsifies the narrative of a slow erosion. It's just the Pareto principle in action. I bet if you graphed the erosion of a hill you'd see the same pattern.

Slowly and then all at once, as they say

I thought that was Hemingway specifically?

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#135

Post by Gud »

preommr wrote: post #77
znnajdla wrote: post #13

This supports my hunch that the current Iran war creates a lethal trifecta that could potentially cause a dollar collapse. 1. Massive military overspend. 2. Petrodollar squeeze (Strait of Hormuz). 3. Allies pulling out: Europe and the Gulf diversifying both their investments and defense purchases. #1 creates oversupply of dollars and #2 and #3 lower demand. This study supports the idea that wars can indeed destroy pu…

> Europe and the Gulf diversifying both their investments and defense purchases. With what? The euro, yuan? Or weapons from france? I hate to admit it, but it's much less that the US is great because it's the reserve currency, and much more that the world reserve currency is the dollar because the US is what it is. Weapons are expensive, and it only makes sense to buy them from a country that specializes in them. And…

Weapons are only expensive if you want them to be expensive.

Ukraine are butchering Russians for 870 USD per dead soldier.

The USA has the most expensive weapons in the world, the problem is that much of it is obsolete.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#136

Post by abetusk »

probablypower wrote: post #35

This study doesn't correct for baseline exponential decay due to inflation, to better highlight the meaningful variations. By comparing based on 1914 dollars it also causes old variations to be relatively more extreme and newer inflationary events to look less extreme. You must compare apples to apples. Finally the events are quite cherry-picked. It is a conclusion looking for a result, when the statistical reason fo…

I think this graph shows the "apples to apples" comparison:

https://www.officialdata.org/us/inflation/1800?amount=1

Doing a spot check, this means $1 in in 1913 is equivalent to roughly $32.83 today.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#137

Post by DeathArrow »

znnajdla wrote: post #13

This supports my hunch that the current Iran war creates a lethal trifecta that could potentially cause a dollar collapse. 1. Massive military overspend. 2. Petrodollar squeeze (Strait of Hormuz). 3. Allies pulling out: Europe and the Gulf diversifying both their investments and defense purchases. #1 creates oversupply of dollars and #2 and #3 lower demand. This study supports the idea that wars can indeed destroy pu…

Add the fact that some countries are using other currencies to trade oil and goods.

Also, some countries started to use other systems beside SWIFT to transfer money.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#138

Post by hintymad »

Booktrope wrote: post #131

Whoever wrote this article seems to think a strong dollar is fundamental to a strong economy. But, notice where it is on this timeline the only prolonged strengthening of the dollar that shows up. Yep, you've got it, the depth of the great depression. And, notice where the WWII and postwar weakening of the dollar led -- that's right, to in many ways the most prosperous economy the world has ever seen. Because we try…

And a strong currency usually means weak manufacturing. And I don't know how a country can be strong without a solid manufacturing sector. Like, when we a war breaks out, we ask our enemies to sell us components and medical key ingredients?

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#139

Post by kasey_junk »

maxglute wrote: post #113
d3ckard wrote: post #43

Earlier quoted context omitted.

This is particularly funny if you consider petrodollar to be a bad deal for US, not a good one. Ironically, if yuan becomes new petroleum currency, it might hurt Chinese long term.

Petro-yuan =/= reserve currency. USD reserve = print USD for everything liquidity to sustain debt financed existence where Triffin hollows out industry, and financialize everything because having stupid amount of liquidity incentivizes certain behaviors. Petro-yuan = PRC gives swap lines to trusted partners to buy oil denominated in yuan in exchange for things like resources. Hormuz ships ~1 trillion USD worth energy…

The problem with that plan is that no one wants to trade hard commodities for a currency that can’t be spent. One part of the dollars appeal is that it spends the world over. The sanctioned countries frequently have more liberal access to dollars than to unsanctioned yuan.

So no one is going to take up a lot of yuan trade unless that changes or they are forced to.

But that puts China in a bind. Liberalizing their currency is going to require very careful and slow actions, China threads this needle now in a very fraught way. If they openly start trading oil at any real size in yuan that will break their peg as you’ll be able to trade through the oil markets.

This is the main reason there isn’t more petro yuan already, it’s bad for China.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#140

Post by nradov »

cheema33 wrote: post #95
leche wrote: post #50

Earlier quoted context omitted.

One of the goals of the Heritage Foundation is a weak dollar. They believe they can bring manufacturing back to the US this way. I don't think they're right. I do think they will continue weakening the dollar.

> One of the goals of the Heritage Foundation is a weak dollar. They believe they can bring manufacturing back to the US this way. Only cheap labor can bring manufacturing back to the US. Are Americans willing to work in factories for the same wages as the Chinese and Indians? I don't see it happening.

Cheap labor wouldn't necessarily bring manufacturing back to the USA. Over time much of the labor can potentially be automated. But environmental and zoning rules effectively ban entire industries such as metal casting. If we want those industries back then we'll need a major realignment of public policy that goes beyond just labor.
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