141–150 of 367 posts
The idea that a basket of foreign currencies or "BRIC+" will replace the dollar is absolutely not going to happen. If the dollar goes down it takes the entire world with it. Nobody is insulated from the risk of a dedollarization.
> idea that a basket of foreign currencies or "BRIC+" will replace the dollar is absolutely not going to happen No it'll be renminbi, with the euro, if they are lucky as a distant second place.
Is there any other country with both the court system and wealth required to back up being the global reserve currency? I don't think there is and I don't see a viable contender showing up in the near future.
It need not be a single country. Organizations like BRICS could float it's own currency, and with significant size of the economy of the members, it could pull it off. This is why Trump has been explicitly warning against that.
BRICS might have the wealth. Would you trust that it's going to be legally stable? I wouldn't.
But, in fairness, for the first time in my life I don't trust the US in that way either. I'm beginning to see it as possible that someday the president could make some arbitrary decision that takes everything I have. (Either this president or another - but it's this president who's making the precedents that make it possible.)
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My friends in Taiwan think they will be invaded before 2030 so we’ll see
There's been a spike in news articles on the invasion the last couple of weeks. Given that the US appears to not hold on to any alliances or assurances, and ~~incontinent~~ incompetent in chief is on the helm, it seems that they've the perfect opportunity. Europe's busy with Russia, US is busy with itself, so honestly, why not?
Because it might not work out so well for them? Let's not kid ourselves, this would be an invasion by sea against an opponent who's prepared for many years, has a modern defense force, and has explicitly designed a defense protocol to inflict as much damage as possible. This is not Russia stepping over fields they already encircle that are governed by a dysfunctional government. And it's not Isreal being allowed to bomb impoverished children with impunity either. And neither of those scenarios have worked out splendidly for them either.
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This is about how the courts operate with regards to international business disputes, US has proven record about being impartial in these matters.
Even if that is true, the US's proven record does not include the current administration.
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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.
It's hard to take your point of view seriously after that honestly.
The 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…
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.)
There are times in history when a government fails, and then there are times when all governments fail, and the world re-organizes (usually after a long and bloody period of multiple wars) into a new system of social organization. The idea of a modern nation-state is only about 150 years old, dating from a series of wars (the U.S. Civil War, the German and Italian wars of unification, the Franco-Prussian War, the Meiji Restoration) in the 1860s-1880s. Before then, the early nation states and concept of nationalism arose out of European Wars of Religion in the early 1600s. Someone who lived under high-Medieval feudalism c. 1300, when the divine right of Kings was a given, would've found the world of the late 1600s quite alien.
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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…
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…
Nothing at all supports that "the rich move their wealth somewhere else"
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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.
The federal budget deficit for fiscal year 2024 totaled around 6.4% of GDP.
It's unsustainable long term.
USD strength comes from military. Just as it was the case with all other currencies in the past. Do you see anyone challenging the US in a conflict? China won’t even invade Taiwan because they are afraid. ‘Nuff said.
What, if I (a European) decide not to buy American treasuries, a squad of Marines is going to bust my front door?
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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.
People are turning melted rocks into thinking machines and general purpose robots and you're like "it's all basically pets.com." It's hard to take your point of view seriously after that honestly.
https://direct.mit.edu/opmi/article/doi/10.1162/opmi_a_00160...
https://www.psychologytoday.com/us/blog/the-digital-self/202...
From the piece (which I agree with):
> As someone that has sold a bunch of LLM enabled software over the past 6 months, I don’t really buy the AI capex turning into huge productivity gains. Everything to date are just chatbots with RAG and API calls. None of them are going to do my laundry or file my taxes.