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Printing Money: The Absolute Privilege of U.S. Dollars

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Re: Printing Money: The Absolute Privilege of U.S. Dollars

#21

Post by anonuser123456 »

Temporary_31337 wrote: post #4
sschueller wrote: post #2

"It is unavoidable that one day in the far far future, the U.S. loses reserved currency status. " There are some opposing opinions on this being far far away. Recently the USD has lost a significant amount in global percentage mainly due to all the sanction the US imposes. The US treasury itself warned that these sanctions are bad for thr US. [1] [1] https://www.livemint.com/news/world/yellen-says-sanctions-ma...

Also by the time US loses its privileged position it will already be too late to reinvest elsewhere without losses. So many funds are already moving money to China and elsewhere. Having said that China etc have their own economic and demographic problems so nowhere seems safe at the moment.

> So many funds are already moving money to China and elsewhere.

Good luck to those investors. China has no established tradition of respecting property rights. It can change the rules of the game as it sees fit politically.

The only way to make it workable is to have some critical trading relationship that makes the cost of seizing property/money unpalatable.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#22

Post by dilyevsky »

NemoNobody wrote: post #14
mark_l_watson wrote: post #11

Earlier quoted context omitted.

I hope it is far in the future but you are probably correct that losing reserve currency status may occur much faster than the pundits say it will. I worry that weaponizing the dollar with excessive sanctions will hurry this process, with not much real value to US citizens.

What currency is stable enough to replace the Dollar? Very likely we repeat the Cold War - Western countries will definitely continue to use the Dollar. I wouldn't want to use the Yuan considering the frequent government manipulation of the currency.

It’s not just about stability (and rmb is basically pegged to dollar anyway) - you also need to run a deficit and that’s not something China is willing or able to do for foreseeable future

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#23

Post by dilyevsky »

mark_l_watson wrote: post #11
sschueller wrote: post #2

"It is unavoidable that one day in the far far future, the U.S. loses reserved currency status. " There are some opposing opinions on this being far far away. Recently the USD has lost a significant amount in global percentage mainly due to all the sanction the US imposes. The US treasury itself warned that these sanctions are bad for thr US. [1] [1] https://www.livemint.com/news/world/yellen-says-sanctions-ma...

I hope it is far in the future but you are probably correct that losing reserve currency status may occur much faster than the pundits say it will. I worry that weaponizing the dollar with excessive sanctions will hurry this process, with not much real value to US citizens.

You think CCP will not try to impose its whims on you? Doesn’t matter which currency it is when your bank account is frozen

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#24

Post by shreyshnaccount »

NemoNobody wrote: post #14
mark_l_watson wrote: post #11

Earlier quoted context omitted.

I hope it is far in the future but you are probably correct that losing reserve currency status may occur much faster than the pundits say it will. I worry that weaponizing the dollar with excessive sanctions will hurry this process, with not much real value to US citizens.

What currency is stable enough to replace the Dollar? Very likely we repeat the Cold War - Western countries will definitely continue to use the Dollar. I wouldn't want to use the Yuan considering the frequent government manipulation of the currency.

Probably only the euro. The yuan isn't the best option for reasons you mention, and the next largest reserve which countries hold is only the euro. Link to interesting podcast episode about exactly that: The Red Line Podcast https://open.spotify.com/episode/6DVtj0E1v6pRgAiZwytmbo

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#25

Post by seydor »

I wonder to what extent the Ukraine war partly an attempt to break this remarkable reserve-monopoly that the US has acquired since the 90s. Using its global projection of military power, the US has managed to open up and secure world trade to the entire rich world, and in the process made the USD indispensable. The US can keep printing for decades , and the USD is not getting debased. People in tech startups are aware of the advantages of low interest rates, being awash with money and using it to outcompete every threat. Not only that created monopolies, but easy capital made US tech cities the default and mandatory destination for entrepreneurs from all over the world, which has added quite a few trillion to the US economy. The US enjoys the privilege of being the last empire in a post-empire world and maybe military action is a desperate attempt to change that. Maybe it even contributed to the rates rise

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#27

Post by mark_l_watson »

NemoNobody wrote: post #14
mark_l_watson wrote: post #11

Earlier quoted context omitted.

I hope it is far in the future but you are probably correct that losing reserve currency status may occur much faster than the pundits say it will. I worry that weaponizing the dollar with excessive sanctions will hurry this process, with not much real value to US citizens.

What currency is stable enough to replace the Dollar? Very likely we repeat the Cold War - Western countries will definitely continue to use the Dollar. I wouldn't want to use the Yuan considering the frequent government manipulation of the currency.

Fair question! If I had to guess: the USA + Europe + Canada + Australia + a few other countries will form one trading block, and BRICS + about 20 other countries will form a separate trading block. The different trading blocks will use different reserve currencies. The BRICS+ trading block would use a basket of currencies and our trading block would use the US dollar, or a basket of currencies with the dollar being the largest percentage in the basket.

I love to travel and visit other countries and meet people. My hope is that a tourist will continue to be able to easily visit any country, even when the world bifurcates into two trading blocks.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#28

Post by photonbeam »

dilyevsky wrote: post #22
NemoNobody wrote: post #14

Earlier quoted context omitted.

What currency is stable enough to replace the Dollar? Very likely we repeat the Cold War - Western countries will definitely continue to use the Dollar. I wouldn't want to use the Yuan considering the frequent government manipulation of the currency.

It’s not just about stability (and rmb is basically pegged to dollar anyway) - you also need to run a deficit and that’s not something China is willing or able to do for foreseeable future

> you also need to run a deficit

Why is this needed?

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#29

Post by GnarfGnarf »

Do you really trust China to manage the World’s currency?

Scenario: Monday: China buys 100 billion Yuan of oil from Saudi Arabia.

Tuesday; China prints 100 billion more Yuan.

Oops!

The only countries that the World mistrusts more than the U.S. … is everybody else.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#30

Post by henry2023 »

GnarfGnarf wrote: post #29

Do you really trust China to manage the World’s currency? Scenario: Monday: China buys 100 billion Yuan of oil from Saudi Arabia. Tuesday; China prints 100 billion more Yuan. Oops! The only countries that the World mistrusts more than the U.S. … is everybody else.

Not for long
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