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USD share as global reserve currency drops to lowest since 1994

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

#221

Post by integralid »

bdangubic wrote: post #176
JumpCrisscross wrote: post #95

Earlier quoted context omitted.

> Dollars are currently only in demand for short-term use in transactions This is all currencies. You store value in debt. You spend in the hot currency. > no one wants to hold them because they devalue and will continue to do so at an accelerating rate Literally what Treasuries are for. > everyone should think of their checking account as something that they pay negative real interest on for the privilege of being a…

> One, you shouldn’t be storing wealth in cash-like instruments, that’s literally using currency wrong (and has been across human history). Cash is for transacting. Talk to Mr. Buffet and see what he thinks about this with his mountain of cash… Cash being just transacting might be the most insane thing I’ve read here this year, well done

Does he really hold cash? Or does he hold TIPS for example, and people colloquially refer to it as "cash"? I assumed it's the latter since it makes much more sense.

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

#222

Post by carlosjobim »

freeone3000 wrote: post #148
carlosjobim wrote: post #123

Earlier quoted context omitted.

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

The literal idea of value.

Gold have existed and thrived long before there were any ideas, and will continue to do so long after the last idea is dead.

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

#223

Post by jazzyjackson »

bdangubic wrote: post #190
toomuchtodo wrote: post #188

Earlier quoted context omitted.

To be early or late is the same as being wrong, and I had a friend who lost everything trying to be right take their life when they were wrong. It is true, you have the potential to make money, and if you can afford it, who am I to stop you? But, you can also lose it all, and I hope that those who try don't. It's just numbers in a database after all. Gamble responsibly. There is always someone smarter or faster on th…

[flagged]

People have winning streaks in casinos too.

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

#224

Post by JumpCrisscross »

rep_movsd wrote: post #217
JumpCrisscross wrote: post #104

Earlier quoted context omitted.

> Oil is now being paid for using that system The petrodollar hypothesis has been a myth since the 1990s. With America a net oil exporter , it’s an entirely stupid model to keep running.

By forcing oil to be bought with dollars, the USD was pegged to oil demand, especially from developing nations whose consumption was growing. Also SWIFT being a means of control of movement of funds.

> forcing oil to be bought with dollars, the USD was pegged to oil demand, especially from developing nations whose consumption was growing

If you give me one source, I'll break down why this is wrong.

(In case there isn't one, the U.S. dollar was never pegged to oil demand [whatever that means]. And nothing about petrodollar recycling thought about developing nations for one second.)

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

#225

Post by JumpCrisscross »

maxglute wrote: post #199
JumpCrisscross wrote: post #102

Earlier quoted context omitted.

> countries (emerging markets / BRI recipients) who would have borrowed USD from FED (or US influenced IMF/WB) now borrow from USD from PRC -> reduce US treasuries demand This makes no sense. If the PRC is lending U.S. dollars, that doesn’t reduce Treasury demand. It increases demand for dollar-denominated assets, goods and service providers. The borrowing country has to spend those lent dollars after all.

PRC lending their USD surplus to countries to buy more PRC shit. "Increases demand for dollar-denominated assets, goods and service" =/= increase demand for US treasury, aka it doesn't fund US deficits. The attack is not on dollar circulation / liquidity but cost of treasury Old: PRC recycle surplus USD into US bonds, increase US treasury demand, subsidizes cheap US debt. New: PRC recycle surplus USD into BRI finance…

> attack is not on dollar circulation / liquidity but cost of treasury

No real way this can work between similarly-sized trading economies. Worst case, a couple central bankers' weekends would be ruined.

> PRC recycle surplus USD into BRI finance, said USD doesn't return to US treasury to buy bonds

How? PRC sends dollars into BRICS. What do they do with the dollars? If they aren't sitting on them, they're contributing to the dollar economy.

The PRC financing using dollars would be nuts because it puts their sovereign financing into American hands.

> PRC parallel dollar bond lending COMPETES with US treasury bond lending

Not in any meaningful way. (There aren't that many indisctiminate buyers of international debt anymore. Put another way, most Treasury buyers have and will never buy any Chinese paper and vice versa.)

> US treasury had to find other buyers to fill ~600 billions (and raising) of USD bonds that PRC no longer holds. Filling hole that size = finding more price sensitive buyers

Not really. You fire up the Fed. If it's China that's doing it, that's national security. Hell, sanction the accounts the dollars are going into.

> but 100 billion here and there and soon we are talking about real money

Have you traded Treasuries in an instituional setting? You're talking about the size of a single desk's intraday exposure.

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

#226

Post by JumpCrisscross »

bdangubic wrote: post #176
JumpCrisscross wrote: post #95

Earlier quoted context omitted.

> Dollars are currently only in demand for short-term use in transactions This is all currencies. You store value in debt. You spend in the hot currency. > no one wants to hold them because they devalue and will continue to do so at an accelerating rate Literally what Treasuries are for. > everyone should think of their checking account as something that they pay negative real interest on for the privilege of being a…

> One, you shouldn’t be storing wealth in cash-like instruments, that’s literally using currency wrong (and has been across human history). Cash is for transacting. Talk to Mr. Buffet and see what he thinks about this with his mountain of cash… Cash being just transacting might be the most insane thing I’ve read here this year, well done

> Talk to Mr. Buffet and see what he thinks about this with his mountain of cash

When finance types say "cash," we mean cash and cash equivalents. Berkshire Hatahway doesn't literally hold cash, they hold yield-generating cash equivalents.

> Cash being just transacting might be the most insane thing I’ve read here this year, well done

I strongly recommend a home economics course if this is the case. If you want to go deeper, anything about monetary theory

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

#227

Post by JumpCrisscross »

integralid wrote: post #221
bdangubic wrote: post #176

Earlier quoted context omitted.

> One, you shouldn’t be storing wealth in cash-like instruments, that’s literally using currency wrong (and has been across human history). Cash is for transacting. Talk to Mr. Buffet and see what he thinks about this with his mountain of cash… Cash being just transacting might be the most insane thing I’ve read here this year, well done

Does he really hold cash? Or does he hold TIPS for example, and people colloquially refer to it as "cash"? I assumed it's the latter since it makes much more sense.

> Does he really hold cash?

No. Berkshire Hathaway isn't a squirrel.

> people colloquially refer to it as "cash"?

Cash and cash equivlants are referred to in finance as cash, since they are–for all practical purposes–equal to it. Except yield generating. Which, if you're not an idiot, is how you hold cash.

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

#228

Post by hshdhdhj4444 »

mvkel wrote: post #21

Whenever I see headlines like this, I ask: what happened in 1994? It was post-Cold War and central banks were trimming USD reserves to test alternatives. Then, crises hit (tequila, Asian, Russian, dot com) and the world reconsolidated around USD, thanks to the immense strength of the Federal Reserve and IMF. Similarly now, reserve share is falling as countries hedge sanctions and geopolitics, yet dollar usage in trad…

> It was post-Cold War and central banks were trimming USD reserves to test alternatives.

This is the problem though. In 1994 central banks were trimming USD to test alternatives. Not because something was wrong with the USD itself.

Today, central banks are trimming USD To test alternatives because the USD itself has lost value.

Any flight to stability will necessarily not use as much USD given that it’s far less stable than it was 3 decades ago or even 3 quarters ago.

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

#229

Post by hshdhdhj4444 »

bdangubic wrote: post #182
toomuchtodo wrote: post #179

Earlier quoted context omitted.

I think it speaks volumes that Buffet has nowhere else to put that ~$382B in cash; that speaks more about current asset valuations ("everything bubble" [1]) more than that US cash is trash. If assets classes are inflated, US treasuries are no longer a safe haven, gold and other precious metals are overbought, where do you go? There is no immediate answer, imho, but only a slow burn as the world reconfigures around th…

damn shit is really bad, sky is failing, bubbles are bursting… any other clickbait I need to read up on before I go spend the last of the good days with my kid…? coolest thing about us in the 50’s is that we’ve seen and read this shit many times before and don’t fall the “bubble du jour” or “shit’s really bad this time…” - especially readers here on HN, bubbles be bursting for yeeeears now, recession is coming, crash…

Coolest thing about you in the 50s is that you’ve spent your grandkids’ money (and used up their resources and polluted their environments) so you wouldn’t have to face any consequences for your poor decisions.

Unfortunately your grand kids have run out of money and descendants to steal money from.

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

#230

Post by xorcist »

chhxdjsj wrote: post #60
827a wrote: post #50

Earlier quoted context omitted.

Gold-backed currencies, and even Bitcoin, are really good if you want your economy to be only this big, and never grow bigger. Eventually, a crisis will happen, and you'll say "actually, its now 1.3 yuan to the gram, because we need to build tanks", or "actually, did we say we had 8,000 tons of gold in reserve? we meant 9,000. Yeah we just counted, no you can't look at it, we have 9,000, here take the yuan and go bui…

"actually, did we say we had 8,000 tons of gold in reserve? we meant 9,000. Yeah we just counted, no you can't look at it, we have 9,000, here take the yuan and go build vaccines" You cant do that with bitcoin

Sure you can. "No you can't look" is the key. All those blocks which hasn't moved in many years? They're all ours. Pinky promise.
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