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USD share as global reserve currency drops to lowest since 1994

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231–240 of 315 posts

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

#231

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…

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Right, because you were predicting chstgpt in 2018…

Amazing how you are quite literally proving you got lucky and yet you seem to believe that you’re hot shit.

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

#232

Judging by the comments Americans still don’t intuitively understand what the rest of the world does. Everyone is trying to create distance from the United States. The US no longer represents the smart deal, it represents risk, risk that countries can’t afford. The US has spent the last year creating chaos and punishing its closest allies and trading partners. The instability goes beyond Trumps term too, they’re righ…

Can confirm, one example: the company that I am currently working for put all its plans for investing in the US in the fridge and is exploring other markets now.

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

#233

Earlier quoted context omitted.

This is more of a go out with a whimper rather than a bang type thing. Being the world reserve currency (as well as the largest consumer market in the world) previously enabled the US to do things like relatively easily export inflation in spite of relatively reckless monetary policy. Now that inflation is sticking around far more persistently, even long term bonds have gone from 1-2% to 4%+, and so on. Stagflation i…

No, physically backed currencies will not return because physical goods do not correlate with the size of an economy, especially the amount of gold

The amount of currency does not have to correlate with the size of an economy. When the economy grows while the amount of currency stays the same then your money simply becomes worth more. For the overwhelming majority of history this was taken to be a good thing. The argument for inflation is that if money become worth more over time then it would discourage investment and encourage money hoarding.

That's probably not untrue, but that critique doesn't simply make the alternative better. Money becoming worth less, inflation, creates an arguably worse scenario where now wealthy individuals are motivated to hoard things instead of currency. For instance Bill Gates is currently the largest private landowner of farmland in the US. This issue is where you get the WEF also publishing their 'You will own nothing, and be happy.' goal. I find this more unpleasant, and even dystopic, than Scrooge nosediving into his stash of ever more valuable dollars.

Another major issue here is that lower classes are the most unable to deal with inflation. They can squirrel away some money, but in an inflationary system that's the last thing you want to do. For instance stuff like bank CDs are basically just exploiting economically illiterate individuals. Nobody wants money in an inflationary system, but lower classes need immediate access to their money for the next time e.g. their car breaks down, and they are extremely risk averse. The net result of this is a system that not only perpetuates but directly drives ever greater extremes of wealth inequality.

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

#234

Earlier quoted context omitted.

There is a fixed supply of gold that does not correlate with economic output. It makes zero sense to tie the value of paper money to gold.

That argument comes from an ancient list of arguments against gold. But nobody seems to be able to explain why that would matter at all. There doesn't need to be any correlation with the amount of currency and the economic output. And there has never been any such correlation, including right now with the dollar or any other currency.

If you want an economy to prosper the currency value has to remain stable. That means it has to scale with economic output. You can, of course, not do that, if you want to kneecap yourself.

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

#235

Earlier quoted context omitted.

I've lived through the '00 crisis, the '08 crisis, and a global pandemic. In all cases, there were signs the event was upon us, but you won't know for sure until the event is in full swing. The advice remains the same as it always does: carry as little debt as reasonably possible, don't overextend yourself without good reason, ensure sufficient liquid reserves, maximize employment and income opportunities, and have a…

Wishing you a favorable outcome too!! I love pretend bubbles cause while everyone is waiting for them to burst one can make shitton of money

This is also the case with real bubbles.

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

#236

Earlier quoted context omitted.

No, physically backed currencies will not return because physical goods do not correlate with the size of an economy, especially the amount of gold

The amount of currency does not have to correlate with the size of an economy. When the economy grows while the amount of currency stays the same then your money simply becomes worth more. For the overwhelming majority of history this was taken to be a good thing. The argument for inflation is that if money become worth more over time then it would discourage investment and encourage money hoarding. That's probably n…

If you want to see how much a deflationary currency fails as a currency, just look at bitcoin. The wild value swings are caused by more people hoarding it than using it as a currency, which is caused by it being deflationary. Now look at monero, which is inflationary, is largely used for day to day purchases (of mostly illegal items) and has a much more stable value, which is one of the key attributes of a good currency.

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

#237

Earlier quoted context omitted.

Being able to conduct monetary policy is valuable, even if it can be misused. Otherwise all other countries would just be using USD.

Conduct monetary policy? I prefer the phrase “tax without consent” instead of that euphemism.

I consent to zero taxes, and also not to property rights except my own. Your move, libertarians. How are you gonna have a society?

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

#238
post #82

Earlier quoted context omitted.

Price of a commodity metal can do whatever they want without causing a big problem. It is just a resource allocation signal. However if you base your currency value on it suddenly you are forcing debtors into bankruptcies if the value shoots up. Credit relationships aka investments are what make an economy run and grow, not some arbitrary commodity price.

Debtors who roll their loans also go bankrupt when the fed raises interest rates. Rolling loans is par for the course for many capital intensive businesses. This is because in a low interest rate environment if you act prudently you’ll get outcompeted.

Fed interest rates don't fluctuate anywhere close to gold prices.

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

#239
post #45

Highly unpopular opinion here and I'm going to get downvoted into the ground (who cares), but ... this has been a very long time coming and has very much been a self-inflicted change. My bet is that it will end up being a very good thing for the world at large. China has recently started to buy Arabian oil and paying with yuan. Major countries (India, China) are starting to buy Russian raw materials and paying direct…

Lot of emotion in this comment; not a lot of substance. I think you're misunderstanding how some of these systems work. > This change will also force the US to finally get fiscally responsible and get the bloody USD printing machine under control, something they never had to do because of the USD reserve currency status. It is not the case that the US didn't "need" to get the USD printing machine under control becaus…

Your entire wall of text has conveniently and completely omitted the hard fact that the U.S. Treasury has borrowed to pay for its defense (oops, sorry, I meant "war") budget for many, many years now. The war budget (~$850B) has been larger than the deficit in many years.

No other nation except the U.S. can sustain this without running into hyperinflation and consequent national rioting.

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

#240

Highly unpopular opinion here and I'm going to get downvoted into the ground (who cares), but ... this has been a very long time coming and has very much been a self-inflicted change. My bet is that it will end up being a very good thing for the world at large. China has recently started to buy Arabian oil and paying with yuan. Major countries (India, China) are starting to buy Russian raw materials and paying direct…

Frankly, this will be good for the world if it happens. The U.S. War Industry will for the first time after Bretton-Woods be deprived of a bottomless piggy-bank.
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