Earlier quoted context omitted.
https://www.ft.com/content/c948b978-c22b-44b7-ba3d-4798e641e...
>Xi Jinping calls for China’s renminbi to attain global reserve currency status "Kill all the sparrows"
"jim crow laws"
72% of the dollar's purchasing power was destroyed in just four episodes
251–260 of 277 posts
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#252Earlier quoted context omitted.
You can’t largely. At least not with offshore yuan. To do that you have to go through the controlled settlement channels to get onshore yuan. That’s tightly controlled to protect the peg. So no one is going to use a controlled currency for a hard liquid commodity. So if China wants petro yuan they have to liberalize that, which will break their peg. China could have more international trade in the yuan before all of…
Very interesting, 2 different yuan’s! - offshore yuan - onshore yuan Do you have more details on this? A book, a blog, an article?
Do a google search for “cnh vs cny forex”
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#253Earlier quoted context omitted.
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.
That’s ~3.17% compounded annually. Modest, stable inflation is good. It encourages investment & discourages deferring consumption for indirect monetary reasons. “Stable” is the hard part.
That seems pretty bad if the Fed target is 2%.
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#254The graph should be on a log scale. Inflation earlier from a higher value is magnified relative to inflation later from a lower value.
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#255Earlier quoted context omitted.
Yes it tends to strengthen during times of conflict as countries buy more dollars in response. That's kinda the whole gimmick with the petrodollar. War is good for the US But if Iran does successfully force countries to stop using the petrodollar by only allowing countries trading in yuan through the strait, then we could actually see that reverse. IMO destroying the petrodollar is the primary clear "victory" Iran co…
Reserve currency status entirely depends on how effective the issuer is at dropping a precision-guided munition over anyone who dares to counterfeit it. China is actually the second-best contender now due to its growing military prowess. But it still might not be at the level where it can carry out the aforementioned task anywhere in the world without exception, like the US can. Hence the dollar will most likely stay…
I'm not seeing the US bomb North Korea though
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#256Earlier quoted context omitted.
Reserve currency status entirely depends on how effective the issuer is at dropping a precision-guided munition over anyone who dares to counterfeit it. China is actually the second-best contender now due to its growing military prowess. But it still might not be at the level where it can carry out the aforementioned task anywhere in the world without exception, like the US can. Hence the dollar will most likely stay…
I'm not seeing the US bomb North Korea though
The US used enough financial sanctions and diplomacy to make North Korea stop doing it. If NK did it on a large enough scale and persisted, we'd absolutely have a war with them.
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#257Earlier quoted context omitted.
Why is it different? If it’s foreign made then you need to export $5 million of stuff to pay for it, so the economic effect should be similar. Expending what it already has is true but doesn’t really help. It’s not like we’re going to sit here with a reduced stockpile forever. Those munitions will be replaced. The fact that the spending comes after using them rather than before doesn’t change the equation much.
They will be replaced, but most likely with something better. Which we would have done for modernization purposes eventually anyway, while disposing of the old stock. Our wars are pre-paid for. America spends $900B/year on the military. Use it or lose it.
I don't think they expire that quickly. It's true they would have been replaced eventually, but this is accelerating that schedule for some munitions by a decade or two.
That $900B/year figure is for peacetime (or what passes for peacetime in an empire constantly involved in small conflicts around the world) and peacetime rates of equipment/munitions replacement. This is the most intense air war the US has been in since at least Desert Storm, maybe Vietnam. That level of expenditure is not already paid for.
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#258Earlier quoted context omitted.
You can buy from China though. And China is the largest import trading partner for the majority of countries in the world. They literally don't need to do anything to prop up a "petro-yuan".
You can’t largely. At least not with offshore yuan. To do that you have to go through the controlled settlement channels to get onshore yuan. That’s tightly controlled to protect the peg. So no one is going to use a controlled currency for a hard liquid commodity. So if China wants petro yuan they have to liberalize that, which will break their peg. China could have more international trade in the yuan before all of…
Saudi Arabia was literally negotiating with China for payments in yuan for petroleum way before the war started, in 2023. The Gulf countries' largest trading partner is China - such a transaction is effectively a barter enabling programme. Russia and now Iran already accept yuan.
The mainland vs offshore renminbi restrictions disappear in Hong Kong, Singapore, etc. where most mainland Chinese trading companies and otherwise have offices anyways. Trading offshore to onshore renminbi becomes their problem, one that they are fairly accustomed to.
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#259Earlier quoted context omitted.
I think the idea is crash the stock market to force interest rate drop to refinance the massive debt.
Huh? Wouldn't bond yields go up if stocks went down?
Bond yields go up when bonds are harder to sell. They’re harder to sell when the present more risk. The biggest risk to bond holders is inflation. So bond yields tend to go up when inflation expectations rise.
Re: 72% of the dollar's purchasing power was destroyed in just four episodes
#260Earlier quoted context omitted.
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 cur…
> 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. > So no one is going to take up a lot of yuan trade unless that changes or they are forced to. Related on the “forced to”point, this is where Russia is stuck with its crude oil sales to India where the payments have been made to it in Indian R…
Unlike China, a country whose exports to other countries dwarfs their exports. The yuan is much more valuable than the rupee (which is turning to trash with each passing month as a net effect of trade wars and oil crises).