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The Dollar Is Dead

mathmeetsmoney.substack.com

271–280 of 367 posts

Re: The Dollar Is Dead

#271

i would like to see deeper analysis of similar forces playing out in other countries. A weakening dollar implies a strengthening world, but European policy is even more messed up than American, there is still widespread talent export e.g. european programmers working for american companies, indian asian and russian programmers immigrating to Europe or working remote abroad, and China seems to face financial crises ju…

US just put tariffs on every other country in the world, and nothing really happened. Thus, US is strong, not weak. dollar is weaker, US is not.

> and nothing really happened

I'm not sure what you expect to happen? Tariffs can be a tool to promote local industry but when used like this they're more of a tax on Americans. I don't think other countries want to play the retaliatory game because it's lose lose. Instead they'll make deals where they can and otherwise get on with things. Trade is going to reorient by itself. That will take time but it's already happening.

In any case, it doesn't show the US is strong. Everyone already knew it has the strongest economy in the world. What it does show is that the US is less stable than partners believed. It's hard to see this benefiting the American economy in the long term. But you know, that might not be terrible, if American workers get more jobs and a larger share of the pie, then it might work out.

Re: The Dollar Is Dead

#272

Earlier quoted context omitted.

The action on Iran proves otherwise, especially since his entire anti-interventionist wing was squealing that World War III would start if he did bomb the nuclear sites. Those around the president have been pretty clear that the US will defend Taiwan until the US is capable of its own supply of leading edge semi conductors. Taiwan is very easy to defend with the harsh ocean separating them, especially since North Kor…

I think the limited actions in Iran are not at all comparable to the commitment and risks involved in directly defending Taiwan from invasion or naval / aerial blockade. With that said, I do think that the US is likely to intervene in some capacity regardless of admin, but slightly less so with the current admin.

I am pretty sure the US is investing hard into naval drones. There's a reason Russia cannot use it's naval fleet in Ukraine as cheap torpedos and drones destroy ships.

Re: The Dollar Is Dead

#273
post #24

Earlier quoted context omitted.

What, if I (a European) decide not to buy American treasuries, a squad of Marines is going to bust my front door?

If you decided to trade oil in euros then a squad of aircraft carriers parks off your coast

See: Irak, Libia

Re: The Dollar Is Dead

#274

I am reading the book from Ray Dalio, "Principles for Dealing with the Changing World Order". This article seems a little reductive in its analysis, but this is actually a huge topic. I have not finished the book yet, I don't claim to understand all its implications, but I really like it because it analyzes many empires over the centuries, and tries to track multiple determinants for all of them (also a lot of pretty…

>Dalio analysis agrees that today China power is rising and the USA is weakening Ray Dalio knows nothing. US just put tariffs on every other country in the world. And threatened China with 145% tariffs to get them to come to the table and open up Chinese market even more, even though China is in its own Great Depression right now.

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Re: The Dollar Is Dead

#276
post #141

Earlier quoted context omitted.

> 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.

The Swiss Franc perhaps?

Probably too small.

Also Switzerland is easy to bully, as can be seen by the current US tariff regime.

Re: The Dollar Is Dead

#277

Earlier quoted context omitted.

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…

I'm not even sure if this is a serious post, but it indicates a significant misunderstanding. There is an asymmetry between a government's revenue and its expenses. Revenue can increase arbitrarily if the government is allowed to take out unlimited debt. The amount a government can tax is limited first by the size of its country's economy. There is a maximum amount of revenue you can collect via taxation, and after a…

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Re: The Dollar Is Dead

#279
post #50

Don't forget, the US is the lowest-taxed Western country, so they have lots of room (and lots of inherent wealth) to tax. Whether they have the political will to do this, or the political will to reduce Defence Spending is an open question. But it's not inevitable. Hell, they can always do what other countries have done and abrogate debt or pay it down pennies or quarters to the dollar. Would work once. Or, the count…

> the US is the lowest-taxed Western country

From 2021 but shows relatively how much tax is taken before you get your after-tax income:

https://www.brusselsreport.eu/2021/07/22/new-study-compares-...

Re: The Dollar Is Dead

#280

i would like to see deeper analysis of similar forces playing out in other countries. A weakening dollar implies a strengthening world, but European policy is even more messed up than American, there is still widespread talent export e.g. european programmers working for american companies, indian asian and russian programmers immigrating to Europe or working remote abroad, and China seems to face financial crises ju…

US just put tariffs on every other country in the world, and nothing really happened. Thus, US is strong, not weak. dollar is weaker, US is not.

Trump just fired the BLS chief because the economic data from liberation day onward was terrible..
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