281–290 of 329 posts
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Spoken with the confidence of someone who never dug a full height trench. No the military doesn't do 30ft deep tunnels on the frontline, and it has no equipment to do it.
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Not an economist but the petrodollar concept helps the dollar because everybody that needs oil needs to buy dollars. You see it as small thing but it is fundamental thing because oil is used in so many places that as we have seen a disruption of 20% of it would start causing real problems on almost the entire world. QED: oil powerful, only dollar buy oil, dollar stronger.
The use of dollars to purchase any commodity is a negligible fraction of demand for dollars. What you should be looking at is investment demand for dollars, that is, in which currency does the seller store their surplus. Think about it: I need to buy a barrel of oil, but I am in Argentina. So I sell my pesos for dollars, I buy the oil with the dollar. The seller now has dollars, and sells the dollars for Swiss Francs…
Part of what enabled that huge capital flow you’re talking about is that it was the Americans who came in and gave [country’s] banks a counterparty to exchange dollars for oil.
A lot of that soft power is not just the ability of America to print dollars, but also the ability of America to control the financial infrastructure. To surveil, KYC, sanction, etc. that is a huge part of it.
The petrodollar is less mechanically important today but back in the day it was huge to have “everyone who needs oil” be the counterparty to a currency exchange. It is what injected all that liquidity, which set the whole thing off.
I think what people are realizing and considering now is with the computerization of everything, capital can flow more freely. That is what is dangerous (for the US) about today’s moment; our political leaders are taking it all for granted.
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> Idk what to tell you, but any target that seems to get marked in Iran blows the fuck up. I’m sure that is true. And yet, the oil is not flowing. We keep “winning” like this for a few more weeks/months and we lose. Not because we sudenly stop “blowing targets the fuck up”, but because we cripple our economies.
The flowing of oil is not of primary importance to the US in this conflict. The oil was already flowing. So I think we can reasonably rule that out as an objective.
It’s a shame there’s inherent performance cost to homomorphic encryption. If there were not it could make sense at least on the compute front to treat it as a commodity and just put it everywhere l, importantly including untrusted locations and have a control plane handle coordination for low latency. Otherwise why not wipe out these gigawatt dcs? They don’t employ many and are of high consequence for rich countries.
It’s a shame there’s inherent performance cost to homomorphic encryption. If there were not it could make sense at least on the compute front to treat it as a commodity and just put it everywhere l, importantly including untrusted locations and have a control plane handle coordination for low latency. Otherwise why not wipe out these gigawatt dcs? They don’t employ many and are of high consequence for rich countries.
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The flowing of oil is not of primary importance to the US in this conflict. The oil was already flowing. So I think we can reasonably rule that out as an objective.
> The flowing of oil is not of primary importance to the US in this conflict. You think so? Then why did the US make it the condition of cease fire? Why did the US even agree to a cease fire? It is not like Iran is hurting the US mainland kinetically. > The oil was already flowing. So I think we can reasonably rule that out as an objective. Sometimes you have a thing and you don’t appreciate how important it is for y…
And Oil is not crucial for the US at all, it is hitting Europe and poor countries the most by far.
(I'm from Europe)
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You think the US will unleash nuclear holocaust of the human race for some drone parts? The US will do none of that shit because they wont be able to do it. Given the US is struggling against Iran, couldn't outproduce Russia on the battlefield yet they want to force down China which is an order of magnitude bigger than Russia.
> struggling against Iran Idk what to tell you, but any target that seems to get marked in Iran blows the fuck up. > couldn't outproduce Russia on the battlefield ??? What does this even mean? It's not like the US is in a wartime economy.
Its well reported in the western press that the US and Europe haven't been able to outproduce the Russian side regarding shells, drones and missiles etc.
I often see these angles, how we should have prepared better or attacked this instead of that, or the unexpected strategy from the adversary. What about not bombing? The best safety trick the US can use is not bombing others.
Who did the US bomb before 9/11? Who did the US bomb before Pearl Harbor? Who did the US bomb before its embassies in East Africa were attacked? https://www.fbi.gov/history/famous-cases/east-african-embass... Who did the US bomb before https://en.wikipedia.org/wiki/Pan_Am_Flight_103 ? I would love for nobody to bomb or kill anyone. Did Ukraine bomb Russia? Is Taiwan bombing China that declares it is going to take Tai…
Afghanistan
Yugoslavia
Before 98:
Libya
Panama
Iraq
Kuwait
Somalia
Bosnia
Iran
Sudan
Afghanistan
Before 88:
Korea
China
Guatemala
Indonesia
Cuba
Guatemala
Belgian Congo
Guatemala
Dominican Republic
Peru
Laos
Vietnam
Cambodia
Guatemala
Lebanon
Grenada
Libya
El Salvador
Nicaragua
Iran
Japan
Before Pearl Harbor:
Dominican Republic
Nicaragua
China
Mexico
Russia
Wow, that's a lot of bombs! Hope this helps.
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The use of dollars to purchase any commodity is a negligible fraction of demand for dollars. What you should be looking at is investment demand for dollars, that is, in which currency does the seller store their surplus. Think about it: I need to buy a barrel of oil, but I am in Argentina. So I sell my pesos for dollars, I buy the oil with the dollar. The seller now has dollars, and sells the dollars for Swiss Francs…
Certainly correct, but I think you’re underselling the historical exchange part of this. Dollars being everywhere causes the financial infrastructure to be built out in dollar terms. Part of what enabled that huge capital flow you’re talking about is that it was the Americans who came in and gave [country’s] banks a counterparty to exchange dollars for oil. A lot of that soft power is not just the ability of America…
Now, in the past we had a gold standard, so you could literally move your money from one country to another. Now during both WW1 and especially the runup to WW2, the wealthy moved much of their money to the United States as a safe harbor, since we were the only advanced economy with deep liquid bond markets, rule of law, and foreign investment rights (sorry, Canada, but it's true).
This was the greatest wealth transfer in history. By 1940, the US held 80% of the world's global gold reserves. 80%! And this was in the era when international trade was settled in gold.
So it all happened in single decade between 1930 and 1940, and the US instantly became the world's global reserve leader, an extremely dominant position, merely because people were afraid of war and wanted a safe place to park their money.
After the devastation after WW2, the flood of European money into the US continued and more than offset the Marshall plan.
So already at the end of WW2, the majority of the world's liquid savings was tucked away in America.
Now, people like to tell stories of American soldiers spending dollars somehow making the dollar a reserve currency, and those are the types of things that seem plausible to people who don't monitor global capital flows, but that's honestly a ridiculous story. That was chump change.
Bottom line, there are no special technical reasons beyond "I want a safe place to store my money". That controls everything else.
There is an adage in the world of money markets: "It does not matter what currency you trade in, what matters is what currency you store the proceeds in".
And the moment that some other nation opens its doors to foreign capital inflow, establishes rule of law (which takes decades to develop a reputation for stability and not confiscating assets), is safe, stable, and secure, establishes financial transparency, and has deep, liquid capital markets -- then the world's wealthy will flood that nation with money also. But unlike declaring that "I will sell my oil for euros", doing the above takes decades of building trust and reputation. Gimmicks aren't going to do it when you are looking for a safe place to store your money.
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When did Ukraine attack Russia?
Russia attacked Ukraine. What's your point?
Ukraine didn’t attack anyone, but that did not keep them safe from being attacked. Clearly not attacking anyone doesn’t mean you don’t have to worry about being attacked.