America’s aggressive use of sanctions endangers the dollar’s reign • Hacker News Board

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#291

Post by erikpukinskis » Sun, Jan 19, 2020, 5:36 PM UTC

LifeLiverTransp wrote: post #82

jariel wrote: post #64

Earlier quoted context omitted.

"What is this protection that the US provides" The US has bases all over Europe, they spend a fortune on their own defensive tech, capabilities and leadership which Germany et. al. depend on, which acts as a massive deterrent, but also provides security partners with 'almost free R&D'. Also, the US specialises and practices so many things that are just far beyond the reach of pretty much all European forces. The abil…

? Dirty money is welcome anywhere. The whole overpriced apartment ghost towns that spread in most popular american cities are basically storage for dirty money.

Yes, I would like to see a more specific breakdown of what crimes Dubai will protect specifically and what crimes the US will and what crimes the EU does.

I would not be surprised to hear there is some qualitative difference, but I think it should be explained before we accept either “Dubai is dirtier” or “everywhere is equally dirty” premise.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#292

Post by HenryBemis » Sun, Jan 19, 2020, 5:55 PM UTC

d0mine wrote: post #270

thatcat wrote: post #217

Earlier quoted context omitted.

So, people speak English many places and the UK doesn't have any right to control those areas.

Look at the context (Crimea, 2020). If we are choosing between ancient greeks and russians then the language/culture/identity of the people should matter.

This is not about Ancient Greece/Rome/Russia/etc. My comment was: you cannot cherry pick which moment in History, a country's borders are convenient to you. I remember talking to a colleague from Poland that was proud that X centuries ago, Poland (or whatever the country/nation was called at the time had conquered big parts of then-Russia, even conquered Moscow. If we all think like that then a WW3 (Romans, Nazis, Mongols, etc.) is certain.

Let's stick to the borders we got, and in the future let's rener them useless (e.g. European Union).

I believe in a Star Trek society. Not "we kicked butts back then so let's get back those lands".

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#293

Post by bakuninsbart » Sun, Jan 19, 2020, 6:33 PM UTC

bloodm wrote: post #208

La1n wrote: post #202

Earlier quoted context omitted.

Ukraine is not a Baltic state, the Baltic states (Lithuania, Latvia and Estonia) are all in the EU and NATO members. No way the EU would let that slide.

I never said Ukraine is a Baltic state. Take out a map. Think about why the Baltic states can hardly be defended militarily. Think about what would be different if Ukraine were in the Nato (and a decent amount of Nato troops on the UA/RU border). "No way the EU would let that slide." They EU has no ability in military things if the UK is out. The Nato would not let it slide but they also would not fight back to win i…

France has a more capable and experienced force than Russia. Also, while small individually, the combined forces of the EU far exceed that of Russia. And the US has troops stationed in Estonia, they would most certainly not let that slide. Russia can't defend its population centres either, the whole discussion is quite absurd.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#294

Post by [deleted] » Sun, Jan 19, 2020, 6:36 PM UTC

aazaa wrote: post #24

LatteLazy wrote: post #14

Earlier quoted context omitted.

Isn't the answer the euro? Stable, inflation proof, light or no sanctions. As brexit proceeds and more financial services move to mainland Europe, you won't even have to worry about the brits messing with it... I seem to remember the EU agreeing to setup a psudo bank to deal direct with Iran so they can bypass restrictions on trade? Edit: here it is! https://www.google.com/amp/s/amp.dw.com/en/eu-mechanism-for-...

Every country sponsoring a currency approaching the reach of the dollar will begin to experience the same political forces as the US. Weaponization of the currency in the service of foreign and domestic policies is viewed as a cheap alternative to war. And so the pressure to weaponize will sooner or later become irresistible.

[deleted]

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#295

Post by erikpukinskis » Sun, Jan 19, 2020, 6:42 PM UTC

cinquemb wrote: post #237

MR4D wrote: post #184

Earlier quoted context omitted.

The yuan won’t be freely convertible because that would open the floodgates to capital flight from China. As long as that possibility exists, free convertibility will not.

Yeah, on top of the issues of infrastructure around payments/settlements/collateral management/kyc laws that often go ignored in these discussions as well as the high correlation of lowering (euro)dollar usage globally with lower global growth rates… ideally you'd have higher growth rates with lower (euro)dollar usage if there was any serious alternative. Fundamentally speaking, I think non CB backed cryptos (combine…

I would expect cryptocurrency to ascend in a series of hops, “chaos is a ladder” style. Every time a central bank somewhere takes home their toys, crypto will click forward.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#296

Post by erikpukinskis » Sun, Jan 19, 2020, 6:52 PM UTC

jonex wrote: post #274

thaumasiotes wrote: post #58

Earlier quoted context omitted.

So, in these two scenarios: 1. The currency is 100% backed by gold. 2. The currency is 20% backed by gold. How much gold does it take to purchase 200 apples? You are saying that it will take more gold in the second case, right? Why?

In this case I interpret "backed by" as that the central bank will give you the corresponding amount of gold for your currency. But, the opposite would not be true, they won't give you currency for gold alone, you'd have to also provide the same kind of backing as for non gold backed currency. So paid in gold or the currency, you'd get the same number of apples in each case. But if you'd convert the currency to gold…

In the case of Russia, does anyone really expect the central bank to “give you” gold in exchange for notes in a crisis?

They’ll certainly exchange some amount of gold for something but I doubt it would be the face value of the notes.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#297

Post by bakuninsbart » Sun, Jan 19, 2020, 6:55 PM UTC

pnw_hazor wrote: post #290

pinkfoot wrote: post #200

Earlier quoted context omitted.

And you don't think they would change that pretty quickly if they really needed to?

They won't have time to train up the manpower. Even if the US gives them more equipment. For example, it takes the US Army almost 2 years to train helicopter pilots. Similar for Air Force or Navy pilots.

German troops have very good discipline, and a far more reliable education than american troops. While certainly far from ideal, the state of the Bundeswehr is often painted worse than it is. You completely gloss over the fact that german (special) forces are in a lot of countries.

Furthermore, Germany isn't militarily threatened by any country with capabilities to invade it. France and Britain are close allies, the US kinda still is, Russia's economy is extremely reliant on Germany and the other countries around it are to small to pose a serious threat.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#298

Post by bakuninsbart » Sun, Jan 19, 2020, 7:02 PM UTC

mattrp wrote: post #65

augstein wrote: post #45

Earlier quoted context omitted.

It’s about Russian natural gas, not oil. About 25% of Germany’s primary energy are produced from gas, of which about 40% come from Russia (down from about 50% in 1995).[1] The US sanctions against the Nord Stream project are seen by a number of Germans as a rather clumsy attempt to push the sale of their expensive liquified natural gas, which to a high degree is produced by hydraulic fracking.[2] 1) https://translate…

Talk about clumsy, I seem to remember Russia turning off the gas back in the 90s and everyone was surprised at just how easily nato’s entire infrastructure could be held ransom by the flick of a switch. The issue basically boils down to the survivability of US/NATO operations. And the Germans ambivalence - what with Gerard Schroeder essentially doing a crony deal for nordstream directly underscores that Germans know…

> Ps also consider the source - the economist - they’ve never met a sanction or a trade barrier they could like so keep that in mind....

They were in favor of sanctions against lots of countries, usually because of human rights abuses. I currently can't access their archives, but I am quite sure they were calling for sanctions on Germany as early as 1933.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#299

Post by erikpukinskis » Sun, Jan 19, 2020, 7:06 PM UTC

ballarak wrote: post #124

There's the possibility that the USG believes the dollar's primacy is going to come to an end in the relatively near future. There are other factors at play that could weaken the dollar's status that matter more than sanctions, including: (1) The geopolitical shift away from a unipolar world, with the rise of states such as China. (2) The upcoming end of the petrodollar, as nations shift to renewable energy. If you b…

This possibility comes along with the rise of a new political brand for the Republicans: “We do whatever we have to to get ours”. In the early stages under GW Bush/Rumsfeld this was the lighter “We do whatever we have to to advance American interests throughout the world” but under Trump/Murdoch it is now “advance the interests of those who are loyal to me”.

That will play well in an economic crisis. I don’t think the brandmakers for liberalism in America are prepared for that fight. Right now the brand on the left is something like “we can and should demand a better wage and better benefits from Daddy!” but that falls flat in a crisis.

That all said, we’re not in that crisis yet. So perhaps it’s fine to focus on the present, where we certainly have the money to increase workers benefits.

Re: America’s aggressive use of sanctions endangers the dollar’s reign

#300

Post by rayiner » Sun, Jan 19, 2020, 7:07 PM UTC

lispm wrote: post #241

bloodm wrote: post #239

Earlier quoted context omitted.

"Look at the numbers, they are vastly different from what you claim. " They are "vastly different" because most countries don't share their fair burden. Trump may be wrong in many things, here he is right. In the PDF you provided "NATO guideline 2%" But hey, why spent it on the military? Let the US spent/fight for us.

Well, you claim that there is a contract which binds NATO countries to spend 2% of their budget on military and that only Germany is not spending 2%. Everything of that is wrong, There is no contract. The goal of 2% is set for 2025, not now. Currently a bunch of countries spend less than 2%. And: large parts of the US military spending is completely unrelated to NATO. Next you need to ask yourself if these approximat…

Your comparison is fatally flawed. If someone declared that the US/Europe doesn’t need to spend so much on social welfare or transit, because Russia and China spend much less in nominal dollars/euro, one would quite rightly point out that a dollar buys much more food or miles of subway tunnel in Russia than the United States.

The same is true for Military spending. The military is labor heavy, and production is mostly domestic. If you don’t adjust for purchasing power, you’re comparing apples and oranges: https://warontherocks.com/2019/12/why-russian-military-expen...

> Perhaps most importantly, the more methodologically sound approach to comparing defense spending based on PPP illustrates that the gap between U.S. expenditure on the one hand and that of Russia and China on the other has closed dramatically over the past 15 years. Today, when taken together, spending by Russia and China is roughly equal to U.S. defense expenditure, with Russia representing a much larger share than previously recognized.

Moreover, even PPP probably doesn’t accurately depict the difference. Beijing spends about a billion dollars a year to operate a subway serving a city of 20 million people. New York spends ten times as much for a system half the length and half the ridership. Moscow spends 1/7 as much as New York to operate a larger system with more ridership.

Military expenditures probably scale much closer to something like a subway system than the overall PPP basket of goods. In that case, we are probably looking at less than a factor of two advantage in what that spending actually buys.