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Printing Money: The Absolute Privilege of U.S. Dollars

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Re: Printing Money: The Absolute Privilege of U.S. Dollars

#31

Post by fwungy »

GnarfGnarf wrote: post #29

Do you really trust China to manage the World’s currency? Scenario: Monday: China buys 100 billion Yuan of oil from Saudi Arabia. Tuesday; China prints 100 billion more Yuan. Oops! The only countries that the World mistrusts more than the U.S. … is everybody else.

You can't print bitcoin. You can't print natural resources. You can't print manufacturing capabilities.

Trade will work on verifiable assets in the future. If Bircoin picks up even a small percentage of foreign exchange it will be worth orders of magnitude more than it is now. A block chain with international trust is a valuable invention.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#32

Post by Longlius »

What is frequently lost in these discussions is what reserve currency status costs the US - namely in having an overvalued currency. This the primary reason why US labor is not cost competitive with the rest of the world except in the highest value-added industries.

Take away reserve currency status and you suddenly have one of the sharpest currency devaluations in human history without any immediate loss in productivity or value-add. Unleashing the US workforce at that price point is a good way to ensure that no country that isn't already highly-developed will become highly-developed in our lifetimes.

On the article itself, comparisons to the pound sterling are rather confusing. The UK faced financial problems not simply because of a shift in the monetary landscape but also the loss of its former empire which a significant portion of its domestic economy was tied up in.

The US, in comparison, is a resource-rich continental power which conducts most of its 'international' trade with Canada and Mexico (both of which the US is deeply interlinked with logistically).

The fact that people continue to draw comparisons between the UK and US economies is incredibly baffling. It smacks of some kind of 'great cycle' religion.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#33

Post by joshdata »

JakkTrent wrote: post #20
fnordpiglet wrote: post #16

Earlier quoted context omitted.

Because it doesn’t print new money to pay it back. It could. But it doesn’t.

Is there an example of this happening? I'm supposed to believe that we ask for money back from foreign countries that have stockpiled dollars as their reserve to finance domestic spending - instead of just printing money. Why would we do that?

We don't ask for dollars back. The government asks for a loan that pays interest and lots of people gladly want to make that loan - like probably your retirement investments. This is where the national debt comes from. If we printed money there would be no national debt.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#34

Post by Razengan »

anonuser123456 wrote: post #21
Temporary_31337 wrote: post #4

Earlier quoted context omitted.

Also by the time US loses its privileged position it will already be too late to reinvest elsewhere without losses. So many funds are already moving money to China and elsewhere. Having said that China etc have their own economic and demographic problems so nowhere seems safe at the moment.

> So many funds are already moving money to China and elsewhere. Good luck to those investors. China has no established tradition of respecting property rights. It can change the rules of the game as it sees fit politically. The only way to make it workable is to have some critical trading relationship that makes the cost of seizing property/money unpalatable.

> China has no established tradition of respecting property rights.

https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...

and that's against their own citizens.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#36

Post by fnordpiglet »

joshdata wrote: post #33
JakkTrent wrote: post #20

Earlier quoted context omitted.

Is there an example of this happening? I'm supposed to believe that we ask for money back from foreign countries that have stockpiled dollars as their reserve to finance domestic spending - instead of just printing money. Why would we do that?

We don't ask for dollars back. The government asks for a loan that pays interest and lots of people gladly want to make that loan - like probably your retirement investments. This is where the national debt comes from. If we printed money there would be no national debt.

Precisely. In fact a lot of reserves aren’t even dollars but are actually us treasury debt denominated in dollars. Treasury debt is treated as cash in most of the world because the treasury market is so liquid and it’s guaranteed by the 14th amendment of the constitution. no one wants to see the 14th invoked because a) it means our political system is so broken we are willing to default, b) it’s possible some conservative court would deny the clear language and take the backstop that insures the debt away. The 14th amendment though is basically supported by printing money rather than borrowing, which is the (c), as it’s diluting.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#37

Post by Our_Benefactors »

Razengan wrote: post #34
anonuser123456 wrote: post #21

Earlier quoted context omitted.

> So many funds are already moving money to China and elsewhere. Good luck to those investors. China has no established tradition of respecting property rights. It can change the rules of the game as it sees fit politically. The only way to make it workable is to have some critical trading relationship that makes the cost of seizing property/money unpalatable.

> China has no established tradition of respecting property rights. https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United... and that's against their own citizens.

Are we really doing this?

https://en.m.wikipedia.org/wiki/Land_Reform_Movement_(China)

Landlords — had their land confiscated and they were subjected to mass killing by the CCP and former tenants, with the estimated death toll ranging from hundreds of thousands to millions.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#38

Post by anon4754737 »

Longlius wrote: post #32

What is frequently lost in these discussions is what reserve currency status costs the US - namely in having an overvalued currency. This the primary reason why US labor is not cost competitive with the rest of the world except in the highest value-added industries. Take away reserve currency status and you suddenly have one of the sharpest currency devaluations in human history without any immediate loss in producti…

> Unleashing the US workforce at that price point is a good way to ensure that no country that isn't already highly-developed will become highly-developed in our lifetimes.

I find it hard to believe that I’m reading this sentence correctly. Are you suggesting that hurting the US working class while moving an increasingly greater percentage of profits into the hands of the globalist class is actually a good and virtuous thing?

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#39

Post by Longlius »

anon4754737 wrote: post #38
Longlius wrote: post #32

What is frequently lost in these discussions is what reserve currency status costs the US - namely in having an overvalued currency. This the primary reason why US labor is not cost competitive with the rest of the world except in the highest value-added industries. Take away reserve currency status and you suddenly have one of the sharpest currency devaluations in human history without any immediate loss in producti…

> Unleashing the US workforce at that price point is a good way to ensure that no country that isn't already highly-developed will become highly-developed in our lifetimes. I find it hard to believe that I’m reading this sentence correctly. Are you suggesting that hurting the US working class while moving an increasingly greater percentage of profits into the hands of the globalist class is actually a good and virtuo…

How did you read that from what I said? The people who would benefit most from de-dollarization would be the US working class working in manufacturing, agriculture, and primary product exports because suddenly their labor would be cost-competitive with other export-oriented economies.

De-dollarization would really be a massive blow to the finance and services class because the US would suddenly be a far less attractive place to park your money whereas it would be good for the class which produces products for export.

Michael Pettis' books have a pretty good coverage of this perspective.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#40

Post by HyperSane »

sschueller wrote: post #2

"It is unavoidable that one day in the far far future, the U.S. loses reserved currency status. " There are some opposing opinions on this being far far away. Recently the USD has lost a significant amount in global percentage mainly due to all the sanction the US imposes. The US treasury itself warned that these sanctions are bad for thr US. [1] [1] https://www.livemint.com/news/world/yellen-says-sanctions-ma...

There is no real alternative to the US dollar as a reserve currency.
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