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De-dollarization: Is the US dollar losing its dominance? (2025)

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Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#311

Post by dnautics »

parsimo2010 wrote: post #138
softwaredoug wrote: post #83

Earlier quoted context omitted.

It’s not just that This is a gradual decline. From 70% in the 90s to 60% today. Today there are more options like the Euro that didn’t exist in the 90s. People can argue over EU economic stability, but it’s there as reasonable option.

As time goes on, fewer people are alive that predate the EU and more people will perceive it as a lasting institution. Additionally, we've now seen the EU survive the departure of a major economic power (the UK). More people are certainly willing to believe in the stability of the EU now. Another major currency is the Yuan, and some countries may be as willing to trade in Yuan to improve relations with China, so perh…

the yuan has major currency controls. there is a real threat of capital flight destabilization if policies change which is why nobody sane would peg tp the yuan as it is now. that said, countries definitely make bad choices.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#312

Post by JumpCrisscross »

TSiege wrote: post #94
andsoitis wrote: post #7

Earlier quoted context omitted.

The decline has been gradual. The dollar's portion of global forex reserves has fallen from over 70% in the late 1990s to around 60%. The Supreme Court's ruling on Fed independency is to be watched.

You're also forgetting BRICs and the EU's efforts to create their own banking systems that would make it easier to do trade and finances without the dollar as an intermediary. The dollar being the reserve currency is going to be come more sudden once mass adoption of those platforms takes hold. Who can blame them with how the US is behaving

> BRICs and the EU's efforts to create their own banking systems

One of these exists. The other is bluster.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#313

Post by alwa »

throwaway290 wrote: post #212
alwa wrote: post #206

Earlier quoted context omitted.

It’s certainly government. The US Congress created it as an agency of the US government, just as it did every other government agency; and the Congress can destroy it. The Congress did not provide for direct political control—elections (and electoral politics) can’t change the Federal Reserve’s decisions (or decision-makers) directly. There’s indirect control: the elected administration selects people to nominate as…

It's as much government as Amtrack and USPS.

I’d argue that its primary functions are core government functions in a way that passenger rail and postal services are not. Amtrak and USPS sell services at retail (and compete; see i.e. SunRail and UPS). The public aspect of their prerogative is relatively small (I tend to care much more about whether the train is on time than I do who operates, and who owns the tracks, and what the liability cap is; I tend to care about speed and price more often than I care that USPS will go places where FedEx won’t). And the “product” is a set of individual services executed by a big workforce—the higher-ups exist to make sure the services get delivered down the line. Quasi-corporate structures make a lot of sense for that.

Whereas the Fed’s jobs involve setting monetary policy and regulating the financial sector. The “product” is the set of policies the board vote to implement, and the staff exist to gather information and pass it upward to support those decisions (maybe using powers delegated downward to them). Like any other government agency.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#314

Post by jorblumesea »

czhu12 wrote: post #279

The ultimate check and balance was always supposed to be the US consumer. It seems any major disruption to purchasing power will result in a backlash large enough to undo any policy and administration. I’d still bet that any sudden movements in this direction will be checked

I wouldn't count on the people that elected trump, twice (!), to come to their senses. The American voter cannot be trusted to do what is right for the country.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#316

Post by Zigurd »

mothballed wrote: post #84
munk-a wrote: post #66

Earlier quoted context omitted.

It isn't prohibited by the constitution and was created as an independent body. You are correct that it wasn't specifically outlined by the constitution but that's an empty statement - the constitution included the allowance of the creation of agencies and laws outside of itself... that's the main power and strength of the constitution. Your statement was equivalent to saying that Hacker News has no constitutional ri…

The 10th amendment limits the federal government to the enumerated powers. So your argument that it "isn't prohibited" isn't how this works. You have to justify it under an enumerated power (which, you might well be able to do, though this is debatable).

The Federal Reserve Bank is in effect a club of banks. They pay for it. It's not an appendage of the Treasury.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#317

Post by FrustratedMonky »

llmslave wrote: post #307
FrustratedMonky wrote: post #272

Earlier quoted context omitted.

everyone complains, nobody has alternatives. what would have been the correct actions in that situation? really the government should tax in good times. and spend in bad times. and be a counter weight to private sector

no they literally just kept printing money for no reason

Its the 'kept printing' that is the problem with the story.

There was a surge and a pull back.

Post-COVID Tightening: After this historic surge, the Federal Reserve began "quantitative tightening" in 2022 to combat inflation, slowing M2 growth to near zero and eventually reversing it.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#318

Post by ahnick »

drinkzima wrote: post #78

The issue is that there isn't a great alternative. The euro is difficult to manage because of the diffuse control, pound an even smaller economy, RMB just not global enough (and tough argument to see that happening), gold/bitcoin/whatever not the same inherent stability. Indeed the dollar weakening, but nothing really to take it's place.

Literally cryptocurrencies are the single greatest alternative ever made. Opt out of the system where the government can just print money into thin air and old guys drawing dots on a plot set interest rates in closed meetings. If you want to hedge USD exposure just buy a Bitcoin ETF or if you really can't stomach cryptocurrencies b/c you don't want to be ostracized from the orange site, buy Gold. We are not going back to the way the world was and if you have all your money in USD realize you are on a leaking boat.

It is entirely possible to manage funds in crypto for growth and move some amount into more liquid USD denominated assets or MMFs when you need liquidity.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#319

Post by JumpCrisscross »

PlatoIsADisease wrote: post #133
maerF0x0 wrote: post #88

China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] 1 - https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s... 2 - https://www.economist.com/china/20…

>China is intentionally undermining the dollar in order to try to make the Yuan the world currency The constant devaluation makes it unappealing. > My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. I generally agree. But economic orthodoxy says 'Inflation is only 2%', despite precovid, it seemed more like 4%.

> constant devaluation makes it unappealing

If this is the complaint the dollar is safe. And international holders of dollars aren't idiots. They hold Treasuries, which more or less preserve their purchasing power. (Nobody outside the poor, who have to, and nutters, who don't know better, hold cash as an asset. It's so thoroughly assumed that in finance, cash refers to cash and cash equivalents.)

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#320

Post by cbolton »

echelon wrote: post #195
renewiltord wrote: post #151

Earlier quoted context omitted.

Indeed. People are actively trying to repair something which cannot be fixed. Now that the US century is over, the only way forward is for the US to use present military power as a cudgel. Given that the multipolar world is nigh, the only path forward is through. If America and her erstwhile allies are no longer aligned, then any attempt by America to repair this is doomed. Consequently, Trump’s approach is the only…

> Consequently, Trump’s approach is the only way forward. It's the DoD. Prior to Trump's actions, the American-led "world order" seemed to work, even if we couldn't get China to agree to a "Bretton Woods 2.0". Biden tried diplomacy with the EU. He tried to get them to agree to a renewed US-led world order, but it wasn't working. The EU decided to play the US and China against each other to improve its own standing, w…

> Biden tried diplomacy with the EU. He tried to get them to agree to a renewed US-led world order, but it wasn't working.

Can you elaborate on that? It seems to me it "wasn't working" mostly in the sense that Trump got elected again.

> The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.

Seems like confusing cause and effect. The EU is drifting away from the US towards China because the US pushed them away.

> The world is going to be a much more violent place without hegemony. Free trade doesn't exist in that type of world. The US realizes this and is playing 50 years ahead. None of the nice words matter when the energy, trade, and economic lines are redrawn.

This is happening largely because of the US, although they stand to lose by replacing a world order that benefits them with a world order that benefits China and Russia. Well maybe the US will become sufficiently like China and Russia that they can benefit too. But even with a gradual loss of hegemony there was nothing inevitable about a transition to the law of the jungle and it's doubtful that the net result will be positive for the US.

> People like to say the US is led by lawyers and China is led by scientists and engineers. This is wrong. The US is led by war generals and intelligence.

I think the relevant distinction is that the US is democratic while China is authoritarian. But the current US government wants to be authoritarian.

> The career DoD folks are the ones impressing upon the administration to make these moves.

Again a reversal of cause and effect? I doubt old career DoD folks like the current developments. But the current government might give a bigger role to the war generals.

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