USD share as global reserve currency drops to lowest since 1994 • Hacker News Board

Re: USD share as global reserve currency drops to lowest since 1994

#81

Post by doctorpangloss » Sat, Dec 27, 2025, 9:29 PM UTC

detourdog wrote: post #72

mvkel wrote: post #21

Whenever I see headlines like this, I ask: what happened in 1994? It was post-Cold War and central banks were trimming USD reserves to test alternatives. Then, crises hit (tequila, Asian, Russian, dot com) and the world reconsolidated around USD, thanks to the immense strength of the Federal Reserve and IMF. Similarly now, reserve share is falling as countries hedge sanctions and geopolitics, yet dollar usage in trad…

Early 90’s during the Clinton administration (and the dot com boom) appeared to be the best run US budgeting process I have ever seen.

another POV is he was extremely lucky

Pfizer decided to NOT commercialize its GLP-1 drug (https://www.statnews.com/2024/09/09/glp-1-history-pfizer-joh...) in 1992.

What if it had commercialized GLP1s?

The law that prevented Medicare from paying for weight loss drugs like GLP1s, the MMA, was passed in 2003. So Medicare would have to pay.

YEAR NOM. ADJ 23 NET NET ($B) ($B) 10% 100%

    1998    69.2   129.4   102.6  -138.6
    1999   125.6   229.7   202.9   -38.3
    2000   236.2   417.9   391.1   149.9
    2001   128.2   220.6   193.8   -47.4

Okay, only 4 surplus years. 10% uptake of GLP1s, okay, they'd be in surplus. 100% uptake, it would be a deficit.

Any number of things could have happened. This was just one thing that definitely was completely in control of people - it was in the control of Pfizer's commercialization team - it wasn't some unforeseeable crisis.

My point is, the little HN takes here and there like yours, better to not make them, because frankly you don't know anything about the budgeting process or governance, so why say anything at all?

Re: USD share as global reserve currency drops to lowest since 1994

#82

Post by fspeech » Sat, Dec 27, 2025, 9:29 PM UTC

OutOfHere wrote: post #56

tmn wrote: post #20

Earlier quoted context omitted.

There’s nothing fundamentally stopping all currencies from floating against gold and gold being the base asset

All the arguments against gold are completely bogus because there is nothing stopping the price of gold from climbing to meet the economic need. The price of gold was suppressed for a long time by institutions, but this active suppression is increasingly difficult to continue. As for verification and transfer, that's what electronic shares are for, distributed across a few key physical asset holders.

Price of a commodity metal can do whatever they want without causing a big problem. It is just a resource allocation signal. However if you base your currency value on it suddenly you are forcing debtors into bankruptcies if the value shoots up. Credit relationships aka investments are what make an economy run and grow, not some arbitrary commodity price.

Re: USD share as global reserve currency drops to lowest since 1994

#83

Post by RealityVoid » Sat, Dec 27, 2025, 9:34 PM UTC

GenerocUsername wrote: post #31

somenameforme wrote: post #11

Earlier quoted context omitted.

This is more of a go out with a whimper rather than a bang type thing. Being the world reserve currency (as well as the largest consumer market in the world) previously enabled the US to do things like relatively easily export inflation in spite of relatively reckless monetary policy. Now that inflation is sticking around far more persistently, even long term bonds have gone from 1-2% to 4%+, and so on. Stagflation i…

Imagine how red 100 years of economists faces will be when the world ends up back on a gold backed currency. Probably only takes 2 years before they start inventing abstractions on top of it and this kicking off the eventually next economic disaster.

I'd rather go back to crypto than be chained to a piece of stupid metal.

Re: USD share as global reserve currency drops to lowest since 1994

#84

Post by brianwawok » Sat, Dec 27, 2025, 9:35 PM UTC

MagnumOpus wrote: post #24

mvkel wrote: post #21

Whenever I see headlines like this, I ask: what happened in 1994? It was post-Cold War and central banks were trimming USD reserves to test alternatives. Then, crises hit (tequila, Asian, Russian, dot com) and the world reconsolidated around USD, thanks to the immense strength of the Federal Reserve and IMF. Similarly now, reserve share is falling as countries hedge sanctions and geopolitics, yet dollar usage in trad…

No, this is an artifact of Russian reserves getting frozen in 2022 and autocracies the world round getting more careful about having all their eggs in that basket. The PRC’s SAFE is selling dollars and buying gold in a very covert but absolutely massive fashion, and most likely, so are many other countries in a smaller way.

Gold price is double, not sure it’s that quiet.

Re: USD share as global reserve currency drops to lowest since 1994

#85

Post by carlosjobim » Sat, Dec 27, 2025, 9:36 PM UTC

daedrdev wrote: post #34

somenameforme wrote: post #11

Earlier quoted context omitted.

This is more of a go out with a whimper rather than a bang type thing. Being the world reserve currency (as well as the largest consumer market in the world) previously enabled the US to do things like relatively easily export inflation in spite of relatively reckless monetary policy. Now that inflation is sticking around far more persistently, even long term bonds have gone from 1-2% to 4%+, and so on. Stagflation i…

No, physically backed currencies will not return because physical goods do not correlate with the size of an economy, especially the amount of gold

They correlate with the size of production, which is a much better measurement than the amount of trading back-and-forth.

Re: USD share as global reserve currency drops to lowest since 1994

#86

Post by Ekaros » Sat, Dec 27, 2025, 9:36 PM UTC

duttish wrote: post #4

I'm not an economist so someone please correct me / expand on this; I'm guessing this is kind of a "It's not a problem until it's a crisis" situation? So far other central banks haven't begun selling treasuries, they've just stopped buying them. But once one starts selling it could become self reinforcing? What could replace it? There doesn't seem to be any new hegemonic power on the same level. Could we enter a worl…

Not buying is same as selling with debt. On long enough time horizon. If the debt is not rolled over anymore eventually you run out of lenders.

Re: USD share as global reserve currency drops to lowest since 1994

#87

Post by brianwawok » Sat, Dec 27, 2025, 9:37 PM UTC

messe wrote: post #80

indubioprorubik wrote: post #27

Earlier quoted context omitted.

No, each pushed alternative is just worser. The euro could take over, but europe just revealed itself as a "lawful" player with no plan and no pants (security-wise) - so the euro is just defacto tied to the dollar value wise. For without the us guarding europe, the euro is just loaded with invisible gigantic security and pension debts. BRICs is dealing in store credits and raw-materials. Every other empire and kingdo…

> For without the us [sic] guarding europe Those words hit harder when you've an executive that isn't beholden to Russia or threatening to fucking annex part of an ally, and a Europe that isn't investing heavily into rearmament. But please, continue in your delusion.

That’s great, I’d love a strong European military. Can you help Ukraine enough so it can win? If not you can’t defend your own countries alone.

Re: USD share as global reserve currency drops to lowest since 1994

#88

Post by alphazard » Sat, Dec 27, 2025, 9:37 PM UTC

mvkel wrote: post #21

Whenever I see headlines like this, I ask: what happened in 1994? It was post-Cold War and central banks were trimming USD reserves to test alternatives. Then, crises hit (tequila, Asian, Russian, dot com) and the world reconsolidated around USD, thanks to the immense strength of the Federal Reserve and IMF. Similarly now, reserve share is falling as countries hedge sanctions and geopolitics, yet dollar usage in trad…

Dollars are currently only in demand for short-term use in transactions. Most of the world still relies on dollars for transactions, because that is what all the banking and payment infrastructure uses.

But no one wants to hold them because they devalue and will continue to do so at an accelerating rate. It's a game of hot potato where everyone is forced to hold equities, commodities or other assets by default in order to preserve their wealth, and then convert to dollars to transact. The days of savings accounts are over, and everyone should think of their checking account as something that they pay negative real interest on for the privilege of being able to transact with the rest of the world.

Meanwhile, the big players in the current financial system are trying to figure out how to continue playing the current game without resetting everyone's progress. They don't want to lose their hard won position to pay for bad decisions by American voters. It's a coordination problem, and the shelling point looks like it is still gold, same as it has been for thousands of years.

Re: USD share as global reserve currency drops to lowest since 1994

#89

Post by mgh95 » Sat, Dec 27, 2025, 9:41 PM UTC

alphazard wrote: post #88

mvkel wrote: post #21

Whenever I see headlines like this, I ask: what happened in 1994? It was post-Cold War and central banks were trimming USD reserves to test alternatives. Then, crises hit (tequila, Asian, Russian, dot com) and the world reconsolidated around USD, thanks to the immense strength of the Federal Reserve and IMF. Similarly now, reserve share is falling as countries hedge sanctions and geopolitics, yet dollar usage in trad…

Dollars are currently only in demand for short-term use in transactions. Most of the world still relies on dollars for transactions, because that is what all the banking and payment infrastructure uses. But no one wants to hold them because they devalue and will continue to do so at an accelerating rate. It's a game of hot potato where everyone is forced to hold equities, commodities or other assets by default in ord…

> But no one wants to hold them because they devalue and will continue to do so at an accelerating rate.

Devalue against what is the main question though, isn't it? The real longer term issue is that the USD is devaluing against the Euro, but even that has serious issues for Europe's export oriented economies [1].

Re: USD share as global reserve currency drops to lowest since 1994

#90

Post by RealityVoid » Sat, Dec 27, 2025, 9:45 PM UTC

ajross wrote: post #40

somenameforme wrote: post #11

Earlier quoted context omitted.

This is more of a go out with a whimper rather than a bang type thing. Being the world reserve currency (as well as the largest consumer market in the world) previously enabled the US to do things like relatively easily export inflation in spite of relatively reckless monetary policy. Now that inflation is sticking around far more persistently, even long term bonds have gone from 1-2% to 4%+, and so on. Stagflation i…

> The replacement will probably be a multinational currency with strictly controlled quantity tied to [...] probably [...] gold. This is econolibertarian fan fiction. Literally no one wants that except people already involved in speculating[1] on gold. Are there bad externalities to relying on a unlitaterally controlled reserve currency? Yes. Are they made better by handing financial control over to a bunch of fuckin…

Yes, thank you. My puny mind can't even understand how people come to be convinced that gold should be the end all be all of international trade.