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.
One of these exists. The other is bluster.
Edit: to the downvoters, did I lie?
The US dollar being used less across the world has both negative and positive consequences for the US and USG. This is the Triffin Dilemma, and dates back to the 1960s; the USD's dominance over-values the currency relative to other currencies, which hurts exports and thus domestic manufacturing. It also conflicts USG/UST priorities between making decisions that are best for the US people, versus best for international customers of the dollar. Triffin covered this at length in his address to the Joint Economic Committee of Congress in 1959, but in short, the USD acting as world reserve currency creates demand for the dollar, which the US has to be able to supply, which pre-1971 meant extreme strain on her gold supply, and post-1971 means greater monetary inflation.
Cheers to you for mentioning Triffin's dilemma. In my opinion, the dilemma is in the ability of the host country to be able to make "good use" of the exorbitant privilege. The financial system was not only used against other states but against its own people. Instead of developing the country and building equity through the middle class, it cannibalized its own.
There’s a delicate, fine line between dedollarization and a heavily weakened dollar, especially when the methods used are viewed as fickle and capricious (tariffs, threats). So it’s basically four choices:
- Dedollarization is not happening (#nothingeverhappens)
- Dedollarization is happening, but not because of anything the Trump admin is doing (lol)
- Dedollarization is happening and the Trump admin is either causing it or exacerbating it, despite not coming out explicitly favoring it (they’re idiots)
- Dedollarization is happening and it’s being orchestrated by the Trump admin (5d chess / malicious actors)The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged.
So draw from that whatever conclusions you wish.
I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
However it will provide incentive to move away from the dollar in the long-term, ie as Fareed Zakaria says "recent actions are accelerating the world to the multipolar future".
The absence of a currency hegemon caused "Kindleberger problems," named after the economist who described them, and will cause them again. The big issue is that everyone wants to pump exports to pump their real economy, they can't all succeed because the world is a closed system, so they fight. First with tariffs, eventually with guns.
These Kindleberger Problems will get worse until the US gets its shit back together or China assumes the throne. Note that assuming the throne will destroy the export sector that they love so much (Triffin Dilemma), so not only are they not ready today, they don't even clearly want to be ready. Much like the US between WWI and WWII.
Buckle up, because the tariff wars, Great Depression, the economic driving force for the imperialism of Imperial Japan, and other awful things that you've heard of before all fall in the category of "Kindleberger Problems," are all downstream of not having a global currency hegemon, and are likely to rhyme with what comes next.
How is that different from trust erosion?
Finance is as rational under the hood as the Vatican's books.
Ultimately if there's too much unpredictable behavior the pain endured will become higher than the pain of eroding trust... which if trust was truly eroding would be signaled by establishment of monetary systems independent of the US, probably with the International Monetary Fund as a base, backed by at least India, China & Europe.
Sure, everyone else is also acting based on childish emotions now, not just the US president. It's not about retaliation at all, it's about reducing suddenly very imminent risks.
A quant partner at Goldman said to me once that the thing that's different about currencies relative other normal financial products is whereas you might buy JPMC or oil or a bond because you like JP Morgan or oil or think rates are going to move in a particular direction or whatever whatever, you never just buy the dollar. You are always trading one currency for another eg selling GBP to buy USD. What that means is currencies are always about the value of one currency relative to other currencies.
In that sense they do fundamentally relate to trust and in particular specifically in this case about trust of the US economy and financial system's stability as opposed to other economies and financial systems.
So there have been times (eg during the financial crisis) where people think all currencies are bad but you can't just sell all of them so typically they would sell the other ones for dollars. For me, de-dollarization is about the choice of central reserve banks to hold dollar assets but also about other financial players changing their "default currency denominator" when they're doing this kind of trade.
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.
The change is that suddenly the US isn't a bastion of stability and having an independent trading currency could ensure more internal stability for other nations.
Past returns are not indicative of future performance
Source?
I live in the US and I have lived in countries with 4-5 gdp growth
The problem is the AI bubble, without it it is speculated that the US economy might actually be in a recession [2] - effectively, that web of investments, deals, ownerships, purchase contracts and god knows what is nothing more than wash trading that will come crashing down hard.
That is why for the 99%, the economy doesn't "feel" like 4.3% of growth. If you're not in AI directly or at least adjacent (e.g. datacenter or utility construction), you don't feel any of that money.
[1] https://tradingeconomics.com/united-states/gdp-growth
[2] https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks...
https://www.nbcnews.com/business/economy/us-economy-grew-thi...
Between Q1/2/3, US growth has been about 1.6%.
Wait until the whole year figures come out.
It's very unlikely the US doesn't have strong GDP numbers for 2025.
K-shaped economy and all that
It’s bad enough that America’s foreign policy lately swings wildly every four years. More recently, it’s been acting aggressive toward allies, and making very strange and unpredictable moves.
The USA’s tariff policies are, frankly, utterly insane. Yes, I do mean the tariffs are irrational and incoherent. The approach to the tariffs has been overly aggressive. They’ve been changing almost daily, at times. Now, tariffs are specifically a thing that must be stable and predictable on a multi-year horizon. This must be, at least, off-putting to other governments, and to any companies wishing to do business in or adjacent to the USA.
Monkeying with the Fed is dangerous and basically unprecedented. This is going to make people nervous because it marks the end of an era of stability in monetary policy. We may be at the start of a new era where interest rates, much like the tariffs, change frequently for bad reasons or for no reason at all. Who can say?
And THAT is the problem.
I can't see how, since the end of habeas corpus, you can claim legal stability.
Your leader is World renowned for reneging on debts and is demanding bribes for companies to operate.
Isn't borrowing through the roof to pay for things like your stasi?
Daily those stasi are murdering and disappearing people seemingly attempting to foment an excuse to escalate the violence.
I don't know how that knife edge can look anything like stable to you.
But also it asserts factually a lot that isn't true, which is why I downvoted.
It's unfortunate the same division tactics the US has been facing are working elsewhere too, however.
I don't think mostly is true? Obviously it depends a lot on the time of day, but there are also a lot of Europeans on the site. Also, most comments here seem to be critical towards current US policy. So, I think there is quite a lot of manipulation going on, since the downvoting/flagging does not really match the comment section.
1. I believe Canada does have an outsized presence though!
So, 32-56% US, so not mostly US.
The excitement being blown out of proportion is hyperlocal. The system grinds on.
America was never a stable country. That 250 years includes:
* A decade of chaos under the impotent Articles of Confederation.
* The deliberately engineered election of George Washington to create the illusion of political stability, a reign which only ended because George stepped down voluntarily.
* An immediate constitutional crisis the moment a competitive election happened, causing the election of a President and Vice President from opposing political parties (imagine a Harris - Trump presidency). The ensuing chaos resulted in SCOTUS unilaterally declaring itself the final arbiter of the law.
* The Thomas Jefferson presidency, which in many ways is the alpha release of Trump.
* The Civil War, started specifically because the losing faction of slaveholders was angry at losing, and ending with the losing faction losing so hard the counter rolled back into flawless victory. They surrendered, then assassinated the President and got his party to give up on everything he stood for.
* Economy-destroying Smoot-Hawley tariffs, which are basically what Trump is doing now.
* A spectacular near-miss in which the country's business elites attempted to assassinate a Progressive president and only failed because the Marine they selected as their Hitleresque dictator ratted them out.
* Widespread civil unrest deliberately created to force America to reckon with its racist past and undo what the South had managed to convince the North to allow them to do after Reconstruction.
* The Richard Nixon presidency, which in many ways is the beta release of Trump.
* Too many foreign invasions to count.
In the entire history of America I can think of maybe 3 brief moments of political stability that weren't outright engineered fantasies. The two that are relevant to modern times are the 1950s and the 1990s. Both of these were the result of America winning a war of conquest.
Consider the turbulence that China experienced over the same 250 years, for example
Stability is a relative thing though. It's hard to judge this except in relation to what other countries were doing.
>Various Euro nations
Suicided in 1900s and destroyed everything they built
>China
Collapse, civil war, famine, poverty
*pretty good for ~30 years
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 perhaps we won't see one single reserve currency but two spheres of influence with most countries maintaining reserves of multiple currencies.
https://www.atlanticcouncil.org/blogs/econographics/what-to-...
Obviously that's extremely impractical and at best you're hiring a 3rd party to streamline that for you. It's a clusterfuck at tax time (edit: stable coin doesn't help here -- you must still report gains on stable coins as it is still a $0 capital gain which is different than no capital gain).
Retailers already dealing with capital gains and with high chargeback rates love it though. For instance, it's usually the cheapest same-day clearing way to buy precious metals online since credit card rates are high (chargeback), ACH takes days, and wires tend to cost $15+ with many banks.
The IRS policy is irrelevant, the law always required payment of capital gains. It's consistently been the hardest thing about accepting Bitcoin for payment.
Foreign currency payments are largely exempted.
If a bitcoin rises or falls by a calculable amount between when you received it vs when you spent a portion of it, you have gains/losses. That has always been required by the IRS to be reported, whether that is a BTC or chicken feathers.
You are required to report capital gains and losses from stablecoins on your tax return (though it’s likely that your gain will be close to 0).
It’s worthless money and I don’t see anything out of china that would cause that to change.
This is quickly going away[1].
[1] https://www.nortonrosefulbright.com/en/knowledge/publication...
The Chinese government spend a lot of money keeping the value of the RMB low.
Eventually you hit an inflection point where it’s cheaper to manufacture elsewhere. Which is why China is working Africa, huh?
Interesting stuff, in a vacuum.
Also, it's not like a 99-year lease has no value. That's your entire lifetime+.
Imagine if you'd invested in lithium mining in Afghanistan 15 years ago: you'd likely have paid a lot, made little money, lost employees and then lost it to the Taliban.
Don't need Econ 101 to understand this basic reality.
Bitcoin is an economic value consumer just to hold it. It does nothing if you have it.
How much do you think debt would cost and how easy would it be for businesses to get credit?
Combining a deflationary currency with a growing (or at least non static) economy is bad a everyone who has a basic understanding of history prior to the 1930s can see that. Something like bitcoin would be even much worse than the gold standard.
Having less of that garbage fiat short-termism is a good thing for society.
Yet having more of endless boom and bust cycles with major economic depressions lasting for years (outcomes of the gold standard was a good idea).
> You're forcing business to produce something valuable in real terms instead of nominal terms
I don't quite understand what does that mean. Pricing goods in oil or grain? (coincidentally either of which would function better as a currency than bitcoin).
But more importantly, you can buy a lot of stuff from the factory of the world. Which is why a lot of countries don't mind holding the RMB. Just not enough for it to become a reserve currency, and certainly no one wants it to become the petroyuan.
If you are in a country or area with a large Chinese population, you can usually pay easily in RMB with Alipay.
If you use Visa and Mastercard, you are subject to US regulations, sanctions, and embargoes. Many alternative payment processor exist, PIX in Brazil, UPI in India, etc.
There are several systems in the EU: Wero, Bizum, BLIK It is urgent that Europeans coordinate to ensure the interoperability of these systems and reduce the influence of Visa and Mastercard.
In the event of conflict, this will be the first service to be cut in order to disrupt European countries.
The US already use it for coercing European politicians : https://www.courthousenews.com/eu-strongly-condemns-us-sanct...
1) Direct payment systems via mobile phone, generally designed initially for payments between friends and family. They have been set up in several countries by neobanks, generally based on the Mastercard network (very common among neobanks). A Latvian neobank may expand into the Baltic countries, but is unlikely to succeed in Portugal. These systems are not interoperable with each other.
2) Systems promoted by banking networks, such as Bizum in Spain, which has expanded to the Iberian Peninsula, and Wero, which is supported by BNP Paribas (France, Belgium, Germany). These networks are independent of Mastercard, Visa, etc., but they seek to favor their members and do not seek to become widespread.
Discussions have been ongoing for years to achieve interoperability. The idea for the moment was to let the market structure itself naturally without too much intervention, other than to say “we must move towards interoperability at the European level.” This approach has worked very well for bank transfers, which have become simple, fast, and relatively secure, but it has taken a long time (Europe, consensus, etc.).
A lot of growing economies don't/can't trust their local currency and they overwhelmingly use USD instead of EUR or CNY. As those economies grow the USD gets a boost that will sustain it for a while over the increasing competition of CNY. But this can't sustain it forever and the US is not doing anything to offset the lost ground in global trade and forex reserves.
I don’t really understand the impact of Brexit on the euro, as Britain wasn’t on it. But clearly they were a key part of the EU. It’ll be interesting to see which side regrets the move more.
In June 2025, 56% of people in Great Britain thought it was the wrong decision:
https://www.statista.com/statistics/987347/brexit-opinion-po...
It's hard to imagine this number would be going down after recent events like USA suddenly threatening arbitrary new tariffs on the UK.
But while "Leaving was a bad idea" isn't enough to seriously push for actual re-entry to the EU it's certainly a good sign for the EU and for the Euro. The EU is a massive bureaucracy, and I think we underestimated how much "a massive bureaucracy" might be the thing we wanted in this role..
Just curious, what privileges did it have? I can think of keeping it currency only.
It's not so clear when you consider that 48.1% of the original referendum voters wanted to stay in the EU. I'm honestly very surprised by this poll, 8% change is pretty minimal considering the turmoil the country has gone through since 2016.
How much of this can be explained by older voters dying in the intervening 10 years, I recall that demographic skewed much more heavily Leave in 2016
https://commonslibrary.parliament.uk/general-election-2024-t...
How many thought it was the right decision at the time?
https://en.wikipedia.org/wiki/2016_United_Kingdom_European_U...
Remain was 48% so it's actually not that large of a swing in total. It's not like it was 5% remain and now it would be 56% or something.
But it does indicate if the referendum was taking place today it might swing the other way.
Perception is hard to measure objectively, but the UK does not feel like it’s on an upswing when compared to last time I was there.
There was a small pro brexit margin, and loads didn’t vote. I don’t dispute the vote result, I just wondering what the result would have been if there had been higher turnout.
Sweden just haven’t completed the stabilization and alignment criteria to formally switch over, arguing that it is voluntary.
We had a referendum on the euro back 2003 with a clear mandate to not adopt it and the politicians don’t want to poke the sleeping tiger that is the euro question.
That said, yes, I would defend Europe against the US, even though I think that fight would be short, deadly and decisive if it really came down to it.
What a fucked up world we live in, just because idiots voted for a convicted felon.
And also, our whole military recruitment strategy here outside of drafts has been "the GI bill" – paid tuition in exchange for lining up to go to war.
I don't know that the gap in morals is as wide as you think.
Which historically has worked more for us, than against us.
Russians are much, much worse than Americans in terms of their eagerness to kill others, in my opinion. I wish it were not so.
I don't think EU vs Russia would be a "good vs evil" situation. Russia/US seem pretty similar to me, dictatorship/propaganda with a majority of the population being regular people not in favor of any war, and 30% of indoctrinated people.
Adopting English as legal secondary language in every EU member state would maybe be a good first step.
Shares values AND Ally AND Being attacked AND Attacker is evil
I think you'll continue to be safe posting on HN
I think you’ll find that threats of violence (which is what your comment is) need to be much more unhinged to be effective deterrents. Remember you’re warning off barbarians (eg us Americans or the Russians), not civilized folk.
I can already hear people storming out of the woods, ready to write how the EU itself is undemocratic, or how free speech isn't real in western European countries. I disagree with you.
And unlike you, some random anonymous poster on this polite version of Reddit, everyone knows what they do.
Regarding the EU, the only elected representatives don't have the right to choose which laws they will vote for. If it was in a soviet country no one would call it a democracy.
There is a strong political and cultural foundation in geographic Europe for the political EU: some exemplary giants/EU co-architects:
Jean Monnet/Robert Schuman
European Coal and Steel Community (ECSC) Schuman Declaration (1950) [It is only right that the R. Schuman Roundabout https://en.wikipedia.org/wiki/Robert_Schuman_Roundabout Rue houses the European quarter in Brussels.]
Konrad Adenauer
Promoted reconciliation with France pro-European
Alcide De Gasperi
Integrated Italy into Western Europe Advocated supranational institutions
Paul-Henri Spaak
institutional designer, key role in the Treaties of Rome (1957) helped design the European Economic Community (EEC) Advocated supranational institutions
Walter Hallstein
1st President, European Commission. Built EC into powerful, independent institution Championed the supremacy of European law
Altiero Spinelli
Wrote the Ventotene Manifesto (while imprisoned by Fascists) Advocated a federal Europe
Winston Churchill
A paradoxical but crucial figure: called for a “United States of Europe” (1946 speech) Influenced Europe’s post-war direction despite UK distance
François Mitterrand
Drove Maastricht Treaty with Helmut Kohl Pushed for the € Symbolized Franco-German partnership
Helmut Kohl
Franco-German friendship exemplified by Mitterand-Kohl personal friendship "Architect of modern Europe" German reunification Key figure behind the EU and monetary union
It's ironic that the name "U.S.E." (United States of Europe) was first proposed by a Brit, alas a smart one, and I'm sure Sir Winston Churchill would have had the oratory abilities to convince his countrymen that his idea had merit, but he did not live to see it. The Federation of Europe or United States of Europe is the logical end-point of the joint vision of all these foundational leaders.
Ironic to call this a "friendship", when Mitterand along with Thatcher were working behind the scenes with the soviets to sabotage and stop Kohl's reunification of Germany. It was anything but a friendship, but more of a concession.
Politics is full of such examples that look friendly to the public, but hide a lot of sabotage and back stabbings in the background. In fact, the later is the norm in politics.
Friendships are just the media facing image. In reality, if a country can gain an advantage over the other they see as an economic adversary, and has the means to enforce it without repercussions, they'll do it. Then they'll meet up in front of the media, shake hands and gaslight the peasants on how this benefits everyone.
The true friendships in between countries are made over decades/centuries over shared blood, heritage and culture because humans are tribalistic and have own group preference. Forcing friendships via political declarations doesn't work.
Let me explain with examples. If Portugal would get attacked a lot of Spaniards would go fight for Portugal voluntarily because of shared history and culture. But if Bulgaria would get attacked, most Spaniards wouldn't volunteer to go die for Bulgaria, even though they're both EU members.
Austria kept torpedoing Romania's Schengen entry just to extract some monetary concession, not exactly something friends do. So if Austria were to hypothetically get attacked tomorrow, a lot of Romanians would cheer rather than want to go help since karma is a bitch. These kinds of petty squabbles are the norm in the EU.
People aren't gonna want to die or sacrifice themselves for the EU flag since it's an artificial construct, kind of like the corporation they work for, not something they feel a sense of belonging and allegiance to like a specific group of people.
Most countries can be subdivided seemingly infinitely into groups that could find reasons to fight each other. But humans have other common 'denominators', much higher than that. Spain, the UK, the US, France, China, and many others are unions of subcultures.
You can see so much better in the world. Instead of insisting that evil is inevitable - making you a victim of it - you can work for good. Our ancestors have had great success and made it easy for us to follow.
Plus, with global warming, this may be the last chance for the Alpine hunters to shine.
There's a certain stigma especially in Germany caused by the WW2 and the the leadership has been complacent to rely on Bretton Woods agreement. But as we're seeing now the geopolitics are doing a 180 degree turnaround and given these circumstances I expect sooner or later Europe will collectively understand the utmost importance to com together and to regrow and redevelop the military to support independence and not having to bow down to any master in the East or int he West.
It might not be in 5 or 10 years but it's inevitable. It's not going to operate like this for 50, 100 years.
Just run a mental simulation of WW2 playing out except Europe had the EU.
So while I agree the EU is becoming more an more normal and important to the average citizen, there will come a time when it has to either solidify further or break apart, and I think it's basically a crapshoot to predict how that will go now when we have basically zero info.
EDIT: by "like the US" I mean federalization. This video explains it well: https://www.youtube.com/watch?v=HnarX3HPruA
The recent electoral success of AfD in Germany and the National Front in France seem to point in the other direction.
More like the US, as-in a country? So also more like Germany, China, South Africa, etc. You are making a false equivalence - being like the US in one extremely non-US specific way does not mean you must be like the US in every other way.
I'm not sure you even understand what I'm saying - this has nothing to do with the US vs. the EU or if the US is reliable.
What does that mean exactly?
I meet a lot of people do enjoy their nation's sovereignty especially as a shield from EU's poor and unpopular decisions that they don't get a vote in, and see the common currency and freedom of movement as just the right amount of integration. Making english an official language would be even better IMHO, but that's about it. I enjoy different countries having different politics and takes on topics, as it would be shit if all EU was a just a homogenous groupthink.
And I've never met anyone who thought the likes of Ursula and Kaja should be trusted with even more power and control over nations.
Also, when the colonies united, the government they agreed on was by today's standards extremely small and decentralized and there was absolutely no welfare state. Revenue was mostly from tariffs on imports with zero income tax. Merging modern European governments would be a massive undertaking in comparison. And the wealth levels between countries are so lopsided that any such merger would mean massive transfer payments out of the rich countries to the poor. And what about tax rates? Low tax countries will not like this one bit. When the US colonies merged under the constitution, you could very truthfully go to the average citizen of any colony and say "basically you won't even notice any changes." Whereas for the EU, you have to say to the voters "your taxes will go up and we will now be sending $100 billion Euros per year to people in other countries."
Also, I was surprised to learn how heterogenous the different regions of the US were from the very beginning, in origin, character and motivations. The Puritans, Quakers, Cavaliers, French nobles and traders etc.
This video explains why it's very likely to happen: https://www.youtube.com/watch?v=7yHJehbWiNo
Is it? CNY seems to be about the same as CHF:
* https://en.wikipedia.org/wiki/Template:Most_traded_currencie...
In a similar range as AUD and CAD.
seems like once it starts falling, it would accelerate.
(Still disappointed that the winner of the FIFA peace prize wants to go to war /s.)
Yet the Euro peaked back in 2009 and has been declining ever since.
At this point its share is not that massively higher than that of the German mark back in the 90s.
fed independence is important, but literally irrelevant in the face of rampant money printing
https://www.sciencedirect.com/science/article/abs/pii/S00941...
Once problem we need to solve is how to unwind housing prices without financially ruining honeowners whose house is their primary/only wealth. Of course this problem is even more severe in areas of the country that are becoming uninhabitable due to changes in climate as it drives down demand.
* housing market was already quite bad before covid (see sibling comment)
* Savings rates have hovered around 5% for almost 25+ years - https://fred.stlouisfed.org/series/PSAVERT
this president is trying to money print during non-crisis, to ramp up economy to "20% GDP".
why downvote? Trump literally said he wants a GDP that goes to 20% or 100%. Shoot to the moon.
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
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.
The M2 money supply went from 15.4b at the start of 2020 to a peak of 21.7b, before slightly reversing to 20.7b. Then they just continued printing. Now it currently stands at a record high of 22.2b. The dollar is more diluted than ever.
Summary of the Policy Reversal Period Policy Action Balance Sheet Impact
June 2022 – Nov 2025 QT (Tightening) Shrank from ~$9T to ~$6.5T
Dec 1, 2025 QT Ends Runoff stops; maturing assets reinvested
Dec 12, 2025 – 2026 Reserve Management Expansion begins via T-bill purchases
By December 1, 2025, the Fed officially halted QT after reducing its balance sheet by approximately $2.4 trillion. The following factors forced the reversal to expansion: 1. Liquidity Squeeze and Repo Market Stress As the Fed drained cash from the system, bank reserves fell toward "critical thresholds". This caused stress in the overnight repo market, where banks lend to each other. Spiking Rates: Key short-term lending rates, such as the Secured Overnight Financing Rate (SOFR), spiked above the Fed’s target range, indicating cash was becoming scarce.
Or in other words the data seems to show the loosening effects were more powerful than the tightening ones. Now that the RRP has been drawn down balance sheet growth will likely occur.
[1] https://fred.stlouisfed.org/series/RRPONTSYD
[2] https://fred.stlouisfed.org/series/BAMLH0A0HYM2
[3]https://www.chicagofed.org/research/data/nfci/current-data
Instead, the golden geese of the American economy (the actual golden geese), simply stayed home and worked from their laptop.
This created a situation where people were getting their regular paycheck, plus getting a multitude of stimulus on top of that. There were many making $100k+ salary, not paying rent (rent moratorium), not paying student loans (student loan moratorium), and not going out to do anything, resulting in having huge pools of cash laying around. If you had a mortgage, you got to refi at 3% and dramatically cut your mortgage bill. I won't even get into PPP loans either, everyone knows the story there.
I could write pages and pages about this, but the short of it is, we thought we need a wheelbarrow of money, but technology meant we only needed a jug of money. But we still got the full wheelbarrow.
The government can print money and inject into the system. Some people have money so they continue to buy stuff but maybe at a slower pace or less amount. Things also can get expensive but it is not a total collapse.
So the mass printing of money meant that banks didn't collapse.
It also meant that a fucktonne of cash went into the hands of the uber rich.
The dollar being the reserve currency which leads to demand for the dollar keeps the dollar from deflating.
But as people no longer demand the dollar because they don't want to support a imperialistic government what happens?
Which is to say, that is a fairly traditional way of how empires go the way of the dodo. First losing their financial dominance, which loses them their international power, which then causes internal rupture.
On the face of it the Greenland situation makes no sense on a national security level regarding a non-existent, fabricated Chinese or Russian threat, nor related to the fantastical grift of the "Golden Dome" that is even more useless against what Russia has recently developed, than it was for things prior to about 3 years ago.
What we are looking at here (you can tell your children that you heard it here first) is a strategic move to essentially take Canada and all of the NA continent, and eventually all of the Americas. Yes, Canada, you are indeed in danger as well as Mexico. I don't see how it could be any other way in the face of current developments; remember Trumps USMCA, i.e., a de facto North American Union?
Biden stated that he wants the USA to have 300 million more "immigrants" before he let in about 15 million in 4 years. Annexing Canada is about 40M by the time we do it, Mexico would add another 150M plus however many people would flood into Mexico to become "Americans". That bring us to a total of around 550 million by the time the North American Union comes around. Perhaps if the UK joins, we will just call it Oceania already.
It does not address the fact that China has 1.4 billion and India another 1.4 billion, but it puts us in contention, especially as Europe has about 700 million by that time if/when the EU absorbs most of Europe.
That also doe not take into account the Wizard of the USA wanting to take over all of South America for positive control eventually… another ~480 million by that time, putting the American Union of Oceania at about 1 Billion, ±100M.
These are real tabletop calculations and how things are seen at the top and discussed amidst cocktails.
> On the face of it the Greenland situation makes no sense on a national security level regarding a non-existent, fabricated Chinese or Russian threat, nor related to the fantastical grift of the "Golden Dome" that is even more useless against what Russia has recently developed, than it was for things prior to about 3 years ago.
Power projection in the arctic is weak. Russia has made multiple tactical movements towards soft projection in the arctic. You have zero idea what submarines are on station. Taking greenland is arguably stupid, boosting it's defense to prevent a Russian incursion is not.
> What we are looking at here (you can tell your children that you heard it here first) is a strategic move to essentially take Canada and all of the NA continent, and eventually all of the Americas. Yes, Canada, you are indeed in danger as well as Mexico. I don't see how it could be any other way in the face of current developments; remember Trumps USMCA, i.e., a de facto North American Union?
No evidence. Unless you're arguing while NAFTA was around this was a way to create a "United America".
> That also doe not take into account the Wizard of the USA wanting to take over all of South America for positive control eventually
No evidence. Most think-tanks have recognized that maintaining positive control of south america would be disastrous. If anything, Maduro and his friends were probably happy the US decided to black bag him. It is well known that whoever was going to attempt control over Venezuela in particular was going to be responsible for spending the money to rebuild it.
> These are real tabletop calculations and how things are seen at the top and discussed amidst cocktails
No.
> No evidence. Unless you're arguing while NAFTA was around this was a way to create a "United America".
Trump recently posted an image on Truth Social of a White House meeting in which a map is displayed, of north america with the US flag superimposed on Canada, Greenland, and Venezuela. [1] He has repeatedly suggested that Canada is the 51st American state. [2]
[1] https://www.wsj.com/livecoverage/greenland-trump-tariffs-tra...
[2] https://www.pbs.org/newshour/politics/trumps-remarks-on-cana...
That biden wanted to grow the USA to 600 million people?
That trump is also trying to do that?
You have to understand that there is the theater of the political sport ball arena where the different sides are set against each other like WWE/Football, etc. but in the background it's just actually all more or less rigged and the truth is written in policy and strategic papers that are implemented over 20+ years, across presidents and their wrangling and herding of their constituents in this charade called "democracy".
I think this oversimplifies things. The dominance of the dollar emerged chiefly because most of the alternatives were worse, for a combination of military, political, and economic reasons.
There is a positive feedback loop at the core of it, because the US economy benefits greatly from being able to issue foreign debt in their own currency. But that doesn't matter: as long as the US faces little risk of getting invaded by any of its neighbors or defaulting on its obligations, everyone is happy.
What's been changing - and it started long before Trump - is that the US is also increasingly willing to use its control of USD (and thus the Western banking system) to pursue sometimes petty policy goals. This is giving many of our partners second thoughts, not because of the fundamentals of USD but because they imagine finding themselves at odds with the US policymakers at some point down the line.
This is mostly due to the behavior of the country being unusual.
The US had grown at a healthy clip for a long time.
Due to the amount of boomers exiting the workforce, and withdrawing rather than adding to their savings - the US is going to be in a very different position for the next 10-20 years before things start to level out.
If something like AI doesn't save us with a pretty sizable productivity boost, we're in for uncharted territory.
Here's a write-up of Trump's grift so far: https://www.nytimes.com/interactive/2026/01/20/opinion/edito...
Not ever passing an audit of any kind. And the FED chairman spending $2.5B on renovations to an office complex. While misleading congress about the kinds of renovations.
There should be less 'independence', if it means zero accountability.
Then the value of the USD is entirely at the whim of whoever is elected and should be priced accordingly.
FED has been instrumental is keeping the monetary policy sane in the recent years, unlike some pushes from the orange person you are taking talking points from.
Congress provides oversight and accountability of the Fed. The GAO does audits as well. Frank-Dodd provides more windows into the Fed. Why did you think the Fed doesn't have oversight?
> Not ever passing an audit of any kind
It might have been hard for you to find because it is hidden under the "audit" page on their website: https://www.federalreserve.gov/regreform/audit.htm
> Why is the independence of the Federal Reserve sacrosanct?
It's never been completely independent. It's independent from short-term (4 years) political influence. It's audited and has congressional oversight and the President nominates people to the board.
What else do you want? Interest rates set by Presidential tweets?
If the goal of this administration is to destroy America, they're doing a fine job.
Sure but replaced by what? The abysmal failure that the EUR is? Or a chinese currency?
What other options are there besides either a Chinese currency or the EUR?
Chinese. EUR.
Seen these twho choices, everybody understands why the USD isn't anywhere near losing its dominance status.
A direct link exists between a nation's status as the world's primary reserve currency and its tendency to run persistent trade deficits.
This relationship is often described by the Triffin Dilemma, a paradox where the global demand for the reserve currency necessitates that the issuing country consistently supplies the world with its currency, primarily through importing more than it exports.
It's like watching the fall of Rome.. on TV
I have about zero clue how finances really work but it looks to me as the statement is only true if the dollar is the predominant currency for international trade. This looks to be slowly changing for various reasons.
Well, not really, because obviously that deprecation via buying government treasuries is balanced by the appreciation in the other currencies. But if everybody (large enough to matter) dosen't want their currency to appreciate, if somebody buys Japanese bonds for example to weaken their own currency, then Japan will buy somebody else's treasuries to offset the increase in Yen, and if we go to the long chain of musical chairs of people offsetting each other's behaviours, it just leads back to the USA as the only ones both large enough and willing to take in those capital inflows.
That's not a interpretation mind you, that's a description of what central banks are doing right now. If that has to change, you need somebody willing to take the mantle of the absorber of global deficits, and nobody wants to do that.
So a 100bn deficit out of 800bn total US imports.
The deficit is there, but it's not nearly as lopsided as some reporting would have you believe.
I suspect there might be a lot of "de-dollarization" going on in realms that might not be easy to measure. To be specific: it is interesting that crypto-currencies have emerged as the currency of choice for illegal activities.
https://www.macrotrends.net/1380/gold-to-oil-ratio-historica...
Obviously, you can't drawn any hard conclusions, but I was wondering what the OP was thinking narratively when posting.
It’s doing to be interesting to see how this plays out as the producers and makers of the world unite, and the EU turns away from the US.
That's the party line & there have been some eye catching military exercises and statements to this effect, but daily life is still very much western aligned. It exports a ton of ore to china and imports a bunch of things from there certainly...but that's kinda just every country these days isn't it.
I mean, it sure looks like the goal.
If you've ever had the unfortunate opportunity to interact with your average CEO at a mid-level business it's the same thing but on a much smaller scale. They can't fail, only be failed.
And if you feel like something long (pdf): https://www.atlanticcouncil.org/wp-content/uploads/2025/05/A...
The US is making an absolute mockery over the honor and responsibility granted to in the post-WW2 world. It has sophisticated rivals that are predictably and effectively making use of the self-inflicted crisis. So far the ruling class of the US has been happy enough to let this go, and has been too busy making rocket ships, fake computer currencies, and large estates in south Florida to deal with real world problems.
If you are in the US, buy some gold or a house so your savings aren't destroyed - utterly predictably - by the man who declared Chapter 11 bankrupcy at least 6 times.
The US was a rather empire without many scruples before WW2 and after it. It engaged in genocide in Vietnam, and was complicit in several others, including the ongoing one in Gaza - which was sanctioned, funded and facilitated first and foremost by the Biden-Harris administration.
So, without detracting from Trump's crimes and jingoist rhetoric and action, his deviation from US foreign policy tradition is not as far as one might imagine.
Vietnam, Korea, Iraq, Gaza, and so many others are atrocities but they are well understood by anyone with a casual understanding of 20th century geopolitics.
Anything you could list is awful but still respected the norms and rules that exist between nation states. There is not a high bar for these things, but some people within a specific flavor of the Republican party reject these rules and norms. By a quirk of history they were able to gain power. I could describe this in more technical and impressive sounding language, but "FAFO, and we are in the find-out stage" goes by many names and is accurate.
It absolutely did not. Perhaps the elites and the mass media in the US tell this to each other, but in (most of) the rest of the world, that doesn't fly.
JP Morgan see gold prices crossing $4,000/oz by Q2 2026
Also. Any attack to the independence of the federal reserve damages whee vale of the dollar
> "Your ‘little men,’ your Nazi friends, were not against National Socialism in principle. Men like me, who were, are the greater offenders, not because we knew better (that would be too much to say) but because we sensed better.
Those who act on behalf of evil are not free from guilt, of course. But the truly damned are those who sense better but look the other way. They walk in the footsteps of the millions who tacitly supported the last time this evil took hold of the world, by not acting.
This entire book, but especially this exerpt, is a must read: https://press.uchicago.edu/Misc/Chicago/511928.htm
Wow, seems on point.
Wow
"kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of the ‘national enemies,’ without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us."
Is it not? Quoting myself:
>> are actively undoing the institutions that were instrumental in US economic and political power at that time.
Who is undoing those institutions? That'd be the current administration.
1. Our post WW2 neocolonial activity and the current admins push to sort of blatantly get control over Venezuela and Greenland.
2. Our WW2 manufacturing and export based economy that made us wealthy. Is similar to the current admins push to reform us from importers to exporters using tariffs and rebuilding manufacturing (at least on the surface the execution of this has been terrible).
There is some probability that US global influence does significantly decline but I wouldn't hold my breath.
I would like for the US to continue being a beacon of freedom where people can come and build great lives.
But that is not the direction we are going, and one might reasonably forecast that no country can maintain indefinite dominance. Paul Kennedy wrote "The Rise and Fall of the Great Powers" almost 40 years ago. Regression to the mean and all that, but also, great powers tend to overstep.
Your first sentence says "not true". Your second sentence says "true".
Your dislike of the current US regime/behavior causes you to forcast the decline of US influence. I'm not saying you should like current US behavior, just that there isn't good evidence for any decline.
These things are hard to predict. The most likely situation is not decline: it is continuity, where the US retains its global influence for the time being.
https://www.readtheline.ca/p/matt-gurney-we-will-never-fucki...
Industrial scale warfare isn't some secret forgotten by accident.
The current American power-trip fantasy delusion is rightfully scaring the shit out of people, and the scary thing is the people who aren't scared.
It's reaching the point that I think the best thing is for Germany to detonate a nuke between the US and Greenland just to wake up the idiots who think it would be unreasonably difficult.
--
Edit: I see people are misunderstanding me as saying they should use the US bombs stationed there. I'm saying they should build their own - to have people remember that It's not really that hard if you have a functioning industrial sector.
Why exactly do you think Germany is a non-nuclear weapon state?
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 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, which is why the US is now moving away from the EU.
I think the US could seriously pull out of NATO and leave the EU to fend off Russia by itself. It'll have to start spending enormous tax dollars on defense and war.
Meanwhile, if the world is truly becoming multi-polar, then the US wants to consolidate power in its own hemisphere. This is why there's all the rhetoric and action on Venezuela, Cuba, Greenland, Canada, etc. The US will keep Chinese ports, basing, and trade completely out and secure the trade routes for when the Arctic opens up. It recently changed control over the Panama Canal, and the DoD is dead serious about taking Greenland and maintaining complete hemispheric control.
With whatever energy the US has left, it will dedicate to Asia. It will strengthen alliances and project power there instead of dealing with Europe.
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.
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. The career DoD folks are the ones impressing upon the administration to make these moves.
To be clear: I hate this. I loved the world I grew up in. I think we're headed for a violent world that could easily erupt into war. I don't like it.
This is sanewashig this whole thing. The fact is, the US is moving away from the EU because Trump doesn't like democracies. It's that simple. You have a large percentage of your population in what is essentially a cult and you have givem them the reigns.
This was being called back during the Biden admin and before Trump even ran again.
Back during the Obama admin, even!
https://www.atlanticcouncil.org/blogs/new-atlanticist/no-piv...
https://www.gisreportsonline.com/r/us-pivot-asia/
https://www.project-syndicate.org/commentary/europe-biggest-...
If the US can't build strong coalitions with Europe, it wants to spend its energy elsewhere.
Even pop-geopolitik wonk Peter Zeihan was pointing this out during Covid. I can't find his videos, but this has been top of mind for a lot of people for a very long time. These are anti-Trump people, too.
Multipolarity means instability, violence, fights over resources, fights over trade. Post-WWII was unusually (relatively) stable.
The US can turtle up, just like it did before WWII. It doesn't share a land border with any other major powers, unlike European and Asian countries. It commands the two oceans on its sides (and soon Arctic), and doesn't need anyone else - this was the US' defense posture since its founding.
But, anyway, good luck. You'll need it.
These are military decisions. These are 50-year plans.
Here I was 10 months ago and two years ago saying the same thing:
Trump was told and encouraged to want this by the little birdies at the DoD.
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.
How so? What actions did the EU take?
You don't think the declaration of himself as dictator and the immediate threats against EU allies might have changed EU attitudes at all?
Disagree. If US pulls out of NATO, most likely scenario is EU continue to concede to Russia. I think EU will concede on Greenland too, but likely won't do it without any military action (unclear whether that will trigger nuclear escalation and how that can end).
If there were a path back, there’d be a point. But in this discussion, everything has already happened. There’s not much point in saying “if you hadn’t”. Well, Trump did. Having done what he did, nothing to do now but to go full bore.
Now that we are on a war footing, potentially with our erstwhile allies who have no interest in renewing the alliance given present conditions, the only path to preserve US control is aggression.
What makes us think this is possible?
It may not be possible for a nuclear powered empire to fall without the death of billions.
Mankind is in uncharted territory.
Even Russia never fully fell after the USSR collapsed. Whoever kept the nuclear weapons continued to be a first tier power.
Nothing in human history compares to the present question of how the current empires fall. And if they can even do so safely.
However, the US is more of a "killer" nowadays. The "killer" is usually more efficient than the "giver", because people value their life more than their wallet. So that's why I think she still has some time left. I don't blame it on Trump though. Being a "giver" is a lot more trouble than being a "killer", and I think the US elites gradually rolled back from the role of "giver" since many years ago. Trump is just here to remind other states that the US can and will be a very efficient killer.
And this is probably the most dangerous time for other states because she cannot afford to lose.
This is the historical equivalent of selective memory, and only really applies to a tiny slice of the planet - western Europe.
A lot happened in the world between 1945 and 1989. Outside of Europe and Japan, most people would probably not be so sympathetic of the US actions during those times. An abridged list:
* Iran 1953 - US and UK overthrow democratically elected PM, install brutal dictator
* Guatemala 1954 - US via CIA overthrows democratically elected president, install brutal dictator
* Brazil 1964, Chile 1973, Argentina 1976 - US supports brutal dictatorships replacing democratically elected governments
* Iran/Iraq 1980s - US funds both sides in the war
etc. This is a very resumed list.
We were on metal standards for millenia. Governments routinely spent beyond their means, including for imperial aims. This is like four centuries of Roman history.
"In the second century, a modius of wheat (approximately nine liters), during normal times, had sold for ½ Denarius…. the same modius of wheat sold in 335 AD for over 6000 denarii, and in 338 AD for over 10,000" [1].
Note that inflation can also occur with zero debasement if the economy around the fixed money supply collapses. This happened in Rome when Pompey and later Augustus were trashing trade routes. It may have even led to the collapse of India's ancient democracies.
> there were serious political repercussions for it
There weren't. The state historically borrowed from the hilt of the sword. Economic collapse constrained kings and emperors. Not politics.
[1] https://etedge-insights.com/featured-insights/analysis/how-h...
You're hitting the nail on the head. Metalness didn't matter. It was competition in money supplies (and strength of private property).
The fact that a banker in Italy could finance (or not) a war by Great Britain is what restrained governments. Same as in the 1990s, the bond market was king.
The historical record simply does not support the hypothesis that metal-based economies are more peaceful or inflate less than modern fiat-based ones. I'm open to revising that opinion if someone has re-run the data. But everything I've seen comes from blogs that start with the conclusion, itself reached from assumptions from first principles that rarely contemplate how armies were actually financed in antiquity. (Hint: they take your shit. Marketing campaigns sharing the martial term isn't a coincidence. If you're a general in the olden times, you got wealthy through your commission because your army took the enemy's shit. If you needed help getting there, you paid a 'friendly' visit to your nobles.)
Maybe, maybe not. We're currently the Soviet Union in the 1970s. Gerontocratic. Sclerotic. Hyped up on a new mythology. And economically uncompetitive on several levels, with the future (then computers, now elecrification) sweeping past us to our applause.
Unlike the Soviets, however, we can see it happening and debate it. If '26 and '28 change course, the damage will still be done. But the America Empire is still young. And Trump's stupidest policies–the tariffs, fighting the Fed, Greenland and raising a Gestapo–don't have the support of most Americans. That leaves hope for reform through electoral pressure.
It will take work. But it's as incorrect to assume indefinite American hegemony as it is to preëmptively concede the game.
What's new is finally the federal government pushing back against locales that refuse to allow local police to cooperate with federal law enforcement by means of massive influxes of federal officers to offset the lack of local support.
Also ICE has widespread support for what they are actually doing. Only when you ask manipulative questions that presume something is happening that isn't, do you get poll results that support a widespread dislike for ICE.
Minnesota would like to have a chat with you.
About 40-50% are in support, so the parent's accurate. That roughly matches the political divide across the states.
It makes conservatives who they are - fascist party.
"Terrible things are happening outside. At any time of night and day, poor helpless people are being dragged out of their homes. They're allowed to take only a knapsack and a little cash with them, and even then, they're robbed of these possessions on the way. Families are torn apart; men, women and children are separated. Children come home from school to find that their parents have disappeared. Women return from shopping to find their houses sealed, their families gone."
The Democrats have also had very weak messaging ahead of the midterms. Like, pathetically weak in the current context.
This is to say nothing of the hypothetical where the US makes moves against allies' territories before the midterms.
Read up on the American Whig Party and President Andrew Jackson. Or, more recently, Poland. This is absolutely still in a reversible field.
> Democrats have also had very weak messaging ahead of the midterms
Utterly leaderless. In part because a lot of the party is compromised in having covered up Biden.
You don't. You work around it.
10 to 20% of Americans will agree with just about any stupid proposal. It's idiosyncratic, however, so even if you shut off that position, they still find representation on other issues. (Unless they're single issue. In that case they're either incredibly powerful, but only when it comes to that issue, or worthless.)
I think you’re severely underestimating how much public discourse has already been chilled. There are a lot of things leaders across business or government won’t say any more for fear of being targeted. And let’s be honest the people who rise to the top in America aren’t the selfless kind.
If they were really Gestapo you wouldn't see people tailgate them in a Subaru or scream in their faces
Fine. Brown shirts [1].
Mankind has never seen the collapse of a nuclear powered empire.
Sadly, it may not be possible for a nuclear powered empire to fall without the death of billions...
Mankind is in uncharted territory.
Even Russia never fully fell after the USSR collapsed. Whoever kept the nuclear weapons continued to be a first tier power.
Nothing in human history compares to the present question of how the current empires fall, and if they can even do so safely.
Very sobering times ahead.
Open your history book and read about what happened in 1991.
Now look at the gold chart over this past year. Yeah, people are uneasy and we're likely to see a lot of printing.
After the nonsense with Greenland no one really wants to give anymore financial power to the US so we'll see more assets kept in local currency or different reserves currencies like the Euro, Yen, Sterling, or ChF.
What would replace it? I guess the options are Yuan, Gold, Oil or maybe BRICS in the future, none of which are safe, stable, and liquid.
The dollar isn't indestructible. If not the Euro, what?
- easy to verify/impossible to forge (as opposed to gold and paper currency)
- fixed supply (as opposed to paper currency, oil, and even gold)
- easy to transfer from one party to another (as opposed to gold, oil, and physical cash)
At that point just hoard resources. Holding a bunch of Bitcoin in a crisis is useless for a country if no other country will buy them off you in exchange for tradeable hard currency.
There is a great reason: a state-backed currency should always be accepted by that state. If the world is in crisis, you may wind up stuck with your Bitcoins.
I agree that you need the currency to be accepted by the state for good local trade support. But that was not the point.
Yes. If you're a random country, you can use your dollars to buy shit from America. Countries hold reserves for basically two direct reasons: to intervene in FX markes and protect their imports. The latter is the main one. At the end of the day, your ideal reserve composition matches your import portfolio because you want currency you can send to the people who are selling you shit.
Yes, none of that makes an iota of sense. If a military wants to take inflation into its own hands, it has far-better options. From hoarding to, you know, taking shit.
But you can easily trade dollars for stuff Americans will sell you. That's the advantage of a national backer. In a crisis, they'll welcome the influx of capital in exchange for goods and services. Precisely what you need it you want to spend it.
This is why sanctions fuck up reserve calculations. If, in a crisis, America will sanction you, you might as well have held gold or Bitcoin.
"Let me just set up my P2P connection to the Bitcoin network and pay mining fees and hope a miner validates the block"
vs
"Here's a bar of gold mate"
Sure, real easy
Yeah, super convenient. Well worth it. I'll just go with gold bars on me to the market to buy lettuce.
By it sure does sound simpler to type some numbers that to cut up pieces of metal.
And there isn't any "hope" involved in bitcoin transactions. Connecting to the peer to peer network is super simple (way, way easier than creating a brokerage or bank account, and no ID or approval is required). Miners will pick up your transaction (and yes fees will help speed that up, as with any financial transaction) and it will be included in a block. Bitcoin has been doing this non-stop, flawlessly since 2009.
There are fixes to that problem, of course, but it's not bitcoin itself that's the solution.
Split the user base along geopolitical axes and see how long the consensus algorithm lasts.
Gold bars don’t have this problem.
In fact - the entire argument seems to more accurately hinge the conditional left off the main saying, so the full description is:
"Bad money drives out good if they exchange for the same price."
But that requires a legal structure that enforces the disparity, and the summary of the whole thing basically boils down to:
---
If given the choice of what money to accept, people will accept the money they believe to be of highest long-term value and not accept what they believe to be of low long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession and pass the bad money to others.
---
But if anything - this is exactly an argument for the value of soft power to the US, because we can't enforce how other nations transact, except through soft power.
[0] https://www.ecb.europa.eu/press/financial-stability-publicat...
Apparently the guy that invented the concept disagrees: https://x.com/nntaleb/status/1914633020671246352
Turns out that being good at SQL does not make one good at the subtle social art / science of power and governance. If anything, the correlation is inverse. This shouldn't be surprising.
>https://en.wikipedia.org/wiki/BRICS
So what is the problem mentioning a future BRICS possibility while discussing de-dollarization. Not a challenge want to understand.
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.
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.
edit: I misunderstood, or do you mean why would you get your internet back? If you're not getting your internet back, I can only offer you're not getting your money back either.
It is so obvious in the context of globalization: countries seeking power will chip away at fiscal dominance of others with a thousand cuts. Why wouldn't they? Especially after years of getting bullied.
So many people are so dependent on this reality that I think it's going to happen long before any Americans accept it has happened.
And since the wealth effect is really the only thing keeping the US out of a recession, if the MAG7 fail then we’re looking at serious economic problems.
1 - https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s...
2 - https://www.economist.com/china/2025/09/10/china-is-ditching... ( https://archive.is/aNRmm )
3 - https://www.amazon.com/dp/B006JAM3UU/ "Currency Wars" by James Rickards (2011)
[4] - https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
"Define real money"
I think everyone can agree if you specify your definition.
https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb...
Times they are a-changing.
I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
- Wait, WTF? Really??
- But but but it's a *chatbot*, not an authority
- We're doomed(And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely.
> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
Isn't this the real chart to look at for that? Completely different story when you select max on the timeline.
https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD
Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)
No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns.
> Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives.
Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
Any advice you don't understand is, of course, useless.
Any advice you do understand but doesn't fit into your mental model will just get rejected.
“I always pass on good advice. It is the only thing to do with it. It is never of any use to oneself.” ― Oscar Wilde
Also the US capital market is huge. Surprisingly huge, even, and there is very little that can change that for the foreseeable future.
It's a very different thing to trust that China will maintain the value of its currency, than to trust that investment in Chinese companies will remain liquid and not be arbitrarily cut to a price of zero.
I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets. Perhaps access to the equivalent of US Treasury auctions?
That's why do many Chinese people buy assets in the Anglo world; assets are much better protected here
If China signals that it is changing its attitude on its currency, that it wants to be the reserve currency and establish a consumer economy, it wouldn't take much for people to shift these days. Nobody needs to adopt the Renminbi 100% right away, they can transition to multiple currencies for a while as a hedge against the US, and the situation will evolve. Dedollarization won't happen in a month or a year, it will be a multi-year process once it kicks off. But once it kicks off, it will be because of such a loss of confidence in the US that it probably won't be possible to stop it.
Well if you use the renminbi or yuan as just a medium of exchange, well, why bother when you already have the dollar?
To answer your question better, what is the point of access to capital markets of a country and how does that stabilize or strengthen its currency, or make it more highly sought after?
> when the dollar is propped up precisely on the good will
The dollar isn't valuable because of good will. Central banks in Europe, or Japan, or elsewhere don't hold dollars because they want to be nice to the United States. They hold them because the United States is incredibly wealthy, has incredibly deep capital markets, high liquidity, and because the dollar is a great medium of exchange.
That's the thing I keep coming back to. What are the specific features of the currency that make it more valuable than the other reserve currencies that exist today? I don't think China is willing to do what they would need to do add those features, because it requires CCP to loosen control and they can't do that.
If China "democratized" it would unlock a ton of potential and go on to dominate the globe. But doing that requires untenable changes for the CCP so it won't happen.
Plus everyone is going to be mad and distrustful once they invade Taiwan.
They already allow this somewhat. Tesla's Gigafactory in Shanghai is fully owned by Tesla, and is the first wholly foreign-owned car manufacturing plant in China, operating without a required local joint venture partner.
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%.
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.)
There's such large fluctuations though, especially compared to the S&P 500 in USD [5] or even TFA's USD shares of FX reserves.
[5] https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
You mean devaluation is causing the growth of SP500, or the other way around?
It's kinda like saying during "My bread appreciated!" during hyper inflation.
IMO we're in one of the cases where "Number go up" is actually bad.
The FTSE100 is mostly multinational companies valued in pounds. The FTSE250 is mostly British companies valued in pounds. If the FTSE100 goes up while the FTSE250 stays flat or falls then it means the currency got devalued and there's no real growth.
Speculation can always drive the price of gold way up past its real value.
USD dominance isn't going anywhere despite hurt feelings over Trump or US policies.
Obama started a process, Biden and Trump are in lockstep. They've reduced this issue by about 1/3rd by 2024. Trumps' tariffs are almost certainly going to be upheld by the supreme court.
This has led to a reshoring boom and trillions of new investment in the usa. Estimates seem to suggest only a marginal improvement of about 3%, so roughly another 20% improvement.
But fixing the very broken trade balances for the USA has long term benefit but it will result in a strong USD, but weaker reserve currency. Obviously the USA is rapidly moving away from bretton woods and being the world police.
They will drop below 50%, but nobody else is there to pick up the reserve currency crown. They get all the benefits of seignoiorage and very little of the downsides for decades.
Their dominance is over but they clearly saw that the cost-benefit was not worth continuing into the future.
Meanwhile, since they stop being the world police and reshored the important things. They dont care about the stability of global trade. Instead their super carrier groups will move to poke their nose only in their own business. You're going to see a fast shift from the usa being hated to being loved over the next 10-20 years.
The aggressiveness might be related to that.
https://www.them.us/story/testosterone-parties-silicon-valle... https://stand.ie/stand-newsroom/political-power-testosterone
The chance of the dollar losing its reserve currency status is slim-to-none. No matter how bizarre the US is, nobody trusts the Chinese Communist Party (CPP). And although the US can manipulate the value of the dollar, its tools are limited compared to the CPP.
Plus, the US is still the only country that's willing and able to prop up the world financial system with no immediate benefit (see Argentina). The US can and will intervene when necessary. And as history has shown, the Euro Zone can't really make decisions quickly and effectively. How many times has the Euro been on the verge of collapse in the last 20 years? And is proximity to Russia is, well, risky.
In any case there is no currency big enough to take the dollar's spot at this point in time. Trillions of dollars flow through the financial system every day.
Also, manufacturing in the US is growing not shrinking. For a long time.
Well, at least up to 2024...
I think when people run the next number, there will be a surprise there.
The US has been playing a currency game since 1980 to make up for the loss of the free money it got for reconstructing Europe and Japan, and using that money to buy things from impoverished workers in China. And as China got on its feet through careful planning and management, it moved to India, Pakistan, Mexico, Indonesia, the Philippines, anywhere that was willing to stomp on its workers and pollute its air and water.
Now China has gotten to the point that it is a viable alternative to the US, so the US can't unilaterally set terms anymore for its suppliers. It's dumping US treasuries. It's competing for natural resources in countries that the US just tried to topple and steal their natural resources through sieges that ironically served to cut the US's legs from under them, giving China a huge discount. The game is up.
China going from nowhere to the greatest economy on the planet in 50 years is what happens when you manage and cultivate manufacturing. US real estate and an economy run on luxury consumption is what you get when you outsource manufacturing and play word games to cover it up. We literally can't tariff China significantly, they could crush our economy just by embargoing us like we freely embargo everyone else. That's the power of a manufacturing base. We might want to fix our bridges, too.
In addition, China leads in the critical technologies need for drone oriented warfare, like we are seeing in Ukraine.
A fun story, China has the best automated seafood processing factories that meet all kinds of regulations in the world. It's cheaper, a lot cheaper, for Japan and Alaska to send their seafood to China to process, and then sell back to the domestic market. And it has nothing to do with cheap labor but deep R&D of China. So, when war broke out, many people won't be able to enjoy cheap seafood either.
I don't understand how people can ignore a simple fact (is it Milton who pointed that out?): Manufacturing is a "doing" business, not a "knowing" business. Our expertise is forged on the shop floor, not dreamed up in a boardroom, and certainly not bought through outsourcing. There is so much tacit knowledge that manufacturing capability is a living system. It lives in the collective experience of the workforce and the rhythm of the line, not in static documents.
Oh maybe this is the time to quota Thomas Joseph Dunning: With adequate profit, capital is very bold. A certain 10 per cent. will ensure its employment anywhere; 20 per cent. certain will produce eagerness; 50 per cent., positive audacity; 100 per cent. will make it ready to trample on all human laws; 300 per cent., and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.
I assume that dollar will be strong if people want to buy stuff from the US, which requires using the US currency. Software indeed is a strong sector. I'm just not sure (as due to my ignorance) if they compensate sufficiently the trade deficit. For instance, if advertisers use Instagram in Europe, they wouldn't need the US dollar to pay for the service, right? If there's no virtual export happens, I'd assume there won't be any need for the US currency either.
> Also, manufacturing in the US is growing not shrinking. For a long time.
What about market share? I remember that the US had more than 65% of the manufacturing marketshare 25 years ago. Actually, I'm more concerned about the long-term national security and prosperity of the US, and I think they are tied to a robust manufacturing sector. But that's different topic.
I think that's foolish and backwards thinking. The US doesn't really need more manufacturing; it had relatively low unemployment, a healthy economy, etc. The US is a service country. Apple is one of the richest companies in the world and does none of it's manufacturing in the US. Why wouldn't people invest in Apple?
If you cannot see this, or cannot believe it, you should probably check if you are in a ideological bubble.
Is the world going to de-dollarize though? Probably not, shy of an EU independence, which is about as likely as Europeans adopting an American work culture. Although, I won't rule out the possibility of the EU moving it's eggs to China's basket either. What a world that would be, a Sino-Euro axis and an North American axis. Whew
The fact that the US provided the majority of weaponry, and half the money to Ukraine should have been shocking wake up call to every European. But instead the vibe seems to be "Americans are so dumb to live the way they do".
It has nothing really to do with populism. It's the US's only rational option. You can't just run trade deficits forever, no matter what the people who make money from trade deficits tell you. A parasite that gets so big that it disables the host is a dead parasite.
People act like this is the how the US always worked. We just started this with Reagan, and every moment since then has seen the rise of finance, the victory of unproductive capital and speculation, and the decline in domestic manufacturing and standard of living that you would expect.
There's never been a moment where there's been anything to point at for a finance capitalist to feel vindicated that his success would lead to the US's greater good, so he resorts to claiming that it is simply impossible to be any other way. At best this is sunk cost fallacy, but at worst, it's just propagandistic gaslighting from a bunch of people who don't have any connection or loyalty to anyone in the US, don't care when it's people suffer, don't care how its children will live, and will just leave if their houses start to feel insecure. There's your populism.
I agree with your assessment, but Europe is in unique trouble that the rest of the world has no need to relate to. The US will simply have Europeans jailed or killed who steer Europe counter to US interests. Right now the US is on a slow road to peace with Russia, while trying to cultivate and maximize European animosity and estrangement from Russia. The world in which the US is mocked in Europe by NATO (a device to carry out US interests) for trying to appease Russia is a world that no one but a realist could have predicted.
Everybody else will de-dollarize, and the US will threaten Europe and the UK with tariffs if they don't peg the Euro and pound to the dollar. The US will be trading freely with Russia and China, while sanctioning Europeans for buying energy from Russia and bribing European governments to harass Chinese companies.
I think they already are -- it's just not going to happen all at once overnight. The shift has happened already and the consequences will take decades to come forward. But it's still possible that the US will do something to reverse course and everyone will be happy to not have to think about finding an alternative to the US dollar.
Understand this and you'll avoid falling into various traps and conspiracy theories. For example, there are people who believe that the US invasion of Iraq was caused by Iraq wanting to sell oil in euros instead of dollars.
This is a nonsen theory because every oil transaction could be denominated in euros tomorrow and it wouldn't change anything. The same demand for US dollars would still exist so people would simply convert to euros, buy oil then convert back.
This same understanding debunks the "threat" of a BRICS alliance.
The real problem, if you can call it that, is we have an administration who is both incredibly inept AND intent on destroying the post-WW2 world order. Wealth inequality is getting so bad and the deficit is so bad. Worse, nobody expects either to improve anytime soon. I'm not saying the budget needs to be in balance. It doesn't. A country doesn't work like a business when you can print your own money. But at some point, crippling public debt (in terms of GDP) will devalue the dollar.
Put another way: the illusion of "safety" is at risk. It's just a question of when the vibes shift.
If the Russian army is the force that enables Russian foreign policy, they why do some people in Ukraine think that they don't want to do things the Russian way?
Likewise, I wonder how helpful the US military will be at forcing our former allies to do things they don't want to do?
The Russian-Ukraine front is kinda like WW1. There's no real air power to speak of. The front is dominated by artillery and infantry and fortifications like trenches.
Russia cannot project military power anywhere like how the US can and the US has decades of projecting that power to force countries to capitulate, essentially. Europe outsourced their security to the US, for example. But make no mistake: NATO is a protection racket. It projects American power into Europe.
This is one reason why I call this administration inept because they seem intent on splintering NATO, which actually diminishes American power. Just like disbanding USAID diminished American soft power, and quite cheaply at that.
The lesson since at least the (W) Bush administration is that only nuclear weapons can guarantee your survival.
• Despite a smaller share of global trade and output, the dollar still dominates in transactions like trade invoicing.
• Dedollarization is advancing in central bank reserves, with USD share at a two decade low.
• Foreign ownership of US Treasuries has declined for 15 years, signaling reduced external reliance on the dollar.
• The shift is most visible in commodities, where an increasing share of energy is priced in non USD contracts.
It should go without saying that this would be shortsighted - China made it work because they were able to take advantage of a strong international market denominated in USD. The US cannot destroy our own common market and currency and expect to take advantage of it.
Furthermore, we know what a de-dollarized world looks like - imperialism. If you need to secure oil/mineral/food for your economy but you need expensive foreign currencies to acquire it, it suddenly becomes much more economically appealing to take the resources.
The U.S. is a net exporter of oil and food and self-sufficent for majority of its mineral needs as well.
There is no need for U.S. to crash its currency to incentivize domestic production, it can just impose tariffs on imports to do so.
So it's not just that the policies are (A) counterproductive and foolish and (B) changed on a whim and (C) have no long-term foundation and (D) are changed for corrupt reasons... but even after all that, (E) the corrupt person "making deals" is incapable of honoring them.
Trump is actively fighting the federal reserve to drop the interest rate to 0%. Members of his team regularly do interviews where they say "it's going to get worse before it gets better". Inflation is being held down despite this administration's best efforts.
> The U.S. is a net exporter of oil and food and self-sufficent for majority of its mineral needs as well.
And has been for a while. But the current conservative rhetoric is specifically about bringing manufacturing jobs back.
> There is no need for U.S. to crash its currency to incentivize domestic production, it can just impose tariffs on imports to do so.
I don't think autarky is this administration's only stated goal. They specifically see an export-led economy as being more important or even "legitimate" and are pushing for other countries to import our goods. Devaluing currency is a strong way to incentivize exports and China's currency manipulations were the key to their rise as a manufacturing power.
The interest rate was near 0 for years, it did not cause inflation. Fighting for low interest is not same as being pro-inflation.
Lowering interest rates to create inflation is literally one of the core tenants of the Federal Reserve:
https://www.clevelandfed.org/center-for-inflation-research/i...
This is how you grow a sclerotic, internationally-uncompetitive domestic industry. See: shipbuilding.
Where tariffs work is as a nursery policy. Give firms a safe haven to grow in. Then let competition hone them. South Korea has pioneered this playbook; China copied it. We were sort of doing it, but the current administration blew up our nascent new energy industry.
For South Korea and China, tariffs were not a very key part of their industrial policy. Which is not to say that the government didn't have a massive hand in the success of their native industries. Case in point: shipbuilding for South Korea. The government was key in securing the capital investment in the massive drydocks the entire world depends on.
Cars were absolutely incubated by Seoul. In part through drastic trade protections.
Which industry is that?
In the late teens, China was dominating all of these industries.
Under policies of the Biden administration, these industries were growing domestically in the US and we were increasing our share of the global market.
Over the last year those domestic industries have been destroyed. They are barely surviving and have stopped rapidly expanding. All gains made against China's dominance in these technologies has been lost, and then some.
For example, businesses are hesitant to invest in domestic manufacture because the tarrifs can be undone by next president. But the reputation that US is building right now cant be undone. Investment in manufacturing takes years, not to mention that its not like America has lots of people wanting to go work in mines and factories. Meawhile as countries with sane leaders adjust, US is gonna be less and less relevant.
So in 5 or so years when your house value and investments are way down and there is a Dem president and you think about complaining about economy is bad under liberals, remeber who cause it all. Most of the current economic problems that existed in late 2020s have origins with Reagan era economics.
Is this some kind of joke? Or is it only imperialism when other countries besides the US do it?
The two are very linked - the tacit agreement of the postwar order was for America to use its might to expand a common market on behalf of the shared benefit of NATO members. But the collapse of today's "American empire" does not mean the end of empires. If anything, the opposite: instead of one common international market, we will return to a 19th century scramble for land.
- Iraq was never a major oil concern for the US. Perhaps maybe stabilizing global oil prices - but the primary beneficiaries were actually our European and Asian allies.
- We never just "took" the oil for our domestic market (which is what we are basically doing in Venezuela)
- Even policymakers who have publicly admitted that Iraq was a massive intelligence and political failure all agree that regional stability was always the main goal.
Similarly we were in Afghanistan for-freaking-ever which had no clear resource benefit or even clear goal.
I would even go so far as to say that for most of the 20th century, America's foreign policy interventions are more easily attributed to our failed role as "World Police". We were brought into Iran because of the British, we were in Vietnam because of the French. Kuwait because of Saudi Arabia. Korea and Lebanon directly.
So while yes you could paint a broad brush and say all of this indirectly was to expand America's "empire", but as an international alliance where America carries the big stick, the US actually carried out a lot more on behalf of the overall alliance than one would realize.
That alliance that the US is now trying to dissolve.
And in their spare time they pretend to sell bridges to people? Nobody sane would believe that invading a country promotes regional stability. The idea is absurdist, the point of invading a country is destabilising it and disrupting any power that the locals might have. Forcefully toppling governments and killing large numbers of people has never been a credible path to stability.
Then you should read about some of the biggest influencers in US foreign policy since WW2. There’s one guy whose entire career was spent essentially trying to convince the president / military brass to bomb enemies into submission: https://en.wikipedia.org/wiki/Curtis_LeMay
I’m sure you’ve also heard of Henry Kissinger.
Anyway, pretty strong history of US political figures dehumanizing foreign populations, justified by some western moral superiority. Direct through line to the Bush presidency (last of the neoconservatives).
No, just sovereign resources. Totes not imperialism. At all.
The whole point of the US transitioning to a service economy was that it would upskill the workforce into the world's Delta Force team of highly educated scientists, engineers, researchers, etc. The rest of the world would handle the boring stuff like actually manufacturing the beautiful inventions designed by the US.
The problem is that a lot of the US populace is gung-ho patriotic and willing to die for their country, but absolutely refuses to learn math or generally do their homework for their country, which is what's actually required for this whole scheme to work.
I'm paraphrasing the shockingly astute observations of this guy[1].
We had the post-WWII optimism and then the post-Cold War optimism clouding the judgment of an entire country.
I kind of wish we'd been more curmudgeonly like the Europeans.
US was doing just fine btw. I know this because people like you blow the small issues way out of proportion, and the reason this haplens is that there is no real issues to worry about.
I do think that the US was not "doing just fine", clearly, because our society was not healthy or educated or sustainable enough to avoid our present fate. It's easy to blame 'them' for all our woes, when we collectively made 'them'. Obviously we can't prevent every idiot and psychopath from existing, but we've certainly failed some 30% of our population if they fall for this crap. And this is the price we pay.
The point of an economy is not to make a profit or collect currency. The point of an economy is to provide ourselves with goods and services.
Focusing all of our efforts on making things so that we can send them to other countries in exchange for pieces of paper is backwards.
I don't see that. Given trump's history, he thinks that going back to tariffs will allow massive tax cuts. As he trades in real estate, tariffs are inconsequential for him
He supports tariffs for the exact same reason Bernie Sanders does. There is a reason so many bernie bros jumped to camp Trump in 2016 when (globalist) Hillary won the nomination.
There is no secret or conspiracy going on here. Trump is a populist president and is unsurprisingly doing populist things, elected because of his populist stances. At this point you have to have stabbed your eyes out and shoved spikes in your ears to not know that all he does it gush about bringing back 1950's factory worker dad.
For your factory worker example, at exactly a year into his presidency, we've yet to hear populist points on:
- a comprehensive overhaul to address medical costs for workers
- point-by-point implementation of tariff revenue in reshoring and subsidizing of industry
- how AI is going to support manufacturing gains to the degree we can become competitive with China
Also Trump already passed the massive tax cuts based off the assumption of income from Tariff's, and those tax cuts disproportionately benefit the rich. I don't think we really need a conspiracy to explain the likely motivations.
Actual answer? In global real estate. So… they don’t or “it’s complicated”.
Trouble will really come when the US tries to get out of its ridiculous debt trap. What will they do, wave a wand and their debt goes away?
Losing the dollar as a reserve currency is losing the empire.
[0] - https://www.youtube.com/watch?v=pT2cohNt6a4 [1] - https://www.youtube.com/watch?v=P2b4TjQa4gk
Would they implement capital flight controls? if you invest in the US, can you get your money out? No one knows but it seems increasingly less likely. Red lines are being crossed weekly.
The country is heading towards a decline into a developing world style authoritarian dictatorship.
Contrary to popular opinion, IMO PRC doesn't want reserve currency trade off (triffin / trade deficits etc). What PRC wants is to secure her own interests with RMB, which is mostly happening, energy contracts, lots of bilateral trade happening in RMB now. What PRC also wants is to make maintaining reserve USD onerous, i.e. high rates, high debt servicing... which already indirectly limits US in real ways like reduced defense acquisitions in last few years.
PRC wants USD exorbitant privilege to be just exorbitant.
Then US incentivized to dump system (etc debasing) which will fuck over global USD users and tank US reputation even more. A lot of US actions make sense when you realize Trump doesn't want to deal with an increasingly unprofitable global utility. PRC doesn't want to step in to build new pipelines, they want to see US (mis)manage existing US owned plumbing that everyone is using so poorly it fucks up things at home and for everyone else, meanwhile PRC has comfy off the grid setup for herself and her guests.
But what I do worry about are the long term consequences of US behavior. Even the largest empires aren't on top forever (even before Trump, China was investing heavily in tech and has made significant inroads. India is developing, too. Who knows?). There may be no country as economically powerful today, but tomorrow is a new day. These shifts don't happen in the short term, but over decades, this could be a big problem for the US if our approach continues this way.
A business goes bankrupt slowly, then all at once. I worry that we are speed running the "slowly" part of our journey.
This may be a historically significant speech.
Good speech indeed
https://en.wikipedia.org/wiki/Mark_Carney
This man is clearly one of the leaders of the new free world.
I’d still bet that any sudden movements in this direction will be checked
That assumes it can be undone. Reversing course and hoping the damage done heals isn't a sure bet. Especially with timing delays.
There is definitely real risk here
I suspect were about to see that pivot
It does risk missing out on AI though (or AI crash depending on your perspective).
There's no replacing the US dollar until a better option comes along. You need a currency that's open (which rules out Yuan), a currency that is backed up by a strong government (which rules out places like Russia, India, Japan, and the UK), and you'd want something that isn't subject to the same geopolitical rules as the US dollar (which rules out the Euro).
if an article ends in a question mark, the answer is no.
> the greenback dominated 88% of traded FX volumes — close to record highs — while the Chinese yuan (CNY) made up just 7%, according to data from the Bank for International Settlements (BIS).
> Likewise, there is little sign of USD erosion in trade invoicing. “The share of USD and EUR has held steady over the past two decades at around 40–50%.
there is currently no other alternative to meet the global liquidity demands
Liquidity is atrocious as soon as you leave USD rails and are trying to move more than a few million (in notional usd terms), let alone billions
Downright terrible, its actually amazing how bad it is. “Finance” as infrastructure isn’t anywhere near finished and swapping the currency rails would be very hard
Its more than people just agreeing to use a different currency, which means its more than all traders and merchants dying, the next best currencies have structural problems. Their central banks trying to pump the market full of liquidity would destabilize those currencies far more than it would the USD doing the same thing
But I’m open to being impressed
One of the most effective ways to ease the trade deficit is to reduce USD's status as a reserve currency.
Then along came the absolute moron Wilhelm, and he managed to Leroy Jenkins Germany's beautifully arranged relationships into an aggressive, tactless nightmare where all Germany's allies were turned into enemies, and everything turned out exactly like you'd expect.
As the saying goes, history doesn't repeat but it often rhymes.
As far as "who set up the US empire, in all its complexity?", I'd argue for the 4 guys I named in my other comment, but your list might differ. And if you're just interested in the dollar system per se, I'd probably go with Harry Dexter White, who strangely enough turned out to be a Soviet spy.
Oh, and if you want a pretty clear analogy from Bismarck's system to earlier US monetary history: Benjamin Strong got the Federal Reserve System up and running and figured out a bunch of the right tricks, but he died in 1928 without getting his successors up to speed on how to run things. They failed miserably in next couple years. Bad timing!
It's just that the USA was so dominant after WW2 that it took about a century for the structure to collapse.
A better model than seeing Trump as a wrecking ball, is seeing him as a high stakes gambler, with middling skills -- in the same way that George W Bush made a big bet on the middle east and lost the chips.
* Henry Morgenthau Jr.: secretary of Treasury during Roosevelt, one of the main designers of the New Deal, of financing the US war machine during WW2, and also one of the US negotiators at the Bretton Woods conference
* George C. Marshall: chief of staff of the US Army, organized the victory in WW2, came up with the eponymous plan and carried it forward politically. secretary of State after the War
* Dean Acheson: main designer of the Marshall Plan and of NATO, and one of the US negotiators at the Bretton Woods conference. secretary of State after Marshall
Behind the Bastards has a pretty good couple of episodes on this little corner of history: https://podcasts.apple.com/ke/podcast/part-one-kaiser-wilhel...
The British Empire actually reached its greatest territorial extent in the 1920s and 30s, but it was overextended, policymaking was becoming increasingly erratic and in hindsight we can see the writing was already on the wall
It's hard to look at what the US is doing and not become extremely angry, because historically the dumb hubristic nationalism always leads to crushing misery. It's so utterly predictable, and yet we're forced to watch the idiocy play itself out again.
You could make a very good case that for Britain entering into WW1 was a catastrophic and ultimately unnecessary decision. And you could make a (much more controversial but I think also true) case that entering into WW2 was also not necessary and ultimately fairly catastrophic.
Yet the British elites chose to do both. Pride, hubris, stupidity, maybe well deserved, call it what you want, but in the end British power was given away cheaply. I think what the US is currently doing is foolish but as you say there's also a sort of inevitability about it.
Edit: You could also add the Soviet Union to this, an even more recent example of the end of an empire. Towards the end during the Gorbachev era policymaking went from relatively "normal" (by Soviet standards) to extremely bizarre in a short space of time
Everybody could see the long string of preventable phenomena leading up to this: financial deregulation, decline of civic institutions, high levels of deaths of despair, rampant individualism, unchecked commerce, rising internal violence, rising inequality, rotten media landscape, open political corruption (not in this order).
My only hope at this point is the minimization of violence when the US resets.
This created a paranoia in Germany, an insecurity that were between Great Powers and were dependent on imports and poorer than their neighbours. They felt like they'd eventually get swallowed unless they did something and the end result was WWI. And WW2 if you think about it.
The cost of victory against Germany (twice) was huge. All those Great Powers lost their colonies and they impoverished themselves with war economies while enriching the United States who, at times, sold arms to all sides.
The US is that Great Power now, complete with colonies. It's energy independent too. So it's nohting like Germany. In fact it's turned Europe into a client state (ie through NATO). These aren't colonies in the British Empire sense of occupying India, for example. It's economic colonialism. The Global South is controlled via the IMF and World Bank. The developed world is controlled with security gurantees.
But where I agree with you is that an absolutel moron has come along and threatens to dismantle this entire system. That's what's happening. Splintering NATO, abolishing USAID, etc all diminish American soft (and hard) power.
China's foreign policy has become to sit and wait while the US destroys itself. They don't have to do anything anymore. It's why i laugh when people predict China will invade Taiwan. No they won't. Why? Because they don't have to. As a reminder, One China is the official policy of the US government.
My problem is that empires don't die quietly. They die violently. And we're going to see a wave of fascism. Things are going to get much, much worse before they get better.
I think this exactly how the US administration _feels_. Alexandr Dugin proposed spheres of influence. Russia starts acting on those. China is getting more powerful. Its now or never.
So some think Duginism and a Greater Russia is driving Putin's expanionist activity in Ukraine (including Crimea and the invasion in 2022). I don't see it that way. It's using the Russian diaspora as an excuse for expansion, similar to what Hitler did in Austria and the Sedetenland. But the interests are material.
Russia does have a "legitimate" interest in not having a hostile Great Power on its borders. I include NATO as an extension of the US. I say "legitimate" in the sense that they're doing the exact same thing the US does. The US has the (ever-changing) Monroe Doctrine and almost started World War Three over Cuba (despite instigating the confrontation in Turkey).
But NATO was never going to expand to include Ukraine. Bush and Biden both made offhand comments about it but countries like Germany would always veto Ukraine's membership because they don't want NATO on Russia's borders. And Putin knows this. So there's some historical revisionism going on to say that Putin invaded Ukraine because of NATO. I personally think he would've done it anyway.
The real problem is that Russia wants a warm water port on the Black Sea and that's what Sevastopol is. Ukraine cut off the water and it's becoming increasingly expensive to maintain that holding so Russia has captured what's essentially a land bridge to Crimea and plans to hold on to it until the West gets bored.
I believe that Putin arguably overplayed his hand by buying European silence on the matter with natural gas dependence.
The US however spends a ton of money and military force and political will projecting power into, say, the Middle East. Is that in the US sphere of influence? No. The US is also a net energy exporter now so you can't even blame securing oil as an excuse for it.
The US isn't operating in a deeply insecure fashion. Instead, they're simply extracting wealth from all over the world for the benefit of a handful of billionaires.
I guess where the US is insecure is in that no system other than neoliberalism can be allowed to exist and prosper because it might cause the populace to revolt. The existence of the USSR actually forced to the US to give Americans something so they didn't revolt. This desire means that any quasi-socialist nation gets starved with sanctions and couped to maintain this illusion.
And the US's big problem is they can't bully and starve China in this way.
In fact, everyone who bore witness to the punch would come away with different opinions depending on the reason I gave for punching you. And those opinions have knock-on effects (“We shouldn’t come to this part of town anymore, people just get punched out of nowhere…”)
> The real problem is that Russia wants a warm water port on the Black Sea
Russia already had several other ports on the Black Sea, so it's not clear to me why they'd need to invade Ukrainian territory to get one extra.
> Germany would always veto Ukraine's membership because they don't want NATO on Russia's borders.
They've already voted three other Russia-bordering countries into NATO. They were practically falling over themselves to add Finland (along with Sweden)[1]
> The process in the Bundestag was "extremely fast," DW's political correspondent Nina Haase said.
> Haase said, citing unnamed sources, that Germany had intended to become the first country to ratify the accession, but other countries were faster. "But nevertheless, the signal remains the same... [Germany] is firmly behind the idea of Finland and Sweden joining NATO," she added.
You make the point that the US is insecure about any other system being successful, I think there's a case to be made that Russia similarly couldn't tolerate a prosperous democratic Ukraine sitting right next door and embarrassing them. You could also argue that, materially, Ukraine has natural resources that Russia just wants to steal.
[1] https://www.dw.com/en/germany-approves-finland-and-sweden-na...
You're not wrong. I kind of glossed over the details for brevity. Sevastopol has historically been the home of the Russian Black Sea fleet and is a much larger port than other Russian ports on the Black Sea, who also have significant commercial traffic, so they're much more crowded.
Behind all this is the Montreux Convention on Turkey's governance of the Bosphorus. Anyone with a permanent naval base on the Black Sea is allowed to traverse the straits (other than in times of war; it's complicated) so should Sevastopol in future fall into enemy hands, it would allow a foreign military power to station warships in the Black Sea. That foreign power could be Ukraine as a NATO member.
As I stated elsewhere, I don't believe this was a realistic possibility but it makes for a justification. I still say Sevastopol is more significant for it being a deep water port and control of territorial waters than any legitimate security threat.
> They've already voted three other Russia-bordering countries into NATO
There's a difference. I'll try to be brief.
Ukraine is flat. It is basically the conventional invasion corridor from Europe to Moscow and was used that way by both Napoleon and Hitler. I mean they failed spectacularly but that's another story. So there's a security argument that the Ukraine border is, in the very least, more sensitive than other borders.
Technically Poland shares a border with Kaliningrad, which is technically Russian territory but that's not quite the same thing. Also, the 1990s and early 2000s were a different time when post-Soviet Russia was weak before it became an energy giant and reawakened as a regional power.
Norway joined in 1949. Different time. Mountainous border. Not really a strategic threat. Norway was a founding member and this occurred before the USSR had the atomic bomb (by a matter of months).
Finland was really a direct response to the Ukraine invasion. It's a softer border than Norway but doesn't have the same strategic threat.
So you can make an argument that Russia has a legitimate concern of having NATO forces on their border. Imagine a scenario where Canada or Mexico joined a military alliance with China and China wanted to put military bases along the US border. would the US just stand by and take that? Absolutely not. So it's hard to completely dismiss Russia having the exact same strategic concern.
But, like I said, I don't think there was a serious threat of Ukraine joining NATO. Borders go both ways. Pre-invasion I don't think the European powers had any interest in a NATO buildup on the Ukraine-Russia border and if Ukraine was a NATO member, a Russian buildup on their side of their border would then become a serious NATO problem.
Would Germany really want to have Article 5 invoked if Russian forces crossed into the Dombas? I don't think so.
> I think there's a case to be made that Russia similarly couldn't tolerate a prosperous democratic Ukraine sitting right next door and embarrassing them.
I... don't. Ukraine is a poor country. A lot of its economy was built on transit fees for Russian natural gas going to Europe in Russian pipeline, a situation that Russia didn't like and they'd actively been building pipelines around Ukraine to avoid those transit fees (eg Nordstream 1 & 2).
In all this, nobody really knows just how rich Putin is. There are just wild guesses but those guesses realistically go all the way up to hundreds of billions of dollars. Russia is a kleptocracy (in a way that the US is becoming, as an aside). It could be that Putin miscalculated Ukraine's resolve and Europe's response and saw it as an opportunity to enrich himself further. I really don't know.
If anything Ukraine is like Venezuela. It's not so much about profiting from Ukraine's oil and gas deposits (for example) but simply making sure nobody else can. Developing Venezuelan oil fields would actually devalue Western oil companies so they're not going to do it. But if nobody else can? Great.
There's a lot of speculation here. Reasonable people can disagree. What I mostly object to is the self-referential idealist interpretation that underlies US foreign policy messaging. We are the good guys because we're the good guys. Rusia are the bad guys because they're the bad guys. Nobody is inherently anything. There are just people and governments responding to material interests. That's my philosophy.
Agreed on all points but this. This is just factually wrong. Ukraine formally declared its intention to pursue NATO membership which was accepted by the NATO council.
The most significant early push occurred at the Bucharest Summit (April 2008). Ukraine (along with Georgia) requested a Membership Action Plan (MAP) - the standard preparatory program for aspiring members. NATO's declaration welcomed Ukraine's aspirations and stated that "these countries will become members of NATO". Ukraine's parliament repealed its non-bloc status and amended its constitution to enshrine irreversible pursuit of NATO (and EU) membership as a national goal. Then, NATO officially listed Ukraine as an aspiring member.
In the Vilnius Summit, NATO even declared that "Ukraine’s future is in NATO" and its path is "irreversible".
Eventually, you will receive a million bucks from me. I am not giving you any timeline or conditions, but trust me, you are on an irreversible path toward that, I promise.
> [2008] was the year that Ukraine was likely closer to becoming a member of the Western alliance than ever, before or since. United States President George W. Bush stood solidly behind Kyiv's accession. But the effort failed, as Zelenskyy made clear, due to the opposition of Merkel and Sarkozy – and an "absurd fear" of Russia. Because of this "miscalculation," the Ukrainian president continued, his country is facing "the most terrible war in Europe since World War II."
There were other European members who had objections or serious reservations.
> Ukraine's parliament repealed its non-bloc status and amended its constitution to enshrine irreversible pursuit of NATO
There was also a period under Yanukovych (a Russian puppet, to be clear) that repealed those efforts, which again changed after the revolution in 2014-2015.
The Vilnius Summit took place in 2023, a year into the war with Russia. As such, I consider it empty platitudes. For one thing, no country can join NATO with active border disputes. I don't see that ever happenign simply because Russia will start a border dispute to avoid that happening.
Even Zelensky recognized the plan as "absurd" [2].
[1]: https://www.spiegel.de/international/europe/ukraine-how-merk...
[2]: https://www.pbs.org/newshour/world/zelensky-calls-nato-plan-...
The wave of fascism is already rising in Europe, but it is still very much under control. Like the AfD political party in Germany.
France has Macron siding with Le Pen to keep Melanchon out of power. The AfD's power is growing and we'll see if there exists a coalition that can form a government without them after the next election. Many expect Nigel Farrage to be the next Prime Minister of the UK.
This is why people say fascism is capitalism in crisis. All of these countries are choosing fascism rather than any socialist movement or even saying "maybe the wealthy could loot slightly less from the public purse". The rise of fascism is paved by centrist neoliberals siding with fascists to crush any leftist momentum.
People are increasingly seeing what life is like in China. Affordable housing, affordable food and public infrastructure like extensive metros and high speed trains. That's the real problem with Tiktok (from the administration's perspective). People asking "why can't we have that?" is incredibly dangerous to the system we have. IMHO there's no unringing that bell however.
"Western social values" are a luxury easily abandoned when you can't afford your rent. Populist fascism is rising because people are increasingly desperate and there's no alternative because the centrists are united with the fascists to crush any leftist momentum.
The president ran on having Gestapo in the streets and having concentration camps. How loyal really are voters to "Western social values"? And what are prominent Democratic politicians doing? Suggesting more funding for ICE [1].
A populist party that ran on giving people healthcare and guaranteeing a roof over their heads and having enough to eat would win in a landslide. Every level of our political system is designed to make sure such a person can't rise to prominence.
Don't believe me? Look at the 2024 election results and see how progressive voter initiatives did compared to the Democratic Party. Missouri, a deep red state, had a majority vote for raising the minimum wage, outperforming the Democratic Party by more than 20 points.
[1]: https://www.newsweek.com/cory-booker-ice-proposal-progressiv...
I think this is the most important and crucial part of what you've said in here.
If you look, East germany former communists states were the biggest voters in favor of the AfD: Saxony and Thuringia. What I understand is that the left wing parties of today's society have forgotten about the 'conservative' socialism that focused on providing good education, food, housing and employment for the general population. Something that was always incorporated on conservative parties, like the CDU in Germany.
Following the disastrous political consequences of Merkel's 2015 immigration crisis, AfD entered the game with the fury from the German population. The alliance of the conservative CDU with the AfD makes a lot of sense.
I may be insane, but I feel there is always some kind of collective Jungian aura or desire among the general population, especially among the elders, for sane, conservative policies to control society and make life bearable. The writings of Jung are quite telling of this phenomenon.[1]
[1]: https://en.wikipedia.org/wiki/The_Mass_Psychology_of_Fascism
I feel the shifting definitions of liberal (US) and conservative taking place under our feet. Suddenly conservatives care about public welfare (but only for the in-group), and liberals prefer laissez faire economy (as opposed to the Trump tariff tantrums).
Yes, US dollar is losing a bit of power and influence. This is likely to continue.
Making inferences about the US global dominance based on this fact is misguided. US global dominance is as strong as ever and, if anything, getting stronger. US has very successfully managed to move the game a level above currency, to direct governance via financial, legal, political and military means. It has made any meaningful competitors either entirely irrelevant (e.g. Russia), pretty well aligned (e.g. India) or pretty well contained (e.g. China) It's blue skies ahead.
The US has a strong military but its dominance position is declining rapidly. It’s going around threatening the whole world.
It’s failing to effectively address their problem with China and Russia.
Domestically, 60% of Americans live paycheck to paycheck, you have ICE running around and Medicaid being slashed to afford that.
All the leaves are brown…
This is going to disappear if USD is no longer the dominant currency.
My first question is: good for whom? Second question is: how? It's definitely good for holders of whatever replaces the dollar, but it's disastrous for everybody in the US, as far as I can tell.
https://www.blackrock.com/corporate/insights/blackrock-inves...
I expect it to be worse here in the US.
I wasn't expecting us to try to speedrun it, though. I thought we had a decade or two left, now I think it'll happen before the end of the year.
[0] https://fred.stlouisfed.org/series/FDHBFIN [1] https://fred.stlouisfed.org/series/DTWEXBGS
Last archival I've found https://web.archive.org/web/20251110042359/https://en.wikipe...
From https://en.wikipedia.org/wiki/Wikipedia:Articles_for_deletio..., the discussion that concluded with the article's deletion
It's the first time in my internet life (20y+) that I go find a wiki article to share to a friend because the US keeps weakening and I found it gone.
Didn't know it was that easy to remove a wikipedia article by just hinting it was AI generated.
Wait until Greenland drama goes sideways, then you will see the dollar getting washed out as the international currency.
Miran, and his thinking, clearly have this admin's ear and they're following many of the prescribed steps in his white paper. To the T frankly.
So if you're surprised by the USD devaluing by 10% last year or the immense pressure to drop the fed rate to under 2% by next year, well the reasoning and strategy is all laid out very clearly in the above whitepaper.
No confusion necessary! They explain every (terrifying) bit of their plan in that paper.
What is left out, and why I say it is terrifying, is that the whitepaper is academic and basically leaves uncovered any of the _political_ ramifications of these economic changes. And of course, those political ramifications can be immense.
He is anti-trade and pro-isolation. He actually wants the US dollar to lose it's status as a world currency. His thought? If it does, then we'll better address national debt. Basically "Let's light the house on fire so we finally address the upstairs draft."
A 1.1% devaluation doesn't seem so bad per year, except for the political risk and economic uncertainty.
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