De-Dollarisation.

[andrewfi]

OK, forum post not a long textbook article...

As I understand it, your last words kinda sum it up. One needs to print enough dollars by creating debt to enable the rest of the world to have dollars for trade as the global economy grows.

As a popular currency the ecxhmge rate rises meaning that it is cheaper for the issuing country to buy up imports cheaply. This leads to a trade deficit.

This is called the Triffin Dilemma.

You can read more about the problem of reserve currency trade deficits here: https://www.investopedia.com/financial-edge/1011/how-the-triffin-dilemma-affects-currencies.aspx#:~:text=A%20popular%20reserve%20currency%20lifts,decisions%20that%20benefit%20other%20countries

So, as I understand it, the issue arises because the dollar floats and is not backed by an asset such as gold. The USA came off the gold standard because the United States could no longer afford to pay out gold at the stated rate. Again IIRC the dollar was the first major reserve currency to fall victim to the effect as previous reserve currencies were gold backed.

[Jonas!]

OK, forum post not a long textbook article...

As I understand it, your last words kinda sum it up. One needs to print enough dollars by creating debt to enable the rest of the world to have dollars for trade as the global economy grows.

As a popular currency the ecxhmge rate rises meaning that it is cheaper for the issuing country to buy up imports cheaply. This leads to a trade deficit.

This is called the Triffin Dilemma.

You can read more about the problem of reserve currency trade deficits here: https://www.investopedia.com/financial-edge/1011/how-the-triffin-dilemma-affects-currencies.aspx#:~:text=A%20popular%20reserve%20currency%20lifts,decisions%20that%20benefit%20other%20countries

So, as I understand it, the issue arises because the dollar floats and is not backed by an asset such as gold. The USA came off the gold standard because the United States could no longer afford to pay out gold at the stated rate. Again IIRC the dollar was the first major reserve currency to fall victim to the effect as previous reserve currencies were gold backed.

Thanks Hoss, that is a great article.  It gives me a slightly better understanding of the 'reserve currency', and it is complicated to extricate from it once you have it.  As more countries use their own or trading partners currencies the dollar should slowly be less needed.   

Jonas!   

[Lon]

Peter Zeihan has another vid.
about 8.5 minutes long

it seems the collapse of the dollar is a little premature   

[2tallbill]

Try exporting something other than death and dollars.

We export baked beans to the UK so that you have
something for your toast. What does the UK export?
crumpets?

[2tallbill]

Doesn't it cost money to mothball a project like that?

Not enough to bankrupt it

[AvHdB]

Try exporting something other than death and dollars.

We export baked beans to the UK so that you have
something for your toast. What does the UK export?
crumpets?

And I thought it was tarts.

[Texan77]

One of our biggest exports is Tecnology, designs of products that are made elsewhere. We are moving to where much of what we design is being made in Mexico. Apple phone is an example. The phones are made in China, but they designed here, and the parts are made all over some of them here. Just the final assembly is in China. That is true with many Chinese made products which are not really made in China but rather assembled in China. The same is true with most high-end chips. The ones that are made elsewhere are for the most part designed in the USA with machines that were built in the USA. USA imports to continue to decline going forward and assembly is being done by robots more and more making Chinese labor and shipping too expensive to be competitive. What this is just sour grapes as you get pissed off how well the USA is doing and its likelihood to continue to grow. At some point you figured it out the stuff you keep reading is not really happening.

[Lon]

short 8.5 min vid from Peter Zeihan  "the end of China?"

not looking good for China's economy and consequently the rest of the world's economy

[Wiz]

short 8.5 min vid from Peter Zeihan  "the end of China?"

not looking good for China's economy and consequently the rest of the world's economy

Another Propaganda post ful of vague comments and other crap......to keep happy the  US/world  audience. The fact is that China is holding more than 1 trillion dollars of USA treasury bonds...which is using to finance and support it's huge exporting bussiness.......

On the other hand China has always kept their currency Renminbi  low for which the Americans are complaining. China is using it's huge exports and income that receives in Dollars to buy many important assets in USA and around the world. They already have bought a large car amanufacturee and many other big American names....like the famouse hotel Waldorf Astoria in NY. Also they buy huge parts  land for caltivation to support its huge population.... They also have bought agriculture land in many other countries and also in the East part of Ukraine on the East side of the river Dnipro.

U.S. debt to China comes in the form of U.S. Treasuries, largely due to their safety and stability

I just read in an article that China's central bank had approximately $3.3 trillion in total foreign exchange reserves.

If China stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.

As we can see the US continue printing and lending billions of Dollars to Ukraine, which most probably will never will be paid back ...... because the Dollar is worthles scam and it is not in real terms a gold supported Reserve currency. it is just a Toilet paper. Just think what will it ahppen if te BRICS and all other independent nations start seling dollars in the market........

At the moment they still buying 53 Millions Electrical Transformers to sent to Ukraine because pretty soon.....everybody there will die from the cold.

That is the result and the end of the Orange revolusion.........and of Ukraine
and the trolls on this board will continue singing TRA LA LA ,,,etc.
while people die from Cold over there!

[BC]

Another Propaganda post ful of vague comments and other crap......to keep happy the  US/world  audience. The fact is that China is holding more than 1 trillion dollars of USA treasury bonds...which is using to finance and support it's huge exporting bussiness.......

Wizz,

It's an interesting opinion, unlike your disinformation posts.

You again bite the bait of those dangling little ignorant tidbits of disinfo you so thrive on.

Under a trillion, mostly used to stabilize their own currency.
https://ticdata.treasury.gov/Publish/mfh.txt

A primer why China holds treasury notes and dumping treasuries would negatively affect China as well:

https://www.investopedia.com/articles/investing/040115/reasons-why-china-buys-us-treasury-bonds.asp

[Wiz]

https://ruadventures.com/forum/index.php?topic=24660.new;topicseen#new

Another Propaganda post ful of vague comments and other crap......to keep happy the  US/world  audience. The fact is that China is holding more than 1 trillion dollars of USA treasury bonds...which is using to finance and support it's huge exporting bussiness.......

Wizz,

It's an interesting opinion, unlike your disinformation posts.

You again bite the bait of those dangling little ignorant tidbits of disinfo you so thrive on.

Under a trillion, mostly used to stabilize their own currency.
https://ticdata.treasury.gov/Publish/mfh.txt

A primer why China holds treasury notes and dumping treasuries would negatively affect China as well:

https://www.investopedia.com/articles/investing/040115/reasons-why-china-buys-us-treasury-bonds.asp

Mamma mia la fortuna

we both must have been reading the same articles.......but you still insist to teach me a lesson.

ARE YOU FROM SICILY DON CORLEONE?  ......

[BC]

we both must have been reading the same articles.......

I doubt it.

[cufflinks]

185,000 Europeans might die from high energy prices this winter... Per UK's Economist Magazine study.

https://www.brusselstimes.com/331119/high-energy-prices-will-kill-more-than-100000-europeans-this-winter-study-finds

[Contrarian]

185,000 Europeans might die from high energy prices this winter... Per UK's Economist Magazine study.

https://www.brusselstimes.com/331119/high-energy-prices-will-kill-more-than-100000-europeans-this-winter-study-finds

I wonder if Macron discussed this over lobster with creepy Joe.

Quote

"The United States is a producer of cheap gas that they are selling us at a high price," French President Emmanuel Macron recently said. "I don't think that's friendly."

[Texan77]

185,000 Europeans might die from high energy prices this winter... Per UK's Economist Magazine study.

https://www.brusselstimes.com/331119/high-energy-prices-will-kill-more-than-100000-europeans-this-winter-study-finds

I wonder if Macron discussed this over lobster with creepy Joe.

Quote

"The United States is a producer of cheap gas that they are selling us at a high price," French President Emmanuel Macron recently said. "I don't think that's friendly."

USA produced gas has a high shipping cost when sold to Europe. The USA government does not sell gas only private companies. If you think they are making too much money you can buy stock in the companies that are doing this and get a share of the profit. 

I guess they think more Europeans will die because of high cost of gas the Ukrainians who do not have electricity. It seems odd to me.

[Contrarian]

185,000 Europeans might die from high energy prices this winter... Per UK's Economist Magazine study.

https://www.brusselstimes.com/331119/high-energy-prices-will-kill-more-than-100000-europeans-this-winter-study-finds

I wonder if Macron discussed this over lobster with creepy Joe.

Quote

"The United States is a producer of cheap gas that they are selling us at a high price," French President Emmanuel Macron recently said. "I don't think that's friendly."

USA produced gas has a high shipping cost when sold to Europe. The USA government does not sell gas only private companies. If you think they are making too much money you can buy stock in the companies that are doing this and get a share of the profit. 

I guess they think more Europeans will die because of high cost of gas the Ukrainians who do not have electricity. It seems odd to me.

If Ukraine hadn't ousted Yanukovych way back when they would have plenty of cheap gas from Russia, as well they would still have Crimea, the Donbas and the rest of their country. 

[2tallbill]

And I thought it was tarts.

They exported just the one, the USA has a more than sufficient homegrown supply for our needs and we do not need to import
more.

[2tallbill]

I wonder if Macron discussed this over lobster with creepy Joe.

Quote

"The United States is a producer of cheap gas that they are selling us at a high price," French President Emmanuel Macron recently said. "I don't think that's friendly."

Francy-pants is used to the USA selling to them at below cost.
Frenchy-boy can either pay the market rate or go home and
eat his stinky cheese without all the whine.

France has an unrealistic opinion of themselves and their value
on the world stage, just remember how they soiled themselves
after Australia decided they didn't want to buy their 40 year old
crap submarine technology.

[Lon]

about an 8 min. vid from Peter Zeihan.
mostly about problems in China, but a few comments on Russia, and the Russian-UKraine war

all is interesting, but at 5:30 or so, he starts talking about the U.S.   

[2tallbill]

We export baked beans to the UK so that you have
something for your toast. What does the UK export?
crumpets?


And I thought it was tarts.

I posted a photo of Meagan Markel (an example of UK tart exports)
in a post and it disappeared. I probably messed up somewhere


 

[2tallbill]

And Russian and Chinese et.al. business prefer exactly the same. When they will be strong enough to push other currency in their business contracts, it will be the point of no return for the dollar.

For me personally, I hope this doesnt happen before I am financially independent from working hard.

Mark.

Nobody trusts the Chinese or the Russians in large and/or future
deals to use their own currency. They will fiddle after the fact. 

[Markje]

And Russian and Chinese et.al. business prefer exactly the same. When they will be strong enough to push other currency in their business contracts, it will be the point of no return for the dollar.

For me personally, I hope this doesnt happen before I am financially independent from working hard.

Mark.

Nobody trusts the Chinese or the Russians in large and/or future
deals to use their own currency. They will fiddle after the fact.

Thats why I said, when they are strong enough.

Then you don't need to trust them, just like people over there know not to trust Americans, but the Dollar is used anyway.

[andrewfi]

Thanks Hoss, that is a great article.  It gives me a slightly better understanding of the 'reserve currency', and it is complicated to extricate from it once you have it.  As more countries use their own or trading partners currencies the dollar should slowly be less needed.   

Jonas!

Reserve currencies were more important in the past when travel and communications were much, much, slower. Imagine a time when it too a week to travel from London to Paris, or weeks to go from London to New York. It was important to have a trusted store of value, hence gold. But gold was heavy and not easy to provide exact amounts. Hence the rise of coins followed by paper currency. A paper currency is a promise to pay (in the past a certain amount of gold - a kind of promissory note). In such a case, trust was vital. Nobody would accept a note to pay in gold from an untrustworthy source.

Today, the world has changed. Transactions can cross the world in fractions of a second, be recorded and resolved almost instantaneously. In such a situation, there is much less need for a reserve currency as trust and delay are much less relevant when a transaction can be sorted from, say Saudi Arabia to China. It is not hard to pay in either sates currency because it can be sold on again almost instantly - kinda like what Russia does with Euros these days. Or each state can choose to hold the other currency for purchases in the future. Probably a mixture of these two.

We will likely still need some kind of intermediary currency though. That'll help with trust - for example, if Nigeria wants to buy stuff from Russia, they might use an intermediary currency as folks tend not to trust the Nigerians. Although at state and large enterprise levels that may not be so much of an issue. But that's where crypto comesin very handy. Crypto requires no trust.

[Contrarian]

We export baked beans to the UK so that you have
something for your toast. What does the UK export?
crumpets?


And I thought it was tarts.

I posted a photo of Meagan Markel (an example of UK tart exports)
in a post and it disappeared. I probably messed up somewhere

There's probably a law in the UK against posting nude photos of "royals".

[rosco]

We export baked beans to the UK so that you have
something for your toast. What does the UK export?
crumpets?


And I thought it was tarts.

I posted a photo of Meagan Markel (an example of UK tart exports)
in a post and it disappeared. I probably messed up somewhere

There's probably a law in the UK against posting nude photos of "royals".

And 'black' women....