U.S. CitiesCity-Data Forum Index
Happy Independence Day!
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-05-2020, 11:21 AM
 
Location: Washington Park, Denver
8,082 posts, read 7,505,926 times
Reputation: 9105

Advertisements

Quote:
Originally Posted by Hoonose View Post
You didn't see it with the 2008 crash, when the whole world moved to the safety and security of the USD?
You didn't see it with the 2008 recovery, where many new $T's were created and we saw little inflation or weakening of the USD?

https://www.americanexpress.com/us/f...ancial-crisis/
For people to move away from they dollar, there would have to be a more attractive alternative. That does not currently exist and there are not signs that it will in the near future.
Reply With Quote Quick reply to this message

 
Old 06-05-2020, 11:43 AM
 
10,547 posts, read 4,580,802 times
Reputation: 2153
Quote:
Originally Posted by SkyDog77 View Post
For people to move away from they dollar, there would have to be a more attractive alternative. That does not currently exist and there are not signs that it will in the near future.
I agree.

The Euro has its inherent weakness over the USD since the EU is not a political union.

The Yen is already much more extended than the USD, and Japanese productivity outlook is not improving due to their aging demographics.

The Yuan after all this time is barely out there. China would have to open up first, as far as its secretive central command/bank and with cross border currency controls. A generation ago I felt this might happen in a generation, and it hasn't. One new kicker is their digital currency, but I believe the above still apply.

There are simply not enough Swiss Francs to service the world.

A global currency is politically impossible. Barring an extra-terrestrial alien invasion!
Reply With Quote Quick reply to this message
 
Old 06-05-2020, 01:23 PM
 
4,587 posts, read 1,944,372 times
Reputation: 2952
Quote:
Originally Posted by Hoonose View Post
I agree.

The Euro has its inherent weakness over the USD since the EU is not a political union.

The Yen is already much more extended than the USD, and Japanese productivity outlook is not improving due to their aging demographics.

The Yuan after all this time is barely out there. China would have to open up first, as far as its secretive central command/bank and with cross border currency controls. A generation ago I felt this might happen in a generation, and it hasn't. One new kicker is their digital currency, but I believe the above still apply.

There are simply not enough Swiss Francs to service the world.

A global currency is politically impossible. Barring an extra-terrestrial alien invasion!
Also those currencies are not Kosher
Reply With Quote Quick reply to this message
 
Old 06-05-2020, 06:34 PM
 
791 posts, read 174,773 times
Reputation: 688
Quote:
Originally Posted by Hoonose View Post
I agree.

The Euro has its inherent weakness over the USD since the EU is not a political union.

The Yen is already much more extended than the USD, and Japanese productivity outlook is not improving due to their aging demographics.

The Yuan after all this time is barely out there. China would have to open up first, as far as its secretive central command/bank and with cross border currency controls. A generation ago I felt this might happen in a generation, and it hasn't. One new kicker is their digital currency, but I believe the above still apply.

There are simply not enough Swiss Francs to service the world.

A global currency is politically impossible. Barring an extra-terrestrial alien invasion!
The current system that originates in Bretton-Woods allows USA to offload the debt to other countries - that's why Feds can "print" money basically uncontrollable. Other countries pay for usage of the dollar. Why do they do it? Well, so far Feds were printing money out of thin air but within the limits, i.e. convenience of using dollar outweighed the plunder and tribute other countries had to pay to US - plus US military were directly on guard to make sure countries pay and do not try to be independent. Japan and Germany are still occupied by USA, so they have no saying; every Middle East country that tried to become independent from the dollar was immediately bombed to the dust (in case you are interested in the real reason for those wars).

But this system recently got severely abused - both fiscally and politically. Now it's just the matter when the losses of using $USD will outweigh the convenience and fear.

Other countries are working hard on this. There were several attempts, so far failed, but work is still going on.

For now, it looks like most promising approach is bilateral currency swap agreements. Their numbers and volume are growing - slowly but surely; total volume already exceeds IMF ~10 times (data from 2015). It's hard to predict, but the moment volume of those agreements reaches some pivoting point - be ready for galloping hyperinflation of $USD.
Reply With Quote Quick reply to this message
 
Old 06-05-2020, 07:07 PM
 
10,547 posts, read 4,580,802 times
Reputation: 2153
Quote:
Originally Posted by kanonka View Post
The current system that originates in Bretton-Woods allows USA to offload the debt to other countries - that's why Feds can "print" money basically uncontrollable. Other countries pay for usage of the dollar. Why do they do it? Well, so far Feds were printing money out of thin air but within the limits, i.e. convenience of using dollar outweighed the plunder and tribute other countries had to pay to US - plus US military were directly on guard to make sure countries pay and do not try to be independent. Japan and Germany are still occupied by USA, so they have no saying; every Middle East country that tried to become independent from the dollar was immediately bombed to the dust (in case you are interested in the real reason for those wars).

But this system recently got severely abused - both fiscally and politically. Now it's just the matter when the losses of using $USD will outweigh the convenience and fear.

Other countries are working hard on this. There were several attempts, so far failed, but work is still going on.

For now, it looks like most promising approach is bilateral currency swap agreements. Their numbers and volume are growing - slowly but surely; total volume already exceeds IMF ~10 times (data from 2015). It's hard to predict, but the moment volume of those agreements reaches some pivoting point - be ready for galloping hyperinflation of $USD.
The BRICS are still small potatoes in the world. Banks, businesses and other financials, other countries, communities and governments in the rest of the world have a better choice.

At some point we may see another reserve, and I've been saying that already for nearly a generation. And when it does present itself, the world and its economy and needs will be much larger. Easily room for another reserve, where the USD doesn't crump.
Reply With Quote Quick reply to this message
 
Old 06-05-2020, 07:36 PM
 
Location: Heart of flyover America
643 posts, read 255,042 times
Reputation: 1222
Let's examine why the USD became the global reserve currency to begin with:

1. It was backed by, and redeemable for gold at $35/oz.

2. It was issued by the world's largest creditor nation.


Neither of those conditions exist now. The US will lose its privilege as the world's reserve currency and when it does, it will be a fast track to 3rd world status for us

I agree that no other currency will replacege USD as the reserve currency. Every other currency in the world is competing in a race to the bottom. Which is why we'll have no choice but to return to sound, honest money ie gold and silver.
Reply With Quote Quick reply to this message
 
Old 06-05-2020, 08:07 PM
 
10,547 posts, read 4,580,802 times
Reputation: 2153
Quote:
Originally Posted by Taggerung View Post
Let's examine why the USD became the global reserve currency to begin with:

1. It was backed by, and redeemable for gold at $35/oz.

2. It was issued by the world's largest creditor nation.


Neither of those conditions exist now. The US will lose its privilege as the world's reserve currency and when it does, it will be a fast track to 3rd world status for us

I agree that no other currency will replacege USD as the reserve currency. Every other currency in the world is competing in a race to the bottom. Which is why we'll have no choice but to return to sound, honest money ie gold and silver.
If that should be the case which I would bet my life against happening, it still will take PM based fiat in order to service the world. PM is just too unwieldy, physically. How does one set foreign exchange numbers?
Reply With Quote Quick reply to this message
 
Old 06-05-2020, 09:18 PM
 
791 posts, read 174,773 times
Reputation: 688
Quote:
Originally Posted by Hoonose View Post
The BRICS are still small potatoes in the world. Banks, businesses and other financials, other countries, communities and governments in the rest of the world have a better choice.

At some point we may see another reserve, and I've been saying that already for nearly a generation. And when it does present itself, the world and its economy and needs will be much larger. Easily room for another reserve, where the USD doesn't crump.
BRICS as small potatoes? You are kidding, right? China alone already exceeds USA economy.
But I'm not talking about sizes at all.
My point is that we are heading toward situation when no currency would be considered as "reserve". You see, countries are just tired of being targets of abuse by USA, when WH literally dictates them what they can or cannot do. If country uses dollar in any way, it cannot avoid this dictate, and it's very bad for its business. So, the proper way out is to not use dollar for anything but trading with USA only. That's why future is in bilateral agreements. Yes, they are more complicated to use compared to any reserve currency, but they bring the most valuable asset these days - independence. Once critical volume is reached - well, welcome to a new world.
Reply With Quote Quick reply to this message
 
Old 06-06-2020, 12:23 AM
 
2,600 posts, read 990,345 times
Reputation: 6538
Quote:
Originally Posted by Hoonose View Post
You didn't see it with the 2008 crash, when the whole world moved to the safety and security of the USD?
You didn't see it with the 2008 recovery, where many new $T's were created and we saw little inflation or weakening of the USD?
The inflation was in equities. The SP500 is up 450% since 2009, GDP is up only 144%. No way we are 3X as productive today compared to ‘09. The difference is due to share buybacks and debt.
Reply With Quote Quick reply to this message
 
Old 06-06-2020, 07:19 AM
 
Location: Washington Park, Denver
8,082 posts, read 7,505,926 times
Reputation: 9105
Quote:
Originally Posted by kanonka View Post
The current system that originates in Bretton-Woods allows USA to offload the debt to other countries - that's why Feds can "print" money basically uncontrollable. Other countries pay for usage of the dollar. Why do they do it? Well, so far Feds were printing money out of thin air but within the limits, i.e. convenience of using dollar outweighed the plunder and tribute other countries had to pay to US - plus US military were directly on guard to make sure countries pay and do not try to be independent. Japan and Germany are still occupied by USA, so they have no saying; every Middle East country that tried to become independent from the dollar was immediately bombed to the dust (in case you are interested in the real reason for those wars).

But this system recently got severely abused - both fiscally and politically. Now it's just the matter when the losses of using $USD will outweigh the convenience and fear.

Other countries are working hard on this. There were several attempts, so far failed, but work is still going on.

For now, it looks like most promising approach is bilateral currency swap agreements. Their numbers and volume are growing - slowly but surely; total volume already exceeds IMF ~10 times (data from 2015). It's hard to predict, but the moment volume of those agreements reaches some pivoting point - be ready for galloping hyperinflation of $USD.
“Fiscally” and “politically” are the same thing.

The distinction is made between fiscal policy and monetary policy.

The Fed, not “the Feds”, controls monetary policy. “The Fed” is short for the Federal Reserve. It is an independent, non political body run by economists.

Congress controls fiscal policy.

I suggest Khan Academy’s macroeconomics class if you want to begin to understand this stuff.

Again, for people to move away from the dollar, there has to be a better alternative. There is not one.

Last edited by SkyDog77; 06-06-2020 at 07:28 AM..
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top