Ask HN: What happens to the global financial system if the USA has a coup?
What do you think will happen to the global financial system if the United States has an actual coup in 2024?
I am curious what smart people think (hopefully someone with an economics background who studies this type of thing when they happen to other countries).
Background: It looks likely that far-right secretaries of state and governors will be elected in 2022 and in position to disrupt the 2024 presidential election. I hope this is unlikely but given the power they wield it also is "possible".
My main questions are:
What happens to the dollar as a reserve currency? How quick if there are changes would you anticipate those being made?
How does this impact the American and global economy the next month / year from your POV?
50 comments
[ 3.3 ms ] story [ 36.4 ms ] threadHowever the USA has an underappreciated stability-focused foundation which helps power its tight historic focus on systems of subjective ethics. You'd think the ethics would push the stability around, but IMO it's the exact reverse. So I personally look around and I see lots of stability-focused people mostly looking to buy the dip and get on with their lives the best way they know how (the united way).
A similar lesson is true with the USA and economic growth. The lesson people are taking out of high gas prices and inflation isn't "the system is broken, so what needs to happen is..." (objective) so much as "stop messing with my life, what I need is..." (subjective) and this latter position rewards government stability.
From a technical perspective the top charts for the US economy are showing an expected relief period, comparable to the duty cycle concept.
Crypto growth, even given the USD-exit mindset, correlates amusingly well with bull markets for US economic growth leaders. I'd say there is at least some considerable disincentive to desire a coup, on the crypto-focused side, for that reason alone, even if the USD or reserve currency concept is annoying.
I see considerable technical reasons to expect US markets to come out very strong after the current breather. There are some massively impressive businesses and tech behind this as well, and businesses are learning to take better care of employees, broadly speaking.
Plus right now we are right in the middle of a panic-focused news cycle so there is systemic bias looking in that direction on even a month-to-month level. Sector rotation seems normal as well.
Tons of new traders and even retail investors are also looking to BTD ASAP which also says a lot. They saw how COVID turned out and want to position for another springboard for personal returns.
Just some thoughts...
> The real worry is what happens when countries reallocate away from US treasury bonds? If the US/allies can just decide to confiscate Russia's assets, every country has to be looking at an alternative
With the US effectively having control over global market monetary flow via multiple means, I don't see other countries having too much choice there. They can absolutely diversify, sure, but I don't think they can ever fully reallocate away, at least not without "forking" the international order (such as it is) nearly in its entirety, and anyone trying that would never accomplish their objectives, just too much risk for too low-probability of success. Besides, nobody's crazy enough to dump the world's richest economy entirely.
Though I would say that unless the extreme wealth inequality problem gets smoothed out by sometime in the next ~30-50 years or so, probably not even that long, we'll DEFINITELY see a MASSIVE DROP in foreign investment because there won't be anyone here with enough money to buy anything anymore.
We've already seen huge reductions in consumer discretionary spending just in the last 6 months (war, pandemic recovery, consequences of treasure injecting tons of money into the economy, inflation, etc.). Food, energy, housing: you can't choose not to have any of these, not realistically. Which means cost increases there force cut-backs anywhere that IS optional (eating out, entertainment, charitible donations, vacations, etc.). My rent, for example, for a shoddy 1br, jumped from apprx $750/m to nearly $1000! And this is in a craptastic area, too! Others have had even larger jumps in cost of housing.
The politicians tell us businesses invest where there's low taxes; that's bullshit. Businesses invest where PEOPLE BUY THEIR STUFF. But if US citizens no longer have enough money left over to buy things, why the hell would anybody invest in the US?
So yeah, either we address this wealth inequality problem now, or we'll be FORCED to address it later when mobs start to gather because there's no food, no jobs, and no other options.
> Are any countries actually looking for an alternative except Russia?
I'd think China would be looking for not just one, but a handfull of trading partners to essentially "replace" the US, especially if those countries are somewhat more malleable when it comes to China's influence on their foreign and domestic policymaking. If China can groom and invest in a sorta "cabal" of various countries, that offers them a significant hedge against US volatility and insulates them against trade disruption with us while providing an eventually-equivalent investment vehicle, even if they do need half a century or more to build it up. Those folks think in terms of decades, centuries, and generations unlike us with our next-quarter shareholder earnings reports and such...
Following that line of thinking, consider the various countries all over the world that the US has alienated with decades of...questionable...foreign policy. Much of Central and South America comes to mind, along with the middle east and parts of Asia. China has a real opportunity there to build out a major geopolitical partnership amongst many nations in those regions, and with wealth transfer from the US toward China over the last ~35-50 years already having taken place, there's definitely capital to flow from China to those other places, and therefore incentive for those other countries to play ball - by China's rules, not ours.
And if another major player on the world stage, a UN Security Council member no less, offers those smaller, struggling economies that alternative option? Oh hell yes they'll be looking and interested. And with things being really bad in some of the aforementioned places, they'll have no choice but to jump in with both feet. Not much of a concern in the short to medium term, ...
where did anyone say this mrman big brain
Compare to the outgoing president’s attempt to overturn a fair election after the 2020 election. That one was a coup attempt.
A President winning the Electoral College and losing the popular vote has only occurred 5 times. Two of them were Bush and Trump.
As an outsider I don't have that much skin in the game when it comes to elections in the USA - not 'no skin' since we here in Europe are exposed in many ways to the rise and fall of the USA as a major economical and military power. I do get the impression that the media in the USA are extremely partisan and mostly seem to side with the DNC position. Especially the major news publishers - whether they be publishing in print like the NYT and WaPo or via cable and 'net like CNN and MSNBC - seem to act like they are the communications division of the DNC instead of independent publishers. The recent departure of the Whitehouse press secretary to one of those networks only serves to underline this all-too-close relationship. This makes it hard to talk about 'fair' elections given that a sizeable percentage of the population depend on these outlets for their information.
Partisan media is not a problem limited to the USA but it is exacerbated by what is in effect a two-party system which has split the media market into a "Democrat" and "Republican" side with the former seemingly being dominant.
By and large the problem is with the Republicans, who have been in minority for more than 20 years, and executing their own "minority rule" by whatever means necessary, including using absurd falsehoods and outright fraud. If DC and Puerto Rico were granted statehood, which is only Constitutional and fair, we'd never see another Republican President ever again, nor a Republican controlled Senate.
Conversely, if everyone always voted in their personal economic interests, we'd never see another Republican elected to any office, anywhere. But as it is, 99% of the Republican Party always votes adversely to their personal economic interests, whether it be for economically irrelevant distractions such as abortion or 2nd Amendment issues, or for the delusion that someday they will be rich, and voting in the interests of the rich at their own economic expense.
It really is absurd, especially because Republican administrations are responsible for all the economic recessions in the last 45 years.
Wake up people! Stop propping up the rich at the expense of your own personal economic interests! If you earn less than $400K/yr, you are a fool to vote Republican, and you are hurting America, and yourself.
A coup would be where there's a clear convincing result pointing one way, and then the other thing happens.
You stopped telling the story at the moment the GP was referring to as a coup. I'll complete the story:
The EC came down to one state. The one state came down to a very close vote. When there is a very close vote a recount should be conducted. A recount began but was halted with help from one candidate's brother and was declared in that candidate's favour.
“Justices” not “jurors”.
...nor does that conflict of interest in and of itself, entirely alone, prove that the decision reached was incorrect, wrong, or an act of corruption or malice.
Gore wanted to selectively recount. Recount this county, but not that one. The Supreme Court shot that down 7-2. The SC also ruled, 5-4, that Florida couldn't keep recounting forever - that, in fact, they had run out of time to do so. (Imagine if in 2021, on January 6, states were still recounting and not ready to report results, and you can see the problem.)
More corporate profits due to:
dismantling the EPA, FDA, all that federal land that will get turned over to corporations.
The states will have to lower their environmental, consumer, employment regulations to compete with other states for campaign donations I mean jobs from the mega corporations.
The bureaucracy kinda runs most of the day to day.
Losing reserve status would be an exception. Look at the strength of the Ruble now. Look at where all the oil tankers in middle east are heading for delivery.
The left has gone so far left, that the right feels "far"
> will be elected
An election is not a coup just because you disagree with the elected peoples' views.
The coup isn't the current election, it's the future one in which the votes of the people are thrown out.
Imagine that in 2024, Trump runs again. (Please, God, no!) And imagine that he wins - legitimately, genuinely wins, with no funny business in any state. Are the Democrats going to accept it? Or are they going to say, no, that's illegitimate, because all these states have extreme Republicans fudging the numbers?
Now imagine that it's the exact same scenario, except that Trump wins because those people fudge the numbers.
Will you be able to tell which scenario actually happened?
That's why the Democrats crying "illegitimate" in 2016 was so bad. They cried wolf when there wasn't one.
(Nothing in this post is intended to deny or minimized the insanity and the moral bankruptcy of the Republicans' response to Trump's 2020 loss.)
Including Hillary Clinton herself, who withdrew her acceptance of the 2016 election results <https://news.yahoo.com/hillary-clinton-maintains-2016-electi...>.
[1] https://www.mcall.com/news/pennsylvania/capitol-ideas/mc-nws... [2] https://lawandcrime.com/2020-election/experts-scorch-pennsyl...
What happens over the 10 year timeframe as the wheels of power are spun in potentially radically different directions is impossible to project with any fidelity but I would be receptive to predictions of a "slowly then all at once" variety.
[edit] Will also say that I think there is a bright line difference between a "coup" and a corrupted election process.
We saw an attempt at a coup on Jan 6. We have had corrupted election processes in the small since there have been elections, and in a couple of cases potentially in the medium.
A successful coup, despite Jan 6, to my jaundiced eyes, is very unlikely, but would accelerate the slowly-then-suddenly shift, tho in what directions would take a book to discuss. (Trump stood down the US military in ways that were totally counter to US power/national interest and instead revealed his own corruption, etc).
A corrupted election process is likely, but would not cause much in the way of external disruption, again not until the intent of the exercise of power was more evident.
You win the "I believe everything I read on /r/politics and /r/worldnews" award of the week.