Not even the US Marines at their strongest could repel an alien invasion. If that was going to happen it would just happen regardless of our relative strength or weakness.
We seem to be doing our darndest in Ukraine to poke The Bear. Maybe we'll get both but I though "they" were going to wait until Trump was re-elected so they could pin the whole mess on him.
That's one narrative. If you choose to ignore the machinations of the US State Department before and through the Maidan uprising then what Russia is doing seems unprovoked and possibly even genocidal. It's amazing that in this age of speed-of-light communication the ability to suppress facts is as prevalent as it is. Personally I'm not rooting for either side, only for the killing and escalation to stop before the whole world gets pulled into it.
The hell you aren't. "Neutrality" always favors the aggressor. And here, you are literally spreading Putin's rhetoric.
No one is "poking the bear". The bear is doing what it has historically done, violently attempt to expand its empire with a genocidal assault on it's neighbor's territory.
This has zero to do with The Former Guy, who would literally hand over Ukraine to Russia; remember he was first impeached for trying to blackmail Ukraine, withholding arms (such as Javelin anti-tank weapons) until Zelenskyy would falsely announce opening some fabricated investigation of his political opponent.
In this case the assault is at it's root being done because Putin cannot tolerate having his public see that a state former under Soviet rule is becoming successfully (small-"d") democratic, prosperous, and seeking to associate with Europe and the free world instead of Russia. The very real problem for Putin's administration is that his subject's seeing Ukraine's success is likely to provoke rebellion against his authoritarian rule. The problem that knowledge of Ukraine's success poses can be seen well in the Russian soldier's universal theft of toilets and painting on the walls "what gives you the right to live so well?". So, (knowledge of) Ukraine's success is an existential threat to the rule of Putin and the Oligarchs. Hence Russia's genocidal rhetoric, saying that they must eliminate the very idea of Ukranian existence, and their genocidal actions, from systematic rape and torture, stealing hundreds of thousands of children for "reeducation", etc.
Another key reason this is happening is that the west has in the past failed to respond. In Chechnyia, Georgia, Syria, Crimea, Donbas, and more,when Russia attacked, the west tried to avoid engaging. The result, that Russia was allowed to continue occupying those territories, and was not punished for repeated atrocities and likely war crimes, was seen as weakness and permission. So they did it again.
Unless it is stopped, it WILL continue. Russian spokesman, up to former Presidents still in the govt have explicitly made statements that the Baltics, Poland, and Germany have no right to exist, and that they should be nuking England.
Russia (along with other authoritarian/fascist states) is a literally an existential threat to the world of democratic nations. If not stopped in Ukraine, they WILL continue their aggression. And, China is watching very closely - if the west lets Ukraine fall, then they WILL attack Taiwan.
So, the question is, if we don't stop Russia now, when do we stop them? It would have been far better to have stopped them at Crimea. But, Obama didn't do that. So, do we stop them now, or in the Baltics, or in Poland? Or, do we wait for artillery to start falling on Berlin, or London, or Washington?
The cost of stopping them goes up at every step, both economically and in blood. It is more expensive now than it would have been in Syria or Crimea. But now is also incredibly cheap. Ukrainian military is literally doing all the heavy lifting, and we are spending low single-digit percentages of our DOD budget sending them third-shelf inventory. And Russia is now stopped dead in it's tracks and it's military capabilities to threaten the rest of the world are heavily degraded.
Providing arms for Ukraine to defend itself against genocide is the bargain of the century, and it is literally necessary to preserve democracy globally. The current POTUS deserves huge credit for leadership in stopping this aggression, and when it is finished will take it (i.e., no one is trying to pin anything on TFG)
> The hell you aren't. "Neutrality" always favors the aggressor. And here, you are literally spreading Putin's rhetoric.
Remember when George W. Bush gave his famous "Either you're with us or you're with the terrorists" speech? Pretty much every media outlet cited this as a classic example of a false dichotomy, one that ignored that nuance could be found on both sides and ignored the possibility, common in a lot of the world, that honestly don't give a crap one way or the other. If the [insert whatever term you want for the kinetic action in Ukraine] didn't involve the very real possibility of escalating into nuclear war then a lot of the world won't care. We never cared when it was groups of non-white people slaughtering each other in Africa or southeast Asia: it's pretty freaking racist to assert that we need to care and pick sides now.
>>Remember when George W. Bush gave his famous ...
Yes, I do. Just because that instance may have been a false dichotomy does not mean that all such assertion are.
In this case, we can literally look to 1: Russia's current tactics (systematic war crimes, targeting civilians, civilian infrastructure, systematic torture, rape, executions, harvesting children, etc.), 2: Russia's recent history (Chechnya, Georgia, Syria, Crimea, Donbas), 3: Russia's history over the last centuries of violent invasions and considering it's neighbors have no right to exist except under it's rule, 4: Russia's specific govt official's statements and statements of state-run media (Ukraine, Baltics, Poland have no right to exist, should be wiped out, etc. and open threats to all western nations), 5: Russia's open practice of asymmetric warfare fomenting divisions and fascist movements in democratic countries.
The result is only that Russia is a clear and present danger to democracies.
Allowing Russia to keep Ukraine's territory, and it's stolen children, and face no consequences for its systematic war crimes will only reward aggression AGAIN, and encourage it further.
It is a 100% legitimate dichotomy. It is literally the way Russia itself sees the situation. You allow them to rape, pillage, plunder, and generally take what they want, or you are against them. For civilized people, you are either allowing it, or you are against it.
Make the situation personal for you as it is for Ukarnaians. I'll invade your house, take over the bottom floor of your house, rape your daughter and wife, hold them hostage. Now, I demand to be able to stay. Do you think your neighbors and the cops and the courts should stay neutral? Who would that help? It sure as hell won't help get back your family and house.
You are, similarly, supporting the aggressor.
>>it's pretty freaking racist to assert that we need to care and pick sides now.
No, it was pretty freaking racist to assert that they did NOT need help.
And although this is closer to home and to our democracies, we absolutely should have been helping Chechnyia, Georgia, Syria, Crimea, Donbas, etc. The fact is, that we likely did provide a bunch of covert help, and US troops are protecting the Kurdish part of Syria (and the Russian troops had a really bad day when they tried to screw w/ some US SpecOps guys), but it is not nearly as adequate as is being done in UKR, which is still inadequate and prolongs the torture and conflict.
Also, helping in UKR DOES secondarily help everyone by deterring this sort of aggression, which is currently looming over Taiwan (and if you don't think Xi is watching very carefully about what to do next, I'd like to talk with you about buying some "great" oceanfront property in Kansas).
>>escalating into nuclear war
Yes, there is the threat of escalation. The ONLY way to deal with that threat is to counter it and fight. If we yield to this or any such nuclear blackmail, it is simply an open invitation to more nuclear blackmail. We literally might as well just give the keys to the White House to Putin immediately and get it over with.
Plus, the fact is (based on public info only), that Russia has been warned of very immediate and severe consequences to even "harmless" threats (demonstration explosions, etc.), and their promptly behavior changed. They see what a bunch of motivated Ukranians using third-shelf inventory are doing to their military, and know that if the US and NATO get involved, their military's half-life will be measured in hours, and if they do anything real with nukes, their own lives are forefeit. They also can have only low confidence in their nuke arsenal even being usable, as rampant massive fraud and lack of maintenance is obvious in their military. So, yes, it is technically and rhetorically a threat, but in reality, it is not at all likely, especially in conventional actions on Ukranian territory, an...
If you are “not rooting for either side, and would like to stop”, you support the aggressor. Like “not rooting for anyone and let’s stop where we are” in 1943 to allow nazi germany to keep their gains.
I’m Ukrainian, I live in Kyiv, so I’m sure I know what happened and what is happening here now much better than you.
I’m also fluent in Russian, and read their “news” targeted at domestic audience. Trust me (or if you don’t, just find yourself using speed-of-light communication) - they hate the US, despise Europeans, and would be happy to destroy lives of many more people if not their fail here.
But TBF, the odds are pretty good, as it is an art form refined by the Russians over centuries, and taught to MAGA movement that they funded in the US (via the NRA), and then made home-grown by the Q-anon movement... so, the odds are pretty good of seeing such stuff
“The dollar's share of traded currency volumes is just shy of record highs, at 88%, while the euro's share has shrunk by 8 percentage points in the last decade to a record low of 31%. The share of the Chinese yuan, meanwhile, has risen to a record high of 7%”
Not always - take oil as the obvious example where transactions are usually done in dollars regardless of the shipping from / shipping to location.
If you were in England and wanted to buy oil in Uganda for use in a subsidiary in Brazil, you would probably use USD regardless of the fact that USD is not the 'standard' currency of any of the parties.
True, but 88% is high, this article doesn't seem to make a good case for why the other trends are worrisome...
And Russia going insane is probably a good example, where they are shifting their oil direct to local currency since they have no choice given they started a war.
>Signs of de-dollarisation are unfolding in the global economy, strategists at the biggest U.S. bank JPMorgan said on Monday, although the currency should maintain its long-held dominance for the foreseeable future.
So... not as scary as the title.
Anyway what is the alternative? Commodities? China's currency is too controlled. Euro(pe) is too reckless. I like Bitcoin for storing value against inflation, but its not a great currency. GBP? Maybe, but for such a small economy, that is a lot of eggs in 1 basket.
I'm the first one to be skeptical of government fiat currency holding value, but which big player is doing it better?
I think what is happening is that there is a push to settle bi-lateral trade using the currencies of the two countries that are trading, and then it will grow from there. Many Countries still use the US Dollar to settle bilateral trade between themselves.
There is a decent amount of inefficiency in doing this though because you still have to establish valuations between the bilateral currencies. How do you do that without using any reference to some kind of a reserve currency? Ie, how would you figure the 'correct' yen:peso rate with first refering to yen:usd and peso:usd? I mean, you can, but either party takes on a decent amount of risk of getting taken to the cleaners if they misjudge their direct currency ratios. Or, if you do use a reference currency, without actually settling with the reserve, the reference price can be more easily manipulated. So, that means everyone doing strict bilateral settlement has their guards up more which makes it harder to get any trade done.
If you're buying into something that isn't "a great currency" then you are being lied to, and the thing that you're buying has been derailed from the original plan.
> I like Bitcoin for storing value against inflation, but its not a great currency.
Why?
A right-leaning (wing?) Canadian politician, Pierre Poilievre, said crptocurrencies would be to 'opt out of inflation' about a year ago. Meanwhile:
> The number of bitcoins needed to pay for shawarmas, groceries, gas, and housing is up 73.1 per cent compared with 5.2 per cent annual inflation measured in Canadian dollars.
>> I like Bitcoin for storing value against inflation, but its not a great currency.
>Why
> The number of bitcoins needed to pay for shawarmas, groceries, gas, and housing is up 73.1 per cent compared with 5.2 per cent annual inflation measured in Canadian dollars.
So its not a good currency, but its a good store of value. No Bitcoin holder is gauging the value in segments of 1 year.
Too many cooks spoil the kitchen, unpredictable policy, serious liability monetization issues. Currently Europe runs the presses about as much as the US. IT is going to be running the presses even more as the entire continent militarizes while the US's share of security agreement wanes and Europe pays for a greater share of its defense.
- yuan
Debt to GDP ratio of 200%, highly manipulated currency (uhh how do you think the evergrande crisis just disappeared one day), *capital controls* where citizens can't take money out of the country... When capital controls are removed, necessary to achieve reserve currency status, the whole system will suddenly be incredibly unstable.
- ruble
Is using the reserve currency of a pariah state really a consideration?
- reais
Let's use a currency that has its name because they had to trick people into acceting a remonetization for the Nth time.
The whole dedollarization narrative is like some weird propaganda pushed by china. Look, the dollar sucks, and maybe some countries will flip to the yuan (it's easy to buy off politicians) but those countries that do are going to be utterly screwed because the it's structurally worse than the dollar, and emerging markets will be forced to be shackled to a currency controlled by a competing (producer) interest.
Let's get Truss back as PM, so she can announce another Minibudget. Masochistic Tory voters will be screaming in combination of pain and pleasure as falling Pound will melt away their retirement funds.
From what I have around Brazil is pushing a new(?) common currency for trading within Latin American countries, China is pushing Yuan for bilateral trading with several countries, and probably more blocks and trade partners follow similar policies elsewhere.
Not having all the eggs in the same basket may lead to some egg breaking, but not all of them at the same time. And the increasing perception of risk relying on dollars may make that strategy attractive.
An international free banking era might be exciting (ok, I think it would be exciting), but even in such a regime literally everything that I wrote still applies, and anyone choosing alternatives to the dollar for transactions in the small is going to get screwed in those individual subdomains for exactly the reasons I point out.
> You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money.
I don't think de-dollarization is particularly pushed by places like China. From the Chinese perspective, dollarization is a good thing because it means they can engage in intl trade without needing to open up their domestic currency and deal with the potential political instability that might result.
I think it's more oft pushed by 'sound money' cranks (either gold bugs or their fellow travelers) or by particularly ornery fiscal conservatives with an axe to grind about whatever monetary policy the US is pursuing this week.
De-dollarization is pushed by china. I think you're right, the dollar hegemony is in their interest, but every country does dumb as shit things (e.g. the US re-invaded Iraq)
De-dollarization for the Chinese is purely because of geopolitical and strategic reasons (rendering bank level SWIFT sanctions ineffective). Whether trade is done/settled in USD or yuan doesn't really affect them as they are an export economy with a peg to the USD. Switching to a currency swap system with specific countries doesn't mean the efficient market hypothesis stops holding. The underlying value of the swaps can still contain a USD peg.
Having all debts and credits in one currency is a recipe for disaster. Not only where the US wishes to make it so (Russia), but when times are hard and the US needs to move to protect its own economy (Sri Lanka).
Hold on: the eurozone is WAY harsher on Russia than the US, they are the ones restricting the price of Russian oil, not the US (US doesn't control the shipping insurance market). I mean that's understandable, Europe is in the line of fire next
Perhas you're not sure what I mean by diversification?
If that's the case look into the original ideas from Markowitz.
If you really can't grasp the difference, consider the PIGS eurozone crisis as a Euro risk lower in USD (other than global correlation), and consider the recurrent US debt crisis (as lower in Eur other than global correlation). China weathered 2008 very well, and it was by learning from them that most of the world decided on furlough for the COVID recession.
Most economic analysis requires that you leave your prejudices at the front door.
It matters to you because we are coming to one of the harest periods for retirees in modern history. You need to know this stuff and it's a shame it's not taught in school any longer.
I mean look at one of my sibling posts: I welcome an international free banking in concept, but I claim 1) it's not going to happen in the large and 2) while it will happen in the small, every player that does it in the small will get screwed.
Theoretically diversification is a good in itself, but if all the alternatives suck, reality will come running at that theory real quick.
The alternative is all of them, and more. Dedollarisation does not mean that another single currency will step into the dollar's shoes as the global reserve currency. You will more likely have multiple spheres of influence with each one having a de facto dominant currency, and you will also have more countries doing trade in multiple currencies in order to "hedge their bets" as it were.
Like, the EU has no interest in trying to force the euro on the world. But in the aftermath of Brexit and the Trump presidency, they have grown concerned about other powers having too much control over their trade.
In theory this sounds like it might work, but in practice any international reserve/settlement currency will see more inflows than outflows. This will cause that currency to appreciate, which by itself is a deal-breaker for many countries.
A good case study is pre-Euro Germany. It had all the ingredients of a secondary reserve currency and was in fact used as such. However the appreciation that resulted from those inflows was not wanted at all since it didn't fit with the export-oriented economic model and made exports noncompetitive. As a result German capital markets were never opened to foreigners to the same degree British or American markets are.
While being the world's reserve currency is undoubtedly an "exorbitant privilege" in some respects, it also has many drawbacks. I don't think India or China would be willing to issue Bonds to foreign entities at the volume that the US is doing.
The two camps I hear pushing the "de-dollarization" narrative are:
BRICS (Mostly the R and C in that) for the purposes of domestic propaganda.
Bankers and Crypto folks who use the HIGHLY unlikely specter of de-dollarization to drive up the price of things like precious metals and crypto as "safe alternatives.
Even a cursory glance at the state of the dollar shows that there is no reality to the notion of its fall, for all of the reasons you already stated and more.
Oh sorry, I should have been clearer: it's obviously not weird for china to do it, it's weird that so many otherwise smart people buy the narrative hook line and sinker.
The more interesting thing is that, because the dollar has no serious reserve status competitor, the maintainers of the currency can be less restrictive in its management, and people can whine about it, but since there is no alternative, they're stuck with it, except for niche use cases that don't matter on a global scale. That's where all the discussion is stemming from: the dollar isn't as good, but it's still the best. It's normal to lament things that used to be better.
> There's a lot of discussion these days about de-dollarization and whether the US dollar will lose its standing as the world's sole reserve currency. Generally, people seem open to the idea, but they also don't see many good alternatives out there. The renminbi is the obvious candidate to take share away from the dollar, given the size of the Chinese economy and China's role in global trade. But for various reasons, the currency isn't suited to be a global reserve currency. So what would it actually take to become one? And what would be the effects if it started to play a major role in global trade? On this episode of the podcast, we speak with Karthik Sankaran, a longtime FX veteran, about what China would have to do if it really has global aspirations for its currency, and why a more multipolar FX landscape might be good for world financial stability.
We're largely headed for Bretton Woods 2.0. Nobody wants a single country to operate as controller of the world reserve/trade currency, because it gives that country a grossly unfair economic advantage over the entire world, which also loosely equates to a military advantage. Bretton Woods was designed such that the USD would be the defacto world currency with all other currencies directly set against it. To prevent the US from exploiting this position, the USD was to be directly convertible to gold at a fixed rate, which severely handcuffed the ability to do things like 'print' excessive money.
So, the ideal is we'd behave responsibility with an unimaginable amount of power at our fingertips. You'll never guess what happened next. Anyhow, after we found ourselves without enough gold to pay off our debts, we simply defaulted and withdrew from Bretton Woods, collapsing the entire system. A fun quote from Nixon's Secretary of the Treasury of the era is, "The dollar is our currency, but it's your problem." Here [1] are some interesting graphs of result economic changes after the dollar became completely free-floating.
So the "real" question is what form Bretton Woods 2.0 will take. One reasonable, if not likely, possibility is BRICS new currency, which is set to be introduced as early as August. The details have not been released, but it seems likely that it will be backed by gold in a similar fashion to the original Bretton Woods, but without any single country having uncontested control over it or the ability to 'default' the entire system. If nothing else, we sure live in interesting times...
Read Moneyland and Butler to the World. On the legal side of things, we need to close loopholes that allow shell companies to hide oligarch money, and prevent countries from selling diplomatic passports to investors that prevent their prosecution anywhere in the world.
> The whole dedollarization narrative is like some weird propaganda pushed by china.
The beauty of the US dollar is it's always worth a US dollar... It's strength is a measure of much foreigners trust the US economy and it's political and judicial system. What drives the demand for the dollar is the will of people to invest money in American securities and on the American capital market. I don't see it ending anytime soon.
Chinese investors invest on the Chinese market in Yuans. Rich Chinese investors invest on the US market with US dollars.
Not a big fan of how the history of the euro played out but I think I need to provide some nuance to your claims: Policy of the ECB has been as predictable as any other CB, European Govs have become much more fiscally prudent in the wake of the euro crisis (maybe too prudent). Eurozone debt to GDP levels stands at 91% (vs. 129% in the US). The "entire continent militarizing" will not meaningfully impact debt ratios (goal is to increase avg. military budgets from ~1.3% to 2% of annual GDP). The bigger question mark in Europe is potentially unsustainable expenses for social security and (related to this) a relative decline in the working age population (as everywhere else).
Yeah, the costs of changing are greater than the costs of staying the same. But the basic idea of using a nation's currency as global reserve currency is a bad design.
"Triffin Dilemma" - a national currency used in a global context will always result in spiralling imbalances. Some China guy cited this as a proximal cause of the collapse in 2007-2008 and I don't think anyone would argue with that at all[1]. So there's a pressure to move to an OCA/OCR (optimum currency area or optimal currency region) that's more like "The World", even if that's a hypothetical space.
I mean, look at the United States today, aside from extractive industries. It's pretty much a military humping/fighting a financial industry on these teeny tiny little fast food legs. That's exactly what you would theoretically expect from an economy that's been the global currency for a couple generations, but it's a damn weird shape to bend your nation into.
The solution is not crypto, but definitely an analytically-arrived at unit that's redeemable in a bucket of commodities via a real World Bank structure. Maybe crypto could be a part of that, maybe a "carbon coin" or some other quantitative measure of future value. All this waffle spells the lie to the "international capitalism" story we've been telling ourselves - without World Cops, World Courts, World Laws, there is no World Market. It's bandits in Brioni with nukes and red tape.
[1] Although, of course, yes yes yes, his motives are suspect, but his statement was not. He wants the Yuan but no one else should.
The 'unit of currency' is immaterial. It all depends on whether or not it is usable by ALL players. In a prison, they often use cigarettes rather than some monetary currencies. Maybe in the future, the 'unit of currency' could be 'barrels of oil', grams of gold, grams of platinum, etc.
The US has blocked too many people from using the Dollar that the Dollar is not as 'universal' as it once was. So people will look for another alternative, or even many alternatives.
USD as a percentage of global foreign reserves has fallen 10% in 20 years... from 70% to 60%. If "de-dollarisation" does happen it's going to take a LONG time.
In any case, EscapeFromNY understated the dollar's historical position. The dollar's share of global foreign reserves in 2022 is almost exactly the same as in 1980 and in 1995, and 10 percentage points higher than in 1990. <https://en.wikipedia.org/wiki/Reserve_currency#Global_curren...> As dgfitz said, "Or stop, or turn around".
The only way the ratio would change meaningfully is if the current emerging countries dependent on China were to continue to grow strongly for the next few decades.
Surprising to see that so many people don't believe this is happening. Yes it is happening slowly but there quite are a lot of incentives for China and it's allies to move away from the dollar, and China has the economic power to pull it off.
84 comments
[ 3.7 ms ] story [ 164 ms ] threadYour selection of semi-truths suggests otherwise.
The whole thing can stop tomorrow if Russia leaves.
The hell you aren't. "Neutrality" always favors the aggressor. And here, you are literally spreading Putin's rhetoric.
No one is "poking the bear". The bear is doing what it has historically done, violently attempt to expand its empire with a genocidal assault on it's neighbor's territory.
This has zero to do with The Former Guy, who would literally hand over Ukraine to Russia; remember he was first impeached for trying to blackmail Ukraine, withholding arms (such as Javelin anti-tank weapons) until Zelenskyy would falsely announce opening some fabricated investigation of his political opponent.
In this case the assault is at it's root being done because Putin cannot tolerate having his public see that a state former under Soviet rule is becoming successfully (small-"d") democratic, prosperous, and seeking to associate with Europe and the free world instead of Russia. The very real problem for Putin's administration is that his subject's seeing Ukraine's success is likely to provoke rebellion against his authoritarian rule. The problem that knowledge of Ukraine's success poses can be seen well in the Russian soldier's universal theft of toilets and painting on the walls "what gives you the right to live so well?". So, (knowledge of) Ukraine's success is an existential threat to the rule of Putin and the Oligarchs. Hence Russia's genocidal rhetoric, saying that they must eliminate the very idea of Ukranian existence, and their genocidal actions, from systematic rape and torture, stealing hundreds of thousands of children for "reeducation", etc.
Another key reason this is happening is that the west has in the past failed to respond. In Chechnyia, Georgia, Syria, Crimea, Donbas, and more,when Russia attacked, the west tried to avoid engaging. The result, that Russia was allowed to continue occupying those territories, and was not punished for repeated atrocities and likely war crimes, was seen as weakness and permission. So they did it again.
Unless it is stopped, it WILL continue. Russian spokesman, up to former Presidents still in the govt have explicitly made statements that the Baltics, Poland, and Germany have no right to exist, and that they should be nuking England.
Russia (along with other authoritarian/fascist states) is a literally an existential threat to the world of democratic nations. If not stopped in Ukraine, they WILL continue their aggression. And, China is watching very closely - if the west lets Ukraine fall, then they WILL attack Taiwan.
So, the question is, if we don't stop Russia now, when do we stop them? It would have been far better to have stopped them at Crimea. But, Obama didn't do that. So, do we stop them now, or in the Baltics, or in Poland? Or, do we wait for artillery to start falling on Berlin, or London, or Washington?
The cost of stopping them goes up at every step, both economically and in blood. It is more expensive now than it would have been in Syria or Crimea. But now is also incredibly cheap. Ukrainian military is literally doing all the heavy lifting, and we are spending low single-digit percentages of our DOD budget sending them third-shelf inventory. And Russia is now stopped dead in it's tracks and it's military capabilities to threaten the rest of the world are heavily degraded.
Providing arms for Ukraine to defend itself against genocide is the bargain of the century, and it is literally necessary to preserve democracy globally. The current POTUS deserves huge credit for leadership in stopping this aggression, and when it is finished will take it (i.e., no one is trying to pin anything on TFG)
Remember when George W. Bush gave his famous "Either you're with us or you're with the terrorists" speech? Pretty much every media outlet cited this as a classic example of a false dichotomy, one that ignored that nuance could be found on both sides and ignored the possibility, common in a lot of the world, that honestly don't give a crap one way or the other. If the [insert whatever term you want for the kinetic action in Ukraine] didn't involve the very real possibility of escalating into nuclear war then a lot of the world won't care. We never cared when it was groups of non-white people slaughtering each other in Africa or southeast Asia: it's pretty freaking racist to assert that we need to care and pick sides now.
Yes, I do. Just because that instance may have been a false dichotomy does not mean that all such assertion are.
In this case, we can literally look to 1: Russia's current tactics (systematic war crimes, targeting civilians, civilian infrastructure, systematic torture, rape, executions, harvesting children, etc.), 2: Russia's recent history (Chechnya, Georgia, Syria, Crimea, Donbas), 3: Russia's history over the last centuries of violent invasions and considering it's neighbors have no right to exist except under it's rule, 4: Russia's specific govt official's statements and statements of state-run media (Ukraine, Baltics, Poland have no right to exist, should be wiped out, etc. and open threats to all western nations), 5: Russia's open practice of asymmetric warfare fomenting divisions and fascist movements in democratic countries.
The result is only that Russia is a clear and present danger to democracies.
Allowing Russia to keep Ukraine's territory, and it's stolen children, and face no consequences for its systematic war crimes will only reward aggression AGAIN, and encourage it further.
It is a 100% legitimate dichotomy. It is literally the way Russia itself sees the situation. You allow them to rape, pillage, plunder, and generally take what they want, or you are against them. For civilized people, you are either allowing it, or you are against it.
Make the situation personal for you as it is for Ukarnaians. I'll invade your house, take over the bottom floor of your house, rape your daughter and wife, hold them hostage. Now, I demand to be able to stay. Do you think your neighbors and the cops and the courts should stay neutral? Who would that help? It sure as hell won't help get back your family and house.
You are, similarly, supporting the aggressor.
>>it's pretty freaking racist to assert that we need to care and pick sides now.
No, it was pretty freaking racist to assert that they did NOT need help.
And although this is closer to home and to our democracies, we absolutely should have been helping Chechnyia, Georgia, Syria, Crimea, Donbas, etc. The fact is, that we likely did provide a bunch of covert help, and US troops are protecting the Kurdish part of Syria (and the Russian troops had a really bad day when they tried to screw w/ some US SpecOps guys), but it is not nearly as adequate as is being done in UKR, which is still inadequate and prolongs the torture and conflict.
Also, helping in UKR DOES secondarily help everyone by deterring this sort of aggression, which is currently looming over Taiwan (and if you don't think Xi is watching very carefully about what to do next, I'd like to talk with you about buying some "great" oceanfront property in Kansas).
>>escalating into nuclear war
Yes, there is the threat of escalation. The ONLY way to deal with that threat is to counter it and fight. If we yield to this or any such nuclear blackmail, it is simply an open invitation to more nuclear blackmail. We literally might as well just give the keys to the White House to Putin immediately and get it over with.
Plus, the fact is (based on public info only), that Russia has been warned of very immediate and severe consequences to even "harmless" threats (demonstration explosions, etc.), and their promptly behavior changed. They see what a bunch of motivated Ukranians using third-shelf inventory are doing to their military, and know that if the US and NATO get involved, their military's half-life will be measured in hours, and if they do anything real with nukes, their own lives are forefeit. They also can have only low confidence in their nuke arsenal even being usable, as rampant massive fraud and lack of maintenance is obvious in their military. So, yes, it is technically and rhetorically a threat, but in reality, it is not at all likely, especially in conventional actions on Ukranian territory, an...
I’m Ukrainian, I live in Kyiv, so I’m sure I know what happened and what is happening here now much better than you.
I’m also fluent in Russian, and read their “news” targeted at domestic audience. Trust me (or if you don’t, just find yourself using speed-of-light communication) - they hate the US, despise Europeans, and would be happy to destroy lives of many more people if not their fail here.
https://en.wikipedia.org/wiki/Russian_Bear
But TBF, the odds are pretty good, as it is an art form refined by the Russians over centuries, and taught to MAGA movement that they funded in the US (via the NRA), and then made home-grown by the Q-anon movement... so, the odds are pretty good of seeing such stuff
Um where?
Why do exports matter for FX? Exports are local?
If you were in England and wanted to buy oil in Uganda for use in a subsidiary in Brazil, you would probably use USD regardless of the fact that USD is not the 'standard' currency of any of the parties.
And Russia going insane is probably a good example, where they are shifting their oil direct to local currency since they have no choice given they started a war.
One of favorite topic for particular breed of financial conspiracy theorists like Schiff.
https://www.tradingview.com/news/cryptoglobe:a160b0028094b:0...
So... not as scary as the title.
Anyway what is the alternative? Commodities? China's currency is too controlled. Euro(pe) is too reckless. I like Bitcoin for storing value against inflation, but its not a great currency. GBP? Maybe, but for such a small economy, that is a lot of eggs in 1 basket.
I'm the first one to be skeptical of government fiat currency holding value, but which big player is doing it better?
If you're buying into something that isn't "a great currency" then you are being lied to, and the thing that you're buying has been derailed from the original plan.
Why?
A right-leaning (wing?) Canadian politician, Pierre Poilievre, said crptocurrencies would be to 'opt out of inflation' about a year ago. Meanwhile:
> The number of bitcoins needed to pay for shawarmas, groceries, gas, and housing is up 73.1 per cent compared with 5.2 per cent annual inflation measured in Canadian dollars.
* https://www.hilltimes.com/story/2023/03/29/poilievres-over-i...
* https://archive.is/6Ab4T
Cryptocurrencies are way more unstable than any fiat currency (at least of developed nations).
>Why
> The number of bitcoins needed to pay for shawarmas, groceries, gas, and housing is up 73.1 per cent compared with 5.2 per cent annual inflation measured in Canadian dollars.
So its not a good currency, but its a good store of value. No Bitcoin holder is gauging the value in segments of 1 year.
How is it a good store of value?
> No Bitcoin holder is gauging the value in segments of 1 year.
If it cannot hold its value for one year, I have little faith that it can hold its value for more than one year.
- euro
- yuan - ruble - reais The whole dedollarization narrative is like some weird propaganda pushed by china. Look, the dollar sucks, and maybe some countries will flip to the yuan (it's easy to buy off politicians) but those countries that do are going to be utterly screwed because the it's structurally worse than the dollar, and emerging markets will be forced to be shackled to a currency controlled by a competing (producer) interest.From what I have around Brazil is pushing a new(?) common currency for trading within Latin American countries, China is pushing Yuan for bilateral trading with several countries, and probably more blocks and trade partners follow similar policies elsewhere.
Not having all the eggs in the same basket may lead to some egg breaking, but not all of them at the same time. And the increasing perception of risk relying on dollars may make that strategy attractive.
Ah yes, the BRICS idea:
> You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money.
* https://twitter.com/davidfrum/status/1665053372402081792
I think it's more oft pushed by 'sound money' cranks (either gold bugs or their fellow travelers) or by particularly ornery fiscal conservatives with an axe to grind about whatever monetary policy the US is pursuing this week.
https://www.scmp.com/comment/opinion/article/3216363/after-d...
Actual propaganda arm of the CPC:
https://www.globaltimes.cn/content/1195115.shtml
https://www.globaltimes.cn/page/202304/1289865.shtml
https://www.globaltimes.cn/page/202304/1289944.shtml
https://www.globaltimes.cn/page/202304/1288446.shtml
Having all debts and credits in one currency is a recipe for disaster. Not only where the US wishes to make it so (Russia), but when times are hard and the US needs to move to protect its own economy (Sri Lanka).
If that's the case look into the original ideas from Markowitz.
If you really can't grasp the difference, consider the PIGS eurozone crisis as a Euro risk lower in USD (other than global correlation), and consider the recurrent US debt crisis (as lower in Eur other than global correlation). China weathered 2008 very well, and it was by learning from them that most of the world decided on furlough for the COVID recession.
Most economic analysis requires that you leave your prejudices at the front door.
It matters to you because we are coming to one of the harest periods for retirees in modern history. You need to know this stuff and it's a shame it's not taught in school any longer.
Theoretically diversification is a good in itself, but if all the alternatives suck, reality will come running at that theory real quick.
You have a flawed theory that does not match reality.
As shares of totals, Yuan is at record high usage. Dollars are record lows.
Case closed.
Like, the EU has no interest in trying to force the euro on the world. But in the aftermath of Brexit and the Trump presidency, they have grown concerned about other powers having too much control over their trade.
A good case study is pre-Euro Germany. It had all the ingredients of a secondary reserve currency and was in fact used as such. However the appreciation that resulted from those inflows was not wanted at all since it didn't fit with the export-oriented economic model and made exports noncompetitive. As a result German capital markets were never opened to foreigners to the same degree British or American markets are.
While being the world's reserve currency is undoubtedly an "exorbitant privilege" in some respects, it also has many drawbacks. I don't think India or China would be willing to issue Bonds to foreign entities at the volume that the US is doing.
BRICS (Mostly the R and C in that) for the purposes of domestic propaganda.
Bankers and Crypto folks who use the HIGHLY unlikely specter of de-dollarization to drive up the price of things like precious metals and crypto as "safe alternatives.
Even a cursory glance at the state of the dollar shows that there is no reality to the notion of its fall, for all of the reasons you already stated and more.
> The whole dedollarization narrative is like some weird propaganda pushed by china
China or not, it's not "weird". Each country pursues its own interests (obviously, including the US). And that is... normal?
To me, on a 50+ year time frame, the rupee is more interesting than any of the 4 mentioned.
I was just thinking yesterday how if 1989 in China went differently that the dollar right now could be in trouble.
Lula's currency is pretty laughable. A currency that you share with Argentina? What could possibly go wrong?
- Swiss Franc (CHF). "But it's such a small market" -> lol they can make more.
- Japanese Yen (JPY).
Also, please don't format with monospace, it breaks things on mobile or small screens.
The Odd Lots podcast just had an episode on this:
> There's a lot of discussion these days about de-dollarization and whether the US dollar will lose its standing as the world's sole reserve currency. Generally, people seem open to the idea, but they also don't see many good alternatives out there. The renminbi is the obvious candidate to take share away from the dollar, given the size of the Chinese economy and China's role in global trade. But for various reasons, the currency isn't suited to be a global reserve currency. So what would it actually take to become one? And what would be the effects if it started to play a major role in global trade? On this episode of the podcast, we speak with Karthik Sankaran, a longtime FX veteran, about what China would have to do if it really has global aspirations for its currency, and why a more multipolar FX landscape might be good for world financial stability.
* https://www.youtube.com/watch?v=T_EZDfe4y1Q
* https://omny.fm/shows/odd-lots/what-needs-to-happen-for-the-...
Snippet/clip on prerequisite(s):
* https://www.youtube.com/watch?v=mIfMC41-Zfc
Transcript:
* https://www.bloomberg.com/news/articles/2023-05-22/transcrip...
* https://archive.is/8iNgy
So, the ideal is we'd behave responsibility with an unimaginable amount of power at our fingertips. You'll never guess what happened next. Anyhow, after we found ourselves without enough gold to pay off our debts, we simply defaulted and withdrew from Bretton Woods, collapsing the entire system. A fun quote from Nixon's Secretary of the Treasury of the era is, "The dollar is our currency, but it's your problem." Here [1] are some interesting graphs of result economic changes after the dollar became completely free-floating.
So the "real" question is what form Bretton Woods 2.0 will take. One reasonable, if not likely, possibility is BRICS new currency, which is set to be introduced as early as August. The details have not been released, but it seems likely that it will be backed by gold in a similar fashion to the original Bretton Woods, but without any single country having uncontested control over it or the ability to 'default' the entire system. If nothing else, we sure live in interesting times...
[1] - https://wtfhappenedin1971.com/
The beauty of the US dollar is it's always worth a US dollar... It's strength is a measure of much foreigners trust the US economy and it's political and judicial system. What drives the demand for the dollar is the will of people to invest money in American securities and on the American capital market. I don't see it ending anytime soon.
Chinese investors invest on the Chinese market in Yuans. Rich Chinese investors invest on the US market with US dollars.
"Triffin Dilemma" - a national currency used in a global context will always result in spiralling imbalances. Some China guy cited this as a proximal cause of the collapse in 2007-2008 and I don't think anyone would argue with that at all[1]. So there's a pressure to move to an OCA/OCR (optimum currency area or optimal currency region) that's more like "The World", even if that's a hypothetical space.
I mean, look at the United States today, aside from extractive industries. It's pretty much a military humping/fighting a financial industry on these teeny tiny little fast food legs. That's exactly what you would theoretically expect from an economy that's been the global currency for a couple generations, but it's a damn weird shape to bend your nation into.
The solution is not crypto, but definitely an analytically-arrived at unit that's redeemable in a bucket of commodities via a real World Bank structure. Maybe crypto could be a part of that, maybe a "carbon coin" or some other quantitative measure of future value. All this waffle spells the lie to the "international capitalism" story we've been telling ourselves - without World Cops, World Courts, World Laws, there is no World Market. It's bandits in Brioni with nukes and red tape.
[1] Although, of course, yes yes yes, his motives are suspect, but his statement was not. He wants the Yuan but no one else should.
The US has blocked too many people from using the Dollar that the Dollar is not as 'universal' as it once was. So people will look for another alternative, or even many alternatives.
https://www.imf.org/en/Blogs/Articles/2021/05/05/blog-us-dol...
In any case, EscapeFromNY understated the dollar's historical position. The dollar's share of global foreign reserves in 2022 is almost exactly the same as in 1980 and in 1995, and 10 percentage points higher than in 1990. <https://en.wikipedia.org/wiki/Reserve_currency#Global_curren...> As dgfitz said, "Or stop, or turn around".
https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar...
The only way the ratio would change meaningfully is if the current emerging countries dependent on China were to continue to grow strongly for the next few decades.