I remember studying pre-WWI history, and particularly how carefully Bismarck arranged German foreign policy like he was the diplomatic equivalent of Bobby Fischer. Everything was situated perfectly and Germany was totally content.
Then along came the absolute moron Wilhelm, and he managed to Leroy Jenkins Germany's beautifully arranged relationships into an aggressive, tactless nightmare where all Germany's allies were turned into enemies, and everything turned out exactly like you'd expect.
As the saying goes, history doesn't repeat but it often rhymes.
You can also draw a comparison with the late imperial stage of other empires, most recently the British.
The British Empire actually reached its greatest territorial extent in the 1920s and 30s, but it was overextended, policymaking was becoming increasingly erratic and in hindsight we can see the writing was already on the wall
The British didn't really make unforced errors like Germany did, though. They mostly were forced into a fire sale situation as they were fighting for their lives. Even with everything they sold off, they were still within an inch of surrendering. The French story is similar. They may have been in a slow decline, but the war threw them off a cliff.
It's hard to look at what the US is doing and not become extremely angry, because historically the dumb hubristic nationalism always leads to crushing misery. It's so utterly predictable, and yet we're forced to watch the idiocy play itself out again.
When societies can't solve their internal problems internally they tend to turn outward for solutions.
Everybody could see the long string of preventable phenomena leading up to this: financial deregulation, decline of civic institutions, high levels of deaths of despair, rampant individualism, unchecked commerce, rising internal violence, rising inequality, rotten media landscape, open political corruption (not in this order).
My only hope at this point is the minimization of violence when the US resets.
I agree but the difference between the French and the British is the French really didn't have a choice (they got physically invaded).
You could make a very good case that for Britain entering into WW1 was a catastrophic and ultimately unnecessary decision. And you could make a (much more controversial but I think also true) case that entering into WW2 was also not necessary and ultimately fairly catastrophic.
Yet the British elites chose to do both. Pride, hubris, stupidity, maybe well deserved, call it what you want, but in the end British power was given away cheaply. I think what the US is currently doing is foolish but as you say there's also a sort of inevitability about it.
Edit: You could also add the Soviet Union to this, an even more recent example of the end of an empire. Towards the end during the Gorbachev era policymaking went from relatively "normal" (by Soviet standards) to extremely bizarre in a short space of time
Britain should have stayed neutral like Sweden and Switzerland instead of getting economically devastated.
One good thing about the collapse of Soviet Union was that Gorbachev refused to start senseless wars. There were hundreds of thousands of Soviet soldiers stationed in various countries of Eastern Europe, but he explicitly said he will not use force to hold the countries in the Soviet fold. After that the communist regimes there promptly fell. Putin apparently thinks this was a mistake he decided to correct. So I don't know, maybe Gorbachev was telling us the (hubris, stupidity) is not inevitable, and Putin is telling it is inevitable, after all? Time will tell I guess.
Who would you say the Bismarck equivalent for the USA is/was?
What gave the US the power it's now throwing away was an array of successes that made the US an example of good governance for the entire world: New Deal, Bretton Woods agreeement, victory in WW2, Marshall Plan and NATO. There wasn't a single person in charge of that all, but I think 3 stand out:
* Henry Morgenthau Jr.: secretary of Treasury during Roosevelt, one of the main designers of the New Deal, of financing the US war machine during WW2, and also one of the US negotiators at the Bretton Woods conference
* George C. Marshall: chief of staff of the US Army, organized the victory in WW2, came up with the eponymous plan and carried it forward politically. secretary of State after the War
* Dean Acheson: main designer of the Marshall Plan and of NATO, and one of the US negotiators at the Bretton Woods conference. secretary of State after Marshall
I wouldn't put it on one person, it was basically everyone between Roosevelt and Obama. Not that any of them were exactly geniuses, but we've gone from mostly sober drivers to someone blowing a 0.5 BAC.
do you mind qualifying this? it sounds like you mean dollar hegemony, which I might accept, but if you mean foreign policy in general, I can think of many invasions , financial crises, cold wars, lost prosperity for most of those Presidents.
I think we're talking less about the aspect of Bismarck where he won 3 big wars and lost none, and more about the part where he set up a delicate system that was maybe too complex for his successors to maintain, especially under idiosyncratic leaders. We're not talking about financial crises. Bismarck did not stop the Panic of 1873 (in fact, you could wave your hands and argue he indirectly caused it).
As far as "who set up the US empire, in all its complexity?", I'd argue for the 4 guys I named in my other comment, but your list might differ. And if you're just interested in the dollar system per se, I'd probably go with Harry Dexter White, who strangely enough turned out to be a Soviet spy.
Oh, and if you want a pretty clear analogy from Bismarck's system to earlier US monetary history: Benjamin Strong got the Federal Reserve System up and running and figured out a bunch of the right tricks, but he died in 1928 without getting his successors up to speed on how to run things. They failed miserably in next couple years. Bad timing!
Your list and the one above (e.g. with General Marshall, etc) are more illustrative & aligned with developing US Hegemony than the 20th Century Presidents. It seems to me the US presidents have been drawing down hegemony assets since JFK.
It's just that the USA was so dominant after WW2 that it took about a century for the structure to collapse.
A better model than seeing Trump as a wrecking ball, is seeing him as a high stakes gambler, with middling skills -- in the same way that George W Bush made a big bet on the middle east and lost the chips.
JQ Adams, Elihu Root, George Kennan, and Henry Kissinger.
Joe Biden.
I don't think you can compare pre-WWI Germany to the US for many reasons. In the colonial era, Germany as a fairly new state and unlike the UK, Spain, France, even Portugal or the Netherlands, they didn't have colonies to exploit. Worse, in the industrialization era they didn't have access to oil.
This created a paranoia in Germany, an insecurity that were between Great Powers and were dependent on imports and poorer than their neighbours. They felt like they'd eventually get swallowed unless they did something and the end result was WWI. And WW2 if you think about it.
The cost of victory against Germany (twice) was huge. All those Great Powers lost their colonies and they impoverished themselves with war economies while enriching the United States who, at times, sold arms to all sides.
The US is that Great Power now, complete with colonies. It's energy independent too. So it's nohting like Germany. In fact it's turned Europe into a client state (ie through NATO). These aren't colonies in the British Empire sense of occupying India, for example. It's economic colonialism. The Global South is controlled via the IMF and World Bank. The developed world is controlled with security gurantees.
But where I agree with you is that an absolutel moron has come along and threatens to dismantle this entire system. That's what's happening. Splintering NATO, abolishing USAID, etc all diminish American soft (and hard) power.
China's foreign policy has become to sit and wait while the US destroys itself. They don't have to do anything anymore. It's why i laugh when people predict China will invade Taiwan. No they won't. Why? Because they don't have to. As a reminder, One China is the official policy of the US government.
My problem is that empires don't die quietly. They die violently. And we're going to see a wave of fascism. Things are going to get much, much worse before they get better.
> They felt like they'd eventually get swallowed unless they did something and the end result was WWI. And WW2 if you think about it.
I think this exactly how the US administration _feels_. Alexandr Dugin proposed spheres of influence. Russia starts acting on those. China is getting more powerful. Its now or never.
I'm an historical materialist. That means I don't believe religion, ethnicity or political philosophy ever drives international conflict. It's always, always, always material interests. Those other things are just an excuse, something to rile up the populace into supporting the government and dying on the front line.
So some think Duginism and a Greater Russia is driving Putin's expanionist activity in Ukraine (including Crimea and the invasion in 2022). I don't see it that way. It's using the Russian diaspora as an excuse for expansion, similar to what Hitler did in Austria and the Sedetenland. But the interests are material.
Russia does have a "legitimate" interest in not having a hostile Great Power on its borders. I include NATO as an extension of the US. I say "legitimate" in the sense that they're doing the exact same thing the US does. The US has the (ever-changing) Monroe Doctrine and almost started World War Three over Cuba (despite instigating the confrontation in Turkey).
But NATO was never going to expand to include Ukraine. Bush and Biden both made offhand comments about it but countries like Germany would always veto Ukraine's membership because they don't want NATO on Russia's borders. And Putin knows this. So there's some historical revisionism going on to say that Putin invaded Ukraine because of NATO. I personally think he would've done it anyway.
The real problem is that Russia wants a warm water port on the Black Sea and that's what Sevastopol is. Ukraine cut off the water and it's becoming increasingly expensive to maintain that holding so Russia has captured what's essentially a land bridge to Crimea and plans to hold on to it until the West gets bored.
I believe that Putin arguably overplayed his hand by buying European silence on the matter with natural gas dependence.
The US however spends a ton of money and military force and political will projecting power into, say, the Middle East. Is that in the US sphere of influence? No. The US is also a net energy exporter now so you can't even blame securing oil as an excuse for it.
The US isn't operating in a deeply insecure fashion. Instead, they're simply extracting wealth from all over the world for the benefit of a handful of billionaires.
I guess where the US is insecure is in that no system other than neoliberalism can be allowed to exist and prosper because it might cause the populace to revolt. The existence of the USSR actually forced to the US to give Americans something so they didn't revolt. This desire means that any quasi-socialist nation gets starved with sanctions and couped to maintain this illusion.
And the US's big problem is they can't bully and starve China in this way.
Overall some great points here, but some don't make sense.
> The real problem is that Russia wants a warm water port on the Black Sea
Russia already had several other ports on the Black Sea, so it's not clear to me why they'd need to invade Ukrainian territory to get one extra.
> Germany would always veto Ukraine's membership because they don't want NATO on Russia's borders.
They've already voted three other Russia-bordering countries into NATO. They were practically falling over themselves to add Finland (along with Sweden)[1]
> The process in the Bundestag was "extremely fast," DW's political correspondent Nina Haase said.
> Haase said, citing unnamed sources, that Germany had intended to become the first country to ratify the accession, but other countries were faster. "But nevertheless, the signal remains the same... [Germany] is firmly behind the idea of Finland and Sweden joining NATO," she added.
You make the point that the US is insecure about any other system being successful, I think there's a case to be made that Russia similarly couldn't tolerate a prosperous democratic Ukraine sitting right next door and embarrassing them. You could also argue that, materially, Ukraine has natural resources that Russia just wants to steal.
> Russia already had several other ports on the Black Sea
You're not wrong. I kind of glossed over the details for brevity. Sevastopol has historically been the home of the Russian Black Sea fleet and is a much larger port than other Russian ports on the Black Sea, who also have significant commercial traffic, so they're much more crowded.
Behind all this is the Montreux Convention on Turkey's governance of the Bosphorus. Anyone with a permanent naval base on the Black Sea is allowed to traverse the straits (other than in times of war; it's complicated) so should Sevastopol in future fall into enemy hands, it would allow a foreign military power to station warships in the Black Sea. That foreign power could be Ukraine as a NATO member.
As I stated elsewhere, I don't believe this was a realistic possibility but it makes for a justification. I still say Sevastopol is more significant for it being a deep water port and control of territorial waters than any legitimate security threat.
> They've already voted three other Russia-bordering countries into NATO
There's a difference. I'll try to be brief.
Ukraine is flat. It is basically the conventional invasion corridor from Europe to Moscow and was used that way by both Napoleon and Hitler. I mean they failed spectacularly but that's another story. So there's a security argument that the Ukraine border is, in the very least, more sensitive than other borders.
Technically Poland shares a border with Kaliningrad, which is technically Russian territory but that's not quite the same thing. Also, the 1990s and early 2000s were a different time when post-Soviet Russia was weak before it became an energy giant and reawakened as a regional power.
Norway joined in 1949. Different time. Mountainous border. Not really a strategic threat. Norway was a founding member and this occurred before the USSR had the atomic bomb (by a matter of months).
Finland was really a direct response to the Ukraine invasion. It's a softer border than Norway but doesn't have the same strategic threat.
So you can make an argument that Russia has a legitimate concern of having NATO forces on their border. Imagine a scenario where Canada or Mexico joined a military alliance with China and China wanted to put military bases along the US border. would the US just stand by and take that? Absolutely not. So it's hard to completely dismiss Russia having the exact same strategic concern.
But, like I said, I don't think there was a serious threat of Ukraine joining NATO. Borders go both ways. Pre-invasion I don't think the European powers had any interest in a NATO buildup on the Ukraine-Russia border and if Ukraine was a NATO member, a Russian buildup on their side of their border would then become a serious NATO problem.
Would Germany really want to have Article 5 invoked if Russian forces crossed into the Dombas? I don't think so.
> I think there's a case to be made that Russia similarly couldn't tolerate a prosperous democratic Ukraine sitting right next door and embarrassing them.
I... don't. Ukraine is a poor country. A lot of its economy was built on transit fees for Russian natural gas going to Europe in Russian pipeline, a situation that Russia didn't like and they'd actively been building pipelines around Ukraine to avoid those transit fees (eg Nordstream 1 & 2).
In all this, nobody really knows just how rich Putin is. There are just wild guesses but those guesses realistically go all the way up to hundreds of billions of dollars. Russia is a kleptocracy (in a way that the US is becoming, as an aside). It could be that Putin miscalculated Ukraine's resolve and Europe's response and saw it as an opportunity to enrich himself further. I really don't know.
If anything Ukraine is like Venezuela. It's not so much about profiting from Ukraine's oil and gas deposits (for example) but simply making sure nobody else can. Developing Venezuelan oil fields would actually devalue Western oil companies so they're not going to do it. But if nobody else can? Great.
There's a lot of speculation here. Reasonable people can disagree. What I mostly object to is the self-referential idealist interpretation that underlies US foreign policy messaging. We are the good guys because we're the good guys. Rusia are the bad guys because they're the bad guys. Nobody is inherently anything. There are just people and governments responding to material interests. That's my philosophy.
> But NATO was never going to expand to include Ukraine.
Agreed on all points but this. This is just factually wrong. Ukraine formally declared its intention to pursue NATO membership which was accepted by the NATO council.
The most significant early push occurred at the Bucharest Summit (April 2008). Ukraine (along with Georgia) requested a Membership Action Plan (MAP) - the standard preparatory program for aspiring members. NATO's declaration welcomed Ukraine's aspirations and stated that "these countries will become members of NATO". Ukraine's parliament repealed its non-bloc status and amended its constitution to enshrine irreversible pursuit of NATO (and EU) membership as a national goal. Then, NATO officially listed Ukraine as an aspiring member.
In the Vilnius Summit, NATO even declared that "Ukraine’s future is in NATO" and its path is "irreversible".
These were empty words of consolation after the allies decided not to invite Ukraine and Georgia into NATO.
Eventually, you will receive a million bucks from me. I am not giving you any timeline or conditions, but trust me, you are on an irreversible path toward that, I promise.
Der Spiegel has a report detailing the efforts of Germany (particularly Merekel) and France (under Sarkozy) actively blocking any efforts to block Ukraine from joining NATO [1]:
> [2008] was the year that Ukraine was likely closer to becoming a member of the Western alliance than ever, before or since. United States President George W. Bush stood solidly behind Kyiv's accession. But the effort failed, as Zelenskyy made clear, due to the opposition of Merkel and Sarkozy – and an "absurd fear" of Russia. Because of this "miscalculation," the Ukrainian president continued, his country is facing "the most terrible war in Europe since World War II."
There were other European members who had objections or serious reservations.
> Ukraine's parliament repealed its non-bloc status and amended its constitution to enshrine irreversible pursuit of NATO
There was also a period under Yanukovych (a Russian puppet, to be clear) that repealed those efforts, which again changed after the revolution in 2014-2015.
The Vilnius Summit took place in 2023, a year into the war with Russia. As such, I consider it empty platitudes. For one thing, no country can join NATO with active border disputes. I don't see that ever happenign simply because Russia will start a border dispute to avoid that happening.
Even Zelensky recognized the plan as "absurd" [2].
Eh, I don't think that is really a consistent, useful model. It's not that material interests are irrelevant, but ideological alignment even at the most Machiavellian level constrains what's possible, if not outright defining where lines are drawn. You can't ignore how politics happens within countries when looking at how they interact with each other.
Also, messaging matters. To make a crass analogy, if I punch you in the face and tell you it’s because I just felt like it, vs. because I thought you slept with my girlfriend, you’re going to respond completely differently (after the initial surprise).
In fact, everyone who bore witness to the punch would come away with different opinions depending on the reason I gave for punching you. And those opinions have knock-on effects (“We shouldn’t come to this part of town anymore, people just get punched out of nowhere…”)
Even if China begins to take over much of the world's economic power, I don't think the rest of the world will accept Chinese culture in the face of Western social values.
The wave of fascism is already rising in Europe, but it is still very much under control. Like the AfD political party in Germany.
Under control how?
France has Macron siding with Le Pen to keep Melanchon out of power. The AfD's power is growing and we'll see if there exists a coalition that can form a government without them after the next election. Many expect Nigel Farrage to be the next Prime Minister of the UK.
This is why people say fascism is capitalism in crisis. All of these countries are choosing fascism rather than any socialist movement or even saying "maybe the wealthy could loot slightly less from the public purse". The rise of fascism is paved by centrist neoliberals siding with fascists to crush any leftist momentum.
People are increasingly seeing what life is like in China. Affordable housing, affordable food and public infrastructure like extensive metros and high speed trains. That's the real problem with Tiktok (from the administration's perspective). People asking "why can't we have that?" is incredibly dangerous to the system we have. IMHO there's no unringing that bell however.
"Western social values" are a luxury easily abandoned when you can't afford your rent. Populist fascism is rising because people are increasingly desperate and there's no alternative because the centrists are united with the fascists to crush any leftist momentum.
The president ran on having Gestapo in the streets and having concentration camps. How loyal really are voters to "Western social values"? And what are prominent Democratic politicians doing? Suggesting more funding for ICE [1].
A populist party that ran on giving people healthcare and guaranteeing a roof over their heads and having enough to eat would win in a landslide. Every level of our political system is designed to make sure such a person can't rise to prominence.
Don't believe me? Look at the 2024 election results and see how progressive voter initiatives did compared to the Democratic Party. Missouri, a deep red state, had a majority vote for raising the minimum wage, outperforming the Democratic Party by more than 20 points.
> "Western social values" are a luxury easily abandoned when you can't afford your rent. Populist fascism is rising because people are increasingly desperate and there's no alternative because the centrists are united with the fascists to crush any leftist momentum.
I think this is the most important and crucial part of what you've said in here.
If you look, East germany former communists states were the biggest voters in favor of the AfD: Saxony and Thuringia. What I understand is that the left wing parties of today's society have forgotten about the 'conservative' socialism that focused on providing good education, food, housing and employment for the general population. Something that was always incorporated on conservative parties, like the CDU in Germany.
Following the disastrous political consequences of Merkel's 2015 immigration crisis, AfD entered the game with the fury from the German population. The alliance of the conservative CDU with the AfD makes a lot of sense.
I may be insane, but I feel there is always some kind of collective Jungian aura or desire among the general population, especially among the elders, for sane, conservative policies to control society and make life bearable. The writings of Jung are quite telling of this phenomenon.[1]
> What I understand is that the left wing parties of today's society have forgotten about the 'conservative' socialism that focused on providing good education, food, housing and employment for the general population.
I feel the shifting definitions of liberal (US) and conservative taking place under our feet. Suddenly conservatives care about public welfare (but only for the in-group), and liberals prefer laissez faire economy (as opposed to the Trump tariff tantrums).
What were the political commitments of the writers of the pre-WWI history you read? Could they have an incentive to characterize things this way?
The summation aligns with everything I've ever read from anyone about Bismarck and Kaiser Wilhelm.
Margaret MacMillan is a modern historian with a liberal world view and no ideological incentive to defend Bismarck, and in her phenomenal work The War that Ended Peace (2013) she largely supports this view.
Related is the PM of Canada’s speech at Davos today. I don’t think that I have heard such a blunt assessment of the past and future from a politician, ever.
It's not losing it so much as that it is being destroyed on purpose.
The decline has been gradual.
The dollar's portion of global forex reserves has fallen from over 70% in the late 1990s to around 60%.
The Supreme Court's ruling on Fed independency is to be watched.
You're also forgetting BRICs and the EU's efforts to create their own banking systems that would make it easier to do trade and finances without the dollar as an intermediary. The dollar being the reserve currency is going to be come more sudden once mass adoption of those platforms takes hold. Who can blame them with how the US is behaving
"BRICS" is one of those organizations of countries that make even OPEC (famous for being non-commital, non-punishing, barely advisorial organization that doesn't meet it's own goals since the 1980's) look like a very serious group.
> BRICs and the EU's efforts to create their own banking systems
One of these exists. The other is bluster.
Does your data include 2025? Because it was the only year with any international pushback at all, so we shouldn't expect the previous trend to stay unperturbed.
It may also point not just to decline in US stability but other areas of the world with stable monetary policy compared to the 90s
Gradual isn't nearly profitable enough for some people.
"at first you go bankrupt slowly, then all at once"
The decline has been steady since ~2000.
The US dollar being used less across the world has both negative and positive consequences for the US and USG. This is the Triffin Dilemma, and dates back to the 1960s; the USD's dominance over-values the currency relative to other currencies, which hurts exports and thus domestic manufacturing. It also conflicts USG/UST priorities between making decisions that are best for the US people, versus best for international customers of the dollar. Triffin covered this at length in his address to the Joint Economic Committee of Congress in 1959, but in short, the USD acting as world reserve currency creates demand for the dollar, which the US has to be able to supply, which pre-1971 meant extreme strain on her gold supply, and post-1971 means greater monetary inflation.
Most think that the cracks in the financial system started to appear after 2008 (global financial crisis) and become truly visible after the financial system was weaponized through the seizures of Russian central bank USD reserves. It setup a precedent that it happened once it could happen again to some other country.
Cheers to you for mentioning Triffin's dilemma. In my opinion, the dilemma is in the ability of the host country to be able to make "good use" of the exorbitant privilege. The financial system was not only used against other states but against its own people. Instead of developing the country and building equity through the middle class, it cannibalized its own.
Would second what you said. Election has consequences. We better correct course soon before the country is made bankrupt.
It's being destroyed on purpose, with backing from the crypto industry who stand to have the most to gain at the expense of everyone else.
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By whom, for what purpose?
The Trump cabinet is explicitly determined to improve its trade imbalance (export / import) and has spoken about the US dollar’s relative strength as a weakness in trade imbalance.
There’s a delicate, fine line between dedollarization and a heavily weakened dollar, especially when the methods used are viewed as fickle and capricious (tariffs, threats). So it’s basically four choices:
- Dedollarization is not happening (#nothingeverhappens)
- Dedollarization is happening, but not because of anything the Trump admin is doing (lol)
- Dedollarization is happening and the Trump admin is either causing it or exacerbating it, despite not coming out explicitly favoring it (they’re idiots)
- Dedollarization is happening and it’s being orchestrated by the Trump admin (5d chess / malicious actors)
True. Good way to pay employees less.
Edit: to the downvoters, did I lie?
You seem to be talking about an alternative universe where employers are being paid in a different currency.
To be generous, asset holders are hurt less by a weakening dollar than non-asset holders (all else equal). To put it another way, do you think billionaires will let themselves suffer before their employees suffer?
It's a conspiracy!
When the debt gets this big and fixed obligations can't be changed devaluation becomes the only workable solution. Yet it's still robbery.
Always has been.
China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
I don’t think that’s feasible because China’s capital markets aren’t secure for foreign investors and never will be unless China changes the very thing that they want to be. They’d have to open their markets, be open to direct foreign investment, no more China-only ownership of companies, and no more artificial devaluation of the Yuan.
Also the US capital market is huge. Surprisingly huge, even, and there is very little that can change that for the foreseeable future.
> no more China-only ownership of companies
They already allow this somewhat. Tesla's Gigafactory in Shanghai is fully owned by Tesla, and is the first wholly foreign-owned car manufacturing plant in China, operating without a required local joint venture partner.
I don't think one small example matters here. The other thing is, actual foreign-ownership of companies. It matters a lot.
Does using the Renminbi require investing in securities?
It's a very different thing to trust that China will maintain the value of its currency, than to trust that investment in Chinese companies will remain liquid and not be arbitrarily cut to a price of zero.
I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets. Perhaps access to the equivalent of US Treasury auctions?
China is notorious for not maintaining the value of it's currency though.
That's why do many Chinese people buy assets in the Anglo world; assets are much better protected here
Yes, it would be a big change. But if Europe needs to bring out the Anti-Coercion Instrument against the US, an economic weapon it invented to be used against China, the world is in a very different place in belief of what could be safe.
If China signals that it is changing its attitude on its currency, that it wants to be the reserve currency and establish a consumer economy, it wouldn't take much for people to shift these days. Nobody needs to adopt the Renminbi 100% right away, they can transition to multiple currencies for a while as a hedge against the US, and the situation will evolve. Dedollarization won't happen in a month or a year, it will be a multi-year process once it kicks off. But once it kicks off, it will be because of such a loss of confidence in the US that it probably won't be possible to stop it.
> I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets.
Well if you use the renminbi or yuan as just a medium of exchange, well, why bother when you already have the dollar?
To answer your question better, what is the point of access to capital markets of a country and how does that stabilize or strengthen its currency, or make it more highly sought after?
That is an excellent point! My intuition is that the yuan could be viewed as more reliable than the dollar, when the dollar is propped up precisely on the good will that gets destroyed by threatening invasion of allies. China does threaten plenty of invasions, but not in Europe or most of the rest of the world yet.
Reliable how? How would you obtain the currency, and what would you do with it?
> when the dollar is propped up precisely on the good will
The dollar isn't valuable because of good will. Central banks in Europe, or Japan, or elsewhere don't hold dollars because they want to be nice to the United States. They hold them because the United States is incredibly wealthy, has incredibly deep capital markets, high liquidity, and because the dollar is a great medium of exchange.
Unless China wants it to happen, it won't have the reserve currency. It would require big changes in China's part to make it happen. I fully agree with you that they wouldn't open up things like equities markets in a way that could be trusted by outsiders. But I do think they could open up access to the currency.
Right, but what I'm arguing is that the currency isn't going to be that valuable without doing things like opening their markets to outside investors. You could just go with the Euro even if you didn't like the dollar.
That's the thing I keep coming back to. What are the specific features of the currency that make it more valuable than the other reserve currencies that exist today? I don't think China is willing to do what they would need to do add those features, because it requires CCP to loosen control and they can't do that.
If China "democratized" it would unlock a ton of potential and go on to dominate the globe. But doing that requires untenable changes for the CCP so it won't happen.
Plus everyone is going to be mad and distrustful once they invade Taiwan.
not even P/E ratios resetting back to historic norms? Or have we finally entered a new age where highly elevated P/E are a permanent feature of markets?
"This is the new normal" is basically the sign of a bubble about to pop.
>China is intentionally undermining the dollar in order to try to make the Yuan the world currency
The constant devaluation makes it unappealing.
> My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar.
I generally agree. But economic orthodoxy says 'Inflation is only 2%', despite precovid, it seemed more like 4%.
> constant devaluation makes it unappealing
If this is the complaint the dollar is safe. And international holders of dollars aren't idiots. They hold Treasuries, which more or less preserve their purchasing power. (Nobody outside the poor, who have to, and nutters, who don't know better, hold cash as an asset. It's so thoroughly assumed that in finance, cash refers to cash and cash equivalents.)
The insidious thing about inflation is that it compounds. Even just a 7% inflation rate will halve your currency's value in just 10 years.
> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
There's such large fluctuations though, especially compared to the S&P 500 in USD [5] or even TFA's USD shares of FX reserves.
> Compared to real money (Gold) the S&P500 is down over the past 10 years.
Speculation can always drive the price of gold way up past its real value.
Yes, the S&P rose only 4% last year for EUR investors.
I keep wondering what would happen if China and the EU came together and agreed to move all trade to the Euro as a pushback of all the current insanity. I don't think the Yuan can ever be the global trade currency given China's current structure.
> My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar.
You mean devaluation is causing the growth of SP500, or the other way around?
the S&P is only growing when the denominator is USD. Not Euro or Gold.
It's kinda like saying during "My bread appreciated!" during hyper inflation.
IMO we're in one of the cases where "Number go up" is actually bad.
In the UK we have a convenient way of observing this phenomenon.
The FTSE100 is mostly multinational companies valued in pounds. The FTSE250 is mostly British companies valued in pounds. If the FTSE100 goes up while the FTSE250 stays flat or falls then it means the currency got devalued and there's no real growth.
How can that be? Maybe gold, but the euro has fallen relative to the dollar.
I don't think China is forcing the US president to do crazy stuff every day
Yes. They are playing chess while the US is playing "shoot yourself in the dick".
Gold is not "real money", come on.
That chart is also really weird. With log scale turned off and expanded to all time...
Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely.
> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
Isn't this the real chart to look at for that? Completely different story when you select max on the timeline.
Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)
> Isn't this the real chart to look at for that?
No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns.
> Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives.
Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
Any advice that you both understand and fits perfectly into your mental model is probably coming from whatever dogma you already follow and is therefore useless.
Any advice you don't understand is, of course, useless.
Any advice you do understand but doesn't fit into your mental model will just get rejected.
“I always pass on good advice. It is the only thing to do with it. It is never of any use to oneself.”
― Oscar Wilde
Although certain "advice" is actually SOP, in that case it is good to know (like stop, drop, and roll).
S&P gets you dividends though, so the interpretation of that chart is tricky.
Holding the S&P, you can still do better than holding gold, even when the GOLD/S&P ratio is positive.
It's a lot less Fiat than USD.
How so?
I guess because gold isn't created by decree?
Supply is only one half of value. The demand for gold is almost entirely speculative, whereas dollars can be directly used for almost anything.
The analytical philosopher in me says:
"Define real money"
I think everyone can agree if you specify your definition.
A goat or a sheep cost roughly the same in gold today as it cost 2000 years ago during the Roman Empire. Gold is the only “real money” in the sense that it is the only stable measure of the value of basic needs over centuries.
First link to ChatGPT as a "source" that I've seen in the wild.
Times they are a-changing.
I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
Unless there's something I'm missing, there isn't even a response at the link - just a question.
(And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
Yeah, I saw that link and had a few thoughts immediately collide in my head:
- Wait, WTF? Really??
- But but but it's a *chatbot*, not an authority
- We're doomed
Goat production is overall much cheaper now so wouldn't we expect the "real" price to be less? That it tracks the price of goats and sheep makes me think it's not a particularly stable unit of value since I don't expect goat or sheep to be valued in a stable way, especially across millenia.
A goat costs exactly (not roughly) the same in goats today as it cost 2000 years ago. So by that measure a goat is the only stable measure of the value of basic needs over centuries.
That's why new stablecoin is backed by goats: Capracoin
Ahh, yes, gold and the speed of light in a vacuum - the only real constants in the real universe.
Just last week, I was accused on HN of "not knowing what I'm talking about" when sharing data showing, and my interpretation of, a declining US dollar globally.
It is so obvious in the context of globalization: countries seeking power will chip away at fiscal dominance of others with a thousand cuts. Why wouldn't they? Especially after years of getting bullied.
So many people are so dependent on this reality that I think it's going to happen long before any Americans accept it has happened.
Yes, people are in denial about these things. I'm still salty for the time I posted I believe the covid money printing will lead to inflation and I was down-voted for it.
Similarly I was downvoted for pointing out that the developed markets index returns (30%) doubled US market returns (15%) over the last year. Simultaneously the value of the dollar has dropped 10%. I simply stated that we’re seeing capital flight from the US. Ray Dalio said the same thing this morning.
And if you look at pricing as a proxy for capital flows, SMMD which is Russell 3000 minus S&P500 has had a heck of a run in 3 months. IMO People are retreating the mag7
I hadn’t noticed that , that is interesting. Makes sense to me. That’s not good for the S&P considering that ten stocks make up 40% of the index.
And since the wealth effect is really the only thing keeping the US out of a recession, if the MAG7 fail then we’re looking at serious economic problems.
HN may not have the best experts - people are kind of quick to downvote. Almost in a reddit-like fashion.
Oh, that’s not entirely fair. I feel like the self appointed experts almost have more pretentiousness than Reddit.
Plenty of Elon musk types / admirers who think that because they’re good with computers they know everything about everything.
For those who are not bothering to read this,the article essentially states that de-dollarization is happening in pockets (e.g., reserves down to ~58-60%, Treasuries foreign ownership at 30%), but the dollar's core dominance persists.
What would replace it? I guess the options are Yuan, Gold, Oil or maybe BRICS in the future, none of which are safe, stable, and liquid.
I can't believe people actually bring BRICS in serious discussions.
HN is great for technical discussions, but is below average for political or macroeconomic discussions. A HN comment thread on those topics is essentially indistinguishable from a NYT comments section, which I mean as an unfavourable comparison.
Turns out that being good at SQL does not make one good at the subtle social art / science of power and governance. If anything, the correlation is inverse. This shouldn't be surprising.
>BRICS has implemented initiatives that could reform the global financial system, such as the New Development Bank, the BRICS Contingent Reserve Arrangement, BRICS PAY and the BRICS Joint Statistical Publication. BRICS has also advanced de-dollarization to reduce the use of the U.S. dollar as reserve currency. In its first 15 years, BRICS has established almost 60 intragroup institutions and an extensive network including think tanks and dialogues.
Your linked page doesn't actually appear to render any sort of compelling argument for this.
In fact - the entire argument seems to more accurately hinge the conditional left off the main saying, so the full description is:
"Bad money drives out good if they exchange for the same price."
But that requires a legal structure that enforces the disparity, and the summary of the whole thing basically boils down to:
---
If given the choice of what money to accept, people will accept the money they believe to be of highest long-term value and not accept what they believe to be of low long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession and pass the bad money to others.
---
But if anything - this is exactly an argument for the value of soft power to the US, because we can't enforce how other nations transact, except through soft power.
In practice, everyone wants to spend their dollars, not their gold, or their bitcoin, or their Euros, and so dollars it will be. What else is there that anyone both with pay with and will be accepted by the other party?
Soon dollars might not be accepted if US companies wants to buy things in the EU, they will have to pay in euros (part of the anti coercion instrument that Macron and others have been talking about the last couple of days)
I don't think it will happen. 10% of EU bank loans that are dollar-denominated [0]. If they cut the flow of dollars into the EU, the debtors of those loans would wind up offering a premium for their goods and services to non-US companies, making them uncompetitive. It would be a roundabout tariff that would hurt the EU countries too much.
Couldn't you make the same case for every other former reserve currency which has had something replace it?
the BRICS Unit was proposed to resolve the "Triffin dilemma", which is that the structural deficit necessary to maintain reserve status inevitably erodes trust in the currency over time. China's economy also relies on exports which would not be helped by reserve status. which is to say an eventual replacement may not be the yuan or any other single currency
Or the Bancor[1], like how Bretton Woods was originally envisioned.
The harsh reality is that a federated state system with a very weak governing body economically and politically is extremely unlikely to be the global trade currency.
Let's what-if a scenario where the Fed is made subservient to the President and the President wants the dials turned to 11, let the next guy deal with the consequences.
The dollar isn't indestructible. If not the Euro, what?
Probably a mix of things, including commodities like gold.
I was referring to Europe and america together -- and I think your conjecture is real -- what if we move to a projection of holographic economy over the real one. The answer is, whichever gets the most people to cooperate and support that holographic system will survive. In general collective weak systems tend to not work well there. But hyper centralized systems tend to over index on projection. Which is why we have the separation.
Countries are replacing it with Yuan, Euro, Yen, Gold, Oil, and more stuff.
As a long term Gold and Oil pretty much are
Oil price is highly volatile for it to be reserve currency. A mix of Gold, Yuan, Euro, Dollar makes more sense.
Bitcoin
People downvote this but Bitcoin has some very nice properties:
- easy to verify/impossible to forge (as opposed to gold and paper currency)
- fixed supply (as opposed to paper currency, oil, and even gold)
- easy to transfer from one party to another (as opposed to gold, oil, and physical cash)
It’s dumb because it requires uninterrupted access to an incredibly complex system. The cognitive dissonance of people who see bitcoin as resilient is hilarious.
It's a peer to peer system that has had 100% uptime since around 2009. I think maybe you have cognitive dissonance?
Because it’s geopolitically irrelevant, not because it’s robust.
Split the user base along geopolitical axes and see how long the consensus algorithm lasts.
Gold bars don’t have this problem.
Huh? Sorry, I don't understand any of what you are saying now.
If a sovereign government declared bitcoin illegal, it becomes illegal. There is nothing unique about any asset to stop this because the rules are all made up and can change anytime.
The context of my comment was Bitcoin as an alternative to traditional reserves. I’m saying that in a domain as lawless as international law, gold bars make sense in a way that bitcoin does not.
It has at least one fatal flaw: the math it is based on. I feel like it won't be too long before a few major weaknesses are found and bitcoin will lose all security.
Bitcoin has been running since 2009 with plenty of incentive for hackers to find flaws in it and they haven't found any. It uses standard cryptography that is used by all our computer systems. If a flaw exists it's not just bitcoin that will be damaged but everything we use.
Suffers from no government having a stake in it. If it causes them problems, it can easily become illegal.
Precisely this makes it attractive. If it can't be _your_ currency let it at least be a currency no other nation controls.
> If it can't be _your_ currency let it at least be a currency no other nation controls
At that point just hoard resources. Holding a bunch of Bitcoin in a crisis is useless for a country if no other country will buy them off you in exchange for tradeable hard currency.
"just hoard resources" really has nothing to do with a world currency to replace the dollar, which is what we are talking about here. In a crisis you can't eat dollars, gold, oil, or bitcoin, so yeah, you kinda have a point, but an orthogonal one.
> In a crisis you can't eat dollars, gold, oil, or bitcoin
But you can easily trade dollars for stuff Americans will sell you. That's the advantage of a national backer. In a crisis, they'll welcome the influx of capital in exchange for goods and services. Precisely what you need it you want to spend it.
This is why sanctions fuck up reserve calculations. If, in a crisis, America will sanction you, you might as well have held gold or Bitcoin.
You are right. My point is that if you have international trade of even mild complexity, having a currency is very convenient so trade will end up being denominated in one. No reason it can't be some crypto that is not backed by any nation.
> No reason it can't be some crypto that is not backed by any nation
There is a great reason: a state-backed currency should always be accepted by that state. If the world is in crisis, you may wind up stuck with your Bitcoins.
I thought we were talking about World reserve currency here i.e. international trade.
I agree that you need the currency to be accepted by the state for good local trade support. But that was not the point.
> thought we were talking about World reserve currency here i.e. international trade
Yes. If you're a random country, you can use your dollars to buy shit from America. Countries hold reserves for basically two direct reasons: to intervene in FX markes and protect their imports. The latter is the main one. At the end of the day, your ideal reserve composition matches your import portfolio because you want currency you can send to the people who are selling you shit.
Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation? I've heard that argument made somewhere but maybe it was just a rumor to try to legitimize Bitcoin?
> Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation?
Yes, none of that makes an iota of sense. If a military wants to take inflation into its own hands, it has far-better options. From hoarding to, you know, taking shit.
Lots of countries outlaw other country's currencies. This is nothing unique to Bitcoin when we are talking about a world currency to replace dollars.
Just because frivilous money printing is bad does not mean that a fixed supply is good. A fixed supply is a terrible property to have in a money system. It's very beneficial to have a money supply that can grow or shrink according to demand.
This is a tough argument to engage with. Define "frivolous" when it comes to money printing. Define beneficial, and define beneficial to whom. Talk about who decides how much money to print. And you said it's beneficial to have the supply grow or shrink. We know "printing more" is how you grow the supply, but how do you shrink the supply?
> easy to transfer from one party to another
"Let me just set up my P2P connection to the Bitcoin network and pay mining fees and hope a miner validates the block"
vs
"Here's a bar of gold mate"
Sure, real easy
OK, how do I know that gold is pure and real? What if you live on the other side of the world and I want to buy that gold from you?
And there isn't any "hope" involved in bitcoin transactions. Connecting to the peer to peer network is super simple (way, way easier than creating a brokerage or bank account, and no ID or approval is required). Miners will pick up your transaction (and yes fees will help speed that up, as with any financial transaction) and it will be included in a block. Bitcoin has been doing this non-stop, flawlessly since 2009.
Bitcoin doesn't really solve the trust issue, because it covers half the transaction. If I send you a bunch of bitcoin in exchange for oil, how do I ensure the oil shows up?
There are fixes to that problem, of course, but it's not bitcoin itself that's the solution.
50% of a transaction verified is a whole lot better than 0%
> "Here's a bar of gold mate"
Yeah, super convenient. Well worth it. I'll just go with gold bars on me to the market to buy lettuce.
Nobody is talking about using Bitcoin or gold for transactions. For which nobody does anyway. The whole discussion is about reserves.
OP was literally comparing payments in gold and in crypto. For which kind of transactions? I admit, it was unspecified, and it might have read too much into it.
By it sure does sound simpler to type some numbers that to cut up pieces of metal.
But Bitcoin is backed by nothing. At least the USD is backed by the sole superpower in the world (at the moment).
What does "backed" mean to you here?
Whenever Bitcoin is brought up, the same arguments against it are made by people who are too arrogant to look up credible counterarguments. I've decided to stop bringing it up to the HN crowd since it seems like a magnet for downvotes.
It's no secret that our current US administration is envious of China. So in no small part they probably want to model the US Dollar after the Renminbi. Drop the value internationally to incentivize American exports, and manipulate the hell out of it. (Hence why they have dropped inflation as a political issue - some in the administration are essentially rooting for inflation to get much, much worse).
It should go without saying that this would be shortsighted - China made it work because they were able to take advantage of a strong international market denominated in USD. The US cannot destroy our own common market and currency and expect to take advantage of it.
Furthermore, we know what a de-dollarized world looks like - imperialism. If you need to secure oil/mineral/food for your economy but you need expensive foreign currencies to acquire it, it suddenly becomes much more economically appealing to take the resources.
> probably want to model the US Dollar after the Renminbi.
I don't see that. Given trump's history, he thinks that going back to tariffs will allow massive tax cuts. As he trades in real estate, tariffs are inconsequential for him
Trump is a populist.
He supports tariffs for the exact same reason Bernie Sanders does. There is a reason so many bernie bros jumped to camp Trump in 2016 when (globalist) Hillary won the nomination.
There is no secret or conspiracy going on here. Trump is a populist president and is unsurprisingly doing populist things, elected because of his populist stances. At this point you have to have stabbed your eyes out and shoved spikes in your ears to not know that all he does it gush about bringing back 1950's factory worker dad.
yeah, he’s a real populist with the <15% that wants the federal boot on everyone else’s neck. i think there’s a name for that specific type of “populism”.
Don't come to me if you weren't aware that populism is a left/right spectrum.
if you wanna cheer for fascism, you should do so openly. no one is fooled anymore, and no one will think any higher of you for being in denial about it
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There's a difference between Trump says populist things and Trump does populist things. Much like "saying things I want to hear" and "saying things I need to hear."
For your factory worker example, at exactly a year into his presidency, we've yet to hear populist points on:
- a comprehensive overhaul to address medical costs for workers
- point-by-point implementation of tariff revenue in reshoring and subsidizing of industry
- how AI is going to support manufacturing gains to the degree we can become competitive with China
Fascism always wears populisms clothing, but they aren't therefore directly equivalent. Bernie and Trump both support tariffs but for different reasons (and to different degrees). Likewise you can gush about 1950's factory workers for different reasons. One is purely to do with economic power of the lower class, the other is to do with supposed Golden age of American history. They have overlapping bases but that's merely a part of their Venn diagrams.
Also Trump already passed the massive tax cuts based off the assumption of income from Tariff's, and those tax cuts disproportionately benefit the rich. I don't think we really need a conspiracy to explain the likely motivations.
We print money, send it around the world, and the world sends us goods. It was a great thing.
For us individually. For us collectively it was a horrible thing. We lost the means and incentive to produce anything durable, including a healthy, educated, sustainable society.
People planning the post-WWII system wildly overestimated how how disciplined Americans could be.
The whole point of the US transitioning to a service economy was that it would upskill the workforce into the world's Delta Force team of highly educated scientists, engineers, researchers, etc. The rest of the world would handle the boring stuff like actually manufacturing the beautiful inventions designed by the US.
The problem is that a lot of the US populace is gung-ho patriotic and willing to die for their country, but absolutely refuses to learn math or generally do their homework for their country, which is what's actually required for this whole scheme to work.
I'm paraphrasing the shockingly astute observations of this guy[1].
>People planning the post-WWII system wildly overestimated how how disciplined Americans could be.
We had the post-WWII optimism and then the post-Cold War optimism clouding the judgment of an entire country.
I kind of wish we'd been more curmudgeonly like the Europeans.
Yeah, I've heard this interpretation before that this is the US trying to wean itself off the resource curse bestowed by a strong dollar. I think it's a fun idea, but there is no reason or strategy to this, I'm afraid. Just stupid people doing what they do best, doing stupid things.
I agree, the whole thing is stupid. But, when you don't have a healthy, educated society, they wind up being easily conned into electing stupid greedy people. So it seems that the resource curse may lead inevitably to systemic failure. Good times make weak men.
Yes... so lets vote someone in that does all the things towards creating a less healthy, less educated and less sustainable society.
US was doing just fine btw. I know this because people like you blow the small issues way out of proportion, and the reason this haplens is that there is no real issues to worry about.
Whoa there. You're making quite some assumptions about me, it seems. I'm in no way advocating for the present administration, not in strategy nor in tactics nor in any other way.
I do think that the US was not "doing just fine", clearly, because our society was not healthy or educated or sustainable enough to avoid our present fate. It's easy to blame 'them' for all our woes, when we collectively made 'them'. Obviously we can't prevent every idiot and psychopath from existing, but we've certainly failed some 30% of our population if they fall for this crap. And this is the price we pay.
Something that weirdly both Milton Friedman and Karl Marx would equally agree on.
The point of an economy is not to make a profit or collect currency. The point of an economy is to provide ourselves with goods and services.
Focusing all of our efforts on making things so that we can send them to other countries in exchange for pieces of paper is backwards.
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They are envious of most dictatorships...
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>we know what a de-dollarized world looks like - imperialism
Is this some kind of joke? Or is it only imperialism when other countries besides the US do it?
I know it's pretty common shorthand to describe American post-war interventions as "Imperialism". But Imperialism before Bretton-Woods was a very specific and intentional international policy - literally conquering and/or colonizing land to secure resources. Which is a bit different than America's "spheres of influence" thing today.
The two are very linked - the tacit agreement of the postwar order was for America to use its might to expand a common market on behalf of the shared benefit of NATO members. But the collapse of today's "American empire" does not mean the end of empires. If anything, the opposite: instead of one common international market, we will return to a 19th century scramble for land.
Venezuela would like a word
Well, that's just it. America has not so brazenly claimed territory for such selfish reasons in well over 100 years. Which is proof enough that America is pulling up the ladder on Pax Americana.
Are you familiar with a country named Iraq?
Obviously, but we're comparing apples and oranges here.
- Iraq was never a major oil concern for the US. Perhaps maybe stabilizing global oil prices - but the primary beneficiaries were actually our European and Asian allies.
- We never just "took" the oil for our domestic market (which is what we are basically doing in Venezuela)
- Even policymakers who have publicly admitted that Iraq was a massive intelligence and political failure all agree that regional stability was always the main goal.
Similarly we were in Afghanistan for-freaking-ever which had no clear resource benefit or even clear goal.
I would even go so far as to say that for most of the 20th century, America's foreign policy interventions are more easily attributed to our failed role as "World Police". We were brought into Iran because of the British, we were in Vietnam because of the French. Kuwait because of Saudi Arabia. Korea and Lebanon directly.
So while yes you could paint a broad brush and say all of this indirectly was to expand America's "empire", but as an international alliance where America carries the big stick, the US actually carried out a lot more on behalf of the overall alliance than one would realize.
That alliance that the US is now trying to dissolve.
> - Even policymakers who have publicly admitted that Iraq was a massive intelligence and political failure all agree that regional stability was always the main goal.
And in their spare time they pretend to sell bridges to people? Nobody sane would believe that invading a country promotes regional stability. The idea is absurdist, the point of invading a country is destabilising it and disrupting any power that the locals might have. Forcefully toppling governments and killing large numbers of people has never been a credible path to stability.
The Assad dictatorships in Syria and the Hussein regime in Iraq were proponents of Baathism. The former had occupied Lebanon and invaded Israel while the latter had invaded Iran in 1980 and annexed Kuwait in 1990.
> Nobody sane would believe that invading a country promotes regional stability.
Then you should read about some of the biggest influencers in US foreign policy since WW2. There’s one guy whose entire career was spent essentially trying to convince the president / military brass to bomb enemies into submission: https://en.wikipedia.org/wiki/Curtis_LeMay
I’m sure you’ve also heard of Henry Kissinger.
Anyway, pretty strong history of US political figures dehumanizing foreign populations, justified by some western moral superiority. Direct through line to the Bush presidency (last of the neoconservatives).
Are you suggesting that LeMay or Kissinger believed that invasions promoted regional stability? On what basis? When Kissenger wanted stability he famously promoted détente with Russia and negotiating with the Chinese.
Kissinger did a lot of evil stuff, but a big part of his thinking was when he wanted an area wrecked he sent in an army, and when he wanted stability he negotiated.
>America has not so brazenly claimed territory
No, just sovereign resources. Totes not imperialism. At all.
Nobody is cheering for inflation to get worse, they are celebrating it being held down to 2.7% after higher inflation a few years ago.
The U.S. is a net exporter of oil and food and self-sufficent for majority of its mineral needs as well.
There is no need for U.S. to crash its currency to incentivize domestic production, it can just impose tariffs on imports to do so.
> Nobody is cheering for inflation to get worse, they are celebrating it being held down to 2.7% after higher inflation a few years ago.
Trump is actively fighting the federal reserve to drop the interest rate to 0%. Members of his team regularly do interviews where they say "it's going to get worse before it gets better". Inflation is being held down despite this administration's best efforts.
> The U.S. is a net exporter of oil and food and self-sufficent for majority of its mineral needs as well.
And has been for a while. But the current conservative rhetoric is specifically about bringing manufacturing jobs back.
> There is no need for U.S. to crash its currency to incentivize domestic production, it can just impose tariffs on imports to do so.
I don't think autarky is this administration's only stated goal. They specifically see an export-led economy as being more important or even "legitimate" and are pushing for other countries to import our goods. Devaluing currency is a strong way to incentivize exports and China's currency manipulations were the key to their rise as a manufacturing power.
> Trump is actively fighting the federal reserve to drop the interest rate to 0
The interest rate was near 0 for years, it did not cause inflation. Fighting for low interest is not same as being pro-inflation.
The reason it was 0 for so many years was because the Fed was trying desperately to create inflation during this time. (Which was chronically low for other reasons).
Lowering interest rates to create inflation is literally one of the core tenants of the Federal Reserve:
This is how you grow a sclerotic, internationally-uncompetitive domestic industry. See: shipbuilding.
Where tariffs work is as a nursery policy. Give firms a safe haven to grow in. Then let competition hone them. South Korea has pioneered this playbook; China copied it. We were sort of doing it, but the current administration blew up our nascent new energy industry.
It's also debatable how important tariffs even are for "infant industries". In most situations, if you ever remove the tariffs, the native industry is just as likely if not more likely to die out to any serious foreign competition.
For South Korea and China, tariffs were not a very key part of their industrial policy. Which is not to say that the government didn't have a massive hand in the success of their native industries. Case in point: shipbuilding for South Korea. The government was key in securing the capital investment in the massive drydocks the entire world depends on.
> For South Korea and China, tariffs were not a very key part of their industrial policy
Cars were absolutely incubated by Seoul. In part through drastic trade protections.
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> the current administration blew up our nascent new energy industry.
Which industry is that?
Solar, wind, and grid-attached battery.
In the late teens, China was dominating all of these industries.
Under policies of the Biden administration, these industries were growing domestically in the US and we were increasing our share of the global market.
Over the last year those domestic industries have been destroyed. They are barely surviving and have stopped rapidly expanding. All gains made against China's dominance in these technologies has been lost, and then some.
Any links to data on these claims?
Plenty. Which specific data are you looking for?
Which part?
The problem with tariffs is really just trumps complete instability. Why would anyone invest in domestic manufactoring when Trump wildly flip flops on all tariff policy using it as a diplomatic punishment and reward system? Especially when his tariffs in general are legally questionable at best and the other half of us politics are against them just in principal. Imagine investing millions in a domestic factory and then trump gets a personalized jet from some random nation so the tariffs you were depending on for your profit margin are gone. Or Trump loses the midterms and now tariffs as a policy are gone. Unless Trump both becomes a dictator and sets the tariffs in stone without changing them too much, or democrats come out in wide support of tariffs themselves, I don't see how you could use them to invest your money.
Also, anything companies build inside the US (factories, supply lines, etc.) just becomes an economic hostage for a Trump to use for further rounds of extortion.
So it's not just that the policies are (A) counterproductive and foolish and (B) changed on a whim and (C) have no long-term foundation and (D) are changed for corrupt reasons... but even after all that, (E) the corrupt person "making deals" is incapable of honoring them.
[deleted]
Precisely. People in this thread almost seem mad that the economy didn't crash in Trump's first year.
Hope and wishing aside, if you think anything Trump is doing is gonna benefit the economy, you really show your ideological side.
For example, businesses are hesitant to invest in domestic manufacture because the tarrifs can be undone by next president. But the reputation that US is building right now cant be undone. Investment in manufacturing takes years, not to mention that its not like America has lots of people wanting to go work in mines and factories. Meawhile as countries with sane leaders adjust, US is gonna be less and less relevant.
So in 5 or so years when your house value and investments are way down and there is a Dem president and you think about complaining about economy is bad under liberals, remeber who cause it all. Most of the current economic problems that existed in late 2020s have origins with Reagan era economics.
The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve.
The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged.
So draw from that whatever conclusions you wish.
It’s not just that
This is a gradual decline. From 70% in the 90s to 60% today. Today there are more options like the Euro that didn’t exist in the 90s. People can argue over EU economic stability, but it’s there as reasonable option.
As time goes on, fewer people are alive that predate the EU and more people will perceive it as a lasting institution.
Additionally, we've now seen the EU survive the departure of a major economic power (the UK). More people are certainly willing to believe in the stability of the EU now.
Another major currency is the Yuan, and some countries may be as willing to trade in Yuan to improve relations with China, so perhaps we won't see one single reserve currency but two spheres of influence with most countries maintaining reserves of multiple currencies.
Interestingly, there seems to be more good will and amiable vibes between EU nationalities than within the US even. Even being enemies for a thousand years, I don't doubt that Swedish and Danish men would go to war for one another, or French and German. It's complicated yes, but the continent is more unified in spirit than it may seem to an outsider.
German here: I'd go to war (and likely will, with how it's looking currently) for any country that shares our values and is an ally or friend, that's being attacked by an evil force such as russia. And that of course includes my french brothers to the west.
Finnish reservist here in Germany. Ready to go. Prost!
Prost, my friend. May we never have to meet.
American expat here in Spain. I do 11 pull-ups every two days and run 7 miles uphill. Ready to go! Salud!
See you on the battlefield.
[dead]
Rarely have prime numbers been so macho.
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Spanish here: I wouldn't go to war even for my own country, imagine for the likes of France or Germany.
80 years ago we were the bad guys, and far more brave people than me, from other countries, stepped up to curb the evil. This time us Germans need to be on the right side.
Enjoy extinction!
Thanks German brother :) I think our main issue in Europe is the lack of a common language. It makes it harder to build strong ties and realize how close our values are.
Which is why I long for the day where a European federation supersedes the weak and fragmented national states we have now.
Adopting English as legal secondary language in every EU member state would maybe be a good first step.
Vat hapened tu ze komon English I got mail abaut 20 yers ago?
Agreed, there is always this little story to remind us of our unity - at least from the perspective of the draftees/workers back in ww1, where everyone was basically forced to fight each other by the elites
That's pretty caveated. Not exactly a ringing war cry
Shares values
AND
Ally
AND
Being attacked
AND
Attacker is evil
I think you'll continue to be safe posting on HN
People place individual, stringent conditions on life threatening responses? Keep going, you're on to something there.
Very funny you got me there.
I think you’ll find that threats of violence (which is what your comment is) need to be much more unhinged to be effective deterrents. Remember you’re warning off barbarians (eg us Americans or the Russians), not civilized folk.
Are you posting from Ukraine?
If he is, it won't be for very long. The most visible merc was a retired US colonel, he ran off home within weeks, got drunk on the War on The Rocks podcast and revealed the corruption and depravity of the "good guys."
You should define what "our values" is when making such bold statements.
Freedom of speech, democratically elected representatives, protection of minorities, religious freedom, to name a few.
I can already hear people storming out of the woods, ready to write how the EU itself is undemocratic, or how free speech isn't real in western European countries. I disagree with you.
Well, indeed, freedom of speech in the EU isn't freedom of speech as only a certain type of speech is allowed. Conveniently weakly defined "hate speech laws" (even in private conversations!) allow easy political suppression. Or just lawfare through defamation, which is happening in Germany at the moment (4,400 defamation cases by politicians, last year).
Regarding the EU, the only elected representatives don't have the right to choose which laws they will vote for. If it was in a soviet country no one would call it a democracy.
Jacques Baud, Alina Lipp, Thomas Röper, Nathalie Yamb, Xavier Moreau disagree with you.
And unlike you, some random anonymous poster on this polite version of Reddit, everyone knows what they do.
They are pro russian propaganda mouthpieces and can go fuck themselves. Specially Alina Lipp, may she have fun in her beloved russia.
most humans share the same core values. values antithetical to war.
... such as usa?
I have many moral problems with that scenario. I used to live in the US a long time ago. The US is sick; there's a mad king at the top who doesn't have the well being of the nation in his interest, and he is driving the world towards war with every passing day while dividing his own people. War with the US isn't a clear cut "good vs evil" situation as the EU vs russia would be, it would be a utter tragedy, not wanted by neither the populace of the EU, nor the US.
That said, yes, I would defend Europe against the US, even though I think that fight would be short, deadly and decisive if it really came down to it.
What a fucked up world we live in, just because idiots voted for a convicted felon.
> War with the US isn't a clear cut "good vs evil" situation as the EU vs russia would be
I don't think EU vs Russia would be a "good vs evil" situation. Russia/US seem pretty similar to me, dictatorship/propaganda with a majority of the population being regular people not in favor of any war, and 30% of indoctrinated people.
You seem to have very little contact to Russians living in Russia or Germany. Their version of "not in favor of any war" is a very strange one – it's more a stance of indifference than disfavor.
Russians were and are pro war by all reports.
not my Russians friends or colleagues. I also don't trust any poll coming from Russia.
I don't know why you believe that a decades-long strict dictatorship like Russia has more democratic support for its "evil" government than a country whose leader was elected just 1 year ago with approximately 50% of the vote.
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Russians are lining up to go to war under the promise of money, around 30k a month last time I checked. Americans not so much, in particular not against Europeans. It's different in my view.
As an American, a sizable number of Americans are lining up to join ICE under the promise of money.
And also, our whole military recruitment strategy here outside of drafts has been "the GI bill" – paid tuition in exchange for lining up to go to war.
I don't know that the gap in morals is as wide as you think.
But is it 30k people a month, for years on end (or rather 75k considering US population is around 2.5x the size of russias population)?
Russians are much, much worse than Americans in terms of their eagerness to kill others, in my opinion. I wish it were not so.
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Americans don't need money to fight. I was paid $0 with the YPG and had to bankroll my own time. Lots of Americans there. I met a lot of them that didn't even really give a shit about the sides of the war, they just needed to fight something. We're a savage people.
Which historically has worked more for us, than against us.
The rot is much deeper. Donald Trump was impeached twice, and both times the Republicans voted to acquit him.
French here: If we can send French soldiers to fight and die in Mali for years, only to end up with a military junta that prefers the Russian Africakorps, I think we're ready to send our soldiers to die defending a European ally.
Plus, with global warming, this may be the last chance for the Alpine hunters to shine.
I think the people on this continent have a lot more in common than they might first realize. We certainly have our own cultures and language but beyond that I think we all share a certain European heritage, core culture and values.
There's a certain stigma especially in Germany caused by the WW2 and the the leadership has been complacent to rely on Bretton Woods agreement. But as we're seeing now the geopolitics are doing a 180 degree turnaround and given these circumstances I expect sooner or later Europe will collectively understand the utmost importance to com together and to regrow and redevelop the military to support independence and not having to bow down to any master in the East or int he West.
Absolutely. "Finlands sak är vår." Finland's problem is our problem, same for Denmark and Norway. We must stand together, we have no choice.
The great minds that - after WWII - built the new Europe had in mind that there should never be war again, which is best realized when former enemies become friends and closer bonds are established at multiple levels: politically, economically, culturally (unions, trading exchanges, visits/open borders/teaching common European values in schools).
There is a strong political and cultural foundation in geographic Europe for the political EU:
some exemplary giants/EU co-architects:
Integrated Italy into Western Europe
Advocated supranational institutions
Paul-Henri Spaak
institutional designer, key role in the Treaties of Rome (1957)
helped design the European Economic Community (EEC)
Advocated supranational institutions
Walter Hallstein
1st President, European Commission.
Built EC into powerful, independent institution
Championed the supremacy of European law
Altiero Spinelli
Wrote the Ventotene Manifesto (while imprisoned by Fascists)
Advocated a federal Europe
Winston Churchill
A paradoxical but crucial figure: called for a “United States of Europe” (1946 speech)
Influenced Europe’s post-war direction despite UK distance
François Mitterrand
Drove Maastricht Treaty with Helmut Kohl
Pushed for the €
Symbolized Franco-German partnership
Helmut Kohl
Franco-German friendship exemplified by Mitterand-Kohl personal friendship
"Architect of modern Europe"
German reunification
Key figure behind the EU and monetary union
It's ironic that the name "U.S.E." (United States of Europe) was first proposed by a Brit, alas a smart one, and I'm sure Sir Winston Churchill would have had the oratory abilities to convince his countrymen that his idea had merit, but he did not live to see it. The Federation of Europe or United States of Europe is the logical end-point of the joint vision of all these foundational leaders.
>Franco-German friendship exemplified by Mitterand-Kohl personal friendship
Ironic to call this a "friendship", when Mitterand along with Thatcher were working behind the scenes with the soviets to sabotage and stop Kohl's reunification of Germany. It was anything but a friendship, but more of a concession.
Politics is full of such examples that look friendly to the public, but hide a lot of sabotage and back stabbings in the background. In fact, the later is the norm in politics.
Maybe you can be friends without always agreeing, and even when competing.
Not when the competition is a zero sum game over critical resources. This isn't a game of table tennis, it's about competition over dominance.
Friendships are just the media facing image. In reality, if a country can gain an advantage over the other they see as an economic adversary, and has the means to enforce it without repercussions, they'll do it. Then they'll meet up in front of the media, shake hands and gaslight the peasants on how this benefits everyone.
The true friendships in between countries are made over decades/centuries over shared blood, heritage and culture because humans are tribalistic and have own group preference. Forcing friendships via political declarations doesn't work.
Let me explain with examples. If Portugal would get attacked a lot of Spaniards would go fight for Portugal voluntarily because of shared history and culture. But if Bulgaria would get attacked, most Spaniards wouldn't volunteer to go die for Bulgaria, even though they're both EU members.
Austria kept torpedoing Romania's Schengen entry just to extract some monetary concession, not exactly something friends do. So if Austria were to hypothetically get attacked tomorrow, a lot of Romanians would cheer rather than want to go help since karma is a bitch. These kinds of petty squabbles are the norm in the EU.
People aren't gonna want to die or sacrifice themselves for the EU flag since it's an artificial construct, kind of like the corporation they work for, not something they feel a sense of belonging and allegiance to like a specific group of people.
The lowest common denominator, racial ("shared blood", "tribal", and also "culture" in this context) perspective is exceeded time and again, and the ones that do exceed it are the most free, most prosperous, and most powerful - NATO being a clear example, but also all the Pacific alliances around China. The poorest and least safe are the ones that follow your advice, places like Somalia. Or look at the US and NATO ten years ago compared to today.
Most countries can be subdivided seemingly infinitely into groups that could find reasons to fight each other. But humans have other common 'denominators', much higher than that. Spain, the UK, the US, France, China, and many others are unions of subcultures.
You can see so much better in the world. Instead of insisting that evil is inevitable - making you a victim of it - you can work for good. Our ancestors have had great success and made it easy for us to follow.
The major benefit of the US Dollar is that you can do things with it. Between export controls, currency controls, laws on foreign ownership, etc, china can pay me all the RMB in the world. I still can’t do a whole lot with it.
This is part of the same reason many people don't use Bitcoin- you can't actually do much with it because retailers don't accept it. But China is definitely thinking about how to fix that problem, and soon they will make it possible to pay directly in CNY in other countries. Once you can buy things with it, the CNY is attractive from a practical perspective. A lot of your stuff is already manufactured in China, once/if using CNY makes your purchase easier then it's going to gain ground on the USD.
Funnily enough you can use Bitcoin at most merchants that use a Square PoS device, which is like 25% of merchants in the US. It just takes time for folks to change their behaviors. And why would they, if they're getting X% cashback on all purchases using their credit cards?
The other thing about Bitcoin is that it's deflationary, which leads to people holding the currency rather than spending it, as predicted by Econ 101.
We've witness deflationary forces in computer hw for decades and no one is holding off their purchases. Time is scarce and it ultimately forces consumption because otherwise, what would you be saving for?
Don't need Econ 101 to understand this basic reality.
Well there is a difference between people not buying anything at all and being significantly less than they are now. Consumer goods and services is only the tip of the iceberg.
How much do you think debt would cost and how easy would it be for businesses to get credit?
Combining a deflationary currency with a growing (or at least non static) economy is bad a everyone who has a basic understanding of history prior to the 1930s can see that. Something like bitcoin would be even much worse than the gold standard.
You're forcing business to produce something valuable in real terms instead of nominal terms and you're making that calculation easier to do for economic actors because the measuring stick is now controlled by an algorithm as opposed to charlatans.
Having less of that garbage fiat short-termism is a good thing for society.
> Having less of that garbage fiat short-termism
Yet having more of endless boom and bust cycles with major economic depressions lasting for years (outcomes of the gold standard was a good idea).
> You're forcing business to produce something valuable in real terms instead of nominal terms
I don't quite understand what does that mean. Pricing goods in oil or grain? (coincidentally either of which would function better as a currency than bitcoin).
Computer hardware isn't trying to be currency. Bitcoin was supposed to be, but hardly anyone who uses Bitcoin these days is using it to buy things--it's used as a store of value or a speculative asset, not a means of transaction.
Computer hardware actually does things - it is an economic value producer.
Bitcoin is an economic value consumer just to hold it. It does nothing if you have it.
Paying Chinese companies in RMB isn’t the issue. If I sell something and a Chinese company pays me in RMB, I can’t really do anything with a billion yuan. Can’t buy a company (limitations on foreign ownership), can’t buy property (99-year lease that can be canceled on the whims of the government at any time), can’t buy Chinese debt (terrible yields, very small foreign market access, incredibly opaque laws and accounting), and nobody else in the world wants it so I have no choice but to sell it back to China in exchange for a real currency at whatever horseshit exchange rate they’ve concocted.
It’s worthless money and I don’t see anything out of china that would cause that to change.
What about buying rare earth metals or containers of electronics or purses? It's a bit more work, but it's not impossible to solve the problem.
Also, it's not like a 99-year lease has no value. That's your entire lifetime+.
Because if I am running a business I just want to be paid in money that I can pay my bills in. I don't want to have the additional task of managing rare earths and electronics inventory. That's not "a bit more work." It's running an entirely different business that I don't know how to run.
I think OP's point is that a "99 year lease" isn't worth very much without a firm guarantee that the least in fact lasts that long. I don't really have an opinion on land leases in the PRC, but it doesn't seem facially unreasonable to suspect that a foreign lease holder's land value wouldn't be a priority for China's leadership during an economic crisis.
This is on full display with the US's Venezuela problem: no one believes the US will hold it, so oil companies don't want to invest because last time exactly this happened - they had everything seized.
Imagine if you'd invested in lithium mining in Afghanistan 15 years ago: you'd likely have paid a lot, made little money, lost employees and then lost it to the Taliban.
> Can’t buy a company (limitations on foreign ownership)
I guess this is naive, but can't you use it to buy (or sell it to people who want to buy) Chinese products? It's not like China doesn't have an enormous amount and range of products on offer.
Thats a feature not a bug.
The Chinese government spend a lot of money keeping the value of the RMB low.
This is actually an interesting point. Wouldn't it be bad for China if the US isn't the reserve currency/the RMB gains a lot more in value relative to the USD? It would proportionally, negatively, affect their export profits, no?
Germany did relatively fine though? Despite the German mark being the second largest reserve currency and their economy being heavily reliant on exports.
Mostly it’s just what I’ve read, I don’t know if it’s true, which is why I asked. If you get less yuan-people-hours per dollar (and materials cost increase for the same reason), you would get less per dollar than previously, I think?
Eventually you hit an inflection point where it’s cheaper to manufacture elsewhere. Which is why China is working Africa, huh?
Interesting stuff, in a vacuum.
I mean, you can buy goods and services within china, and you can sell those goods and services. The “horseshit” exchange rate can’t deviate too far from the real value or it incentivises laundering too much. The exchange rate isn’t _that_ bad as a result.
Retailers don't accept crypto not because of the technology so much as the fact it is a capital gains event every time you transfer crypto, which means both the buyer and seller are now forced to keep a log of their gains/losses against the dollar everytime they buy a pack of gum.
Obviously that's extremely impractical and at best you're hiring a 3rd party to streamline that for you. It's a clusterfuck at tax time (edit: stable coin doesn't help here -- you must still report gains on stable coins as it is still a $0 capital gain which is different than no capital gain).
Retailers already dealing with capital gains and with high chargeback rates love it though. For instance, it's usually the cheapest same-day clearing way to buy precious metals online since credit card rates are high (chargeback), ACH takes days, and wires tend to cost $15+ with many banks.
Reticence among retailers predates the capital gains policy of the IRS. The volatility of Bitcoin's value induces excessive exchange risk. However, we don't see capital gains nor exchange risk with stablecoins. I assume that network effects are insufficient to drive retail demand for stablecoin support.
The volatility of bitcoin is why there is capital gains on every trade, it has nothing to do with the IRS's new crypto policy.
If a bitcoin rises or falls by a calculable amount between when you received it vs when you spent a portion of it, you have gains/losses. That has always been required by the IRS to be reported, whether that is a BTC or chicken feathers.
> Reticence among retailers predates the capital gains policy of the IRS. The volatility of Bitcoin's value induces excessive
The IRS policy is irrelevant, the law always required payment of capital gains. It's consistently been the hardest thing about accepting Bitcoin for payment.
Foreign currency payments are largely exempted.
You do not need to report a $0 capital gain when using stablecoins. Sure crypto can seem like the wild West with CPAs having different opinions on what little official guidance is out there but that one is simply absurd.
CPA Miles Brooks claims you do[]
You are required to report capital gains and losses from stablecoins on your tax return (though it’s likely that your gain will be close to 0).
Don't we already pay in foreign currency? I do this online with foreign websites and credit cards.
It's more of a payment processor issue than a device issue.
If you are in a country or area with a large Chinese population, you can usually pay easily in RMB with Alipay.
If you use Visa and Mastercard, you are subject to US regulations, sanctions, and embargoes. Many alternative payment processor exist, PIX in Brazil, UPI in India, etc.
There are several systems in the EU: Wero, Bizum, BLIK
It is urgent that Europeans coordinate to ensure the interoperability of these systems and reduce the influence of Visa and Mastercard.
In the event of conflict, this will be the first service to be cut in order to disrupt European countries.
An integrated European payments system should be very high up on the priorities list of the European Commision. I believe every EU country already has its own version of a QR code payment, I don't know why can't they connect "easily" connect them.
It's complicated, there are two types of applications and networks.
1) Direct payment systems via mobile phone, generally designed initially for payments between friends and family. They have been set up in several countries by neobanks, generally based on the Mastercard network (very common among neobanks). A Latvian neobank may expand into the Baltic countries, but is unlikely to succeed in Portugal. These systems are not interoperable with each other.
2) Systems promoted by banking networks, such as Bizum in Spain, which has expanded to the Iberian Peninsula, and Wero, which is supported by BNP Paribas (France, Belgium, Germany). These networks are independent of Mastercard, Visa, etc., but they seek to favor their members and do not seek to become widespread.
Discussions have been ongoing for years to achieve interoperability. The idea for the moment was to let the market structure itself naturally without too much intervention, other than to say “we must move towards interoperability at the European level.” This approach has worked very well for bank transfers, which have become simple, fast, and relatively secure, but it has taken a long time (Europe, consensus, etc.).
Here in Belgium I have the impression there's steady progress towards such a system: https://wero-wallet.eu
You can buy with RMB in a lot of countries outside the West, if they have integrated UnionPay or AliPay into their payment processors.
But more importantly, you can buy a lot of stuff from the factory of the world. Which is why a lot of countries don't mind holding the RMB. Just not enough for it to become a reserve currency, and certainly no one wants it to become the petroyuan.
The euro has been gaining ground ever since the financial crisis in terms of share of currencies held in global foreign exchange reserves. Less than a third of the US dollar, but still a distant second. Nevertheless, I'm still concerned about the Russian invasion of Ukraine, and how intertwined the EU economy is to countries which it has shaky relations with at best.
the yuan has major currency controls. there is a real threat of capital flight destabilization if policies change which is why nobody sane would peg tp the yuan as it is now. that said, countries definitely make bad choices.
The IMF seem to think it's good enough to peg their special not-a-currency currency to.
All IMF participating states have allocations of SDRs. By your definition, the IMF is "pegged" to the currency of Afghanistan.
I partially agree. But the EU is in a pretty unstable state as incomplete government structure over a collection of peers. "Unstable" does not mean it's going to fall apart. It means it's going to fall apart or coalesce into a single thing (a new country). Or maybe a little of both (a new country with some fringe members leaving).
It might not be in 5 or 10 years but it's inevitable. It's not going to operate like this for 50, 100 years.
Just run a mental simulation of WW2 playing out except Europe had the EU.
So while I agree the EU is becoming more an more normal and important to the average citizen, there will come a time when it has to either solidify further or break apart, and I think it's basically a crapshoot to predict how that will go now when we have basically zero info.
I wouldn't describe integrating further to the point of becoming more like the US as "unstable". And that's the most likely outcome, which should make the EU more trustworthy as a partner, not less.
I would argue that not only is it not the most likely outcome, but that it's practically impossible. When the colonies united they all spoke the same language and shared the same culture as the descendants of recent British colonists. Furthermore, they had just fought and won a war of independence together. The first presidential election was unanimous with every single electoral vote backing George Washington. Do you think an EU presidential election would play out like that?
Also, when the colonies united, the government they agreed on was by today's standards extremely small and decentralized and there was absolutely no welfare state. Revenue was mostly from tariffs on imports with zero income tax. Merging modern European governments would be a massive undertaking in comparison. And the wealth levels between countries are so lopsided that any such merger would mean massive transfer payments out of the rich countries to the poor. And what about tax rates? Low tax countries will not like this one bit. When the US colonies merged under the constitution, you could very truthfully go to the average citizen of any colony and say "basically you won't even notice any changes." Whereas for the EU, you have to say to the voters "your taxes will go up and we will now be sending $100 billion Euros per year to people in other countries."
Just re taxes: why would anything need to change on that front in the event of federalization of the EU? There already is a union, it already has money, money already flows from richer countries to poorer countries—what would federalization change?
Sure the contexts are different, and you can also look at the federalization of German states as yet another example with a different context, but not all of the factors are unfavorable. For example, the countries of the EU are already more integrated than the colonies were. Plus it's a very different time now, we've had the UN for a long time already, etc.
Also, I was surprised to learn how heterogenous the different regions of the US were from the very beginning, in origin, character and motivations. The Puritans, Quakers, Cavaliers, French nobles and traders etc.
There are still, to this day, massive wealth disparities between US states.
And until the first entitlement programs during the New Deal it made no difference because it was entirely the poor state's problem. Only after the country had been a political union for over 150 years did they have any sort of welfare transfer program. If New Yorkers had been told in the late 1700s that joining the union would mean taxes coming out of their paycheck to send money to people in Georgia, they never would have joined.
> integrating further
What does that mean exactly?
I meet a lot of people do enjoy their nation's sovereignty especially as a shield from EU's poor and unpopular decisions that they don't get a vote in, and see the common currency and freedom of movement as just the right amount of integration. Making english an official language would be even better IMHO, but that's about it. I enjoy different countries having different politics and takes on topics, as it would be shit if all EU was a just a homogenous groupthink.
And I've never met anyone who thought the likes of Ursula and Kaja should be trusted with even more power and control over nations.
>I wouldn't describe integrating further to the point of becoming more like the US as "unstable".
More like the US, as-in a country? So also more like Germany, China, South Africa, etc. You are making a false equivalence - being like the US in one extremely non-US specific way does not mean you must be like the US in every other way.
I'm not sure you even understand what I'm saying - this has nothing to do with the US vs. the EU or if the US is reliable.
I was referring to the possibility of the EU becoming a federal union which acts like a country. Yes, like the US and Germany, but unlike China and of South Africa I don't know enough to say.
It doesnt have to be a federal union. Probably a logical step but I didn't prescribe it. Regardless, I dont see how it could persist in its current form through lots of conflict.
> And that's the most likely outcome
The recent electoral success of AfD in Germany and the National Front in France seem to point in the other direction.
Yeah, there are already major opposition parties advocating EU exit in many countries already. Try to centralize further and their support will increase. Contrast that with the US when it unified. George Washington won the election 69-0 in the electoral college. And that's not even getting into any of the other massive problems with EU unification.
> Additionally, we've now seen the EU survive the departure of a major economic power (the UK).
I don’t really understand the impact of Brexit on the euro, as Britain wasn’t on it.
But clearly they were a key part of the EU. It’ll be interesting to see which side regrets the move more.
The answer is already clear: Britain regrets the move more.
In June 2025, 56% of people in Great Britain thought it was the wrong decision:
It's hard to imagine this number would be going down after recent events like USA suddenly threatening arbitrary new tariffs on the UK.
>In June 2025, 56% of people in Great Britain thought it was the wrong decision
It's not so clear when you consider that 48.1% of the original referendum voters wanted to stay in the EU. I'm honestly very surprised by this poll, 8% change is pretty minimal considering the turmoil the country has gone through since 2016.
How much of this can be explained by older voters dying in the intervening 10 years, I recall that demographic skewed much more heavily Leave in 2016
Half the issue is the definition of ‘voter’. Turn-out is abysmal and polling has been crap in major ways. Calling someone eligible to vote a ‘voter’ is probably only right 50-60% of the time.
Remain was 48% so it's actually not that large of a swing in total. It's not like it was 5% remain and now it would be 56% or something.
But it does indicate if the referendum was taking place today it might swing the other way.
Note the turn out too. 72% isn’t great for a major change like this. The non-voters would easily swing it either way as a landslide.
Agree, that's a good point. Perhaps many who would have voted remain just didn't think it was a chance it would pass so sort of stayed home because of that.
But only 56% in a poll? Is that enough for another referendum and guarantee rejoin? EU politicians have made it clear, ALL UK opt-outs will be gone if UK rejoins, whether it is UK opt-out regarding budget (like paying billions less in annual EU fees like UK did before), to special fishing rights pre-Brexit, to forced to adopt Euro currency and drop Pound sterling.
Rejoining is seen as politically too risky in the short term. As you observe, the UK would not get back its privileged position, there are probably some bargains to be struck but a track to the Euro currency is almost certainly mandatory and that'd be unpopular because people really like our banknotes for some reason and the Euro deliberately just looks like play money, the illustrations deliberately don't show real structures to avoid associations with the nations where those things were built.
But while "Leaving was a bad idea" isn't enough to seriously push for actual re-entry to the EU it's certainly a good sign for the EU and for the Euro. The EU is a massive bureaucracy, and I think we underestimated how much "a massive bureaucracy" might be the thing we wanted in this role..
> Rejoining is seen as politically too risky in the short term. As you observe, the UK would not get back its privileged position,
Just curious, what privileges did it have? I can think of keeping it currency only.
Opt outs for Schengen, the Euro, all police and justice policies, and the charter of fundamental rights
Also a multi-billion pound rebate on what Britain contributed to the EU budget. Thatcher negotiated it in 1984 and it’s never coming back.
I was there about 8-10 years ago and again for a few weeks just recently.
Perception is hard to measure objectively, but the UK does not feel like it’s on an upswing when compared to last time I was there.
That's crazy it's not even moved 10% from the vote guess by and large people are pretty happy with their vote.
I don’t know if you can confidently claim that the vote represented the view of the population at the time.
There was a small pro brexit margin, and loads didn’t vote. I don’t dispute the vote result, I just wondering what the result would have been if there had been higher turnout.
The Yuan is not a freely convertible currency, so not really an option here. The Euro isn't terrible, but it has structural issues in that member states all must take out debt in what is for monetary policy purposes a foreign currency. This generated a debt crisis 10 years ago, which has been papered over, but the structural issues remain unresolved. Also, the Euro has been around now for 25 years. That's not long enough to convince anyone of long term stability.
And to add on (rather than edit my comment), I think the saving grace that keeps USD around for a while longer is the last section of the article, "Deposit dollarization in emerging markets"
A lot of growing economies don't/can't trust their local currency and they overwhelmingly use USD instead of EUR or CNY. As those economies grow the USD gets a boost that will sustain it for a while over the increasing competition of CNY. But this can't sustain it forever and the US is not doing anything to offset the lost ground in global trade and forex reserves.
It is not counted as such but it is very much tied to it and for the most part goes up and down with the Euro economy barring some own goals.
While similar to Denmark and Sweden it retained its own currency, and was also not part of Schengen, It was part of the Single Market.
Sweden does not have an opt out for the euro.
Sweden just haven’t completed the stabilization and alignment criteria to formally switch over, arguing that it is voluntary.
We had a referendum on the euro back 2003 with a clear mandate to not adopt it and the politicians don’t want to poke the sleeping tiger that is the euro question.
Saudi Arabia was privately discussing de-dollarization way back in summer last year, when the irrational tariffs were imposed, followed by the Israeli-US strikes on Iran. Make of that what you will.
There is a very sudden shift though - those options have existed but not generally been seriously considered. The US was seen as a bastion of stability and while sanctions could drastically impact a country's ability to trade due to the reliance on US currency exchange it has arguably been used relatively scarcely.
The change is that suddenly the US isn't a bastion of stability and having an independent trading currency could ensure more internal stability for other nations.
The U.S. is as stable as it gets. It has been one continuous republic and has 250 years of legal stability and a history of paying its debts. It has 4.2% GDP growth, with the largest economy in the world and growing.
Your ruler is no longer following the rules of law, nor the foundational constitution. USA ended with their declaration of dictatorship and the failure of your houses/legislature/military to act against that and defend the Constitution.
I can't see how, since the end of habeas corpus, you can claim legal stability.
Your leader is World renowned for reneging on debts and is demanding bribes for companies to operate.
Isn't borrowing through the roof to pay for things like your stasi?
Daily those stasi are murdering and disappearing people seemingly attempting to foment an excuse to escalate the violence.
I don't know how that knife edge can look anything like stable to you.
It's a very grandoise (or alarmist, depending on your perspective), but this isn't super new. The US has been "unstable" with rulers breaking their own laws domestically and internationally for many decades.
Why is this getting downvoted?
My money is that influence campaigns are active on HN and try to mold the discourse. The whole internet is manipulated to hell, and HN is a prime target, you have a bunch of smart people that probably have oversized influence, how could you NOT try manipulating this place?
This is most certainly happening. A lot of US-critical articles also get flagged to death, even when they have a lot of upvotes and healthy, civilized discussion.
Yes to manipulation.
But also it asserts factually a lot that isn't true, which is why I downvoted.
Mostly an US audience here. A deeply divided country on politics. The wording doesn't help matters either.
It's unfortunate the same division tactics the US has been facing are working elsewhere too, however.
Mostly an US audience here.
I don't think mostly is true? Obviously it depends a lot on the time of day, but there are also a lot of Europeans on the site. Also, most comments here seem to be critical towards current US policy. So, I think there is quite a lot of manipulation going on, since the downvoting/flagging does not really match the comment section.
I think it's true. There is a significant audience here from other areas but this being an english language forum and one focused on tech means that the US is always going to have a dominant presence[1]. The US dominance also means that the news is highly focused on US events when it wanders out of tech which further reinforced the audience.
1. I believe Canada does have an outsized presence though!
That is an annualised figure, which means they took the Q3 figure by itself and multiplied it by 4. US annualised growth in Q1 would've been -2%.
Between Q1/2/3, US growth has been about 1.6%.
Wait until the whole year figures come out.
And you have to wonder: if they do come out, are they truthful or are they fabricated.
Holiday spending was up 6.8% YoY and the highest spending on record. About 67% of GDP comes from consumer spending.
It's very unlikely the US doesn't have strong GDP numbers for 2025.
K-shaped economy and all that
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They are likely referring to Q3/25 numbers [1].
The problem is the AI bubble, without it it is speculated that the US economy might actually be in a recession [2] - effectively, that web of investments, deals, ownerships, purchase contracts and god knows what is nothing more than wash trading that will come crashing down hard.
That is why for the 99%, the economy doesn't "feel" like 4.3% of growth. If you're not in AI directly or at least adjacent (e.g. datacenter or utility construction), you don't feel any of that money.
The U.S. chose to abandon the rules based international order that has made it a bastion of stability since WW2 when they decided they wanted a return to the monroe doctrine and that it was okay to arbitrarily invade countries and take their resources based on the impulses of a single person. The same person outwardly stated, "Considering your Country decided not to give me the Nobel Peace Prize for having stopped 8 Wars PLUS, I no longer feel an obligation to think purely of Peace". If you think this is "as stable as it gets", then we're living on different planets.
There more to stability than continuity of government. Though, that definitely is important.
It’s bad enough that America’s foreign policy lately swings wildly every four years. More recently, it’s been acting aggressive toward allies, and making very strange and unpredictable moves.
The USA’s tariff policies are, frankly, utterly insane. Yes, I do mean the tariffs are irrational and incoherent. The approach to the tariffs has been overly aggressive. They’ve been changing almost daily, at times. Now, tariffs are specifically a thing that must be stable and predictable on a multi-year horizon. This must be, at least, off-putting to other governments, and to any companies wishing to do business in or adjacent to the USA.
Monkeying with the Fed is dangerous and basically unprecedented. This is going to make people nervous because it marks the end of an era of stability in monetary policy. We may be at the start of a new era where interest rates, much like the tariffs, change frequently for bad reasons or for no reason at all. Who can say?
And THAT is the problem.
Why is this getting downvoted? Everything said here is true.
> 250 years of legal stability
America was never a stable country. That 250 years includes:
* A decade of chaos under the impotent Articles of Confederation.
* The deliberately engineered election of George Washington to create the illusion of political stability, a reign which only ended because George stepped down voluntarily.
* An immediate constitutional crisis the moment a competitive election happened, causing the election of a President and Vice President from opposing political parties (imagine a Harris - Trump presidency). The ensuing chaos resulted in SCOTUS unilaterally declaring itself the final arbiter of the law.
* The Thomas Jefferson presidency, which in many ways is the alpha release of Trump.
* The Civil War, started specifically because the losing faction of slaveholders was angry at losing, and ending with the losing faction losing so hard the counter rolled back into flawless victory. They surrendered, then assassinated the President and got his party to give up on everything he stood for.
* Economy-destroying Smoot-Hawley tariffs, which are basically what Trump is doing now.
* A spectacular near-miss in which the country's business elites attempted to assassinate a Progressive president and only failed because the Marine they selected as their Hitleresque dictator ratted them out.
* Widespread civil unrest deliberately created to force America to reckon with its racist past and undo what the South had managed to convince the North to allow them to do after Reconstruction.
* The Richard Nixon presidency, which in many ways is the beta release of Trump.
* Too many foreign invasions to count.
In the entire history of America I can think of maybe 3 brief moments of political stability that weren't outright engineered fantasies. The two that are relevant to modern times are the 1950s and the 1990s. Both of these were the result of America winning a war of conquest.
Really love this, seriously great analysis (even though I'd quibble on a few points).
Stability is a relative thing though. It's hard to judge this except in relation to what other countries were doing.
>Various Euro nations
Suicided in 1900s and destroyed everything they built
>China
Collapse, civil war, famine, poverty
*pretty good for ~30 years
That's not as bad as what a lot of nations have dealt with
Consider the turbulence that China experienced over the same 250 years, for example
For 250 years that sounds very stable compared to many other countries
> Today there are more options like the Euro that didn’t exist in the 90s
Yet the Euro peaked back in 2009 and has been declining ever since.
At this point its share is not that massively higher than that of the German mark back in the 90s.
when do we reach a tipping point for rapid decline?
seems like once it starts falling, it would accelerate.
There's an excellent and eerily prescient novel that attempts to portray what such a "tipping point" might look like, and when it could arrive: https://en.wikipedia.org/wiki/The_Mandibles
There is a pretty good chance you're right on top of it.
EU can easily pull the plug on Euro as a reserve currency if they confiscate the money of a certain country and give it to another one. That would be the "front fell off" moment for Euro.
Except they didn't and instead borrowed money for the other country. But more importantly, there seems to be a process in place, where a collective of rational actors makes choices, rather than someone who states he can go to war because he didn't get the Nobel Peace Prize.
(Still disappointed that the winner of the FIFA peace prize wants to go to war /s.)
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Currencies fundamentally relate to some trust.
I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
However it will provide incentive to move away from the dollar in the long-term, ie as Fareed Zakaria says "recent actions are accelerating the world to the multipolar future".
> Currencies fundamentally relate to some trust.
A quant partner at Goldman said to me once that the thing that's different about currencies relative other normal financial products is whereas you might buy JPMC or oil or a bond because you like JP Morgan or oil or think rates are going to move in a particular direction or whatever whatever, you never just buy the dollar. You are always trading one currency for another eg selling GBP to buy USD. What that means is currencies are always about the value of one currency relative to other currencies.
In that sense they do fundamentally relate to trust and in particular specifically in this case about trust of the US economy and financial system's stability as opposed to other economies and financial systems.
So there have been times (eg during the financial crisis) where people think all currencies are bad but you can't just sell all of them so typically they would sell the other ones for dollars. For me, de-dollarization is about the choice of central reserve banks to hold dollar assets but also about other financial players changing their "default currency denominator" when they're doing this kind of trade.
Multipolar? So kind of like Europe before the beginning of World War 1, with major powers all competing with each other?
Yes, though I expect there to be a European block, the US, and a Chinese block. Russia there as a wildcard. I doubt we see Germany in competition with Britain.
The trouble with thinking in terms of blocs is that they don't solve the foundational economic problem: who is the sin-eater who is trusted and willing to run the deficits so that everyone else can run surpluses? Without a clear answer, you just have the same question repeated within and between blocs, so the same beggar-thy-neighbor incentives that exist without blocs exist within and between blocs, so the fighting continues within and between blocs until the question is answered. Blocs don't solve the problem at all.
Russia firmly in that second tier along with better behaved peers that have brighter demographic futures and an actual economy, like India, Indonesia and Brazil.
Russia is self destructing as we speak.
As far as I can see they have a massive uprise in industrial capacity and reformation in general. People underestimate countries in war.
The interwar era between WWI and WWII is most instructive for what a multipolar currency world looks like. The Pound Sterling still mostly worked before WWI and the Dollar rose in the wake of WWII.
The absence of a currency hegemon caused "Kindleberger problems," named after the economist who described them, and will cause them again. The big issue is that everyone wants to pump exports to pump their real economy, they can't all succeed because the world is a closed system, so they fight. First with tariffs, eventually with guns.
These Kindleberger Problems will get worse until the US gets its shit back together or China assumes the throne. Note that assuming the throne will destroy the export sector that they love so much (Triffin Dilemma), so not only are they not ready today, they don't even clearly want to be ready. Much like the US between WWI and WWII.
Buckle up, because the tariff wars, Great Depression, the economic driving force for the imperialism of Imperial Japan, and other awful things that you've heard of before all fall in the category of "Kindleberger Problems," are all downstream of not having a global currency hegemon, and are likely to rhyme with what comes next.
> I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
How is that different from trust erosion?
Monetary penalties are different from trust erosion in that they are the test of whether trust can be restored, ie you are acting very unpredictable => I am going to show you I'm paying attention and hit you with a penalty and watch your response. If you continue to show you are unpredictable => I plan an exit so that I don't _have_ to trust you, ie trust erosion.
Ultimately if there's too much unpredictable behavior the pain endured will become higher than the pain of eroding trust... which if trust was truly eroding would be signaled by establishment of monetary systems independent of the US, probably with the International Monetary Fund as a base, backed by at least India, China & Europe.
The difference is emotionally based retaliation vs. reassessing risk. And it's about money, so it's for sure not about emotions. The financial world isn't run on anger and emotions, like the White House.
Finance is run on two emotions. Greed/avarice and fear. Three if you count confidence/trust.
Finance is as rational under the hood as the Vatican's books.
> I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
Sure, everyone else is also acting based on childish emotions now, not just the US president. It's not about retaliation at all, it's about reducing suddenly very imminent risks.
Unusual? That's one way of putting it. I think unpredictable, erratic and criminal paint a more a realistic picture. The fact we're threatening Greenland is absolutely insane.
If the goal of this administration is to destroy America, they're doing a fine job.
Didn't know that was a real term Mike Pondsmith used for cyberpunk
It is, but he got the macroeconomics backwards so enjoying it on an aesthetic level rather than a mechanical level is still the right choice.
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Few people actually know how Eurodollar system works under the hood.
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They are related but I think the lack of de-dollarization already shows there are other, more raw mechanics that are operative. Namely, liquidity and lack of alternatives.
The bro's in the whitehouse is using their mouthpieces to create a volatile market, thus gaming the system with pump & dumps. They are stealing from everyone in a sense.
> The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged.
This is mostly due to the behavior of the country being unusual.
The US had grown at a healthy clip for a long time.
Due to the amount of boomers exiting the workforce, and withdrawing rather than adding to their savings - the US is going to be in a very different position for the next 10-20 years before things start to level out.
If something like AI doesn't save us with a pretty sizable productivity boost, we're in for uncharted territory.
> The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve.
I think this oversimplifies things. The dominance of the dollar emerged chiefly because most of the alternatives were worse, for a combination of military, political, and economic reasons.
There is a positive feedback loop at the core of it, because the US economy benefits greatly from being able to issue foreign debt in their own currency. But that doesn't matter: as long as the US faces little risk of getting invaded by any of its neighbors or defaulting on its obligations, everyone is happy.
What's been changing - and it started long before Trump - is that the US is also increasingly willing to use its control of USD (and thus the Western banking system) to pursue sometimes petty policy goals. This is giving many of our partners second thoughts, not because of the fundamentals of USD but because they imagine finding themselves at odds with the US policymakers at some point down the line.
> So draw from that whatever conclusions you wish.
Sure but replaced by what? The abysmal failure that the EUR is? Or a chinese currency?
What other options are there besides either a Chinese currency or the EUR?
Chinese. EUR.
Seen these twho choices, everybody understands why the USD isn't anywhere near losing its dominance status.
I love the complete lack of argumentations this comment has
Our federal deficit interest rate is like 15% of government expenditures.
The dollar being the reserve currency which leads to demand for the dollar keeps the dollar from deflating.
But as people no longer demand the dollar because they don't want to support a imperialistic government what happens?
The US would no longer be able to export the cost of its spending on other countries which is the so called 'extraordinary privilege' of running the world's reserve currency and the US population would feel the consequences of its out of control spending.
Which is to say, that is a fairly traditional way of how empires go the way of the dodo. First losing their financial dominance, which loses them their international power, which then causes internal rupture.
This is an article about multi-decade trends but you’re associating recent current events with the behavior. Consider reading the article.
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It isn't prohibited by the constitution and was created as an independent body. You are correct that it wasn't specifically outlined by the constitution but that's an empty statement - the constitution included the allowance of the creation of agencies and laws outside of itself... that's the main power and strength of the constitution.
Your statement was equivalent to saying that Hacker News has no constitutional right to exist - it is equally vapid.
The 10th amendment limits the federal government to the enumerated powers. So your argument that it "isn't prohibited" isn't how this works. You have to justify it under an enumerated power (which, you might well be able to do, though this is debatable).
I am not a constitutional scholar so a better expert may be able to provide a more sound response but I believe the Commerce Clause is generally accepted to include currency control (and early tests of federalism in the US found that independent state currencies could be restricted by the federal government).
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From Article 1, Section 8: Powers of Congress:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
...
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
...
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
Congress's authority in this area was upheld by the foundational case McCulloch v. Maryland in 1819. The Federal Reserve System was created in 1913 by Congress via the Federal Reserve Act.
There's no serious argument that the Federal Reserve is unconstitutional. People who espouse this are ignorant of the facts and law, or are either quacks or have paid heed to the arguments are quacks.
There's no serious argument that a central bank is unconstitutional facially
is not the same as
There's no serious argument that the Federal Reserve is unconstitutional as applied.
The latter is certainly debatable, especially insofar as the fed (in their own words) claims to operate independently when in fact the constitution delegates the powers you cited to congress and the execution of powers of congress to the executive.
The Federal Reserve Bank is in effect a club of banks. They pay for it. It's not an appendage of the Treasury.
> The 10th amendment limits the federal government to the enumerated powers.
federal reserve is not government... that's kinda the entire point)
its why current US admin is being so butthurt about it, it's not under its control.
It’s certainly government. The US Congress created it as an agency of the US government, just as it did every other government agency; and the Congress can destroy it. The Congress did not provide for direct political control—elections (and electoral politics) can’t change the Federal Reserve’s decisions (or decision-makers) directly.
There’s indirect control: the elected administration selects people to nominate as governors, who then go on to make the decisions. But they have to choose people who the (elected) Senate will confirm, and there’s not too much the executive can do if they don’t like the decisions their appointed governors go on to make during their 14-year terms.
The question at hand at the moment is whether the executive can unilaterally usurp the agency’s Congressionally-mandated structure and use its power directly.
It’s kind of like how the various Civil Service acts sheltered career civil servants from the constant changes in political winds, so that we can have career professionals in government instead of using public paychecks purely as a prize for the buddies of whoever won the last election. The present administration resents that independence too.
It's as much government as Amtrack and USPS.
I’d argue that its primary functions are core government functions in a way that passenger rail and postal services are not. Amtrak and USPS sell services at retail (and compete; see i.e. SunRail and UPS). The public aspect of their prerogative is relatively small (I tend to care much more about whether the train is on time than I do who operates, and who owns the tracks, and what the liability cap is; I tend to care about speed and price more often than I care that USPS will go places where FedEx won’t). And the “product” is a set of individual services executed by a big workforce—the higher-ups exist to make sure the services get delivered down the line. Quasi-corporate structures make a lot of sense for that.
Whereas the Fed’s jobs involve setting monetary policy and regulating the financial sector. The “product” is the set of policies the board vote to implement, and the staff exist to gather information and pass it upward to support those decisions (maybe using powers delegated downward to them). Like any other government agency.
It is quasi-government, its a hybrid entity.
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What does it mean that the Federal Reserve is "independent within the government"?
The Federal Reserve, like many other central banks, is an independent government agency
The federal reserve calls themselves "within the government" and a government agency. Isn't it fraud (and indeed wire fraud) to falsely represent yourself as a government agency to induce a financial transaction?
> Isn't it fraud (and indeed wire fraud) to falsely represent yourself as a government agency to induce a financial transaction?
Hmm what transaction it induces?
You'll need to check the law that created the Fed. Maybe it makes sure that doing whatever the fed needs to do the job is not a crime
This character espouses a lot of the same drivel that the 'sovereign citizens' tend to throw around.
Your position is they're not government, but you also talk of them "doing whatever the fed needs to do the job" in response to the fed claiming to be a government agency and within government.
So either you are lying, or the fed is lying, and if the latter your position is that they need to lie to do their job (per your dismissive quip) -- much of which involves transactions of banks drawing on master accounts which are held in part in full faith that they are doing business with a government agency.
Maybe unsaid but the idea that Congress can create an organization that is not executed by the executive is the issue
If you go by the default constitutional allocations, Congress starts with much tighter control of how the executive operates than it does now. Via passage of laws, Congress over the years has chosen to delegate a lot of responsibility to the executive branch - some for pragmatic management reasons, but some as a trend of historic concentration of power towards the executive. Congress can also delegate to non exec branch bodies like the Fed and other quasi-govermental orgs. Congress has the constitutional purview to take back a lot of that power into it's direct hands instead of allocating it to other bodies if it so chose.
> Via passage of laws, Congress over the years has chosen to delegate a lot of responsibility to the executive branch
Part of the reason for this is that 2-year presidents are more common, they make promises within the first two years and even if they meet them, it can take years for effects to be seen in the general population, so the party loses majority in the midterms and then nothing happens politically for the remaining two years. Congress is often slow and burdensome (for good reason) but it always makes out for a disenfranchised voter base
Isn't that the entire point of congress? Otherwise why not just have an all powerful president and do away with the houses
Just wait for next year under the current administration ...
you appear to be there already
It wasn't an issue for 250 years, or at least until the Unitary Executive Theory became a dream of the Federalist Society.
I don't understand why you're being downvoted. This sounds like a reasonably debatable argument.
There's a lot of groupthink around this. I blame the pseudoscience called economics
This is a non-sequitor.
Google has no constitutional right to exist or have accurate search results either. However, it's value depends on the quality of their search results.
People outside the US don't care about the particulars of the US constitution like it's a holy document, but rather the US governance as a whole and whether it's well-ordered, lawful, and predictable.
That's true, but the US dollar also doesn't have a constitutional right to be the international reserve currency.
It does exist, and it has been independent, and consequently global markets have priced that in. If that changes, markets will respond accordingly.
This much is understood.
What the other said about it being a non sequitur, adding on top of that "constitutional right" is no longer as strong a statement as you think it is considering the kangaroo court that is the SCOTUS nowadays.
In many ways, this is the real problem.
That’s correct, Congress could pass a law removing its independence or eliminating it entirely whenever it so chooses. Until then, it’s independent because that’s how Congress created it using its powers under Article 1 of the Constitution.
It has about 38 trillion reasons exist. if you want to see what national debt looks like for countries without an independent central bank, there are plenty of examples around the world and throughout history. I’m sure the Wikipedia page on failed states would be a good starting point.
It does have a strong economic reason to exist and be independent.
While maybe true, the history of direct democratic control of monetary policy is not a pretty one.
Neither is the history of control of the money supply by private financial institutions.
the fed has been doing a pretty good job for the last 100+ years. I'm not a fan of the 'we'll let's just try it this other way, we haven't in awhile' argumentation.
Something tells me you aren't exactly steelmanning your opponents here.
Holders of US debt have no obligation to give a shit about the statutory background of the Fed, and to just make decisions about who is the best fiduciary of their currency.
If holders of US debt goes away, we have immediate inflation to the point where our currency hits trade equilibriums such that we can service our debt. All of your savings are worthless.
Ok? Trump doesn't have a constitutional right to do a bunch of crap but he's doing them anyway. This is the world we live in.
My local town doesn't have a Constitutional right to exist or be independent either.
This has very little to do with the price of tea in China.
Parties outside of the US who don't give a fuck all about the Constitution are involved in keeping us as a reserve currency, and they care that the fed is independent. We have kept it so to keep the economy stable and to reap the benefits of that stability.
> The federal reserve has no constitutional right to exist or be independent.
Do we suddenly care about the constitution again?
Ah yes, the "sovereign citizen" argument applied to the Fed. You've been wrong for 110 years -- I predict you will remain wrong.
Their stability has worked to benefit a lot of rich and powerful people, so I would question the motives of this sect of billionaires who are trying to destabilize it. They must believe they can extract something from the ashes.
Almost Hanlon's razor. "Don't try to find logic in actions of monkey brain."
Look at Russia. They just want to be the billionaires who can throw other billionaires out of windows for Crossing them.
>The federal reserve has no constitutional right to exist or be independent.
Irrelevant.
Actions have consequences, and the natural consequence of the actions of the US administration is that corporations and states that value stability are looking elsewhere than the US Dollar.
Whether or not the Fed has a constitutional right to independence is irrelevant to this situation. If Americans want to cheer while Trump flushes nearly a century of soft power down the toilet that's their prerogative, but the trend of de-dollarization has already begun and it's unlikely to be reversed.
And I sure Trump would be a great steward of our fiscal policy and wouldn't wildly throw the levers back and forth every Friday as his whims change
I don't know how you can say that about an institution that was formed by people using false identities on Jekyll Island and ramming it through congress as fast as possible because in their own words "if the people found out they would stop them" (paraphrased).
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I read it as side-stepping Hacker News' tendency to kill comments that get into politics.
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I've been trying to read more about investing properly recently and this is such an annoying characteristic of most advice you read. Sometimes it's also "well, economic theory says this, and that doesn't follow the behavior of these markets, so decide for yourself".
I feel like we do generally brush, a little too easily, over the fact that economics is still a theoretical science, of which finance is subsequently the practical and technical implementation. Much like psychology, sometimes we turn out to be right about theories, sometimes we're not.
What else would you expect? If the person writing the advice knew how to reliably beat the market they would be doing that, not writing financial advice.
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what unsupported gut-feeling conclusion would you prefer they reach for you?
Surely the issue here is all they've got is unsupported gut-feeling conclusions, not that I'm asking them to be useful?
I'm sorry, but was there a specific point you wanted to make in relation to the first two sentences of the grandparent's post?
> Are you a financial analyst by any chance, because the "here's a few facts, interpret how that's going to impact the market yourself" is very on-brand.
What do you want him to say?
1. De-dollarization is all Trump’s fault
Or
2. The world is reacting to Trump putting America first
The world is reacting to reserve currency being used as a tool to conduct politics and twist arms. Started before Trump. He is just increasing "efficiency"
That is true, but it also goes well beyond that. Much of the "US Gov't behavior" is largely related to trashing and panicked frantic moves because the consequences of its prior and long tailed actions over decades has now not only started bearing rotten fruit, but a previous strategy of world domination through "globalism" has also turned against those who control the Wizard of the USA from behind the curtain.
On the face of it the Greenland situation makes no sense on a national security level regarding a non-existent, fabricated Chinese or Russian threat, nor related to the fantastical grift of the "Golden Dome" that is even more useless against what Russia has recently developed, than it was for things prior to about 3 years ago.
What we are looking at here (you can tell your children that you heard it here first) is a strategic move to essentially take Canada and all of the NA continent, and eventually all of the Americas. Yes, Canada, you are indeed in danger as well as Mexico. I don't see how it could be any other way in the face of current developments; remember Trumps USMCA, i.e., a de facto North American Union?
Biden stated that he wants the USA to have 300 million more "immigrants" before he let in about 15 million in 4 years. Annexing Canada is about 40M by the time we do it, Mexico would add another 150M plus however many people would flood into Mexico to become "Americans". That bring us to a total of around 550 million by the time the North American Union comes around. Perhaps if the UK joins, we will just call it Oceania already.
It does not address the fact that China has 1.4 billion and India another 1.4 billion, but it puts us in contention, especially as Europe has about 700 million by that time if/when the EU absorbs most of Europe.
That also doe not take into account the Wizard of the USA wanting to take over all of South America for positive control eventually… another ~480 million by that time, putting the American Union of Oceania at about 1 Billion, ±100M.
These are real tabletop calculations and how things are seen at the top and discussed amidst cocktails.
I'm struggling to understand what you are trying to say?
That biden wanted to grow the USA to 600 million people?
That trump is also trying to do that?
It seems you are clearly understanding? You are likely just confused because you do not understand that the overarching objectives of the "uni-party" or "deep state" system hold fast, it's just that each political sporty ball team has to play things different and tell different lies in different ways to different cohorts in order to keep the system operating. So, e.g., Biden says we need 300M more immigrants and his team fans cheer because they support it, wile deporting more people than Trump; while Trump tells his team fans that he will deport people and does this whole theatrical ICE stuff to give the impression of deporting people to drive down costs and retain their support, but in fact barely moves the needle on deportations and committing to 600,000 more Chinese students and wanting to "staple citizenships to diplomas" for millions of Indians, etc.
You have to understand that there is the theater of the political sport ball arena where the different sides are set against each other like WWE/Football, etc. but in the background it's just actually all more or less rigged and the truth is written in policy and strategic papers that are implemented over 20+ years, across presidents and their wrangling and herding of their constituents in this charade called "democracy".
When did Biden say the US needs 300M more immigrants?
When did Biden say the US needs 300M more immigrants?
This is quite obviously written by someone with no intelligence experience.
> On the face of it the Greenland situation makes no sense on a national security level regarding a non-existent, fabricated Chinese or Russian threat, nor related to the fantastical grift of the "Golden Dome" that is even more useless against what Russia has recently developed, than it was for things prior to about 3 years ago.
Power projection in the arctic is weak. Russia has made multiple tactical movements towards soft projection in the arctic. You have zero idea what submarines are on station. Taking greenland is arguably stupid, boosting it's defense to prevent a Russian incursion is not.
> What we are looking at here (you can tell your children that you heard it here first) is a strategic move to essentially take Canada and all of the NA continent, and eventually all of the Americas. Yes, Canada, you are indeed in danger as well as Mexico. I don't see how it could be any other way in the face of current developments; remember Trumps USMCA, i.e., a de facto North American Union?
No evidence. Unless you're arguing while NAFTA was around this was a way to create a "United America".
> That also doe not take into account the Wizard of the USA wanting to take over all of South America for positive control eventually
No evidence. Most think-tanks have recognized that maintaining positive control of south america would be disastrous. If anything, Maduro and his friends were probably happy the US decided to black bag him. It is well known that whoever was going to attempt control over Venezuela in particular was going to be responsible for spending the money to rebuild it.
> These are real tabletop calculations and how things are seen at the top and discussed amidst cocktails
No.
>> Yes, Canada, you are indeed in danger as well as Mexico.
> No evidence. Unless you're arguing while NAFTA was around this was a way to create a "United America".
Trump recently posted an image on Truth Social of a White House meeting in which a map is displayed, of north america with the US flag superimposed on Canada, Greenland, and Venezuela. [1] He has repeatedly suggested that Canada is the 51st American state. [2]
did you forget about all the money the fed printed during covid?
fed independence is important, but literally irrelevant in the face of rampant money printing
Who signed the front of those checks?
Various civil servants at the Treasury Department?
We were in a lockdown, and Congress voted for multiple trillion dollar stimulus' financed by debt. Refusing to "print money" in those circumstances is just asking for a worse Great Depression.
Our of curiosity as I know nothing about economics, how would not printing miney lead to a Great Depression?
A crisis prevents people from earning money. No money means nobody buys anything. Nobody buys anything means no company can now sell stuff, so no revenue. Companies start closing down, so there are even more people who cannot earn money.
The government can print money and inject into the system. Some people have money so they continue to buy stuff but maybe at a slower pace or less amount. Things also can get expensive but it is not a total collapse.
one of the big problems of the great depression was banks went bankrupt left right and centre, and took everyone's life savings with them. Also as a lot of banks generally hold mortgages in their portfolio, so when a bank collapses it means that mortgages all get fucky too.
So the mass printing of money meant that banks didn't collapse.
It also meant that a fucktonne of cash went into the hands of the uber rich.
This is one of the reasons safety nets on savings exist in both the USA and in Europe (and probably other places as well about which I'm less informed). Even so, the tacit understanding is that this is more about preventing bank runs than about the practical effects on the currencies involved because it could very well be that that insurance will pay out in money that is worthless.
Why did the fed raise interest rates? To soak up some of that cash. It was too slow, but this is exactly the sound money policy that everyone expects. You loosen cash (what you mistakenly call printing money), when you need investment, and tighten cash when inflation and risk taking is out of control.
a sound response to some of the worst fed decision making in US history. they essentially ruined the housing market, priced out a generation of younger buyers, which is now crushing fertility rates, savings, and more
Strict zoning ruined the housing market, and this is a multigenerational problem:
Investment real estate ruined the housing market. All of a sudden housing prices are expected to grow year over year as an investment. As more and more growth expectations were applied to housing, public policy (including zoning) changed to protect those expectations. Is it any surprise that there came a point at which it became too expensive?
Once problem we need to solve is how to unwind housing prices without financially ruining honeowners whose house is their primary/only wealth. Of course this problem is even more severe in areas of the country that are becoming uninhabitable due to changes in climate as it drives down demand.
Was it them that did that or employers freezing wages and losing R&D credits/facing tarrifs / wild instability?
Well, seeing is how that happened before the tariffs, yeah, I'd have to agree with GP.
It's almost like pandemics have consequences.
was money printing because of a lack of independence, and manipulation by the executive? or the fed trying to keep things afloat.
this president is trying to money print during non-crisis, to ramp up economy to "20% GDP".
why downvote? Trump literally said he wants a GDP that goes to 20% or 100%. Shoot to the moon.
covid money printing was some of the worst fed decision making in US history. they essentially ruined the housing market, priced out a generation of younger buyers, which is now crushing fertility rates, savings, and more
actually, llmslave, it was a very good decision. It's better to have mild inflation than widespread unemployment. But also, the fed's actions contributed comparatively little to the inflation we experienced. Globally there was a huge drop in supply, which caused prices to jump everywhere, not just in the US.
everyone complains, nobody has alternatives.
what would have been the correct actions in that situation?
really the government should tax in good times.
and
spend in bad times.
and be a counter weight to private sector
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The government acted as if the pandemic was happening in 1990, when everyone either worked in person all the time, or nothing worked.
Instead, the golden geese of the American economy (the actual golden geese), simply stayed home and worked from their laptop.
This created a situation where people were getting their regular paycheck, plus getting a multitude of stimulus on top of that. There were many making $100k+ salary, not paying rent (rent moratorium), not paying student loans (student loan moratorium), and not going out to do anything, resulting in having huge pools of cash laying around. If you had a mortgage, you got to refi at 3% and dramatically cut your mortgage bill. I won't even get into PPP loans either, everyone knows the story there.
I could write pages and pages about this, but the short of it is, we thought we need a wheelbarrow of money, but technology meant we only needed a jug of money. But we still got the full wheelbarrow.
no they literally just kept printing money for no reason
And directly funneling it to the rich
Its the 'kept printing' that is the problem with the story.
There was a surge and a pull back.
Post-COVID Tightening: After this historic surge, the Federal Reserve began "quantitative tightening" in 2022 to combat inflation, slowing M2 growth to near zero and eventually reversing it.
This was arguably largely offset by the actions of the treasury's increased short duration issuance (>1 Trillion in t-bills) combined with draw-downs of the reverse repo facility[1] instead of from banks. It's difficult to tell exactly how much money winds it's way into the economy without using proxies - for example credit spreads[2] or NFCI[3] which indicate loose conditions, which don't show much evidence of post 2022 QT's impact.
Or in other words the data seems to show the loosening effects were more powerful than the tightening ones. Now that the RRP has been drawn down balance sheet growth will likely occur.
>slowing M2 growth to near zero and eventually reversing it.
The M2 money supply went from 15.4b at the start of 2020 to a peak of 21.7b, before slightly reversing to 20.7b. Then they just continued printing. Now it currently stands at a record high of 22.2b. The dollar is more diluted than ever.
its a tight rope. shrinking the money supply also has downsides.
Summary of the Policy Reversal
Period Policy Action Balance Sheet Impact
June 2022 – Nov 2025 QT (Tightening) Shrank from ~$9T to ~$6.5T
Dec 1, 2025 QT Ends Runoff stops; maturing assets reinvested
Dec 12, 2025 – 2026 Reserve Management Expansion begins via T-bill
purchases
By December 1, 2025, the Fed officially halted QT after reducing its balance sheet by approximately $2.4 trillion. The following factors forced the reversal to expansion:
1. Liquidity Squeeze and Repo Market Stress
As the Fed drained cash from the system, bank reserves fell toward "critical thresholds". This caused stress in the overnight repo market, where banks lend to each other.
Spiking Rates: Key short-term lending rates, such as the Secured Overnight Financing Rate (SOFR), spiked above the Fed’s target range, indicating cash was becoming scarce.
Why is the independence of the Federal Reserve sacrosanct? For one, they should have oversight and they should have accountability.
Not ever passing an audit of any kind. And the FED chairman spending $2.5B on renovations to an office complex. While misleading congress about the kinds of renovations.
There should be less 'independence', if it means zero accountability.
I can't believe you are making an office complex renovation argument.
FED has been instrumental is keeping the monetary policy sane in the recent years, unlike some pushes from the orange person you are taking talking points from.
> they should have oversight
Congress provides oversight and accountability of the Fed. The GAO does audits as well. Frank-Dodd provides more windows into the Fed. Why did you think the Fed doesn't have oversight?
> Why is the independence of the Federal Reserve sacrosanct?
It's never been completely independent. It's independent from short-term (4 years) political influence. It's audited and has congressional oversight and the President nominates people to the board.
What else do you want? Interest rates set by Presidential tweets?
It's not sacrosanct, it's just a 14 year term for the Fed chair so that they don't give in to political pressure to be re-appointed.
> Why is the independence of the Federal Reserve sacrosanct?
Then the value of the USD is entirely at the whim of whoever is elected and should be priced accordingly.
Do you realize that you’ve digested a whole bunch of misinformation uncritically?
If the goal is to make US goods attractive to other countries and to decrease our trade deficit (not saying I agree with this goal), either the dollar has to become fundamentally weaker or the goods have to become more valuable. The latter feels more difficult than the former at this point. However, the side effects of a weaker dollar may not be worth weakening it.
> decrease our trade deficit (not saying I agree with this goal), either the dollar
A direct link exists between a nation's status as the world's primary reserve currency and its tendency to run persistent trade deficits.
This relationship is often described by the Triffin Dilemma, a paradox where the global demand for the reserve currency necessitates that the issuing country consistently supplies the world with its currency, primarily through importing more than it exports.
The flip side is if you weaken the dollar by appearing unstable and displaying hostility to your main trade partners, you get the drawbacks of the weaker currency (reduced purchasing power) without commensurate improvement in the attractiveness of goods to other countries. Some devaluations are more strategic than others.
But the broligarchs don't need purchasing power. All their wealth is in assets, leveraged many times over. Currency collapse is the best that can happen to them.
Don't worry, assets collapse as well when a lot of the market of the US becomes unavailable.
This is the most important comment here. The US rebuilt nations' economies after World War II by printing dollars and buying goods from those countries. In return, the dollar became the world reserve currency and did not suffer massive inflation despite printing so much of it. It's a supply and demand thing, just like any good or service. There was a ton of demand for the dollar, so printing more (increasing supply) did not crash the "price" of the dollar (inflation is the price/value of the dollar decreasing). We printed a ton of dollars during covid but it didn't result in hyperinflation like what happens with, say, Iran or South American currencies because the demand for dollars was still so very high.
It depends on how this happens. Labor would still be more expensive here than developing economies. We could easily just end up with a weaker dollar and floundering manufacturing, which means more inflation.
USA exports services (tech, culture, r&d) and will lose all of that for the unclear manufacturing that might never come.
It's like watching the fall of Rome.. on TV
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Blackrock released a document you can download that outlines their 2026 outlook. A key point there was: "We go underweight long-term US Treasuries." A sign of bearishness on USD due to fiscal policy.
The dollar has lost 13% vs the South African Rand in the past year. Thats an interesting metric for me given how South Africa has decoupled from the US in favor of China and Russia, with a strong anti-Israel stance. And also taking into consideration how the country is still struggling with crime, corruption and uncertainty.
It’s doing to be interesting to see how this plays out as the producers and makers of the world unite, and the EU turns away from the US.
>given how South Africa has decoupled from the US in favor of China and Russia
That's the party line & there have been some eye catching military exercises and statements to this effect, but daily life is still very much western aligned. It exports a ton of ore to china and imports a bunch of things from there certainly...but that's kinda just every country these days isn't it.
Dollar has also lost like 99% vs the South African Kruggerand since 1967.
But is the exchange rate really the right metric for the "weakening" due to de-dollarization? Especially since world states decoupling from the US would try avoiding both transactions which gain them USD and which require paying USD?
The world is rich and getting richer. The quality of life outside of the US is rising.
Europeans might disagree
There is more to the world than Europe.
Which is why the euro will not be a reasonable reserve cirrency
Definitely says something, but I'm not sure what. How are you interpreting this?
not the OP - That gold is rarer than oil, and the supply is lower when compared to demand.
I appreciate that this figure is showing that the relative scarcity of gold compared to oil increasing, but I'm not sure what it's saying, or is interesting beyond that? Is this reflecting a global shift towards natural gas rather than oil, or reflecting investors are particularly nervous since covid, for example?
Obviously, you can't drawn any hard conclusions, but I was wondering what the OP was thinking narratively when posting.
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I strongly encourage interested folks to read Miran's "A User's Guide to Restructuring the Global Trading System" (I won't link directly since it auto-downloads a PDF).
Miran, and his thinking, clearly have this admin's ear and they're following many of the prescribed steps in his white paper. To the T frankly.
So if you're surprised by the USD devaluing by 10% last year or the immense pressure to drop the fed rate to under 2% by next year, well the reasoning and strategy is all laid out very clearly in the above whitepaper.
No confusion necessary! They explain every (terrifying) bit of their plan in that paper.
What is left out, and why I say it is terrifying, is that the whitepaper is academic and basically leaves uncovered any of the _political_ ramifications of these economic changes. And of course, those political ramifications can be immense.
Peter Navarro is the idiot whose mostly pushing the Trump economic policies. I say idiot, because he is really a complete and total crackpot. He's written a couple of papers where he cites himself on uncited principles as if they were ironclad economics. A flat earther to an astronomer is what Navarro is to an economist.
He is anti-trade and pro-isolation. He actually wants the US dollar to lose it's status as a world currency. His thought? If it does, then we'll better address national debt. Basically "Let's light the house on fire so we finally address the upstairs draft."
Gold front-runs monetary policy, meaning central banks and people use it as a hedge against currency devaluation or other uncertainty (e.g. the U.S. Federal Reserve being taken over by the executive)
Now look at the gold chart over this past year. Yeah, people are uneasy and we're likely to see a lot of printing.
Also JPM in April 2025...
JP Morgan see gold prices crossing $4,000/oz by Q2 2026
> This appears to be an AI-generated draft with severe hallucination problems bordering on WP:HOAX. For one, it calls it the "Margo Largo Accord" -- a name that is not and never was real. The draft also claims the accord was already introduced, and goes into detail about its supposed contents, effects, and reactions to it; the problem is, no actual accord was introduced at the time (or now), so pretty much all of that is made up. The sourcing gives an impression of WP:SIGCOV [significant coverage] but almost all of it appears to be background information about various topics that aren't the accord.
Yeah, I've read that and find it a little sus. The article for me was fine even if not perfect.
It's the first time in my internet life (20y+) that I go find a wiki article to share to a friend because the US keeps weakening and I found it gone.
Didn't know it was that easy to remove a wikipedia article by just hinting it was AI generated.
The US century is already over. It's just that a lot of US citizens don't see that. De-dollarization will happen when one is a traitor to it's allies
Many of us see it, but many others seem to be embracing it and trying to hasten it for reasons unknown. They pine for the glory days of post-WWII US hegemony but are actively undoing the institutions that were instrumental in US economic and political power at that time. They have no coherent world view, they are severely confused, but unfortunately numerous.
Well people pushing for this have a world view.
They see a bipolar world with China dominating Asia,
US dominating it's hemisphere and Europe fending for itself.
They also have major crypto holdings so instability of both major currencies benefits them financially.
Except that Crypto is also falling with the stock market (and faster), so if anything, it is correlated the wrong direction
I am not arguing it's a sane world view
I actually have a greater disgust for those who see it but don't act. I think this line from an incredibly relevant book is precisely this:
> "Your ‘little men,’ your Nazi friends, were not against National Socialism in principle. Men like me, who were, are the greater offenders, not because we knew better (that would be too much to say) but because we sensed better.
Those who act on behalf of evil are not free from guilt, of course. But the truly damned are those who sense better but look the other way. They walk in the footsteps of the millions who tacitly supported the last time this evil took hold of the world, by not acting.
"What happened here was the gradual habituation of the people, little by little, to being governed by surprise"
Wow, seems on point.
Wow
"kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of the ‘national enemies,’ without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us."
I think it's fair to say that neither ideology is free from evil, and choosing the "lesser evil" is still choosing evil. Every good or well-meaning movement I've seen has been taken over once it reaches a certain size.
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Thanks for sharing this except of the book.
The US wasn't exactly "friendly", but comparing US hegemony to Nazi Germany is a bit much, don't you think? /s
It wasn't of course. But the current regime looks more and more like them. Including all the minions going along with it
Y'know, yeah I think you're right. It's not like they're dressing the part and marching through the streets like some sort of secret police agency.
I feel like many are going to upvote this because they think it is an indictment on the current administration but it isn't exactly.
> I feel like many are going to upvote this because they think it is an indictment on the current administration but it isn't exactly.
Is it not? Quoting myself:
>> are actively undoing the institutions that were instrumental in US economic and political power at that time.
Who is undoing those institutions? That'd be the current administration.
Ah I was seeing a parallel between:
1. Our post WW2 neocolonial activity and the current admins push to sort of blatantly get control over Venezuela and Greenland.
2. Our WW2 manufacturing and export based economy that made us wealthy. Is similar to the current admins push to reform us from importers to exporters using tariffs and rebuilding manufacturing (at least on the surface the execution of this has been terrible).
Hopes or morality do not strictly dictate power as much as we might wish it to be true.
The number of Trump apologists lunatics who do not seem to understand what MAD was about is staggering.
Industrial scale warfare isn't some secret forgotten by accident.
The current American power-trip fantasy delusion is rightfully scaring the shit out of people, and the scary thing is the people who aren't scared.
It's reaching the point that I think the best thing is for Germany to detonate a nuke between the US and Greenland just to wake up the idiots who think it would be unreasonably difficult.
--
Edit: I see people are misunderstanding me as saying they should use the US bombs stationed there. I'm saying they should build their own - to have people remember that It's not really that hard if you have a functioning industrial sector.
Germany is a non-nuclear-weapon state. Our bombs are there yes, but if you use one of our bombs without our approval there will be hell to pay. An invasion of Greenland will be all but guaranteed. Whether Germany will retain its military the next day is questionable.
It is ok for Germany to detonate nukes on someone who attacked NATO. The approval of the aggressor is not necessary.
Germany will be glass if they tried. Berlin will glow in the dark. They wouldn't even consider it in government. Their planes wouldn't make it off the ground.
I see you don't want to understand my point.
Why exactly do you think Germany is a non-nuclear weapon state?
Because we muzzled the wolf.
This is a hilarious take. Which ally is the US a traitor to or will be a traitor to again? You sound emotionally invested in the fake drama and propaganda of Trump.
Are you a troll or just uninformed and stupid?
Not so fast, though. A state can be a "killer", or a "giver", or both, to gain followers and sell its currency to other states. The US was both back in the 40s as well as the late 80s when Germany and USSR crumbled. So hail to Pax Americana.
However, the US is more of a "killer" nowadays. The "killer" is usually more efficient than the "giver", because people value their life more than their wallet. So that's why I think she still has some time left. I don't blame it on Trump though. Being a "giver" is a lot more trouble than being a "killer", and I think the US elites gradually rolled back from the role of "giver" since many years ago. Trump is just here to remind other states that the US can and will be a very efficient killer.
And this is probably the most dangerous time for other states because she cannot afford to lose.
>The US was both back in the 40s as well as the late 80s when Germany and USSR crumbled. So hail to Pax Americana.
This is the historical equivalent of selective memory, and only really applies to a tiny slice of the planet - western Europe.
A lot happened in the world between 1945 and 1989. Outside of Europe and Japan, most people would probably not be so sympathetic of the US actions during those times. An abridged list:
* Iran 1953 - US and UK overthrow democratically elected PM, install brutal dictator
* Guatemala 1954 - US via CIA overthrows democratically elected president, install brutal dictator
* Brazil 1964, Chile 1973, Argentina 1976 - US supports brutal dictatorships replacing democratically elected governments
* Iran/Iraq 1980s - US funds both sides in the war
etc. This is a very resumed list.
Yeah that's the killer part I think. For EU and Japan/SK it's mostly the giver but there were also killer events like Operation Gladio.
Is it more efficient though? It just looks like burning long term prospects for short term ones.
Which is on brand with the current regime to be fair.
Yeah it's more short term, I agree.
Something to think about....
Mankind has never seen the collapse of a nuclear powered empire.
Sadly, it may not be possible for a nuclear powered empire to fall without the death of billions...
Mankind is in uncharted territory.
Even Russia never fully fell after the USSR collapsed. Whoever kept the nuclear weapons continued to be a first tier power.
Nothing in human history compares to the present question of how the current empires fall, and if they can even do so safely.
Very sobering times ahead.
> Mankind has never seen the collapse of a nuclear powered empire.
Open your history book and read about what happened in 1991.
There are also many Americans who have always desired de-dollarization, since the dollar has been the foundation of our imperial system and abuses of state power. Say what you will about how dated a gold standard is, but it forces immediate fiscal responsibility upon governments; fiat currencies defer responsibility, turning it into a Sword of Damocles that catastrophically falls upon future generations. You trade geopolitical dominance now for guaranteed future withering. Of course, fiscal responsibility and the rejection of imperial ambition were core principles of the Anti-Federalists, Democratic-Republicans, and Whigs. It's baked into our history and tradition to not want to be the unilateral arbiters of a global trade and alliance system.
> Say what you will about how dated a gold standard is, but it forces immediate fiscal responsibility upon governments
We were on metal standards for millenia. Governments routinely spent beyond their means, including for imperial aims. This is like four centuries of Roman history.
Yes, but there were practical limits to currency debasement when the currency was a physical commodity with intrinsic value. People notice when their coins start getting filled with lead, and there were serious political repercussions for it. You cant just conjure a trillion gold/silver coins out of nothing like you can with fiat, and the ability to do so is 100% guaranteed to be abused.
> there were practical limits to currency debasement when the currency was a physical commodity
"In the second century, a modius of wheat (approximately nine liters), during normal times, had sold for ½ Denarius…. the same modius of wheat sold in 335 AD for over 6000 denarii, and in 338 AD for over 10,000" [1].
Note that inflation can also occur with zero debasement if the economy around the fixed money supply collapses. This happened in Rome when Pompey and later Augustus were trashing trade routes. It may have even led to the collapse of India's ancient democracies.
> there were serious political repercussions for it
There weren't. The state historically borrowed from the hilt of the sword. Economic collapse constrained kings and emperors. Not politics.
What @cheeseomlit said, plus: During the Age of Exploration/Colonization, competing European powers each minted metal currencies and couldn't reasonably debase their metals without immediately being out-competed (which is why the trusted purity of Spanish gold and silver coinage slowly dominated). The primary mode of failure for those empires was bankruptcy via war. The impossibly high cost of fielding armies around the globe was laid bare during that era. Paper money lets us (funnily enough) paper those costs over and live with the illusion that it's all a free lunch. But what we're actually doing today is debasement, and eating, vociferously, all of the deflationary efficiency gains won by 20th century technological progress.
> During the Age of Exploration/Colonization, competing European powers each minted metal currencies and couldn't reasonably debase their metals without immediately being out-competed
You're hitting the nail on the head. Metalness didn't matter. It was competition in money supplies (and strength of private property).
The fact that a banker in Italy could finance (or not) a war by Great Britain is what restrained governments. Same as in the 1990s, the bond market was king.
The historical record simply does not support the hypothesis that metal-based economies are more peaceful or inflate less than modern fiat-based ones. I'm open to revising that opinion if someone has re-run the data. But everything I've seen comes from blogs that start with the conclusion, itself reached from assumptions from first principles that rarely contemplate how armies were actually financed in antiquity. (Hint: they take your shit. Marketing campaigns sharing the martial term isn't a coincidence. If you're a general in the olden times, you got wealthy through your commission because your army took the enemy's shit. If you needed help getting there, you paid a 'friendly' visit to your nobles.)
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Saying “we gotta get Greenland” when the people in Greenland say they don’t want to join the US. Then refusing to rule out using force. If you want to say that no exact act of treachery has been committed, then substitute “treacherous words”, which also harms alliances.
> what treachery was committed?
Invading ones allies has been treacherous for millenia. If you want to be pedantic, you can say the U.S. President is openly threatening treachery, and showing as part of his character an affinity for it.
This is about way more than a few tariffs. Think Venezuela, think madman jizzing over the idea of invading greenland, or just throwing tantrums on an international scale.
But Iraq, Afghanistan, Grenada, Panama, Vietnam ... were not a problem?
Ahistorical BS, I am sorry. As if Trump is a radical departure of NORMS. Euros were chanting HO HO HO CHI MIN in 1968 in the streets of Berlin and Paris.
There is a long tradition of anti-American feelings outside the US, like with any hegemon.
The global left had to build walls to keep their people IN, crush them with tanks, from Prague to Berlin to Beijing. So there is that.
HN turning so left is weird to watch, I guess a reflection of PG's stances and moderation/group votes. Well, money does not give a fig.
classic whataboutism
if you don't think Trump is a departure from norms you aren't paying enough attention
I believe this is the correct response.
We're not going to debate the measuring stick when the stick itself is incapable of measuring the outcome.
In none of those scenarios provided did a sitting US president come close to insinuating acquisition of land by "hook or crook" - either agree with us or we take it.
The closest modern discussion that comes to mind is the PRC saying they could militarily "walk in and take the whole this afternoon" in regard to Hong Kong.
Thatcher, for all her wrongs, provided a salient response:
"There is nothing I could do to stop you, but the eyes of the world would now know what China is like."
The US has shown the world what we're like with the current administration.
I believe Saddam Hussein would disagree with you, if he could.
Just bonkers how basic history is getting rewritten.
"The great satan USA" has been a slogan since the 1960s. The US dropped napalm and agent orange on Vietnamese civilians en masse - Lyndon B Johnson was what, a good guy?
What on earth are people learning about today?
Interesting you'd think I know about 1980's Hong Kong political handover of power and not know about whatever whataboutism you're spouting.
Truly remarkable.
Bro is cooked
>> I'm sorry, what treachery was committed? The imposition of import taxes is not treachery.
It is an egregious violation of the Constitution, which specifically says that only Congress can impose taxes.
You must be a proud holder of his cryptocurrency.
> US century is already over
Maybe, maybe not. We're currently the Soviet Union in the 1970s. Gerontocratic. Sclerotic. Hyped up on a new mythology. And economically uncompetitive on several levels, with the future (then computers, now elecrification) sweeping past us to our applause.
Unlike the Soviets, however, we can see it happening and debate it. If '26 and '28 change course, the damage will still be done. But the America Empire is still young. And Trump's stupidest policies–the tariffs, fighting the Fed, Greenland and raising a Gestapo–don't have the support of most Americans. That leaves hope for reform through electoral pressure.
It will take work. But it's as incorrect to assume indefinite American hegemony as it is to preëmptively concede the game.
> Unlike the Soviets, however, we can see it happening and debate it.
I think you’re severely underestimating how much public discourse has already been chilled. There are a lot of things leaders across business or government won’t say any more for fear of being targeted. And let’s be honest the people who rise to the top in America aren’t the selfless kind.
How do you suppose we change the minds of the third of Americans who like having a Gestapo
> How do you suppose we change the minds of the third of Americans who like having a Gestapo
You don't. You work around it.
10 to 20% of Americans will agree with just about any stupid proposal. It's idiosyncratic, however, so even if you shut off that position, they still find representation on other issues. (Unless they're single issue. In that case they're either incredibly powerful, but only when it comes to that issue, or worthless.)
Most people aren’t empathetic enough to learn from other people’s mistakes. So the answer is, you don’t. Hard luck. At least you had it good for a while.
My outsider's POV: the fact that there's a Gestapo-analogue in place already tells me that an electoral solution alone is almost certainly no longer sufficient (or at least, unlikely to be effective) at this point.
The Democrats have also had very weak messaging ahead of the midterms. Like, pathetically weak in the current context.
This is to say nothing of the hypothetical where the US makes moves against allies' territories before the midterms.
> the fact that there's a Gestapo-analogue in place already tells me that an electoral solution alone is almost certainly no longer sufficient (or at least, unlikely to be effective) at this point
Read up on the American Whig Party and President Andrew Jackson. Or, more recently, Poland. This is absolutely still in a reversible field.
> Democrats have also had very weak messaging ahead of the midterms
Utterly leaderless. In part because a lot of the party is compromised in having covered up Biden.
> raising a Gestapo
If they were really Gestapo you wouldn't see people tailgate them in a Subaru or scream in their faces
> If they were really Gestapo you wouldn't see people tailgate them in a Subaru or scream in their faces
I'd agree with most of what you said, but there is no "raising a Gestapo". ICE has existed for 25 years. And the laws that give it permission to act haven't changed. It has gradually grown over the decades but what it fundamentally does has not.
What's new is finally the federal government pushing back against locales that refuse to allow local police to cooperate with federal law enforcement by means of massive influxes of federal officers to offset the lack of local support.
Also ICE has widespread support for what they are actually doing. Only when you ask manipulative questions that presume something is happening that isn't, do you get poll results that support a widespread dislike for ICE.
ICE has not been disappearing people to meet quotas for 25 years.
"Terrible things are happening outside. At any time of night and day, poor helpless people are being dragged out of their homes. They're allowed to take only a knapsack and a little cash with them, and even then, they're robbed of these possessions on the way. Families are torn apart; men, women and children are separated. Children come home from school to find that their parents have disappeared. Women return from shopping to find their houses sealed, their families gone."
I'm not sure what you're quoting but that is fan fiction of some sort divorced from reality.
> ICE has widespread support for what they are actually doing
About 40-50% are in support, so the parent's accurate. That roughly matches the political divide across the states.
The first sentence says that that's a national poll, not a Minnesota poll
I mean yes conservatives like gestapo mistreating their political opponents. It does not make it not gestapo or not lawless.
It makes conservatives who they are - fascist party.
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> deportation rates are much too low
“U.S. Border Patrol agents recorded nearly 238,000 apprehensions of migrants crossing the southern border illegally in fiscal year 2025” [1]. For 2012 to 2015, the chart shows about 360k, 420k, 480k and 330k, respectively.
That means ICE is spending $330 to 580 thousand dollars per additional Southwest border encounter in 2025 versus 2012. ($250 to 440 thousand if we average Obama’s second-term numbers.)
These numbers 10x even San Francisco’s circa 2016 homeless-industrial profligacy [2]. Unless ICE is a ball of wormy corruption, they’re clearly not focused on immigration enforcement.
If you prefer anecdotes, I live in Wyoming. Our farms are de facto exempt from enforcement. I believe in enforcing our immigration laws while we work to reform through the legislature. But that's clearly not what ICE is doing. The most-generous interpretation is they're making videos that make people who want enforcement feel good.
I've said for a while that ICE needs to go after businesses that hire illegal immigrants. So if you're looking for some kind of conflict in what I'm saying that isn't it.
That's why I said that ICE isn't doing enough.
It's kind of mind blowing people hate immigrants so much they are willing to burn their own country down to get rid of them.
I love immigrants lol. I just want immigrants that integrate and come into the country without breaking the law.
Why do you have so much hate for immigrants?
I'll tell you the same thing I told the other person:
I love immigrants lol. I just want immigrants that integrate and come into the country without breaking the law.
Thanks for sharing your perspective.
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It's just nice to know what my neighbors are thinking
> No, actually to be frank, I'd rather the Nazis go back to hiding under the floorboards in fear of public retribution.
You're defaming me and spreading lies. Any actual Nazis can go fuck themselves.
I don’t like that these kinds of posts get flagged. If a post is praising ICE or Trump it should be highlighted and mocked, not flagged and deleted. People should see how batshit insane MAGA people are.
ICE is shooting bystanders in the face, blinding teenagers, and tear-gassing infants.
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Indeed. People are actively trying to repair something which cannot be fixed. Now that the US century is over, the only way forward is for the US to use present military power as a cudgel.
Given that the multipolar world is nigh, the only path forward is through. If America and her erstwhile allies are no longer aligned, then any attempt by America to repair this is doomed. Consequently, Trump’s approach is the only way forward.
This is a self fulfilling prophecy. It may only be over because the administration is actively trying to create the multi-polar world. It could absolutely be fixed by Congress re-asserting its power.
Something that is “already over” cannot be “un-over”. That’s not how “is already over” works. It means it’s done, finito, not a prophecy but a historical fact. We have to move on. And that means less interference in internal European affairs like Ukraine-Russia and more protection of our interests like consolidation of power over the Atlantic, the Arctic, and the Americas.
We already have power over greenland tho :/
You do realize Denmark/Greenland is (well, at least used to be before this circus act) your ally?
“Used to be” is not “is”. The USSR was an ally. As everyone is pointing out here, there’s no going back. Given that, and as much as I preferred the old order, we have only forward to go.
If there were a path back, there’d be a point. But in this discussion, everything has already happened. There’s not much point in saying “if you hadn’t”. Well, Trump did. Having done what he did, nothing to do now but to go full bore.
Now that we are on a war footing, potentially with our erstwhile allies who have no interest in renewing the alliance given present conditions, the only path to preserve US control is aggression.
Path back to what? Time before the US started bullying its allies and destroying Nato? This seems all self-inflicted.
Mankind has never seen the collapse of a nuclear powered empire.
What makes us think this is possible?
It may not be possible for a nuclear powered empire to fall without the death of billions.
Mankind is in uncharted territory.
Even Russia never fully fell after the USSR collapsed. Whoever kept the nuclear weapons continued to be a first tier power.
Nothing in human history compares to the present question of how the current empires fall. And if they can even do so safely.
> Consequently, Trump’s approach is the only way forward.
It's the DoD.
Prior to Trump's actions, the American-led "world order" seemed to work, even if we couldn't get China to agree to a "Bretton Woods 2.0".
Biden tried diplomacy with the EU. He tried to get them to agree to a renewed US-led world order, but it wasn't working. The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
I think the US could seriously pull out of NATO and leave the EU to fend off Russia by itself. It'll have to start spending enormous tax dollars on defense and war.
Meanwhile, if the world is truly becoming multi-polar, then the US wants to consolidate power in its own hemisphere. This is why there's all the rhetoric and action on Venezuela, Cuba, Greenland, Canada, etc. The US will keep Chinese ports, basing, and trade completely out and secure the trade routes for when the Arctic opens up. It recently changed control over the Panama Canal, and the DoD is dead serious about taking Greenland and maintaining complete hemispheric control.
With whatever energy the US has left, it will dedicate to Asia. It will strengthen alliances and project power there instead of dealing with Europe.
The world is going to be a much more violent place without hegemony. Free trade doesn't exist in that type of world. The US realizes this and is playing 50 years ahead. None of the nice words matter when the energy, trade, and economic lines are redrawn.
People like to say the US is led by lawyers and China is led by scientists and engineers. This is wrong. The US is led by war generals and intelligence. The career DoD folks are the ones impressing upon the administration to make these moves.
To be clear: I hate this. I loved the world I grew up in. I think we're headed for a violent world that could easily erupt into war. I don't like it.
>The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
How so? What actions did the EU take?
You don't think the declaration of himself as dictator and the immediate threats against EU allies might have changed EU attitudes at all?
> Biden tried diplomacy with the EU. He tried to get them to agree to a renewed US-led world order, but it wasn't working.
Can you elaborate on that? It seems to me it "wasn't working" mostly in the sense that Trump got elected again.
> The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
Seems like confusing cause and effect. The EU is drifting away from the US towards China because the US pushed them away.
> The world is going to be a much more violent place without hegemony. Free trade doesn't exist in that type of world. The US realizes this and is playing 50 years ahead. None of the nice words matter when the energy, trade, and economic lines are redrawn.
This is happening largely because of the US, although they stand to lose by replacing a world order that benefits them with a world order that benefits China and Russia. Well maybe the US will become sufficiently like China and Russia that they can benefit too. But even with a gradual loss of hegemony there was nothing inevitable about a transition to the law of the jungle and it's doubtful that the net result will be positive for the US.
> People like to say the US is led by lawyers and China is led by scientists and engineers. This is wrong. The US is led by war generals and intelligence.
I think the relevant distinction is that the US is democratic while China is authoritarian. But the current US government wants to be authoritarian.
> The career DoD folks are the ones impressing upon the administration to make these moves.
Again a reversal of cause and effect? I doubt old career DoD folks like the current developments. But the current government might give a bigger role to the war generals.
> I think the US could seriously pull out of NATO and leave the EU to fend off Russia by itself. It'll have to start spending enormous tax dollars on defense and war.
Disagree. If US pulls out of NATO, most likely scenario is EU continue to concede to Russia. I think EU will concede on Greenland too, but likely won't do it without any military action (unclear whether that will trigger nuclear escalation and how that can end).
> The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
This is sanewashig this whole thing. The fact is, the US is moving away from the EU because Trump doesn't like democracies. It's that simple. You have a large percentage of your population in what is essentially a cult and you have givem them the reigns.
> This is sanewashig this whole thing.
This was being called back during the Biden admin and before Trump even ran again.
If the US can't build strong coalitions with Europe, it wants to spend its energy elsewhere.
Even pop-geopolitik wonk Peter Zeihan was pointing this out during Covid. I can't find his videos, but this has been top of mind for a lot of people for a very long time. These are anti-Trump people, too.
Multipolarity means instability, violence, fights over resources, fights over trade. Post-WWII was unusually (relatively) stable.
The US can turtle up, just like it did before WWII. It doesn't share a land border with any other major powers, unlike European and Asian countries. It commands the two oceans on its sides (and soon Arctic), and doesn't need anyone else - this was the US' defense posture since its founding.
You’re right. It was in the book Disunited Nations by Zeihan.
Honestly, the idea of Trump making geopolitically informed decisions is so out of the realm of my perception of reality I don't even know how to engage with you. Trump is a narcissistic idiot that you voted into power. Your geopolitical direction is dictated by his narcissistic whims. "National security reasons Greenland" or "EU collaboration with China" or whatever is exactly what I initially said - sane washing a lunatic.
But, anyway, good luck. You'll need it.
I have a great interest in geopolitics. I didn't vote for Trump, and I already told you this is coming from within the DoD.
These are military decisions. These are 50-year plans.
Here I was 10 months ago and two years ago saying the same thing:
I am not saying you're stupid or misinformed, I'm saying you're missing the point. Understanding what Trump wants doesn't require you to understand geopolitics, it requires you know clinical psychiatry.
Trump doesn't want this. He didn't come up with the idea.
Trump was told and encouraged to want this by the little birdies at the DoD.
What do you expect (e.g.) Norway to do except disentangle, when their PM sends this text and gets back this response? And note that Finland's president (Alex there) has been one of the big proponents of continuing to engage with Trump. So, honest question, what should Finland, Norway, etc, do?
Trump absolutely drives this. You're deluded if you think this whole thing comes from the DOD. He is in effect a king at this point and he rules by posting in social media.
Except all of that will be for naught because the US is making the fatal mistake of doubling down on oil and coal. It's pointless to play 50 years ahead if you won't make it even the next 20.
The reverse is true: people who say things like "The US century is over" almost always dislike the US or wish its global influence would decline. Their commentary is wishful thinking.
There is some probability that US global influence does significantly decline but I wouldn't hold my breath.
Not true. Some, like myself, love the idea of the shining city on the hill, although we often find the behavior of the actual city less than shining.
I would like for the US to continue being a beacon of freedom where people can come and build great lives.
But that is not the direction we are going, and one might reasonably forecast that no country can maintain indefinite dominance. Paul Kennedy wrote "The Rise and Fall of the Great Powers" almost 40 years ago. Regression to the mean and all that, but also, great powers tend to overstep.
> Not true. Some, like myself, love the idea of the shining city on the hill, although we often find the behavior of the actual city less than shining.
Your first sentence says "not true". Your second sentence says "true".
Your dislike of the current US regime/behavior causes you to forcast the decline of US influence. I'm not saying you should like current US behavior, just that there isn't good evidence for any decline.
These things are hard to predict. The most likely situation is not decline: it is continuity, where the US retains its global influence for the time being.
Ignores the totally exceptional nature of some of the US changes/instabilities of this administration. I say "not true" because that is my read of where things are going, regardless of preferences.
Yep, and nobody ever goes on these types of threads and says the EU is collapsing, even though there's demonstrable evidence that things are not going great for the EU (the UK left, there is virtually zero economic dynamism or tech investment, Russia has seized 1/3 of Ukraine who was trying to join the EU, and the continent has no money, no navies and terrible demographics to compete globally in the next century). People gloss over issues about the EU because it aligns more closely with their political beliefs.
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I believe the recent line from a US ally at a recent security summit was, "We will never fucking trust you again."
Having dollars was useful to trade with US. But the trade has been reduced by tariffs.
Also. Any attack to the independence of the federal reserve damages whee vale of the dollar
Current Trade with US is a small percentage of the reserve. It's the trade with everybody else and trust that it will hold value for all the future trade is where it matters.
Is World in immediate trouble? I see three posts discussing collapse of US currency and market on homepage, and this site actively avoids anything political.
This was written in July 01, 2025, and lot has happened since then. Is there any update to this report?
Is the US dollar losing its dominance? The answer is both A) yes and B) it doesn't matter.
Yes, US dollar is losing a bit of power and influence. This is likely to continue.
Making inferences about the US global dominance based on this fact is misguided. US global dominance is as strong as ever and, if anything, getting stronger. US has very successfully managed to move the game a level above currency, to direct governance via financial, legal, political and military means. It has made any meaningful competitors either entirely irrelevant (e.g. Russia), pretty well aligned (e.g. India) or pretty well contained (e.g. China) It's blue skies ahead.
As strong as ever…
The US has a strong military but its dominance position is declining rapidly. It’s going around threatening the whole world.
It’s failing to effectively address their problem with China and Russia.
Domestically, 60% of Americans live paycheck to paycheck, you have ICE running around and Medicaid being slashed to afford that.
All the leaves are brown…
USA is doing everything in its power to make Russia great again. It was in great position to make it irrelevant, but it has choosen to make itself Russia like and snatch defest out of the jaws of victory against Russia .
> direct governance via financial [means]
This is going to disappear if USD is no longer the dominant currency.
The exact point I'm making is that this is NOT the case! US has super strong financial control over most of the world in a way which is NOT connected to the strength of the US currency.
As they say about bankruptcy. First it happens slowly then quickly.
I suspect were about to see that pivot
The USD's status as a reserve currency is directly linked to it's trade deficit with the rest of the world. Because all other entities (individuals, corporations, organizations) want to keep their wealth in USD, there's a strong incentive to sell (goods, services, infrastructure) to the US and obtain USD in return. Conversely, there's a strong disincentive to buy from the US because goods have to be paid for with USD, which means parting with the very currency one is trying to accrue.
One of the most effective ways to ease the trade deficit is to reduce USD's status as a reserve currency.
The dollar is a weapon, and when the US can print as much as it likes, the odds are always stacked in favour of the US.
Trouble will really come when the US tries to get out of its ridiculous debt trap. What will they do, wave a wand and their debt goes away?
A large amount of the debt is owed to the US population. I doubt that the debt trap is that large of an existential problem, but having trade alliances break down is much more of a big deal.
I would imagine U.S. foreign policy, particularly the prolific use of sanctions contributes to this wane as well. There was some discussion about this a while ago - effectively as the U.S. continues to rely on a strategy of imposing sanctions against foreign adversaries, those adversaries increasingly reorient their economy towards non-U.S. economies such as Russia or China. The more the U.S. utilizes sanctions, the less effective they become.
The former IMF chief Kenneth Rogoff has been talking about this and appeared on NYT Ezra Klein's podcast that I highly recommend[0]. He also talks about China and the role of the dollar at the end with Dwarkesh Patel[1]. A lot of the discussion I see here is adressed by him.
No idea how those things work but surprised the $/€ exchange rate stabilized.
You had a year of flip-flopping on tariffs, and a lot of noise. Serious threats are coming out just now, and may get cut abruptly closer to November. It's going to be a while before this presidency gets reflected by the market.
Patently. The current situation in the USA doesn't inspire confidence.
My understanding is that the standard of living in Britain dropped about 75% when Britain lost the reserve status of the Pound Sterling.
I expect it to be worse here in the US.
I wasn't expecting us to try to speedrun it, though. I thought we had a decade or two left, now I think it'll happen before the end of the year.
The US has had an economic wind at its back for a long time, but there’s perfect storm of debt, trade, inflation and de-dollarization brewing.
It's a small relief to have emerging markets holding dollars. Hopefully their economies will continue to grow and that could be a long term benefit to offset the slow de-dollarization across the rest of the world. It would be in US interest to invest into those emerging markets.
The issue is that there isn't a great alternative.
The euro is difficult to manage because of the diffuse control, pound an even smaller economy, RMB just not global enough (and tough argument to see that happening), gold/bitcoin/whatever not the same inherent stability.
Indeed the dollar weakening, but nothing really to take it's place.
The ECB is not diffusely controlled.
CHF?
Literally cryptocurrencies are the single greatest alternative ever made. Opt out of the system where the government can just print money into thin air and old guys drawing dots on a plot set interest rates in closed meetings. If you want to hedge USD exposure just buy a Bitcoin ETF or if you really can't stomach cryptocurrencies b/c you don't want to be ostracized from the orange site, buy Gold. We are not going back to the way the world was and if you have all your money in USD realize you are on a leaking boat.
It is entirely possible to manage funds in crypto for growth and move some amount into more liquid USD denominated assets or MMFs when you need liquidity.
Right up until you lose your internet access.
It'll all still be there when you get it back.
Why would you get it back?
--You don't want the bank to give you your money back?--
edit: I misunderstood, or do you mean why would you get your internet back? If you're not getting your internet back, I can only offer you're not getting your money back either.
I have been interested in this topic for a while now, and have run different scenarios. What is everyone's thought on Chinese Yuan or Euro as the reserve currency?
The Yuan isn't free floating enough. Banks will probably hold a mix of currencies including the Euro and others.
Contrary to what everyone thinks - Dollar losing its reserve currency _canbe_ a good thing.
I can't figure out what in that article is supposed to be a good thing, and the article doesn't seem to hold an opinion of that sort.
My first question is: good for whom? Second question is: how? It's definitely good for holders of whatever replaces the dollar, but it's disastrous for everybody in the US, as far as I can tell.
> As applied to the United States, the current account version of Triffin runs as follows. The global accumulation of dollar reserves requires the United States to run a current account deficit. Since desired reserves rise with world nominal GDP, which is growing faster than US nominal GDP, the growth of dollar reserves will raise US external indebtedness unsustainably. Either the United States will not run the current account deficits, leading to an insufficiency of global reserves. Or US indebtedness will rise without limit, undermining the value of the dollar and the reserves denominated in it.
Can you be a bit more explicit about what the benefit is, and who benefits? It's not clear what your thinking is.
How do people hold yuan? I was surprised at the lack of ETFs in this space. There's of course a lot of Chinese equity ETFs. There used to be a pure currency ETF but it was liquidated a couple years back. CBON seems like a good way to get exposure via bonds, but its AUM is quite low.
> How do people hold yuan?
Actual answer? In global real estate. So… they don’t or “it’s complicated”.
The ultimate check and balance was always supposed to be the US consumer. It seems any major disruption to purchasing power will result in a backlash large enough to undo any policy and administration.
I’d still bet that any sudden movements in this direction will be checked
>It seems any major disruption to purchasing power will result in a backlash large enough to undo any policy and administration.
That assumes it can be undone. Reversing course and hoping the damage done heals isn't a sure bet. Especially with timing delays.
There is definitely real risk here
More and more of the people actually spending money in the economy are concentrating in the top 10%. They don't NEED the millions of everyday consumers to maintain the status quo.
I wouldn't count on the people that elected trump, twice (!), to come to their senses. The American voter cannot be trusted to do what is right for the country.
The event has been in motion with every action from the administration just cementing it more. Forget about the dollar’s dominance, at this point I am not forked that he will usher in ww3, or at the very least a war between Europe as the US seems very likely
There's no point in a war between US and Europe, it's not gonna happen. However bad a war would be, the current situation isn't much better. There's definitely a rift going on and will cause irreversible changes to the US - EU partnership. Oh well, not only EU, it seems like US is losing friends at a very fast rate with Trump at the whelm of the country.
Honest question: isn't it just a matter of time before US dollar loses its dominance, given that US has been losing its manufacturing business? I mean, can people really keep investing in the US market if they need less and less stuff produced by the US?
Why is manufacturing so special? As opposed to something like software?
Also, manufacturing in the US is growing not shrinking. For a long time.
If The US goes to war against China, we are screwed, because we outsourced our manufacturing to China. We cannot quickly ramp up our manufacture of ships, tanks, aircraft or ammunition. Not only do we lack manufacturing capacity, the entire supply chain is in China / Asia.
In addition, China leads in the critical technologies need for drone oriented warfare, like we are seeing in Ukraine.
In particular, the pentagon has so many suppliers in China. Oh, the KPIs (key pharmaceutical ingredients) are produced by China too. We even had shortage of saline solution when China was having a supply crunch. So when a conflict, let alone a war, broke out with China, what do we do? We ask China to supply us the war logistics?
A fun story, China has the best automated seafood processing factories that meet all kinds of regulations in the world. It's cheaper, a lot cheaper, for Japan and Alaska to send their seafood to China to process, and then sell back to the domestic market. And it has nothing to do with cheap labor but deep R&D of China. So, when war broke out, many people won't be able to enjoy cheap seafood either.
I don't understand how people can ignore a simple fact (is it Milton who pointed that out?): Manufacturing is a "doing" business, not a "knowing" business. Our expertise is forged on the shop floor, not dreamed up in a boardroom, and certainly not bought through outsourcing. There is so much tacit knowledge that manufacturing capability is a living system. It lives in the collective experience of the workforce and the rhythm of the line, not in static documents.
Oh maybe this is the time to quota Thomas Joseph Dunning: With adequate profit, capital is very bold. A certain 10 per cent. will ensure its employment anywhere; 20 per cent. certain will produce eagerness; 50 per cent., positive audacity; 100 per cent. will make it ready to trample on all human laws; 300 per cent., and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.
> Why is manufacturing so special? As opposed to something like software?
I assume that dollar will be strong if people want to buy stuff from the US, which requires using the US currency. Software indeed is a strong sector. I'm just not sure (as due to my ignorance) if they compensate sufficiently the trade deficit. For instance, if advertisers use Instagram in Europe, they wouldn't need the US dollar to pay for the service, right? If there's no virtual export happens, I'd assume there won't be any need for the US currency either.
> Also, manufacturing in the US is growing not shrinking. For a long time.
What about market share? I remember that the US had more than 65% of the manufacturing marketshare 25 years ago. Actually, I'm more concerned about the long-term national security and prosperity of the US, and I think they are tied to a robust manufacturing sector. But that's different topic.
> Also, manufacturing in the US is growing not shrinking. For a long time.
Well, at least up to 2024...
I think when people run the next number, there will be a surprise there.
Software can leave your country in a fraction of a second. Manufacturing is infrastructure. This is also basic. Manufacturing in the US is shrinking, comparatively with other countries that actually make things. People just think they can just play with numbers, categories and dollar values to hide it.
The US has been playing a currency game since 1980 to make up for the loss of the free money it got for reconstructing Europe and Japan, and using that money to buy things from impoverished workers in China. And as China got on its feet through careful planning and management, it moved to India, Pakistan, Mexico, Indonesia, the Philippines, anywhere that was willing to stomp on its workers and pollute its air and water.
Now China has gotten to the point that it is a viable alternative to the US, so the US can't unilaterally set terms anymore for its suppliers. It's dumping US treasuries. It's competing for natural resources in countries that the US just tried to topple and steal their natural resources through sieges that ironically served to cut the US's legs from under them, giving China a huge discount. The game is up.
China going from nowhere to the greatest economy on the planet in 50 years is what happens when you manage and cultivate manufacturing. US real estate and an economy run on luxury consumption is what you get when you outsource manufacturing and play word games to cover it up. We literally can't tariff China significantly, they could crush our economy just by embargoing us like we freely embargo everyone else. That's the power of a manufacturing base. We might want to fix our bridges, too.
Case in point, it's news that Canada leaned toward partnering with China when having dispute with the US, but it would be a joke 20 years ago. It's a humiliation that the US brought upon itself: you can't produce things that people need, then don't blame that people will have leverage in other places.
A weak dollar is good for manufacturing and a strong dollar is bad for it. China tightly controls to the Yuan to purposely keep it's value low to benefit it's manufacturing. The current US administration wants to something similar for the US to boost manufacturing.
I think that's foolish and backwards thinking. The US doesn't really need more manufacturing; it had relatively low unemployment, a healthy economy, etc. The US is a service country. Apple is one of the richest companies in the world and does none of it's manufacturing in the US. Why wouldn't people invest in Apple?
This too. Many people argue that if we weaken the dollar enough, the manufacturing will come back.
Title needs to be updated when the 1 July 2025 date. For a moment I thought JPM put it out in sort of a response to criminal charges against Jerome Powell, fed chair. It’s probably unprecedented? Wild times.
Do i need to stop investing in msci world? what else would i invest in?
Curious how HN is using this information to plan your investing approach. Does the typical approach, broad market globally diversified still hold assuming dedollarization?
You do get World excluding USA ETFs yes - including denominated in say EUR.
It does risk missing out on AI though (or AI crash depending on your perspective).
India pays one 1.4 GW nuclear power plant in yuan and they start talking about global de-dollarization as if people can't think in proportions anymore?
If Something Cannot Go on Forever, It Will Stop
With the pace of news these days, especially economic news, I think this deserves a (2025) in the title.
When is everyone going to dump their US bonds?
Will Groenland be the redline, finally?
As a big nitpick, I found the y axis in that chart ranging between 40%...90% to be horribly misleading.
Interesting how gold hit a record high today of $4700+/oz.
Betteridge's Law strikes again. As of Q2 2025 (roughly the time that TFA was published) there is more dollar-denominated debt than ever before [0]. And its value relative to other currencies (as of this month), while subject to cyclical fluctuations, is on par for the post-Covid cycles and higher than pre-2020 levels [1].
A 1.1% devaluation doesn't seem so bad per year, except for the political risk and economic uncertainty.
Empires are very adept at dethroning themselves by way of greed.
Dollar milkshake theory
Up until about a month ago, I’d have argued it’s overblown. However, I think this time it’s a real possibility and perhaps even certain. This country is absolutely going down the toilet and China is using this opportunity to strengthen its position. Things will get far worse as the economy rolls over this year and AI bubble pops. It’s a perfect storm.
One can only hope.
Turns out, Putin was a genius after all. And maybe the optics of Gaza wasn’t helpful either, that seemed to be the moment Macron et al finally turned against the west.
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What world do you guys live in? The dollar is not held by some mythical rules and polices. It has it's status because of aircraft carriers and 30000+ fighter jets US has. No other country is even remotely close to that level of offensive military power.
It's not going to be replaced any time soon, there's no realistic replacement at the moment, but there is a slow movement away from it. We've already seen a stampede into gold from central banks. And pimco have said they're going to relocate funds out of dollar debt.
After the nonsense with Greenland no one really wants to give anymore financial power to the US so we'll see more assets kept in local currency or different reserves currencies like the Euro, Yen, Sterling, or ChF.
The reason de-dollarization should be concerning to US citizens and many don't understand is that having the dollar as a reserve currency is a huge asset to the US. The US has control over how many dollars are created and where they are spent. If countries are willing to sell to us for dollars, then the world becomes a friendly market for raw materials and products to be vacuumed up here.
Losing the dollar as a reserve currency is losing the empire.
Key Takeaways from the JP Morgan Research:
• Despite a smaller share of global trade and output, the dollar still dominates in transactions like trade invoicing.
• Dedollarization is advancing in central bank reserves, with USD share at a two decade low.
• Foreign ownership of US Treasuries has declined for 15 years, signaling reduced external reliance on the dollar.
• The shift is most visible in commodities, where an increasing share of energy is priced in non USD contracts.
Part of the strength came from trust and participation in a community. The US has become untrustworthy and hostile toward community.
De-dollarization is one of those things economists love to talk about.
The chance of the dollar losing its reserve currency status is slim-to-none. No matter how bizarre the US is, nobody trusts the Chinese Communist Party (CPP). And although the US can manipulate the value of the dollar, its tools are limited compared to the CPP.
Plus, the US is still the only country that's willing and able to prop up the world financial system with no immediate benefit (see Argentina). The US can and will intervene when necessary. And as history has shown, the Euro Zone can't really make decisions quickly and effectively. How many times has the Euro been on the verge of collapse in the last 20 years? And is proximity to Russia is, well, risky.
In any case there is no currency big enough to take the dollar's spot at this point in time. Trillions of dollars flow through the financial system every day.
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It's far from slim - it's very likely USD and EUR hegemony will be challenged. Western financial systems are ultimately and inherently discriminatory towards any non-western countries. Where for westerners using those systems enjoy reliability and predictability, the same systems implicitly (and recently, more explicitly) punish non-westerners with excessive compliance and scrutiny. So, basically, if you're from a non-western country, good luck not having your money confiscated or fronzen at some point - and this applies both on state-level and individual level. Of course sensible countries will seek alternatives and will create ways to bypass this elitist bullshit. The whole thing is literally nothing else but inertia at this point and over time both USD and EUR systems are destined to become merely regional.
When you say non-western what do you mean in this context? From what you describe it just sounds like China, Russia and North Korea
I mean literally any country outside of Europe, North america, Australia, New Zealand and maybe some non-western exceptions like Singapore.
I don't think that's exactly fair; there are plenty of other places that do not suit these criteria that get along fine with the dollar. it is on an exclusion basis not an inclusion basis
I'm hopeful that any loss in dominance translates directly to economic pain for all Americans. Nothing will rose those sleepwalking through the rise of fascism faster than not being able to make ends meet.
I'm not sure that is true at all. I think the sleepwalkers are just as likely to blame immigrants, foreigners, <insert out group> and continue to hand the current regime more power.
Yeah, on second evaluation I think you're right. People are less likely to be motivated to act, and more likely to be more easily manipulated.
Yes
The article is written by JP Morgan which is a little odd but even stranger is they mention of all places China as being a great investment place to put your money, when in reality they can literally take your money away from you and nationalize your business under their current laws.
I'm glad you're one of the few to call this out. JPM has hedged its bets against American interests and holds a ton of crypto. Of course they'd put out an article like this
I'm surprised that people are so surprised by this. Funds operate with risk management models and practices. As the US becomes more unstable, politically, these will weigh in on how much money people keep in US markets. US threats to annex Canada and invade greenland. US kidnapping foreign heads of state. Actively using federal agents as shock troops against blue cities. All of this has true economic impact, either real in terms of losses but also USD as a stable currency run by legitimate people.
Would they implement capital flight controls? if you invest in the US, can you get your money out? No one knows but it seems increasingly less likely. Red lines are being crossed weekly.
The country is heading towards a decline into a developing world style authoritarian dictatorship.
What if the goal is to crash/burn and consolidate ownership? This time with the money system?
I mean, it sure looks like the goal.
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it'd sound reasonable, if that ownership wasn't already overconsolidated. But who says people doing that are reasonable.
It might be over-consolidated in the aggregate but I don't think the greed is too worried about that.
I don't think there is a single concrete goal, when you look at how flabbergastingly stupid most of the oligarchs are (just scroll through Elon Musk's most recent posts) it's hard to imagine there being any real master plan. It's a bunch of dumb assholes that were raised with infinite money and where nobody ever told them no.
If you've ever had the unfortunate opportunity to interact with your average CEO at a mid-level business it's the same thing but on a much smaller scale. They can't fail, only be failed.
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Well the real question: Is the US losing interest in reserve dominance?
Contrary to popular opinion, IMO PRC doesn't want reserve currency trade off (triffin / trade deficits etc). What PRC wants is to secure her own interests with RMB, which is mostly happening, energy contracts, lots of bilateral trade happening in RMB now. What PRC also wants is to make maintaining reserve USD onerous, i.e. high rates, high debt servicing... which already indirectly limits US in real ways like reduced defense acquisitions in last few years.
PRC wants USD exorbitant privilege to be just exorbitant.
Then US incentivized to dump system (etc debasing) which will fuck over global USD users and tank US reputation even more. A lot of US actions make sense when you realize Trump doesn't want to deal with an increasingly unprofitable global utility. PRC doesn't want to step in to build new pipelines, they want to see US (mis)manage existing US owned plumbing that everyone is using so poorly it fucks up things at home and for everyone else, meanwhile PRC has comfy off the grid setup for herself and her guests.
Let's hope so. The USA has become very aggressive under the TechBro rule.
many of whom are jacked on testosterone supplements.
uhm, they need to proof thier article "This increased demand has in turn partly driven the current bull market in gold, with prices forecast to climb toward $4,000/oz by mid-2026."
Article is from July 2025, Gold was 3362 at that time
So gold is up 50% in six months? That's... quite a bit.
They were off, it is going so much faster.
so nobody read the article and instead regurgitated pre-existing sentiment, while forgetting the golden rule of journalism:
if an article ends in a question mark, the answer is no.
> the greenback dominated 88% of traded FX volumes — close to record highs — while the Chinese yuan (CNY) made up just 7%, according to data from the Bank for International Settlements (BIS).
> Likewise, there is little sign of USD erosion in trade invoicing. “The share of USD and EUR has held steady over the past two decades at around 40–50%.
there is currently no other alternative to meet the global liquidity demands
That first sentence starts with "In 2022,", so presumably the numbers are different now, but I couldn't find anything in the article about how things have changed in the last four years.
You just have to be in it
Liquidity is atrocious as soon as you leave USD rails and are trying to move more than a few million (in notional usd terms), let alone billions
Downright terrible, its actually amazing how bad it is. “Finance” as infrastructure isn’t anywhere near finished and swapping the currency rails would be very hard
Its more than people just agreeing to use a different currency, which means its more than all traders and merchants dying, the next best currencies have structural problems. Their central banks trying to pump the market full of liquidity would destabilize those currencies far more than it would the USD doing the same thing
But I’m open to being impressed
The US is losing respect in general. Its foreign policy which was never really friendly, now is really really bad. Many countries on Africa genuinely prefer countries like Russia. That's something unheard of 20 years ago.
I usually read piaeces like this as bullish for the US .. the truth is .. neither the author nor anyone else can really call how this plays out .. but what is clear (and f***g obvious) is that there’s still no country as economically dynamic or creative as the US .. and if not the dollar .. then what realistically takes its place ... the euro, RMB, rupee? None come close yet in terms of depth, liquidity, or trust ... these type of de dollarization makes for an interesting news cycle and discussion, but it’s a super long road from theory to reality ..
In the short run, I agree.
But what I do worry about are the long term consequences of US behavior. Even the largest empires aren't on top forever (even before Trump, China was investing heavily in tech and has made significant inroads. India is developing, too. Who knows?). There may be no country as economically powerful today, but tomorrow is a new day. These shifts don't happen in the short term, but over decades, this could be a big problem for the US if our approach continues this way.
A business goes bankrupt slowly, then all at once. I worry that we are speed running the "slowly" part of our journey.
Countries are learning that the USA is no longer what it used to be, on the surface they are trying to please Trump to avoid getting more tariffs but on the ground they are no longer depending on the dollar.
Wait until Greenland drama goes sideways, then you will see the dollar getting washed out as the international currency.
Trump will go down in history as the clearest marker of the United States’ decline.
And you could have said that during The Apprentice.
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The biggest problem of all social sciences is that they measure only what can be measured or is easier to measure. Sorry for the redundancy, but they don't see what is hard to see and, therefore, think it doesn't exist.
I suspect there might be a lot of "de-dollarization" going on in realms that might not be easy to measure. To be specific: it is interesting that crypto-currencies have emerged as the currency of choice for illegal activities.
The article is talking about reserve currencies. Cryptocurrency isn’t relevant.
The export driven economies like China or the EU rely on the dollar to weaken their own currencies for competitive trade. Without it, natural FX mechanisms would naturally begin to appreciate their currencies and make their exports uncompetitive.
According to USTR data the EU had a 200bn goods surplus, but a 100bn services deficit in 2024.
So a 100bn deficit out of 800bn total US imports.
The deficit is there, but it's not nearly as lopsided as some reporting would have you believe.
>"The export driven economies like China or the EU rely on the dollar to weaken their own currencies for competitive trade"
I have about zero clue how finances really work but it looks to me as the statement is only true if the dollar is the predominant currency for international trade. This looks to be slowly changing for various reasons.
>This looks to be slowly changing for various reasons.
Well, not really, because obviously that deprecation via buying government treasuries is balanced by the appreciation in the other currencies. But if everybody (large enough to matter) dosen't want their currency to appreciate, if somebody buys Japanese bonds for example to weaken their own currency, then Japan will buy somebody else's treasuries to offset the increase in Yen, and if we go to the long chain of musical chairs of people offsetting each other's behaviours, it just leads back to the USA as the only ones both large enough and willing to take in those capital inflows.
That's not a interpretation mind you, that's a description of what central banks are doing right now. If that has to change, you need somebody willing to take the mantle of the absorber of global deficits, and nobody wants to do that.
If Trump announces some toady lunatic to run the Fed, watch out below, because the dollar is going to crash. I know I have moved a bunch of money into international stocks and currency and I suspect when the right leaning crowd finally catches on it will be a stampede.
What's the difference between an international stock and a US based multinational in your analysis?
The most important thing to understand is where the value of the US dollar comes from. It's the US military. More generally speaking, it's US foreign policy. The US military is the force that enables foreign policy.
Understand this and you'll avoid falling into various traps and conspiracy theories. For example, there are people who believe that the US invasion of Iraq was caused by Iraq wanting to sell oil in euros instead of dollars.
This is a nonsen theory because every oil transaction could be denominated in euros tomorrow and it wouldn't change anything. The same demand for US dollars would still exist so people would simply convert to euros, buy oil then convert back.
This same understanding debunks the "threat" of a BRICS alliance.
The real problem, if you can call it that, is we have an administration who is both incredibly inept AND intent on destroying the post-WW2 world order. Wealth inequality is getting so bad and the deficit is so bad. Worse, nobody expects either to improve anytime soon. I'm not saying the budget needs to be in balance. It doesn't. A country doesn't work like a business when you can print your own money. But at some point, crippling public debt (in terms of GDP) will devalue the dollar.
Put another way: the illusion of "safety" is at risk. It's just a question of when the vibes shift.
Your first paragraph is close to correct, but have you thought of the difference between supportive vs coercive power?
If the Russian army is the force that enables Russian foreign policy, they why do some people in Ukraine think that they don't want to do things the Russian way?
Likewise, I wonder how helpful the US military will be at forcing our former allies to do things they don't want to do?
It's a fair question but the answer is fairly simple: the Russian military simply isn't strong. The only reason they haven't been bombed back into the Stone Age is because they have a nuclear arsenal. That has limited the West's response to being "proportionate".
The Russian-Ukraine front is kinda like WW1. There's no real air power to speak of. The front is dominated by artillery and infantry and fortifications like trenches.
Russia cannot project military power anywhere like how the US can and the US has decades of projecting that power to force countries to capitulate, essentially. Europe outsourced their security to the US, for example. But make no mistake: NATO is a protection racket. It projects American power into Europe.
This is one reason why I call this administration inept because they seem intent on splintering NATO, which actually diminishes American power. Just like disbanding USAID diminished American soft power, and quite cheaply at that.
The lesson since at least the (W) Bush administration is that only nuclear weapons can guarantee your survival.
Trump is a populist president who sees the value of US exports (on the back of blue collar work) being more important than global dollar dominance. This plays hand in hand with his championing of tariffs (foreign goods become more expensive) and hostility towards immigrants (apply upwards pressure on domestic wages).
If you cannot see this, or cannot believe it, you should probably check if you are in a ideological bubble.
Is the world going to de-dollarize though? Probably not, shy of an EU independence, which is about as likely as Europeans adopting an American work culture. Although, I won't rule out the possibility of the EU moving it's eggs to China's basket either. What a world that would be, a Sino-Euro axis and an North American axis. Whew
> Is the world going to de-dollarize though?
I think they already are -- it's just not going to happen all at once overnight. The shift has happened already and the consequences will take decades to come forward. But it's still possible that the US will do something to reverse course and everyone will be happy to not have to think about finding an alternative to the US dollar.
The EU is not going to move into China's basket, not if you mean using the yuan as a reserve currency. There's too much political risk - the value is at the control of political decisions by the CCP.
The EU is going to have to (very painfully) grow legs then.
The fact that the US provided the majority of weaponry, and half the money to Ukraine should have been shocking wake up call to every European. But instead the vibe seems to be "Americans are so dumb to live the way they do".
> Trump is a populist president who sees the value of US exports (on the back of blue collar work) being more important than global dollar dominance. This plays hand in hand with his championing of tariffs (foreign goods become more expensive) and hostility towards immigrants (apply upwards pressure on domestic wages).
It has nothing really to do with populism. It's the US's only rational option. You can't just run trade deficits forever, no matter what the people who make money from trade deficits tell you. A parasite that gets so big that it disables the host is a dead parasite.
People act like this is the how the US always worked. We just started this with Reagan, and every moment since then has seen the rise of finance, the victory of unproductive capital and speculation, and the decline in domestic manufacturing and standard of living that you would expect.
There's never been a moment where there's been anything to point at for a finance capitalist to feel vindicated that his success would lead to the US's greater good, so he resorts to claiming that it is simply impossible to be any other way. At best this is sunk cost fallacy, but at worst, it's just propagandistic gaslighting from a bunch of people who don't have any connection or loyalty to anyone in the US, don't care when it's people suffer, don't care how its children will live, and will just leave if their houses start to feel insecure. There's your populism.
I agree with your assessment, but Europe is in unique trouble that the rest of the world has no need to relate to. The US will simply have Europeans jailed or killed who steer Europe counter to US interests. Right now the US is on a slow road to peace with Russia, while trying to cultivate and maximize European animosity and estrangement from Russia. The world in which the US is mocked in Europe by NATO (a device to carry out US interests) for trying to appease Russia is a world that no one but a realist could have predicted.
Everybody else will de-dollarize, and the US will threaten Europe and the UK with tariffs if they don't peg the Euro and pound to the dollar. The US will be trading freely with Russia and China, while sanctioning Europeans for buying energy from Russia and bribing European governments to harass Chinese companies.
India will be chairing BRICS this year. And Trump decided to fuck with the wrong country, especially when India-US relations were at its peak. This year will mark the beginning of the end of USD as a global reserve.
Betteridge (correctly) says "no".
Trump is destroying it intentionally.
Without a good strategy of course...
There's one of these articles it feels like every month. And as usual, Betteridge's Law of Headlines is at play here.
There's no replacing the US dollar until a better option comes along. You need a currency that's open (which rules out Yuan), a currency that is backed up by a strong government (which rules out places like Russia, India, Japan, and the UK), and you'd want something that isn't subject to the same geopolitical rules as the US dollar (which rules out the Euro).
Yes, of fucking course it is. The US elected a convicted con artist who is incontrovertibly violating human rights law, breaking treaties with allies, militarily threatening neighbors, and in general making a global outcast of themselves.
The US is making an absolute mockery over the honor and responsibility granted to in the post-WW2 world. It has sophisticated rivals that are predictably and effectively making use of the self-inflicted crisis. So far the ruling class of the US has been happy enough to let this go, and has been too busy making rocket ships, fake computer currencies, and large estates in south Florida to deal with real world problems.
If you are in the US, buy some gold or a house so your savings aren't destroyed - utterly predictably - by the man who declared Chapter 11 bankrupcy at least 6 times.
> The US is making an absolute mockery over the honor and responsibility etc.
The US was a rather empire without many scruples before WW2 and after it. It engaged in genocide in Vietnam, and was complicit in several others, including the ongoing one in Gaza - which was sanctioned, funded and facilitated first and foremost by the Biden-Harris administration.
So, without detracting from Trump's crimes and jingoist rhetoric and action, his deviation from US foreign policy tradition is not as far as one might imagine.
I'm afraid I completely disagree with you and am not interested in arguing further than this.
Vietnam, Korea, Iraq, Gaza, and so many others are atrocities but they are well understood by anyone with a casual understanding of 20th century geopolitics.
Anything you could list is awful but still respected the norms and rules that exist between nation states. There is not a high bar for these things, but some people within a specific flavor of the Republican party reject these rules and norms. By a quirk of history they were able to gain power. I could describe this in more technical and impressive sounding language, but "FAFO, and we are in the find-out stage" goes by many names and is accurate.
> Anything you could list is awful but still respected the norms and rules that exist between nation states.
It absolutely did not. Perhaps the elites and the mass media in the US tell this to each other, but in (most of) the rest of the world, that doesn't fly.
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TLDR: Yes.
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Not really relevant to why there is de-dollarization. And I am not a Trump fan.
Compromised people and useful idiots within the Trump administration are being persuaded by Russia to destroy the dollar and break up NATO.
Where persuaded is probably "bribed"
Are you certain inflating the money supply with trillions of dollars by prior administrations did not have an effect?
Well, yeah. Because there hasn't been any significant fluctuation in exchange rates. You can also see the decline in the velocity of money that's offsetting the increase in the money supply metrics (numbers checked on FRED). It's very clear that we haven't had unprecedented inflation. So the burden of proof is on you... why would the increase in the money supply matter when all metrics are saying otherwise?
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It assuredly did. For example, the first Trump administration is responsible for ~25% of the current money supply, with the second Trump term only contributing about 6%.
So, "let's have Trump burn the house down just to make the point nobody was arguing against that fireplaces can be hazardous"?
How exactly is QE related to all this bullshit? You’re going to need some sources before you start randomly claiming that QE is leading to the collapse of NATO.
USD remains and will remain dominant. Trillions in dollar denominated debt and derivatives, insurance products and assets exist globally. No other country willing to run prolonged & massive deficits required for a reserve currency. No other country, of sufficient size, has as predictable legal and regulatory dispute resolution environment. No other country currently has capabilities to protect overseas shipping - a key component of global trade.
USD dominance isn't going anywhere despite hurt feelings over Trump or US policies.
Obama during affordable healthcare act discovered they were very dependent on other countries. This was very visible during covid and the 'supply chain' breakdown.
Obama started a process, Biden and Trump are in lockstep. They've reduced this issue by about 1/3rd by 2024. Trumps' tariffs are almost certainly going to be upheld by the supreme court.
This has led to a reshoring boom and trillions of new investment in the usa. Estimates seem to suggest only a marginal improvement of about 3%, so roughly another 20% improvement.
But fixing the very broken trade balances for the USA has long term benefit but it will result in a strong USD, but weaker reserve currency. Obviously the USA is rapidly moving away from bretton woods and being the world police.
They will drop below 50%, but nobody else is there to pick up the reserve currency crown. They get all the benefits of seignoiorage and very little of the downsides for decades.
Their dominance is over but they clearly saw that the cost-benefit was not worth continuing into the future.
Meanwhile, since they stop being the world police and reshored the important things. They dont care about the stability of global trade. Instead their super carrier groups will move to poke their nose only in their own business. You're going to see a fast shift from the usa being hated to being loved over the next 10-20 years.
Have people completely missed the stable coin move that will ensure there is a massive continuing market for USD. The prognosis is 2 trillion USD around 2028. Thats a lot of bonds that will need to be purchased to back the coin.
Bitcoin fixes.
7 tps
How many bars of gold get moved round the world every second?
Talk about moving the goalposts.
Ain't no football game son. Bitcoin clears faster than any other world reserve candidate. Every ten minutes, electricity gets traded. Tick tock.
I remember studying pre-WWI history, and particularly how carefully Bismarck arranged German foreign policy like he was the diplomatic equivalent of Bobby Fischer. Everything was situated perfectly and Germany was totally content.
Then along came the absolute moron Wilhelm, and he managed to Leroy Jenkins Germany's beautifully arranged relationships into an aggressive, tactless nightmare where all Germany's allies were turned into enemies, and everything turned out exactly like you'd expect.
As the saying goes, history doesn't repeat but it often rhymes.
You can also draw a comparison with the late imperial stage of other empires, most recently the British.
The British Empire actually reached its greatest territorial extent in the 1920s and 30s, but it was overextended, policymaking was becoming increasingly erratic and in hindsight we can see the writing was already on the wall
The British didn't really make unforced errors like Germany did, though. They mostly were forced into a fire sale situation as they were fighting for their lives. Even with everything they sold off, they were still within an inch of surrendering. The French story is similar. They may have been in a slow decline, but the war threw them off a cliff.
It's hard to look at what the US is doing and not become extremely angry, because historically the dumb hubristic nationalism always leads to crushing misery. It's so utterly predictable, and yet we're forced to watch the idiocy play itself out again.
When societies can't solve their internal problems internally they tend to turn outward for solutions.
Everybody could see the long string of preventable phenomena leading up to this: financial deregulation, decline of civic institutions, high levels of deaths of despair, rampant individualism, unchecked commerce, rising internal violence, rising inequality, rotten media landscape, open political corruption (not in this order).
My only hope at this point is the minimization of violence when the US resets.
I agree but the difference between the French and the British is the French really didn't have a choice (they got physically invaded).
You could make a very good case that for Britain entering into WW1 was a catastrophic and ultimately unnecessary decision. And you could make a (much more controversial but I think also true) case that entering into WW2 was also not necessary and ultimately fairly catastrophic.
Yet the British elites chose to do both. Pride, hubris, stupidity, maybe well deserved, call it what you want, but in the end British power was given away cheaply. I think what the US is currently doing is foolish but as you say there's also a sort of inevitability about it.
Edit: You could also add the Soviet Union to this, an even more recent example of the end of an empire. Towards the end during the Gorbachev era policymaking went from relatively "normal" (by Soviet standards) to extremely bizarre in a short space of time
Britain should have stayed neutral like Sweden and Switzerland instead of getting economically devastated.
One good thing about the collapse of Soviet Union was that Gorbachev refused to start senseless wars. There were hundreds of thousands of Soviet soldiers stationed in various countries of Eastern Europe, but he explicitly said he will not use force to hold the countries in the Soviet fold. After that the communist regimes there promptly fell. Putin apparently thinks this was a mistake he decided to correct. So I don't know, maybe Gorbachev was telling us the (hubris, stupidity) is not inevitable, and Putin is telling it is inevitable, after all? Time will tell I guess.
Who would you say the Bismarck equivalent for the USA is/was?
What gave the US the power it's now throwing away was an array of successes that made the US an example of good governance for the entire world: New Deal, Bretton Woods agreeement, victory in WW2, Marshall Plan and NATO. There wasn't a single person in charge of that all, but I think 3 stand out:
* Henry Morgenthau Jr.: secretary of Treasury during Roosevelt, one of the main designers of the New Deal, of financing the US war machine during WW2, and also one of the US negotiators at the Bretton Woods conference
* George C. Marshall: chief of staff of the US Army, organized the victory in WW2, came up with the eponymous plan and carried it forward politically. secretary of State after the War
* Dean Acheson: main designer of the Marshall Plan and of NATO, and one of the US negotiators at the Bretton Woods conference. secretary of State after Marshall
I wouldn't put it on one person, it was basically everyone between Roosevelt and Obama. Not that any of them were exactly geniuses, but we've gone from mostly sober drivers to someone blowing a 0.5 BAC.
do you mind qualifying this? it sounds like you mean dollar hegemony, which I might accept, but if you mean foreign policy in general, I can think of many invasions , financial crises, cold wars, lost prosperity for most of those Presidents.
I think we're talking less about the aspect of Bismarck where he won 3 big wars and lost none, and more about the part where he set up a delicate system that was maybe too complex for his successors to maintain, especially under idiosyncratic leaders. We're not talking about financial crises. Bismarck did not stop the Panic of 1873 (in fact, you could wave your hands and argue he indirectly caused it).
As far as "who set up the US empire, in all its complexity?", I'd argue for the 4 guys I named in my other comment, but your list might differ. And if you're just interested in the dollar system per se, I'd probably go with Harry Dexter White, who strangely enough turned out to be a Soviet spy.
Oh, and if you want a pretty clear analogy from Bismarck's system to earlier US monetary history: Benjamin Strong got the Federal Reserve System up and running and figured out a bunch of the right tricks, but he died in 1928 without getting his successors up to speed on how to run things. They failed miserably in next couple years. Bad timing!
Your list and the one above (e.g. with General Marshall, etc) are more illustrative & aligned with developing US Hegemony than the 20th Century Presidents. It seems to me the US presidents have been drawing down hegemony assets since JFK.
It's just that the USA was so dominant after WW2 that it took about a century for the structure to collapse.
A better model than seeing Trump as a wrecking ball, is seeing him as a high stakes gambler, with middling skills -- in the same way that George W Bush made a big bet on the middle east and lost the chips.
JQ Adams, Elihu Root, George Kennan, and Henry Kissinger.
Joe Biden.
I don't think you can compare pre-WWI Germany to the US for many reasons. In the colonial era, Germany as a fairly new state and unlike the UK, Spain, France, even Portugal or the Netherlands, they didn't have colonies to exploit. Worse, in the industrialization era they didn't have access to oil.
This created a paranoia in Germany, an insecurity that were between Great Powers and were dependent on imports and poorer than their neighbours. They felt like they'd eventually get swallowed unless they did something and the end result was WWI. And WW2 if you think about it.
The cost of victory against Germany (twice) was huge. All those Great Powers lost their colonies and they impoverished themselves with war economies while enriching the United States who, at times, sold arms to all sides.
The US is that Great Power now, complete with colonies. It's energy independent too. So it's nohting like Germany. In fact it's turned Europe into a client state (ie through NATO). These aren't colonies in the British Empire sense of occupying India, for example. It's economic colonialism. The Global South is controlled via the IMF and World Bank. The developed world is controlled with security gurantees.
But where I agree with you is that an absolutel moron has come along and threatens to dismantle this entire system. That's what's happening. Splintering NATO, abolishing USAID, etc all diminish American soft (and hard) power.
China's foreign policy has become to sit and wait while the US destroys itself. They don't have to do anything anymore. It's why i laugh when people predict China will invade Taiwan. No they won't. Why? Because they don't have to. As a reminder, One China is the official policy of the US government.
My problem is that empires don't die quietly. They die violently. And we're going to see a wave of fascism. Things are going to get much, much worse before they get better.
> They felt like they'd eventually get swallowed unless they did something and the end result was WWI. And WW2 if you think about it.
I think this exactly how the US administration _feels_. Alexandr Dugin proposed spheres of influence. Russia starts acting on those. China is getting more powerful. Its now or never.
I'm an historical materialist. That means I don't believe religion, ethnicity or political philosophy ever drives international conflict. It's always, always, always material interests. Those other things are just an excuse, something to rile up the populace into supporting the government and dying on the front line.
So some think Duginism and a Greater Russia is driving Putin's expanionist activity in Ukraine (including Crimea and the invasion in 2022). I don't see it that way. It's using the Russian diaspora as an excuse for expansion, similar to what Hitler did in Austria and the Sedetenland. But the interests are material.
Russia does have a "legitimate" interest in not having a hostile Great Power on its borders. I include NATO as an extension of the US. I say "legitimate" in the sense that they're doing the exact same thing the US does. The US has the (ever-changing) Monroe Doctrine and almost started World War Three over Cuba (despite instigating the confrontation in Turkey).
But NATO was never going to expand to include Ukraine. Bush and Biden both made offhand comments about it but countries like Germany would always veto Ukraine's membership because they don't want NATO on Russia's borders. And Putin knows this. So there's some historical revisionism going on to say that Putin invaded Ukraine because of NATO. I personally think he would've done it anyway.
The real problem is that Russia wants a warm water port on the Black Sea and that's what Sevastopol is. Ukraine cut off the water and it's becoming increasingly expensive to maintain that holding so Russia has captured what's essentially a land bridge to Crimea and plans to hold on to it until the West gets bored.
I believe that Putin arguably overplayed his hand by buying European silence on the matter with natural gas dependence.
The US however spends a ton of money and military force and political will projecting power into, say, the Middle East. Is that in the US sphere of influence? No. The US is also a net energy exporter now so you can't even blame securing oil as an excuse for it.
The US isn't operating in a deeply insecure fashion. Instead, they're simply extracting wealth from all over the world for the benefit of a handful of billionaires.
I guess where the US is insecure is in that no system other than neoliberalism can be allowed to exist and prosper because it might cause the populace to revolt. The existence of the USSR actually forced to the US to give Americans something so they didn't revolt. This desire means that any quasi-socialist nation gets starved with sanctions and couped to maintain this illusion.
And the US's big problem is they can't bully and starve China in this way.
Overall some great points here, but some don't make sense.
> The real problem is that Russia wants a warm water port on the Black Sea
Russia already had several other ports on the Black Sea, so it's not clear to me why they'd need to invade Ukrainian territory to get one extra.
> Germany would always veto Ukraine's membership because they don't want NATO on Russia's borders.
They've already voted three other Russia-bordering countries into NATO. They were practically falling over themselves to add Finland (along with Sweden)[1]
> The process in the Bundestag was "extremely fast," DW's political correspondent Nina Haase said.
> Haase said, citing unnamed sources, that Germany had intended to become the first country to ratify the accession, but other countries were faster. "But nevertheless, the signal remains the same... [Germany] is firmly behind the idea of Finland and Sweden joining NATO," she added.
You make the point that the US is insecure about any other system being successful, I think there's a case to be made that Russia similarly couldn't tolerate a prosperous democratic Ukraine sitting right next door and embarrassing them. You could also argue that, materially, Ukraine has natural resources that Russia just wants to steal.
[1] https://www.dw.com/en/germany-approves-finland-and-sweden-na...
> Russia already had several other ports on the Black Sea
You're not wrong. I kind of glossed over the details for brevity. Sevastopol has historically been the home of the Russian Black Sea fleet and is a much larger port than other Russian ports on the Black Sea, who also have significant commercial traffic, so they're much more crowded.
Behind all this is the Montreux Convention on Turkey's governance of the Bosphorus. Anyone with a permanent naval base on the Black Sea is allowed to traverse the straits (other than in times of war; it's complicated) so should Sevastopol in future fall into enemy hands, it would allow a foreign military power to station warships in the Black Sea. That foreign power could be Ukraine as a NATO member.
As I stated elsewhere, I don't believe this was a realistic possibility but it makes for a justification. I still say Sevastopol is more significant for it being a deep water port and control of territorial waters than any legitimate security threat.
> They've already voted three other Russia-bordering countries into NATO
There's a difference. I'll try to be brief.
Ukraine is flat. It is basically the conventional invasion corridor from Europe to Moscow and was used that way by both Napoleon and Hitler. I mean they failed spectacularly but that's another story. So there's a security argument that the Ukraine border is, in the very least, more sensitive than other borders.
Technically Poland shares a border with Kaliningrad, which is technically Russian territory but that's not quite the same thing. Also, the 1990s and early 2000s were a different time when post-Soviet Russia was weak before it became an energy giant and reawakened as a regional power.
Norway joined in 1949. Different time. Mountainous border. Not really a strategic threat. Norway was a founding member and this occurred before the USSR had the atomic bomb (by a matter of months).
Finland was really a direct response to the Ukraine invasion. It's a softer border than Norway but doesn't have the same strategic threat.
So you can make an argument that Russia has a legitimate concern of having NATO forces on their border. Imagine a scenario where Canada or Mexico joined a military alliance with China and China wanted to put military bases along the US border. would the US just stand by and take that? Absolutely not. So it's hard to completely dismiss Russia having the exact same strategic concern.
But, like I said, I don't think there was a serious threat of Ukraine joining NATO. Borders go both ways. Pre-invasion I don't think the European powers had any interest in a NATO buildup on the Ukraine-Russia border and if Ukraine was a NATO member, a Russian buildup on their side of their border would then become a serious NATO problem.
Would Germany really want to have Article 5 invoked if Russian forces crossed into the Dombas? I don't think so.
> I think there's a case to be made that Russia similarly couldn't tolerate a prosperous democratic Ukraine sitting right next door and embarrassing them.
I... don't. Ukraine is a poor country. A lot of its economy was built on transit fees for Russian natural gas going to Europe in Russian pipeline, a situation that Russia didn't like and they'd actively been building pipelines around Ukraine to avoid those transit fees (eg Nordstream 1 & 2).
In all this, nobody really knows just how rich Putin is. There are just wild guesses but those guesses realistically go all the way up to hundreds of billions of dollars. Russia is a kleptocracy (in a way that the US is becoming, as an aside). It could be that Putin miscalculated Ukraine's resolve and Europe's response and saw it as an opportunity to enrich himself further. I really don't know.
If anything Ukraine is like Venezuela. It's not so much about profiting from Ukraine's oil and gas deposits (for example) but simply making sure nobody else can. Developing Venezuelan oil fields would actually devalue Western oil companies so they're not going to do it. But if nobody else can? Great.
There's a lot of speculation here. Reasonable people can disagree. What I mostly object to is the self-referential idealist interpretation that underlies US foreign policy messaging. We are the good guys because we're the good guys. Rusia are the bad guys because they're the bad guys. Nobody is inherently anything. There are just people and governments responding to material interests. That's my philosophy.
> But NATO was never going to expand to include Ukraine.
Agreed on all points but this. This is just factually wrong. Ukraine formally declared its intention to pursue NATO membership which was accepted by the NATO council.
The most significant early push occurred at the Bucharest Summit (April 2008). Ukraine (along with Georgia) requested a Membership Action Plan (MAP) - the standard preparatory program for aspiring members. NATO's declaration welcomed Ukraine's aspirations and stated that "these countries will become members of NATO". Ukraine's parliament repealed its non-bloc status and amended its constitution to enshrine irreversible pursuit of NATO (and EU) membership as a national goal. Then, NATO officially listed Ukraine as an aspiring member.
In the Vilnius Summit, NATO even declared that "Ukraine’s future is in NATO" and its path is "irreversible".
These were empty words of consolation after the allies decided not to invite Ukraine and Georgia into NATO.
Eventually, you will receive a million bucks from me. I am not giving you any timeline or conditions, but trust me, you are on an irreversible path toward that, I promise.
Der Spiegel has a report detailing the efforts of Germany (particularly Merekel) and France (under Sarkozy) actively blocking any efforts to block Ukraine from joining NATO [1]:
> [2008] was the year that Ukraine was likely closer to becoming a member of the Western alliance than ever, before or since. United States President George W. Bush stood solidly behind Kyiv's accession. But the effort failed, as Zelenskyy made clear, due to the opposition of Merkel and Sarkozy – and an "absurd fear" of Russia. Because of this "miscalculation," the Ukrainian president continued, his country is facing "the most terrible war in Europe since World War II."
There were other European members who had objections or serious reservations.
> Ukraine's parliament repealed its non-bloc status and amended its constitution to enshrine irreversible pursuit of NATO
There was also a period under Yanukovych (a Russian puppet, to be clear) that repealed those efforts, which again changed after the revolution in 2014-2015.
The Vilnius Summit took place in 2023, a year into the war with Russia. As such, I consider it empty platitudes. For one thing, no country can join NATO with active border disputes. I don't see that ever happenign simply because Russia will start a border dispute to avoid that happening.
Even Zelensky recognized the plan as "absurd" [2].
[1]: https://www.spiegel.de/international/europe/ukraine-how-merk...
[2]: https://www.pbs.org/newshour/world/zelensky-calls-nato-plan-...
Eh, I don't think that is really a consistent, useful model. It's not that material interests are irrelevant, but ideological alignment even at the most Machiavellian level constrains what's possible, if not outright defining where lines are drawn. You can't ignore how politics happens within countries when looking at how they interact with each other.
Also, messaging matters. To make a crass analogy, if I punch you in the face and tell you it’s because I just felt like it, vs. because I thought you slept with my girlfriend, you’re going to respond completely differently (after the initial surprise).
In fact, everyone who bore witness to the punch would come away with different opinions depending on the reason I gave for punching you. And those opinions have knock-on effects (“We shouldn’t come to this part of town anymore, people just get punched out of nowhere…”)
Even if China begins to take over much of the world's economic power, I don't think the rest of the world will accept Chinese culture in the face of Western social values.
The wave of fascism is already rising in Europe, but it is still very much under control. Like the AfD political party in Germany.
Under control how?
France has Macron siding with Le Pen to keep Melanchon out of power. The AfD's power is growing and we'll see if there exists a coalition that can form a government without them after the next election. Many expect Nigel Farrage to be the next Prime Minister of the UK.
This is why people say fascism is capitalism in crisis. All of these countries are choosing fascism rather than any socialist movement or even saying "maybe the wealthy could loot slightly less from the public purse". The rise of fascism is paved by centrist neoliberals siding with fascists to crush any leftist momentum.
People are increasingly seeing what life is like in China. Affordable housing, affordable food and public infrastructure like extensive metros and high speed trains. That's the real problem with Tiktok (from the administration's perspective). People asking "why can't we have that?" is incredibly dangerous to the system we have. IMHO there's no unringing that bell however.
"Western social values" are a luxury easily abandoned when you can't afford your rent. Populist fascism is rising because people are increasingly desperate and there's no alternative because the centrists are united with the fascists to crush any leftist momentum.
The president ran on having Gestapo in the streets and having concentration camps. How loyal really are voters to "Western social values"? And what are prominent Democratic politicians doing? Suggesting more funding for ICE [1].
A populist party that ran on giving people healthcare and guaranteeing a roof over their heads and having enough to eat would win in a landslide. Every level of our political system is designed to make sure such a person can't rise to prominence.
Don't believe me? Look at the 2024 election results and see how progressive voter initiatives did compared to the Democratic Party. Missouri, a deep red state, had a majority vote for raising the minimum wage, outperforming the Democratic Party by more than 20 points.
[1]: https://www.newsweek.com/cory-booker-ice-proposal-progressiv...
> "Western social values" are a luxury easily abandoned when you can't afford your rent. Populist fascism is rising because people are increasingly desperate and there's no alternative because the centrists are united with the fascists to crush any leftist momentum.
I think this is the most important and crucial part of what you've said in here.
If you look, East germany former communists states were the biggest voters in favor of the AfD: Saxony and Thuringia. What I understand is that the left wing parties of today's society have forgotten about the 'conservative' socialism that focused on providing good education, food, housing and employment for the general population. Something that was always incorporated on conservative parties, like the CDU in Germany.
Following the disastrous political consequences of Merkel's 2015 immigration crisis, AfD entered the game with the fury from the German population. The alliance of the conservative CDU with the AfD makes a lot of sense.
I may be insane, but I feel there is always some kind of collective Jungian aura or desire among the general population, especially among the elders, for sane, conservative policies to control society and make life bearable. The writings of Jung are quite telling of this phenomenon.[1]
[1]: https://en.wikipedia.org/wiki/The_Mass_Psychology_of_Fascism
> What I understand is that the left wing parties of today's society have forgotten about the 'conservative' socialism that focused on providing good education, food, housing and employment for the general population.
I feel the shifting definitions of liberal (US) and conservative taking place under our feet. Suddenly conservatives care about public welfare (but only for the in-group), and liberals prefer laissez faire economy (as opposed to the Trump tariff tantrums).
What were the political commitments of the writers of the pre-WWI history you read? Could they have an incentive to characterize things this way?
The summation aligns with everything I've ever read from anyone about Bismarck and Kaiser Wilhelm.
Behind the Bastards has a pretty good couple of episodes on this little corner of history: https://podcasts.apple.com/ke/podcast/part-one-kaiser-wilhel...
Margaret MacMillan is a modern historian with a liberal world view and no ideological incentive to defend Bismarck, and in her phenomenal work The War that Ended Peace (2013) she largely supports this view.
Related is the PM of Canada’s speech at Davos today. I don’t think that I have heard such a blunt assessment of the past and future from a politician, ever.
This may be a historically significant speech.
https://www.youtube.com/live/dE981Z_TaVo?t=100
Mark Carney is a great orator, I was impressed just a few days ago by his speech after meeting Xi Jinping in China:
https://www.youtube.com/watch?v=TLasfU4l__A
Not only a great orator, but look at his resume:
https://en.wikipedia.org/wiki/Mark_Carney
This man is clearly one of the leaders of the new free world.
He is pissed. Damn. This will take a very long time to clean up… Assuming it’s reversible.
He quotes Václav Havel: https://en.wikipedia.org/wiki/The_Power_of_the_Powerless
"If we’re not at table, we’re on the menu"
Good speech indeed
It's not losing it so much as that it is being destroyed on purpose.
The decline has been gradual.
The dollar's portion of global forex reserves has fallen from over 70% in the late 1990s to around 60%.
The Supreme Court's ruling on Fed independency is to be watched.
You're also forgetting BRICs and the EU's efforts to create their own banking systems that would make it easier to do trade and finances without the dollar as an intermediary. The dollar being the reserve currency is going to be come more sudden once mass adoption of those platforms takes hold. Who can blame them with how the US is behaving
"BRICS" is one of those organizations of countries that make even OPEC (famous for being non-commital, non-punishing, barely advisorial organization that doesn't meet it's own goals since the 1980's) look like a very serious group.
> BRICs and the EU's efforts to create their own banking systems
One of these exists. The other is bluster.
Does your data include 2025? Because it was the only year with any international pushback at all, so we shouldn't expect the previous trend to stay unperturbed.
It may also point not just to decline in US stability but other areas of the world with stable monetary policy compared to the 90s
Gradual isn't nearly profitable enough for some people.
"at first you go bankrupt slowly, then all at once"
The decline has been steady since ~2000.
The US dollar being used less across the world has both negative and positive consequences for the US and USG. This is the Triffin Dilemma, and dates back to the 1960s; the USD's dominance over-values the currency relative to other currencies, which hurts exports and thus domestic manufacturing. It also conflicts USG/UST priorities between making decisions that are best for the US people, versus best for international customers of the dollar. Triffin covered this at length in his address to the Joint Economic Committee of Congress in 1959, but in short, the USD acting as world reserve currency creates demand for the dollar, which the US has to be able to supply, which pre-1971 meant extreme strain on her gold supply, and post-1971 means greater monetary inflation.
Most think that the cracks in the financial system started to appear after 2008 (global financial crisis) and become truly visible after the financial system was weaponized through the seizures of Russian central bank USD reserves. It setup a precedent that it happened once it could happen again to some other country.
Cheers to you for mentioning Triffin's dilemma. In my opinion, the dilemma is in the ability of the host country to be able to make "good use" of the exorbitant privilege. The financial system was not only used against other states but against its own people. Instead of developing the country and building equity through the middle class, it cannibalized its own.
Would second what you said. Election has consequences. We better correct course soon before the country is made bankrupt.
It's being destroyed on purpose, with backing from the crypto industry who stand to have the most to gain at the expense of everyone else.
By whom, for what purpose?
The Trump cabinet is explicitly determined to improve its trade imbalance (export / import) and has spoken about the US dollar’s relative strength as a weakness in trade imbalance.
There’s a delicate, fine line between dedollarization and a heavily weakened dollar, especially when the methods used are viewed as fickle and capricious (tariffs, threats). So it’s basically four choices:
True. Good way to pay employees less.
Edit: to the downvoters, did I lie?
You seem to be talking about an alternative universe where employers are being paid in a different currency.
To be generous, asset holders are hurt less by a weakening dollar than non-asset holders (all else equal). To put it another way, do you think billionaires will let themselves suffer before their employees suffer?
It's a conspiracy!
When the debt gets this big and fixed obligations can't be changed devaluation becomes the only workable solution. Yet it's still robbery.
Always has been.
China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
1 - https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s...
2 - https://www.economist.com/china/2025/09/10/china-is-ditching... ( https://archive.is/aNRmm )
3 - https://www.amazon.com/dp/B006JAM3UU/ "Currency Wars" by James Rickards (2011)
[4] - https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
I don’t think that’s feasible because China’s capital markets aren’t secure for foreign investors and never will be unless China changes the very thing that they want to be. They’d have to open their markets, be open to direct foreign investment, no more China-only ownership of companies, and no more artificial devaluation of the Yuan.
Also the US capital market is huge. Surprisingly huge, even, and there is very little that can change that for the foreseeable future.
> no more China-only ownership of companies
They already allow this somewhat. Tesla's Gigafactory in Shanghai is fully owned by Tesla, and is the first wholly foreign-owned car manufacturing plant in China, operating without a required local joint venture partner.
I don't think one small example matters here. The other thing is, actual foreign-ownership of companies. It matters a lot.
Does using the Renminbi require investing in securities?
It's a very different thing to trust that China will maintain the value of its currency, than to trust that investment in Chinese companies will remain liquid and not be arbitrarily cut to a price of zero.
I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets. Perhaps access to the equivalent of US Treasury auctions?
China is notorious for not maintaining the value of it's currency though.
That's why do many Chinese people buy assets in the Anglo world; assets are much better protected here
Yes, it would be a big change. But if Europe needs to bring out the Anti-Coercion Instrument against the US, an economic weapon it invented to be used against China, the world is in a very different place in belief of what could be safe.
If China signals that it is changing its attitude on its currency, that it wants to be the reserve currency and establish a consumer economy, it wouldn't take much for people to shift these days. Nobody needs to adopt the Renminbi 100% right away, they can transition to multiple currencies for a while as a hedge against the US, and the situation will evolve. Dedollarization won't happen in a month or a year, it will be a multi-year process once it kicks off. But once it kicks off, it will be because of such a loss of confidence in the US that it probably won't be possible to stop it.
> I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets.
Well if you use the renminbi or yuan as just a medium of exchange, well, why bother when you already have the dollar?
To answer your question better, what is the point of access to capital markets of a country and how does that stabilize or strengthen its currency, or make it more highly sought after?
That is an excellent point! My intuition is that the yuan could be viewed as more reliable than the dollar, when the dollar is propped up precisely on the good will that gets destroyed by threatening invasion of allies. China does threaten plenty of invasions, but not in Europe or most of the rest of the world yet.
Reliable how? How would you obtain the currency, and what would you do with it?
> when the dollar is propped up precisely on the good will
The dollar isn't valuable because of good will. Central banks in Europe, or Japan, or elsewhere don't hold dollars because they want to be nice to the United States. They hold them because the United States is incredibly wealthy, has incredibly deep capital markets, high liquidity, and because the dollar is a great medium of exchange.
Unless China wants it to happen, it won't have the reserve currency. It would require big changes in China's part to make it happen. I fully agree with you that they wouldn't open up things like equities markets in a way that could be trusted by outsiders. But I do think they could open up access to the currency.
Right, but what I'm arguing is that the currency isn't going to be that valuable without doing things like opening their markets to outside investors. You could just go with the Euro even if you didn't like the dollar.
That's the thing I keep coming back to. What are the specific features of the currency that make it more valuable than the other reserve currencies that exist today? I don't think China is willing to do what they would need to do add those features, because it requires CCP to loosen control and they can't do that.
If China "democratized" it would unlock a ton of potential and go on to dominate the globe. But doing that requires untenable changes for the CCP so it won't happen.
Plus everyone is going to be mad and distrustful once they invade Taiwan.
not even P/E ratios resetting back to historic norms? Or have we finally entered a new age where highly elevated P/E are a permanent feature of markets?
"This is the new normal" is basically the sign of a bubble about to pop.
>China is intentionally undermining the dollar in order to try to make the Yuan the world currency
The constant devaluation makes it unappealing.
> My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar.
I generally agree. But economic orthodoxy says 'Inflation is only 2%', despite precovid, it seemed more like 4%.
> constant devaluation makes it unappealing
If this is the complaint the dollar is safe. And international holders of dollars aren't idiots. They hold Treasuries, which more or less preserve their purchasing power. (Nobody outside the poor, who have to, and nutters, who don't know better, hold cash as an asset. It's so thoroughly assumed that in finance, cash refers to cash and cash equivalents.)
The insidious thing about inflation is that it compounds. Even just a 7% inflation rate will halve your currency's value in just 10 years.
> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
There's such large fluctuations though, especially compared to the S&P 500 in USD [5] or even TFA's USD shares of FX reserves.
[5] https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
> Compared to real money (Gold) the S&P500 is down over the past 10 years.
Speculation can always drive the price of gold way up past its real value.
Yes, the S&P rose only 4% last year for EUR investors.
I keep wondering what would happen if China and the EU came together and agreed to move all trade to the Euro as a pushback of all the current insanity. I don't think the Yuan can ever be the global trade currency given China's current structure.
> My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar.
You mean devaluation is causing the growth of SP500, or the other way around?
the S&P is only growing when the denominator is USD. Not Euro or Gold.
It's kinda like saying during "My bread appreciated!" during hyper inflation.
IMO we're in one of the cases where "Number go up" is actually bad.
In the UK we have a convenient way of observing this phenomenon.
The FTSE100 is mostly multinational companies valued in pounds. The FTSE250 is mostly British companies valued in pounds. If the FTSE100 goes up while the FTSE250 stays flat or falls then it means the currency got devalued and there's no real growth.
How can that be? Maybe gold, but the euro has fallen relative to the dollar.
I don't think China is forcing the US president to do crazy stuff every day
Yes. They are playing chess while the US is playing "shoot yourself in the dick".
Gold is not "real money", come on.
That chart is also really weird. With log scale turned off and expanded to all time...
https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely.
> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
Isn't this the real chart to look at for that? Completely different story when you select max on the timeline.
https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD
Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)
> Isn't this the real chart to look at for that?
No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns.
> Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives.
Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
Any advice that you both understand and fits perfectly into your mental model is probably coming from whatever dogma you already follow and is therefore useless.
Any advice you don't understand is, of course, useless.
Any advice you do understand but doesn't fit into your mental model will just get rejected.
“I always pass on good advice. It is the only thing to do with it. It is never of any use to oneself.” ― Oscar Wilde
Although certain "advice" is actually SOP, in that case it is good to know (like stop, drop, and roll).
S&P gets you dividends though, so the interpretation of that chart is tricky. Holding the S&P, you can still do better than holding gold, even when the GOLD/S&P ratio is positive.
It's a lot less Fiat than USD.
How so?
I guess because gold isn't created by decree?
Supply is only one half of value. The demand for gold is almost entirely speculative, whereas dollars can be directly used for almost anything.
The analytical philosopher in me says:
"Define real money"
I think everyone can agree if you specify your definition.
A goat or a sheep cost roughly the same in gold today as it cost 2000 years ago during the Roman Empire. Gold is the only “real money” in the sense that it is the only stable measure of the value of basic needs over centuries.
https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb...
First link to ChatGPT as a "source" that I've seen in the wild.
Times they are a-changing.
I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
Unless there's something I'm missing, there isn't even a response at the link - just a question.
(And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
Yeah, I saw that link and had a few thoughts immediately collide in my head:
Goat production is overall much cheaper now so wouldn't we expect the "real" price to be less? That it tracks the price of goats and sheep makes me think it's not a particularly stable unit of value since I don't expect goat or sheep to be valued in a stable way, especially across millenia.
A goat costs exactly (not roughly) the same in goats today as it cost 2000 years ago. So by that measure a goat is the only stable measure of the value of basic needs over centuries.
That's why new stablecoin is backed by goats: Capracoin
Ahh, yes, gold and the speed of light in a vacuum - the only real constants in the real universe.
Just last week, I was accused on HN of "not knowing what I'm talking about" when sharing data showing, and my interpretation of, a declining US dollar globally.
It is so obvious in the context of globalization: countries seeking power will chip away at fiscal dominance of others with a thousand cuts. Why wouldn't they? Especially after years of getting bullied.
So many people are so dependent on this reality that I think it's going to happen long before any Americans accept it has happened.
Yes, people are in denial about these things. I'm still salty for the time I posted I believe the covid money printing will lead to inflation and I was down-voted for it.
Similarly I was downvoted for pointing out that the developed markets index returns (30%) doubled US market returns (15%) over the last year. Simultaneously the value of the dollar has dropped 10%. I simply stated that we’re seeing capital flight from the US. Ray Dalio said the same thing this morning.
And if you look at pricing as a proxy for capital flows, SMMD which is Russell 3000 minus S&P500 has had a heck of a run in 3 months. IMO People are retreating the mag7
I hadn’t noticed that , that is interesting. Makes sense to me. That’s not good for the S&P considering that ten stocks make up 40% of the index.
And since the wealth effect is really the only thing keeping the US out of a recession, if the MAG7 fail then we’re looking at serious economic problems.
HN may not have the best experts - people are kind of quick to downvote. Almost in a reddit-like fashion.
Oh, that’s not entirely fair. I feel like the self appointed experts almost have more pretentiousness than Reddit.
Plenty of Elon musk types / admirers who think that because they’re good with computers they know everything about everything.
Interesting related read: https://www.chathamhouse.org/2025/04/us-dollars-role-interna...
And if you feel like something long (pdf): https://www.atlanticcouncil.org/wp-content/uploads/2025/05/A...
For those who are not bothering to read this,the article essentially states that de-dollarization is happening in pockets (e.g., reserves down to ~58-60%, Treasuries foreign ownership at 30%), but the dollar's core dominance persists.
What would replace it? I guess the options are Yuan, Gold, Oil or maybe BRICS in the future, none of which are safe, stable, and liquid.
I can't believe people actually bring BRICS in serious discussions.
HN is great for technical discussions, but is below average for political or macroeconomic discussions. A HN comment thread on those topics is essentially indistinguishable from a NYT comments section, which I mean as an unfavourable comparison.
Turns out that being good at SQL does not make one good at the subtle social art / science of power and governance. If anything, the correlation is inverse. This shouldn't be surprising.
>BRICS has implemented initiatives that could reform the global financial system, such as the New Development Bank, the BRICS Contingent Reserve Arrangement, BRICS PAY and the BRICS Joint Statistical Publication. BRICS has also advanced de-dollarization to reduce the use of the U.S. dollar as reserve currency. In its first 15 years, BRICS has established almost 60 intragroup institutions and an extensive network including think tanks and dialogues.
>https://en.wikipedia.org/wiki/BRICS
So what is the problem mentioning a future BRICS possibility while discussing de-dollarization. Not a challenge want to understand.
Explain why. That's more than half the world's population
Nothing. The Dollar is antifragile. The worse it gets, the more entrenched it becomes. [0]
[0] https://en.wikipedia.org/wiki/Gresham%27s_law
Your linked page doesn't actually appear to render any sort of compelling argument for this.
In fact - the entire argument seems to more accurately hinge the conditional left off the main saying, so the full description is:
"Bad money drives out good if they exchange for the same price."
But that requires a legal structure that enforces the disparity, and the summary of the whole thing basically boils down to:
---
If given the choice of what money to accept, people will accept the money they believe to be of highest long-term value and not accept what they believe to be of low long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession and pass the bad money to others.
---
But if anything - this is exactly an argument for the value of soft power to the US, because we can't enforce how other nations transact, except through soft power.
In practice, everyone wants to spend their dollars, not their gold, or their bitcoin, or their Euros, and so dollars it will be. What else is there that anyone both with pay with and will be accepted by the other party?
Soon dollars might not be accepted if US companies wants to buy things in the EU, they will have to pay in euros (part of the anti coercion instrument that Macron and others have been talking about the last couple of days)
I don't think it will happen. 10% of EU bank loans that are dollar-denominated [0]. If they cut the flow of dollars into the EU, the debtors of those loans would wind up offering a premium for their goods and services to non-US companies, making them uncompetitive. It would be a roundabout tariff that would hurt the EU countries too much.
[0] https://www.ecb.europa.eu/press/financial-stability-publicat...
> The Dollar is antifragile.
Apparently the guy that invented the concept disagrees: https://x.com/nntaleb/status/1914633020671246352
Couldn't you make the same case for every other former reserve currency which has had something replace it?
the BRICS Unit was proposed to resolve the "Triffin dilemma", which is that the structural deficit necessary to maintain reserve status inevitably erodes trust in the currency over time. China's economy also relies on exports which would not be helped by reserve status. which is to say an eventual replacement may not be the yuan or any other single currency
Or the Bancor[1], like how Bretton Woods was originally envisioned.
1. https://en.wikipedia.org/wiki/Bancor
Euro?
The harsh reality is that a federated state system with a very weak governing body economically and politically is extremely unlikely to be the global trade currency.
Let's what-if a scenario where the Fed is made subservient to the President and the President wants the dials turned to 11, let the next guy deal with the consequences.
The dollar isn't indestructible. If not the Euro, what?
Probably a mix of things, including commodities like gold.
I was referring to Europe and america together -- and I think your conjecture is real -- what if we move to a projection of holographic economy over the real one. The answer is, whichever gets the most people to cooperate and support that holographic system will survive. In general collective weak systems tend to not work well there. But hyper centralized systems tend to over index on projection. Which is why we have the separation.
Countries are replacing it with Yuan, Euro, Yen, Gold, Oil, and more stuff.
As a long term Gold and Oil pretty much are
Oil price is highly volatile for it to be reserve currency. A mix of Gold, Yuan, Euro, Dollar makes more sense.
Bitcoin
People downvote this but Bitcoin has some very nice properties:
- easy to verify/impossible to forge (as opposed to gold and paper currency)
- fixed supply (as opposed to paper currency, oil, and even gold)
- easy to transfer from one party to another (as opposed to gold, oil, and physical cash)
It’s dumb because it requires uninterrupted access to an incredibly complex system. The cognitive dissonance of people who see bitcoin as resilient is hilarious.
It's a peer to peer system that has had 100% uptime since around 2009. I think maybe you have cognitive dissonance?
Because it’s geopolitically irrelevant, not because it’s robust.
Split the user base along geopolitical axes and see how long the consensus algorithm lasts.
Gold bars don’t have this problem.
Huh? Sorry, I don't understand any of what you are saying now.
If a sovereign government declared bitcoin illegal, it becomes illegal. There is nothing unique about any asset to stop this because the rules are all made up and can change anytime.
The context of my comment was Bitcoin as an alternative to traditional reserves. I’m saying that in a domain as lawless as international law, gold bars make sense in a way that bitcoin does not.
It has at least one fatal flaw: the math it is based on. I feel like it won't be too long before a few major weaknesses are found and bitcoin will lose all security.
Bitcoin has been running since 2009 with plenty of incentive for hackers to find flaws in it and they haven't found any. It uses standard cryptography that is used by all our computer systems. If a flaw exists it's not just bitcoin that will be damaged but everything we use.
Suffers from no government having a stake in it. If it causes them problems, it can easily become illegal.
Precisely this makes it attractive. If it can't be _your_ currency let it at least be a currency no other nation controls.
> If it can't be _your_ currency let it at least be a currency no other nation controls
At that point just hoard resources. Holding a bunch of Bitcoin in a crisis is useless for a country if no other country will buy them off you in exchange for tradeable hard currency.
"just hoard resources" really has nothing to do with a world currency to replace the dollar, which is what we are talking about here. In a crisis you can't eat dollars, gold, oil, or bitcoin, so yeah, you kinda have a point, but an orthogonal one.
> In a crisis you can't eat dollars, gold, oil, or bitcoin
But you can easily trade dollars for stuff Americans will sell you. That's the advantage of a national backer. In a crisis, they'll welcome the influx of capital in exchange for goods and services. Precisely what you need it you want to spend it.
This is why sanctions fuck up reserve calculations. If, in a crisis, America will sanction you, you might as well have held gold or Bitcoin.
You are right. My point is that if you have international trade of even mild complexity, having a currency is very convenient so trade will end up being denominated in one. No reason it can't be some crypto that is not backed by any nation.
> No reason it can't be some crypto that is not backed by any nation
There is a great reason: a state-backed currency should always be accepted by that state. If the world is in crisis, you may wind up stuck with your Bitcoins.
I thought we were talking about World reserve currency here i.e. international trade.
I agree that you need the currency to be accepted by the state for good local trade support. But that was not the point.
> thought we were talking about World reserve currency here i.e. international trade
Yes. If you're a random country, you can use your dollars to buy shit from America. Countries hold reserves for basically two direct reasons: to intervene in FX markes and protect their imports. The latter is the main one. At the end of the day, your ideal reserve composition matches your import portfolio because you want currency you can send to the people who are selling you shit.
Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation? I've heard that argument made somewhere but maybe it was just a rumor to try to legitimize Bitcoin?
> Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation?
Yes, none of that makes an iota of sense. If a military wants to take inflation into its own hands, it has far-better options. From hoarding to, you know, taking shit.
Lots of countries outlaw other country's currencies. This is nothing unique to Bitcoin when we are talking about a world currency to replace dollars.
Several countries do now have a stake in Bitcoin. See: https://bitbo.io/treasuries/countries/
Just because frivilous money printing is bad does not mean that a fixed supply is good. A fixed supply is a terrible property to have in a money system. It's very beneficial to have a money supply that can grow or shrink according to demand.
This is a tough argument to engage with. Define "frivolous" when it comes to money printing. Define beneficial, and define beneficial to whom. Talk about who decides how much money to print. And you said it's beneficial to have the supply grow or shrink. We know "printing more" is how you grow the supply, but how do you shrink the supply?
> easy to transfer from one party to another
"Let me just set up my P2P connection to the Bitcoin network and pay mining fees and hope a miner validates the block"
vs
"Here's a bar of gold mate"
Sure, real easy
OK, how do I know that gold is pure and real? What if you live on the other side of the world and I want to buy that gold from you?
And there isn't any "hope" involved in bitcoin transactions. Connecting to the peer to peer network is super simple (way, way easier than creating a brokerage or bank account, and no ID or approval is required). Miners will pick up your transaction (and yes fees will help speed that up, as with any financial transaction) and it will be included in a block. Bitcoin has been doing this non-stop, flawlessly since 2009.
Bitcoin doesn't really solve the trust issue, because it covers half the transaction. If I send you a bunch of bitcoin in exchange for oil, how do I ensure the oil shows up?
There are fixes to that problem, of course, but it's not bitcoin itself that's the solution.
50% of a transaction verified is a whole lot better than 0%
> "Here's a bar of gold mate"
Yeah, super convenient. Well worth it. I'll just go with gold bars on me to the market to buy lettuce.
Nobody is talking about using Bitcoin or gold for transactions. For which nobody does anyway. The whole discussion is about reserves.
OP was literally comparing payments in gold and in crypto. For which kind of transactions? I admit, it was unspecified, and it might have read too much into it.
By it sure does sound simpler to type some numbers that to cut up pieces of metal.
But Bitcoin is backed by nothing. At least the USD is backed by the sole superpower in the world (at the moment).
What does "backed" mean to you here?
Whenever Bitcoin is brought up, the same arguments against it are made by people who are too arrogant to look up credible counterarguments. I've decided to stop bringing it up to the HN crowd since it seems like a magnet for downvotes.
It's no secret that our current US administration is envious of China. So in no small part they probably want to model the US Dollar after the Renminbi. Drop the value internationally to incentivize American exports, and manipulate the hell out of it. (Hence why they have dropped inflation as a political issue - some in the administration are essentially rooting for inflation to get much, much worse).
It should go without saying that this would be shortsighted - China made it work because they were able to take advantage of a strong international market denominated in USD. The US cannot destroy our own common market and currency and expect to take advantage of it.
Furthermore, we know what a de-dollarized world looks like - imperialism. If you need to secure oil/mineral/food for your economy but you need expensive foreign currencies to acquire it, it suddenly becomes much more economically appealing to take the resources.
> probably want to model the US Dollar after the Renminbi.
I don't see that. Given trump's history, he thinks that going back to tariffs will allow massive tax cuts. As he trades in real estate, tariffs are inconsequential for him
Trump is a populist.
He supports tariffs for the exact same reason Bernie Sanders does. There is a reason so many bernie bros jumped to camp Trump in 2016 when (globalist) Hillary won the nomination.
There is no secret or conspiracy going on here. Trump is a populist president and is unsurprisingly doing populist things, elected because of his populist stances. At this point you have to have stabbed your eyes out and shoved spikes in your ears to not know that all he does it gush about bringing back 1950's factory worker dad.
yeah, he’s a real populist with the <15% that wants the federal boot on everyone else’s neck. i think there’s a name for that specific type of “populism”.
Don't come to me if you weren't aware that populism is a left/right spectrum.
if you wanna cheer for fascism, you should do so openly. no one is fooled anymore, and no one will think any higher of you for being in denial about it
There's a difference between Trump says populist things and Trump does populist things. Much like "saying things I want to hear" and "saying things I need to hear."
For your factory worker example, at exactly a year into his presidency, we've yet to hear populist points on:
- a comprehensive overhaul to address medical costs for workers
- point-by-point implementation of tariff revenue in reshoring and subsidizing of industry
- how AI is going to support manufacturing gains to the degree we can become competitive with China
Fascism always wears populisms clothing, but they aren't therefore directly equivalent. Bernie and Trump both support tariffs but for different reasons (and to different degrees). Likewise you can gush about 1950's factory workers for different reasons. One is purely to do with economic power of the lower class, the other is to do with supposed Golden age of American history. They have overlapping bases but that's merely a part of their Venn diagrams.
Also Trump already passed the massive tax cuts based off the assumption of income from Tariff's, and those tax cuts disproportionately benefit the rich. I don't think we really need a conspiracy to explain the likely motivations.
We print money, send it around the world, and the world sends us goods. It was a great thing.
For us individually. For us collectively it was a horrible thing. We lost the means and incentive to produce anything durable, including a healthy, educated, sustainable society.
People planning the post-WWII system wildly overestimated how how disciplined Americans could be.
The whole point of the US transitioning to a service economy was that it would upskill the workforce into the world's Delta Force team of highly educated scientists, engineers, researchers, etc. The rest of the world would handle the boring stuff like actually manufacturing the beautiful inventions designed by the US.
The problem is that a lot of the US populace is gung-ho patriotic and willing to die for their country, but absolutely refuses to learn math or generally do their homework for their country, which is what's actually required for this whole scheme to work.
I'm paraphrasing the shockingly astute observations of this guy[1].
[1] https://www.instagram.com/reel/DD-MPWAPoaT/?hl=en
>People planning the post-WWII system wildly overestimated how how disciplined Americans could be.
We had the post-WWII optimism and then the post-Cold War optimism clouding the judgment of an entire country.
I kind of wish we'd been more curmudgeonly like the Europeans.
Yeah, I've heard this interpretation before that this is the US trying to wean itself off the resource curse bestowed by a strong dollar. I think it's a fun idea, but there is no reason or strategy to this, I'm afraid. Just stupid people doing what they do best, doing stupid things.
I agree, the whole thing is stupid. But, when you don't have a healthy, educated society, they wind up being easily conned into electing stupid greedy people. So it seems that the resource curse may lead inevitably to systemic failure. Good times make weak men.
Yes... so lets vote someone in that does all the things towards creating a less healthy, less educated and less sustainable society.
US was doing just fine btw. I know this because people like you blow the small issues way out of proportion, and the reason this haplens is that there is no real issues to worry about.
Whoa there. You're making quite some assumptions about me, it seems. I'm in no way advocating for the present administration, not in strategy nor in tactics nor in any other way.
I do think that the US was not "doing just fine", clearly, because our society was not healthy or educated or sustainable enough to avoid our present fate. It's easy to blame 'them' for all our woes, when we collectively made 'them'. Obviously we can't prevent every idiot and psychopath from existing, but we've certainly failed some 30% of our population if they fall for this crap. And this is the price we pay.
Something that weirdly both Milton Friedman and Karl Marx would equally agree on.
The point of an economy is not to make a profit or collect currency. The point of an economy is to provide ourselves with goods and services.
Focusing all of our efforts on making things so that we can send them to other countries in exchange for pieces of paper is backwards.
[dead]
They are envious of most dictatorships...
>we know what a de-dollarized world looks like - imperialism
Is this some kind of joke? Or is it only imperialism when other countries besides the US do it?
I know it's pretty common shorthand to describe American post-war interventions as "Imperialism". But Imperialism before Bretton-Woods was a very specific and intentional international policy - literally conquering and/or colonizing land to secure resources. Which is a bit different than America's "spheres of influence" thing today.
The two are very linked - the tacit agreement of the postwar order was for America to use its might to expand a common market on behalf of the shared benefit of NATO members. But the collapse of today's "American empire" does not mean the end of empires. If anything, the opposite: instead of one common international market, we will return to a 19th century scramble for land.
Venezuela would like a word
Well, that's just it. America has not so brazenly claimed territory for such selfish reasons in well over 100 years. Which is proof enough that America is pulling up the ladder on Pax Americana.
Are you familiar with a country named Iraq?
Obviously, but we're comparing apples and oranges here.
- Iraq was never a major oil concern for the US. Perhaps maybe stabilizing global oil prices - but the primary beneficiaries were actually our European and Asian allies.
- We never just "took" the oil for our domestic market (which is what we are basically doing in Venezuela)
- Even policymakers who have publicly admitted that Iraq was a massive intelligence and political failure all agree that regional stability was always the main goal.
Similarly we were in Afghanistan for-freaking-ever which had no clear resource benefit or even clear goal.
I would even go so far as to say that for most of the 20th century, America's foreign policy interventions are more easily attributed to our failed role as "World Police". We were brought into Iran because of the British, we were in Vietnam because of the French. Kuwait because of Saudi Arabia. Korea and Lebanon directly.
So while yes you could paint a broad brush and say all of this indirectly was to expand America's "empire", but as an international alliance where America carries the big stick, the US actually carried out a lot more on behalf of the overall alliance than one would realize.
That alliance that the US is now trying to dissolve.
> - Even policymakers who have publicly admitted that Iraq was a massive intelligence and political failure all agree that regional stability was always the main goal.
And in their spare time they pretend to sell bridges to people? Nobody sane would believe that invading a country promotes regional stability. The idea is absurdist, the point of invading a country is destabilising it and disrupting any power that the locals might have. Forcefully toppling governments and killing large numbers of people has never been a credible path to stability.
The Assad dictatorships in Syria and the Hussein regime in Iraq were proponents of Baathism. The former had occupied Lebanon and invaded Israel while the latter had invaded Iran in 1980 and annexed Kuwait in 1990.
> Nobody sane would believe that invading a country promotes regional stability.
Then you should read about some of the biggest influencers in US foreign policy since WW2. There’s one guy whose entire career was spent essentially trying to convince the president / military brass to bomb enemies into submission: https://en.wikipedia.org/wiki/Curtis_LeMay
I’m sure you’ve also heard of Henry Kissinger.
Anyway, pretty strong history of US political figures dehumanizing foreign populations, justified by some western moral superiority. Direct through line to the Bush presidency (last of the neoconservatives).
Are you suggesting that LeMay or Kissinger believed that invasions promoted regional stability? On what basis? When Kissenger wanted stability he famously promoted détente with Russia and negotiating with the Chinese.
Kissinger did a lot of evil stuff, but a big part of his thinking was when he wanted an area wrecked he sent in an army, and when he wanted stability he negotiated.
>America has not so brazenly claimed territory
No, just sovereign resources. Totes not imperialism. At all.
Nobody is cheering for inflation to get worse, they are celebrating it being held down to 2.7% after higher inflation a few years ago.
The U.S. is a net exporter of oil and food and self-sufficent for majority of its mineral needs as well.
There is no need for U.S. to crash its currency to incentivize domestic production, it can just impose tariffs on imports to do so.
> Nobody is cheering for inflation to get worse, they are celebrating it being held down to 2.7% after higher inflation a few years ago.
Trump is actively fighting the federal reserve to drop the interest rate to 0%. Members of his team regularly do interviews where they say "it's going to get worse before it gets better". Inflation is being held down despite this administration's best efforts.
> The U.S. is a net exporter of oil and food and self-sufficent for majority of its mineral needs as well.
And has been for a while. But the current conservative rhetoric is specifically about bringing manufacturing jobs back.
> There is no need for U.S. to crash its currency to incentivize domestic production, it can just impose tariffs on imports to do so.
I don't think autarky is this administration's only stated goal. They specifically see an export-led economy as being more important or even "legitimate" and are pushing for other countries to import our goods. Devaluing currency is a strong way to incentivize exports and China's currency manipulations were the key to their rise as a manufacturing power.
> Trump is actively fighting the federal reserve to drop the interest rate to 0
The interest rate was near 0 for years, it did not cause inflation. Fighting for low interest is not same as being pro-inflation.
The reason it was 0 for so many years was because the Fed was trying desperately to create inflation during this time. (Which was chronically low for other reasons).
Lowering interest rates to create inflation is literally one of the core tenants of the Federal Reserve:
https://www.clevelandfed.org/center-for-inflation-research/i...
> it can just impose tariffs on imports to do so
This is how you grow a sclerotic, internationally-uncompetitive domestic industry. See: shipbuilding.
Where tariffs work is as a nursery policy. Give firms a safe haven to grow in. Then let competition hone them. South Korea has pioneered this playbook; China copied it. We were sort of doing it, but the current administration blew up our nascent new energy industry.
It's also debatable how important tariffs even are for "infant industries". In most situations, if you ever remove the tariffs, the native industry is just as likely if not more likely to die out to any serious foreign competition.
For South Korea and China, tariffs were not a very key part of their industrial policy. Which is not to say that the government didn't have a massive hand in the success of their native industries. Case in point: shipbuilding for South Korea. The government was key in securing the capital investment in the massive drydocks the entire world depends on.
> For South Korea and China, tariffs were not a very key part of their industrial policy
Cars were absolutely incubated by Seoul. In part through drastic trade protections.
> the current administration blew up our nascent new energy industry.
Which industry is that?
Solar, wind, and grid-attached battery.
In the late teens, China was dominating all of these industries.
Under policies of the Biden administration, these industries were growing domestically in the US and we were increasing our share of the global market.
Over the last year those domestic industries have been destroyed. They are barely surviving and have stopped rapidly expanding. All gains made against China's dominance in these technologies has been lost, and then some.
Any links to data on these claims?
Plenty. Which specific data are you looking for?
Which part?
The problem with tariffs is really just trumps complete instability. Why would anyone invest in domestic manufactoring when Trump wildly flip flops on all tariff policy using it as a diplomatic punishment and reward system? Especially when his tariffs in general are legally questionable at best and the other half of us politics are against them just in principal. Imagine investing millions in a domestic factory and then trump gets a personalized jet from some random nation so the tariffs you were depending on for your profit margin are gone. Or Trump loses the midterms and now tariffs as a policy are gone. Unless Trump both becomes a dictator and sets the tariffs in stone without changing them too much, or democrats come out in wide support of tariffs themselves, I don't see how you could use them to invest your money.
Also, anything companies build inside the US (factories, supply lines, etc.) just becomes an economic hostage for a Trump to use for further rounds of extortion.
So it's not just that the policies are (A) counterproductive and foolish and (B) changed on a whim and (C) have no long-term foundation and (D) are changed for corrupt reasons... but even after all that, (E) the corrupt person "making deals" is incapable of honoring them.
Precisely. People in this thread almost seem mad that the economy didn't crash in Trump's first year.
Hope and wishing aside, if you think anything Trump is doing is gonna benefit the economy, you really show your ideological side.
For example, businesses are hesitant to invest in domestic manufacture because the tarrifs can be undone by next president. But the reputation that US is building right now cant be undone. Investment in manufacturing takes years, not to mention that its not like America has lots of people wanting to go work in mines and factories. Meawhile as countries with sane leaders adjust, US is gonna be less and less relevant.
So in 5 or so years when your house value and investments are way down and there is a Dem president and you think about complaining about economy is bad under liberals, remeber who cause it all. Most of the current economic problems that existed in late 2020s have origins with Reagan era economics.
The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve.
The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged.
So draw from that whatever conclusions you wish.
It’s not just that
This is a gradual decline. From 70% in the 90s to 60% today. Today there are more options like the Euro that didn’t exist in the 90s. People can argue over EU economic stability, but it’s there as reasonable option.
As time goes on, fewer people are alive that predate the EU and more people will perceive it as a lasting institution.
Additionally, we've now seen the EU survive the departure of a major economic power (the UK). More people are certainly willing to believe in the stability of the EU now.
Another major currency is the Yuan, and some countries may be as willing to trade in Yuan to improve relations with China, so perhaps we won't see one single reserve currency but two spheres of influence with most countries maintaining reserves of multiple currencies.
Interestingly, there seems to be more good will and amiable vibes between EU nationalities than within the US even. Even being enemies for a thousand years, I don't doubt that Swedish and Danish men would go to war for one another, or French and German. It's complicated yes, but the continent is more unified in spirit than it may seem to an outsider.
German here: I'd go to war (and likely will, with how it's looking currently) for any country that shares our values and is an ally or friend, that's being attacked by an evil force such as russia. And that of course includes my french brothers to the west.
Finnish reservist here in Germany. Ready to go. Prost!
Prost, my friend. May we never have to meet.
American expat here in Spain. I do 11 pull-ups every two days and run 7 miles uphill. Ready to go! Salud!
See you on the battlefield.
[dead]
Rarely have prime numbers been so macho.
Spanish here: I wouldn't go to war even for my own country, imagine for the likes of France or Germany.
80 years ago we were the bad guys, and far more brave people than me, from other countries, stepped up to curb the evil. This time us Germans need to be on the right side.
Enjoy extinction!
Thanks German brother :) I think our main issue in Europe is the lack of a common language. It makes it harder to build strong ties and realize how close our values are.
Which is why I long for the day where a European federation supersedes the weak and fragmented national states we have now.
Adopting English as legal secondary language in every EU member state would maybe be a good first step.
Vat hapened tu ze komon English I got mail abaut 20 yers ago?
Agreed, there is always this little story to remind us of our unity - at least from the perspective of the draftees/workers back in ww1, where everyone was basically forced to fight each other by the elites
https://en.wikipedia.org/wiki/Christmas_truce
That's pretty caveated. Not exactly a ringing war cry
Shares values AND Ally AND Being attacked AND Attacker is evil
I think you'll continue to be safe posting on HN
People place individual, stringent conditions on life threatening responses? Keep going, you're on to something there.
Very funny you got me there.
I think you’ll find that threats of violence (which is what your comment is) need to be much more unhinged to be effective deterrents. Remember you’re warning off barbarians (eg us Americans or the Russians), not civilized folk.
Are you posting from Ukraine?
If he is, it won't be for very long. The most visible merc was a retired US colonel, he ran off home within weeks, got drunk on the War on The Rocks podcast and revealed the corruption and depravity of the "good guys."
You should define what "our values" is when making such bold statements.
Freedom of speech, democratically elected representatives, protection of minorities, religious freedom, to name a few.
I can already hear people storming out of the woods, ready to write how the EU itself is undemocratic, or how free speech isn't real in western European countries. I disagree with you.
Well, indeed, freedom of speech in the EU isn't freedom of speech as only a certain type of speech is allowed. Conveniently weakly defined "hate speech laws" (even in private conversations!) allow easy political suppression. Or just lawfare through defamation, which is happening in Germany at the moment (4,400 defamation cases by politicians, last year).
Regarding the EU, the only elected representatives don't have the right to choose which laws they will vote for. If it was in a soviet country no one would call it a democracy.
Jacques Baud, Alina Lipp, Thomas Röper, Nathalie Yamb, Xavier Moreau disagree with you.
And unlike you, some random anonymous poster on this polite version of Reddit, everyone knows what they do.
They are pro russian propaganda mouthpieces and can go fuck themselves. Specially Alina Lipp, may she have fun in her beloved russia.
most humans share the same core values. values antithetical to war.
... such as usa?
I have many moral problems with that scenario. I used to live in the US a long time ago. The US is sick; there's a mad king at the top who doesn't have the well being of the nation in his interest, and he is driving the world towards war with every passing day while dividing his own people. War with the US isn't a clear cut "good vs evil" situation as the EU vs russia would be, it would be a utter tragedy, not wanted by neither the populace of the EU, nor the US.
That said, yes, I would defend Europe against the US, even though I think that fight would be short, deadly and decisive if it really came down to it.
What a fucked up world we live in, just because idiots voted for a convicted felon.
> War with the US isn't a clear cut "good vs evil" situation as the EU vs russia would be
I don't think EU vs Russia would be a "good vs evil" situation. Russia/US seem pretty similar to me, dictatorship/propaganda with a majority of the population being regular people not in favor of any war, and 30% of indoctrinated people.
You seem to have very little contact to Russians living in Russia or Germany. Their version of "not in favor of any war" is a very strange one – it's more a stance of indifference than disfavor.
Russians were and are pro war by all reports.
not my Russians friends or colleagues. I also don't trust any poll coming from Russia.
I don't know why you believe that a decades-long strict dictatorship like Russia has more democratic support for its "evil" government than a country whose leader was elected just 1 year ago with approximately 50% of the vote.
Russians are lining up to go to war under the promise of money, around 30k a month last time I checked. Americans not so much, in particular not against Europeans. It's different in my view.
As an American, a sizable number of Americans are lining up to join ICE under the promise of money.
And also, our whole military recruitment strategy here outside of drafts has been "the GI bill" – paid tuition in exchange for lining up to go to war.
I don't know that the gap in morals is as wide as you think.
But is it 30k people a month, for years on end (or rather 75k considering US population is around 2.5x the size of russias population)?
Russians are much, much worse than Americans in terms of their eagerness to kill others, in my opinion. I wish it were not so.
Americans don't need money to fight. I was paid $0 with the YPG and had to bankroll my own time. Lots of Americans there. I met a lot of them that didn't even really give a shit about the sides of the war, they just needed to fight something. We're a savage people.
Which historically has worked more for us, than against us.
The rot is much deeper. Donald Trump was impeached twice, and both times the Republicans voted to acquit him.
French here: If we can send French soldiers to fight and die in Mali for years, only to end up with a military junta that prefers the Russian Africakorps, I think we're ready to send our soldiers to die defending a European ally.
Plus, with global warming, this may be the last chance for the Alpine hunters to shine.
I think the people on this continent have a lot more in common than they might first realize. We certainly have our own cultures and language but beyond that I think we all share a certain European heritage, core culture and values.
There's a certain stigma especially in Germany caused by the WW2 and the the leadership has been complacent to rely on Bretton Woods agreement. But as we're seeing now the geopolitics are doing a 180 degree turnaround and given these circumstances I expect sooner or later Europe will collectively understand the utmost importance to com together and to regrow and redevelop the military to support independence and not having to bow down to any master in the East or int he West.
Absolutely. "Finlands sak är vår." Finland's problem is our problem, same for Denmark and Norway. We must stand together, we have no choice.
The great minds that - after WWII - built the new Europe had in mind that there should never be war again, which is best realized when former enemies become friends and closer bonds are established at multiple levels: politically, economically, culturally (unions, trading exchanges, visits/open borders/teaching common European values in schools).
There is a strong political and cultural foundation in geographic Europe for the political EU: some exemplary giants/EU co-architects:
Jean Monnet/Robert Schuman
European Coal and Steel Community (ECSC) Schuman Declaration (1950) [It is only right that the R. Schuman Roundabout https://en.wikipedia.org/wiki/Robert_Schuman_Roundabout Rue houses the European quarter in Brussels.]
Konrad Adenauer
Promoted reconciliation with France pro-European
Alcide De Gasperi
Integrated Italy into Western Europe Advocated supranational institutions
Paul-Henri Spaak
institutional designer, key role in the Treaties of Rome (1957) helped design the European Economic Community (EEC) Advocated supranational institutions
Walter Hallstein
1st President, European Commission. Built EC into powerful, independent institution Championed the supremacy of European law
Altiero Spinelli
Wrote the Ventotene Manifesto (while imprisoned by Fascists) Advocated a federal Europe
Winston Churchill
A paradoxical but crucial figure: called for a “United States of Europe” (1946 speech) Influenced Europe’s post-war direction despite UK distance
François Mitterrand
Drove Maastricht Treaty with Helmut Kohl Pushed for the € Symbolized Franco-German partnership
Helmut Kohl
Franco-German friendship exemplified by Mitterand-Kohl personal friendship "Architect of modern Europe" German reunification Key figure behind the EU and monetary union
It's ironic that the name "U.S.E." (United States of Europe) was first proposed by a Brit, alas a smart one, and I'm sure Sir Winston Churchill would have had the oratory abilities to convince his countrymen that his idea had merit, but he did not live to see it. The Federation of Europe or United States of Europe is the logical end-point of the joint vision of all these foundational leaders.
>Franco-German friendship exemplified by Mitterand-Kohl personal friendship
Ironic to call this a "friendship", when Mitterand along with Thatcher were working behind the scenes with the soviets to sabotage and stop Kohl's reunification of Germany. It was anything but a friendship, but more of a concession.
Politics is full of such examples that look friendly to the public, but hide a lot of sabotage and back stabbings in the background. In fact, the later is the norm in politics.
Maybe you can be friends without always agreeing, and even when competing.
Not when the competition is a zero sum game over critical resources. This isn't a game of table tennis, it's about competition over dominance.
Friendships are just the media facing image. In reality, if a country can gain an advantage over the other they see as an economic adversary, and has the means to enforce it without repercussions, they'll do it. Then they'll meet up in front of the media, shake hands and gaslight the peasants on how this benefits everyone.
The true friendships in between countries are made over decades/centuries over shared blood, heritage and culture because humans are tribalistic and have own group preference. Forcing friendships via political declarations doesn't work.
Let me explain with examples. If Portugal would get attacked a lot of Spaniards would go fight for Portugal voluntarily because of shared history and culture. But if Bulgaria would get attacked, most Spaniards wouldn't volunteer to go die for Bulgaria, even though they're both EU members.
Austria kept torpedoing Romania's Schengen entry just to extract some monetary concession, not exactly something friends do. So if Austria were to hypothetically get attacked tomorrow, a lot of Romanians would cheer rather than want to go help since karma is a bitch. These kinds of petty squabbles are the norm in the EU.
People aren't gonna want to die or sacrifice themselves for the EU flag since it's an artificial construct, kind of like the corporation they work for, not something they feel a sense of belonging and allegiance to like a specific group of people.
The lowest common denominator, racial ("shared blood", "tribal", and also "culture" in this context) perspective is exceeded time and again, and the ones that do exceed it are the most free, most prosperous, and most powerful - NATO being a clear example, but also all the Pacific alliances around China. The poorest and least safe are the ones that follow your advice, places like Somalia. Or look at the US and NATO ten years ago compared to today.
Most countries can be subdivided seemingly infinitely into groups that could find reasons to fight each other. But humans have other common 'denominators', much higher than that. Spain, the UK, the US, France, China, and many others are unions of subcultures.
You can see so much better in the world. Instead of insisting that evil is inevitable - making you a victim of it - you can work for good. Our ancestors have had great success and made it easy for us to follow.
The major benefit of the US Dollar is that you can do things with it. Between export controls, currency controls, laws on foreign ownership, etc, china can pay me all the RMB in the world. I still can’t do a whole lot with it.
This is part of the same reason many people don't use Bitcoin- you can't actually do much with it because retailers don't accept it. But China is definitely thinking about how to fix that problem, and soon they will make it possible to pay directly in CNY in other countries. Once you can buy things with it, the CNY is attractive from a practical perspective. A lot of your stuff is already manufactured in China, once/if using CNY makes your purchase easier then it's going to gain ground on the USD.
https://www.atlanticcouncil.org/blogs/econographics/what-to-...
Funnily enough you can use Bitcoin at most merchants that use a Square PoS device, which is like 25% of merchants in the US. It just takes time for folks to change their behaviors. And why would they, if they're getting X% cashback on all purchases using their credit cards?
The other thing about Bitcoin is that it's deflationary, which leads to people holding the currency rather than spending it, as predicted by Econ 101.
We've witness deflationary forces in computer hw for decades and no one is holding off their purchases. Time is scarce and it ultimately forces consumption because otherwise, what would you be saving for?
Don't need Econ 101 to understand this basic reality.
Well there is a difference between people not buying anything at all and being significantly less than they are now. Consumer goods and services is only the tip of the iceberg.
How much do you think debt would cost and how easy would it be for businesses to get credit?
Combining a deflationary currency with a growing (or at least non static) economy is bad a everyone who has a basic understanding of history prior to the 1930s can see that. Something like bitcoin would be even much worse than the gold standard.
You're forcing business to produce something valuable in real terms instead of nominal terms and you're making that calculation easier to do for economic actors because the measuring stick is now controlled by an algorithm as opposed to charlatans.
Having less of that garbage fiat short-termism is a good thing for society.
> Having less of that garbage fiat short-termism
Yet having more of endless boom and bust cycles with major economic depressions lasting for years (outcomes of the gold standard was a good idea).
> You're forcing business to produce something valuable in real terms instead of nominal terms
I don't quite understand what does that mean. Pricing goods in oil or grain? (coincidentally either of which would function better as a currency than bitcoin).
Computer hardware isn't trying to be currency. Bitcoin was supposed to be, but hardly anyone who uses Bitcoin these days is using it to buy things--it's used as a store of value or a speculative asset, not a means of transaction.
Computer hardware actually does things - it is an economic value producer.
Bitcoin is an economic value consumer just to hold it. It does nothing if you have it.
Paying Chinese companies in RMB isn’t the issue. If I sell something and a Chinese company pays me in RMB, I can’t really do anything with a billion yuan. Can’t buy a company (limitations on foreign ownership), can’t buy property (99-year lease that can be canceled on the whims of the government at any time), can’t buy Chinese debt (terrible yields, very small foreign market access, incredibly opaque laws and accounting), and nobody else in the world wants it so I have no choice but to sell it back to China in exchange for a real currency at whatever horseshit exchange rate they’ve concocted.
It’s worthless money and I don’t see anything out of china that would cause that to change.
What about buying rare earth metals or containers of electronics or purses? It's a bit more work, but it's not impossible to solve the problem.
Also, it's not like a 99-year lease has no value. That's your entire lifetime+.
Because if I am running a business I just want to be paid in money that I can pay my bills in. I don't want to have the additional task of managing rare earths and electronics inventory. That's not "a bit more work." It's running an entirely different business that I don't know how to run.
I think OP's point is that a "99 year lease" isn't worth very much without a firm guarantee that the least in fact lasts that long. I don't really have an opinion on land leases in the PRC, but it doesn't seem facially unreasonable to suspect that a foreign lease holder's land value wouldn't be a priority for China's leadership during an economic crisis.
This is on full display with the US's Venezuela problem: no one believes the US will hold it, so oil companies don't want to invest because last time exactly this happened - they had everything seized.
Imagine if you'd invested in lithium mining in Afghanistan 15 years ago: you'd likely have paid a lot, made little money, lost employees and then lost it to the Taliban.
> Can’t buy a company (limitations on foreign ownership)
This is quickly going away[1].
[1] https://www.nortonrosefulbright.com/en/knowledge/publication...
I guess this is naive, but can't you use it to buy (or sell it to people who want to buy) Chinese products? It's not like China doesn't have an enormous amount and range of products on offer.
Thats a feature not a bug.
The Chinese government spend a lot of money keeping the value of the RMB low.
This is actually an interesting point. Wouldn't it be bad for China if the US isn't the reserve currency/the RMB gains a lot more in value relative to the USD? It would proportionally, negatively, affect their export profits, no?
Germany did relatively fine though? Despite the German mark being the second largest reserve currency and their economy being heavily reliant on exports.
Mostly it’s just what I’ve read, I don’t know if it’s true, which is why I asked. If you get less yuan-people-hours per dollar (and materials cost increase for the same reason), you would get less per dollar than previously, I think?
Eventually you hit an inflection point where it’s cheaper to manufacture elsewhere. Which is why China is working Africa, huh?
Interesting stuff, in a vacuum.
I mean, you can buy goods and services within china, and you can sell those goods and services. The “horseshit” exchange rate can’t deviate too far from the real value or it incentivises laundering too much. The exchange rate isn’t _that_ bad as a result.
Retailers don't accept crypto not because of the technology so much as the fact it is a capital gains event every time you transfer crypto, which means both the buyer and seller are now forced to keep a log of their gains/losses against the dollar everytime they buy a pack of gum.
Obviously that's extremely impractical and at best you're hiring a 3rd party to streamline that for you. It's a clusterfuck at tax time (edit: stable coin doesn't help here -- you must still report gains on stable coins as it is still a $0 capital gain which is different than no capital gain).
Retailers already dealing with capital gains and with high chargeback rates love it though. For instance, it's usually the cheapest same-day clearing way to buy precious metals online since credit card rates are high (chargeback), ACH takes days, and wires tend to cost $15+ with many banks.
Reticence among retailers predates the capital gains policy of the IRS. The volatility of Bitcoin's value induces excessive exchange risk. However, we don't see capital gains nor exchange risk with stablecoins. I assume that network effects are insufficient to drive retail demand for stablecoin support.
The volatility of bitcoin is why there is capital gains on every trade, it has nothing to do with the IRS's new crypto policy.
If a bitcoin rises or falls by a calculable amount between when you received it vs when you spent a portion of it, you have gains/losses. That has always been required by the IRS to be reported, whether that is a BTC or chicken feathers.
> Reticence among retailers predates the capital gains policy of the IRS. The volatility of Bitcoin's value induces excessive
The IRS policy is irrelevant, the law always required payment of capital gains. It's consistently been the hardest thing about accepting Bitcoin for payment.
Foreign currency payments are largely exempted.
You do not need to report a $0 capital gain when using stablecoins. Sure crypto can seem like the wild West with CPAs having different opinions on what little official guidance is out there but that one is simply absurd.
CPA Miles Brooks claims you do[]
[] https://coinledger.io/blog/stablecoin-taxesDon't we already pay in foreign currency? I do this online with foreign websites and credit cards.
It's more of a payment processor issue than a device issue.
If you are in a country or area with a large Chinese population, you can usually pay easily in RMB with Alipay.
If you use Visa and Mastercard, you are subject to US regulations, sanctions, and embargoes. Many alternative payment processor exist, PIX in Brazil, UPI in India, etc.
There are several systems in the EU: Wero, Bizum, BLIK It is urgent that Europeans coordinate to ensure the interoperability of these systems and reduce the influence of Visa and Mastercard.
In the event of conflict, this will be the first service to be cut in order to disrupt European countries.
The US already use it for coercing European politicians : https://www.courthousenews.com/eu-strongly-condemns-us-sanct...
An integrated European payments system should be very high up on the priorities list of the European Commision. I believe every EU country already has its own version of a QR code payment, I don't know why can't they connect "easily" connect them.
It's complicated, there are two types of applications and networks.
1) Direct payment systems via mobile phone, generally designed initially for payments between friends and family. They have been set up in several countries by neobanks, generally based on the Mastercard network (very common among neobanks). A Latvian neobank may expand into the Baltic countries, but is unlikely to succeed in Portugal. These systems are not interoperable with each other.
2) Systems promoted by banking networks, such as Bizum in Spain, which has expanded to the Iberian Peninsula, and Wero, which is supported by BNP Paribas (France, Belgium, Germany). These networks are independent of Mastercard, Visa, etc., but they seek to favor their members and do not seek to become widespread.
Discussions have been ongoing for years to achieve interoperability. The idea for the moment was to let the market structure itself naturally without too much intervention, other than to say “we must move towards interoperability at the European level.” This approach has worked very well for bank transfers, which have become simple, fast, and relatively secure, but it has taken a long time (Europe, consensus, etc.).
Here in Belgium I have the impression there's steady progress towards such a system: https://wero-wallet.eu
You can buy with RMB in a lot of countries outside the West, if they have integrated UnionPay or AliPay into their payment processors.
But more importantly, you can buy a lot of stuff from the factory of the world. Which is why a lot of countries don't mind holding the RMB. Just not enough for it to become a reserve currency, and certainly no one wants it to become the petroyuan.
The euro has been gaining ground ever since the financial crisis in terms of share of currencies held in global foreign exchange reserves. Less than a third of the US dollar, but still a distant second. Nevertheless, I'm still concerned about the Russian invasion of Ukraine, and how intertwined the EU economy is to countries which it has shaky relations with at best.
the yuan has major currency controls. there is a real threat of capital flight destabilization if policies change which is why nobody sane would peg tp the yuan as it is now. that said, countries definitely make bad choices.
The IMF seem to think it's good enough to peg their special not-a-currency currency to.
https://www.imf.org/en/topics/special-drawing-right
All IMF participating states have allocations of SDRs. By your definition, the IMF is "pegged" to the currency of Afghanistan.
I partially agree. But the EU is in a pretty unstable state as incomplete government structure over a collection of peers. "Unstable" does not mean it's going to fall apart. It means it's going to fall apart or coalesce into a single thing (a new country). Or maybe a little of both (a new country with some fringe members leaving).
It might not be in 5 or 10 years but it's inevitable. It's not going to operate like this for 50, 100 years.
Just run a mental simulation of WW2 playing out except Europe had the EU.
So while I agree the EU is becoming more an more normal and important to the average citizen, there will come a time when it has to either solidify further or break apart, and I think it's basically a crapshoot to predict how that will go now when we have basically zero info.
I wouldn't describe integrating further to the point of becoming more like the US as "unstable". And that's the most likely outcome, which should make the EU more trustworthy as a partner, not less.
EDIT: by "like the US" I mean federalization. This video explains it well: https://www.youtube.com/watch?v=HnarX3HPruA
I would argue that not only is it not the most likely outcome, but that it's practically impossible. When the colonies united they all spoke the same language and shared the same culture as the descendants of recent British colonists. Furthermore, they had just fought and won a war of independence together. The first presidential election was unanimous with every single electoral vote backing George Washington. Do you think an EU presidential election would play out like that?
Also, when the colonies united, the government they agreed on was by today's standards extremely small and decentralized and there was absolutely no welfare state. Revenue was mostly from tariffs on imports with zero income tax. Merging modern European governments would be a massive undertaking in comparison. And the wealth levels between countries are so lopsided that any such merger would mean massive transfer payments out of the rich countries to the poor. And what about tax rates? Low tax countries will not like this one bit. When the US colonies merged under the constitution, you could very truthfully go to the average citizen of any colony and say "basically you won't even notice any changes." Whereas for the EU, you have to say to the voters "your taxes will go up and we will now be sending $100 billion Euros per year to people in other countries."
Just re taxes: why would anything need to change on that front in the event of federalization of the EU? There already is a union, it already has money, money already flows from richer countries to poorer countries—what would federalization change?
Sure the contexts are different, and you can also look at the federalization of German states as yet another example with a different context, but not all of the factors are unfavorable. For example, the countries of the EU are already more integrated than the colonies were. Plus it's a very different time now, we've had the UN for a long time already, etc.
Also, I was surprised to learn how heterogenous the different regions of the US were from the very beginning, in origin, character and motivations. The Puritans, Quakers, Cavaliers, French nobles and traders etc.
This video explains why it's very likely to happen: https://www.youtube.com/watch?v=7yHJehbWiNo
There are still, to this day, massive wealth disparities between US states.
And until the first entitlement programs during the New Deal it made no difference because it was entirely the poor state's problem. Only after the country had been a political union for over 150 years did they have any sort of welfare transfer program. If New Yorkers had been told in the late 1700s that joining the union would mean taxes coming out of their paycheck to send money to people in Georgia, they never would have joined.
> integrating further
What does that mean exactly?
I meet a lot of people do enjoy their nation's sovereignty especially as a shield from EU's poor and unpopular decisions that they don't get a vote in, and see the common currency and freedom of movement as just the right amount of integration. Making english an official language would be even better IMHO, but that's about it. I enjoy different countries having different politics and takes on topics, as it would be shit if all EU was a just a homogenous groupthink.
And I've never met anyone who thought the likes of Ursula and Kaja should be trusted with even more power and control over nations.
>I wouldn't describe integrating further to the point of becoming more like the US as "unstable".
More like the US, as-in a country? So also more like Germany, China, South Africa, etc. You are making a false equivalence - being like the US in one extremely non-US specific way does not mean you must be like the US in every other way.
I'm not sure you even understand what I'm saying - this has nothing to do with the US vs. the EU or if the US is reliable.
I was referring to the possibility of the EU becoming a federal union which acts like a country. Yes, like the US and Germany, but unlike China and of South Africa I don't know enough to say.
It doesnt have to be a federal union. Probably a logical step but I didn't prescribe it. Regardless, I dont see how it could persist in its current form through lots of conflict.
> And that's the most likely outcome
The recent electoral success of AfD in Germany and the National Front in France seem to point in the other direction.
Yeah, there are already major opposition parties advocating EU exit in many countries already. Try to centralize further and their support will increase. Contrast that with the US when it unified. George Washington won the election 69-0 in the electoral college. And that's not even getting into any of the other massive problems with EU unification.
> Additionally, we've now seen the EU survive the departure of a major economic power (the UK).
I don’t really understand the impact of Brexit on the euro, as Britain wasn’t on it. But clearly they were a key part of the EU. It’ll be interesting to see which side regrets the move more.
The answer is already clear: Britain regrets the move more.
In June 2025, 56% of people in Great Britain thought it was the wrong decision:
https://www.statista.com/statistics/987347/brexit-opinion-po...
It's hard to imagine this number would be going down after recent events like USA suddenly threatening arbitrary new tariffs on the UK.
>In June 2025, 56% of people in Great Britain thought it was the wrong decision
It's not so clear when you consider that 48.1% of the original referendum voters wanted to stay in the EU. I'm honestly very surprised by this poll, 8% change is pretty minimal considering the turmoil the country has gone through since 2016.
How much of this can be explained by older voters dying in the intervening 10 years, I recall that demographic skewed much more heavily Leave in 2016
Half the issue is the definition of ‘voter’. Turn-out is abysmal and polling has been crap in major ways. Calling someone eligible to vote a ‘voter’ is probably only right 50-60% of the time.
https://commonslibrary.parliament.uk/general-election-2024-t...
> In June 2025, 56% of people in Great Britain thought it was the wrong decision:
How many thought it was the right decision at the time?
https://en.wikipedia.org/wiki/2016_United_Kingdom_European_U...
Remain was 48% so it's actually not that large of a swing in total. It's not like it was 5% remain and now it would be 56% or something.
But it does indicate if the referendum was taking place today it might swing the other way.
Note the turn out too. 72% isn’t great for a major change like this. The non-voters would easily swing it either way as a landslide.
Agree, that's a good point. Perhaps many who would have voted remain just didn't think it was a chance it would pass so sort of stayed home because of that.
But only 56% in a poll? Is that enough for another referendum and guarantee rejoin? EU politicians have made it clear, ALL UK opt-outs will be gone if UK rejoins, whether it is UK opt-out regarding budget (like paying billions less in annual EU fees like UK did before), to special fishing rights pre-Brexit, to forced to adopt Euro currency and drop Pound sterling.
Rejoining is seen as politically too risky in the short term. As you observe, the UK would not get back its privileged position, there are probably some bargains to be struck but a track to the Euro currency is almost certainly mandatory and that'd be unpopular because people really like our banknotes for some reason and the Euro deliberately just looks like play money, the illustrations deliberately don't show real structures to avoid associations with the nations where those things were built.
But while "Leaving was a bad idea" isn't enough to seriously push for actual re-entry to the EU it's certainly a good sign for the EU and for the Euro. The EU is a massive bureaucracy, and I think we underestimated how much "a massive bureaucracy" might be the thing we wanted in this role..
> Rejoining is seen as politically too risky in the short term. As you observe, the UK would not get back its privileged position,
Just curious, what privileges did it have? I can think of keeping it currency only.
Opt outs for Schengen, the Euro, all police and justice policies, and the charter of fundamental rights
Also a multi-billion pound rebate on what Britain contributed to the EU budget. Thatcher negotiated it in 1984 and it’s never coming back.
I was there about 8-10 years ago and again for a few weeks just recently.
Perception is hard to measure objectively, but the UK does not feel like it’s on an upswing when compared to last time I was there.
That's crazy it's not even moved 10% from the vote guess by and large people are pretty happy with their vote.
I don’t know if you can confidently claim that the vote represented the view of the population at the time.
There was a small pro brexit margin, and loads didn’t vote. I don’t dispute the vote result, I just wondering what the result would have been if there had been higher turnout.
The Yuan is not a freely convertible currency, so not really an option here. The Euro isn't terrible, but it has structural issues in that member states all must take out debt in what is for monetary policy purposes a foreign currency. This generated a debt crisis 10 years ago, which has been papered over, but the structural issues remain unresolved. Also, the Euro has been around now for 25 years. That's not long enough to convince anyone of long term stability.
And to add on (rather than edit my comment), I think the saving grace that keeps USD around for a while longer is the last section of the article, "Deposit dollarization in emerging markets"
A lot of growing economies don't/can't trust their local currency and they overwhelmingly use USD instead of EUR or CNY. As those economies grow the USD gets a boost that will sustain it for a while over the increasing competition of CNY. But this can't sustain it forever and the US is not doing anything to offset the lost ground in global trade and forex reserves.
> Another major currency is the Yuan
Is it? CNY seems to be about the same as CHF:
* https://en.wikipedia.org/wiki/Template:Most_traded_currencie...
In a similar range as AUD and CAD.
The UK was not part of the Euro economy.
It is not counted as such but it is very much tied to it and for the most part goes up and down with the Euro economy barring some own goals.
While similar to Denmark and Sweden it retained its own currency, and was also not part of Schengen, It was part of the Single Market.
Sweden does not have an opt out for the euro.
Sweden just haven’t completed the stabilization and alignment criteria to formally switch over, arguing that it is voluntary.
We had a referendum on the euro back 2003 with a clear mandate to not adopt it and the politicians don’t want to poke the sleeping tiger that is the euro question.
Saudi Arabia was privately discussing de-dollarization way back in summer last year, when the irrational tariffs were imposed, followed by the Israeli-US strikes on Iran. Make of that what you will.
There is a very sudden shift though - those options have existed but not generally been seriously considered. The US was seen as a bastion of stability and while sanctions could drastically impact a country's ability to trade due to the reliance on US currency exchange it has arguably been used relatively scarcely.
The change is that suddenly the US isn't a bastion of stability and having an independent trading currency could ensure more internal stability for other nations.
The U.S. is as stable as it gets. It has been one continuous republic and has 250 years of legal stability and a history of paying its debts. It has 4.2% GDP growth, with the largest economy in the world and growing.
Your ruler is no longer following the rules of law, nor the foundational constitution. USA ended with their declaration of dictatorship and the failure of your houses/legislature/military to act against that and defend the Constitution.
I can't see how, since the end of habeas corpus, you can claim legal stability.
Your leader is World renowned for reneging on debts and is demanding bribes for companies to operate.
Isn't borrowing through the roof to pay for things like your stasi?
Daily those stasi are murdering and disappearing people seemingly attempting to foment an excuse to escalate the violence.
I don't know how that knife edge can look anything like stable to you.
It's a very grandoise (or alarmist, depending on your perspective), but this isn't super new. The US has been "unstable" with rulers breaking their own laws domestically and internationally for many decades.
Why is this getting downvoted?
My money is that influence campaigns are active on HN and try to mold the discourse. The whole internet is manipulated to hell, and HN is a prime target, you have a bunch of smart people that probably have oversized influence, how could you NOT try manipulating this place?
This is most certainly happening. A lot of US-critical articles also get flagged to death, even when they have a lot of upvotes and healthy, civilized discussion.
Yes to manipulation.
But also it asserts factually a lot that isn't true, which is why I downvoted.
Mostly an US audience here. A deeply divided country on politics. The wording doesn't help matters either.
It's unfortunate the same division tactics the US has been facing are working elsewhere too, however.
Mostly an US audience here.
I don't think mostly is true? Obviously it depends a lot on the time of day, but there are also a lot of Europeans on the site. Also, most comments here seem to be critical towards current US policy. So, I think there is quite a lot of manipulation going on, since the downvoting/flagging does not really match the comment section.
I think it's true. There is a significant audience here from other areas but this being an english language forum and one focused on tech means that the US is always going to have a dominant presence[1]. The US dominance also means that the news is highly focused on US events when it wanders out of tech which further reinforced the audience.
1. I believe Canada does have an outsized presence though!
From dang themselves: https://news.ycombinator.com/item?id=16633521
So, 32-56% US, so not mostly US.
Because it makes people uncomfortable.
It's hysteria in the addictive, viral, breathless, and self-indulgent social media flavor that permeates everything.
The excitement being blown out of proportion is hyperlocal. The system grinds on.
> The U.S. is as stable as it gets
Past returns are not indicative of future performance
"Faith and credit" means trust, and there's an elephant in the room impacting trust. Worse, what comes next?
I am pretty sure the US has not 4.2 percent growth
Source?
I live in the US and I have lived in countries with 4-5 gdp growth
The latest US GDP print is the Q3 2025 Initial Estimate, showing real GDP grew at a 4.3% annual rate
https://www.nbcnews.com/business/economy/us-economy-grew-thi...
That is an annualised figure, which means they took the Q3 figure by itself and multiplied it by 4. US annualised growth in Q1 would've been -2%.
Between Q1/2/3, US growth has been about 1.6%.
Wait until the whole year figures come out.
And you have to wonder: if they do come out, are they truthful or are they fabricated.
Holiday spending was up 6.8% YoY and the highest spending on record. About 67% of GDP comes from consumer spending.
It's very unlikely the US doesn't have strong GDP numbers for 2025.
K-shaped economy and all that
They are likely referring to Q3/25 numbers [1].
The problem is the AI bubble, without it it is speculated that the US economy might actually be in a recession [2] - effectively, that web of investments, deals, ownerships, purchase contracts and god knows what is nothing more than wash trading that will come crashing down hard.
That is why for the 99%, the economy doesn't "feel" like 4.3% of growth. If you're not in AI directly or at least adjacent (e.g. datacenter or utility construction), you don't feel any of that money.
[1] https://tradingeconomics.com/united-states/gdp-growth
[2] https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks...
The U.S. chose to abandon the rules based international order that has made it a bastion of stability since WW2 when they decided they wanted a return to the monroe doctrine and that it was okay to arbitrarily invade countries and take their resources based on the impulses of a single person. The same person outwardly stated, "Considering your Country decided not to give me the Nobel Peace Prize for having stopped 8 Wars PLUS, I no longer feel an obligation to think purely of Peace". If you think this is "as stable as it gets", then we're living on different planets.
There more to stability than continuity of government. Though, that definitely is important.
It’s bad enough that America’s foreign policy lately swings wildly every four years. More recently, it’s been acting aggressive toward allies, and making very strange and unpredictable moves.
The USA’s tariff policies are, frankly, utterly insane. Yes, I do mean the tariffs are irrational and incoherent. The approach to the tariffs has been overly aggressive. They’ve been changing almost daily, at times. Now, tariffs are specifically a thing that must be stable and predictable on a multi-year horizon. This must be, at least, off-putting to other governments, and to any companies wishing to do business in or adjacent to the USA.
Monkeying with the Fed is dangerous and basically unprecedented. This is going to make people nervous because it marks the end of an era of stability in monetary policy. We may be at the start of a new era where interest rates, much like the tariffs, change frequently for bad reasons or for no reason at all. Who can say?
And THAT is the problem.
Why is this getting downvoted? Everything said here is true.
> 250 years of legal stability
America was never a stable country. That 250 years includes:
* A decade of chaos under the impotent Articles of Confederation.
* The deliberately engineered election of George Washington to create the illusion of political stability, a reign which only ended because George stepped down voluntarily.
* An immediate constitutional crisis the moment a competitive election happened, causing the election of a President and Vice President from opposing political parties (imagine a Harris - Trump presidency). The ensuing chaos resulted in SCOTUS unilaterally declaring itself the final arbiter of the law.
* The Thomas Jefferson presidency, which in many ways is the alpha release of Trump.
* The Civil War, started specifically because the losing faction of slaveholders was angry at losing, and ending with the losing faction losing so hard the counter rolled back into flawless victory. They surrendered, then assassinated the President and got his party to give up on everything he stood for.
* Economy-destroying Smoot-Hawley tariffs, which are basically what Trump is doing now.
* A spectacular near-miss in which the country's business elites attempted to assassinate a Progressive president and only failed because the Marine they selected as their Hitleresque dictator ratted them out.
* Widespread civil unrest deliberately created to force America to reckon with its racist past and undo what the South had managed to convince the North to allow them to do after Reconstruction.
* The Richard Nixon presidency, which in many ways is the beta release of Trump.
* Too many foreign invasions to count.
In the entire history of America I can think of maybe 3 brief moments of political stability that weren't outright engineered fantasies. The two that are relevant to modern times are the 1950s and the 1990s. Both of these were the result of America winning a war of conquest.
Really love this, seriously great analysis (even though I'd quibble on a few points).
Stability is a relative thing though. It's hard to judge this except in relation to what other countries were doing.
>Various Euro nations
Suicided in 1900s and destroyed everything they built
>China
Collapse, civil war, famine, poverty
*pretty good for ~30 years
That's not as bad as what a lot of nations have dealt with
Consider the turbulence that China experienced over the same 250 years, for example
For 250 years that sounds very stable compared to many other countries
> Today there are more options like the Euro that didn’t exist in the 90s
Yet the Euro peaked back in 2009 and has been declining ever since.
At this point its share is not that massively higher than that of the German mark back in the 90s.
when do we reach a tipping point for rapid decline?
seems like once it starts falling, it would accelerate.
There's an excellent and eerily prescient novel that attempts to portray what such a "tipping point" might look like, and when it could arrive: https://en.wikipedia.org/wiki/The_Mandibles
There is a pretty good chance you're right on top of it.
EU can easily pull the plug on Euro as a reserve currency if they confiscate the money of a certain country and give it to another one. That would be the "front fell off" moment for Euro.
Except they didn't and instead borrowed money for the other country. But more importantly, there seems to be a process in place, where a collective of rational actors makes choices, rather than someone who states he can go to war because he didn't get the Nobel Peace Prize.
(Still disappointed that the winner of the FIFA peace prize wants to go to war /s.)
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Currencies fundamentally relate to some trust.
I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
However it will provide incentive to move away from the dollar in the long-term, ie as Fareed Zakaria says "recent actions are accelerating the world to the multipolar future".
> Currencies fundamentally relate to some trust.
A quant partner at Goldman said to me once that the thing that's different about currencies relative other normal financial products is whereas you might buy JPMC or oil or a bond because you like JP Morgan or oil or think rates are going to move in a particular direction or whatever whatever, you never just buy the dollar. You are always trading one currency for another eg selling GBP to buy USD. What that means is currencies are always about the value of one currency relative to other currencies.
In that sense they do fundamentally relate to trust and in particular specifically in this case about trust of the US economy and financial system's stability as opposed to other economies and financial systems.
So there have been times (eg during the financial crisis) where people think all currencies are bad but you can't just sell all of them so typically they would sell the other ones for dollars. For me, de-dollarization is about the choice of central reserve banks to hold dollar assets but also about other financial players changing their "default currency denominator" when they're doing this kind of trade.
Multipolar? So kind of like Europe before the beginning of World War 1, with major powers all competing with each other?
Yes, though I expect there to be a European block, the US, and a Chinese block. Russia there as a wildcard. I doubt we see Germany in competition with Britain.
The trouble with thinking in terms of blocs is that they don't solve the foundational economic problem: who is the sin-eater who is trusted and willing to run the deficits so that everyone else can run surpluses? Without a clear answer, you just have the same question repeated within and between blocs, so the same beggar-thy-neighbor incentives that exist without blocs exist within and between blocs, so the fighting continues within and between blocs until the question is answered. Blocs don't solve the problem at all.
Russia firmly in that second tier along with better behaved peers that have brighter demographic futures and an actual economy, like India, Indonesia and Brazil.
Russia is self destructing as we speak.
As far as I can see they have a massive uprise in industrial capacity and reformation in general. People underestimate countries in war.
The interwar era between WWI and WWII is most instructive for what a multipolar currency world looks like. The Pound Sterling still mostly worked before WWI and the Dollar rose in the wake of WWII.
The absence of a currency hegemon caused "Kindleberger problems," named after the economist who described them, and will cause them again. The big issue is that everyone wants to pump exports to pump their real economy, they can't all succeed because the world is a closed system, so they fight. First with tariffs, eventually with guns.
These Kindleberger Problems will get worse until the US gets its shit back together or China assumes the throne. Note that assuming the throne will destroy the export sector that they love so much (Triffin Dilemma), so not only are they not ready today, they don't even clearly want to be ready. Much like the US between WWI and WWII.
Buckle up, because the tariff wars, Great Depression, the economic driving force for the imperialism of Imperial Japan, and other awful things that you've heard of before all fall in the category of "Kindleberger Problems," are all downstream of not having a global currency hegemon, and are likely to rhyme with what comes next.
This is a complicated and evolving subject that probably isn't well described in a comment, wiki has a good article https://en.wikipedia.org/wiki/Polarity_(international_relati...
"world of fortresses" -- Carney today.
> I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
How is that different from trust erosion?
Monetary penalties are different from trust erosion in that they are the test of whether trust can be restored, ie you are acting very unpredictable => I am going to show you I'm paying attention and hit you with a penalty and watch your response. If you continue to show you are unpredictable => I plan an exit so that I don't _have_ to trust you, ie trust erosion.
Ultimately if there's too much unpredictable behavior the pain endured will become higher than the pain of eroding trust... which if trust was truly eroding would be signaled by establishment of monetary systems independent of the US, probably with the International Monetary Fund as a base, backed by at least India, China & Europe.
The difference is emotionally based retaliation vs. reassessing risk. And it's about money, so it's for sure not about emotions. The financial world isn't run on anger and emotions, like the White House.
Finance is run on two emotions. Greed/avarice and fear. Three if you count confidence/trust.
Finance is as rational under the hood as the Vatican's books.
> I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways.
Sure, everyone else is also acting based on childish emotions now, not just the US president. It's not about retaliation at all, it's about reducing suddenly very imminent risks.
Unusual? That's one way of putting it. I think unpredictable, erratic and criminal paint a more a realistic picture. The fact we're threatening Greenland is absolutely insane.
If the goal of this administration is to destroy America, they're doing a fine job.
It's easier to cancel elections during à conflict
The Fed and largely US policy has absolutely no effect on the real reserve currency: https://en.wikipedia.org/wiki/Eurodollar
Didn't know that was a real term Mike Pondsmith used for cyberpunk
It is, but he got the macroeconomics backwards so enjoying it on an aesthetic level rather than a mechanical level is still the right choice.
Few people actually know how Eurodollar system works under the hood.
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They are related but I think the lack of de-dollarization already shows there are other, more raw mechanics that are operative. Namely, liquidity and lack of alternatives.
The bro's in the whitehouse is using their mouthpieces to create a volatile market, thus gaming the system with pump & dumps. They are stealing from everyone in a sense.
This is a pretty astute interpretation.
Here's a write-up of Trump's grift so far: https://www.nytimes.com/interactive/2026/01/20/opinion/edito...
> The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged.
This is mostly due to the behavior of the country being unusual.
The US had grown at a healthy clip for a long time.
Due to the amount of boomers exiting the workforce, and withdrawing rather than adding to their savings - the US is going to be in a very different position for the next 10-20 years before things start to level out.
If something like AI doesn't save us with a pretty sizable productivity boost, we're in for uncharted territory.
> The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve.
I think this oversimplifies things. The dominance of the dollar emerged chiefly because most of the alternatives were worse, for a combination of military, political, and economic reasons.
There is a positive feedback loop at the core of it, because the US economy benefits greatly from being able to issue foreign debt in their own currency. But that doesn't matter: as long as the US faces little risk of getting invaded by any of its neighbors or defaulting on its obligations, everyone is happy.
What's been changing - and it started long before Trump - is that the US is also increasingly willing to use its control of USD (and thus the Western banking system) to pursue sometimes petty policy goals. This is giving many of our partners second thoughts, not because of the fundamentals of USD but because they imagine finding themselves at odds with the US policymakers at some point down the line.
> So draw from that whatever conclusions you wish.
Sure but replaced by what? The abysmal failure that the EUR is? Or a chinese currency?
What other options are there besides either a Chinese currency or the EUR?
Chinese. EUR.
Seen these twho choices, everybody understands why the USD isn't anywhere near losing its dominance status.
I love the complete lack of argumentations this comment has
Our federal deficit interest rate is like 15% of government expenditures.
The dollar being the reserve currency which leads to demand for the dollar keeps the dollar from deflating.
But as people no longer demand the dollar because they don't want to support a imperialistic government what happens?
The US would no longer be able to export the cost of its spending on other countries which is the so called 'extraordinary privilege' of running the world's reserve currency and the US population would feel the consequences of its out of control spending.
Which is to say, that is a fairly traditional way of how empires go the way of the dodo. First losing their financial dominance, which loses them their international power, which then causes internal rupture.
This is an article about multi-decade trends but you’re associating recent current events with the behavior. Consider reading the article.
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It isn't prohibited by the constitution and was created as an independent body. You are correct that it wasn't specifically outlined by the constitution but that's an empty statement - the constitution included the allowance of the creation of agencies and laws outside of itself... that's the main power and strength of the constitution.
Your statement was equivalent to saying that Hacker News has no constitutional right to exist - it is equally vapid.
The 10th amendment limits the federal government to the enumerated powers. So your argument that it "isn't prohibited" isn't how this works. You have to justify it under an enumerated power (which, you might well be able to do, though this is debatable).
I am not a constitutional scholar so a better expert may be able to provide a more sound response but I believe the Commerce Clause is generally accepted to include currency control (and early tests of federalism in the US found that independent state currencies could be restricted by the federal government).
From Article 1, Section 8: Powers of Congress:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
...
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
...
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
Congress's authority in this area was upheld by the foundational case McCulloch v. Maryland in 1819. The Federal Reserve System was created in 1913 by Congress via the Federal Reserve Act.
There's no serious argument that the Federal Reserve is unconstitutional. People who espouse this are ignorant of the facts and law, or are either quacks or have paid heed to the arguments are quacks.
There's no serious argument that a central bank is unconstitutional facially
is not the same as
There's no serious argument that the Federal Reserve is unconstitutional as applied.
The latter is certainly debatable, especially insofar as the fed (in their own words) claims to operate independently when in fact the constitution delegates the powers you cited to congress and the execution of powers of congress to the executive.
The Federal Reserve Bank is in effect a club of banks. They pay for it. It's not an appendage of the Treasury.
> The 10th amendment limits the federal government to the enumerated powers.
federal reserve is not government... that's kinda the entire point)
its why current US admin is being so butthurt about it, it's not under its control.
It’s certainly government. The US Congress created it as an agency of the US government, just as it did every other government agency; and the Congress can destroy it. The Congress did not provide for direct political control—elections (and electoral politics) can’t change the Federal Reserve’s decisions (or decision-makers) directly.
There’s indirect control: the elected administration selects people to nominate as governors, who then go on to make the decisions. But they have to choose people who the (elected) Senate will confirm, and there’s not too much the executive can do if they don’t like the decisions their appointed governors go on to make during their 14-year terms.
The question at hand at the moment is whether the executive can unilaterally usurp the agency’s Congressionally-mandated structure and use its power directly.
It’s kind of like how the various Civil Service acts sheltered career civil servants from the constant changes in political winds, so that we can have career professionals in government instead of using public paychecks purely as a prize for the buddies of whoever won the last election. The present administration resents that independence too.
It's as much government as Amtrack and USPS.
I’d argue that its primary functions are core government functions in a way that passenger rail and postal services are not. Amtrak and USPS sell services at retail (and compete; see i.e. SunRail and UPS). The public aspect of their prerogative is relatively small (I tend to care much more about whether the train is on time than I do who operates, and who owns the tracks, and what the liability cap is; I tend to care about speed and price more often than I care that USPS will go places where FedEx won’t). And the “product” is a set of individual services executed by a big workforce—the higher-ups exist to make sure the services get delivered down the line. Quasi-corporate structures make a lot of sense for that.
Whereas the Fed’s jobs involve setting monetary policy and regulating the financial sector. The “product” is the set of policies the board vote to implement, and the staff exist to gather information and pass it upward to support those decisions (maybe using powers delegated downward to them). Like any other government agency.
It is quasi-government, its a hybrid entity.
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https://www.federalreserve.gov/faqs/about_12799.htm
> Isn't it fraud (and indeed wire fraud) to falsely represent yourself as a government agency to induce a financial transaction?
Hmm what transaction it induces?
You'll need to check the law that created the Fed. Maybe it makes sure that doing whatever the fed needs to do the job is not a crime
This character espouses a lot of the same drivel that the 'sovereign citizens' tend to throw around.
Your position is they're not government, but you also talk of them "doing whatever the fed needs to do the job" in response to the fed claiming to be a government agency and within government.
So either you are lying, or the fed is lying, and if the latter your position is that they need to lie to do their job (per your dismissive quip) -- much of which involves transactions of banks drawing on master accounts which are held in part in full faith that they are doing business with a government agency.
Maybe unsaid but the idea that Congress can create an organization that is not executed by the executive is the issue
If you go by the default constitutional allocations, Congress starts with much tighter control of how the executive operates than it does now. Via passage of laws, Congress over the years has chosen to delegate a lot of responsibility to the executive branch - some for pragmatic management reasons, but some as a trend of historic concentration of power towards the executive. Congress can also delegate to non exec branch bodies like the Fed and other quasi-govermental orgs. Congress has the constitutional purview to take back a lot of that power into it's direct hands instead of allocating it to other bodies if it so chose.
> Via passage of laws, Congress over the years has chosen to delegate a lot of responsibility to the executive branch
Part of the reason for this is that 2-year presidents are more common, they make promises within the first two years and even if they meet them, it can take years for effects to be seen in the general population, so the party loses majority in the midterms and then nothing happens politically for the remaining two years. Congress is often slow and burdensome (for good reason) but it always makes out for a disenfranchised voter base
Isn't that the entire point of congress? Otherwise why not just have an all powerful president and do away with the houses
Just wait for next year under the current administration ...
you appear to be there already
It wasn't an issue for 250 years, or at least until the Unitary Executive Theory became a dream of the Federalist Society.
I don't understand why you're being downvoted. This sounds like a reasonably debatable argument.
There's a lot of groupthink around this. I blame the pseudoscience called economics
This is a non-sequitor.
Google has no constitutional right to exist or have accurate search results either. However, it's value depends on the quality of their search results.
People outside the US don't care about the particulars of the US constitution like it's a holy document, but rather the US governance as a whole and whether it's well-ordered, lawful, and predictable.
That's true, but the US dollar also doesn't have a constitutional right to be the international reserve currency.
It does exist, and it has been independent, and consequently global markets have priced that in. If that changes, markets will respond accordingly.
This much is understood.
What the other said about it being a non sequitur, adding on top of that "constitutional right" is no longer as strong a statement as you think it is considering the kangaroo court that is the SCOTUS nowadays.
In many ways, this is the real problem.
That’s correct, Congress could pass a law removing its independence or eliminating it entirely whenever it so chooses. Until then, it’s independent because that’s how Congress created it using its powers under Article 1 of the Constitution.
It has about 38 trillion reasons exist. if you want to see what national debt looks like for countries without an independent central bank, there are plenty of examples around the world and throughout history. I’m sure the Wikipedia page on failed states would be a good starting point.
It does have a strong economic reason to exist and be independent.
While maybe true, the history of direct democratic control of monetary policy is not a pretty one.
Neither is the history of control of the money supply by private financial institutions.
the fed has been doing a pretty good job for the last 100+ years. I'm not a fan of the 'we'll let's just try it this other way, we haven't in awhile' argumentation.
Something tells me you aren't exactly steelmanning your opponents here.
Holders of US debt have no obligation to give a shit about the statutory background of the Fed, and to just make decisions about who is the best fiduciary of their currency.
If holders of US debt goes away, we have immediate inflation to the point where our currency hits trade equilibriums such that we can service our debt. All of your savings are worthless.
Ok? Trump doesn't have a constitutional right to do a bunch of crap but he's doing them anyway. This is the world we live in.
My local town doesn't have a Constitutional right to exist or be independent either.
This has very little to do with the price of tea in China.
Parties outside of the US who don't give a fuck all about the Constitution are involved in keeping us as a reserve currency, and they care that the fed is independent. We have kept it so to keep the economy stable and to reap the benefits of that stability.
> The federal reserve has no constitutional right to exist or be independent.
Do we suddenly care about the constitution again?
Ah yes, the "sovereign citizen" argument applied to the Fed. You've been wrong for 110 years -- I predict you will remain wrong.
Their stability has worked to benefit a lot of rich and powerful people, so I would question the motives of this sect of billionaires who are trying to destabilize it. They must believe they can extract something from the ashes.
Almost Hanlon's razor. "Don't try to find logic in actions of monkey brain."
Look at Russia. They just want to be the billionaires who can throw other billionaires out of windows for Crossing them.
>The federal reserve has no constitutional right to exist or be independent.
Irrelevant.
Actions have consequences, and the natural consequence of the actions of the US administration is that corporations and states that value stability are looking elsewhere than the US Dollar.
Whether or not the Fed has a constitutional right to independence is irrelevant to this situation. If Americans want to cheer while Trump flushes nearly a century of soft power down the toilet that's their prerogative, but the trend of de-dollarization has already begun and it's unlikely to be reversed.
And I sure Trump would be a great steward of our fiscal policy and wouldn't wildly throw the levers back and forth every Friday as his whims change
I don't know how you can say that about an institution that was formed by people using false identities on Jekyll Island and ramming it through congress as fast as possible because in their own words "if the people found out they would stop them" (paraphrased).
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I read it as side-stepping Hacker News' tendency to kill comments that get into politics.
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I've been trying to read more about investing properly recently and this is such an annoying characteristic of most advice you read. Sometimes it's also "well, economic theory says this, and that doesn't follow the behavior of these markets, so decide for yourself".
I feel like we do generally brush, a little too easily, over the fact that economics is still a theoretical science, of which finance is subsequently the practical and technical implementation. Much like psychology, sometimes we turn out to be right about theories, sometimes we're not.
What else would you expect? If the person writing the advice knew how to reliably beat the market they would be doing that, not writing financial advice.
what unsupported gut-feeling conclusion would you prefer they reach for you?
Surely the issue here is all they've got is unsupported gut-feeling conclusions, not that I'm asking them to be useful?
I'm sorry, but was there a specific point you wanted to make in relation to the first two sentences of the grandparent's post?
> Are you a financial analyst by any chance, because the "here's a few facts, interpret how that's going to impact the market yourself" is very on-brand.
What do you want him to say?
1. De-dollarization is all Trump’s fault
Or
2. The world is reacting to Trump putting America first
The world is reacting to reserve currency being used as a tool to conduct politics and twist arms. Started before Trump. He is just increasing "efficiency"
That is true, but it also goes well beyond that. Much of the "US Gov't behavior" is largely related to trashing and panicked frantic moves because the consequences of its prior and long tailed actions over decades has now not only started bearing rotten fruit, but a previous strategy of world domination through "globalism" has also turned against those who control the Wizard of the USA from behind the curtain.
On the face of it the Greenland situation makes no sense on a national security level regarding a non-existent, fabricated Chinese or Russian threat, nor related to the fantastical grift of the "Golden Dome" that is even more useless against what Russia has recently developed, than it was for things prior to about 3 years ago.
What we are looking at here (you can tell your children that you heard it here first) is a strategic move to essentially take Canada and all of the NA continent, and eventually all of the Americas. Yes, Canada, you are indeed in danger as well as Mexico. I don't see how it could be any other way in the face of current developments; remember Trumps USMCA, i.e., a de facto North American Union?
Biden stated that he wants the USA to have 300 million more "immigrants" before he let in about 15 million in 4 years. Annexing Canada is about 40M by the time we do it, Mexico would add another 150M plus however many people would flood into Mexico to become "Americans". That bring us to a total of around 550 million by the time the North American Union comes around. Perhaps if the UK joins, we will just call it Oceania already.
It does not address the fact that China has 1.4 billion and India another 1.4 billion, but it puts us in contention, especially as Europe has about 700 million by that time if/when the EU absorbs most of Europe.
That also doe not take into account the Wizard of the USA wanting to take over all of South America for positive control eventually… another ~480 million by that time, putting the American Union of Oceania at about 1 Billion, ±100M.
These are real tabletop calculations and how things are seen at the top and discussed amidst cocktails.
I'm struggling to understand what you are trying to say?
That biden wanted to grow the USA to 600 million people?
That trump is also trying to do that?
It seems you are clearly understanding? You are likely just confused because you do not understand that the overarching objectives of the "uni-party" or "deep state" system hold fast, it's just that each political sporty ball team has to play things different and tell different lies in different ways to different cohorts in order to keep the system operating. So, e.g., Biden says we need 300M more immigrants and his team fans cheer because they support it, wile deporting more people than Trump; while Trump tells his team fans that he will deport people and does this whole theatrical ICE stuff to give the impression of deporting people to drive down costs and retain their support, but in fact barely moves the needle on deportations and committing to 600,000 more Chinese students and wanting to "staple citizenships to diplomas" for millions of Indians, etc.
You have to understand that there is the theater of the political sport ball arena where the different sides are set against each other like WWE/Football, etc. but in the background it's just actually all more or less rigged and the truth is written in policy and strategic papers that are implemented over 20+ years, across presidents and their wrangling and herding of their constituents in this charade called "democracy".
When did Biden say the US needs 300M more immigrants?
When did Biden say the US needs 300M more immigrants?
This is quite obviously written by someone with no intelligence experience.
> On the face of it the Greenland situation makes no sense on a national security level regarding a non-existent, fabricated Chinese or Russian threat, nor related to the fantastical grift of the "Golden Dome" that is even more useless against what Russia has recently developed, than it was for things prior to about 3 years ago.
Power projection in the arctic is weak. Russia has made multiple tactical movements towards soft projection in the arctic. You have zero idea what submarines are on station. Taking greenland is arguably stupid, boosting it's defense to prevent a Russian incursion is not.
> What we are looking at here (you can tell your children that you heard it here first) is a strategic move to essentially take Canada and all of the NA continent, and eventually all of the Americas. Yes, Canada, you are indeed in danger as well as Mexico. I don't see how it could be any other way in the face of current developments; remember Trumps USMCA, i.e., a de facto North American Union?
No evidence. Unless you're arguing while NAFTA was around this was a way to create a "United America".
> That also doe not take into account the Wizard of the USA wanting to take over all of South America for positive control eventually
No evidence. Most think-tanks have recognized that maintaining positive control of south america would be disastrous. If anything, Maduro and his friends were probably happy the US decided to black bag him. It is well known that whoever was going to attempt control over Venezuela in particular was going to be responsible for spending the money to rebuild it.
> These are real tabletop calculations and how things are seen at the top and discussed amidst cocktails
No.
>> Yes, Canada, you are indeed in danger as well as Mexico.
> No evidence. Unless you're arguing while NAFTA was around this was a way to create a "United America".
Trump recently posted an image on Truth Social of a White House meeting in which a map is displayed, of north america with the US flag superimposed on Canada, Greenland, and Venezuela. [1] He has repeatedly suggested that Canada is the 51st American state. [2]
[1] https://www.wsj.com/livecoverage/greenland-trump-tariffs-tra...
[2] https://www.pbs.org/newshour/politics/trumps-remarks-on-cana...
did you forget about all the money the fed printed during covid?
fed independence is important, but literally irrelevant in the face of rampant money printing
Who signed the front of those checks?
Various civil servants at the Treasury Department?
We were in a lockdown, and Congress voted for multiple trillion dollar stimulus' financed by debt. Refusing to "print money" in those circumstances is just asking for a worse Great Depression.
Our of curiosity as I know nothing about economics, how would not printing miney lead to a Great Depression?
A crisis prevents people from earning money. No money means nobody buys anything. Nobody buys anything means no company can now sell stuff, so no revenue. Companies start closing down, so there are even more people who cannot earn money.
The government can print money and inject into the system. Some people have money so they continue to buy stuff but maybe at a slower pace or less amount. Things also can get expensive but it is not a total collapse.
one of the big problems of the great depression was banks went bankrupt left right and centre, and took everyone's life savings with them. Also as a lot of banks generally hold mortgages in their portfolio, so when a bank collapses it means that mortgages all get fucky too.
So the mass printing of money meant that banks didn't collapse.
It also meant that a fucktonne of cash went into the hands of the uber rich.
This is one of the reasons safety nets on savings exist in both the USA and in Europe (and probably other places as well about which I'm less informed). Even so, the tacit understanding is that this is more about preventing bank runs than about the practical effects on the currencies involved because it could very well be that that insurance will pay out in money that is worthless.
Why did the fed raise interest rates? To soak up some of that cash. It was too slow, but this is exactly the sound money policy that everyone expects. You loosen cash (what you mistakenly call printing money), when you need investment, and tighten cash when inflation and risk taking is out of control.
a sound response to some of the worst fed decision making in US history. they essentially ruined the housing market, priced out a generation of younger buyers, which is now crushing fertility rates, savings, and more
Strict zoning ruined the housing market, and this is a multigenerational problem:
https://www.sciencedirect.com/science/article/abs/pii/S00941...
Investment real estate ruined the housing market. All of a sudden housing prices are expected to grow year over year as an investment. As more and more growth expectations were applied to housing, public policy (including zoning) changed to protect those expectations. Is it any surprise that there came a point at which it became too expensive?
Once problem we need to solve is how to unwind housing prices without financially ruining honeowners whose house is their primary/only wealth. Of course this problem is even more severe in areas of the country that are becoming uninhabitable due to changes in climate as it drives down demand.
* fertility rates have been dropping for a long time. While this article is focused on "it's not about the teens", it isn't tied to housing, or after covid: https://ifstudies.org/blog/the-us-fertility-decline-is-not-d...
* housing market was already quite bad before covid (see sibling comment)
* Savings rates have hovered around 5% for almost 25+ years - https://fred.stlouisfed.org/series/PSAVERT
Was it them that did that or employers freezing wages and losing R&D credits/facing tarrifs / wild instability?
Well, seeing is how that happened before the tariffs, yeah, I'd have to agree with GP.
It's almost like pandemics have consequences.
was money printing because of a lack of independence, and manipulation by the executive? or the fed trying to keep things afloat.
this president is trying to money print during non-crisis, to ramp up economy to "20% GDP".
why downvote? Trump literally said he wants a GDP that goes to 20% or 100%. Shoot to the moon.
covid money printing was some of the worst fed decision making in US history. they essentially ruined the housing market, priced out a generation of younger buyers, which is now crushing fertility rates, savings, and more
actually, llmslave, it was a very good decision. It's better to have mild inflation than widespread unemployment. But also, the fed's actions contributed comparatively little to the inflation we experienced. Globally there was a huge drop in supply, which caused prices to jump everywhere, not just in the US.
everyone complains, nobody has alternatives.
what would have been the correct actions in that situation?
really the government should tax in good times.
and
spend in bad times.
and be a counter weight to private sector
The government acted as if the pandemic was happening in 1990, when everyone either worked in person all the time, or nothing worked.
Instead, the golden geese of the American economy (the actual golden geese), simply stayed home and worked from their laptop.
This created a situation where people were getting their regular paycheck, plus getting a multitude of stimulus on top of that. There were many making $100k+ salary, not paying rent (rent moratorium), not paying student loans (student loan moratorium), and not going out to do anything, resulting in having huge pools of cash laying around. If you had a mortgage, you got to refi at 3% and dramatically cut your mortgage bill. I won't even get into PPP loans either, everyone knows the story there.
I could write pages and pages about this, but the short of it is, we thought we need a wheelbarrow of money, but technology meant we only needed a jug of money. But we still got the full wheelbarrow.
no they literally just kept printing money for no reason
And directly funneling it to the rich
Its the 'kept printing' that is the problem with the story.
There was a surge and a pull back.
Post-COVID Tightening: After this historic surge, the Federal Reserve began "quantitative tightening" in 2022 to combat inflation, slowing M2 growth to near zero and eventually reversing it.
This was arguably largely offset by the actions of the treasury's increased short duration issuance (>1 Trillion in t-bills) combined with draw-downs of the reverse repo facility[1] instead of from banks. It's difficult to tell exactly how much money winds it's way into the economy without using proxies - for example credit spreads[2] or NFCI[3] which indicate loose conditions, which don't show much evidence of post 2022 QT's impact.
Or in other words the data seems to show the loosening effects were more powerful than the tightening ones. Now that the RRP has been drawn down balance sheet growth will likely occur.
[1] https://fred.stlouisfed.org/series/RRPONTSYD
[2] https://fred.stlouisfed.org/series/BAMLH0A0HYM2
[3]https://www.chicagofed.org/research/data/nfci/current-data
>slowing M2 growth to near zero and eventually reversing it.
The M2 money supply went from 15.4b at the start of 2020 to a peak of 21.7b, before slightly reversing to 20.7b. Then they just continued printing. Now it currently stands at a record high of 22.2b. The dollar is more diluted than ever.
https://fred.stlouisfed.org/series/M2SL
its a tight rope. shrinking the money supply also has downsides.
Summary of the Policy Reversal Period Policy Action Balance Sheet Impact
June 2022 – Nov 2025 QT (Tightening) Shrank from ~$9T to ~$6.5T
Dec 1, 2025 QT Ends Runoff stops; maturing assets reinvested
Dec 12, 2025 – 2026 Reserve Management Expansion begins via T-bill purchases
By December 1, 2025, the Fed officially halted QT after reducing its balance sheet by approximately $2.4 trillion. The following factors forced the reversal to expansion: 1. Liquidity Squeeze and Repo Market Stress As the Fed drained cash from the system, bank reserves fell toward "critical thresholds". This caused stress in the overnight repo market, where banks lend to each other. Spiking Rates: Key short-term lending rates, such as the Secured Overnight Financing Rate (SOFR), spiked above the Fed’s target range, indicating cash was becoming scarce.
Why is the independence of the Federal Reserve sacrosanct? For one, they should have oversight and they should have accountability.
Not ever passing an audit of any kind. And the FED chairman spending $2.5B on renovations to an office complex. While misleading congress about the kinds of renovations.
There should be less 'independence', if it means zero accountability.
I can't believe you are making an office complex renovation argument.
FED has been instrumental is keeping the monetary policy sane in the recent years, unlike some pushes from the orange person you are taking talking points from.
> they should have oversight
Congress provides oversight and accountability of the Fed. The GAO does audits as well. Frank-Dodd provides more windows into the Fed. Why did you think the Fed doesn't have oversight?
> Not ever passing an audit of any kind
It might have been hard for you to find because it is hidden under the "audit" page on their website: https://www.federalreserve.gov/regreform/audit.htm
> Why is the independence of the Federal Reserve sacrosanct?
It's never been completely independent. It's independent from short-term (4 years) political influence. It's audited and has congressional oversight and the President nominates people to the board.
What else do you want? Interest rates set by Presidential tweets?
It's not sacrosanct, it's just a 14 year term for the Fed chair so that they don't give in to political pressure to be re-appointed.
> Why is the independence of the Federal Reserve sacrosanct?
Then the value of the USD is entirely at the whim of whoever is elected and should be priced accordingly.
Do you realize that you’ve digested a whole bunch of misinformation uncritically?
If the goal is to make US goods attractive to other countries and to decrease our trade deficit (not saying I agree with this goal), either the dollar has to become fundamentally weaker or the goods have to become more valuable. The latter feels more difficult than the former at this point. However, the side effects of a weaker dollar may not be worth weakening it.
> decrease our trade deficit (not saying I agree with this goal), either the dollar
A direct link exists between a nation's status as the world's primary reserve currency and its tendency to run persistent trade deficits.
This relationship is often described by the Triffin Dilemma, a paradox where the global demand for the reserve currency necessitates that the issuing country consistently supplies the world with its currency, primarily through importing more than it exports.
The flip side is if you weaken the dollar by appearing unstable and displaying hostility to your main trade partners, you get the drawbacks of the weaker currency (reduced purchasing power) without commensurate improvement in the attractiveness of goods to other countries. Some devaluations are more strategic than others.
But the broligarchs don't need purchasing power. All their wealth is in assets, leveraged many times over. Currency collapse is the best that can happen to them.
Don't worry, assets collapse as well when a lot of the market of the US becomes unavailable.
This is the most important comment here. The US rebuilt nations' economies after World War II by printing dollars and buying goods from those countries. In return, the dollar became the world reserve currency and did not suffer massive inflation despite printing so much of it. It's a supply and demand thing, just like any good or service. There was a ton of demand for the dollar, so printing more (increasing supply) did not crash the "price" of the dollar (inflation is the price/value of the dollar decreasing). We printed a ton of dollars during covid but it didn't result in hyperinflation like what happens with, say, Iran or South American currencies because the demand for dollars was still so very high.
It depends on how this happens. Labor would still be more expensive here than developing economies. We could easily just end up with a weaker dollar and floundering manufacturing, which means more inflation.
USA exports services (tech, culture, r&d) and will lose all of that for the unclear manufacturing that might never come.
It's like watching the fall of Rome.. on TV
Blackrock released a document you can download that outlines their 2026 outlook. A key point there was: "We go underweight long-term US Treasuries." A sign of bearishness on USD due to fiscal policy.
https://www.blackrock.com/corporate/insights/blackrock-inves...
The dollar has lost 13% vs the South African Rand in the past year. Thats an interesting metric for me given how South Africa has decoupled from the US in favor of China and Russia, with a strong anti-Israel stance. And also taking into consideration how the country is still struggling with crime, corruption and uncertainty.
It’s doing to be interesting to see how this plays out as the producers and makers of the world unite, and the EU turns away from the US.
>given how South Africa has decoupled from the US in favor of China and Russia
That's the party line & there have been some eye catching military exercises and statements to this effect, but daily life is still very much western aligned. It exports a ton of ore to china and imports a bunch of things from there certainly...but that's kinda just every country these days isn't it.
Dollar has also lost like 99% vs the South African Kruggerand since 1967.
But is the exchange rate really the right metric for the "weakening" due to de-dollarization? Especially since world states decoupling from the US would try avoiding both transactions which gain them USD and which require paying USD?
The world is rich and getting richer. The quality of life outside of the US is rising.
Europeans might disagree
There is more to the world than Europe.
Which is why the euro will not be a reasonable reserve cirrency
The gold :: oil ratio tells quite a tale
https://www.macrotrends.net/1380/gold-to-oil-ratio-historica...
Definitely says something, but I'm not sure what. How are you interpreting this?
not the OP - That gold is rarer than oil, and the supply is lower when compared to demand.
I appreciate that this figure is showing that the relative scarcity of gold compared to oil increasing, but I'm not sure what it's saying, or is interesting beyond that? Is this reflecting a global shift towards natural gas rather than oil, or reflecting investors are particularly nervous since covid, for example?
Obviously, you can't drawn any hard conclusions, but I was wondering what the OP was thinking narratively when posting.
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I strongly encourage interested folks to read Miran's "A User's Guide to Restructuring the Global Trading System" (I won't link directly since it auto-downloads a PDF).
Miran, and his thinking, clearly have this admin's ear and they're following many of the prescribed steps in his white paper. To the T frankly.
So if you're surprised by the USD devaluing by 10% last year or the immense pressure to drop the fed rate to under 2% by next year, well the reasoning and strategy is all laid out very clearly in the above whitepaper.
No confusion necessary! They explain every (terrifying) bit of their plan in that paper.
What is left out, and why I say it is terrifying, is that the whitepaper is academic and basically leaves uncovered any of the _political_ ramifications of these economic changes. And of course, those political ramifications can be immense.
Peter Navarro is the idiot whose mostly pushing the Trump economic policies. I say idiot, because he is really a complete and total crackpot. He's written a couple of papers where he cites himself on uncited principles as if they were ironclad economics. A flat earther to an astronomer is what Navarro is to an economist.
He is anti-trade and pro-isolation. He actually wants the US dollar to lose it's status as a world currency. His thought? If it does, then we'll better address national debt. Basically "Let's light the house on fire so we finally address the upstairs draft."
Gold front-runs monetary policy, meaning central banks and people use it as a hedge against currency devaluation or other uncertainty (e.g. the U.S. Federal Reserve being taken over by the executive)
Now look at the gold chart over this past year. Yeah, people are uneasy and we're likely to see a lot of printing.
Also JPM in April 2025...
https://finance.yahoo.com/news/jp-morgan-see-gold-prices-192...It's $4700/oz today which is crazy.
And silver is $95 per ounce.
I know. Bring back silver currency!
Interesting the wikipedia article of the Mar-a-Lago Accord has been deleted https://en.wikipedia.org/wiki/Mar-a-Lago_Accord
Last archival I've found https://web.archive.org/web/20251110042359/https://en.wikipe...
> This appears to be an AI-generated draft with severe hallucination problems bordering on WP:HOAX. For one, it calls it the "Margo Largo Accord" -- a name that is not and never was real. The draft also claims the accord was already introduced, and goes into detail about its supposed contents, effects, and reactions to it; the problem is, no actual accord was introduced at the time (or now), so pretty much all of that is made up. The sourcing gives an impression of WP:SIGCOV [significant coverage] but almost all of it appears to be background information about various topics that aren't the accord.
From https://en.wikipedia.org/wiki/Wikipedia:Articles_for_deletio..., the discussion that concluded with the article's deletion
Yeah, I've read that and find it a little sus. The article for me was fine even if not perfect.
It's the first time in my internet life (20y+) that I go find a wiki article to share to a friend because the US keeps weakening and I found it gone.
Didn't know it was that easy to remove a wikipedia article by just hinting it was AI generated.
The US century is already over. It's just that a lot of US citizens don't see that. De-dollarization will happen when one is a traitor to it's allies
Many of us see it, but many others seem to be embracing it and trying to hasten it for reasons unknown. They pine for the glory days of post-WWII US hegemony but are actively undoing the institutions that were instrumental in US economic and political power at that time. They have no coherent world view, they are severely confused, but unfortunately numerous.
Well people pushing for this have a world view. They see a bipolar world with China dominating Asia, US dominating it's hemisphere and Europe fending for itself. They also have major crypto holdings so instability of both major currencies benefits them financially.
Except that Crypto is also falling with the stock market (and faster), so if anything, it is correlated the wrong direction
I am not arguing it's a sane world view
I actually have a greater disgust for those who see it but don't act. I think this line from an incredibly relevant book is precisely this:
> "Your ‘little men,’ your Nazi friends, were not against National Socialism in principle. Men like me, who were, are the greater offenders, not because we knew better (that would be too much to say) but because we sensed better.
Those who act on behalf of evil are not free from guilt, of course. But the truly damned are those who sense better but look the other way. They walk in the footsteps of the millions who tacitly supported the last time this evil took hold of the world, by not acting.
This entire book, but especially this exerpt, is a must read: https://press.uchicago.edu/Misc/Chicago/511928.htm
"What happened here was the gradual habituation of the people, little by little, to being governed by surprise"
Wow, seems on point.
Wow
"kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of the ‘national enemies,’ without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us."
I think it's fair to say that neither ideology is free from evil, and choosing the "lesser evil" is still choosing evil. Every good or well-meaning movement I've seen has been taken over once it reaches a certain size.
Thanks for sharing this except of the book.
The US wasn't exactly "friendly", but comparing US hegemony to Nazi Germany is a bit much, don't you think? /s
It wasn't of course. But the current regime looks more and more like them. Including all the minions going along with it
Y'know, yeah I think you're right. It's not like they're dressing the part and marching through the streets like some sort of secret police agency.
https://ibb.co/qMynfBBW
I feel like many are going to upvote this because they think it is an indictment on the current administration but it isn't exactly.
> I feel like many are going to upvote this because they think it is an indictment on the current administration but it isn't exactly.
Is it not? Quoting myself:
>> are actively undoing the institutions that were instrumental in US economic and political power at that time.
Who is undoing those institutions? That'd be the current administration.
Ah I was seeing a parallel between:
1. Our post WW2 neocolonial activity and the current admins push to sort of blatantly get control over Venezuela and Greenland.
2. Our WW2 manufacturing and export based economy that made us wealthy. Is similar to the current admins push to reform us from importers to exporters using tariffs and rebuilding manufacturing (at least on the surface the execution of this has been terrible).
Hopes or morality do not strictly dictate power as much as we might wish it to be true.
The number of Trump apologists lunatics who do not seem to understand what MAD was about is staggering.
Industrial scale warfare isn't some secret forgotten by accident.
The current American power-trip fantasy delusion is rightfully scaring the shit out of people, and the scary thing is the people who aren't scared.
It's reaching the point that I think the best thing is for Germany to detonate a nuke between the US and Greenland just to wake up the idiots who think it would be unreasonably difficult.
--
Edit: I see people are misunderstanding me as saying they should use the US bombs stationed there. I'm saying they should build their own - to have people remember that It's not really that hard if you have a functioning industrial sector.
Germany is a non-nuclear-weapon state. Our bombs are there yes, but if you use one of our bombs without our approval there will be hell to pay. An invasion of Greenland will be all but guaranteed. Whether Germany will retain its military the next day is questionable.
It is ok for Germany to detonate nukes on someone who attacked NATO. The approval of the aggressor is not necessary.
Germany will be glass if they tried. Berlin will glow in the dark. They wouldn't even consider it in government. Their planes wouldn't make it off the ground.
I see you don't want to understand my point.
Why exactly do you think Germany is a non-nuclear weapon state?
Because we muzzled the wolf.
This is a hilarious take. Which ally is the US a traitor to or will be a traitor to again? You sound emotionally invested in the fake drama and propaganda of Trump.
Are you a troll or just uninformed and stupid?
Not so fast, though. A state can be a "killer", or a "giver", or both, to gain followers and sell its currency to other states. The US was both back in the 40s as well as the late 80s when Germany and USSR crumbled. So hail to Pax Americana.
However, the US is more of a "killer" nowadays. The "killer" is usually more efficient than the "giver", because people value their life more than their wallet. So that's why I think she still has some time left. I don't blame it on Trump though. Being a "giver" is a lot more trouble than being a "killer", and I think the US elites gradually rolled back from the role of "giver" since many years ago. Trump is just here to remind other states that the US can and will be a very efficient killer.
And this is probably the most dangerous time for other states because she cannot afford to lose.
>The US was both back in the 40s as well as the late 80s when Germany and USSR crumbled. So hail to Pax Americana.
This is the historical equivalent of selective memory, and only really applies to a tiny slice of the planet - western Europe.
A lot happened in the world between 1945 and 1989. Outside of Europe and Japan, most people would probably not be so sympathetic of the US actions during those times. An abridged list:
* Iran 1953 - US and UK overthrow democratically elected PM, install brutal dictator
* Guatemala 1954 - US via CIA overthrows democratically elected president, install brutal dictator
* Brazil 1964, Chile 1973, Argentina 1976 - US supports brutal dictatorships replacing democratically elected governments
* Iran/Iraq 1980s - US funds both sides in the war
etc. This is a very resumed list.
Yeah that's the killer part I think. For EU and Japan/SK it's mostly the giver but there were also killer events like Operation Gladio.
Is it more efficient though? It just looks like burning long term prospects for short term ones. Which is on brand with the current regime to be fair.
Yeah it's more short term, I agree.
Something to think about....
Mankind has never seen the collapse of a nuclear powered empire.
Sadly, it may not be possible for a nuclear powered empire to fall without the death of billions...
Mankind is in uncharted territory.
Even Russia never fully fell after the USSR collapsed. Whoever kept the nuclear weapons continued to be a first tier power.
Nothing in human history compares to the present question of how the current empires fall, and if they can even do so safely.
Very sobering times ahead.
> Mankind has never seen the collapse of a nuclear powered empire.
Open your history book and read about what happened in 1991.
There are also many Americans who have always desired de-dollarization, since the dollar has been the foundation of our imperial system and abuses of state power. Say what you will about how dated a gold standard is, but it forces immediate fiscal responsibility upon governments; fiat currencies defer responsibility, turning it into a Sword of Damocles that catastrophically falls upon future generations. You trade geopolitical dominance now for guaranteed future withering. Of course, fiscal responsibility and the rejection of imperial ambition were core principles of the Anti-Federalists, Democratic-Republicans, and Whigs. It's baked into our history and tradition to not want to be the unilateral arbiters of a global trade and alliance system.
> Say what you will about how dated a gold standard is, but it forces immediate fiscal responsibility upon governments
We were on metal standards for millenia. Governments routinely spent beyond their means, including for imperial aims. This is like four centuries of Roman history.
Yes, but there were practical limits to currency debasement when the currency was a physical commodity with intrinsic value. People notice when their coins start getting filled with lead, and there were serious political repercussions for it. You cant just conjure a trillion gold/silver coins out of nothing like you can with fiat, and the ability to do so is 100% guaranteed to be abused.
> there were practical limits to currency debasement when the currency was a physical commodity
"In the second century, a modius of wheat (approximately nine liters), during normal times, had sold for ½ Denarius…. the same modius of wheat sold in 335 AD for over 6000 denarii, and in 338 AD for over 10,000" [1].
Note that inflation can also occur with zero debasement if the economy around the fixed money supply collapses. This happened in Rome when Pompey and later Augustus were trashing trade routes. It may have even led to the collapse of India's ancient democracies.
> there were serious political repercussions for it
There weren't. The state historically borrowed from the hilt of the sword. Economic collapse constrained kings and emperors. Not politics.
[1] https://etedge-insights.com/featured-insights/analysis/how-h...
What @cheeseomlit said, plus: During the Age of Exploration/Colonization, competing European powers each minted metal currencies and couldn't reasonably debase their metals without immediately being out-competed (which is why the trusted purity of Spanish gold and silver coinage slowly dominated). The primary mode of failure for those empires was bankruptcy via war. The impossibly high cost of fielding armies around the globe was laid bare during that era. Paper money lets us (funnily enough) paper those costs over and live with the illusion that it's all a free lunch. But what we're actually doing today is debasement, and eating, vociferously, all of the deflationary efficiency gains won by 20th century technological progress.
> During the Age of Exploration/Colonization, competing European powers each minted metal currencies and couldn't reasonably debase their metals without immediately being out-competed
You're hitting the nail on the head. Metalness didn't matter. It was competition in money supplies (and strength of private property).
The fact that a banker in Italy could finance (or not) a war by Great Britain is what restrained governments. Same as in the 1990s, the bond market was king.
The historical record simply does not support the hypothesis that metal-based economies are more peaceful or inflate less than modern fiat-based ones. I'm open to revising that opinion if someone has re-run the data. But everything I've seen comes from blogs that start with the conclusion, itself reached from assumptions from first principles that rarely contemplate how armies were actually financed in antiquity. (Hint: they take your shit. Marketing campaigns sharing the martial term isn't a coincidence. If you're a general in the olden times, you got wealthy through your commission because your army took the enemy's shit. If you needed help getting there, you paid a 'friendly' visit to your nobles.)
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Saying “we gotta get Greenland” when the people in Greenland say they don’t want to join the US. Then refusing to rule out using force. If you want to say that no exact act of treachery has been committed, then substitute “treacherous words”, which also harms alliances.
> what treachery was committed?
Invading ones allies has been treacherous for millenia. If you want to be pedantic, you can say the U.S. President is openly threatening treachery, and showing as part of his character an affinity for it.
This is about way more than a few tariffs. Think Venezuela, think madman jizzing over the idea of invading greenland, or just throwing tantrums on an international scale.
But Iraq, Afghanistan, Grenada, Panama, Vietnam ... were not a problem?
Ahistorical BS, I am sorry. As if Trump is a radical departure of NORMS. Euros were chanting HO HO HO CHI MIN in 1968 in the streets of Berlin and Paris.
There is a long tradition of anti-American feelings outside the US, like with any hegemon.
The global left had to build walls to keep their people IN, crush them with tanks, from Prague to Berlin to Beijing. So there is that.
HN turning so left is weird to watch, I guess a reflection of PG's stances and moderation/group votes. Well, money does not give a fig.
classic whataboutism
if you don't think Trump is a departure from norms you aren't paying enough attention
I believe this is the correct response.
We're not going to debate the measuring stick when the stick itself is incapable of measuring the outcome.
In none of those scenarios provided did a sitting US president come close to insinuating acquisition of land by "hook or crook" - either agree with us or we take it.
The closest modern discussion that comes to mind is the PRC saying they could militarily "walk in and take the whole this afternoon" in regard to Hong Kong.
Thatcher, for all her wrongs, provided a salient response:
"There is nothing I could do to stop you, but the eyes of the world would now know what China is like."
The US has shown the world what we're like with the current administration.
I believe Saddam Hussein would disagree with you, if he could.
Just bonkers how basic history is getting rewritten.
"The great satan USA" has been a slogan since the 1960s. The US dropped napalm and agent orange on Vietnamese civilians en masse - Lyndon B Johnson was what, a good guy?
What on earth are people learning about today?
Interesting you'd think I know about 1980's Hong Kong political handover of power and not know about whatever whataboutism you're spouting.
Truly remarkable.
Bro is cooked
>> I'm sorry, what treachery was committed? The imposition of import taxes is not treachery.
It is an egregious violation of the Constitution, which specifically says that only Congress can impose taxes.
You must be a proud holder of his cryptocurrency.
> US century is already over
Maybe, maybe not. We're currently the Soviet Union in the 1970s. Gerontocratic. Sclerotic. Hyped up on a new mythology. And economically uncompetitive on several levels, with the future (then computers, now elecrification) sweeping past us to our applause.
Unlike the Soviets, however, we can see it happening and debate it. If '26 and '28 change course, the damage will still be done. But the America Empire is still young. And Trump's stupidest policies–the tariffs, fighting the Fed, Greenland and raising a Gestapo–don't have the support of most Americans. That leaves hope for reform through electoral pressure.
It will take work. But it's as incorrect to assume indefinite American hegemony as it is to preëmptively concede the game.
> Unlike the Soviets, however, we can see it happening and debate it.
I think you’re severely underestimating how much public discourse has already been chilled. There are a lot of things leaders across business or government won’t say any more for fear of being targeted. And let’s be honest the people who rise to the top in America aren’t the selfless kind.
How do you suppose we change the minds of the third of Americans who like having a Gestapo
> How do you suppose we change the minds of the third of Americans who like having a Gestapo
You don't. You work around it.
10 to 20% of Americans will agree with just about any stupid proposal. It's idiosyncratic, however, so even if you shut off that position, they still find representation on other issues. (Unless they're single issue. In that case they're either incredibly powerful, but only when it comes to that issue, or worthless.)
Most people aren’t empathetic enough to learn from other people’s mistakes. So the answer is, you don’t. Hard luck. At least you had it good for a while.
My outsider's POV: the fact that there's a Gestapo-analogue in place already tells me that an electoral solution alone is almost certainly no longer sufficient (or at least, unlikely to be effective) at this point.
The Democrats have also had very weak messaging ahead of the midterms. Like, pathetically weak in the current context.
This is to say nothing of the hypothetical where the US makes moves against allies' territories before the midterms.
> the fact that there's a Gestapo-analogue in place already tells me that an electoral solution alone is almost certainly no longer sufficient (or at least, unlikely to be effective) at this point
Read up on the American Whig Party and President Andrew Jackson. Or, more recently, Poland. This is absolutely still in a reversible field.
> Democrats have also had very weak messaging ahead of the midterms
Utterly leaderless. In part because a lot of the party is compromised in having covered up Biden.
> raising a Gestapo
If they were really Gestapo you wouldn't see people tailgate them in a Subaru or scream in their faces
> If they were really Gestapo you wouldn't see people tailgate them in a Subaru or scream in their faces
Fine. Brown shirts [1].
[1] https://en.wikipedia.org/wiki/Sturmabteilung
I'd agree with most of what you said, but there is no "raising a Gestapo". ICE has existed for 25 years. And the laws that give it permission to act haven't changed. It has gradually grown over the decades but what it fundamentally does has not.
What's new is finally the federal government pushing back against locales that refuse to allow local police to cooperate with federal law enforcement by means of massive influxes of federal officers to offset the lack of local support.
Also ICE has widespread support for what they are actually doing. Only when you ask manipulative questions that presume something is happening that isn't, do you get poll results that support a widespread dislike for ICE.
ICE has not been disappearing people to meet quotas for 25 years.
"Terrible things are happening outside. At any time of night and day, poor helpless people are being dragged out of their homes. They're allowed to take only a knapsack and a little cash with them, and even then, they're robbed of these possessions on the way. Families are torn apart; men, women and children are separated. Children come home from school to find that their parents have disappeared. Women return from shopping to find their houses sealed, their families gone."
I'm not sure what you're quoting but that is fan fiction of some sort divorced from reality.
> ICE has widespread support for what they are actually doing
Minnesota would like to have a chat with you.
https://www.kttc.com/2026/01/20/americas-pulse-current-ice-a...
About 40-50% are in support, so the parent's accurate. That roughly matches the political divide across the states.
The first sentence says that that's a national poll, not a Minnesota poll
I mean yes conservatives like gestapo mistreating their political opponents. It does not make it not gestapo or not lawless.
It makes conservatives who they are - fascist party.
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> deportation rates are much too low
“U.S. Border Patrol agents recorded nearly 238,000 apprehensions of migrants crossing the southern border illegally in fiscal year 2025” [1]. For 2012 to 2015, the chart shows about 360k, 420k, 480k and 330k, respectively.
That means ICE is spending $330 to 580 thousand dollars per additional Southwest border encounter in 2025 versus 2012. ($250 to 440 thousand if we average Obama’s second-term numbers.)
These numbers 10x even San Francisco’s circa 2016 homeless-industrial profligacy [2]. Unless ICE is a ball of wormy corruption, they’re clearly not focused on immigration enforcement.
If you prefer anecdotes, I live in Wyoming. Our farms are de facto exempt from enforcement. I believe in enforcing our immigration laws while we work to reform through the legislature. But that's clearly not what ICE is doing. The most-generous interpretation is they're making videos that make people who want enforcement feel good.
[1] https://www.whitehouse.gov/articles/2025/10/icymi-illegal-cr...
[2] https://www.hoover.org/research/despite-spending-11-billion-...
I've said for a while that ICE needs to go after businesses that hire illegal immigrants. So if you're looking for some kind of conflict in what I'm saying that isn't it.
That's why I said that ICE isn't doing enough.
It's kind of mind blowing people hate immigrants so much they are willing to burn their own country down to get rid of them.
I love immigrants lol. I just want immigrants that integrate and come into the country without breaking the law.
Why do you have so much hate for immigrants?
I'll tell you the same thing I told the other person:
I love immigrants lol. I just want immigrants that integrate and come into the country without breaking the law.
Thanks for sharing your perspective.
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It's just nice to know what my neighbors are thinking
> No, actually to be frank, I'd rather the Nazis go back to hiding under the floorboards in fear of public retribution.
You're defaming me and spreading lies. Any actual Nazis can go fuck themselves.
I don’t like that these kinds of posts get flagged. If a post is praising ICE or Trump it should be highlighted and mocked, not flagged and deleted. People should see how batshit insane MAGA people are.
ICE is shooting bystanders in the face, blinding teenagers, and tear-gassing infants.
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Indeed. People are actively trying to repair something which cannot be fixed. Now that the US century is over, the only way forward is for the US to use present military power as a cudgel.
Given that the multipolar world is nigh, the only path forward is through. If America and her erstwhile allies are no longer aligned, then any attempt by America to repair this is doomed. Consequently, Trump’s approach is the only way forward.
This is a self fulfilling prophecy. It may only be over because the administration is actively trying to create the multi-polar world. It could absolutely be fixed by Congress re-asserting its power.
Something that is “already over” cannot be “un-over”. That’s not how “is already over” works. It means it’s done, finito, not a prophecy but a historical fact. We have to move on. And that means less interference in internal European affairs like Ukraine-Russia and more protection of our interests like consolidation of power over the Atlantic, the Arctic, and the Americas.
We already have power over greenland tho :/
You do realize Denmark/Greenland is (well, at least used to be before this circus act) your ally?
“Used to be” is not “is”. The USSR was an ally. As everyone is pointing out here, there’s no going back. Given that, and as much as I preferred the old order, we have only forward to go.
If there were a path back, there’d be a point. But in this discussion, everything has already happened. There’s not much point in saying “if you hadn’t”. Well, Trump did. Having done what he did, nothing to do now but to go full bore.
Now that we are on a war footing, potentially with our erstwhile allies who have no interest in renewing the alliance given present conditions, the only path to preserve US control is aggression.
Path back to what? Time before the US started bullying its allies and destroying Nato? This seems all self-inflicted.
Mankind has never seen the collapse of a nuclear powered empire.
What makes us think this is possible?
It may not be possible for a nuclear powered empire to fall without the death of billions.
Mankind is in uncharted territory.
Even Russia never fully fell after the USSR collapsed. Whoever kept the nuclear weapons continued to be a first tier power.
Nothing in human history compares to the present question of how the current empires fall. And if they can even do so safely.
> Consequently, Trump’s approach is the only way forward.
It's the DoD.
Prior to Trump's actions, the American-led "world order" seemed to work, even if we couldn't get China to agree to a "Bretton Woods 2.0".
Biden tried diplomacy with the EU. He tried to get them to agree to a renewed US-led world order, but it wasn't working. The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
I think the US could seriously pull out of NATO and leave the EU to fend off Russia by itself. It'll have to start spending enormous tax dollars on defense and war.
Meanwhile, if the world is truly becoming multi-polar, then the US wants to consolidate power in its own hemisphere. This is why there's all the rhetoric and action on Venezuela, Cuba, Greenland, Canada, etc. The US will keep Chinese ports, basing, and trade completely out and secure the trade routes for when the Arctic opens up. It recently changed control over the Panama Canal, and the DoD is dead serious about taking Greenland and maintaining complete hemispheric control.
With whatever energy the US has left, it will dedicate to Asia. It will strengthen alliances and project power there instead of dealing with Europe.
The world is going to be a much more violent place without hegemony. Free trade doesn't exist in that type of world. The US realizes this and is playing 50 years ahead. None of the nice words matter when the energy, trade, and economic lines are redrawn.
People like to say the US is led by lawyers and China is led by scientists and engineers. This is wrong. The US is led by war generals and intelligence. The career DoD folks are the ones impressing upon the administration to make these moves.
To be clear: I hate this. I loved the world I grew up in. I think we're headed for a violent world that could easily erupt into war. I don't like it.
>The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
How so? What actions did the EU take?
You don't think the declaration of himself as dictator and the immediate threats against EU allies might have changed EU attitudes at all?
> Biden tried diplomacy with the EU. He tried to get them to agree to a renewed US-led world order, but it wasn't working.
Can you elaborate on that? It seems to me it "wasn't working" mostly in the sense that Trump got elected again.
> The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
Seems like confusing cause and effect. The EU is drifting away from the US towards China because the US pushed them away.
> The world is going to be a much more violent place without hegemony. Free trade doesn't exist in that type of world. The US realizes this and is playing 50 years ahead. None of the nice words matter when the energy, trade, and economic lines are redrawn.
This is happening largely because of the US, although they stand to lose by replacing a world order that benefits them with a world order that benefits China and Russia. Well maybe the US will become sufficiently like China and Russia that they can benefit too. But even with a gradual loss of hegemony there was nothing inevitable about a transition to the law of the jungle and it's doubtful that the net result will be positive for the US.
> People like to say the US is led by lawyers and China is led by scientists and engineers. This is wrong. The US is led by war generals and intelligence.
I think the relevant distinction is that the US is democratic while China is authoritarian. But the current US government wants to be authoritarian.
> The career DoD folks are the ones impressing upon the administration to make these moves.
Again a reversal of cause and effect? I doubt old career DoD folks like the current developments. But the current government might give a bigger role to the war generals.
> I think the US could seriously pull out of NATO and leave the EU to fend off Russia by itself. It'll have to start spending enormous tax dollars on defense and war.
Disagree. If US pulls out of NATO, most likely scenario is EU continue to concede to Russia. I think EU will concede on Greenland too, but likely won't do it without any military action (unclear whether that will trigger nuclear escalation and how that can end).
> The EU decided to play the US and China against each other to improve its own standing, which is why the US is now moving away from the EU.
This is sanewashig this whole thing. The fact is, the US is moving away from the EU because Trump doesn't like democracies. It's that simple. You have a large percentage of your population in what is essentially a cult and you have givem them the reigns.
> This is sanewashig this whole thing.
This was being called back during the Biden admin and before Trump even ran again.
Back during the Obama admin, even!
https://www.atlanticcouncil.org/blogs/new-atlanticist/no-piv...
https://www.gisreportsonline.com/r/us-pivot-asia/
https://www.project-syndicate.org/commentary/europe-biggest-...
If the US can't build strong coalitions with Europe, it wants to spend its energy elsewhere.
Even pop-geopolitik wonk Peter Zeihan was pointing this out during Covid. I can't find his videos, but this has been top of mind for a lot of people for a very long time. These are anti-Trump people, too.
Multipolarity means instability, violence, fights over resources, fights over trade. Post-WWII was unusually (relatively) stable.
The US can turtle up, just like it did before WWII. It doesn't share a land border with any other major powers, unlike European and Asian countries. It commands the two oceans on its sides (and soon Arctic), and doesn't need anyone else - this was the US' defense posture since its founding.
You’re right. It was in the book Disunited Nations by Zeihan.
Honestly, the idea of Trump making geopolitically informed decisions is so out of the realm of my perception of reality I don't even know how to engage with you. Trump is a narcissistic idiot that you voted into power. Your geopolitical direction is dictated by his narcissistic whims. "National security reasons Greenland" or "EU collaboration with China" or whatever is exactly what I initially said - sane washing a lunatic.
But, anyway, good luck. You'll need it.
I have a great interest in geopolitics. I didn't vote for Trump, and I already told you this is coming from within the DoD.
These are military decisions. These are 50-year plans.
Here I was 10 months ago and two years ago saying the same thing:
https://news.ycombinator.com/item?id=43505524
https://news.ycombinator.com/item?id=36896699
I am not saying you're stupid or misinformed, I'm saying you're missing the point. Understanding what Trump wants doesn't require you to understand geopolitics, it requires you know clinical psychiatry.
Trump doesn't want this. He didn't come up with the idea.
Trump was told and encouraged to want this by the little birdies at the DoD.
What do you expect (e.g.) Norway to do except disentangle, when their PM sends this text and gets back this response? And note that Finland's president (Alex there) has been one of the big proponents of continuing to engage with Trump. So, honest question, what should Finland, Norway, etc, do?
https://archive.ph/rjEtm
Trump absolutely drives this. You're deluded if you think this whole thing comes from the DOD. He is in effect a king at this point and he rules by posting in social media.
Except all of that will be for naught because the US is making the fatal mistake of doubling down on oil and coal. It's pointless to play 50 years ahead if you won't make it even the next 20.
The reverse is true: people who say things like "The US century is over" almost always dislike the US or wish its global influence would decline. Their commentary is wishful thinking.
There is some probability that US global influence does significantly decline but I wouldn't hold my breath.
Not true. Some, like myself, love the idea of the shining city on the hill, although we often find the behavior of the actual city less than shining.
I would like for the US to continue being a beacon of freedom where people can come and build great lives.
But that is not the direction we are going, and one might reasonably forecast that no country can maintain indefinite dominance. Paul Kennedy wrote "The Rise and Fall of the Great Powers" almost 40 years ago. Regression to the mean and all that, but also, great powers tend to overstep.
> Not true. Some, like myself, love the idea of the shining city on the hill, although we often find the behavior of the actual city less than shining.
Your first sentence says "not true". Your second sentence says "true".
Your dislike of the current US regime/behavior causes you to forcast the decline of US influence. I'm not saying you should like current US behavior, just that there isn't good evidence for any decline.
These things are hard to predict. The most likely situation is not decline: it is continuity, where the US retains its global influence for the time being.
Ignores the totally exceptional nature of some of the US changes/instabilities of this administration. I say "not true" because that is my read of where things are going, regardless of preferences.
Yep, and nobody ever goes on these types of threads and says the EU is collapsing, even though there's demonstrable evidence that things are not going great for the EU (the UK left, there is virtually zero economic dynamism or tech investment, Russia has seized 1/3 of Ukraine who was trying to join the EU, and the continent has no money, no navies and terrible demographics to compete globally in the next century). People gloss over issues about the EU because it aligns more closely with their political beliefs.
I believe the recent line from a US ally at a recent security summit was, "We will never fucking trust you again."
https://www.readtheline.ca/p/matt-gurney-we-will-never-fucki...
Having dollars was useful to trade with US. But the trade has been reduced by tariffs.
Also. Any attack to the independence of the federal reserve damages whee vale of the dollar
Current Trade with US is a small percentage of the reserve. It's the trade with everybody else and trust that it will hold value for all the future trade is where it matters.
Is World in immediate trouble? I see three posts discussing collapse of US currency and market on homepage, and this site actively avoids anything political.
This was written in July 01, 2025, and lot has happened since then. Is there any update to this report?
Is the US dollar losing its dominance? The answer is both A) yes and B) it doesn't matter.
Yes, US dollar is losing a bit of power and influence. This is likely to continue.
Making inferences about the US global dominance based on this fact is misguided. US global dominance is as strong as ever and, if anything, getting stronger. US has very successfully managed to move the game a level above currency, to direct governance via financial, legal, political and military means. It has made any meaningful competitors either entirely irrelevant (e.g. Russia), pretty well aligned (e.g. India) or pretty well contained (e.g. China) It's blue skies ahead.
As strong as ever…
The US has a strong military but its dominance position is declining rapidly. It’s going around threatening the whole world.
It’s failing to effectively address their problem with China and Russia.
Domestically, 60% of Americans live paycheck to paycheck, you have ICE running around and Medicaid being slashed to afford that.
All the leaves are brown…
USA is doing everything in its power to make Russia great again. It was in great position to make it irrelevant, but it has choosen to make itself Russia like and snatch defest out of the jaws of victory against Russia .
> direct governance via financial [means]
This is going to disappear if USD is no longer the dominant currency.
The exact point I'm making is that this is NOT the case! US has super strong financial control over most of the world in a way which is NOT connected to the strength of the US currency.
As they say about bankruptcy. First it happens slowly then quickly.
I suspect were about to see that pivot
The USD's status as a reserve currency is directly linked to it's trade deficit with the rest of the world. Because all other entities (individuals, corporations, organizations) want to keep their wealth in USD, there's a strong incentive to sell (goods, services, infrastructure) to the US and obtain USD in return. Conversely, there's a strong disincentive to buy from the US because goods have to be paid for with USD, which means parting with the very currency one is trying to accrue.
One of the most effective ways to ease the trade deficit is to reduce USD's status as a reserve currency.
The dollar is a weapon, and when the US can print as much as it likes, the odds are always stacked in favour of the US.
Trouble will really come when the US tries to get out of its ridiculous debt trap. What will they do, wave a wand and their debt goes away?
A large amount of the debt is owed to the US population. I doubt that the debt trap is that large of an existential problem, but having trade alliances break down is much more of a big deal.
I would imagine U.S. foreign policy, particularly the prolific use of sanctions contributes to this wane as well. There was some discussion about this a while ago - effectively as the U.S. continues to rely on a strategy of imposing sanctions against foreign adversaries, those adversaries increasingly reorient their economy towards non-U.S. economies such as Russia or China. The more the U.S. utilizes sanctions, the less effective they become.
The former IMF chief Kenneth Rogoff has been talking about this and appeared on NYT Ezra Klein's podcast that I highly recommend[0]. He also talks about China and the role of the dollar at the end with Dwarkesh Patel[1]. A lot of the discussion I see here is adressed by him.
[0] - https://www.youtube.com/watch?v=pT2cohNt6a4 [1] - https://www.youtube.com/watch?v=P2b4TjQa4gk
No idea how those things work but surprised the $/€ exchange rate stabilized.
You had a year of flip-flopping on tariffs, and a lot of noise. Serious threats are coming out just now, and may get cut abruptly closer to November. It's going to be a while before this presidency gets reflected by the market.
Patently. The current situation in the USA doesn't inspire confidence.
My understanding is that the standard of living in Britain dropped about 75% when Britain lost the reserve status of the Pound Sterling.
I expect it to be worse here in the US.
I wasn't expecting us to try to speedrun it, though. I thought we had a decade or two left, now I think it'll happen before the end of the year.
The US has had an economic wind at its back for a long time, but there’s perfect storm of debt, trade, inflation and de-dollarization brewing.
It's a small relief to have emerging markets holding dollars. Hopefully their economies will continue to grow and that could be a long term benefit to offset the slow de-dollarization across the rest of the world. It would be in US interest to invest into those emerging markets.
The issue is that there isn't a great alternative.
The euro is difficult to manage because of the diffuse control, pound an even smaller economy, RMB just not global enough (and tough argument to see that happening), gold/bitcoin/whatever not the same inherent stability.
Indeed the dollar weakening, but nothing really to take it's place.
The ECB is not diffusely controlled.
CHF?
Literally cryptocurrencies are the single greatest alternative ever made. Opt out of the system where the government can just print money into thin air and old guys drawing dots on a plot set interest rates in closed meetings. If you want to hedge USD exposure just buy a Bitcoin ETF or if you really can't stomach cryptocurrencies b/c you don't want to be ostracized from the orange site, buy Gold. We are not going back to the way the world was and if you have all your money in USD realize you are on a leaking boat.
It is entirely possible to manage funds in crypto for growth and move some amount into more liquid USD denominated assets or MMFs when you need liquidity.
Right up until you lose your internet access.
It'll all still be there when you get it back.
Why would you get it back?
--You don't want the bank to give you your money back?--
edit: I misunderstood, or do you mean why would you get your internet back? If you're not getting your internet back, I can only offer you're not getting your money back either.
I have been interested in this topic for a while now, and have run different scenarios. What is everyone's thought on Chinese Yuan or Euro as the reserve currency?
The Yuan isn't free floating enough. Banks will probably hold a mix of currencies including the Euro and others.
Contrary to what everyone thinks - Dollar losing its reserve currency _canbe_ a good thing.
https://www.lynalden.com/fraying-petrodollar-system/
I can't figure out what in that article is supposed to be a good thing, and the article doesn't seem to hold an opinion of that sort.
My first question is: good for whom? Second question is: how? It's definitely good for holders of whatever replaces the dollar, but it's disastrous for everybody in the US, as far as I can tell.
> As applied to the United States, the current account version of Triffin runs as follows. The global accumulation of dollar reserves requires the United States to run a current account deficit. Since desired reserves rise with world nominal GDP, which is growing faster than US nominal GDP, the growth of dollar reserves will raise US external indebtedness unsustainably. Either the United States will not run the current account deficits, leading to an insufficiency of global reserves. Or US indebtedness will rise without limit, undermining the value of the dollar and the reserves denominated in it.
Can you be a bit more explicit about what the benefit is, and who benefits? It's not clear what your thinking is.
How do people hold yuan? I was surprised at the lack of ETFs in this space. There's of course a lot of Chinese equity ETFs. There used to be a pure currency ETF but it was liquidated a couple years back. CBON seems like a good way to get exposure via bonds, but its AUM is quite low.
> How do people hold yuan?
Actual answer? In global real estate. So… they don’t or “it’s complicated”.
The ultimate check and balance was always supposed to be the US consumer. It seems any major disruption to purchasing power will result in a backlash large enough to undo any policy and administration.
I’d still bet that any sudden movements in this direction will be checked
>It seems any major disruption to purchasing power will result in a backlash large enough to undo any policy and administration.
That assumes it can be undone. Reversing course and hoping the damage done heals isn't a sure bet. Especially with timing delays.
There is definitely real risk here
More and more of the people actually spending money in the economy are concentrating in the top 10%. They don't NEED the millions of everyday consumers to maintain the status quo.
I wouldn't count on the people that elected trump, twice (!), to come to their senses. The American voter cannot be trusted to do what is right for the country.
The event has been in motion with every action from the administration just cementing it more. Forget about the dollar’s dominance, at this point I am not forked that he will usher in ww3, or at the very least a war between Europe as the US seems very likely
There's no point in a war between US and Europe, it's not gonna happen. However bad a war would be, the current situation isn't much better. There's definitely a rift going on and will cause irreversible changes to the US - EU partnership. Oh well, not only EU, it seems like US is losing friends at a very fast rate with Trump at the whelm of the country.
Honest question: isn't it just a matter of time before US dollar loses its dominance, given that US has been losing its manufacturing business? I mean, can people really keep investing in the US market if they need less and less stuff produced by the US?
Why is manufacturing so special? As opposed to something like software?
Also, manufacturing in the US is growing not shrinking. For a long time.
If The US goes to war against China, we are screwed, because we outsourced our manufacturing to China. We cannot quickly ramp up our manufacture of ships, tanks, aircraft or ammunition. Not only do we lack manufacturing capacity, the entire supply chain is in China / Asia.
In addition, China leads in the critical technologies need for drone oriented warfare, like we are seeing in Ukraine.
In particular, the pentagon has so many suppliers in China. Oh, the KPIs (key pharmaceutical ingredients) are produced by China too. We even had shortage of saline solution when China was having a supply crunch. So when a conflict, let alone a war, broke out with China, what do we do? We ask China to supply us the war logistics?
A fun story, China has the best automated seafood processing factories that meet all kinds of regulations in the world. It's cheaper, a lot cheaper, for Japan and Alaska to send their seafood to China to process, and then sell back to the domestic market. And it has nothing to do with cheap labor but deep R&D of China. So, when war broke out, many people won't be able to enjoy cheap seafood either.
I don't understand how people can ignore a simple fact (is it Milton who pointed that out?): Manufacturing is a "doing" business, not a "knowing" business. Our expertise is forged on the shop floor, not dreamed up in a boardroom, and certainly not bought through outsourcing. There is so much tacit knowledge that manufacturing capability is a living system. It lives in the collective experience of the workforce and the rhythm of the line, not in static documents.
Oh maybe this is the time to quota Thomas Joseph Dunning: With adequate profit, capital is very bold. A certain 10 per cent. will ensure its employment anywhere; 20 per cent. certain will produce eagerness; 50 per cent., positive audacity; 100 per cent. will make it ready to trample on all human laws; 300 per cent., and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.
> Why is manufacturing so special? As opposed to something like software?
I assume that dollar will be strong if people want to buy stuff from the US, which requires using the US currency. Software indeed is a strong sector. I'm just not sure (as due to my ignorance) if they compensate sufficiently the trade deficit. For instance, if advertisers use Instagram in Europe, they wouldn't need the US dollar to pay for the service, right? If there's no virtual export happens, I'd assume there won't be any need for the US currency either.
> Also, manufacturing in the US is growing not shrinking. For a long time.
What about market share? I remember that the US had more than 65% of the manufacturing marketshare 25 years ago. Actually, I'm more concerned about the long-term national security and prosperity of the US, and I think they are tied to a robust manufacturing sector. But that's different topic.
> Also, manufacturing in the US is growing not shrinking. For a long time.
Well, at least up to 2024...
I think when people run the next number, there will be a surprise there.
Software can leave your country in a fraction of a second. Manufacturing is infrastructure. This is also basic. Manufacturing in the US is shrinking, comparatively with other countries that actually make things. People just think they can just play with numbers, categories and dollar values to hide it.
The US has been playing a currency game since 1980 to make up for the loss of the free money it got for reconstructing Europe and Japan, and using that money to buy things from impoverished workers in China. And as China got on its feet through careful planning and management, it moved to India, Pakistan, Mexico, Indonesia, the Philippines, anywhere that was willing to stomp on its workers and pollute its air and water.
Now China has gotten to the point that it is a viable alternative to the US, so the US can't unilaterally set terms anymore for its suppliers. It's dumping US treasuries. It's competing for natural resources in countries that the US just tried to topple and steal their natural resources through sieges that ironically served to cut the US's legs from under them, giving China a huge discount. The game is up.
China going from nowhere to the greatest economy on the planet in 50 years is what happens when you manage and cultivate manufacturing. US real estate and an economy run on luxury consumption is what you get when you outsource manufacturing and play word games to cover it up. We literally can't tariff China significantly, they could crush our economy just by embargoing us like we freely embargo everyone else. That's the power of a manufacturing base. We might want to fix our bridges, too.
Case in point, it's news that Canada leaned toward partnering with China when having dispute with the US, but it would be a joke 20 years ago. It's a humiliation that the US brought upon itself: you can't produce things that people need, then don't blame that people will have leverage in other places.
A weak dollar is good for manufacturing and a strong dollar is bad for it. China tightly controls to the Yuan to purposely keep it's value low to benefit it's manufacturing. The current US administration wants to something similar for the US to boost manufacturing.
I think that's foolish and backwards thinking. The US doesn't really need more manufacturing; it had relatively low unemployment, a healthy economy, etc. The US is a service country. Apple is one of the richest companies in the world and does none of it's manufacturing in the US. Why wouldn't people invest in Apple?
This too. Many people argue that if we weaken the dollar enough, the manufacturing will come back.
Title needs to be updated when the 1 July 2025 date. For a moment I thought JPM put it out in sort of a response to criminal charges against Jerome Powell, fed chair. It’s probably unprecedented? Wild times.
Do i need to stop investing in msci world? what else would i invest in?
Curious how HN is using this information to plan your investing approach. Does the typical approach, broad market globally diversified still hold assuming dedollarization?
You do get World excluding USA ETFs yes - including denominated in say EUR.
It does risk missing out on AI though (or AI crash depending on your perspective).
India pays one 1.4 GW nuclear power plant in yuan and they start talking about global de-dollarization as if people can't think in proportions anymore?
If Something Cannot Go on Forever, It Will Stop
With the pace of news these days, especially economic news, I think this deserves a (2025) in the title.
When is everyone going to dump their US bonds? Will Groenland be the redline, finally?
As a big nitpick, I found the y axis in that chart ranging between 40%...90% to be horribly misleading.
At the risk of sounding like shameless self promotion, I recently wrote about how Zoltan Pozsar predicted this over three years ago: https://philippdubach.com/posts/pozsars-bretton-woods-iii-th...
Interesting how gold hit a record high today of $4700+/oz.
Betteridge's Law strikes again. As of Q2 2025 (roughly the time that TFA was published) there is more dollar-denominated debt than ever before [0]. And its value relative to other currencies (as of this month), while subject to cyclical fluctuations, is on par for the post-Covid cycles and higher than pre-2020 levels [1].
[0] https://fred.stlouisfed.org/series/FDHBFIN [1] https://fred.stlouisfed.org/series/DTWEXBGS
I remember looking this up a while ago: https://corporate.vanguard.com/content/corporatesite/us/en/c...
A 1.1% devaluation doesn't seem so bad per year, except for the political risk and economic uncertainty.
Empires are very adept at dethroning themselves by way of greed.
Dollar milkshake theory
Up until about a month ago, I’d have argued it’s overblown. However, I think this time it’s a real possibility and perhaps even certain. This country is absolutely going down the toilet and China is using this opportunity to strengthen its position. Things will get far worse as the economy rolls over this year and AI bubble pops. It’s a perfect storm.
One can only hope.
Turns out, Putin was a genius after all. And maybe the optics of Gaza wasn’t helpful either, that seemed to be the moment Macron et al finally turned against the west.
What world do you guys live in? The dollar is not held by some mythical rules and polices. It has it's status because of aircraft carriers and 30000+ fighter jets US has. No other country is even remotely close to that level of offensive military power.
It's not going to be replaced any time soon, there's no realistic replacement at the moment, but there is a slow movement away from it. We've already seen a stampede into gold from central banks. And pimco have said they're going to relocate funds out of dollar debt.
After the nonsense with Greenland no one really wants to give anymore financial power to the US so we'll see more assets kept in local currency or different reserves currencies like the Euro, Yen, Sterling, or ChF.
The reason de-dollarization should be concerning to US citizens and many don't understand is that having the dollar as a reserve currency is a huge asset to the US. The US has control over how many dollars are created and where they are spent. If countries are willing to sell to us for dollars, then the world becomes a friendly market for raw materials and products to be vacuumed up here.
Losing the dollar as a reserve currency is losing the empire.
Key Takeaways from the JP Morgan Research:
• Despite a smaller share of global trade and output, the dollar still dominates in transactions like trade invoicing.
• Dedollarization is advancing in central bank reserves, with USD share at a two decade low.
• Foreign ownership of US Treasuries has declined for 15 years, signaling reduced external reliance on the dollar.
• The shift is most visible in commodities, where an increasing share of energy is priced in non USD contracts.
Part of the strength came from trust and participation in a community. The US has become untrustworthy and hostile toward community.
De-dollarization is one of those things economists love to talk about.
The chance of the dollar losing its reserve currency status is slim-to-none. No matter how bizarre the US is, nobody trusts the Chinese Communist Party (CPP). And although the US can manipulate the value of the dollar, its tools are limited compared to the CPP.
Plus, the US is still the only country that's willing and able to prop up the world financial system with no immediate benefit (see Argentina). The US can and will intervene when necessary. And as history has shown, the Euro Zone can't really make decisions quickly and effectively. How many times has the Euro been on the verge of collapse in the last 20 years? And is proximity to Russia is, well, risky.
In any case there is no currency big enough to take the dollar's spot at this point in time. Trillions of dollars flow through the financial system every day.
It's far from slim - it's very likely USD and EUR hegemony will be challenged. Western financial systems are ultimately and inherently discriminatory towards any non-western countries. Where for westerners using those systems enjoy reliability and predictability, the same systems implicitly (and recently, more explicitly) punish non-westerners with excessive compliance and scrutiny. So, basically, if you're from a non-western country, good luck not having your money confiscated or fronzen at some point - and this applies both on state-level and individual level. Of course sensible countries will seek alternatives and will create ways to bypass this elitist bullshit. The whole thing is literally nothing else but inertia at this point and over time both USD and EUR systems are destined to become merely regional.
When you say non-western what do you mean in this context? From what you describe it just sounds like China, Russia and North Korea
I mean literally any country outside of Europe, North america, Australia, New Zealand and maybe some non-western exceptions like Singapore.
I don't think that's exactly fair; there are plenty of other places that do not suit these criteria that get along fine with the dollar. it is on an exclusion basis not an inclusion basis
I'm hopeful that any loss in dominance translates directly to economic pain for all Americans. Nothing will rose those sleepwalking through the rise of fascism faster than not being able to make ends meet.
I'm not sure that is true at all. I think the sleepwalkers are just as likely to blame immigrants, foreigners, <insert out group> and continue to hand the current regime more power.
Yeah, on second evaluation I think you're right. People are less likely to be motivated to act, and more likely to be more easily manipulated.
Yes
The article is written by JP Morgan which is a little odd but even stranger is they mention of all places China as being a great investment place to put your money, when in reality they can literally take your money away from you and nationalize your business under their current laws.
I'm glad you're one of the few to call this out. JPM has hedged its bets against American interests and holds a ton of crypto. Of course they'd put out an article like this
I'm surprised that people are so surprised by this. Funds operate with risk management models and practices. As the US becomes more unstable, politically, these will weigh in on how much money people keep in US markets. US threats to annex Canada and invade greenland. US kidnapping foreign heads of state. Actively using federal agents as shock troops against blue cities. All of this has true economic impact, either real in terms of losses but also USD as a stable currency run by legitimate people.
Would they implement capital flight controls? if you invest in the US, can you get your money out? No one knows but it seems increasingly less likely. Red lines are being crossed weekly.
The country is heading towards a decline into a developing world style authoritarian dictatorship.
What if the goal is to crash/burn and consolidate ownership? This time with the money system?
I mean, it sure looks like the goal.
it'd sound reasonable, if that ownership wasn't already overconsolidated. But who says people doing that are reasonable.
It might be over-consolidated in the aggregate but I don't think the greed is too worried about that.
I don't think there is a single concrete goal, when you look at how flabbergastingly stupid most of the oligarchs are (just scroll through Elon Musk's most recent posts) it's hard to imagine there being any real master plan. It's a bunch of dumb assholes that were raised with infinite money and where nobody ever told them no.
If you've ever had the unfortunate opportunity to interact with your average CEO at a mid-level business it's the same thing but on a much smaller scale. They can't fail, only be failed.
Well the real question: Is the US losing interest in reserve dominance?
Contrary to popular opinion, IMO PRC doesn't want reserve currency trade off (triffin / trade deficits etc). What PRC wants is to secure her own interests with RMB, which is mostly happening, energy contracts, lots of bilateral trade happening in RMB now. What PRC also wants is to make maintaining reserve USD onerous, i.e. high rates, high debt servicing... which already indirectly limits US in real ways like reduced defense acquisitions in last few years.
PRC wants USD exorbitant privilege to be just exorbitant.
Then US incentivized to dump system (etc debasing) which will fuck over global USD users and tank US reputation even more. A lot of US actions make sense when you realize Trump doesn't want to deal with an increasingly unprofitable global utility. PRC doesn't want to step in to build new pipelines, they want to see US (mis)manage existing US owned plumbing that everyone is using so poorly it fucks up things at home and for everyone else, meanwhile PRC has comfy off the grid setup for herself and her guests.
Let's hope so. The USA has become very aggressive under the TechBro rule.
many of whom are jacked on testosterone supplements.
The aggressiveness might be related to that.
https://www.them.us/story/testosterone-parties-silicon-valle... https://stand.ie/stand-newsroom/political-power-testosterone
uhm, they need to proof thier article "This increased demand has in turn partly driven the current bull market in gold, with prices forecast to climb toward $4,000/oz by mid-2026."
Article is from July 2025, Gold was 3362 at that time
So gold is up 50% in six months? That's... quite a bit.
They were off, it is going so much faster.
so nobody read the article and instead regurgitated pre-existing sentiment, while forgetting the golden rule of journalism:
if an article ends in a question mark, the answer is no.
> the greenback dominated 88% of traded FX volumes — close to record highs — while the Chinese yuan (CNY) made up just 7%, according to data from the Bank for International Settlements (BIS).
> Likewise, there is little sign of USD erosion in trade invoicing. “The share of USD and EUR has held steady over the past two decades at around 40–50%.
there is currently no other alternative to meet the global liquidity demands
That first sentence starts with "In 2022,", so presumably the numbers are different now, but I couldn't find anything in the article about how things have changed in the last four years.
You just have to be in it
Liquidity is atrocious as soon as you leave USD rails and are trying to move more than a few million (in notional usd terms), let alone billions
Downright terrible, its actually amazing how bad it is. “Finance” as infrastructure isn’t anywhere near finished and swapping the currency rails would be very hard
Its more than people just agreeing to use a different currency, which means its more than all traders and merchants dying, the next best currencies have structural problems. Their central banks trying to pump the market full of liquidity would destabilize those currencies far more than it would the USD doing the same thing
But I’m open to being impressed
The US is losing respect in general. Its foreign policy which was never really friendly, now is really really bad. Many countries on Africa genuinely prefer countries like Russia. That's something unheard of 20 years ago.
I usually read piaeces like this as bullish for the US .. the truth is .. neither the author nor anyone else can really call how this plays out .. but what is clear (and f***g obvious) is that there’s still no country as economically dynamic or creative as the US .. and if not the dollar .. then what realistically takes its place ... the euro, RMB, rupee? None come close yet in terms of depth, liquidity, or trust ... these type of de dollarization makes for an interesting news cycle and discussion, but it’s a super long road from theory to reality ..
In the short run, I agree.
But what I do worry about are the long term consequences of US behavior. Even the largest empires aren't on top forever (even before Trump, China was investing heavily in tech and has made significant inroads. India is developing, too. Who knows?). There may be no country as economically powerful today, but tomorrow is a new day. These shifts don't happen in the short term, but over decades, this could be a big problem for the US if our approach continues this way.
A business goes bankrupt slowly, then all at once. I worry that we are speed running the "slowly" part of our journey.
Countries are learning that the USA is no longer what it used to be, on the surface they are trying to please Trump to avoid getting more tariffs but on the ground they are no longer depending on the dollar.
Wait until Greenland drama goes sideways, then you will see the dollar getting washed out as the international currency.
Trump will go down in history as the clearest marker of the United States’ decline.
And you could have said that during The Apprentice.
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The biggest problem of all social sciences is that they measure only what can be measured or is easier to measure. Sorry for the redundancy, but they don't see what is hard to see and, therefore, think it doesn't exist.
I suspect there might be a lot of "de-dollarization" going on in realms that might not be easy to measure. To be specific: it is interesting that crypto-currencies have emerged as the currency of choice for illegal activities.
The article is talking about reserve currencies. Cryptocurrency isn’t relevant.
The export driven economies like China or the EU rely on the dollar to weaken their own currencies for competitive trade. Without it, natural FX mechanisms would naturally begin to appreciate their currencies and make their exports uncompetitive.
According to USTR data the EU had a 200bn goods surplus, but a 100bn services deficit in 2024.
So a 100bn deficit out of 800bn total US imports.
The deficit is there, but it's not nearly as lopsided as some reporting would have you believe.
>"The export driven economies like China or the EU rely on the dollar to weaken their own currencies for competitive trade"
I have about zero clue how finances really work but it looks to me as the statement is only true if the dollar is the predominant currency for international trade. This looks to be slowly changing for various reasons.
>This looks to be slowly changing for various reasons.
Well, not really, because obviously that deprecation via buying government treasuries is balanced by the appreciation in the other currencies. But if everybody (large enough to matter) dosen't want their currency to appreciate, if somebody buys Japanese bonds for example to weaken their own currency, then Japan will buy somebody else's treasuries to offset the increase in Yen, and if we go to the long chain of musical chairs of people offsetting each other's behaviours, it just leads back to the USA as the only ones both large enough and willing to take in those capital inflows.
That's not a interpretation mind you, that's a description of what central banks are doing right now. If that has to change, you need somebody willing to take the mantle of the absorber of global deficits, and nobody wants to do that.
If Trump announces some toady lunatic to run the Fed, watch out below, because the dollar is going to crash. I know I have moved a bunch of money into international stocks and currency and I suspect when the right leaning crowd finally catches on it will be a stampede.
What's the difference between an international stock and a US based multinational in your analysis?
The most important thing to understand is where the value of the US dollar comes from. It's the US military. More generally speaking, it's US foreign policy. The US military is the force that enables foreign policy.
Understand this and you'll avoid falling into various traps and conspiracy theories. For example, there are people who believe that the US invasion of Iraq was caused by Iraq wanting to sell oil in euros instead of dollars.
This is a nonsen theory because every oil transaction could be denominated in euros tomorrow and it wouldn't change anything. The same demand for US dollars would still exist so people would simply convert to euros, buy oil then convert back.
This same understanding debunks the "threat" of a BRICS alliance.
The real problem, if you can call it that, is we have an administration who is both incredibly inept AND intent on destroying the post-WW2 world order. Wealth inequality is getting so bad and the deficit is so bad. Worse, nobody expects either to improve anytime soon. I'm not saying the budget needs to be in balance. It doesn't. A country doesn't work like a business when you can print your own money. But at some point, crippling public debt (in terms of GDP) will devalue the dollar.
Put another way: the illusion of "safety" is at risk. It's just a question of when the vibes shift.
Your first paragraph is close to correct, but have you thought of the difference between supportive vs coercive power?
If the Russian army is the force that enables Russian foreign policy, they why do some people in Ukraine think that they don't want to do things the Russian way?
Likewise, I wonder how helpful the US military will be at forcing our former allies to do things they don't want to do?
It's a fair question but the answer is fairly simple: the Russian military simply isn't strong. The only reason they haven't been bombed back into the Stone Age is because they have a nuclear arsenal. That has limited the West's response to being "proportionate".
The Russian-Ukraine front is kinda like WW1. There's no real air power to speak of. The front is dominated by artillery and infantry and fortifications like trenches.
Russia cannot project military power anywhere like how the US can and the US has decades of projecting that power to force countries to capitulate, essentially. Europe outsourced their security to the US, for example. But make no mistake: NATO is a protection racket. It projects American power into Europe.
This is one reason why I call this administration inept because they seem intent on splintering NATO, which actually diminishes American power. Just like disbanding USAID diminished American soft power, and quite cheaply at that.
The lesson since at least the (W) Bush administration is that only nuclear weapons can guarantee your survival.
Trump is a populist president who sees the value of US exports (on the back of blue collar work) being more important than global dollar dominance. This plays hand in hand with his championing of tariffs (foreign goods become more expensive) and hostility towards immigrants (apply upwards pressure on domestic wages).
If you cannot see this, or cannot believe it, you should probably check if you are in a ideological bubble.
Is the world going to de-dollarize though? Probably not, shy of an EU independence, which is about as likely as Europeans adopting an American work culture. Although, I won't rule out the possibility of the EU moving it's eggs to China's basket either. What a world that would be, a Sino-Euro axis and an North American axis. Whew
> Is the world going to de-dollarize though?
I think they already are -- it's just not going to happen all at once overnight. The shift has happened already and the consequences will take decades to come forward. But it's still possible that the US will do something to reverse course and everyone will be happy to not have to think about finding an alternative to the US dollar.
The EU is not going to move into China's basket, not if you mean using the yuan as a reserve currency. There's too much political risk - the value is at the control of political decisions by the CCP.
The EU is going to have to (very painfully) grow legs then.
The fact that the US provided the majority of weaponry, and half the money to Ukraine should have been shocking wake up call to every European. But instead the vibe seems to be "Americans are so dumb to live the way they do".
> Trump is a populist president who sees the value of US exports (on the back of blue collar work) being more important than global dollar dominance. This plays hand in hand with his championing of tariffs (foreign goods become more expensive) and hostility towards immigrants (apply upwards pressure on domestic wages).
It has nothing really to do with populism. It's the US's only rational option. You can't just run trade deficits forever, no matter what the people who make money from trade deficits tell you. A parasite that gets so big that it disables the host is a dead parasite.
People act like this is the how the US always worked. We just started this with Reagan, and every moment since then has seen the rise of finance, the victory of unproductive capital and speculation, and the decline in domestic manufacturing and standard of living that you would expect.
There's never been a moment where there's been anything to point at for a finance capitalist to feel vindicated that his success would lead to the US's greater good, so he resorts to claiming that it is simply impossible to be any other way. At best this is sunk cost fallacy, but at worst, it's just propagandistic gaslighting from a bunch of people who don't have any connection or loyalty to anyone in the US, don't care when it's people suffer, don't care how its children will live, and will just leave if their houses start to feel insecure. There's your populism.
I agree with your assessment, but Europe is in unique trouble that the rest of the world has no need to relate to. The US will simply have Europeans jailed or killed who steer Europe counter to US interests. Right now the US is on a slow road to peace with Russia, while trying to cultivate and maximize European animosity and estrangement from Russia. The world in which the US is mocked in Europe by NATO (a device to carry out US interests) for trying to appease Russia is a world that no one but a realist could have predicted.
Everybody else will de-dollarize, and the US will threaten Europe and the UK with tariffs if they don't peg the Euro and pound to the dollar. The US will be trading freely with Russia and China, while sanctioning Europeans for buying energy from Russia and bribing European governments to harass Chinese companies.
India will be chairing BRICS this year. And Trump decided to fuck with the wrong country, especially when India-US relations were at its peak. This year will mark the beginning of the end of USD as a global reserve.
Betteridge (correctly) says "no".
Trump is destroying it intentionally.
Without a good strategy of course...
There's one of these articles it feels like every month. And as usual, Betteridge's Law of Headlines is at play here.
There's no replacing the US dollar until a better option comes along. You need a currency that's open (which rules out Yuan), a currency that is backed up by a strong government (which rules out places like Russia, India, Japan, and the UK), and you'd want something that isn't subject to the same geopolitical rules as the US dollar (which rules out the Euro).
Yes, of fucking course it is. The US elected a convicted con artist who is incontrovertibly violating human rights law, breaking treaties with allies, militarily threatening neighbors, and in general making a global outcast of themselves.
The US is making an absolute mockery over the honor and responsibility granted to in the post-WW2 world. It has sophisticated rivals that are predictably and effectively making use of the self-inflicted crisis. So far the ruling class of the US has been happy enough to let this go, and has been too busy making rocket ships, fake computer currencies, and large estates in south Florida to deal with real world problems.
If you are in the US, buy some gold or a house so your savings aren't destroyed - utterly predictably - by the man who declared Chapter 11 bankrupcy at least 6 times.
> The US is making an absolute mockery over the honor and responsibility etc.
The US was a rather empire without many scruples before WW2 and after it. It engaged in genocide in Vietnam, and was complicit in several others, including the ongoing one in Gaza - which was sanctioned, funded and facilitated first and foremost by the Biden-Harris administration.
So, without detracting from Trump's crimes and jingoist rhetoric and action, his deviation from US foreign policy tradition is not as far as one might imagine.
I'm afraid I completely disagree with you and am not interested in arguing further than this.
Vietnam, Korea, Iraq, Gaza, and so many others are atrocities but they are well understood by anyone with a casual understanding of 20th century geopolitics.
Anything you could list is awful but still respected the norms and rules that exist between nation states. There is not a high bar for these things, but some people within a specific flavor of the Republican party reject these rules and norms. By a quirk of history they were able to gain power. I could describe this in more technical and impressive sounding language, but "FAFO, and we are in the find-out stage" goes by many names and is accurate.
> Anything you could list is awful but still respected the norms and rules that exist between nation states.
It absolutely did not. Perhaps the elites and the mass media in the US tell this to each other, but in (most of) the rest of the world, that doesn't fly.
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TLDR: Yes.
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Not really relevant to why there is de-dollarization. And I am not a Trump fan.
Compromised people and useful idiots within the Trump administration are being persuaded by Russia to destroy the dollar and break up NATO.
Where persuaded is probably "bribed"
Are you certain inflating the money supply with trillions of dollars by prior administrations did not have an effect?
Well, yeah. Because there hasn't been any significant fluctuation in exchange rates. You can also see the decline in the velocity of money that's offsetting the increase in the money supply metrics (numbers checked on FRED). It's very clear that we haven't had unprecedented inflation. So the burden of proof is on you... why would the increase in the money supply matter when all metrics are saying otherwise?
It assuredly did. For example, the first Trump administration is responsible for ~25% of the current money supply, with the second Trump term only contributing about 6%.
So, "let's have Trump burn the house down just to make the point nobody was arguing against that fireplaces can be hazardous"?
How exactly is QE related to all this bullshit? You’re going to need some sources before you start randomly claiming that QE is leading to the collapse of NATO.
USD remains and will remain dominant. Trillions in dollar denominated debt and derivatives, insurance products and assets exist globally. No other country willing to run prolonged & massive deficits required for a reserve currency. No other country, of sufficient size, has as predictable legal and regulatory dispute resolution environment. No other country currently has capabilities to protect overseas shipping - a key component of global trade.
USD dominance isn't going anywhere despite hurt feelings over Trump or US policies.
Obama during affordable healthcare act discovered they were very dependent on other countries. This was very visible during covid and the 'supply chain' breakdown.
Obama started a process, Biden and Trump are in lockstep. They've reduced this issue by about 1/3rd by 2024. Trumps' tariffs are almost certainly going to be upheld by the supreme court.
This has led to a reshoring boom and trillions of new investment in the usa. Estimates seem to suggest only a marginal improvement of about 3%, so roughly another 20% improvement.
But fixing the very broken trade balances for the USA has long term benefit but it will result in a strong USD, but weaker reserve currency. Obviously the USA is rapidly moving away from bretton woods and being the world police.
They will drop below 50%, but nobody else is there to pick up the reserve currency crown. They get all the benefits of seignoiorage and very little of the downsides for decades.
Their dominance is over but they clearly saw that the cost-benefit was not worth continuing into the future.
Meanwhile, since they stop being the world police and reshored the important things. They dont care about the stability of global trade. Instead their super carrier groups will move to poke their nose only in their own business. You're going to see a fast shift from the usa being hated to being loved over the next 10-20 years.
Have people completely missed the stable coin move that will ensure there is a massive continuing market for USD. The prognosis is 2 trillion USD around 2028. Thats a lot of bonds that will need to be purchased to back the coin.
Bitcoin fixes.
7 tps
How many bars of gold get moved round the world every second?
Talk about moving the goalposts.
Ain't no football game son. Bitcoin clears faster than any other world reserve candidate. Every ten minutes, electricity gets traded. Tick tock.
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