By Daniel Kowalski
While the US dollar is the world’s “reserve” currency—at least for now—the reckless spending and money creation policies of the US government place the dollar in peril.
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59 sats \ 3 replies \ @sancristrader 7 Oct
Can one explain to me why he is saying that CA is the biggest contributor to the federal debt, to the tune of 0.5T? The standard progressive argument is that CA is the biggest federal budget contributor, while the red states are the recipients. There seems to be a contradiction?
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12 sats \ 2 replies \ @Undisciplined OP 7 Oct
I don't think that's what the author's saying. That part is about the individual states being in debt and potentially needing to be bailed out by the federal government. I don't know if it's true that CA has half a trillion dollars in state debt obligations, but that's the claim.
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39 sats \ 1 reply \ @sancristrader 7 Oct
Ok thanks: he's talking about the internal or state liabilities, that are separate from the federal debt. In that sense, the debt load is only ½ of CA GDP (federal liabilities load is 128% of the US GDP). So I don't see why it's that significant?
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9 sats \ 0 replies \ @Undisciplined OP 7 Oct
I didn't really understand that whole part of the analysis, since the event being described is highly inflationary, which should make repaying debts easier rather than more difficult. Perhaps I missed something, though.
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34 sats \ 6 replies \ @grayruby 7 Oct
Yes, it will likely benefit the US in the long run.
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50 sats \ 5 replies \ @Undisciplined OP 7 Oct
It depends how you interpret "America". I agree with you, but if people are specifically thinking of the current political arrangement, then there's a good chance that the answer is "no".
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37 sats \ 4 replies \ @grayruby 7 Oct
Definitely agree. It would not be good at all for the status quo.
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10 sats \ 3 replies \ @Solomonsatoshi 8 Oct
China has won the trade war.
China already operates its CBDC yuan DCEP which is designed specifically to enable international trade payments independent of SWIFT.
It will be painful for the USA to lose the unlimited fiat debt seigniorage it has enjoyed and become hugely dependent upon...but it looks almost inevitable now.
The future of the USA looks similar or worse than that of the UK post WW2.
Chinas assumption of global trade and protocol dominance is less likely to see China giving USA advantage as the relatively smooth UK-USA transition did.
The Jewish banks that quietly have backed European powers (frequently playing both sides) and more lately USA will not find their role easily transferred into Chinese hegemony.
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0 sats \ 2 replies \ @sancristrader 8 Oct
That transition that you are talking about would unlikely happen without a global nuclear war.
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10 sats \ 0 replies \ @Solomonsatoshi 8 Oct
Both sides know that a nuclear war is one that nobody wins...if China is still at some disadvantage in that area the disadvantage is quickly closing as Russia increasingly shares its military technology with China.
This is why they are already fighting via proxies in Ukraine and Middle East and fighting over supply chain control and protocol setting, biotech, robotics, space, nanotech EVs solar and wind technology.
China already leads on most of these areas.
Strategic asymmetric warfare.
Russia and Iran supply China with discounted oil and gas and directly attack US dependents costing the US billions while China profits.
Russia and Iran demonstrate Chinas ability to provide almost complete substitute for the USD SWIFT trade network. Chinas range of manufactured goods and appetite for oil and gas and most other raw materials makes it a potential trade protocol alternative to any nation which might feel constricted by the constant threat of US sanctions. If for example, Saudi Arabia chose to join the Chinese DCEP trade payments alternative to USD SWIFT that would be pretty much game over for USD fiat debt global hegemony... one could almost get the impression China are just taking their time and in no great hurry.
But, the moment that trade payments swing over to DCEP (when USD is no longer seen as solid (which we all know it isn't already!)) the process could be very swift, Taiwan could be occupied with little resistance and while the US could launch its nukes it would only lose what remaining dignity it could have saved.
This war is more than most, an economic one, where direct military action is not possible.
If the USA were to declare war on China it would immediately render most large US corporates bankrupt via the Trading with the Enemy Act.
China has already won the trade war- that almost certainly gives it the advantage- it is very difficult (though not impossible, Churchill ultimately did triumph against Hitler, at least once US joined the war when it had already almost been won by UK and Russia!) to see the US coming back from the hugely weakened position it is in now.
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0 sats \ 0 replies \ @Solomonsatoshi 8 Oct
deleted by author
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21 sats \ 2 replies \ @Satosora 7 Oct
Maybe our face needs to be curb stomped in order for us to figure out we dont rule the world.
El salvador is doing pretty well for themselves without the dollar.
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20 sats \ 1 reply \ @Undisciplined OP 7 Oct
I certainly don't want to see that, but it is how empires usually end.
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47 sats \ 0 replies \ @Satosora 7 Oct
Me either, but it seems like it will be happening if we dont shape up.
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0 sats \ 2 replies \ @zapsammy 8 Oct
Americans will go full crypto, it's only a matter of time.
the clowns will tokenize everything; they are preparing for the great reveal.
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0 sats \ 1 reply \ @Solomonsatoshi 8 Oct
USA without its USD fiat debt seigniorage is bankrupt.
Its already trading while insolvent.
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0 sats \ 0 replies \ @zapsammy 8 Oct
banks don't care. they love shilling crypto.
u.s.a. is one of the many store-front names for the banks.
banks are cattle registry facilities.
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0 sats \ 0 replies \ @Solomonsatoshi 8 Oct
Unfortunately it appears very unlikely that USA can avert disaster.
The trend away from a productive economy toward a parasitic rentseeking fiat debt funded economy has been in view for over 5 decades.
At the same time China has emerged from the Chaos that resulted from The Opium Wars and achieved unprecedented economic growth driven by a strong centralised CCP strategy designed to restore China former glory as the most wealth nation on earth.
Today China has won the trade war- it produces manufactured goods at a lower cost more efficient rate than any other nation. Consequently it also has a strong influece on commodity prices and tends to dominate many commodity markets.
In short nearly every nation today needs to trade with China or suffer significant economic disadvantage. That includes the formerly great USA.
China has won the trade war and is building its Belt and Road global infrastructure network- and the tertiary layer of that empire is monetary payments and international standards protocols.
China has already built its CBDC Yuan, DCEP and this protocol is almost certain to be the new platform upon which international trade is settled.
China may not be as liked by some still wealthy western nations but they need to trade with China and as the USD reaches a tipping point where it is no longer seen as the strongest and most stable currency the transition could occur very swiftly.
Libertarians will struggle with this reality as China is an autocratic highly centralised economy- it will not compute for Libertarians that this could be taking place and they will cling to denial of the reality as it completely undercuts their flawed belief system.
State power and state power projection has always been a significant economic factor- and monetary hegemony beyond ones borders has always been an important strategic advantage that comes with gaining trade dominance.
The USA had such dominance post WW2- with more than half the planets manufacturing capacity.
Today China has that trade dominance which almost certainly leads to monetary hegemony.
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