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The dollar as a reserve currency and the Cantillon effect
805 sats \ 30 comments \ @stack_harder 29 Dec 2024 econ
Ok, since we know that those closest to the printing press benefit the most, is it correct to say that, by virtue of the USD being the world reserve currency, US citizens are the first to benefit (Vs citizens of other countries)?
It seems US wages just keep going up and up, while EU and UK fall behind. but is this mostly because of the inefficiencies and shitty red tape? or just a complex amount of variables?
the median US wage is 80k, while in the UK it's apparently 40k pounds (63k USD ) but I don't know how much weight I should put on those numbers anyway.
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21 sats \ 20 replies \ @flat24 30 Dec 2024
But we have to see if salaries are rising in real terms and not just in nominal terms. ehem I read an article a while ago where they were talking about the salaries of educators in Europe. Here they expressed that in the decade of the 2000s these salaries were around 17,000 Euros and today they are around 28,000 or more than 30k more or less, I don't remember exactly the FIAT amount. The thing to pay attention to is how many ounces of gold could that person buy in the decade of the 2000s compared to how many ounces they can buy today. And the example more or less said the following. In the decade of the 2000s that person could acquire more or less a little more than 50 ounces a year, compared to the 10 or 12 that they could only acquire currently. Seeing their purchasing power reduced more or less 5 times, and that is despite having been earning thousands of Euros year after year.
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11 sats \ 14 replies \ @stack_harder OP 30 Dec 2024
i mean for sure, we'd all have been better getting paid in oz of gold (before btc) and also for sure i feel like purchasing power is down, but it seems like the US salaries are blasting way ahead.
like 100k used to be a good benchmark just a decade ago, now people are like oh i have 100k and somehow it's not providing the purchasing power
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21 sats \ 13 replies \ @flat24 30 Dec 2024
The United States, by exporting its debt and its inflation, enjoys a privilege that no other country enjoys, and this is directly reflected in the purchasing power of its citizens, who continue to earn more money (only in face numbers) because behind it the dollar also deteriorates and loses purchasing power, only not at the same rate as other fiat currencies. and in the end it looks as if they earn more money every year, because year after year you earn more paper, but let's remember that these papers are losing purchasing power with the uncontrolled increase in the money supply, so in reality they are not earning more.
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11 sats \ 6 replies \ @stack_harder OP 30 Dec 2024
i have to say, while compared to someone in the US i earn poverty-level wages, my general standard of living is pretty great. lower fiat wages do mean a reduced ability to stack as aggressively as i would like though unfortunately
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21 sats \ 5 replies \ @flat24 30 Dec 2024
Believe me, I can understand that. Here I feel the same frustration of not being able to stack more real coins. I lived in South America where the sale of gold and silver for investment is almost non-existent. and where the salaries are like those left by someone in a bar in a first world city.
Here you earn less, but to a certain extent there is less control and more freedom. Now we only have to move forward, step by step, firmly and without hesitation.
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11 sats \ 4 replies \ @stack_harder OP 30 Dec 2024
the silver lining i suppose is that now people at least have the option to put what small amounts they can in btc for the future.
meanwhile, so many people with mega salaries and they;re not stacking a single sat, such wasted potential
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21 sats \ 1 reply \ @flat24 31 Dec 2024
Totally, I have a friend who is currently making a good income with her job, and since we were at 25 or 30, which was when I started my DCA and began to expose myself to this bitcoin thing seriously. I gave her the voice and told her to take advantage of your purchasing power and make sure of some of this. And she did nothing, and I literally spent the entire year of 2024, telling her, friend, you have to buy something, watch this video, listen to this Podcast, study Fiat, we must conserve energy, and nothing. A year ago she went to Argentina and returned this year in November as well. And she came back complaining because she spent twice as much as budgeted for the trip. Her trip cost her twice as much in dollars as the previous year. That's it, the last time we talked was at the end of November when I told her to do the SATS calculation of your first trip (Bitcoin between 17k and 20k Nov-2023) and now calculate your second trip (Bitcoin 60k -70k NOV-24)... and see how much you spent on the first trip and how much you needed for the second and finally I told her
Don't believe me at all, go and check it out. Research, read, question.
But as far as I know, she still doesn't expose herself to bitcoin and says that her job consumes her a lot, that she doesn't have time to sit down and study. 🤷
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11 sats \ 0 replies \ @stack_harder OP 31 Dec 2024
some people are beyond help, as the saying goes, when the student is ready, the teacher appears
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10 sats \ 1 reply \ @Bell_curve 30 Dec 2024
The silver lining is silver. Or not.
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11 sats \ 0 replies \ @stack_harder OP 31 Dec 2024
sometimes if a sharp blade that slices normies and makes them say it's unfair that bitcoiners get in early lol
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0 sats \ 5 replies \ @Bell_curve 30 Dec 2024
Which countries import USA debt and inflation?
I don’t think inflation is exportable because it’s a central bank problem.
The exceptions are countries who use USD like Panama 🇵🇦 and El Salvador 🇸🇻
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21 sats \ 4 replies \ @flat24 31 Dec 2024
Friend, the dollar is the world's reserve currency, therefore all countries demand dollars for their reserves, dollars and American treasury bonds. and additionally, being the reference currency worldwide, all assets are mainly measured in dollars and are traded in dollars between countries. This in turn allows the American government to export debt (the dollar is debt, issued without any backing) which translates into exporting dollars to the whole world. This in turn causes the strong printing of money that they have brought in the last 50 years to not be noticed, to not be noticed within their territory, and to this add that the rest of the Fiat currencies are even more garbage, then everyone asks for and needs dollars, because it is presumed that it is the best money. and add to this that ordinary people 👥 don't know about good money or bad money in school they don't teach about it, only those where the country is involved in a crisis and the currency depreciates rapidly is that the average citizens see something called "good money and bad money" and end up getting rid of their bad money (local Fiat money) and get what they think is better money, that is, dollars (but remember that the dollar is another bad money) But people don't know this, so they keep demanding dollars from every corner of the planet. The government doesn't care that its citizens are poorer, it even suits them. so the government prints tons of it, banks create money out of thin air in bulk through new loans, and in this way they export their currency to everyone while eroding it along the way and while the average citizen has no idea what is happening.
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11 sats \ 1 reply \ @stack_harder OP 31 Dec 2024
to be fair, until btc , the options were gold and dollars for most countries that didn't have access to the US financial instruments etc. course, all things considered, dollars were most likely the easist option. now it's just the new generation that will have to adopt bitcoin as the superior money
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21 sats \ 0 replies \ @flat24 31 Dec 2024
to be fair, until btc , the options were gold and dollars for most countries that didn't have access to the US financial instruments etc.
Totally true, before Bitcoin the common citizen could only access the dollar. Because gold is very difficult to deal with and not in all cities in the world, you can go and buy some investment currency (Chinese panda, American eagle, Australian kangaroo, English Britannia) to name a few. All citizens lived deceived, between the bad money of our countries of residence and the other bad money, disguised as "good money", that is, dollars.
Now we have BTC and we can be truly free. And the work of the new generations is to wake up and free themselves from the fiduciary system by adopting
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0 sats \ 1 reply \ @Bell_curve 31 Dec 2024
Amigo, Milei plans to dollarize in Argentina. This is a step in the right direction because the dollar is more stable than the peso, though Milei has done a great job of curbing and controlling inflation since he took office in Dec 2023.
It's easy to blame USA for all the world's financial problems but that is also lazy.
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11 sats \ 0 replies \ @flat24 31 Dec 2024
Here I do not agree with you, I cannot agree
  1. Milei is not going to dollarize Argentina, that is, replace the Argentine Peso with the Dollar. What Milei is allowing is the free trade of currencies, in order to break the existing exchange system that handles two different prices.
  2. It is not about whether the dollar is more stable than the peso or not. Milei stopped inflation, turning off the machine and allowing the peso to recover strength. Milei wants to recover the currency of the country, not adopt that of another.
  3. Nobody here is saying that the US is to blame for the world's problems, at no time has such a position been said or hinted at. It was simply said as it is part of the functioning of the dollar in the world.
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11 sats \ 4 replies \ @flat24 30 Dec 2024
Here is the source of the example I cited. By the way, the amounts I mentioned are totally wrong. My memory is correct in the important fact (the erosion of purchasing power). The price went from 6.3 ounces to 0.87 ounces, an erosion of one-fifth of what it was before.
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11 sats \ 2 replies \ @stack_harder OP 30 Dec 2024
i always have this handy lol
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10 sats \ 1 reply \ @flat24 30 Dec 2024
A very valuable resource, this is like that good friend who warns you before stepping in shit, to avoid the unpleasantness while you are walking,
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11 sats \ 0 replies \ @stack_harder OP 31 Dec 2024
true, but unfortunately the response of most normies when trying to warn them is
:p
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0 sats \ 0 replies \ @nitter 30 Dec 2024 bot
https://xcancel.com/ladoblabullion/status/1862474022572679670
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21 sats \ 0 replies \ @pillar 29 Dec 2024
The US Federal Reserve is the heart of the fiat money printer. The closer you get there, the more benefit you get out of it.
  • US citizens benefit more than other countries' citizens.
  • People with close access to the US financial system benefit more than people who have little or no access to it.
  • People who can easily get USD benefit more than people who have a hard time finding and/or holding them.
This applies both to borrowing and investing.
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11 sats \ 0 replies \ @theonceler 29 Dec 2024
Yes, we’re closer to the printer than them. Consider dollarized countries. When the stimmy checks were printed they were directly stealing from all of those countries citizens
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10 sats \ 0 replies \ @denlillaapan 29 Dec 2024
Yes.
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10 sats \ 2 replies \ @Undisciplined 29 Dec 2024
It's a great and complex question. I think you're suspicion is largely correct. Sometimes, we talk about the US exporting inflation, which is what you're talking about.
There are some important caveats. One of which is that the recipients of US foreign aid benefit before the average US citizen.
The situation in Europe is largely of their own making. The policies are so much more destructive there and in Canada than in the US.
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51 sats \ 1 reply \ @stack_harder OP 30 Dec 2024
does any of that affect Canadians much? i hear there is a bit of a brain drain from Canada as they are like, i can make a ton more money in the US and hop over there
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0 sats \ 0 replies \ @Undisciplined 30 Dec 2024
I haven't looked into how large the migration flows are from Canada into the US. Anecdotally, it does seem like people are increasingly voting with their feet and leaving Canada for the US.
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0 sats \ 1 reply \ @Shugard 29 Dec 2024
It seems US wages just keep going up and up, while EU and UK fall behind. but is this mostly because of the inefficiencies and shitty red tape? or just a complex amount of variables?
I think it is less the cantilever effect that plays a bigger role here, but rather the higher social securities and greater bureaucratic hurdles in the EU.
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11 sats \ 0 replies \ @stack_harder OP 30 Dec 2024
i've heard the bureaucratic hurdles are crazy in most EU countries, i havnt run a business here though so cant say for sure
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0 sats \ 0 replies \ @7e6e393a56 29 Dec 2024
Having a dominant global currency provides ample demand which benefits US businesses and consumers through the liquidity and stability of their currency. Additionally, it allows them to theoretically borrow at lower rates than are available in the rest of the world. Being the issuer of the world's reserve currency also generates another source of revenue for the US government. This income is the purchasing power created through the printing of new US dollar bills.
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