pull down to refresh
0 sats \ 5 replies \ @028559d218 6 Apr \ parent \ on: Worrying About a Dethroned Dollar (The Economist) econ
When the 'dollar exports' dry up... I think the point of the article is that other countries are looking for and finding alternatives.
Dollar exports 'drying up' assumes that countries will have to 'use' the dollar and that they won't find anything else... instead of the Dollar continuing to fall as other countries choose alternatives (the Euro, Yen and eventually Bitcoin)
Their debt is still priced in dollars, and monetary zones reflect security zones which really only leaves 1-2 other options that would be even more untenable to the globalists. Globalism is inevitably taking the L. Yen and Euro's are going home to their local stock markets as phase 1 of the of the decoupling, but they are in no way becoming reserve, they're not reserve material.
Countries adopting Bitcoin as a neutral reserve will be better off in the long run sure, but that still means devaluing their local currency to acquire said Bitcoin.
There's no way around the fact that it's not possible to have a trade imbalance without fiat currency manipulation, since you literally can't buy stuff and import it if you didn't first take in money by exporting the same amount of stuff. The subsidy that made this possible is going (mostly) away.
This is why the reciprocal tariffs are set as a multiple of the deficit, because this is a currency war, and there's no other economy that can subsidize the rest of the worlds currencies. The fuse has been lit, the temporary bump in FX is just ducking for cover.
reply
I wouldn't even call them 'reciprocal tariffs...'
They're not reciprocal tariffs as far as I can tell.
They're like... import taxes to reduce the trade deficit. They're "trade deficit disincentives" or "trade deficit taxes" on Americans to reduce the purchasing of overseas goods.
It's not even about other countries tariffs at this point
reply
They're reciprocal against all forms of protection regardless of what the other countries call that, hense the multiple of the trade imbalance... This includes the aforementioned currency manipulation without which such imbalance is not possible
reply
Do you think the end goal then... is to balance the trade deficit with multiple countries? Make the balance of trade basically zero then?
reply
The goal is national security more broadly. Trade imbalance is a symptom, not the cause.
The cause is that we are at war, and have been for a long time.
You can't have a country if you don't make things, so in war you prevent your enemy from being able to make things they can fight you with. Historically that was kinetic, blowing up factories and bridges etc. But since kinetic wars between great powers today would result in nuclear armageddon, we now have 5th generation warfare. As citizens without secret clearance all we see is the tip of the iceberg played out as information operations in the media.
Currencies are just one battlefield in the 5GW battlespace. I don't think it will end once the dollar is weaponized to the same degree other fiats are, as I said before monetary zones reflect security zones. I stand by my predictions from last year that this results in territorial expansion and likely a constitutional convention.
reply