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because it's not the case at all. de-dollarization is picking up rapidly across most neutral/anti-US countries and this is the start of it. China is trading wit

because it's not the case at all. de-dollarization is picking up rapidly across most neutral/anti-US countries and this is the start of it. China is trading with Russia in yuan and even India has allowed small players to bypass USD and trade in INR directly https://www.reuters.com/world/india/india-allows-international-trade-settlements-rupees-export-promotion-schemes-2022-11-09/ https://www.reuters.com/world/india/india-allows-internation... Something I have been shouting hoarse is that this war in Ukraine is going to have multi-generational effect on world order with USD coming under US pressure. If Saudi drops USD, which now seems extremely unlikely, then it's truly a descent for the US empire.

nojito 4y ago
USD in Forex is well over $5T per day USD in oil is barely $3T per year Nothing external will ever pressure USD without the United States having collapsed first.
- deleted 4y ago
  [deleted]
- pphysch 4y ago
  > Nothing external will ever pressure USD Not completely true. The current crisis is driven by foreign buyers not being enthusiastic about buying more US debt. The current inflation crisis is directly related to the large amount of price support for US debt provided by the US Fed in 2020-21. US govt is essentially holding foreign creditors hostage. If you try to move away from US debt, they will just print more dollars and devalue all your (and everyone else's) assets. So the non-Western world (90% of humans) very strongly wants to dedollarize as smoothly as possible. US debt is extremely toxic, which isn't an obvious fact if you look at the surface only.
  - jdkee 4y ago
    "The current crisis is driven by foreign buyers not being enthusiastic about buying more US debt." That is largely irrelevant. As the world's reserve currency, the Federal Reserve could buy up Treasuries as needed. The domestic inflation problem is another matter.
    - pphysch 4y ago
      Suppose the Fed buys 100% of outstanding US debt via QE, etc. Then USD is no longer the global reserve currency.
  - bjornsing 4y ago
    > US debt is extremely toxic, which isn't an obvious fact if you look at the surface only. Is it? Why do you think so? I’d say it’s the safest asset in the world. Sure, if you buy a 10y US bond you risk having some of the value eaten by inflation. But that’s a relatively “soft” risk in that hyperinflation is unlikely. Default I think is extremely unlikely.
    - grogers 4y ago
      US treasuries are sometimes called "return-free risk". It seems pretty clear that the US government is borrowing unsustainably high amounts. We can't keep this pace of borrowing up for very long. So either the government starts being financially responsible (how likely do you think that is?), or by the time those 10y bonds mature you'll either get highly devalued dollars or just nothing at all.
  - nojito 4y ago
    What crisis? The USD has never been stronger and FX volume for USD is increasing.
- amluto 4y ago
  That’s like saying “cryptocurrency trades 7 zillion dollars of value per day but only $3M per day of actual business occurs, so actual business considerations can’t possibly affect the price of cryptocurrency”. There is a whole lot of money moving around via forex transactions, but that doesn’t control the value of the dollar.
  - nojito 4y ago
    USD FX runs the entire world. Comparing it to crypto shows a lack of understanding of international markets.
    - amluto 4y ago
      USD is extremely important internationally. The ability to exchange it freely is part of why it’s important. This does not mean that the $5T per day of FX outweighs the actual commerce in determining the value of the dollar. (I’m not interested in the “lack of understanding” game.)
kasey_junk 4y ago
The Chinese are demanding Russia trade in yuan because the Russian currency has, through a series of impressive self owns, become completely useless. If the Russian position was even a little less weak it wouldn’t fly because Russians don’t want yuan for the same reason Chinese people don’t, it’s an illiberal currency unsuitable for trade. That’s getting worse not better, because there is a moderate chance if China relaxed its currency controls it would crater their economy and bring the ruling class to an end. Similarly, the INR is being (slightly) liberalized, not because Indians prefer international trade in their local currency but because it costs them so much to have such a bad currency. There are reasons to think people would prefer a different currency to USD to be the reserve currency but it’s because it’s not liberal enough. Switching to extremely repressive currency regimes like the yuan or the rupee is counterproductive To the people who want a different international trade currency.
- georgeplusplus 4y ago
  China demands payment in useless currency. What part of this narrative makes sense to you?
  - deleted 4y ago
    [deleted]
  - kasey_junk 4y ago
    I will buy your car in kasey_junk bucks to explain my point if you want.
    - georgeplusplus 4y ago
      I don't want Kasey junk bucks. Which is why I'm scratching my head at youre reasoning the largest economy in the world would accept worthless currency.
      - kasey_junk 4y ago
        And if I held a gun to your head and demanded that you accept kasey_junk bucks? China has some of the strictest currency controls in the world. To the point if you are doing treasury operations for an international business there you can’t use your normal financial rails to accomplish day to day tasks like manage payroll. No one, including Chinese citizens, want to keep their cash there. For corporations this manifests in added costs, but for individuals (with even moderate means) it becomes a game of hide the assets. So much so that cities in the west are dealing with asset inflation specifically attached to Chinese buyers. China doesn’t have a problem with western citizens over paying for property there. Until a currency liberalizes it can’t become a reserve currency for international trade. So for the yuan we have 2 choices, it liberalizes (and perhaps tanks their leadership) or it stays second class. The current Chinese leadership believes the former is worse than the latter.
RC_ITR 4y ago
It’s so interesting to me that people see the dollar at a long term high, a proxy war in which the US is kicking ass (we don’t even need to send troops, our old equipment is enough) and their takeaway is that the US is in decline.
- hnews_account_1 4y ago
  The US is incredibly strong. That does not mean the dollar is in good shape. Too much strength for your currency of exchange / account is a bad thing. It is why crypto cannot be a currency even if the blockchain was rock solid tech. Nobody in their right mind will use a currency that is that volatile. You cannot price anything properly or run a business. Same with usd. Sure the guy above is exaggerating and he probably knows that, but dollar strength is a bad thing beyond a point. People in finance already understand this very well.
  - SergeAx 4y ago
    Are you saying that USD is very volatile currency? Volatile relative to what?
    - petre 4y ago
      Not very volatile but the USD/Euro parity changed lot during the last five years. The BCE is obsessed with the stability of the currency, but I find that the FED is doing a much better job with the USD or maybe it's also the US economy being more resilient.
      - bjornsing 4y ago
        I think it’s the US economy being more resilient. Here in Europe things started falling apart when the interest rate went up to 1.75%. The US seems fine with double that. I think the over regulating of the labor market and Ponzi style pensions are the two major factors. But it is hard to understand how they can be so different. I’d love to read something on the subject if anybody has any recommendations.
    - 4y ago

nojito 4y ago

USD in Forex is well over $5T per day USD in oil is barely $3T per year Nothing external will ever pressure USD without the United States having collapsed first.

deleted 4y ago
[deleted]
pphysch 4y ago
> Nothing external will ever pressure USD Not completely true. The current crisis is driven by foreign buyers not being enthusiastic about buying more US debt. The current inflation crisis is directly related to the large amount of price support for US debt provided by the US Fed in 2020-21. US govt is essentially holding foreign creditors hostage. If you try to move away from US debt, they will just print more dollars and devalue all your (and everyone else's) assets. So the non-Western world (90% of humans) very strongly wants to dedollarize as smoothly as possible. US debt is extremely toxic, which isn't an obvious fact if you look at the surface only.
- jdkee 4y ago
  "The current crisis is driven by foreign buyers not being enthusiastic about buying more US debt." That is largely irrelevant. As the world's reserve currency, the Federal Reserve could buy up Treasuries as needed. The domestic inflation problem is another matter.
  - pphysch 4y ago
    Suppose the Fed buys 100% of outstanding US debt via QE, etc. Then USD is no longer the global reserve currency.
- bjornsing 4y ago
  > US debt is extremely toxic, which isn't an obvious fact if you look at the surface only. Is it? Why do you think so? I’d say it’s the safest asset in the world. Sure, if you buy a 10y US bond you risk having some of the value eaten by inflation. But that’s a relatively “soft” risk in that hyperinflation is unlikely. Default I think is extremely unlikely.
  - grogers 4y ago
    US treasuries are sometimes called "return-free risk". It seems pretty clear that the US government is borrowing unsustainably high amounts. We can't keep this pace of borrowing up for very long. So either the government starts being financially responsible (how likely do you think that is?), or by the time those 10y bonds mature you'll either get highly devalued dollars or just nothing at all.
- nojito 4y ago
  What crisis? The USD has never been stronger and FX volume for USD is increasing.
amluto 4y ago
That’s like saying “cryptocurrency trades 7 zillion dollars of value per day but only $3M per day of actual business occurs, so actual business considerations can’t possibly affect the price of cryptocurrency”. There is a whole lot of money moving around via forex transactions, but that doesn’t control the value of the dollar.
- nojito 4y ago
  USD FX runs the entire world. Comparing it to crypto shows a lack of understanding of international markets.
  - amluto 4y ago
    USD is extremely important internationally. The ability to exchange it freely is part of why it’s important. This does not mean that the $5T per day of FX outweighs the actual commerce in determining the value of the dollar. (I’m not interested in the “lack of understanding” game.)

kasey_junk 4y ago

The Chinese are demanding Russia trade in yuan because the Russian currency has, through a series of impressive self owns, become completely useless. If the Russian position was even a little less weak it wouldn’t fly because Russians don’t want yuan for the same reason Chinese people don’t, it’s an illiberal currency unsuitable for trade. That’s getting worse not better, because there is a moderate chance if China relaxed its currency controls it would crater their economy and bring the ruling class to an end. Similarly, the INR is being (slightly) liberalized, not because Indians prefer international trade in their local currency but because it costs them so much to have such a bad currency. There are reasons to think people would prefer a different currency to USD to be the reserve currency but it’s because it’s not liberal enough. Switching to extremely repressive currency regimes like the yuan or the rupee is counterproductive To the people who want a different international trade currency.

georgeplusplus 4y ago
China demands payment in useless currency. What part of this narrative makes sense to you?
- deleted 4y ago
  [deleted]
- kasey_junk 4y ago
  I will buy your car in kasey_junk bucks to explain my point if you want.
  - georgeplusplus 4y ago
    I don't want Kasey junk bucks. Which is why I'm scratching my head at youre reasoning the largest economy in the world would accept worthless currency.
    - kasey_junk 4y ago
      And if I held a gun to your head and demanded that you accept kasey_junk bucks? China has some of the strictest currency controls in the world. To the point if you are doing treasury operations for an international business there you can’t use your normal financial rails to accomplish day to day tasks like manage payroll. No one, including Chinese citizens, want to keep their cash there. For corporations this manifests in added costs, but for individuals (with even moderate means) it becomes a game of hide the assets. So much so that cities in the west are dealing with asset inflation specifically attached to Chinese buyers. China doesn’t have a problem with western citizens over paying for property there. Until a currency liberalizes it can’t become a reserve currency for international trade. So for the yuan we have 2 choices, it liberalizes (and perhaps tanks their leadership) or it stays second class. The current Chinese leadership believes the former is worse than the latter.

RC_ITR 4y ago

It’s so interesting to me that people see the dollar at a long term high, a proxy war in which the US is kicking ass (we don’t even need to send troops, our old equipment is enough) and their takeaway is that the US is in decline.

hnews_account_1 4y ago
The US is incredibly strong. That does not mean the dollar is in good shape. Too much strength for your currency of exchange / account is a bad thing. It is why crypto cannot be a currency even if the blockchain was rock solid tech. Nobody in their right mind will use a currency that is that volatile. You cannot price anything properly or run a business. Same with usd. Sure the guy above is exaggerating and he probably knows that, but dollar strength is a bad thing beyond a point. People in finance already understand this very well.
- SergeAx 4y ago
  Are you saying that USD is very volatile currency? Volatile relative to what?
  - petre 4y ago
    Not very volatile but the USD/Euro parity changed lot during the last five years. The BCE is obsessed with the stability of the currency, but I find that the FED is doing a much better job with the USD or maybe it's also the US economy being more resilient.
    - bjornsing 4y ago
      I think it’s the US economy being more resilient. Here in Europe things started falling apart when the interest rate went up to 1.75%. The US seems fine with double that. I think the over regulating of the labor market and Ponzi style pensions are the two major factors. But it is hard to understand how they can be so different. I’d love to read something on the subject if anybody has any recommendations.
  - 4y ago