5 ms·

Because they control the medium of exchange: the American Dollar is the de-facto standard for all currencies of the world. I've heard (or maybe read?) a quote

by hasenj 16y ago

Because they control the medium of exchange: the American Dollar is the de-facto standard for all currencies of the world. I've heard (or maybe read?) a quote to the effect that the US dollar is one of the top things that America exports. It's also the reasons Banks are rich, even though they don't practically produce anything. If they were simply accounting firms managing people's money and doing nothing other than book-keeping, without the ability to "create" money out of thin air, they wouldn't have become so rich. Japan and China on the other hand, became rich solely due to their hard work. I'm particularity fascinated by how Japan raised from the ashes, literally, to become what they are. The quantity and quality of creativity over there is just amazing.

chailatte 16y ago
Too bad Japan decided to save the banks in the 90s crash, and drain their citizen's cash savings by keeping interest rate at 0%. Fast forward to present day where the savings rate is close to 0%, and they have 200% GDP public debt. US is trying to do the same thing, but alas, it won't have the same effect as Americans have a negative savings rate, and dollar will suffer massive inflation in the process, dooming 60% of the population that live on less than 40k a year.
- fonosip 16y ago
  that sounds bad. but the US is nowhere near 200% GDP public debt. and has the world's reserve currency which is a key thing Japan did not have.
  - SkyMarshal 16y ago
    As soon as you start counting on things like having the world's reserve currency, or house prices never declining, etc. etc., you lose it. Economic history is replete with that theme. Will we ever learn?
    - OmniBus 16y ago
      One well-known fact is that nearly every petroleum producer trades petroleum in US dollar. Rumour has it that if some major producers attempt to switch to another currency, she hurts US economy and will be retaliated by US. Printing more money does not benefit Americans in general. Much of money is taken by US financial firms to overseas for speculation instead of going to manufacturing sector when the devaluation of US dollar is foreseeable. Sudden flux of speculation hurts the economy of other nations.
      - SkyMarshal 16y ago
        I know how it works, but the trend to replace the US dollar as the world reserve currency is already happening, being driven primarily by China and Russia. Be it a currency basket, IMF SDRs, 'petro', or something else, they're working on alternatives. It won't happen overnight, and the effort may ultimately fail, but it would foolish and complacent of the US to count on having the world reserve currency forever. A multi-polar world eventually won't accept it, both b/c of the Triffin dilemna and balance of power games.
fleitz 16y ago
Both of them were tremendous beneficiaries of the Marshall Aid plan. http://en.wikipedia.org/wiki/Marshall_Plan#Aid_to_Asia http://en.wikipedia.org/wiki/Marshall_Plan#Aid_to_Asia I know that US bashing is popular, but the US has in the past done tremendously generous things for the world.
- hasenj 16y ago
  From the random things I've read about Japan post WWII, they were basically forbidden to produce anything by the occupation government. http://en.wikipedia.org/wiki/Occupation_of_Japan#Industrial_disarmament http://en.wikipedia.org/wiki/Occupation_of_Japan#Industrial_...
SkyMarshal 16y ago
"Japan and China on the other hand, became rich solely due to their hard work." Every country that becomes rich does so due to hard work. Whether you borrow the knowledge and technology from an already developed country as Japan and China did, or figure it all out the hard way yourself as Europe and the US did during the Industrial Revolution, none of it is easy. I suppose the one exception might be natural-resource-rich countries that allowed foreign companies to extract the riches in return for profit sharing, but it remains to be seen whether that's sustainable. "I'm particularity fascinated by how Japan raised from the ashes, literally, to become what they are." Keep in mind Europe and Britain did that too. It's hard to say which was more decimated - Europe after years of bombing and tank warfare razed much of the continent, or the Japanese mainland after months of localized firebombing and two atomic blasts. Also don't forget that Japan had already developed into a superpower on its own by the early 1900s, a relatively short time after the Meiji Restoration opened the country and accelerated industrialization in 1868. They had the experience and knowledge to do it again after WWII, with a little funding from the US who needed an Asian bullwark against Soviet Communism. Japanese culture is arguably the very best in the world at learning from other cultures, and have been doing it for hundreds of years, borrowing parts of their language, fashion, military techniques, and other aspects from others, originally China and somewhat Korea, more recently the US and Europe. There is an admirable curiosity and lack of shame at learning from others and building on it. Of all the countries in the world, Japan may be the least affected by 'Not-Invented-Here' syndrome. I really wish more of that would rub off on the US.
- joe_the_user 16y ago
  Every country that becomes rich does so due to hard work. Sorry to abuse your illusions but some countries have become wealthy by stealing and/or borrowing from other countries - Spain after the conquest of the new world, for example. It is certainly true that wealth based on conquest or credit doesn't last. That might be a reason for American policy makers to reconsider current policy. But you should never assume that just because a person, organization or country has a fat bank account, they ipso facto worked hard for it. If the world is just, it's only just in a long time frame.
  - 16y ago
joe_the_user 16y ago
I've heard (or maybe read?) a quote to the effect that the US dollar is one of the top things that America exports. Ha, Ha It's a great business to be in: "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." (Ben Bernanke) The problem comes with such "business" perhaps not having great staying power.

by hasenj 16y ago

chailatte 16y ago

Too bad Japan decided to save the banks in the 90s crash, and drain their citizen's cash savings by keeping interest rate at 0%. Fast forward to present day where the savings rate is close to 0%, and they have 200% GDP public debt. US is trying to do the same thing, but alas, it won't have the same effect as Americans have a negative savings rate, and dollar will suffer massive inflation in the process, dooming 60% of the population that live on less than 40k a year.

fonosip 16y ago
that sounds bad. but the US is nowhere near 200% GDP public debt. and has the world's reserve currency which is a key thing Japan did not have.
- SkyMarshal 16y ago
  As soon as you start counting on things like having the world's reserve currency, or house prices never declining, etc. etc., you lose it. Economic history is replete with that theme. Will we ever learn?
  - OmniBus 16y ago
    One well-known fact is that nearly every petroleum producer trades petroleum in US dollar. Rumour has it that if some major producers attempt to switch to another currency, she hurts US economy and will be retaliated by US. Printing more money does not benefit Americans in general. Much of money is taken by US financial firms to overseas for speculation instead of going to manufacturing sector when the devaluation of US dollar is foreseeable. Sudden flux of speculation hurts the economy of other nations.
    - SkyMarshal 16y ago
      I know how it works, but the trend to replace the US dollar as the world reserve currency is already happening, being driven primarily by China and Russia. Be it a currency basket, IMF SDRs, 'petro', or something else, they're working on alternatives. It won't happen overnight, and the effort may ultimately fail, but it would foolish and complacent of the US to count on having the world reserve currency forever. A multi-polar world eventually won't accept it, both b/c of the Triffin dilemna and balance of power games.

fleitz 16y ago

Both of them were tremendous beneficiaries of the Marshall Aid plan. http://en.wikipedia.org/wiki/Marshall_Plan#Aid_to_Asia http://en.wikipedia.org/wiki/Marshall_Plan#Aid_to_Asia I know that US bashing is popular, but the US has in the past done tremendously generous things for the world.

hasenj 16y ago
From the random things I've read about Japan post WWII, they were basically forbidden to produce anything by the occupation government. http://en.wikipedia.org/wiki/Occupation_of_Japan#Industrial_disarmament http://en.wikipedia.org/wiki/Occupation_of_Japan#Industrial_...

SkyMarshal 16y ago

"Japan and China on the other hand, became rich solely due to their hard work." Every country that becomes rich does so due to hard work. Whether you borrow the knowledge and technology from an already developed country as Japan and China did, or figure it all out the hard way yourself as Europe and the US did during the Industrial Revolution, none of it is easy. I suppose the one exception might be natural-resource-rich countries that allowed foreign companies to extract the riches in return for profit sharing, but it remains to be seen whether that's sustainable. "I'm particularity fascinated by how Japan raised from the ashes, literally, to become what they are." Keep in mind Europe and Britain did that too. It's hard to say which was more decimated - Europe after years of bombing and tank warfare razed much of the continent, or the Japanese mainland after months of localized firebombing and two atomic blasts. Also don't forget that Japan had already developed into a superpower on its own by the early 1900s, a relatively short time after the Meiji Restoration opened the country and accelerated industrialization in 1868. They had the experience and knowledge to do it again after WWII, with a little funding from the US who needed an Asian bullwark against Soviet Communism. Japanese culture is arguably the very best in the world at learning from other cultures, and have been doing it for hundreds of years, borrowing parts of their language, fashion, military techniques, and other aspects from others, originally China and somewhat Korea, more recently the US and Europe. There is an admirable curiosity and lack of shame at learning from others and building on it. Of all the countries in the world, Japan may be the least affected by 'Not-Invented-Here' syndrome. I really wish more of that would rub off on the US.

joe_the_user 16y ago
Every country that becomes rich does so due to hard work. Sorry to abuse your illusions but some countries have become wealthy by stealing and/or borrowing from other countries - Spain after the conquest of the new world, for example. It is certainly true that wealth based on conquest or credit doesn't last. That might be a reason for American policy makers to reconsider current policy. But you should never assume that just because a person, organization or country has a fat bank account, they ipso facto worked hard for it. If the world is just, it's only just in a long time frame.
- 16y ago

joe_the_user 16y ago

I've heard (or maybe read?) a quote to the effect that the US dollar is one of the top things that America exports. Ha, Ha It's a great business to be in: "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." (Ben Bernanke) The problem comes with such "business" perhaps not having great staying power.