5 ms·

From "Currency Wars: The Making of the Next Global Crisis", which I read too many years ago to clearly remember, this was a economic war strategy. During econom

From "Currency Wars: The Making of the Next Global Crisis", which I read too many years ago to clearly remember, this was a economic war strategy. During economic war-games the Pentagon set up this strategy was successfully employed. China, Russia- the "anti-west" powers started buying gold, dumping US debt and finally proposed creating their own currency for regional trade instead of using the USD as their reserve currency. This is a summary based on a book I can't really remember and concepts I might not have understood. That said, I do remember it was a good book, worth a read.

0815test 7y ago
This is not much of an "economic war" strategy, TBH - it's just a very visible signal of the "hey, we hate the U.S." sort. The "reserve currency" one uses as part of world trade is immaterial, except for convenience; the U.S. are not perceptibly better or worse off as a result of such choices. Tariffs and trade barriers though? Now, there's some "economic war" if I've ever seen it! "When goods won't cross borders... armies will."
- aaronblohowiak 7y ago
  >the U.S. are not perceptibly better or worse off as a result of such choices. How is that true? We can print more dollars. We don't have the same kind of control over other currencies.
  - 0815test 7y ago
    "You can print more dollars" only as long as market participants trust that you're not going to print too many dollars - as soon as you try to do anything of the sort, your status as "safety deposit box of the world" goes away. That's not much of a privilege!
- jddj 7y ago
  In most of the analyses I've read, the petrodollar has been of huge benefit to the US - effectively propping it up in the face of massive QE efforts and (in theory) allowing much more to be printed to service debts than would otherwise be sustainable. I mean, there must be some reason that trading or threatening to trade oil in Euros is practically asking for some kind of forced regime change.
  - treis 7y ago
    >In most of the analyses I've read, the petrodollar has been of huge benefit to the US - effectively propping it up in the face of massive QE efforts and (in theory) allowing much more to be printed to service debts than would otherwise be sustainable. It's not as simplistic as good or bad for the country. If have a good job and you want to buy a lot of imports then it's good. If you want to be a factory worker it's bad because what you make is more expensive for other companies to buy.
    - jddj 7y ago
      Sure, a weak currency is better for basic exports. It's widely accepted that Germany prefers a weaker euro to a stronger mark. We can look at the US's behaviour, though, to determine whether they think it's valuable to them or not. It's had every year since the petrodollar was established post WW2 to push the world towards using the Euro and instead has fiercely defended it.
      - treis 7y ago
        > they think it's valuable to them "They" in this case are the elected politicians that are in the "good jobs that buy imports" category and/or dependent on that category for political support.
  - lostapathy 7y ago
    It’s not that simple. Being the reserve currency also puts weird pressures on the US economy when other economies have issues. The total effect of which is probably not well understood.
  - igravious 7y ago
    “ COMMISSION RECOMMENDATION of 5.12.2018 on the international role of the euro in the field of energy ” https://ec.europa.eu/info/sites/info/files/c-2018-8111-recommendation_en.pdf https://ec.europa.eu/info/sites/info/files/c-2018-8111-recom... Does that mean the EU is going to be forcibly regime changed?
xmly 7y ago
Now Facebook has Libra to replace US dollars.
qqqwerty 7y ago
Individual Chinese, Russian, and Saudi billionaires generally invest heavily in US based investments (real estate, stocks, bonds, etc..) as a hedge against the political and legal uncertainty in their own countries. The US at this point is basically the safety deposit box for the world elite, and until that changes I highly doubt there will be much interest in coordinated economic war against the US. There will be some posturing and saber rattling though.
lowdose 7y ago
You think the prediction made in this book about returning to a gold standard can still happen?

0815test 7y ago

This is not much of an "economic war" strategy, TBH - it's just a very visible signal of the "hey, we hate the U.S." sort. The "reserve currency" one uses as part of world trade is immaterial, except for convenience; the U.S. are not perceptibly better or worse off as a result of such choices. Tariffs and trade barriers though? Now, there's some "economic war" if I've ever seen it! "When goods won't cross borders... armies will."

aaronblohowiak 7y ago
>the U.S. are not perceptibly better or worse off as a result of such choices. How is that true? We can print more dollars. We don't have the same kind of control over other currencies.
- 0815test 7y ago
  "You can print more dollars" only as long as market participants trust that you're not going to print too many dollars - as soon as you try to do anything of the sort, your status as "safety deposit box of the world" goes away. That's not much of a privilege!
jddj 7y ago
In most of the analyses I've read, the petrodollar has been of huge benefit to the US - effectively propping it up in the face of massive QE efforts and (in theory) allowing much more to be printed to service debts than would otherwise be sustainable. I mean, there must be some reason that trading or threatening to trade oil in Euros is practically asking for some kind of forced regime change.
- treis 7y ago
  >In most of the analyses I've read, the petrodollar has been of huge benefit to the US - effectively propping it up in the face of massive QE efforts and (in theory) allowing much more to be printed to service debts than would otherwise be sustainable. It's not as simplistic as good or bad for the country. If have a good job and you want to buy a lot of imports then it's good. If you want to be a factory worker it's bad because what you make is more expensive for other companies to buy.
  - jddj 7y ago
    Sure, a weak currency is better for basic exports. It's widely accepted that Germany prefers a weaker euro to a stronger mark. We can look at the US's behaviour, though, to determine whether they think it's valuable to them or not. It's had every year since the petrodollar was established post WW2 to push the world towards using the Euro and instead has fiercely defended it.
    - treis 7y ago
      > they think it's valuable to them "They" in this case are the elected politicians that are in the "good jobs that buy imports" category and/or dependent on that category for political support.
- lostapathy 7y ago
  It’s not that simple. Being the reserve currency also puts weird pressures on the US economy when other economies have issues. The total effect of which is probably not well understood.
- igravious 7y ago
  “ COMMISSION RECOMMENDATION of 5.12.2018 on the international role of the euro in the field of energy ” https://ec.europa.eu/info/sites/info/files/c-2018-8111-recommendation_en.pdf https://ec.europa.eu/info/sites/info/files/c-2018-8111-recom... Does that mean the EU is going to be forcibly regime changed?

xmly 7y ago

Now Facebook has Libra to replace US dollars.

qqqwerty 7y ago

Individual Chinese, Russian, and Saudi billionaires generally invest heavily in US based investments (real estate, stocks, bonds, etc..) as a hedge against the political and legal uncertainty in their own countries. The US at this point is basically the safety deposit box for the world elite, and until that changes I highly doubt there will be much interest in coordinated economic war against the US. There will be some posturing and saber rattling though.

lowdose 7y ago

You think the prediction made in this book about returning to a gold standard can still happen?