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The Changing World Order

118 points by mtm7 6y ago

airstrike 6y ago
> a rising world power (China) challenging the overextended existing world power (the US) This is a pretty bold claim, at least for now. People have been claiming this is the case for decades, but I still don't see it. Western (US / EU) demand is what drives China's growth. Technology in China is still by and large imported / copied. The West can move manufacturing back home (or anywhere else with cheap labor) and China's economic prowess will be severely undermined. China doesn't have a whole lot of leverage – it's cheap and convenient, but its cheap labor is easily replaceable, while Western demand (mostly US, really) and its technology are not. EDIT: Additionally, the balance of power used to change much more frequently back when we didn't have nuclear weapons. From the introduction, it seems this analysis is entirely economic when it ought to also factor in politics (domestic and international), strategy and military power.
- api 6y ago
  Wasn't quite a lot of what you say about China true about the USA in the 19th century? Not saying the cases are the same and I am skeptical of grand historical theses, but I don't think you can glibly dismiss China either. Personally I see China replacing a superpower, but the superpower being replaced is Russia. Russia is by nearly every metric declining and much faster than the USA. The question is whether the USA will remain the dominant superpower or whether China will be a serious challenger by mid century. To really challenge the USA China would have to export more than just goods and services but also ideas and culture. I see a little bit of ideas being exported but very little cultural export happening.
  - cheez 6y ago
    Russia's debt is minuscule in comparison to the other two.
    - hilbertseries 6y ago
      Yeah, but so is Russia’s GDP. For reference, Canada has a higher GDP.
      - cheez 6y ago
        It's roughly the same but per capita, definitely worse. IMO, Russia will bide her time. They have a lot of intelligent, entrepreneurial people. Just need the government to loosen up a bit. Or perhaps, most of the economy doesn't need GDP.
        hylaride 6y ago
        As a whole Russia’s entrepreneurs are leaving because they know if you get big enough, the corruption will come into play. Their government needs to do more than just loosen up.
        api 6y ago
        From all that I've read, corruption is why Africa has been so poor and missed out on much of the development of the 20th century. Why bother investing in anything when it will just be stolen by the local strong man?
    - ericmay 6y ago
      But that doesn’t really matter. It’s like if you have a net worth of $50 and an income of $100, but your buddies have an income of $100,000 and a debt of $70,000
      - cheez 6y ago
        Kind of. But which one would you bet on in a startup position?
        api 6y ago
        The latter. Wealth is a verb, not a noun. It's measured in flow, not money in the bank. Idle wealth is not wealth.
  - tanilama 6y ago
    Russia is objectively no longer a superpower but a shell of its past self. US after Cold War and before 2008 will be remembered as a very special country by history. China or the post great recession US can only imagine that power and influence, they can't match it.
    - api 6y ago
      That was kinda my point. We had a brief period of a unipolar world with the US as the sole superpower. I don't think that's stable or likely to persist, and it looks like China is already filling the empty niche. I think the 21st century will have China and the US as the two superpowers and the rivalry will be mostly economic and technological rather than military (via build up and proxy wars) and propagandistic. I don't think it was the Great Recession that cut America down to size. I think it was the Iraq war. We "won" but it was a classic Pyrrhic victory that cost us both a ton of capital (I wonder if it caused the Great Recession) and our reputation on the world stage. We basically burned our Cold War victory on that. Bush II was the worst president of the last 100 years, in my opinion worse than Nixon and worse than Trump has been so far in terms of actual damage done. I don't think there would be a President Trump either were it not for that damage.
- cheez 6y ago
  Dalio is kissing up to CCP
  - LB232323 6y ago
    Without a doubt. He has no rights to forfeit as a billionaire. So eager to jump ship, at least they are making their "principles" clear.
  - cscurmudgeon 6y ago
    Totally. Sort of surprised it is so blatant and that HN is eating this up.
  - saltedonion 6y ago
    If you read or watch enough of dalios interviews, you will realize he almost never says anything negative about China.
- hello_moto 6y ago
  > but its cheap labor is easily replaceable If it's that easy, it should have happened by now.
  - airstrike 6y ago
    > If it's that easy, it should have happened by now. Why? It's not convenient. I'm just saying it could be done if necessary. It isn't convenient because China also offers infrastructure, a rich supply-chain of similarly off-shored labor / parts and it's "the devil you know" vs. e.g. Vietnam
- tanilama 6y ago
  All you said might be true 5 years ago. But many no longer holds. China is no longer an export dependent economy, and moving manufacturing away from it, is hard. The belief that manufacturing is about labor is simply false. Dalio is pretty smart to smell the trend, maybe just because he is less idealogical driven but data-driven.
  - gimmeThaBeet 6y ago
    Yeah, I think one of the biggest misconceptions people have about china's economy today is that they aren't nearly as dependent on exports as people think. On an absolute number net exports look big, but as % of GDP, countries like Germany or SK nearly log like more dependent. The much more critical thing for China is domestic consumption, which is where they focus the most and struggle the most. And a big thing there that has made other developed countries mad is that China's net imports haven't nearly kept up with their consumption growth. China has been meeting consumption domestically, which changes their mix, and makes everyone else understandably frustrated.
- marktolson 6y ago
  Look at China's GDP over the last 2 decades. It has grown exponentially. At this rate they'll surpass the US this decade or next. You cant just move manufacturing elsewhere. China have perfected low cost mass manufacturing. It's not just beacuse labour is cheaper. That used to be the case but now they are innovating at a huge scale.
  - clairity 6y ago
    economics lectures i attended a decade ago indicated that china has already surpassed the US in gdp, but to give us face and to not decelerate their growth, china manipulates their numbers and monetary policy to keep up appearances that the US is still larger. china has 4x our population and growing like a weed. it’s naive to think they haven’t/won’t/can’t eclipse the US economy. it’s another reason we should overhaul immigration policy to attract the world’s best minds while we still have the prestige to do so.
    - lonelappde 6y ago
      In publicly announced numbers, China has larger GDP by purchasing power parity. (I'm not sure if that's equivalent to your currency manipulation interpretation.)
      - clairity 6y ago
        yes, ppp gdp was largely on par a decade ago too. apparently that's not as worrying to american politicians and policymakers as nominal gdp, as it's nominal gdp being manipulated for appearances (besides monetary policy, the government apparently has enough tentacles into industry and regional accounting to do so).
  - icelancer 6y ago
    >> You cant just move manufacturing elsewhere That's exactly what China and the United States are trying to do: To Africa.
- ipnon 6y ago
  Note, Japan's ascension to the largest economy in the world was also "guaranteed" near the end of the Cold War. We can all see plainly how such claims have played out. You have to admit that the possibility of a global hegemony is more likely today than ever in modern history. An unlikely event, however, is still unlikely, no matter the rate at which it increases in likelihood. Our prerogative now is to carefully monitor this increasing rate, lest it somehow escape our attention while becoming unavoidable.
  - dehrmann 6y ago
    Interestingly, Japan ended up going down a low-growth path in part due to demographics--lots of old people, not many immigrants. China's former one child policy and a preference for boys set the stage for stagnation in 10-20 years. China just has 10x the population of Japan. https://www.indexmundi.com/graphs/population-pyramids/china-population-pyramid-2018.jpg https://www.indexmundi.com/graphs/population-pyramids/china-...
- hn_throwaway_99 6y ago
  I think at the end of the day if a country's strongest asset is its "demand", that is, its ability to consume goods and services instead of produce them, then i think that country is in for a world of hurt.
  - BubRoss 6y ago
    Not only has no one said that, it doesn't even make sense in the first place.
  - darkerside 6y ago
    US is the "buyer" who has the money. China is the biggest supplier of goods. A statement like the above is overly simplistic. The US will exert power and influence in a buyer's market, and will lose influence in a seller's market. Which market we're in is an be interesting discussion, and it predicates any prediction of the future.
  - magicsmoke 6y ago
    A country's demand is linked to its supply. After all, it has to pay for the goods it demands with something.
    - lonelappde 6y ago
      That's a very loose link in a world where fiat currency and reserve currency exist for printing money.
      - magicsmoke 6y ago
        But not negligible. The USD wouldn't be where it is without the US economy.
- dehrmann 6y ago
  > copied https://www.youtube.com/watch?v=Km5XQxRrQvw&start=46&end=62 https://www.youtube.com/watch?v=Km5XQxRrQvw&start=46&end=62
- fbelzile 6y ago
  > The West can move manufacturing back home (or anywhere else with cheap labor) and China's economic prowess will be severely undermined. The US technically can, but then how many Americans would be able to buy the $2999 iPhone (for example) to keep Apple's current valuation?
  - icelancer 6y ago
    Not to mention the lead times on factory construction being two orders of magnitude longer in the United States. Steve Jobs told Obama manufacturing is never coming home, but it only partly had to do with cost. Impossibility of scaling like China was the major blocker.
  - bhupy 6y ago
    I'm not sure that the West can move manufacturing back home, but I can see manufacturing moving to the next poorest country, in perpetuity. China's standard of living is increasing, and it will eventually be as economical to outsource work to China as it is to outsource labor to Japan or South Korea. Instead, I can see the world gradually shifting manufacturing to the next cheapest labor pool until there is none left, and then the ensuing equilibrium would have diversified supply chains, with any concentration largely being a function of 1) access to natural resources, and 2) access to expertise.
  - cscurmudgeon 6y ago
    It will move to places like India and Vietnam and other countries that are more open and transparent but also Cheap. It was accelerating before the pandemic. https://www.scmp.com/economy/china-economy/article/3045141/chinas-manufacturing-exodus-set-continue-2020-despite https://www.scmp.com/economy/china-economy/article/3045141/c...
- basch 6y ago
  >still by and large imported / copied. The import of intellectual property could take decades or lifetimes to truly play out. If a country could take everything we know, without the debt, it would be a stellar starting point, but wouldnt instantly make them us.
- RareSoft 6y ago
  >Western (US / EU) demand is what drives China's growth. China's exports are not as much of an influence on it's GDP as you would think. The difference between China and the US is less than 10% of GDP. China's middle class has grown very wealthy which has undoubtedly reduced China's reliance on exports and stabilized its economy against outside interference.
- justinzollars 6y ago
  > Technology in China is still by and large imported / copied. When I visited China, I felt like I was in the future. We have fallen behind, and we literarily have shipped the "Arsenal of Democracy" to China. Their airports are bigger and better, the high speed rail was amazing, and the subway system was simple to navigate. China has innovated in important ways - they have beat us to 5G, and they have weapons systems that could take out our best aircraft carriers and satellites.
  - Alekhine 6y ago
    Who gives a damn if their infrastructure is new and modern? Was that technology developed in China? It's possible, but I doubt it. And what kind of visit was this where you were inspecting their weapon systems, and ascertained that they could take out the best of what the American military has, based on some knowledge of military technology you magically have?
    - lonelappde 6y ago
      Technology still works even if it's copied. Don't confusing "copying" with "only copying". Modern US tech is in large part created by Chinese emigrants and their children. Do you think every technologist emigrated? Infrastructure is a sign of a healthy economy and capability to build a war machine.
    - justinzollars 6y ago
      > and ascertained that they could take out the best of what the American military has, based on some knowledge of military technology you magically have? Thats called reading. https://www.rand.org/blog/2019/10/how-the-united-states-could-lose-a-great-power-war.html https://www.rand.org/blog/2019/10/how-the-united-states-coul... https://www.amazon.com/Destined-War-America-Escape-Thucydidess-ebook/dp/B01IAS9FZY https://www.amazon.com/Destined-War-America-Escape-Thucydide...
- nopinsight 6y ago
  China is doing most things right according to endogenous growth theory. Exports help it grow faster but are not the most essential part of the equation. China's export is only ~20% of its 2018 GDP. https://www.theglobaleconomy.com/china/exports/ https://www.theglobaleconomy.com/china/exports/ "Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economic growth." https://en.wikipedia.org/wiki/Endogenous_growth_theory https://en.wikipedia.org/wiki/Endogenous_growth_theory > Technology in China is still by and large imported / copied. For many important technologies, it is either on par, a bit behind, or sometimes a bit ahead (5G, quantum communications) of the west. A few key areas where China still lacks are semiconductors, aviation, and global reaches of internet platforms. These are important but account for far less than half of its GDP. China's numbers of patents and scientific publications have reached world's no.1 in recent years: https://en.wikipedia.org/wiki/World_Intellectual_Property_Indicators https://en.wikipedia.org/wiki/World_Intellectual_Property_In... https://en.wikipedia.org/wiki/List_of_countries_by_number_of_scientific_and_technical_journal_articles https://en.wikipedia.org/wiki/List_of_countries_by_number_of... One can argue about the quality of those, but one should not assume that China is substantially behind the west as was the case even a couple decades ago. China's number of STEM graduates, many of whom are sources of the progress above, is the highest in the world: 4.7m in 2016. The only country that comes close is India. https://www.statista.com/chart/7913/the-countries-with-the-most-stem-graduates/ https://www.statista.com/chart/7913/the-countries-with-the-m... > ...while Western demand (mostly US, really) and its technology are not. US population: ~330 million; EU, ~450 million => Total: 780 million. China's population: ~1400 million. Domestic demand is clearly not China's disadvantage.
  - airstrike 6y ago
    > US population: ~330 million; EU, ~450 million => Total: 780 million. China's population: ~1400 million. Domestic demand is clearly not China's disadvantage. Population size doesn't paint a full picture. China's GDP per capita is still less than a third of the US. A lot of those 1.4 billion have absolutely appalling living standards.
    - nopinsight 6y ago
- magicsmoke 6y ago
  Nuclear weapons don't actually have that much of an impact. They don't do anything socially or economically. They don't prevent all conventional warfare either. If one country annexes territory from another and the target responds with a threat to nuke the aggressor, the aggressor can just call their bluff. Mutual destruction over a flesh wound isn't credible. The only things nukes do is ensure that actors can't be forced off the stage with military conquest. Barring that, the rest of the military-economic-social game plays on as it did before the nuclear age.
- tarsinge 6y ago
  The question is how these trends will evolve in the future. The trends in education for example, China has a huge population, it’s hypothetical but do you think US engineering and innovation keep up if it’s then vastly outnumbered in 20 years?
- nazgulnarsil 6y ago
  The West can move manufacturing back home (or anywhere else with cheap labor No it can't. An empire is the complexity*robustness of its supply chains, and supply chains are much less modular on the ground than they appear to be from the air.
xiaolingxiao 6y ago
Highly recommend listening to this full interview: https://www.youtube.com/watch?v=yrxYhv2O3wU https://www.youtube.com/watch?v=yrxYhv2O3wU. It's long but worth it, and it touches on many of the points he brings up in the article. In fact, the interview occurred just a week after this article was published.
tootie 6y ago
Lost me in the first paragraph. Examining a history of money supply and debt that predates Bretton-Woods is simply not relevant. Everything I read could have been lifted from a comment thread in /r/Libertarian 10 years ago. The last financial crisis was the ultimate test for fiat currency. One that was pointed at as the moment that debt-driven currency would crash and burn by a lot of gold bugs. Instead, a deluge of loose money came and went. Banks recovered. Markets recovered. Jobs recovered. Everything recovered. Even if the face of continued fiscal profligacy. There is absolutely no logical conclusion that can be drawn except for fiat currency being one of the greatest accomplishments of the 20th century.
- cheez 6y ago
  debasement happens all the time https://money.visualcapitalist.com/currency-and-the-collapse-of-the-roman-empire/ https://money.visualcapitalist.com/currency-and-the-collapse...
  - tootie 6y ago
    That's utterly preposterous. It's the exact same gibberish that Ron Paul used to try to convince us the Fed action was going to cause massive inflation. He said it for years. Then we struggled to crack 2% with gigatons of helicopter money.
  - AnimalMuppet 6y ago
    OK, but what's your point? The US dollar doesn't seem to be debasing too badly since 2008, despite all the new money created.
seibelj 6y ago
Everything Ray Dalio writes he presents like the prophet come down from high to give us the Sacred Truths. Dalio is a successful trader and is beyond wealthy. He’s a smart guy who has a true interest in history. But he is just one opinion of many and he is absolutely not saying things that are uniquely known to him. I read the whole thing and it’s like, “Powerful countries decline! Declining power leads to social strife!” No shit dude.
- DennisP 6y ago
  It's not just that Dalio is a "successful trader." He runs the world's largest hedge fund and their expertise is in predicting global macroeconomic trends. His experience is directly relevant.
  - viburnum 6y ago
    You know successful hedge funds profit more from insider trading than from any kind of analytical wizardry, right?
    - Vinceo 6y ago
      Could you provide a source on this?
    - tryptophan 6y ago
      Lol. Dalio is too big to bother with insider trading. With $160bill under management, that leaves like what, ~50 companies he can't just buy outright in the entire world? Please stop watching Billions and thinking it represents anything close to reality.
      - deleted 6y ago
        [deleted]
      - taylortrusty 6y ago
        Billions is absolutely based on reality. Steve Cohen / SAC Capital.
dehrmann 6y ago
Worth mentioning Pure Alpha was down 20% in Q1. Someone else observed Ray Dalio has been too busy building his brand as a financial sage (cough cough) and either not keeping his eyes on the road or he just got lucky in 2008. https://www.bloomberg.com/news/articles/2020-04-03/bridgewater-s-main-hedge-fund-loses-about-20-in-first-quarter https://www.bloomberg.com/news/articles/2020-04-03/bridgewat...
- icelancer 6y ago
  ...or he didn't plan for the pandemic and got wiped out like most everyone else? It doesn't have to be Ray's fault for not being prescient.
- astrofinch 6y ago
  Dalio admits in this that he didn't see the pandemic coming.
plainOldText 6y ago
I'm currently reading Disunited Nations: The Scramble for Power in an Ungoverned World by Peter Zeihan. [1] The book discusses the upcoming world order from a geopolitical perspective and gives original insight into potential developments. For example, I wasn't aware the US Navy has been securing the maritime shipping lanes, thus boosting global trade; and if that stops, well, you can imagine the implications. [1] https://www.amazon.com/Disunited-Nations-Scramble-Power-Ungoverned/dp/0062913689 https://www.amazon.com/Disunited-Nations-Scramble-Power-Ungo...
- sremani 6y ago
  Zeihan and George Friedman are really good. After getting perspective from reading them, prepared to be annoyed by geopolitical commentary on HN.
  - dang 6y ago
    Generic dissing of other commenters just adds noise to HN. If you know more than others, why not share some of what you know so we all can learn? (Edit: I originally wrote "one of the worst ways to add noise". That was overkill; it gets worse.)
    - plainOldText 6y ago
      I beg to differ. The comment was perfectly reasonable in my view. I also learned about someone new, namely George Friedman.
      - dang 6y ago
        You're talking about a different part of the comment.
    - sremani 6y ago
      It is a qualitative analysis done by an enthusiastic amateur (me). You may disagree, and it is perhaps noise. Who knows!
wcoenen 6y ago
Chapter 2 doesn't seem to be available there yet, but Dalio did post it on his linkedin page: https://www.linkedin.com/pulse/money-credit-debt-ray-dalio https://www.linkedin.com/pulse/money-credit-debt-ray-dalio
adaisadais 6y ago
“The slow one now will later be fast / for the times they are a Changin’” -Bob Dylan Loved reading “Principles” by Dalio. Great read. I find it apparent that the U.S. is declining while China is in a prime position to reach new heights. The U.S. greatest competitive advantage has been culture which is quickly being copied by the new middle class in China. The U.S. has allowed the wealth gap to grow to levels that are pretty scary. The U.S. has continued to elect inept and crony politicians who wish to look backward instead of bring the nation forward.
- cscurmudgeon 6y ago
  > The U.S. has allowed the wealth gap to grow to levels that are pretty scary. China has scary levels of wealth gap too. I think it is probably has more. https://blogs.lse.ac.uk/usappblog/2019/04/06/income-inequality-is-growing-fast-in-china-and-making-it-look-more-like-the-us/ https://blogs.lse.ac.uk/usappblog/2019/04/06/income-inequali... > The U.S. has continued to elect inept and crony politicians who wish to look backward instead of bring the nation forward China is perceived to much more corrupt than the US. It is not even a competition. This index is not perfect but this is the closest we have to measuring corruption uniformly across different systems. https://en.wikipedia.org/wiki/Corruption_Perceptions_Index https://en.wikipedia.org/wiki/Corruption_Perceptions_Index If the US is declining and China is ascending, why do we so many Chinese PhDs students (many of them my friends and hate going back) who want to stay back in the US with many years of wait time? https://www.boundless.com/blog/visa-bulletin/ https://www.boundless.com/blog/visa-bulletin/ Let us please stick to facts and data. (All the falsifiable statements in this parent comment are false but for some reason it is on top.)
  - seibelj 6y ago
    It’s amazing that someone who has a deep nuanced view of American politics and critiques the minutia of American current events from the inside, then blindly believes vague propaganda from China (“China united and strong! Great and competent leader!”). Super common perspective from upper-middle class Americans who argue on HN and Reddit. If you don’t live in China, don’t speak Chinese, didn’t grow up in China, have no Chinese family, then you simply have to idea what the fuck is really going on there.
prostheticvamp 6y ago
I couldn’t tolerate this writing long enough to get through more than half the article. There’s the “history is cyclical” trope, the “I have learned how to read history” repeated self-aggrandizement without any specifics, despite going on long enough to repeat himself, and really obvious statements meant to read like profundity (“when there’s great inequality of wealth, there will be social tensions”, paraphrasing only slightly.) I read a book by him once. It was short and vapid and full of pseudo-profundity. It was cheap and highly rated on Amazon, so I’d given it a try. I didn’t realize he was banking on his name as an investor. Now I understand why anyone would bother reading his writing once, but not why they would read it twice.
- justinzollars 6y ago
  Not everyone is a great messenger. I recommend Graham Allison Destined for War. Similar message but delivered differently.
- sameerds 6y ago
  On the flip side, the writing has an increasingly rare property that the whole article (essay?) is divided into sections with proper titles. More often than not, I lose patience and give up on most articles these days, simply because there are no visual markers when scrolling through. I have no way to know where to stop and scan a few lines as I scroll through ... it's all just a continuous torrent of words and sentences.
eointierney 6y ago
The world order, in terms of socio-economic and politico-legal structures, is for sure changing, but it's more a matter of demographics and communication. We have shattered certain assumptions about the world economy to ensure the continuing welfare of the oldest of us. This is an unprecedented act of selflessness by everyone younger than seventy-ish, because we love our elders so. The real change in the world order is logistical, which has caused significant re-pricings of almost everything (even the things that are roughly the same price are so in a very different set of market conditions). It is no longer a matter of how nations compete but how they collaborate, and the markets are adjusting accordingly. I'm quite optimistic, but then I study Science. [Edit (apart from mis-spellings)]: The shattered assumptions pertain to debt management by governments, which are trivial compared to the volume of daily trading. We are in for a reckoning on resource measurement hopefully not of catastrophic proportions and this pandemic is merely a spur. In a nutshell: money fails dimensional analysis. [Edit the second]: By the way, if any of you would like to get together and discuss type theory and dimensional analysis and maybe reach out to the folk on the n-category cafe and lambdatheultimate and suchlike I'll happily help. We've a problem needs solving and Hacker News is populated by folk who like solving problems. I'll end (cheekily, give it a search engine result) with a reference to Terence Tao: A mathematical formalisation of dimensional analysis. I keep coming back to this blogpost. The subject kinda weirds me out. [Edit the third]: Removed the first paragraph as snarky, mea culpa
- dforrestwilson 6y ago
  Lots of people seem to believe that Ray Dalio knows anything, with anymore certainty than we do. In financial circles the man is not taken seriously, and allegations of fraud have been whispered for years now. I would be curious to know why anyone believes that Ray Dalio should be taken seriously here?
  - thedudeabides5 6y ago
    I’ve worked personally w Ray and can attest he’s the real deal. If the “financial circles” you run with don’t respect $100bn+ AUM, there not really “financial circles,” sorry. If you want to make up your own mind, take a look at their work on debt crises. Sometimes hard to see how it connects to day to day trading, but not the hallmarks of a fraud. https://www.bridgewater.com/big-debt-crises/Principles-For-Navigating-Big-Debt-Crises-By-Ray-Dalio.pdf https://www.bridgewater.com/big-debt-crises/Principles-For-N... All that being said, still think he’s wrong about China.
m3kw9 6y ago
Unless the US losses a major war either economical or physical they are hard to upend because of globalization. Everything is very dependent on the US dollar and switching it will take a lot of persuading. Like losing a world war type persuading.
- mark_l_watson 6y ago
  I think that the “de-dollarization” can happen gradually, with the dollar slowly becoming a smaller portion of a bucket of currencies used for international transactions. Even countries that want to get out from under the dollar tax probably want this to be a slow transition. That said, I have no idea what the next few years will look like economically. Probably income inequality will greatly expand and I wouldn’t be surprised if new national alliances occur.
- smitty1e 6y ago
  With covid-19, the U.S. Congress is really hammering the Cosmic Credit Card. The deficit and the debt seem to be Really Big Numbers, existing in a scope outside of economic reality. One has the impression that this is not an economic perpetual motion machine. Maybe covid-19 could sink the USD and usher in a new economic phase. But seems unlikely, and there further seems zero political will to do anything more sane fiscally.
dredmorbius 6y ago
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118 points by mtm7 6y ago

> a rising world power (China) challenging the overextended existing world power (the US) This is a pretty bold claim, at least for now. People have been claiming this is the case for decades, but I still don't see it. Western (US / EU) demand is what drives China's growth. Technology in China is still by and large imported / copied. The West can move manufacturing back home (or anywhere else with cheap labor) and China's economic prowess will be severely undermined. China doesn't have a whole lot of leverage – it's cheap and convenient, but its cheap labor is easily replaceable, while Western demand (mostly US, really) and its technology are not. EDIT: Additionally, the balance of power used to change much more frequently back when we didn't have nuclear weapons. From the introduction, it seems this analysis is entirely economic when it ought to also factor in politics (domestic and international), strategy and military power.

api 6y ago
Wasn't quite a lot of what you say about China true about the USA in the 19th century? Not saying the cases are the same and I am skeptical of grand historical theses, but I don't think you can glibly dismiss China either. Personally I see China replacing a superpower, but the superpower being replaced is Russia. Russia is by nearly every metric declining and much faster than the USA. The question is whether the USA will remain the dominant superpower or whether China will be a serious challenger by mid century. To really challenge the USA China would have to export more than just goods and services but also ideas and culture. I see a little bit of ideas being exported but very little cultural export happening.
- cheez 6y ago
  Russia's debt is minuscule in comparison to the other two.
  - hilbertseries 6y ago
    Yeah, but so is Russia’s GDP. For reference, Canada has a higher GDP.
    - cheez 6y ago
      It's roughly the same but per capita, definitely worse. IMO, Russia will bide her time. They have a lot of intelligent, entrepreneurial people. Just need the government to loosen up a bit. Or perhaps, most of the economy doesn't need GDP.
      - hylaride 6y ago
        As a whole Russia’s entrepreneurs are leaving because they know if you get big enough, the corruption will come into play. Their government needs to do more than just loosen up.
        api 6y ago
        From all that I've read, corruption is why Africa has been so poor and missed out on much of the development of the 20th century. Why bother investing in anything when it will just be stolen by the local strong man?
  - ericmay 6y ago
    But that doesn’t really matter. It’s like if you have a net worth of $50 and an income of $100, but your buddies have an income of $100,000 and a debt of $70,000
    - cheez 6y ago
      Kind of. But which one would you bet on in a startup position?
      - api 6y ago
        The latter. Wealth is a verb, not a noun. It's measured in flow, not money in the bank. Idle wealth is not wealth.
- tanilama 6y ago
  Russia is objectively no longer a superpower but a shell of its past self. US after Cold War and before 2008 will be remembered as a very special country by history. China or the post great recession US can only imagine that power and influence, they can't match it.
  - api 6y ago
    That was kinda my point. We had a brief period of a unipolar world with the US as the sole superpower. I don't think that's stable or likely to persist, and it looks like China is already filling the empty niche. I think the 21st century will have China and the US as the two superpowers and the rivalry will be mostly economic and technological rather than military (via build up and proxy wars) and propagandistic. I don't think it was the Great Recession that cut America down to size. I think it was the Iraq war. We "won" but it was a classic Pyrrhic victory that cost us both a ton of capital (I wonder if it caused the Great Recession) and our reputation on the world stage. We basically burned our Cold War victory on that. Bush II was the worst president of the last 100 years, in my opinion worse than Nixon and worse than Trump has been so far in terms of actual damage done. I don't think there would be a President Trump either were it not for that damage.
cheez 6y ago
Dalio is kissing up to CCP
- LB232323 6y ago
  Without a doubt. He has no rights to forfeit as a billionaire. So eager to jump ship, at least they are making their "principles" clear.
- cscurmudgeon 6y ago
  Totally. Sort of surprised it is so blatant and that HN is eating this up.
- saltedonion 6y ago
  If you read or watch enough of dalios interviews, you will realize he almost never says anything negative about China.
hello_moto 6y ago
> but its cheap labor is easily replaceable If it's that easy, it should have happened by now.
- airstrike 6y ago
  > If it's that easy, it should have happened by now. Why? It's not convenient. I'm just saying it could be done if necessary. It isn't convenient because China also offers infrastructure, a rich supply-chain of similarly off-shored labor / parts and it's "the devil you know" vs. e.g. Vietnam
tanilama 6y ago
All you said might be true 5 years ago. But many no longer holds. China is no longer an export dependent economy, and moving manufacturing away from it, is hard. The belief that manufacturing is about labor is simply false. Dalio is pretty smart to smell the trend, maybe just because he is less idealogical driven but data-driven.
- gimmeThaBeet 6y ago
  Yeah, I think one of the biggest misconceptions people have about china's economy today is that they aren't nearly as dependent on exports as people think. On an absolute number net exports look big, but as % of GDP, countries like Germany or SK nearly log like more dependent. The much more critical thing for China is domestic consumption, which is where they focus the most and struggle the most. And a big thing there that has made other developed countries mad is that China's net imports haven't nearly kept up with their consumption growth. China has been meeting consumption domestically, which changes their mix, and makes everyone else understandably frustrated.
marktolson 6y ago
Look at China's GDP over the last 2 decades. It has grown exponentially. At this rate they'll surpass the US this decade or next. You cant just move manufacturing elsewhere. China have perfected low cost mass manufacturing. It's not just beacuse labour is cheaper. That used to be the case but now they are innovating at a huge scale.
- clairity 6y ago
  economics lectures i attended a decade ago indicated that china has already surpassed the US in gdp, but to give us face and to not decelerate their growth, china manipulates their numbers and monetary policy to keep up appearances that the US is still larger. china has 4x our population and growing like a weed. it’s naive to think they haven’t/won’t/can’t eclipse the US economy. it’s another reason we should overhaul immigration policy to attract the world’s best minds while we still have the prestige to do so.
  - lonelappde 6y ago
    In publicly announced numbers, China has larger GDP by purchasing power parity. (I'm not sure if that's equivalent to your currency manipulation interpretation.)
    - clairity 6y ago
      yes, ppp gdp was largely on par a decade ago too. apparently that's not as worrying to american politicians and policymakers as nominal gdp, as it's nominal gdp being manipulated for appearances (besides monetary policy, the government apparently has enough tentacles into industry and regional accounting to do so).
- icelancer 6y ago
  >> You cant just move manufacturing elsewhere That's exactly what China and the United States are trying to do: To Africa.
ipnon 6y ago
Note, Japan's ascension to the largest economy in the world was also "guaranteed" near the end of the Cold War. We can all see plainly how such claims have played out. You have to admit that the possibility of a global hegemony is more likely today than ever in modern history. An unlikely event, however, is still unlikely, no matter the rate at which it increases in likelihood. Our prerogative now is to carefully monitor this increasing rate, lest it somehow escape our attention while becoming unavoidable.
- dehrmann 6y ago
  Interestingly, Japan ended up going down a low-growth path in part due to demographics--lots of old people, not many immigrants. China's former one child policy and a preference for boys set the stage for stagnation in 10-20 years. China just has 10x the population of Japan. https://www.indexmundi.com/graphs/population-pyramids/china-population-pyramid-2018.jpg https://www.indexmundi.com/graphs/population-pyramids/china-...
hn_throwaway_99 6y ago
I think at the end of the day if a country's strongest asset is its "demand", that is, its ability to consume goods and services instead of produce them, then i think that country is in for a world of hurt.
- BubRoss 6y ago
  Not only has no one said that, it doesn't even make sense in the first place.
- darkerside 6y ago
  US is the "buyer" who has the money. China is the biggest supplier of goods. A statement like the above is overly simplistic. The US will exert power and influence in a buyer's market, and will lose influence in a seller's market. Which market we're in is an be interesting discussion, and it predicates any prediction of the future.
- magicsmoke 6y ago
  A country's demand is linked to its supply. After all, it has to pay for the goods it demands with something.
  - lonelappde 6y ago
    That's a very loose link in a world where fiat currency and reserve currency exist for printing money.
    - magicsmoke 6y ago
      But not negligible. The USD wouldn't be where it is without the US economy.
dehrmann 6y ago
> copied https://www.youtube.com/watch?v=Km5XQxRrQvw&start=46&end=62 https://www.youtube.com/watch?v=Km5XQxRrQvw&start=46&end=62
fbelzile 6y ago
> The West can move manufacturing back home (or anywhere else with cheap labor) and China's economic prowess will be severely undermined. The US technically can, but then how many Americans would be able to buy the $2999 iPhone (for example) to keep Apple's current valuation?
- icelancer 6y ago
  Not to mention the lead times on factory construction being two orders of magnitude longer in the United States. Steve Jobs told Obama manufacturing is never coming home, but it only partly had to do with cost. Impossibility of scaling like China was the major blocker.
- bhupy 6y ago
  I'm not sure that the West can move manufacturing back home, but I can see manufacturing moving to the next poorest country, in perpetuity. China's standard of living is increasing, and it will eventually be as economical to outsource work to China as it is to outsource labor to Japan or South Korea. Instead, I can see the world gradually shifting manufacturing to the next cheapest labor pool until there is none left, and then the ensuing equilibrium would have diversified supply chains, with any concentration largely being a function of 1) access to natural resources, and 2) access to expertise.
- cscurmudgeon 6y ago
  It will move to places like India and Vietnam and other countries that are more open and transparent but also Cheap. It was accelerating before the pandemic. https://www.scmp.com/economy/china-economy/article/3045141/chinas-manufacturing-exodus-set-continue-2020-despite https://www.scmp.com/economy/china-economy/article/3045141/c...
basch 6y ago
>still by and large imported / copied. The import of intellectual property could take decades or lifetimes to truly play out. If a country could take everything we know, without the debt, it would be a stellar starting point, but wouldnt instantly make them us.
RareSoft 6y ago
>Western (US / EU) demand is what drives China's growth. China's exports are not as much of an influence on it's GDP as you would think. The difference between China and the US is less than 10% of GDP. China's middle class has grown very wealthy which has undoubtedly reduced China's reliance on exports and stabilized its economy against outside interference.
justinzollars 6y ago
> Technology in China is still by and large imported / copied. When I visited China, I felt like I was in the future. We have fallen behind, and we literarily have shipped the "Arsenal of Democracy" to China. Their airports are bigger and better, the high speed rail was amazing, and the subway system was simple to navigate. China has innovated in important ways - they have beat us to 5G, and they have weapons systems that could take out our best aircraft carriers and satellites.
- Alekhine 6y ago
  Who gives a damn if their infrastructure is new and modern? Was that technology developed in China? It's possible, but I doubt it. And what kind of visit was this where you were inspecting their weapon systems, and ascertained that they could take out the best of what the American military has, based on some knowledge of military technology you magically have?
  - lonelappde 6y ago
    Technology still works even if it's copied. Don't confusing "copying" with "only copying". Modern US tech is in large part created by Chinese emigrants and their children. Do you think every technologist emigrated? Infrastructure is a sign of a healthy economy and capability to build a war machine.
  - justinzollars 6y ago
    > and ascertained that they could take out the best of what the American military has, based on some knowledge of military technology you magically have? Thats called reading. https://www.rand.org/blog/2019/10/how-the-united-states-could-lose-a-great-power-war.html https://www.rand.org/blog/2019/10/how-the-united-states-coul... https://www.amazon.com/Destined-War-America-Escape-Thucydidess-ebook/dp/B01IAS9FZY https://www.amazon.com/Destined-War-America-Escape-Thucydide...
nopinsight 6y ago
China is doing most things right according to endogenous growth theory. Exports help it grow faster but are not the most essential part of the equation. China's export is only ~20% of its 2018 GDP. https://www.theglobaleconomy.com/china/exports/ https://www.theglobaleconomy.com/china/exports/ "Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economic growth." https://en.wikipedia.org/wiki/Endogenous_growth_theory https://en.wikipedia.org/wiki/Endogenous_growth_theory > Technology in China is still by and large imported / copied. For many important technologies, it is either on par, a bit behind, or sometimes a bit ahead (5G, quantum communications) of the west. A few key areas where China still lacks are semiconductors, aviation, and global reaches of internet platforms. These are important but account for far less than half of its GDP. China's numbers of patents and scientific publications have reached world's no.1 in recent years: https://en.wikipedia.org/wiki/World_Intellectual_Property_Indicators https://en.wikipedia.org/wiki/World_Intellectual_Property_In... https://en.wikipedia.org/wiki/List_of_countries_by_number_of_scientific_and_technical_journal_articles https://en.wikipedia.org/wiki/List_of_countries_by_number_of... One can argue about the quality of those, but one should not assume that China is substantially behind the west as was the case even a couple decades ago. China's number of STEM graduates, many of whom are sources of the progress above, is the highest in the world: 4.7m in 2016. The only country that comes close is India. https://www.statista.com/chart/7913/the-countries-with-the-most-stem-graduates/ https://www.statista.com/chart/7913/the-countries-with-the-m... > ...while Western demand (mostly US, really) and its technology are not. US population: ~330 million; EU, ~450 million => Total: 780 million. China's population: ~1400 million. Domestic demand is clearly not China's disadvantage.
- airstrike 6y ago
  > US population: ~330 million; EU, ~450 million => Total: 780 million. China's population: ~1400 million. Domestic demand is clearly not China's disadvantage. Population size doesn't paint a full picture. China's GDP per capita is still less than a third of the US. A lot of those 1.4 billion have absolutely appalling living standards.
  - nopinsight 6y ago
magicsmoke 6y ago
Nuclear weapons don't actually have that much of an impact. They don't do anything socially or economically. They don't prevent all conventional warfare either. If one country annexes territory from another and the target responds with a threat to nuke the aggressor, the aggressor can just call their bluff. Mutual destruction over a flesh wound isn't credible. The only things nukes do is ensure that actors can't be forced off the stage with military conquest. Barring that, the rest of the military-economic-social game plays on as it did before the nuclear age.
tarsinge 6y ago
The question is how these trends will evolve in the future. The trends in education for example, China has a huge population, it’s hypothetical but do you think US engineering and innovation keep up if it’s then vastly outnumbered in 20 years?
nazgulnarsil 6y ago
The West can move manufacturing back home (or anywhere else with cheap labor No it can't. An empire is the complexity*robustness of its supply chains, and supply chains are much less modular on the ground than they appear to be from the air.

xiaolingxiao 6y ago

Highly recommend listening to this full interview: https://www.youtube.com/watch?v=yrxYhv2O3wU https://www.youtube.com/watch?v=yrxYhv2O3wU. It's long but worth it, and it touches on many of the points he brings up in the article. In fact, the interview occurred just a week after this article was published.

tootie 6y ago

Lost me in the first paragraph. Examining a history of money supply and debt that predates Bretton-Woods is simply not relevant. Everything I read could have been lifted from a comment thread in /r/Libertarian 10 years ago. The last financial crisis was the ultimate test for fiat currency. One that was pointed at as the moment that debt-driven currency would crash and burn by a lot of gold bugs. Instead, a deluge of loose money came and went. Banks recovered. Markets recovered. Jobs recovered. Everything recovered. Even if the face of continued fiscal profligacy. There is absolutely no logical conclusion that can be drawn except for fiat currency being one of the greatest accomplishments of the 20th century.

cheez 6y ago
debasement happens all the time https://money.visualcapitalist.com/currency-and-the-collapse-of-the-roman-empire/ https://money.visualcapitalist.com/currency-and-the-collapse...
- tootie 6y ago
  That's utterly preposterous. It's the exact same gibberish that Ron Paul used to try to convince us the Fed action was going to cause massive inflation. He said it for years. Then we struggled to crack 2% with gigatons of helicopter money.
- AnimalMuppet 6y ago
  OK, but what's your point? The US dollar doesn't seem to be debasing too badly since 2008, despite all the new money created.

seibelj 6y ago

Everything Ray Dalio writes he presents like the prophet come down from high to give us the Sacred Truths. Dalio is a successful trader and is beyond wealthy. He’s a smart guy who has a true interest in history. But he is just one opinion of many and he is absolutely not saying things that are uniquely known to him. I read the whole thing and it’s like, “Powerful countries decline! Declining power leads to social strife!” No shit dude.

DennisP 6y ago
It's not just that Dalio is a "successful trader." He runs the world's largest hedge fund and their expertise is in predicting global macroeconomic trends. His experience is directly relevant.
- viburnum 6y ago
  You know successful hedge funds profit more from insider trading than from any kind of analytical wizardry, right?
  - Vinceo 6y ago
    Could you provide a source on this?
  - tryptophan 6y ago
    Lol. Dalio is too big to bother with insider trading. With $160bill under management, that leaves like what, ~50 companies he can't just buy outright in the entire world? Please stop watching Billions and thinking it represents anything close to reality.
    - deleted 6y ago
      [deleted]
    - taylortrusty 6y ago
      Billions is absolutely based on reality. Steve Cohen / SAC Capital.

dehrmann 6y ago

Worth mentioning Pure Alpha was down 20% in Q1. Someone else observed Ray Dalio has been too busy building his brand as a financial sage (cough cough) and either not keeping his eyes on the road or he just got lucky in 2008. https://www.bloomberg.com/news/articles/2020-04-03/bridgewater-s-main-hedge-fund-loses-about-20-in-first-quarter https://www.bloomberg.com/news/articles/2020-04-03/bridgewat...

icelancer 6y ago
...or he didn't plan for the pandemic and got wiped out like most everyone else? It doesn't have to be Ray's fault for not being prescient.
astrofinch 6y ago
Dalio admits in this that he didn't see the pandemic coming.

plainOldText 6y ago

I'm currently reading Disunited Nations: The Scramble for Power in an Ungoverned World by Peter Zeihan. [1] The book discusses the upcoming world order from a geopolitical perspective and gives original insight into potential developments. For example, I wasn't aware the US Navy has been securing the maritime shipping lanes, thus boosting global trade; and if that stops, well, you can imagine the implications. [1] https://www.amazon.com/Disunited-Nations-Scramble-Power-Ungoverned/dp/0062913689 https://www.amazon.com/Disunited-Nations-Scramble-Power-Ungo...

sremani 6y ago
Zeihan and George Friedman are really good. After getting perspective from reading them, prepared to be annoyed by geopolitical commentary on HN.
- dang 6y ago
  Generic dissing of other commenters just adds noise to HN. If you know more than others, why not share some of what you know so we all can learn? (Edit: I originally wrote "one of the worst ways to add noise". That was overkill; it gets worse.)
  - plainOldText 6y ago
    I beg to differ. The comment was perfectly reasonable in my view. I also learned about someone new, namely George Friedman.
    - dang 6y ago
      You're talking about a different part of the comment.
  - sremani 6y ago
    It is a qualitative analysis done by an enthusiastic amateur (me). You may disagree, and it is perhaps noise. Who knows!

wcoenen 6y ago

Chapter 2 doesn't seem to be available there yet, but Dalio did post it on his linkedin page: https://www.linkedin.com/pulse/money-credit-debt-ray-dalio https://www.linkedin.com/pulse/money-credit-debt-ray-dalio

adaisadais 6y ago

“The slow one now will later be fast / for the times they are a Changin’” -Bob Dylan Loved reading “Principles” by Dalio. Great read. I find it apparent that the U.S. is declining while China is in a prime position to reach new heights. The U.S. greatest competitive advantage has been culture which is quickly being copied by the new middle class in China. The U.S. has allowed the wealth gap to grow to levels that are pretty scary. The U.S. has continued to elect inept and crony politicians who wish to look backward instead of bring the nation forward.

cscurmudgeon 6y ago
> The U.S. has allowed the wealth gap to grow to levels that are pretty scary. China has scary levels of wealth gap too. I think it is probably has more. https://blogs.lse.ac.uk/usappblog/2019/04/06/income-inequality-is-growing-fast-in-china-and-making-it-look-more-like-the-us/ https://blogs.lse.ac.uk/usappblog/2019/04/06/income-inequali... > The U.S. has continued to elect inept and crony politicians who wish to look backward instead of bring the nation forward China is perceived to much more corrupt than the US. It is not even a competition. This index is not perfect but this is the closest we have to measuring corruption uniformly across different systems. https://en.wikipedia.org/wiki/Corruption_Perceptions_Index https://en.wikipedia.org/wiki/Corruption_Perceptions_Index If the US is declining and China is ascending, why do we so many Chinese PhDs students (many of them my friends and hate going back) who want to stay back in the US with many years of wait time? https://www.boundless.com/blog/visa-bulletin/ https://www.boundless.com/blog/visa-bulletin/ Let us please stick to facts and data. (All the falsifiable statements in this parent comment are false but for some reason it is on top.)
- seibelj 6y ago
  It’s amazing that someone who has a deep nuanced view of American politics and critiques the minutia of American current events from the inside, then blindly believes vague propaganda from China (“China united and strong! Great and competent leader!”). Super common perspective from upper-middle class Americans who argue on HN and Reddit. If you don’t live in China, don’t speak Chinese, didn’t grow up in China, have no Chinese family, then you simply have to idea what the fuck is really going on there.

prostheticvamp 6y ago

I couldn’t tolerate this writing long enough to get through more than half the article. There’s the “history is cyclical” trope, the “I have learned how to read history” repeated self-aggrandizement without any specifics, despite going on long enough to repeat himself, and really obvious statements meant to read like profundity (“when there’s great inequality of wealth, there will be social tensions”, paraphrasing only slightly.) I read a book by him once. It was short and vapid and full of pseudo-profundity. It was cheap and highly rated on Amazon, so I’d given it a try. I didn’t realize he was banking on his name as an investor. Now I understand why anyone would bother reading his writing once, but not why they would read it twice.

justinzollars 6y ago
Not everyone is a great messenger. I recommend Graham Allison Destined for War. Similar message but delivered differently.
sameerds 6y ago
On the flip side, the writing has an increasingly rare property that the whole article (essay?) is divided into sections with proper titles. More often than not, I lose patience and give up on most articles these days, simply because there are no visual markers when scrolling through. I have no way to know where to stop and scan a few lines as I scroll through ... it's all just a continuous torrent of words and sentences.

eointierney 6y ago

The world order, in terms of socio-economic and politico-legal structures, is for sure changing, but it's more a matter of demographics and communication. We have shattered certain assumptions about the world economy to ensure the continuing welfare of the oldest of us. This is an unprecedented act of selflessness by everyone younger than seventy-ish, because we love our elders so. The real change in the world order is logistical, which has caused significant re-pricings of almost everything (even the things that are roughly the same price are so in a very different set of market conditions). It is no longer a matter of how nations compete but how they collaborate, and the markets are adjusting accordingly. I'm quite optimistic, but then I study Science. [Edit (apart from mis-spellings)]: The shattered assumptions pertain to debt management by governments, which are trivial compared to the volume of daily trading. We are in for a reckoning on resource measurement hopefully not of catastrophic proportions and this pandemic is merely a spur. In a nutshell: money fails dimensional analysis. [Edit the second]: By the way, if any of you would like to get together and discuss type theory and dimensional analysis and maybe reach out to the folk on the n-category cafe and lambdatheultimate and suchlike I'll happily help. We've a problem needs solving and Hacker News is populated by folk who like solving problems. I'll end (cheekily, give it a search engine result) with a reference to Terence Tao: A mathematical formalisation of dimensional analysis. I keep coming back to this blogpost. The subject kinda weirds me out. [Edit the third]: Removed the first paragraph as snarky, mea culpa

dforrestwilson 6y ago
Lots of people seem to believe that Ray Dalio knows anything, with anymore certainty than we do. In financial circles the man is not taken seriously, and allegations of fraud have been whispered for years now. I would be curious to know why anyone believes that Ray Dalio should be taken seriously here?
- thedudeabides5 6y ago
  I’ve worked personally w Ray and can attest he’s the real deal. If the “financial circles” you run with don’t respect $100bn+ AUM, there not really “financial circles,” sorry. If you want to make up your own mind, take a look at their work on debt crises. Sometimes hard to see how it connects to day to day trading, but not the hallmarks of a fraud. https://www.bridgewater.com/big-debt-crises/Principles-For-Navigating-Big-Debt-Crises-By-Ray-Dalio.pdf https://www.bridgewater.com/big-debt-crises/Principles-For-N... All that being said, still think he’s wrong about China.

m3kw9 6y ago

Unless the US losses a major war either economical or physical they are hard to upend because of globalization. Everything is very dependent on the US dollar and switching it will take a lot of persuading. Like losing a world war type persuading.

mark_l_watson 6y ago
I think that the “de-dollarization” can happen gradually, with the dollar slowly becoming a smaller portion of a bucket of currencies used for international transactions. Even countries that want to get out from under the dollar tax probably want this to be a slow transition. That said, I have no idea what the next few years will look like economically. Probably income inequality will greatly expand and I wouldn’t be surprised if new national alliances occur.
smitty1e 6y ago
With covid-19, the U.S. Congress is really hammering the Cosmic Credit Card. The deficit and the debt seem to be Really Big Numbers, existing in a scope outside of economic reality. One has the impression that this is not an economic perpetual motion machine. Maybe covid-19 could sink the USD and usher in a new economic phase. But seems unlikely, and there further seems zero political will to do anything more sane fiscally.

dredmorbius 6y ago

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