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Maybe. The article's whole argument centres on whether the US' place in the world is waining or not. That isn't really the point. The dollar is the world's c

Maybe. The article's whole argument centres on whether the US' place in the world is waining or not. That isn't really the point. The dollar is the world's currency because it's the most stable of a bad bunch of options. For another currency to displace it, that currency would presumably need to be seen as more stable than the dollar at that time (and probably by quite a bit to elicit wide change). What would replace the dollar? The yuan, euro and pound all have a history of fiddling whenever it suits the government of the day, so why switch from the dollar? "Already stressed by the impact of the Covid-19 pandemic, U.S. living standards are about to be squeezed as never before." The US economy is driven by it's companies, who enjoy lucrative tax arrangements and a lot of leeway relative to other jurisdictions. Google, Amazon, Facebook, Apple and Microsoft are going nowhere, and neither is anyone downstream from them. They aren't going to get a better deal based on tax or red tape anywhere in the world.

admax88q 6y ago
What fiddling has been done to the euro?
- kylegordon 6y ago
  I wonder if the poster was referring to Quantitative Easing, but the Federal Reserve has been doing that as well.
  - headmelted 6y ago
    Yes, I was referring to QE, which is much more disruptive in the eurozone than in the US, even at lower volumes. In the US, you have a central bank that is tasked with protecting the economy of the country, and the central bank is responsible for the money supply. Same in the UK and almost anywhere else. In Europe, the central bank is tasked with protecting the economies of 19 different countries who each have divergent tax and expenditure strategies (some markedly so), meaning the currency is subject to the fluctuations caused by any number of those states getting into difficulty at any time, which happens frequently.
    - admax88q 6y ago
      Is there any data backing this that shows the Euro is less stable than the USD? It seems like it would be a fine choice for a reserve currency to replace USD, if USD goes to shit. Remember it doesn't have to be better than the USD ever was, it just has to be better than the USD now.
    - oblio 6y ago
      Greece crashing barely budged the Euro, though.
- woodpanel 6y ago
  Seeing the ongoing cases in front of the european nations supreme courts [1], the ongoing debates within EU-nations and between them, about in which direction to steer the currency or about what country benefits the most: alledgedly always the one country a political camp of another country hates the most. Just think about matching the world-views of far-right Greek parties with far-right German ones and you'll see that the Euro has plenty potential for future "fiddling". [1] https://www.nzz.ch/wirtschaft/nach-ezb-urteil-bundesbank-sieht-handlungsbedarf-beim-ezb-rat-ld.1557427 https://www.nzz.ch/wirtschaft/nach-ezb-urteil-bundesbank-sie...
- headmelted 6y ago
  Seriously? https://www.forbes.com/sites/isabeltogoh/2019/09/12/what-to-expect-from-the-european-central-bank-decision/#2a4fd91b3df9 https://www.forbes.com/sites/isabeltogoh/2019/09/12/what-to-... https://www.intereconomics.eu/contents/year/2016/number/4/article/quantitative-easing-in-the-eurozone-a-one-year-assessment.html https://www.intereconomics.eu/contents/year/2016/number/4/ar... https://www.investopedia.com/articles/investing/070115/understanding-downfall-greeces-economy.asp https://www.investopedia.com/articles/investing/070115/under...
  - joshuaissac 6y ago
    The Forbes and Intereconomics articles are both about quantitative easing (QE), which is also performed by the US Federal Reserve.[1][2] In your original post, you had implied that the euro was being manipulated in a way that the US dollar is not, so QE is not enough. The Investopedia link is about Greece, and it does not even mention QE, let alone any other type of currency manipulation. 1. https://www.ft.com/content/11b338a2-6d0c-11ea-89df-41bea055720b https://www.ft.com/content/11b338a2-6d0c-11ea-89df-41bea0557... 2. https://www.fool.com/investing/2020/03/23/federal-reserve-pledges-unlimited-quantitative-eas.aspx https://www.fool.com/investing/2020/03/23/federal-reserve-pl...
    - headmelted 6y ago
      I don't want to repost a reply from elsewhere in the thread but as it's directly relevant: Yes, I was referring to QE, which is much more disruptive in the eurozone than in the US, even at lower volumes. In the US, you have a central bank that is tasked with protecting the economy of the country, and the central bank is responsible for the money supply. Same in the UK and almost anywhere else. In Europe, the central bank is tasked with protecting the economies of 19 different countries who each have divergent tax and expenditure strategies (some markedly so), meaning the currency is subject to the fluctuations caused by any number of those states getting into difficulty at any time, which happens frequently.
  - admax88q 6y ago
    Yes seriously, I don't follow news on all the worlds currencies. Don't be a dick.
WC3w6pXxgGd 6y ago
Hopefully a decentralized currency.
nolok 6y ago
As a European I really don't want the euro to replace it as the world currency, but I don't think you're fair in your evaluation, the euro hardly has an history of fiddling depending on today's need. Even what it had was very small compared to the others dollars included, and still matched the need to stabilize inflation at 2% as much if not more than the need to help the underlying countries' economies. And I say that as someone who believe we should have used it more to get out of the slump after 2008. Your comparison is incorrect on that point.
- rossdavidh 6y ago
  Not the OP, but I think the printing money in response to slow economy is what they are referring to. The U.S. Federal Reserve certainly did so as well, but the point is if the Euro is willing to tolerate (or even encourage) extremely low or even negative interest rates in response to a slowdown (unlike, say, gold, which has no central bank), then it is not much different than the dollar in that respect. Perhaps no worse, but also not really better, and so not much reason to switch from the status quo.
  - nolok 6y ago
    I am not saying it is a reason to switch, I don't think it is, I'm just answering thos specific points. "Stability, predictable" is the euro's mantra, literally the only thing they follow is do whatever is needed to keep inflation at 2%, period. And then the specific line from parent I answered to > "The yuan, euro and pound all have a history of fiddling whenever it suits the government of the day" This is absolutely not true for the euro. I wish it was a bit more.
    - woodpanel 6y ago
      This is absolutely not true for the euro It is indeed true. The ECU was a basket of the currencies of the European Community member states, which in it were tied at a fixed rate (The ECU later on was converted 1:1 into euros as were the nations currencies exchange rates). That fixture already was enough 'fiddling' to enable speculators to "break The Bank Of England".
BurningFrog 6y ago
Yeah, you just have to run faster than the other campers. But with all currencies in bad shape, you don't want to store wealth as money.
- perl4ever 6y ago
  I've been trying to decide if inflation would be bad for stocks. I frequently see anonymous internet people say/presume it would be fine, or talk about "asset inflation" as though printing money would obviously inflate stocks. However, my first instinct is, wouldn't it be like the 70s, when stocks got down to single digit P/E ratios? Inflation, historically, seemed really really bad for stocks. But then I think, well, that may have been because of the gold standard which distorted things until we were forced to give up on it. So I was thinking along these lines - the big American companies are multinationals, which means they run businesses that have customers and costs largely in local currency all over the world, while they are going to have stock priced and dividends paid in US $. So maybe they are essentially immune to inflation now. If the dollar halves, they will just go on doing what they do, and twice as many dollars will come out. Maybe the world is not dependent on the dollar because of globalization. I wonder if we might see the same pattern with respect to dollar inflation as COVID - the huge and high tech companies will be unexpectedly advantaged, while the smaller non-multinationals will be seriously wounded.
selectodude 6y ago
That and it would require an extraordinary coordinated effort among basically every other country in the world to de-dollarize. The whole financial system is based off settlement in USD. A switch away from dollars wouldn’t be due to a collapse in value vis a vis other currencies, it would be due a collapse of the United States as a country, and that would probably take more than a few other nations down with it.
api 6y ago
> Google, Amazon, Facebook, Apple and Microsoft are going nowhere They also don't employ very many Americans. America's corporations are great for Wall St. and the neighborhoods around their HQs but America is a nation of more than 300 million people.
mark_l_watson 6y ago
I agree with you except for one thing: I think that no single currency will replace the dollar. The replacement will be a basket of currencies that also includes the dollar. It seems crazy, I think, to replace one single reserve currency with another. A basket of currencies makes the most sense.
- vsareto 6y ago
  Wouldn't the basket of currencies just end up being traded as a single thing? Finance loves abstraction just as much as tech it seems.
  - pphysch 6y ago
    Likely, but that sort of framework makes it easier to adjust the relative share of each component currency over time. If only as a separate, more popular bundle.
  - nopzor 6y ago
    the basket can be adjusted, just like eg. the s&p 500 index.
- headmelted 6y ago
  Does it though? Logically that's what we should be doing now (and it sort of is - all of those currencies are freely tradeable on the markets today), and yet we still use the dollar as the base currency for almost everything. We don't have to, but we do, because otherwise you don't have a single, comparable figure you can place on anything. I get that not having a single figure is entirely the point, but even now, I don't think of bitcoin in terms of what it costs in pounds (even though UK here), because that's not how we collectively value it for comparison's sake. I think the US would have to destroy its' economy entirely (or enter a period of genuine hyperinflation) before we move away from it as a base currency.
zorked 6y ago
It's not necessary that the thing that replaces the Roman Empire is a new Roman Empire. It will be something different. Also if US strength depends on the loyalty of big capitalism then I have bad news to share.
kolbe 6y ago
What are the lucrative tax arrangements that are keeping them here? What about the US's tax structure is better than Switzerland's? https://taxsummaries.pwc.com/Switzerland/Corporate/Taxes-on-corporate-income https://taxsummaries.pwc.com/Switzerland/Corporate/Taxes-on-...

admax88q 6y ago

What fiddling has been done to the euro?

kylegordon 6y ago
I wonder if the poster was referring to Quantitative Easing, but the Federal Reserve has been doing that as well.
- headmelted 6y ago
  Yes, I was referring to QE, which is much more disruptive in the eurozone than in the US, even at lower volumes. In the US, you have a central bank that is tasked with protecting the economy of the country, and the central bank is responsible for the money supply. Same in the UK and almost anywhere else. In Europe, the central bank is tasked with protecting the economies of 19 different countries who each have divergent tax and expenditure strategies (some markedly so), meaning the currency is subject to the fluctuations caused by any number of those states getting into difficulty at any time, which happens frequently.
  - admax88q 6y ago
    Is there any data backing this that shows the Euro is less stable than the USD? It seems like it would be a fine choice for a reserve currency to replace USD, if USD goes to shit. Remember it doesn't have to be better than the USD ever was, it just has to be better than the USD now.
  - oblio 6y ago
    Greece crashing barely budged the Euro, though.
woodpanel 6y ago
Seeing the ongoing cases in front of the european nations supreme courts [1], the ongoing debates within EU-nations and between them, about in which direction to steer the currency or about what country benefits the most: alledgedly always the one country a political camp of another country hates the most. Just think about matching the world-views of far-right Greek parties with far-right German ones and you'll see that the Euro has plenty potential for future "fiddling". [1] https://www.nzz.ch/wirtschaft/nach-ezb-urteil-bundesbank-sieht-handlungsbedarf-beim-ezb-rat-ld.1557427 https://www.nzz.ch/wirtschaft/nach-ezb-urteil-bundesbank-sie...
headmelted 6y ago
Seriously? https://www.forbes.com/sites/isabeltogoh/2019/09/12/what-to-expect-from-the-european-central-bank-decision/#2a4fd91b3df9 https://www.forbes.com/sites/isabeltogoh/2019/09/12/what-to-... https://www.intereconomics.eu/contents/year/2016/number/4/article/quantitative-easing-in-the-eurozone-a-one-year-assessment.html https://www.intereconomics.eu/contents/year/2016/number/4/ar... https://www.investopedia.com/articles/investing/070115/understanding-downfall-greeces-economy.asp https://www.investopedia.com/articles/investing/070115/under...
- joshuaissac 6y ago
  The Forbes and Intereconomics articles are both about quantitative easing (QE), which is also performed by the US Federal Reserve.[1][2] In your original post, you had implied that the euro was being manipulated in a way that the US dollar is not, so QE is not enough. The Investopedia link is about Greece, and it does not even mention QE, let alone any other type of currency manipulation. 1. https://www.ft.com/content/11b338a2-6d0c-11ea-89df-41bea055720b https://www.ft.com/content/11b338a2-6d0c-11ea-89df-41bea0557... 2. https://www.fool.com/investing/2020/03/23/federal-reserve-pledges-unlimited-quantitative-eas.aspx https://www.fool.com/investing/2020/03/23/federal-reserve-pl...
  - headmelted 6y ago
    I don't want to repost a reply from elsewhere in the thread but as it's directly relevant: Yes, I was referring to QE, which is much more disruptive in the eurozone than in the US, even at lower volumes. In the US, you have a central bank that is tasked with protecting the economy of the country, and the central bank is responsible for the money supply. Same in the UK and almost anywhere else. In Europe, the central bank is tasked with protecting the economies of 19 different countries who each have divergent tax and expenditure strategies (some markedly so), meaning the currency is subject to the fluctuations caused by any number of those states getting into difficulty at any time, which happens frequently.
- admax88q 6y ago
  Yes seriously, I don't follow news on all the worlds currencies. Don't be a dick.

WC3w6pXxgGd 6y ago

Hopefully a decentralized currency.

nolok 6y ago

As a European I really don't want the euro to replace it as the world currency, but I don't think you're fair in your evaluation, the euro hardly has an history of fiddling depending on today's need. Even what it had was very small compared to the others dollars included, and still matched the need to stabilize inflation at 2% as much if not more than the need to help the underlying countries' economies. And I say that as someone who believe we should have used it more to get out of the slump after 2008. Your comparison is incorrect on that point.

rossdavidh 6y ago
Not the OP, but I think the printing money in response to slow economy is what they are referring to. The U.S. Federal Reserve certainly did so as well, but the point is if the Euro is willing to tolerate (or even encourage) extremely low or even negative interest rates in response to a slowdown (unlike, say, gold, which has no central bank), then it is not much different than the dollar in that respect. Perhaps no worse, but also not really better, and so not much reason to switch from the status quo.
- nolok 6y ago
  I am not saying it is a reason to switch, I don't think it is, I'm just answering thos specific points. "Stability, predictable" is the euro's mantra, literally the only thing they follow is do whatever is needed to keep inflation at 2%, period. And then the specific line from parent I answered to > "The yuan, euro and pound all have a history of fiddling whenever it suits the government of the day" This is absolutely not true for the euro. I wish it was a bit more.
  - woodpanel 6y ago
    This is absolutely not true for the euro It is indeed true. The ECU was a basket of the currencies of the European Community member states, which in it were tied at a fixed rate (The ECU later on was converted 1:1 into euros as were the nations currencies exchange rates). That fixture already was enough 'fiddling' to enable speculators to "break The Bank Of England".

BurningFrog 6y ago

Yeah, you just have to run faster than the other campers. But with all currencies in bad shape, you don't want to store wealth as money.

perl4ever 6y ago
I've been trying to decide if inflation would be bad for stocks. I frequently see anonymous internet people say/presume it would be fine, or talk about "asset inflation" as though printing money would obviously inflate stocks. However, my first instinct is, wouldn't it be like the 70s, when stocks got down to single digit P/E ratios? Inflation, historically, seemed really really bad for stocks. But then I think, well, that may have been because of the gold standard which distorted things until we were forced to give up on it. So I was thinking along these lines - the big American companies are multinationals, which means they run businesses that have customers and costs largely in local currency all over the world, while they are going to have stock priced and dividends paid in US $. So maybe they are essentially immune to inflation now. If the dollar halves, they will just go on doing what they do, and twice as many dollars will come out. Maybe the world is not dependent on the dollar because of globalization. I wonder if we might see the same pattern with respect to dollar inflation as COVID - the huge and high tech companies will be unexpectedly advantaged, while the smaller non-multinationals will be seriously wounded.

selectodude 6y ago

That and it would require an extraordinary coordinated effort among basically every other country in the world to de-dollarize. The whole financial system is based off settlement in USD. A switch away from dollars wouldn’t be due to a collapse in value vis a vis other currencies, it would be due a collapse of the United States as a country, and that would probably take more than a few other nations down with it.

api 6y ago

> Google, Amazon, Facebook, Apple and Microsoft are going nowhere They also don't employ very many Americans. America's corporations are great for Wall St. and the neighborhoods around their HQs but America is a nation of more than 300 million people.

mark_l_watson 6y ago

I agree with you except for one thing: I think that no single currency will replace the dollar. The replacement will be a basket of currencies that also includes the dollar. It seems crazy, I think, to replace one single reserve currency with another. A basket of currencies makes the most sense.

vsareto 6y ago
Wouldn't the basket of currencies just end up being traded as a single thing? Finance loves abstraction just as much as tech it seems.
- pphysch 6y ago
  Likely, but that sort of framework makes it easier to adjust the relative share of each component currency over time. If only as a separate, more popular bundle.
- nopzor 6y ago
  the basket can be adjusted, just like eg. the s&p 500 index.
headmelted 6y ago
Does it though? Logically that's what we should be doing now (and it sort of is - all of those currencies are freely tradeable on the markets today), and yet we still use the dollar as the base currency for almost everything. We don't have to, but we do, because otherwise you don't have a single, comparable figure you can place on anything. I get that not having a single figure is entirely the point, but even now, I don't think of bitcoin in terms of what it costs in pounds (even though UK here), because that's not how we collectively value it for comparison's sake. I think the US would have to destroy its' economy entirely (or enter a period of genuine hyperinflation) before we move away from it as a base currency.

zorked 6y ago

It's not necessary that the thing that replaces the Roman Empire is a new Roman Empire. It will be something different. Also if US strength depends on the loyalty of big capitalism then I have bad news to share.

kolbe 6y ago

What are the lucrative tax arrangements that are keeping them here? What about the US's tax structure is better than Switzerland's? https://taxsummaries.pwc.com/Switzerland/Corporate/Taxes-on-corporate-income https://taxsummaries.pwc.com/Switzerland/Corporate/Taxes-on-...