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In Argentinian or Russian style currency defaults the computer networks continued to function. We are talking about the dollar no longer being the world reserve

by cft 6y ago

In Argentinian or Russian style currency defaults the computer networks continued to function. We are talking about the dollar no longer being the world reserve currency here, not a total societal collapse. It will happen when a more attractive alternative is found by the global markets. Currently the excess dollars created are absorbed by the foreign economies. This keeps the US from inflation caused by this creation. For example, Brazil has to buy dollars with its goods to then use them for purchases of IT equipment from China. At some point Brazil and China will find a direct medium of exchange. Here is what Ray Dalio has to say: https://youtu.be/7WxfQ2zKXeA?t=1076 https://youtu.be/7WxfQ2zKXeA?t=1076

martinald 6y ago
This idea has been going on for literally decades, with no real progress. Iran started allowing Euro trades for oil (keep in mind the EU imports way way more oil than the US) in 2003. Result = everyone still trades oil in dollars.
- cft 6y ago
  The first effect maybe that the increasing dollar creation rate needed to sustain the functioning of American economy may exceed the ability of foreign countries to absorb them.
  - three_seagrass 6y ago
    This is just more of the usual "The Fed has really done it this time and here comes it's inevitable collapse". There will likely be inflation but it's considered better than the alternative right now which is stagflation.
- didntknowya 6y ago
  no real progress because every time a country propose or implements a major switch from the dollar, coincidentally they get invaded and drawn into a war. switching to another currency standard is a major threat to value of the USD, and would collapse the economy more than any nuclear weapons or politics would... but that's a rabbit hole for another day.
shadowgovt 6y ago
The space between "The dollar is no longer the world's reserve currency" and "total societal collapse" is very narrow, given how many countries rely on the dollar to back-stop their own currencies. I think there's a decent risk that in the interim, people run out of money to pay for telecommunications links and BTC-farming datacenters.

by cft 6y ago

martinald 6y ago

This idea has been going on for literally decades, with no real progress. Iran started allowing Euro trades for oil (keep in mind the EU imports way way more oil than the US) in 2003. Result = everyone still trades oil in dollars.

cft 6y ago
The first effect maybe that the increasing dollar creation rate needed to sustain the functioning of American economy may exceed the ability of foreign countries to absorb them.
- three_seagrass 6y ago
  This is just more of the usual "The Fed has really done it this time and here comes it's inevitable collapse". There will likely be inflation but it's considered better than the alternative right now which is stagflation.
didntknowya 6y ago
no real progress because every time a country propose or implements a major switch from the dollar, coincidentally they get invaded and drawn into a war. switching to another currency standard is a major threat to value of the USD, and would collapse the economy more than any nuclear weapons or politics would... but that's a rabbit hole for another day.

shadowgovt 6y ago

The space between "The dollar is no longer the world's reserve currency" and "total societal collapse" is very narrow, given how many countries rely on the dollar to back-stop their own currencies. I think there's a decent risk that in the interim, people run out of money to pay for telecommunications links and BTC-farming datacenters.