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China is able to manipulate its exchange rate to regulate the relative prices of imports and exports. So are ~200 other economies in the world. The US doesn't h
by prionassembly 6y ago
China is able to manipulate its exchange rate to regulate the relative prices of imports and exports. So are ~200 other economies in the world. The US doesn't have an exchange rate to fiddle with. Hell, it can hardly produce domestic inflation with its low interest rates, let alone devalue its currency.
Cf. https://en.wikipedia.org/wiki/Exorbitant_privilege https://en.wikipedia.org/wiki/Exorbitant_privilege
- ska 6y agoTrue, but there is a reason it's been called "exorbitant privilege" - while nothing here is clear cut there lots of reasonable people would argue that there is a net benefit to US.
- prionassembly 6y agoYes. To abuse mathematical language, the first-order effects of the exorbitant privilege are very positive for the US. Some negative second-order effects are arguable (strategic capacity / robustness); some are reminiscent of your typical third-world lobbying for a kind of state capitalism. Then, this has beneficiaries and losers. "Good jobs" in particular is such specious rhetoric.
- twobitshifter 6y agoIf China can move to DCEP (Chinese state crypto) and get their borrowers to follow their lead, the US will find itself in a tough position. In the end game for China, they displace the US and can avoid the dollar in trade.
- seppin 6y agoIf it was that easy to displace the dollar, someone would have done it already. What advantage does a Chinese cryptocurrency have over a traditional one?
- caeril 6y agoThis. August 15th of this year will be FIFTIETH anniversary of Nixon telling the rest of the world that their dollars held in reserve are redeemable for precisely one bag of dicks. If the world was ever going to de-dollarize, they would have done it at any point in the last half-century.
- machiaweliczny 6y agoYou think noone tried? They just got assasinated.