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> Say everyone in an unstable economy were paid in usd. Then that country would be paying the unseen tax of inflation as the US banking system prints more and

> Say everyone in an unstable economy were paid in usd. Then that country would be paying the unseen tax of inflation as the US banking system prints more and more USD. Said country would basically be a US colony.

variaga 6y ago
TIL Zimbabwe, Ecuador, El Salvador, Palau, East Timor and the British Virgin Islands are all "basically US colonies". What about countries that don't use the dollar as currency directly, but keep a fixed exchange rate to the dollar - they would be paying the unseen tax of inflation too, right? With a fixed exchange rate if the dollar value falls, so will the value of their currency. So that would mean Hong Kong, Cuba, Jordan and the Netherlands are all "basically US colonies" too. (China may be kind of surprised about that first one.) Does this work for other currencies, or just $USD? Are Martinique, Andorra, Montenegro and Kosovo "basically EU colonies"? - they all use the Euro as currency, but are not part of either the EU or the EEA. We don't actually have to hypothesize about what would happen if an unstable economy switched everything over to dollars (or Euros), either directly or by exchange rate peg, because it has already happened, many times. https://www.worlddata.info/currencies/usd-us-dollar.php https://www.worlddata.info/currencies/usd-us-dollar.php
- reedjosh 6y ago
  Your argument from incredulity doesn't make what I say less true. Maybe my language was a bit strong, but there's no denying if somebody can freely make more of something you value, then they're gaining from your use of said valuable.
- IG_Semmelweiss 6y ago
  Montenegro and Ecuador are effective colonies in their most developed areas. Most of the valuable property in major metros is owned directly by US-based or EU-based emigrees , who paid top dollar for property that has a ROC duration in excess of 20 years. Most of the metro areas on these countries are rapidly turning hollow projects which cheap rents or undeveloped land. It is quickly becoming like paris. Flat rental 2000 EUR. Buy price: 2M EUR. When someone that is not a local is taking all your valuable land... Thats the textbook definition of colony
- nathias 6y ago
  yes, calling them colonies are a stretch but there is a relation of dominance there, not just because of inflation but the whole credit system
- RobertoG 6y ago
  Andorra is definitely a EU colony, or more precisely, a France/Spain colony used for fiscal evasion.
deleted 6y ago
[deleted]
arcticbull 6y ago
This happens in many countries already, the inflation tax of the US banking system is 2% and not an issue. That does not make Panama or Hong Kong US colonies.
- omegaworks 6y ago
  It makes them economically dependent. Explicit rather than implicit client states of the US. Colonies in all but name. When President Arnulfo Arias tried exercising his nation's right to issue sovereign currency, he was deposed in a US-backed coup on October 2, 1941.
  - MrMan 6y ago
    Switching from one currency you can’t control to another doesn’t sound good
    - omegaworks 6y ago
      Exactly. The Bitcoin folks like to point to a "shadow cabal" that controls US currency as though that same problem doesn't exist in Bitcoin's architecture. At least we know the names of everyone serving on the Federal Reserve's board. Bitcoin, on the other hand, can be controlled by any miner or group of miners having over 50% of the network's hash rate[1]. We don't know the identities of the miners and we have seen them engage in political actions that change the behavior of the currency[2]. 1. https://www.investopedia.com/terms/1/51-attack.asp https://www.investopedia.com/terms/1/51-attack.asp 2. https://en.wikipedia.org/wiki/List_of_bitcoin_forks https://en.wikipedia.org/wiki/List_of_bitcoin_forks
- reedjosh 6y ago
  That 2% number depends upon whether you trust the people inflating the USD to tell you what the inflation rate is. Feel free to call shadowstats crazy, but nothing in it is false. It's just another perspective. http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts
jariel 6y ago
Not at all. It may not be optimal for certain reasons to use USD, and they'd lose some advantages, but there are others to be gained that might make it worth it. To the extent there are no real capital controls on USD anywhere - and - the US Fed is separate from the government, then nobody is going to be a 'colony' of the US by using USD.

variaga 6y ago

TIL Zimbabwe, Ecuador, El Salvador, Palau, East Timor and the British Virgin Islands are all "basically US colonies". What about countries that don't use the dollar as currency directly, but keep a fixed exchange rate to the dollar - they would be paying the unseen tax of inflation too, right? With a fixed exchange rate if the dollar value falls, so will the value of their currency. So that would mean Hong Kong, Cuba, Jordan and the Netherlands are all "basically US colonies" too. (China may be kind of surprised about that first one.) Does this work for other currencies, or just $USD? Are Martinique, Andorra, Montenegro and Kosovo "basically EU colonies"? - they all use the Euro as currency, but are not part of either the EU or the EEA. We don't actually have to hypothesize about what would happen if an unstable economy switched everything over to dollars (or Euros), either directly or by exchange rate peg, because it has already happened, many times. https://www.worlddata.info/currencies/usd-us-dollar.php https://www.worlddata.info/currencies/usd-us-dollar.php

reedjosh 6y ago
Your argument from incredulity doesn't make what I say less true. Maybe my language was a bit strong, but there's no denying if somebody can freely make more of something you value, then they're gaining from your use of said valuable.
IG_Semmelweiss 6y ago
Montenegro and Ecuador are effective colonies in their most developed areas. Most of the valuable property in major metros is owned directly by US-based or EU-based emigrees , who paid top dollar for property that has a ROC duration in excess of 20 years. Most of the metro areas on these countries are rapidly turning hollow projects which cheap rents or undeveloped land. It is quickly becoming like paris. Flat rental 2000 EUR. Buy price: 2M EUR. When someone that is not a local is taking all your valuable land... Thats the textbook definition of colony
nathias 6y ago
yes, calling them colonies are a stretch but there is a relation of dominance there, not just because of inflation but the whole credit system
RobertoG 6y ago
Andorra is definitely a EU colony, or more precisely, a France/Spain colony used for fiscal evasion.

deleted 6y ago

[deleted]

arcticbull 6y ago

This happens in many countries already, the inflation tax of the US banking system is 2% and not an issue. That does not make Panama or Hong Kong US colonies.

omegaworks 6y ago
It makes them economically dependent. Explicit rather than implicit client states of the US. Colonies in all but name. When President Arnulfo Arias tried exercising his nation's right to issue sovereign currency, he was deposed in a US-backed coup on October 2, 1941.
- MrMan 6y ago
  Switching from one currency you can’t control to another doesn’t sound good
  - omegaworks 6y ago
    Exactly. The Bitcoin folks like to point to a "shadow cabal" that controls US currency as though that same problem doesn't exist in Bitcoin's architecture. At least we know the names of everyone serving on the Federal Reserve's board. Bitcoin, on the other hand, can be controlled by any miner or group of miners having over 50% of the network's hash rate[1]. We don't know the identities of the miners and we have seen them engage in political actions that change the behavior of the currency[2]. 1. https://www.investopedia.com/terms/1/51-attack.asp https://www.investopedia.com/terms/1/51-attack.asp 2. https://en.wikipedia.org/wiki/List_of_bitcoin_forks https://en.wikipedia.org/wiki/List_of_bitcoin_forks
reedjosh 6y ago
That 2% number depends upon whether you trust the people inflating the USD to tell you what the inflation rate is. Feel free to call shadowstats crazy, but nothing in it is false. It's just another perspective. http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts

jariel 6y ago

Not at all. It may not be optimal for certain reasons to use USD, and they'd lose some advantages, but there are others to be gained that might make it worth it. To the extent there are no real capital controls on USD anywhere - and - the US Fed is separate from the government, then nobody is going to be a 'colony' of the US by using USD.