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US monetary dominance is up for grabs. This doesn't mean the US is necessarily supplanted as the world reserve currency, but it does mean lots of trade may dedo

by fny 6y ago

US monetary dominance is up for grabs. This doesn't mean the US is necessarily supplanted as the world reserve currency, but it does mean lots of trade may dedollarize to some extent. My bet is there will be two major currency zones. Dollar/Euro in the West + Middle East + India, Renmimbi in the East + Australia + Africa. Given the explosion of debt to GDP in the west vs the east, I see no way the Renmimbi will not continue to appreciate against the dollar, and I fully expect Chinese monetary dominance to increase with the government's continued annexation of Hong Kong. BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent) but as only as a back channel currency: I doubt any major commodity market or trade is ever going to be priced in BTC.

kmonsen 6y ago
This is just silly, US military dominance is not anywhere close to up for grabs. They US might not have total dominance anywhere on earth anymore due to asymmetric weapons, but in a big fight the US is far and away the biggest dog still. It is not that it is not close, it is not even close to being close.
- fny 6y ago
  Edit: You may have misread. I said US /monetary/ dominance not military. Nonetheless, there is a thesis that military dominance dictates monetary dominance, which I do not subscribe to. Below is why. The idea that the US can use its military to reassert financial dominance in the modern age is silly especially after having exported near all manufacturing capacity to China. US aircraft carriers are worthless in the pacific. They haven't accomplished anything significant in the South China Sea. Hell, even more aggressive annexations like that of Crimea were never blocked. Modern warefare is no longer physicial. It's economic and online. If anything the information economy in the US and the West are more at risk from espionage, information manipulation and other attacks given the value of the intellectual assets are far greater and that China has a vice grip on communications. Additionally, our supply chain is incredibly dependent on the East. As local demand picks up and the region can afford to be less dependent on the US, they can afford to cut off supply chains with mild consequences compared to what the US would face. Good luck with your guns.
  - dmt0 6y ago
    Arguably, US military has been successful so far in keeping the world's oil priced in USD. But yes, the world is changing.
- Animats 6y ago
  This is less true than it used to be. The US is unlikely to sail a carrier through the Taiwan strait again to intimidate China.
PragmaticPulp 6y ago
> BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent) I’m not a fan of the current inflation in the US, but the idea that the US currency is being destroyed has been blown out of proportion online. People like to quote M1 money supply as if it’s the only measure of wealth, while ignoring that investors weren’t keeping investments in cash in the first place. Inflation drives up the value of assets, by definition.

by fny 6y ago

kmonsen 6y ago

This is just silly, US military dominance is not anywhere close to up for grabs. They US might not have total dominance anywhere on earth anymore due to asymmetric weapons, but in a big fight the US is far and away the biggest dog still. It is not that it is not close, it is not even close to being close.

fny 6y ago
Edit: You may have misread. I said US /monetary/ dominance not military. Nonetheless, there is a thesis that military dominance dictates monetary dominance, which I do not subscribe to. Below is why. The idea that the US can use its military to reassert financial dominance in the modern age is silly especially after having exported near all manufacturing capacity to China. US aircraft carriers are worthless in the pacific. They haven't accomplished anything significant in the South China Sea. Hell, even more aggressive annexations like that of Crimea were never blocked. Modern warefare is no longer physicial. It's economic and online. If anything the information economy in the US and the West are more at risk from espionage, information manipulation and other attacks given the value of the intellectual assets are far greater and that China has a vice grip on communications. Additionally, our supply chain is incredibly dependent on the East. As local demand picks up and the region can afford to be less dependent on the US, they can afford to cut off supply chains with mild consequences compared to what the US would face. Good luck with your guns.
- dmt0 6y ago
  Arguably, US military has been successful so far in keeping the world's oil priced in USD. But yes, the world is changing.
Animats 6y ago
This is less true than it used to be. The US is unlikely to sail a carrier through the Taiwan strait again to intimidate China.

PragmaticPulp 6y ago

> BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent) I’m not a fan of the current inflation in the US, but the idea that the US currency is being destroyed has been blown out of proportion online. People like to quote M1 money supply as if it’s the only measure of wealth, while ignoring that investors weren’t keeping investments in cash in the first place. Inflation drives up the value of assets, by definition.