45 ms·

It appears that Lebanon's currency devalued sharply, meaning the nation can no longer afford to buy oil, leading to electricity shortages. Can someone here mor

by rsj_hn 5y ago

It appears that Lebanon's currency devalued sharply, meaning the nation can no longer afford to buy oil, leading to electricity shortages. Can someone here more knowledgeable about Lebanon's economic history explain why the currency devalued?

deleted 5y ago
[deleted]
syshum 5y ago
My guess is someone in their government thought the best way to get the nation out of debt was to start creating trillion dollar coins...... Oh wait that is the USA. Never mind I will come back in a few months when we are talking about the us dollar
- b0tzzzzzzman 5y ago
  Me too, with my dead on submit comments.
- imtringued 5y ago
  I don't know why you are focusing on the stupid coins. The idea that we do away with the debt system is insane. The debt ceiling was never used for any fiscal reasons, it's always turned into a political weapon and the consequences are just plain stupid.
  - syshum 5y ago
    I don't have a problem with debt. However outstanding debt should never be greater then GDP, the fed should be barred from buying debt, and government spending should be capped at 20% of GDP
- bellyfullofbac 5y ago
  Debt is fine if you're a big country. If you're a factory, a bank might decide to not loan you any money if it thinks you're not going to make any profit (e.g. because of inefficiencies, unpredictable raw material costs, better competition) so you can return that loan with interest. If you're the United States of America, you're going to be around for a looong time and the population there are going to continue enterprising and paying tax, so the bank knows you're good for the loan. I guess it's not such a good example since the US can just mint a trillion dollars as you moaned, but that's a coin that no one in the world would refuse, so I guess it's good to be king.
  - syshum 5y ago
    The normalcy bias of people combined with the pure arrogant hubris that the USD can not collapse will lead USD collapse The people in charge of the money believe the world would not dare change to something else. Bullshit The history of the world shows empires collapse. To believe the US is somehow immune is moronic Having our levels of debt combined with unrestricted spending, combined with currency minplulation / creation is 3 strikes The world has already sent a singal we have too much debt and too much spending as they have stopped buying our debt so the fed has to buy it all with money created from thin air It also ironic you use monarchy anology here. I am sure you are correct that the king also thought they could do what ever they want right up until the peasants chopped the king's head off in revolution. As the blade came down I am sure he was thinking "this is not possible for i am the king "
    - bellyfullofbac 5y ago
      At this point a USD collapse is a collapse of the entire planet's economic system. (IMO, I could be wrong.) It could collapse, but it will take the whole world down with it. To use the monarchy analogy again, yeah the emperor might be naked, but as long as we pretend he isn't, we'll continue to have order. Even China isn't interested in a bankrupt USA/a crashed dollar, because it wants to keep its people fed, and they get fed when they can toil in the factories making cheap shit for Walmart...
      - syshum 5y ago
        While none wants the dollar to collapse they are also not willing to see their own economies suffer at the hand of irresponsible people in the fed and Treasury. It is pure hubris to believe the it is impossible for the world to get off the dollar. Hell their have been talks about it in a orderly way by many nations for a long time. OPEC is one of the leading reason for US dollar dominance. If OPEC starts trading oil in something other then USD well we here in the us are going to have a bad time.
    - throw0101a 5y ago
      > The normalcy bias of people combined with the pure arrogant hubris that the USD can not collapse will lead USD collapse Reserve currencies do not "collapse", they get replaced. The GBP didn't collapse for example: over the course of decades the USD came up and for many years they were used equally. So if the USD is to be replaced, the obvious question is: with what? EUR? CNY/RMB? JPY? Other? A mix? For a paper on possible multi-currencies, see Eichengreen 2014: * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2580651 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2580651 For a good historical overview see How global currencies work past, present, and future by Eichengreen, Chitu, Mehl. > The history of the world shows empires collapse. To believe the US is somehow immune is moronic The US is not an empire. It is a hegemony: it simply exerts (exerted?) influence because of the size of its economy relative to everyone else, and it was willing to spend a whole bunch of money to basically keep the peace. > The world has already sent a singal we have too much debt and too much spending as they have stopped buying our debt so the fed has to buy it all with money created from thin air What signal would that be? The US Treasury sells bonds to interested buyers, and the Fed then gets the bonds on the secondary market. No one has stopped buying US bonds. Further, the purchase are done with US Fed reserves, which are not "real" money as they do not enter the economy and simply sit in the accounts that institutions have at the Fed.
throwaway984393 5y ago
It's complicated. Suffice to say that it's in part from years of corruption, rampant debt, political revolution, international pressure/manipulation, an influx of migrants/refugees, and no significant trade/business to repair the economic impacts. The problems have been bubbling for years, but 2019 was the beginning of the implosion.
- rsj_hn 5y ago
  thank you

by rsj_hn 5y ago

deleted 5y ago

[deleted]

syshum 5y ago

My guess is someone in their government thought the best way to get the nation out of debt was to start creating trillion dollar coins...... Oh wait that is the USA. Never mind I will come back in a few months when we are talking about the us dollar

b0tzzzzzzman 5y ago
Me too, with my dead on submit comments.
imtringued 5y ago
I don't know why you are focusing on the stupid coins. The idea that we do away with the debt system is insane. The debt ceiling was never used for any fiscal reasons, it's always turned into a political weapon and the consequences are just plain stupid.
- syshum 5y ago
  I don't have a problem with debt. However outstanding debt should never be greater then GDP, the fed should be barred from buying debt, and government spending should be capped at 20% of GDP
bellyfullofbac 5y ago
Debt is fine if you're a big country. If you're a factory, a bank might decide to not loan you any money if it thinks you're not going to make any profit (e.g. because of inefficiencies, unpredictable raw material costs, better competition) so you can return that loan with interest. If you're the United States of America, you're going to be around for a looong time and the population there are going to continue enterprising and paying tax, so the bank knows you're good for the loan. I guess it's not such a good example since the US can just mint a trillion dollars as you moaned, but that's a coin that no one in the world would refuse, so I guess it's good to be king.
- syshum 5y ago
  The normalcy bias of people combined with the pure arrogant hubris that the USD can not collapse will lead USD collapse The people in charge of the money believe the world would not dare change to something else. Bullshit The history of the world shows empires collapse. To believe the US is somehow immune is moronic Having our levels of debt combined with unrestricted spending, combined with currency minplulation / creation is 3 strikes The world has already sent a singal we have too much debt and too much spending as they have stopped buying our debt so the fed has to buy it all with money created from thin air It also ironic you use monarchy anology here. I am sure you are correct that the king also thought they could do what ever they want right up until the peasants chopped the king's head off in revolution. As the blade came down I am sure he was thinking "this is not possible for i am the king "
  - bellyfullofbac 5y ago
    At this point a USD collapse is a collapse of the entire planet's economic system. (IMO, I could be wrong.) It could collapse, but it will take the whole world down with it. To use the monarchy analogy again, yeah the emperor might be naked, but as long as we pretend he isn't, we'll continue to have order. Even China isn't interested in a bankrupt USA/a crashed dollar, because it wants to keep its people fed, and they get fed when they can toil in the factories making cheap shit for Walmart...
    - syshum 5y ago
      While none wants the dollar to collapse they are also not willing to see their own economies suffer at the hand of irresponsible people in the fed and Treasury. It is pure hubris to believe the it is impossible for the world to get off the dollar. Hell their have been talks about it in a orderly way by many nations for a long time. OPEC is one of the leading reason for US dollar dominance. If OPEC starts trading oil in something other then USD well we here in the us are going to have a bad time.
  - throw0101a 5y ago
    > The normalcy bias of people combined with the pure arrogant hubris that the USD can not collapse will lead USD collapse Reserve currencies do not "collapse", they get replaced. The GBP didn't collapse for example: over the course of decades the USD came up and for many years they were used equally. So if the USD is to be replaced, the obvious question is: with what? EUR? CNY/RMB? JPY? Other? A mix? For a paper on possible multi-currencies, see Eichengreen 2014: * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2580651 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2580651 For a good historical overview see How global currencies work past, present, and future by Eichengreen, Chitu, Mehl. > The history of the world shows empires collapse. To believe the US is somehow immune is moronic The US is not an empire. It is a hegemony: it simply exerts (exerted?) influence because of the size of its economy relative to everyone else, and it was willing to spend a whole bunch of money to basically keep the peace. > The world has already sent a singal we have too much debt and too much spending as they have stopped buying our debt so the fed has to buy it all with money created from thin air What signal would that be? The US Treasury sells bonds to interested buyers, and the Fed then gets the bonds on the secondary market. No one has stopped buying US bonds. Further, the purchase are done with US Fed reserves, which are not "real" money as they do not enter the economy and simply sit in the accounts that institutions have at the Fed.

throwaway984393 5y ago

It's complicated. Suffice to say that it's in part from years of corruption, rampant debt, political revolution, international pressure/manipulation, an influx of migrants/refugees, and no significant trade/business to repair the economic impacts. The problems have been bubbling for years, but 2019 was the beginning of the implosion.

rsj_hn 5y ago
thank you