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The US can keep issuing dollars for as long as they like. And you will buy these pieces of paper because they are backed by the US Military, the US Air Force a

The US can keep issuing dollars for as long as they like. And you will buy these pieces of paper because they are backed by the US Military, the US Air Force and the US Navy.

roody15 5y ago
Are you sure? The US military doesn’t look to be at its peak. Despite its massive budget China’s military rise and the return of Russian military power might be changing the US’s role as the worlds only military super power. We may spend 10 times more than any other nation on our military … but due to bureaucracy and other inefficiencies our spending doesn’t quite get the same bang for its buck if you will.
- deleted 5y ago
  [deleted]
- asdff 5y ago
  US has spent the last 20 years testing technology in a real theater. China shoots at props in the desert. Russia can't afford to even play this game.
  - roody15 5y ago
    Recent history would suggest otherwise.
    - johnny22 5y ago
      there is no recent history of conventional warfare. It's all guerilla stuff.
phist_mcgee 5y ago
And the marines and coast guard too!
darawk 5y ago
They can keep issuing them. They will not have the same value, though.
- whatever1 5y ago
  No this rule does not apply in the US. The US has printed 20% of all dollars ever existed since 2020. Check the exchange rates with any other currency, EUR, British sterling, Chinese RMB. Did it become cheaper? Of course not. We will always buy USD, because it has as a collateral 8billion lives.
  - xwdv 5y ago
    We buy USD because its long term existence is practically guaranteed by the power of its military.
    - ethbr0 5y ago
      The world buys dollars because it needs them to fulfill oil and other commodity contracts, that are priced in dollars, which are then typically reinvested in US Treasuries by commodity exporters (because why not?). https://www.investopedia.com/terms/p/petrodollars.asp https://www.investopedia.com/terms/p/petrodollars.asp https://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret https://www.bloomberg.com/news/features/2016-05-30/the-untol... If a country wanted to not buy dollars, here's how that would go. No Dollars: "Hi, we'd like some oil." Oil Producer: "Great, here's how much that contract is in dollars." No Dollars: "How much would it be in my local currency?" Oil Producer: "Well, you see, we don't really quote in other currencies..." No Dollars: "Fine, I'll find someone who will." Middle Person: "I heard you're looking to buy oil with Pentali Marcograms?" No Dollars: "Sure am, what price will you give me?" Middle Person: "10% over the exchange rate between Pentali Marcograms and US dollars. You know oil producers trade in dollars, right?"
      - rsj_hn 5y ago
        > 10% over the exchange rate between Pentali Marcograms and US dollars. You know oil producers trade in dollars, right?" You are off by three orders of magnitude, which is pretty amazing. Forex markets have incredibly tight spreads measured in pips, say 1-4 pips, where 1 pip = 0.0001. The reason why dollars are important is that people store the results of their oil sales in USD assets. What a good is purchased with means nothing. Where you store the proceeds of the sale is what counts. This goes to that oh-so-tired phrase 'petrodollar', which many autodidacts misuse to signal a lack of understanding of both forex markets and oil economics. What "petrodollars" means is the dollar holdings that oil exporting states maintain. It does not refer to the currency oil is purchased in. It comes from eurodollar, which signifies dollar holdings in Europe, and not the purchasing of European goods with dollars. Once we get that definition right, we understand it as a synecdoche for US hegemony in reserve currencies -- e.g. where foreign central banks store their wealth. The actual currency oil is priced in - or anything is priced in - means nothing. What is the point of saving a pip in the forex markets if you are going to be losing .1% in bid/ask spreads when you try to store your wealth in an illiquid bond market? No one -- absolutely no one - optimizes for reducing forex costs when deciding in which nation to park their wealth. They are much more concerned with questions like "Is it legal for me to purchase these bonds? will my wealth be confiscated in the future? What kind of fees do I pay when I buy these bonds?" The reason the world wants to store their wealth as dollar assets is because the US has a reputation for openness to foreign investment, rule of law, political stability, upholding foreign investor rights, and amazingly deep capital markets that can absorb large foreign inflows with very low spreads. So the bid/ask spread when trying purchase a few billion worth of U.S. bonds is much more important to explaining US financial hegemony than what some random country demands as payment. I think the no. 1 reason why people get this all wrong is they still want to think we live in a world of specie flows. But there are no bearer assets in international trade - you can't take it with you back home. Your foreign trade profits are going to be stored in some custodial account in some other country. So trusting that country is a big deal. People who think trade is conducted with gold nuggets don't see this custodial account problem, and that's why they don't understand why the U.S. is a global reserve currency. That's when all sorts of conspiracy theories about oil sales, or aircraft carriers, come into play as they try to understand the U.S. role using the ideas they are comfortable with.
deleted 5y ago
[deleted]

The US can keep issuing dollars for as long as they like. And you will buy these pieces of paper because they are backed by the US Military, the US Air Force and the US Navy.

roody15 5y ago

Are you sure? The US military doesn’t look to be at its peak. Despite its massive budget China’s military rise and the return of Russian military power might be changing the US’s role as the worlds only military super power. We may spend 10 times more than any other nation on our military … but due to bureaucracy and other inefficiencies our spending doesn’t quite get the same bang for its buck if you will.

deleted 5y ago
[deleted]
asdff 5y ago
US has spent the last 20 years testing technology in a real theater. China shoots at props in the desert. Russia can't afford to even play this game.
- roody15 5y ago
  Recent history would suggest otherwise.
  - johnny22 5y ago
    there is no recent history of conventional warfare. It's all guerilla stuff.

phist_mcgee 5y ago

And the marines and coast guard too!

darawk 5y ago

They can keep issuing them. They will not have the same value, though.

whatever1 5y ago
No this rule does not apply in the US. The US has printed 20% of all dollars ever existed since 2020. Check the exchange rates with any other currency, EUR, British sterling, Chinese RMB. Did it become cheaper? Of course not. We will always buy USD, because it has as a collateral 8billion lives.
- xwdv 5y ago
  We buy USD because its long term existence is practically guaranteed by the power of its military.
  - ethbr0 5y ago
    The world buys dollars because it needs them to fulfill oil and other commodity contracts, that are priced in dollars, which are then typically reinvested in US Treasuries by commodity exporters (because why not?). https://www.investopedia.com/terms/p/petrodollars.asp https://www.investopedia.com/terms/p/petrodollars.asp https://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret https://www.bloomberg.com/news/features/2016-05-30/the-untol... If a country wanted to not buy dollars, here's how that would go. No Dollars: "Hi, we'd like some oil." Oil Producer: "Great, here's how much that contract is in dollars." No Dollars: "How much would it be in my local currency?" Oil Producer: "Well, you see, we don't really quote in other currencies..." No Dollars: "Fine, I'll find someone who will." Middle Person: "I heard you're looking to buy oil with Pentali Marcograms?" No Dollars: "Sure am, what price will you give me?" Middle Person: "10% over the exchange rate between Pentali Marcograms and US dollars. You know oil producers trade in dollars, right?"
    - rsj_hn 5y ago
      > 10% over the exchange rate between Pentali Marcograms and US dollars. You know oil producers trade in dollars, right?" You are off by three orders of magnitude, which is pretty amazing. Forex markets have incredibly tight spreads measured in pips, say 1-4 pips, where 1 pip = 0.0001. The reason why dollars are important is that people store the results of their oil sales in USD assets. What a good is purchased with means nothing. Where you store the proceeds of the sale is what counts. This goes to that oh-so-tired phrase 'petrodollar', which many autodidacts misuse to signal a lack of understanding of both forex markets and oil economics. What "petrodollars" means is the dollar holdings that oil exporting states maintain. It does not refer to the currency oil is purchased in. It comes from eurodollar, which signifies dollar holdings in Europe, and not the purchasing of European goods with dollars. Once we get that definition right, we understand it as a synecdoche for US hegemony in reserve currencies -- e.g. where foreign central banks store their wealth. The actual currency oil is priced in - or anything is priced in - means nothing. What is the point of saving a pip in the forex markets if you are going to be losing .1% in bid/ask spreads when you try to store your wealth in an illiquid bond market? No one -- absolutely no one - optimizes for reducing forex costs when deciding in which nation to park their wealth. They are much more concerned with questions like "Is it legal for me to purchase these bonds? will my wealth be confiscated in the future? What kind of fees do I pay when I buy these bonds?" The reason the world wants to store their wealth as dollar assets is because the US has a reputation for openness to foreign investment, rule of law, political stability, upholding foreign investor rights, and amazingly deep capital markets that can absorb large foreign inflows with very low spreads. So the bid/ask spread when trying purchase a few billion worth of U.S. bonds is much more important to explaining US financial hegemony than what some random country demands as payment. I think the no. 1 reason why people get this all wrong is they still want to think we live in a world of specie flows. But there are no bearer assets in international trade - you can't take it with you back home. Your foreign trade profits are going to be stored in some custodial account in some other country. So trusting that country is a big deal. People who think trade is conducted with gold nuggets don't see this custodial account problem, and that's why they don't understand why the U.S. is a global reserve currency. That's when all sorts of conspiracy theories about oil sales, or aircraft carriers, come into play as they try to understand the U.S. role using the ideas they are comfortable with.

deleted 5y ago

[deleted]