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> I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Look at USD FX rates. The US may be able to purchase resources and

> I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Look at USD FX rates. The US may be able to purchase resources and goods abroad at more favorable exchange, but who can afford to buy US exports as the USD rockets skyward? And what is the logical follow-on to unobtainable USD units of trade? Substitutes that China, for example, are more than delighted to support if it means they exert (even) more control over the global monetary system.

spywaregorilla 4y ago
FX rates are like racing logic. It might be better to be behind for a while (weaker currency) because that could have long term advantages like moving industry to your country. But you want to be in first place. The USD is strong because people need to buy things from the US to begin with. That is, at best, a "nobody goes there it's too popular" kind of comment. The idea that you weaken your currency to increase exports is something you do to benefit from growth, like moving industry to China. But if something like an energy shortage or a fertilizer shortage start limiting your ability to produce things with that opportunity, you're just doubled down on a bad situation. This isn't even a story on "reserve currency" status. This is just the US (and Canada) being in an incredible competitive situation. What do you do when there's a global food shortage and the US is the only country unhindered? You suck it up, buy those stupidly expensive US dollars, and import US food. And get screwed if you owe USD denominated debts while your currency goes down. And if the US finds it's not at the right level, it can always just... spend more money. It's basically free. Everyone's getting hit with inflation because it's genuinely harder to make and ship things. Slapping on some excess money sloshing around to try and keep things going is dangerous.
- code51 4y ago
  That's why petrodollar is part of heated conversations around the world. You do this enough and your allies become collateral damage, the system begs for a change. Rest of the world starts to only base their trades in gold (or some other standard) and when faced with USD debt, change the debt amount through policy. US has to keep their (future) allies afloat either openly or with hidden support.
seibelj 4y ago
All the trinkets that could be offshored were done already. What the US manufactures now is high-end (chips) or protected by tariffs (cars). A lot of virtual stuff like software and call centers. I think we've hollowed out so much there isn't really much left to offshore.
- elcritch 4y ago
  Don’t forget the US still excels at high speed pizza delivery. ;) Odd but that Snowcrash reference seems oddly prescient given the rise of Uber, Instacart, GrubHub, etc. Not quite pizza delivery but similar genres.
  - spywaregorilla 4y ago
    If it were snowcrash, however, there'd be a lot slow-ass uber drivers bleeding out on the road.

spywaregorilla 4y ago

FX rates are like racing logic. It might be better to be behind for a while (weaker currency) because that could have long term advantages like moving industry to your country. But you want to be in first place. The USD is strong because people need to buy things from the US to begin with. That is, at best, a "nobody goes there it's too popular" kind of comment. The idea that you weaken your currency to increase exports is something you do to benefit from growth, like moving industry to China. But if something like an energy shortage or a fertilizer shortage start limiting your ability to produce things with that opportunity, you're just doubled down on a bad situation. This isn't even a story on "reserve currency" status. This is just the US (and Canada) being in an incredible competitive situation. What do you do when there's a global food shortage and the US is the only country unhindered? You suck it up, buy those stupidly expensive US dollars, and import US food. And get screwed if you owe USD denominated debts while your currency goes down. And if the US finds it's not at the right level, it can always just... spend more money. It's basically free. Everyone's getting hit with inflation because it's genuinely harder to make and ship things. Slapping on some excess money sloshing around to try and keep things going is dangerous.

code51 4y ago
That's why petrodollar is part of heated conversations around the world. You do this enough and your allies become collateral damage, the system begs for a change. Rest of the world starts to only base their trades in gold (or some other standard) and when faced with USD debt, change the debt amount through policy. US has to keep their (future) allies afloat either openly or with hidden support.

seibelj 4y ago

All the trinkets that could be offshored were done already. What the US manufactures now is high-end (chips) or protected by tariffs (cars). A lot of virtual stuff like software and call centers. I think we've hollowed out so much there isn't really much left to offshore.

elcritch 4y ago
Don’t forget the US still excels at high speed pizza delivery. ;) Odd but that Snowcrash reference seems oddly prescient given the rise of Uber, Instacart, GrubHub, etc. Not quite pizza delivery but similar genres.
- spywaregorilla 4y ago
  If it were snowcrash, however, there'd be a lot slow-ass uber drivers bleeding out on the road.