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Doesn't help that the US seems set on destroying the world's confidence in the US dollar: first the 2008 financial crises and monetary creation (I.e. devalu

Doesn't help that the US seems set on destroying the world's confidence in the US dollar: first the 2008 financial crises and monetary creation (I.e. devaluation) in response; then much more recently they hammered nails in the coffin of Breton Woods 2 (I.e. the post-1971 monetary status quo of floating fiat currencies) by confiscating the Afghan Central Bank's reserves (which included private individuals' deposits, and they gave the money to families of September 11th victims) and by freezing the assets of the Russian Central Bank. inter-Central Bank settlements were supposed to be apolitical. All that in the context of multiple hot wars (Iran in 2003 and then Libya, perhaps?) and military actions that appear to be in defense of US dollar dominance: https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-petrodollar https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-....

delecti 4y ago
> Doesn't help that the US seems set on destroying the world's confidence in the US dollar Over the last 15 years, USD has increased in value against the Ghanaian Cedi by almost 16x. If we're trying to destroy confidence in USD, then Ghana sure makes it seem like we're doing an awful job. https://www.google.com/search?q=1+USD+to+GHS&oq=1+USD+to+GHS https://www.google.com/search?q=1+USD+to+GHS&oq=1+USD+to+GHS
- jkepler 4y ago
  You're correct that the Cedi has lost value compared with the US dollar while existing in a world where USD is one side if nearly every international business transaction. However, look at the US dollar over longer durations against wheat [1], copper [2], gold[3], or Bitcoin [4]: the dollar buys significantly less than 10, 15, 40, or 100 years ago. While the Cedi may be much weaker against the dollar, the dollar is loosing against real commodities/assets that can't simply be created by banker's fiat. So, the dollar's the cleanest dirty shirt in the room. And Ghana just announced that they'd rather trade oil for a clean shirt (gold) rather than taking a dirty one. [1] https://www.macrotrends.net/2534/wheat-prices-historical-chart-data https://www.macrotrends.net/2534/wheat-prices-historical-cha... [2] https://www.macrotrends.net/1476/copper-prices-historical-chart-data https://www.macrotrends.net/1476/copper-prices-historical-ch... [3] https://goldprice.org/gold-price-charts/15-year-gold-price-history-in-us-dollars-per-ounce https://goldprice.org/gold-price-charts/15-year-gold-price-h... / For 100 year chart, https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-... [4] https://www.xe.com/currencycharts/?from=USD&to=BTC&view=10Y https://www.xe.com/currencycharts/?from=USD&to=BTC&view=10Y
  - selectodude 4y ago
    Of course the dollar has devalued. That's the whole idea. It's supposed to. At a modest rate of 2% inflation, $1 should be worth 50 cents after 35 years. That's literally how currency works.
    - ponow 4y ago
      That's a policy choice, one which is non-obvious and requires serious justification. Why should people be incentivized to spend their money, morally? The mandatory inflation basically is saying, "spend your money or we'll spend it for you". How does this robbery encourage social mobility and the building of generational wealth, exactly? It's one thing to give handouts to people, and quite another to rob them. It's most harmful to the poor who generally have less leverage in ensuring that their wages keep up with inflation and they tend to need to spend a high fraction of their wages to live on, so eroding their savings is seriously destructive. The poor also can't as easily access investing advice and methods, to avoid the effects of inflation.
      - selectodude 4y ago
        It's important to realize what currency really is at its core, which is not a store of value but an intermediary store of the current value of labor vs the barter value. Todays labor is worth more today than it will be in 10 years, so the dollar value of that labor should fall correspondingly. When we pick an inflation rate, we are more deciding what the time decay of todays labor should be moving forward.
      - sedeki 4y ago
        May I ask if you think price stability is of any benefit for a given currency at all? If not, why not? My intention is to justify inflation from this end.
      - hnews_account_1 4y ago
        This is not a policy choice. Step outside, touch grass, then open a macro Econ 101 book and understand how and why inflationary economies were created and settled upon as a working model. A non inflationary economy literally cannot expand. You’ll be writing this from a typewriter and posting it from your local post office if inflation didn’t exist.
enkid 4y ago
If people's confidence was destroyed, it wouldn't be in high demand.

delecti 4y ago

> Doesn't help that the US seems set on destroying the world's confidence in the US dollar Over the last 15 years, USD has increased in value against the Ghanaian Cedi by almost 16x. If we're trying to destroy confidence in USD, then Ghana sure makes it seem like we're doing an awful job. https://www.google.com/search?q=1+USD+to+GHS&oq=1+USD+to+GHS https://www.google.com/search?q=1+USD+to+GHS&oq=1+USD+to+GHS

jkepler 4y ago
You're correct that the Cedi has lost value compared with the US dollar while existing in a world where USD is one side if nearly every international business transaction. However, look at the US dollar over longer durations against wheat [1], copper [2], gold[3], or Bitcoin [4]: the dollar buys significantly less than 10, 15, 40, or 100 years ago. While the Cedi may be much weaker against the dollar, the dollar is loosing against real commodities/assets that can't simply be created by banker's fiat. So, the dollar's the cleanest dirty shirt in the room. And Ghana just announced that they'd rather trade oil for a clean shirt (gold) rather than taking a dirty one. [1] https://www.macrotrends.net/2534/wheat-prices-historical-chart-data https://www.macrotrends.net/2534/wheat-prices-historical-cha... [2] https://www.macrotrends.net/1476/copper-prices-historical-chart-data https://www.macrotrends.net/1476/copper-prices-historical-ch... [3] https://goldprice.org/gold-price-charts/15-year-gold-price-history-in-us-dollars-per-ounce https://goldprice.org/gold-price-charts/15-year-gold-price-h... / For 100 year chart, https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-... [4] https://www.xe.com/currencycharts/?from=USD&to=BTC&view=10Y https://www.xe.com/currencycharts/?from=USD&to=BTC&view=10Y
- selectodude 4y ago
  Of course the dollar has devalued. That's the whole idea. It's supposed to. At a modest rate of 2% inflation, $1 should be worth 50 cents after 35 years. That's literally how currency works.
  - ponow 4y ago
    That's a policy choice, one which is non-obvious and requires serious justification. Why should people be incentivized to spend their money, morally? The mandatory inflation basically is saying, "spend your money or we'll spend it for you". How does this robbery encourage social mobility and the building of generational wealth, exactly? It's one thing to give handouts to people, and quite another to rob them. It's most harmful to the poor who generally have less leverage in ensuring that their wages keep up with inflation and they tend to need to spend a high fraction of their wages to live on, so eroding their savings is seriously destructive. The poor also can't as easily access investing advice and methods, to avoid the effects of inflation.
    - selectodude 4y ago
      It's important to realize what currency really is at its core, which is not a store of value but an intermediary store of the current value of labor vs the barter value. Todays labor is worth more today than it will be in 10 years, so the dollar value of that labor should fall correspondingly. When we pick an inflation rate, we are more deciding what the time decay of todays labor should be moving forward.
    - sedeki 4y ago
      May I ask if you think price stability is of any benefit for a given currency at all? If not, why not? My intention is to justify inflation from this end.
    - hnews_account_1 4y ago
      This is not a policy choice. Step outside, touch grass, then open a macro Econ 101 book and understand how and why inflationary economies were created and settled upon as a working model. A non inflationary economy literally cannot expand. You’ll be writing this from a typewriter and posting it from your local post office if inflation didn’t exist.

enkid 4y ago

If people's confidence was destroyed, it wouldn't be in high demand.