4 ms·

This isn't why people use (and hold) dollars. These figures can go up and down without affecting anything real. Paying this much attention to trivial minutia do

This isn't why people use (and hold) dollars. These figures can go up and down without affecting anything real. Paying this much attention to trivial minutia doesn't serve the interests of normal people. When non-Americans stop holding so many dollars, these figures will not be the cause. Rather, it will be due to our unconscionable foreign policy and abusive economic sanctions.

OscarCunningham 4y ago
They might stop holding dollars for that reason, but they would definitely also stop holding dollars if inflation was high and the Fed had nothing to sell to bring it back down.
- hindsightbias 4y ago
  What non-inflationary currency would they go to?
  - OscarCunningham 4y ago
    In this hypothetical the dollar has inflation higher than its 2% target, but there are still other major currencies whose central banks haven't gone bankrupt.
    - AnimalMuppet 4y ago
      Central banks don't go bankrupt. And, even in that hypothetical, it would still depend on what interest rate you can get in dollars vs. what interest rate you can get in, say, Swiss Francs.
Invictus0 4y ago
And the reason dollars have value is because we have intelligent people in government managing the system and preventing it from going haywire, not because of some sort of magic. It might not matter when you go buy eggs but it's still interesting to see what's going on under the hood.
- jessaustin 4y ago
  The "magic" is the military that threatens every inch of the globe, the CIA (and other more clandestine organizations) that punish leaders who value the material interests of their people over those of American firms (Allende, Mosaddegh, Magufuli, etc.), the IMF and World Bank who impose austerity as table stakes, and ironclad control over global banking infrastructure. The nerds with their "balance sheets" themselves don't imagine they have any effect on any of this. TFA skirts fairly close to crank territory.
  - shadowgovt 4y ago
    Essentially. The leaders of other countries don't stuff dollars into the proverbial mattress because our central-bank T-sheet looks good. They do it because if their country goes into civil war and their currency becomes worthless, they perceive our currency as least likely to do that next. It's our demonstrated force projection, our vast multinational business reach, our entanglement into the IMF (the dollar being the currency used to pay IMF debts), and a couple centuries of relatively stable democracy that pins the value of the dollar. The January 6 insurrection did more damage to the international perception of the dollar than anything the Federal Reserve is doing.
  - OscarCunningham 4y ago
    It has more to do with the US's ability to reliably tax its own citizens. Plenty of small countries also have stable currencies, but only the ones with stable governments.
    - jessaustin 4y ago
      Yes, that is another factor, and shouldn't be underestimated. Government-issued currency exists the moment the government decides it will be accepted for payment of taxes.

OscarCunningham 4y ago

They might stop holding dollars for that reason, but they would definitely also stop holding dollars if inflation was high and the Fed had nothing to sell to bring it back down.

hindsightbias 4y ago
What non-inflationary currency would they go to?
- OscarCunningham 4y ago
  In this hypothetical the dollar has inflation higher than its 2% target, but there are still other major currencies whose central banks haven't gone bankrupt.
  - AnimalMuppet 4y ago
    Central banks don't go bankrupt. And, even in that hypothetical, it would still depend on what interest rate you can get in dollars vs. what interest rate you can get in, say, Swiss Francs.

Invictus0 4y ago

And the reason dollars have value is because we have intelligent people in government managing the system and preventing it from going haywire, not because of some sort of magic. It might not matter when you go buy eggs but it's still interesting to see what's going on under the hood.

jessaustin 4y ago
The "magic" is the military that threatens every inch of the globe, the CIA (and other more clandestine organizations) that punish leaders who value the material interests of their people over those of American firms (Allende, Mosaddegh, Magufuli, etc.), the IMF and World Bank who impose austerity as table stakes, and ironclad control over global banking infrastructure. The nerds with their "balance sheets" themselves don't imagine they have any effect on any of this. TFA skirts fairly close to crank territory.
- shadowgovt 4y ago
  Essentially. The leaders of other countries don't stuff dollars into the proverbial mattress because our central-bank T-sheet looks good. They do it because if their country goes into civil war and their currency becomes worthless, they perceive our currency as least likely to do that next. It's our demonstrated force projection, our vast multinational business reach, our entanglement into the IMF (the dollar being the currency used to pay IMF debts), and a couple centuries of relatively stable democracy that pins the value of the dollar. The January 6 insurrection did more damage to the international perception of the dollar than anything the Federal Reserve is doing.
- OscarCunningham 4y ago
  It has more to do with the US's ability to reliably tax its own citizens. Plenty of small countries also have stable currencies, but only the ones with stable governments.
  - jessaustin 4y ago
    Yes, that is another factor, and shouldn't be underestimated. Government-issued currency exists the moment the government decides it will be accepted for payment of taxes.