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The US fails to see that the more they hold other down for their own benefit, the less others will tolerate it, and the more other countries will push for self

The US fails to see that the more they hold other down for their own benefit, the less others will tolerate it, and the more other countries will push for self sovereignty. When that happens, the whole dollar based global financial system will collapse like a house of cards. The US is over playing their hand, and the results will be disaster.

nebula8804 4y ago
>When that happens, the whole dollar based global financial system will collapse like a house of cards. The common rebuttal to this is what will replace it? Whenever Chinese open up capital controls for their currency people rush to get their money out and into USD/Euro so much so that they have to shut it down again. They also manipulate it like crazy. The currency with the highest trust is the one that stays on top and it appears that the USD is the least worst option for the foreseeable future.
- jags 4y ago
  Heard it in a video somewhere that it won't be a one big blow that takes down USD, instead, it will be thousand-little-cuts. USD won't be replaced by a single currency instead countries pissed off by US will start using their local currency as and when possible. E.g. India buying oil from Russia in dubai dirhams/rubles. China and Russia doing their trades in yuan amd ruble. Here are few more examples: https://www.google.com/amp/story/s/www.wionews.com/web-stories/world/six-big-economies-that-are-ditching-us-dollar-1680521121418 https://www.google.com/amp/story/s/www.wionews.com/web-stori... I personally feel that USD dollar circulation will go down a lot in not so far away future and the domino effect will be significant on US political and economical dominance.
  - refurb 4y ago
    That's not so simple and has a significant cost. The reason why USD are used so much is multi-factorial: a) a huge float so massive currency exchanges don't move the price much [unlike say Dubai's currency], b) predictable US government monetary policy [so no sudden changes in value], c) no capital controls so you can move it anywhere in the world easily [unlike China], d) widespread use because of a,b,c. China's entire economy is dependent on undervaluing the currency to goose exports, so they have very strict currency controls otherwise the value would rapidly increase. And what people don't realize is that it's not exactly going to hurt the US if suddenly some other currency becomes more dominant. GBPs, CHFs, SGDs are all strong, stable currencies that aren't a global reserve currency and those countries do just fine.
    - jags 4y ago
      I don't think anyone can deny the benefits of having USD as a default currency for global trade as of today but just think once from the perspective of a country against whom USD is used as a political/economic weapon. Iran/Russia won't care much about the points you mentioned. They would come up with some workaround/compromise instead just to keep things going. USA has a great currency but they use it as a tool of bullying others way too often. Other countries have started noticing and are now taking concrete steps to come up with an alternate/backup plan. And it may not have a direct effect on US economy if some other currency becomes dominant but they would certainly lose out on their political dominance (they would no longer be able to strongly impose economic sanctions and coarse others to do as they please) and that could have snowball effect on its economy.
  - lenkite 4y ago
    The United States has the largest external debt in the world thanks to dollar as the default international reserve currency. Removing this extraordinary privileged position and having a bucket of trading currencies is a very good thing for the rest of the world. It will take quite some time for this to happen.
- max51 4y ago
  A massive amount of US dollars is held purely because countries and companies are forced to use it for many types of transactions (eg. trading oil). It's not by choice, they have a gun to head. The US has proven over and over again that they will kill state leaders and invade entire countries in order to preserve that economic power. When the US loses that power and other countries start using whatever currency they prefer, the USD you are holding in your account will lose a lot of value. It doesn't matter what other countries prefer to use (euro, yen, rubles, CAD, bitcoins, etc.), anything other than the USD will fuck up the US economy really badly. I personally wouldn't trust current US politicians (both sides) to deal with this successfully.
  - imwillofficial 4y ago
    Exactly my point. This is already happening now.
- imwillofficial 4y ago
  This is already happening. Saudi has started to trade in various local currencies.

nebula8804 4y ago

>When that happens, the whole dollar based global financial system will collapse like a house of cards. The common rebuttal to this is what will replace it? Whenever Chinese open up capital controls for their currency people rush to get their money out and into USD/Euro so much so that they have to shut it down again. They also manipulate it like crazy. The currency with the highest trust is the one that stays on top and it appears that the USD is the least worst option for the foreseeable future.

jags 4y ago
Heard it in a video somewhere that it won't be a one big blow that takes down USD, instead, it will be thousand-little-cuts. USD won't be replaced by a single currency instead countries pissed off by US will start using their local currency as and when possible. E.g. India buying oil from Russia in dubai dirhams/rubles. China and Russia doing their trades in yuan amd ruble. Here are few more examples: https://www.google.com/amp/story/s/www.wionews.com/web-stories/world/six-big-economies-that-are-ditching-us-dollar-1680521121418 https://www.google.com/amp/story/s/www.wionews.com/web-stori... I personally feel that USD dollar circulation will go down a lot in not so far away future and the domino effect will be significant on US political and economical dominance.
- refurb 4y ago
  That's not so simple and has a significant cost. The reason why USD are used so much is multi-factorial: a) a huge float so massive currency exchanges don't move the price much [unlike say Dubai's currency], b) predictable US government monetary policy [so no sudden changes in value], c) no capital controls so you can move it anywhere in the world easily [unlike China], d) widespread use because of a,b,c. China's entire economy is dependent on undervaluing the currency to goose exports, so they have very strict currency controls otherwise the value would rapidly increase. And what people don't realize is that it's not exactly going to hurt the US if suddenly some other currency becomes more dominant. GBPs, CHFs, SGDs are all strong, stable currencies that aren't a global reserve currency and those countries do just fine.
  - jags 4y ago
    I don't think anyone can deny the benefits of having USD as a default currency for global trade as of today but just think once from the perspective of a country against whom USD is used as a political/economic weapon. Iran/Russia won't care much about the points you mentioned. They would come up with some workaround/compromise instead just to keep things going. USA has a great currency but they use it as a tool of bullying others way too often. Other countries have started noticing and are now taking concrete steps to come up with an alternate/backup plan. And it may not have a direct effect on US economy if some other currency becomes dominant but they would certainly lose out on their political dominance (they would no longer be able to strongly impose economic sanctions and coarse others to do as they please) and that could have snowball effect on its economy.
- lenkite 4y ago
  The United States has the largest external debt in the world thanks to dollar as the default international reserve currency. Removing this extraordinary privileged position and having a bucket of trading currencies is a very good thing for the rest of the world. It will take quite some time for this to happen.
max51 4y ago
A massive amount of US dollars is held purely because countries and companies are forced to use it for many types of transactions (eg. trading oil). It's not by choice, they have a gun to head. The US has proven over and over again that they will kill state leaders and invade entire countries in order to preserve that economic power. When the US loses that power and other countries start using whatever currency they prefer, the USD you are holding in your account will lose a lot of value. It doesn't matter what other countries prefer to use (euro, yen, rubles, CAD, bitcoins, etc.), anything other than the USD will fuck up the US economy really badly. I personally wouldn't trust current US politicians (both sides) to deal with this successfully.
- imwillofficial 4y ago
  Exactly my point. This is already happening now.
imwillofficial 4y ago
This is already happening. Saudi has started to trade in various local currencies.