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It also seems the Fed can just absorb whatever it needs to. And it's not like Japan needed to be a global reserve currency to sustain massive debt. De-dolarizat

by tootie 2y ago

It also seems the Fed can just absorb whatever it needs to. And it's not like Japan needed to be a global reserve currency to sustain massive debt. De-dolarization seems unlikely to cost much aside from prestige.

elzbardico 2y ago
Japan is a massive exporter, while the US is a massive net importer. American industrial production depends heavily on global supply chains, and thus, american prosperity requires a healthy global demand of US dollars.
- JumpCrisscross 2y ago
  > american prosperity requires a healthy global demand of US dollars The supply chains create the international demand for dollars and dollar-denominated assets. That then reinforces the supply chains. But causation starts with America being a massive producer and consumer.
  - elzbardico 2y ago
    Way less of a producer and more of a consumer. And no, the biggest driver for the US Dollars demand nowadays it is status as the global currency of trade.
    - JumpCrisscross 2y ago
      > Way less of a producer and more of a consumer We're the second-largest exporter in the world [1]. (But yes, more consumer.) > And no, the biggest driver for the US Dollars demand nowadays it is status as the global currency of trade Who do you think does most of the trading? If America weren't the world's largest importer and second-largest exporter, the dollar wouldn't be the global currency of trade. You're correct that our financial system reinforces that relationship. But it's reinforcing, not underwriting. (China isn't challenging us in our financial services, it's challenging us on trade.) [1] https://en.wikipedia.org/wiki/List_of_countries_by_exports https://en.wikipedia.org/wiki/List_of_countries_by_exports
- Dalewyn 2y ago
  >Japan is a massive exporter, Absolutely no, Japan imports far more than they export. >Total exports reached 100.88 trillion yen ($680 billion) last year, up 2.8% from 2022. >Total imports stood at 110.17 trillion yen last year, down 7%, due to lower oil and gas prices, resulting in an annual trade deficit of 9.29 trillion yen. The deficit declined from 20 trillion yen in 2022. https://asia.nikkei.com/Economy/Japanese-exports-hit-record-in-2023-on-weak-yen https://asia.nikkei.com/Economy/Japanese-exports-hit-record-...

by tootie 2y ago

elzbardico 2y ago

Japan is a massive exporter, while the US is a massive net importer. American industrial production depends heavily on global supply chains, and thus, american prosperity requires a healthy global demand of US dollars.

JumpCrisscross 2y ago
> american prosperity requires a healthy global demand of US dollars The supply chains create the international demand for dollars and dollar-denominated assets. That then reinforces the supply chains. But causation starts with America being a massive producer and consumer.
- elzbardico 2y ago
  Way less of a producer and more of a consumer. And no, the biggest driver for the US Dollars demand nowadays it is status as the global currency of trade.
  - JumpCrisscross 2y ago
    > Way less of a producer and more of a consumer We're the second-largest exporter in the world [1]. (But yes, more consumer.) > And no, the biggest driver for the US Dollars demand nowadays it is status as the global currency of trade Who do you think does most of the trading? If America weren't the world's largest importer and second-largest exporter, the dollar wouldn't be the global currency of trade. You're correct that our financial system reinforces that relationship. But it's reinforcing, not underwriting. (China isn't challenging us in our financial services, it's challenging us on trade.) [1] https://en.wikipedia.org/wiki/List_of_countries_by_exports https://en.wikipedia.org/wiki/List_of_countries_by_exports
Dalewyn 2y ago
>Japan is a massive exporter, Absolutely no, Japan imports far more than they export. >Total exports reached 100.88 trillion yen ($680 billion) last year, up 2.8% from 2022. >Total imports stood at 110.17 trillion yen last year, down 7%, due to lower oil and gas prices, resulting in an annual trade deficit of 9.29 trillion yen. The deficit declined from 20 trillion yen in 2022. https://asia.nikkei.com/Economy/Japanese-exports-hit-record-in-2023-on-weak-yen https://asia.nikkei.com/Economy/Japanese-exports-hit-record-...