3 ms·

> I'm inclined to think that is true, that the US is retreating from the world stage and the dollar will follow, but whether that happens now, later or never, I

> I'm inclined to think that is true, that the US is retreating from the world stage and the dollar will follow, but whether that happens now, later or never, I couldn't say. I don't understand why or how that would be a goal. Doesn't the US get / consume something like 25% of the world's production while having about 5% of the population? If they're consuming 5x their share, the bottom is way, way further down than anyone can fathom, isn't it?

alfiedotwtf 1y ago
America is literally following Trump into isolation. Why trade using a reclusive countries currency? Would you expect Finland to do international trade using North Korean WON?
- deleted 1y ago
  [deleted]
mystified5016 1y ago
Most of us don't really understand why, but that is apparently the goal of this administration. I'm honestly not sure there's any grand design or even inkling of a plan. It's happening and we have to deal with the consequences
- alwillis 1y ago
  It's called The Mar-a-Lago Accord. When you google it, this is the summary: The "Mar-a-Lago Accord" is a proposed economic strategy, often discussed in financial circles, suggesting a coordinated effort to devalue the US dollar and reduce the country's trade deficit. Essentially, it envisions a deal where the US would pressure its trading partners to weaken the dollar and lower US borrowing costs, potentially in exchange for continued US security guarantees. The idea is rooted in the 1985 Plaza Accord, where major economies agreed to jointly weaken the dollar, but with some key differences.
  - wahern 1y ago
    > weaken the dollar and lower US borrowing costs I found this confusing as weakening the dollar and lowering borrowing costs would seem to be at odds. Apparently the "deal" involves central banks which hold US Treasuries swapping some large share of them for near-zero interest ultra-long Treasury bonds (50-100 years), to prevent yields on typical Treasury bonds spiking when rolling over debt. See https://www.cfr.org/article/mar-lago-accord-not-recipe-success https://www.cfr.org/article/mar-lago-accord-not-recipe-succe... I'm still not sure how that's supposed to work to actually lower borrowing costs rather than blunt the increase. Maybe it's like the Laffer Curve where they rely on some very specific hypothetical conditions to make the numbers work?
    - slt2021 1y ago
      China calls 100 year zero coupon bonds basically Technical Default on foreign debt, and rejected it. If you think about, it really is a default, because US borrowers are being forced to exchange their cash into trust-me-bro letters. Technically USD has been a trust me bro paper ever since Bretton Woods, but today the trust in the system is really at very low level, unlike before
      - mcv 1y ago
        That's the real damage Trump is causing. The US has traded on trust for the past 80 years, but they had that trust. Trump squanders that trust and then wants a new trust-based deal? That ship has sailed, and he's the one who sent it off.
        slt2021 1y ago
        The trust was undermined long time ago by inlimited printing and decades of forever wars where $36 trln of debt has been borrowed on behalf of US, with absolutely nothing to show for it
        alwillis 1y ago
        The reputational damage to the US is incalculable.
pessimizer 1y ago
> Doesn't the US get / consume something like 25% of the world's production while having about 5% of the population? It did this by running up an impossibly massive trade debt since Reagan. This is not something that can be done endlessly, unless you're going to "start" invading other countries for resources.
- PaulDavisThe1st 1y ago
  It is far, far from impossibly massive. It is, for example, entirely comparable to a typical mortgage:income debt ratio. It is lower than the debt:GDP ratio of several other countries (including Japan in the recent past) that did not fail as a result. It also can't be done (in the sense of grown) endlessly if the only tools brought to bear upon it are the ones of heterodox economics and the historical policies of the two major US parties. You don't, however, need to invade other countries. You can take the sort of approach MMT advocates, for example.
coldtea 1y ago
Speaking for the global community, so they can consume a fairer share, instead the 5% consuming 25% of the world's production? It's not just the US itself that sets goals about dollar's use as global reserve.
datavirtue 1y ago
My bottom would be Americans consuming 4x their share. You don't have to get to zero or even close to reach a "really shitty for me" outcome.
rich_sasha 1y ago
I don't either, but the UK did exactly that (you know, scaled down somewhat) for similarly no good reason. It ended up a runaway political rhetoric, eventually they believed their own BS and pressed the Brexit button. 6% of missed GDP since 2019. From afar I'd say it could be the same.
- drcongo 1y ago
  This is a really interesting comment. Most* of those who pushed Brexit in the UK were people rich enough to ride the fallout, and rich enough to become even richer by playing at disaster capitalism. Seems like a good shout that this could be the same goal. * I say most, because obviously there were also an awful lot of useful idiots.
showdeaduser 1y ago
America also produces 25% of the world's production. If we went back to gold and silver, things wouldn't be much different on that front.
mcv 1y ago
I suspect Trump's goal is for the US to also produce 25% of the world's goods. Otherwise, Americans reducing their consumption to more reasonable levels sounds like a benefit to the world.

alfiedotwtf 1y ago

America is literally following Trump into isolation. Why trade using a reclusive countries currency? Would you expect Finland to do international trade using North Korean WON?

deleted 1y ago
[deleted]

mystified5016 1y ago

Most of us don't really understand why, but that is apparently the goal of this administration. I'm honestly not sure there's any grand design or even inkling of a plan. It's happening and we have to deal with the consequences

alwillis 1y ago
It's called The Mar-a-Lago Accord. When you google it, this is the summary: The "Mar-a-Lago Accord" is a proposed economic strategy, often discussed in financial circles, suggesting a coordinated effort to devalue the US dollar and reduce the country's trade deficit. Essentially, it envisions a deal where the US would pressure its trading partners to weaken the dollar and lower US borrowing costs, potentially in exchange for continued US security guarantees. The idea is rooted in the 1985 Plaza Accord, where major economies agreed to jointly weaken the dollar, but with some key differences.
- wahern 1y ago
  > weaken the dollar and lower US borrowing costs I found this confusing as weakening the dollar and lowering borrowing costs would seem to be at odds. Apparently the "deal" involves central banks which hold US Treasuries swapping some large share of them for near-zero interest ultra-long Treasury bonds (50-100 years), to prevent yields on typical Treasury bonds spiking when rolling over debt. See https://www.cfr.org/article/mar-lago-accord-not-recipe-success https://www.cfr.org/article/mar-lago-accord-not-recipe-succe... I'm still not sure how that's supposed to work to actually lower borrowing costs rather than blunt the increase. Maybe it's like the Laffer Curve where they rely on some very specific hypothetical conditions to make the numbers work?
  - slt2021 1y ago
    China calls 100 year zero coupon bonds basically Technical Default on foreign debt, and rejected it. If you think about, it really is a default, because US borrowers are being forced to exchange their cash into trust-me-bro letters. Technically USD has been a trust me bro paper ever since Bretton Woods, but today the trust in the system is really at very low level, unlike before
    - mcv 1y ago
      That's the real damage Trump is causing. The US has traded on trust for the past 80 years, but they had that trust. Trump squanders that trust and then wants a new trust-based deal? That ship has sailed, and he's the one who sent it off.
      - slt2021 1y ago
        The trust was undermined long time ago by inlimited printing and decades of forever wars where $36 trln of debt has been borrowed on behalf of US, with absolutely nothing to show for it
      - alwillis 1y ago
        The reputational damage to the US is incalculable.

pessimizer 1y ago

> Doesn't the US get / consume something like 25% of the world's production while having about 5% of the population? It did this by running up an impossibly massive trade debt since Reagan. This is not something that can be done endlessly, unless you're going to "start" invading other countries for resources.

PaulDavisThe1st 1y ago
It is far, far from impossibly massive. It is, for example, entirely comparable to a typical mortgage:income debt ratio. It is lower than the debt:GDP ratio of several other countries (including Japan in the recent past) that did not fail as a result. It also can't be done (in the sense of grown) endlessly if the only tools brought to bear upon it are the ones of heterodox economics and the historical policies of the two major US parties. You don't, however, need to invade other countries. You can take the sort of approach MMT advocates, for example.

coldtea 1y ago

Speaking for the global community, so they can consume a fairer share, instead the 5% consuming 25% of the world's production? It's not just the US itself that sets goals about dollar's use as global reserve.

datavirtue 1y ago

My bottom would be Americans consuming 4x their share. You don't have to get to zero or even close to reach a "really shitty for me" outcome.

rich_sasha 1y ago

I don't either, but the UK did exactly that (you know, scaled down somewhat) for similarly no good reason. It ended up a runaway political rhetoric, eventually they believed their own BS and pressed the Brexit button. 6% of missed GDP since 2019. From afar I'd say it could be the same.

drcongo 1y ago
This is a really interesting comment. Most* of those who pushed Brexit in the UK were people rich enough to ride the fallout, and rich enough to become even richer by playing at disaster capitalism. Seems like a good shout that this could be the same goal. * I say most, because obviously there were also an awful lot of useful idiots.

showdeaduser 1y ago

America also produces 25% of the world's production. If we went back to gold and silver, things wouldn't be much different on that front.

mcv 1y ago

I suspect Trump's goal is for the US to also produce 25% of the world's goods. Otherwise, Americans reducing their consumption to more reasonable levels sounds like a benefit to the world.