4 ms·

Is this finally a severe enough escalation for the UK to stop using the US dollar as a reserve currency?

by immibis 9mo ago

OgsyedIE 9mo ago
The UK is extremely dependent on American LNG to serve as a vital component of the UK's home heating infrastructure. The UK would have significant affordability problems with making up the difference from other gas exporting countries and would likely just have rationing and rolling outages instead.
- arethuza 9mo ago
  "Extremely dependent" seems to be overstating things a bit - 11% of imported gas comes from the US with is about a fifth of what we import from Norway and a third of domestic production? https://www.sunsave.energy/blog/uk-gas-sources https://www.sunsave.energy/blog/uk-gas-sources
  - throw0101d 9mo ago
    >> The UK is extremely dependent on American LNG to […] > "Extremely dependent" seems to be overstating things a bit - 11% of imported gas comes from the US with is about a fifth of what we import from Norway and a third of domestic production? If the GP wants to hold to his logic, then the US would be "extremely dependent" on Canada, given that 25% of all crude oil refined in the US comes from their northern neighbour: * https://www.afpm.org/newsroom/blog/how-much-oil-does-united-states-import-and-why https://www.afpm.org/newsroom/blog/how-much-oil-does-united-...
  - einichi 9mo ago
    That does not make the distinction between pipeline gas and LNG, but I do not know if that is a distinction worth making
    - arethuza 9mo ago
      The UK does produce its own LNG though - I watch the tankers sailing past my house!
    - tom_ 9mo ago
      It doesn't make much difference in terms of the actual gas. It's an alternative transportation mechanism for what's basically the same sort of stuff.
- jjkaczor 9mo ago
  Well - according to a quick search, 99% of Canadian LNG goes to the US - am sure we would be happy to switch customers at this point in time...
  - gadflyinyoureye 9mo ago
    Does Canada have the port systems to load boats to the UK? Of not, can they add such facilities without raising the price?
- einichi 9mo ago
  Pipeline-based providers are still a significantly greater percentage of the UK's overall gas consumption Could the UK not rebalance its imports from LNG to more pipeline-based gas? It seems like the UK has managed to cut out Russian LNG imports completely already.
  - miroljub 9mo ago
    Their precious pipelines could just be blown up by an unknown actor the moment the US president says the UK will not get any gas through them. The North Stream scenario could just repeat.
    - einichi 9mo ago
      Time for some heat pump subsidies I guess! Haha
  - pjc50 9mo ago
    I suspect it absolutely could rebalance, resulting in some other country taking the US gas instead while we take their previous non-US gas. Rebalancing US cloud services out is impossible, though. That's the real UK economy kill switch.
    - OgsyedIE 9mo ago
      And payment clearing, incidentally. Bank interlending (including BoE) in the UK is almost entirely built on US systems.
blitzar 9mo ago
We use the Great British Pound in the UK.
- ta20240528 9mo ago
  So why then does the bank of England have and need the right* to print as many USD as they need, whenever they want. If they only use sterling? * - along five other central banks
  - pjc50 9mo ago
    This is the first I've heard of this? Where's this legislated? Or is this misinterpreting contracted out physical printing services?
  - pastor_williams 9mo ago
    Quick search says it does not. What is your source for this claim?
    - GJim 9mo ago
      Probably Grok AI :-)
      - ta20240528 9mo ago
        No need for that here.
    - ta20240528 9mo ago
      I thought I would garner these comments above and the down-votes :) So as requested. Actually I see its 14 central banks that have this USD FX swap facility (but the BoE, ECB, and BoJ are essentially uncapped). My sources: 1. I did some early work in a very early precursor of this with Reuters 2. The Bank of International Settlements (BIS) https://www.bis.org/speeches/sp230324a.pdf https://www.bis.org/speeches/sp230324a.pdf 3. The Federal Reserve Banks (Richmond) https://www.richmondfed.org/publications/research/econ_focus/2024/q4_federal_reserve https://www.richmondfed.org/publications/research/econ_focus... How it works is: The BoE needs USD, say $10 billion, so it SIMULTANEOUS conjures out of absolute thin air a single ledger entry: - GBP ₤ 7,437,400,000 - liability to US FED - USD $10,000,000,000 - asset to UK BoE It then: - lends the $10 billion to whoever needs it in the UK - later (so not immediately*) lets the Fed know it has a new GBP asset. It later promises to pay it all back. If it can. But, be very clear, 14 central banks, can and do conjure up USD out of thin air. They call it something boring ("FX swaps"). The modern fiat monetary system is weird. (And I want to be a bank). But to my earlier point - this print on demand, let us know later facility is only needed because of the demand for USD.

Is this finally a severe enough escalation for the UK to stop using the US dollar as a reserve currency?

by immibis 9mo ago

Is this finally a severe enough escalation for the UK to stop using the US dollar as a reserve currency?

The UK is extremely dependent on American LNG to serve as a vital component of the UK's home heating infrastructure. The UK would have significant affordability problems with making up the difference from other gas exporting countries and would likely just have rationing and rolling outages instead.

arethuza 9mo ago
"Extremely dependent" seems to be overstating things a bit - 11% of imported gas comes from the US with is about a fifth of what we import from Norway and a third of domestic production? https://www.sunsave.energy/blog/uk-gas-sources https://www.sunsave.energy/blog/uk-gas-sources
- throw0101d 9mo ago
  >> The UK is extremely dependent on American LNG to […] > "Extremely dependent" seems to be overstating things a bit - 11% of imported gas comes from the US with is about a fifth of what we import from Norway and a third of domestic production? If the GP wants to hold to his logic, then the US would be "extremely dependent" on Canada, given that 25% of all crude oil refined in the US comes from their northern neighbour: * https://www.afpm.org/newsroom/blog/how-much-oil-does-united-states-import-and-why https://www.afpm.org/newsroom/blog/how-much-oil-does-united-...
- einichi 9mo ago
  That does not make the distinction between pipeline gas and LNG, but I do not know if that is a distinction worth making
  - arethuza 9mo ago
    The UK does produce its own LNG though - I watch the tankers sailing past my house!
  - tom_ 9mo ago
    It doesn't make much difference in terms of the actual gas. It's an alternative transportation mechanism for what's basically the same sort of stuff.
jjkaczor 9mo ago
Well - according to a quick search, 99% of Canadian LNG goes to the US - am sure we would be happy to switch customers at this point in time...
- gadflyinyoureye 9mo ago
  Does Canada have the port systems to load boats to the UK? Of not, can they add such facilities without raising the price?
einichi 9mo ago
Pipeline-based providers are still a significantly greater percentage of the UK's overall gas consumption Could the UK not rebalance its imports from LNG to more pipeline-based gas? It seems like the UK has managed to cut out Russian LNG imports completely already.
- miroljub 9mo ago
  Their precious pipelines could just be blown up by an unknown actor the moment the US president says the UK will not get any gas through them. The North Stream scenario could just repeat.
  - einichi 9mo ago
    Time for some heat pump subsidies I guess! Haha
- pjc50 9mo ago
  I suspect it absolutely could rebalance, resulting in some other country taking the US gas instead while we take their previous non-US gas. Rebalancing US cloud services out is impossible, though. That's the real UK economy kill switch.
  - OgsyedIE 9mo ago
    And payment clearing, incidentally. Bank interlending (including BoE) in the UK is almost entirely built on US systems.

blitzar 9mo ago

We use the Great British Pound in the UK.

ta20240528 9mo ago
So why then does the bank of England have and need the right* to print as many USD as they need, whenever they want. If they only use sterling? * - along five other central banks
- pjc50 9mo ago
  This is the first I've heard of this? Where's this legislated? Or is this misinterpreting contracted out physical printing services?
- pastor_williams 9mo ago
  Quick search says it does not. What is your source for this claim?
  - GJim 9mo ago
    Probably Grok AI :-)
    - ta20240528 9mo ago
      No need for that here.
  - ta20240528 9mo ago
    I thought I would garner these comments above and the down-votes :) So as requested. Actually I see its 14 central banks that have this USD FX swap facility (but the BoE, ECB, and BoJ are essentially uncapped). My sources: 1. I did some early work in a very early precursor of this with Reuters 2. The Bank of International Settlements (BIS) https://www.bis.org/speeches/sp230324a.pdf https://www.bis.org/speeches/sp230324a.pdf 3. The Federal Reserve Banks (Richmond) https://www.richmondfed.org/publications/research/econ_focus/2024/q4_federal_reserve https://www.richmondfed.org/publications/research/econ_focus... How it works is: The BoE needs USD, say $10 billion, so it SIMULTANEOUS conjures out of absolute thin air a single ledger entry: - GBP ₤ 7,437,400,000 - liability to US FED - USD $10,000,000,000 - asset to UK BoE It then: - lends the $10 billion to whoever needs it in the UK - later (so not immediately*) lets the Fed know it has a new GBP asset. It later promises to pay it all back. If it can. But, be very clear, 14 central banks, can and do conjure up USD out of thin air. They call it something boring ("FX swaps"). The modern fiat monetary system is weird. (And I want to be a bank). But to my earlier point - this print on demand, let us know later facility is only needed because of the demand for USD.