6 ms·

China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _pric

China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] 1 - https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_surpassed_the_us_dollar_to_become_the/ https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s... 2 - https://www.economist.com/china/2025/09/10/china-is-ditching-the-dollar-fast https://www.economist.com/china/2025/09/10/china-is-ditching... ( https://archive.is/aNRmm https://archive.is/aNRmm ) 3 - https://www.amazon.com/dp/B006JAM3UU/ https://www.amazon.com/dp/B006JAM3UU/ "Currency Wars" by James Rickards (2011) [4] - https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart

IshKebab 9mo ago
Gold is not "real money", come on.
- PlatoIsADisease 9mo ago
  The analytical philosopher in me says: "Define real money" I think everyone can agree if you specify your definition.
- maerF0x0 9mo ago
  It's a lot less Fiat than USD.
  - hagbarth 9mo ago
    How so?
    - maerF0x0 9mo ago
      I guess because gold isn't created by decree?
      - BlarfMcFlarf 9mo ago
        Supply is only one half of value. The demand for gold is almost entirely speculative, whereas dollars can be directly used for almost anything.
        maerF0x0 9mo ago
        The issue isn't it's usefulness in small transactions. The issue is who decides. In the case of gold a huge distributed system decides the valuation of Gold. Yes we usually use USD as the comparator. But there is a Gold:RealEstate ratio, Gold:Oil Ratio, Gold:Bread ratio. No single or small number of actors can change that in a meaningful/reliable way.[1] Whereas USD can, and has been, printed at an exponential rate. [1] -(Let's exclude intentional market manipulations like if a world leader were to buy a bunch of gold and then saber rattle to drive up fear).
- znnajdla 9mo ago
  A goat or a sheep cost roughly the same in gold today as it cost 2000 years ago during the Roman Empire. Gold is the only “real money” in the sense that it is the only stable measure of the value of basic needs over centuries. https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadebc5 https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb...
  - spicyusername 9mo ago
    First link to ChatGPT as a "source" that I've seen in the wild. Times they are a-changing. I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
    - gamacodre 9mo ago
      Yeah, I saw that link and had a few thoughts immediately collide in my head: - Wait, WTF? Really?? - But but but it's a *chatbot*, not an authority - We're doomed
    - duskwuff 9mo ago
      Unless there's something I'm missing, there isn't even a response at the link - just a question. (And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
  - RealityVoid 9mo ago
    Ahh, yes, gold and the speed of light in a vacuum - the only real constants in the real universe.
  - tyuu 9mo ago
    A goat costs exactly (not roughly) the same in goats today as it cost 2000 years ago. So by that measure a goat is the only stable measure of the value of basic needs over centuries.
    - 9mo ago
- tyuu 9mo ago
  That chart is also really weird. With log scale turned off and expanded to all time... https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely. > Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] Isn't this the real chart to look at for that? Completely different story when you select max on the timeline. https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)
  - dcl 9mo ago
    S&P gets you dividends though, so the interpretation of that chart is tricky. Holding the S&P, you can still do better than holding gold, even when the GOLD/S&P ratio is positive.
  - derangedHorse 9mo ago
    > Isn't this the real chart to look at for that? No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns. > Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
    - tyuu 9mo ago
ericmay 9mo ago
I don’t think that’s feasible because China’s capital markets aren’t secure for foreign investors and never will be unless China changes the very thing that they want to be. They’d have to open their markets, be open to direct foreign investment, no more China-only ownership of companies, and no more artificial devaluation of the Yuan. Also the US capital market is huge. Surprisingly huge, even, and there is very little that can change that for the foreseeable future.
- epistasis 9mo ago
  Does using the Renminbi require investing in securities? It's a very different thing to trust that China will maintain the value of its currency, than to trust that investment in Chinese companies will remain liquid and not be arbitrarily cut to a price of zero. I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets. Perhaps access to the equivalent of US Treasury auctions?
  - vatsachak 9mo ago
    China is notorious for not maintaining the value of it's currency though. That's why do many Chinese people buy assets in the Anglo world; assets are much better protected here
    - epistasis 9mo ago
      Yes, it would be a big change. But if Europe needs to bring out the Anti-Coercion Instrument against the US, an economic weapon it invented to be used against China, the world is in a very different place in belief of what could be safe. If China signals that it is changing its attitude on its currency, that it wants to be the reserve currency and establish a consumer economy, it wouldn't take much for people to shift these days. Nobody needs to adopt the Renminbi 100% right away, they can transition to multiple currencies for a while as a hedge against the US, and the situation will evolve. Dedollarization won't happen in a month or a year, it will be a multi-year process once it kicks off. But once it kicks off, it will be because of such a loss of confidence in the US that it probably won't be possible to stop it.
baxtr 9mo ago
Yes, the S&P rose only 4% last year for EUR investors.
PlatoIsADisease 9mo ago
>China is intentionally undermining the dollar in order to try to make the Yuan the world currency The constant devaluation makes it unappealing. > My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. I generally agree. But economic orthodoxy says 'Inflation is only 2%', despite precovid, it seemed more like 4%.
- JumpCrisscross 9mo ago
  > constant devaluation makes it unappealing If this is the complaint the dollar is safe. And international holders of dollars aren't idiots. They hold Treasuries, which more or less preserve their purchasing power. (Nobody outside the poor, who have to, and nutters, who don't know better, hold cash as an asset. It's so thoroughly assumed that in finance, cash refers to cash and cash equivalents.)
- weberer 9mo ago
  The insidious thing about inflation is that it compounds. Even just a 7% inflation rate will halve your currency's value in just 10 years.
wasabi991011 9mo ago
> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] There's such large fluctuations though, especially compared to the S&P 500 in USD [5] or even TFA's USD shares of FX reserves. [5] https://www.macrotrends.net/2324/sp-500-historical-chart-data https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
snarf21 9mo ago
I keep wondering what would happen if China and the EU came together and agreed to move all trade to the Euro as a pushback of all the current insanity. I don't think the Yuan can ever be the global trade currency given China's current structure.
evilfred 9mo ago
I don't think China is forcing the US president to do crazy stuff every day
elAhmo 9mo ago
> My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. You mean devaluation is causing the growth of SP500, or the other way around?
- maerF0x0 9mo ago
  the S&P is only growing when the denominator is USD. Not Euro or Gold. It's kinda like saying during "My bread appreciated!" during hyper inflation. IMO we're in one of the cases where "Number go up" is actually bad.
  - anon291 9mo ago
    How can that be? Maybe gold, but the euro has fallen relative to the dollar.
  - chippiewill 9mo ago
    In the UK we have a convenient way of observing this phenomenon. The FTSE100 is mostly multinational companies valued in pounds. The FTSE250 is mostly British companies valued in pounds. If the FTSE100 goes up while the FTSE250 stays flat or falls then it means the currency got devalued and there's no real growth.
arbuge 9mo ago
> Compared to real money (Gold) the S&P500 is down over the past 10 years. Speculation can always drive the price of gold way up past its real value.
throwaway5752 9mo ago
Yes. They are playing chess while the US is playing "shoot yourself in the dick".
Buttons840 9mo ago
> the S&P500 is down over the past 10 years. It's down over the last 5, 10, 20, and 30 year windows; which I think is mostly a timing coincidence, but it's a "fun" observation. It took a big drop this last year.

IshKebab 9mo ago

Gold is not "real money", come on.

PlatoIsADisease 9mo ago
The analytical philosopher in me says: "Define real money" I think everyone can agree if you specify your definition.
maerF0x0 9mo ago
It's a lot less Fiat than USD.
- hagbarth 9mo ago
  How so?
  - maerF0x0 9mo ago
    I guess because gold isn't created by decree?
    - BlarfMcFlarf 9mo ago
      Supply is only one half of value. The demand for gold is almost entirely speculative, whereas dollars can be directly used for almost anything.
      - maerF0x0 9mo ago
        The issue isn't it's usefulness in small transactions. The issue is who decides. In the case of gold a huge distributed system decides the valuation of Gold. Yes we usually use USD as the comparator. But there is a Gold:RealEstate ratio, Gold:Oil Ratio, Gold:Bread ratio. No single or small number of actors can change that in a meaningful/reliable way.[1] Whereas USD can, and has been, printed at an exponential rate. [1] -(Let's exclude intentional market manipulations like if a world leader were to buy a bunch of gold and then saber rattle to drive up fear).
znnajdla 9mo ago
A goat or a sheep cost roughly the same in gold today as it cost 2000 years ago during the Roman Empire. Gold is the only “real money” in the sense that it is the only stable measure of the value of basic needs over centuries. https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadebc5 https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb...
- spicyusername 9mo ago
  First link to ChatGPT as a "source" that I've seen in the wild. Times they are a-changing. I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
  - gamacodre 9mo ago
    Yeah, I saw that link and had a few thoughts immediately collide in my head: - Wait, WTF? Really?? - But but but it's a *chatbot*, not an authority - We're doomed
  - duskwuff 9mo ago
    Unless there's something I'm missing, there isn't even a response at the link - just a question. (And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
- RealityVoid 9mo ago
  Ahh, yes, gold and the speed of light in a vacuum - the only real constants in the real universe.
- tyuu 9mo ago
  A goat costs exactly (not roughly) the same in goats today as it cost 2000 years ago. So by that measure a goat is the only stable measure of the value of basic needs over centuries.
  - 9mo ago
tyuu 9mo ago
That chart is also really weird. With log scale turned off and expanded to all time... https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely. > Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] Isn't this the real chart to look at for that? Completely different story when you select max on the timeline. https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)
- dcl 9mo ago
  S&P gets you dividends though, so the interpretation of that chart is tricky. Holding the S&P, you can still do better than holding gold, even when the GOLD/S&P ratio is positive.
- derangedHorse 9mo ago
  > Isn't this the real chart to look at for that? No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns. > Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
  - tyuu 9mo ago

ericmay 9mo ago

I don’t think that’s feasible because China’s capital markets aren’t secure for foreign investors and never will be unless China changes the very thing that they want to be. They’d have to open their markets, be open to direct foreign investment, no more China-only ownership of companies, and no more artificial devaluation of the Yuan. Also the US capital market is huge. Surprisingly huge, even, and there is very little that can change that for the foreseeable future.

epistasis 9mo ago
Does using the Renminbi require investing in securities? It's a very different thing to trust that China will maintain the value of its currency, than to trust that investment in Chinese companies will remain liquid and not be arbitrarily cut to a price of zero. I'm not saying you're wrong, but I also don't fully understand the need to have grander access to capital markets. Perhaps access to the equivalent of US Treasury auctions?
- vatsachak 9mo ago
  China is notorious for not maintaining the value of it's currency though. That's why do many Chinese people buy assets in the Anglo world; assets are much better protected here
  - epistasis 9mo ago
    Yes, it would be a big change. But if Europe needs to bring out the Anti-Coercion Instrument against the US, an economic weapon it invented to be used against China, the world is in a very different place in belief of what could be safe. If China signals that it is changing its attitude on its currency, that it wants to be the reserve currency and establish a consumer economy, it wouldn't take much for people to shift these days. Nobody needs to adopt the Renminbi 100% right away, they can transition to multiple currencies for a while as a hedge against the US, and the situation will evolve. Dedollarization won't happen in a month or a year, it will be a multi-year process once it kicks off. But once it kicks off, it will be because of such a loss of confidence in the US that it probably won't be possible to stop it.

baxtr 9mo ago

Yes, the S&P rose only 4% last year for EUR investors.

PlatoIsADisease 9mo ago

>China is intentionally undermining the dollar in order to try to make the Yuan the world currency The constant devaluation makes it unappealing. > My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. I generally agree. But economic orthodoxy says 'Inflation is only 2%', despite precovid, it seemed more like 4%.

JumpCrisscross 9mo ago
> constant devaluation makes it unappealing If this is the complaint the dollar is safe. And international holders of dollars aren't idiots. They hold Treasuries, which more or less preserve their purchasing power. (Nobody outside the poor, who have to, and nutters, who don't know better, hold cash as an asset. It's so thoroughly assumed that in finance, cash refers to cash and cash equivalents.)
weberer 9mo ago
The insidious thing about inflation is that it compounds. Even just a 7% inflation rate will halve your currency's value in just 10 years.

wasabi991011 9mo ago

> Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] There's such large fluctuations though, especially compared to the S&P 500 in USD [5] or even TFA's USD shares of FX reserves. [5] https://www.macrotrends.net/2324/sp-500-historical-chart-data https://www.macrotrends.net/2324/sp-500-historical-chart-dat...

snarf21 9mo ago

I keep wondering what would happen if China and the EU came together and agreed to move all trade to the Euro as a pushback of all the current insanity. I don't think the Yuan can ever be the global trade currency given China's current structure.

evilfred 9mo ago

I don't think China is forcing the US president to do crazy stuff every day

elAhmo 9mo ago

> My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. You mean devaluation is causing the growth of SP500, or the other way around?

maerF0x0 9mo ago
the S&P is only growing when the denominator is USD. Not Euro or Gold. It's kinda like saying during "My bread appreciated!" during hyper inflation. IMO we're in one of the cases where "Number go up" is actually bad.
- anon291 9mo ago
  How can that be? Maybe gold, but the euro has fallen relative to the dollar.
- chippiewill 9mo ago
  In the UK we have a convenient way of observing this phenomenon. The FTSE100 is mostly multinational companies valued in pounds. The FTSE250 is mostly British companies valued in pounds. If the FTSE100 goes up while the FTSE250 stays flat or falls then it means the currency got devalued and there's no real growth.

arbuge 9mo ago

> Compared to real money (Gold) the S&P500 is down over the past 10 years. Speculation can always drive the price of gold way up past its real value.

throwaway5752 9mo ago

Yes. They are playing chess while the US is playing "shoot yourself in the dick".

Buttons840 9mo ago

> the S&P500 is down over the past 10 years. It's down over the last 5, 10, 20, and 30 year windows; which I think is mostly a timing coincidence, but it's a "fun" observation. It took a big drop this last year.