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Your linked page doesn't actually appear to render any sort of compelling argument for this. In fact - the entire argument seems to more accurately hinge the c
by horsawlarway 9mo ago
Your linked page doesn't actually appear to render any sort of compelling argument for this.
In fact - the entire argument seems to more accurately hinge the conditional left off the main saying, so the full description is:
"Bad money drives out good if they exchange for the same price."
But that requires a legal structure that enforces the disparity, and the summary of the whole thing basically boils down to:
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If given the choice of what money to accept, people will accept the money they believe to be of highest long-term value and not accept what they believe to be of low long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession and pass the bad money to others.
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But if anything - this is exactly an argument for the value of soft power to the US, because we can't enforce how other nations transact, except through soft power.
- jollyllama 9mo agoIn practice, everyone wants to spend their dollars, not their gold, or their bitcoin, or their Euros, and so dollars it will be. What else is there that anyone both with pay with and will be accepted by the other party?
- dybber 9mo agoSoon dollars might not be accepted if US companies wants to buy things in the EU, they will have to pay in euros (part of the anti coercion instrument that Macron and others have been talking about the last couple of days)
- jollyllama 9mo agoI don't think it will happen. 10% of EU bank loans that are dollar-denominated [0]. If they cut the flow of dollars into the EU, the debtors of those loans would wind up offering a premium for their goods and services to non-US companies, making them uncompetitive. It would be a roundabout tariff that would hurt the EU countries too much. [0] https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2025/html/ecb.fsrbox202511_03~9d7639f76c.ro.html https://www.ecb.europa.eu/press/financial-stability-publicat...
- direwolf20 9mo ago[dead]
- horsawlarway 9mo agoAgain - you skip the full statement of the economic principle at hand. No one cares that everyone wants to spend their dollars. They care whether the seller takes them, and is forced to take them at the same value as more cherished coin. There is no functional mechanism to enforce this internationally - we already see the value of the dollar declining. It's entrenched, so I expect the withdrawal to be relatively slow for the same reason you don't rip the bandaid off - you avoid a lot of pain. But there is nothing stopping the bandaid from coming off.
- jollyllama 9mo ago> you skip the full statement of the economic principle at hand. Hence "In practice". To the meat of your argument: sure, there's no mechanism to coerce it internationally, but it's self-perpetuating. Everybody could quit using dollars tomorrow. But they won't. > we already see the value of the dollar declining. This is not clearly the case. Its value relative to other currencies (as of this month), while subject to cyclical fluctuations, is on par for the post-Covid cycles and higher than pre-2020 levels [0]. [0] https://fred.stlouisfed.org/series/DTWEXBGS https://fred.stlouisfed.org/series/DTWEXBGS