Dollar acts as reserve currency cuz most countries has trade surplus with US .. and instead of converting their dollar surplus to their own currency , they save for yeild on T bills ..
I mean dollar is not an OFFICIAL reserve currency.. wherever countries have massive trade among each other , they retain each other currency as well ..
Why should US let this advantage go ?
They won’t voluntarily. It will slowly happen over decades
It's already happening, it's just very slow.
What advantage? The ability to print money for the elites' financial bubble? The benefits seem negligible for your average American
Advantage - US has world's largest financial markets ... Just like the freeways , the pace at which US system distributes wealth and moves from one asset to another is beyond normal perception ! This pace not only control the direction of innovation , but also political future of world ... Americans vote with money ..
As regards to printing - China has printed almost three times of US ( in USD value ) .. So .
It would be very hard to argue that it has not been great for innovation. I think it has come with tremendous and compounding costs to other parts of society though. The average citizen is worse off every year, the incredible concentration of wealth and power in Washington has no doubt been a source of stunning corruption, and the obsessive need to police the rest of the world to keep this system in place has caused alot of harm to diplomatic relations with the rest of the world
I don’t see how having the reserve currency has logically contributed to innovation actually. It would make way more sense that the foundation of culture, independence, and entrepreneurship that were established during America’s rise simply haven’t been fully rotted away by the fiat system. By being partially intact as technological progress continues to compound, and while we are able to import skilled workers, we still achieve enormous amounts of innovation and progress.
I guess in listing it out we can say that it may have contributed to our ability to import talent, but this was also a massive element for much of this country’s history, freedom has always been highly desirable. I doubt that net different with the reserve currency is on the direction of more talent either. To the contrary, fiat has allowed the establishment of the welfare and any state, which may very well mean the quality and ratio of imported talent has decreased broadly. The saving grace may simply be that with technological progress and a more connected economy, fewer great minds and innovations can still have a much larger and quicker impact on the entire ecosystem.
There are lots of opposing forces at play, but I can’t find a strong reason to attribute much of anything positive to the fiat system.
As far as corruption - having lived in India , Europe and US - I can vouch US is lowest corruption .. The one that you see in terms of USAID etc .. is a tiny misicule .. totally agree with nostr:nprofile1qqstnem9g6aqv3tw6vqaneftcj06frns56lj9q470gdww228vysz8hqpzdmhxue69uhkzmr8duh82arcduhx7mn9qy2hwumn8ghj7etyv4hzumn0wd68ytnvv9hxgqgdwaehxw309ahx7uewd3hkcam28zl point in note below - it is largely because the character of people and institutions built over time .. But here is my difference with Guy
The biggest institutions built in US is independence of FED. And the the financial rails ..
Why do I say that :
Experience : Try investing money in India or China .. even Europe's local markets .. First of all foreigners cant even trade in most parts .. then the rules are so arcane that you would beat yourself ... And finally the tools .. Platforms like Vanguard , iShare , Schwaab .. and now totally free Bitcoin market space - It allows movement of Trillions of dollars in a single day ... In most countries , if there is a flow of a billion dollar ( not ten billion) , their markets would simply choke ..
And most imprtantly - Finacial Awareness ... You can't impart Financial education overnight ... It is interwoven in culture .
I think US would come out lot stronger as the dust settles in Trade war .. meanwhile exercise your choice in BTC and Gold ..
I mean China certainly has its problems and is on a miserable debt path just like the US, but the fact that they can manufacture 100x as much as we can, even taking out the great many other structural problems they have and lack of freedoms, is a hard thing to simply hand wave away.
Bottom line : if you want to sleep well :-)
30 :30 :30 :: BTC : GLD : VTI
