The centre of world power is shifting toward Asia-Pacific in which China emerges as a global superpower. U.S. and Europe hegemony will dwindle as they continue to experience internal crises and destabilization. China will be close with Russia, and India, and along with its influence over African nations, that will encompass a great deal of raw power. It will control loads of natural resources, manufacturing hubs, tech hubs, and more. If Ukraine falls and China invades Taiwan, this will cement the new global order. I really do not believe, despite repeated assurances, that we would go directly to war with china over taiwan. China might just be waiting for the right time, expecting the US to implode like it currently is doing. Regardless, it's the same as any other conflict. The losers are ultimately the average people, the winners being the cabal of defense contractors, weapons manufacturers, and elected officials.
I believe it's far fetched to think the US will implode due to east asian policies or natural resources in russia, india, etc. The average person doesn't understand monetary policy enough to get a clear picture of how the economies of the world works. 90% of the debt in the world is issued in US dollars....that can't just go poof..... China doesnt want to be the global reserve dollar and they couldn't cover the debts if they wanted to.
90% of the debt in the world is issued in US dollars....that can't just go poof..... Of course it can. When those who owe debt in USD cannot make payments, that is exactly what happens in a bankruptcy. Poof and its gone. It is one reason the dollar is running higher, EVERYONE needs them to repay debts. Which of course makes it more difficult to get them in foreign countries, where local currencies are crashing.
IMO - You're making a point more about general dollar liquidity vs the changing of how debts of the world are structured and issued. This is why we have swap lines, right? In the case of an asset backed debt that goes thru 'bankruptcy' - the underlying currency backing that debt isn't going to be converted to something else by the creditor just because the debtor failed to pay.
I believe you might study the rise and fall of empires. why did the British Empire fail? insolvency, bankruptcy, ruination of a continent, and no way to dig itself out. you make some very important points about the world's reserve currency and i think you're also correct about china lack of fiscal means to dominate as the world's currency - there's not much there to back it up. they, the CCP, are currently teetering on the edge of a huge currency crash right now. The US is already fiscally upside down by huge numbers and our production capacity is dwindling. the US prints as much paper as it needs to but at some point that paper will actually be worth zip because there's nothing to actually back it up and there's too much paper already in circulation. Never say never. edit: hey here's a thought! maybe the planet needs a Great Reset. zero out the balance sheet and start all over. hmmm The Great Reset.... novel?
Why? Only difference is the size of the entity that is defaulting and amount of damage being done. We were not far from a reset in 2008. The numbers MUST continue growing or things blow up and everything is interconnected. The system is much more fragile than any would care to admit. "Counter party risk" This is years out of date......
The United States can and will kick the can down the road for longer then anyone thinks they can. Just look at Japan as a case study. Is anyone familiar with the Milkshake Theory of Santiago Capital? Another suggestion - This is a very long but informative read by Ray Dalio on societies and their rise and fall. https://www.economicprinciples.org/DalioChangingWorldOrderCharts.pdf. And while I'm not dismissing a future 'great reset' - Whatever fully trackable digital phoenix rises will be by the hands of the world bank / WEF and any issuance of SDRs or 'new currency' will have USD as the strongest weighted with the highest basket allocation. small debts can go poof without too much pain or contagion - global debts can't just go poof because it would cause civilization to collapse.
Made me think of what is happening in Sri Lanka now. But thats a different story. Just the civilization collapse thing
Great series. Well written and researched - https://m.youtube.com/c/FallofCivilizationsPodcast/videos
Yup. We're cutting off our nose to spite our face. Trudeau has said he's all-aboard the starvation train. Trudeau gov't pushes ahead on fertilizer reduction as provinces say no | Toronto Sun
I hear you. The societal /economic collapse of emerging markets is a very real and ugly current event but that won't take down civilization. And imo, demographic reductions from the 'majors' plays a huge roll in this 'game' but it plays out better for the USD and long term debts(social security, entitlements, etc). The United States owns roughly 50% of the mortgages in this country, which really means they own 60%+ of the land here.... New technologies get developed and natural resources are replaced with synthetic materials (like going from copper to PEX or steel to graphene), the world will carry on...kicking the can...
As i think about this more what occurs to me is, the simplicity of moving to a different global currency hinges only on developing a new replacement. the central banks and IMF will make those decisions because it's certainly not a US decision to make and "they" are looking at it today. the central banks are developing their own digital currency to facilitate transfers on balances because moving physical cash is always a logistics nightmare. there are ~$7 trillion in US dollars currently held by foreign countries. the US has a hold on $300+ billion in russia's physical gold. some "on the street" say countries might be looking closer at their risk exposure to sanctions if they don't toe the US/UK line. As i understand it the US dollar comprises only ~60% of total global reserves, a historic 25 year low. idk. never say never.
Can't just create something out of nothing, crypto mania proved that out.....a new global reserve requires liquidity and it requires asset backing.
I mean, yes and no. While you could debate its now a 'pure fiat' currency....going back over time, it was not only previously "backed" by gold, and to some extent silver, but also the GDP of its hard working people over the last 50+ years...and there are many many physical assets that are backed by USD..... You can't say the same for the lira or other devalued emerging market currencies...
EVERY fiat currency has been inflated into nothingness. Once real backing is gone, there is nothing left but confidence. And that is often lost very suddenly.
isnt this the real reason all the other countries really hated trump, from him wanting paid hahahahah funny as shit that all the folks that are so hard core to have this new administration all are hording up gold, dont you think if it got to that level in this economy and back sliding to the days of old that there would be a catastrophic event would happen and if it did what good would gold be? when there isnt humans all left is dust