yep. heres hoping BRICS has what it takes to topple this rotten empire. but its also a scary thought, because the US will lash out even harsher the more inevitable its collapse becomes
BRICS is a trading alliance that works WITH other systems. It is NOT a military/strategic alliance. Please understand BRICS (goals, how it works, etc.) before assuming/misunderstanding things.
BRICS may well topple the empire simply through economics, not necessarily military force. If the US dollar loses its status as reserve currency for the world, the economic collapse of the US will be astonishingly rapid. (Yes I know that is not one of the stated goals of BRICS but it might still be an inevitable consequence of strong multi-lateral trading arrangements not centered on the US.)
You are right about BRICS. Marco Rubio is a lying warmonger, but he spoke the truth when he said losing the dollar as the world's currency meant the U.S. will no longer be able to sanction as punishment those countries not doing it's bidding. The also won't be able to steal billions from any country in BRICS, as they stole a billion in gold from Venezuela and millions from Russia and others. The world is turning its back on the West and Israel. Pushed by Rubio, Trump wants to attack Cuba and Venezuela. So much for him not wanting war. Anyone who supports Israel is pure evil. That includes our Congressional cowards.
Agreed, but my fear is that the US is not going to allow that transition without a fight. The sort of fight that might annihilate us all. Unless of course the Empire is foolish enough to have a poke at Iran in the meantime.
You are exactly right. vansdan never mentions anything about a military alliance or bringing down the empire militarily, so it seems that Chang Chokaski has decided to employ a classic straw-man rhetorical tactic to imply that you are uninformed.
>>"If the US dollar loses its status as reserve currency for the world,..."
If the US dollar loses that much value, ALL the countries that hold US dollars (including China owning trillions) will suffer much more than the US. You see, the world is held hostage by the US dollar. That is one of the LARGEST points of leverage the US has over others -> all the other countries have "skin in the game" in keeping the US dollar going (that's one reason why many countries have "fixed" exchange rates pegged to the USD instead of "floating" currencies/rates).
A whole book could be written on why OTHERS lose more than the US. Here is just one reason: US is a net IMPORTER while other countries are net EXPORTERS. If the USD becomes exceedingly weak, it benefits the US and all the other countries (especially periphery and semi-periphery countries) lose out on trade.
Also, why do you think the US has 800-1,000 military bases around the world? One reason is to maintain US Dollar hegemony/supremacy.
The best possible outcome (IMHO), is multiple reserve currencies (or a basket of mixed trading value).
So, your entire argument can be summed up as a *very* large game of chicken. Let's summarise the current situation:
1. The US issues copious sums of worthless fiat currency (debt) backed by nothing except mafiosi-style threats of violence.
2. The US uses this intrinsically worthless currency (debt) to buy massive amounts of imports from the rest of the world, thereby running up a huge, chronic trade deficit. In 2022, excess of imports over exports was $3,500 per capita.
3. The US trade deficit has been saved from falling off a cliff in the last 20 years by a boom in oil and gas exports, facilitated by hydraulic fracturing (fracking) technology. The fracking bubble is about to burst in 2025 as production from major oil and gas fields begins to decline. The rate of post-peak decline for fracking is much faster than conventional extraction methods.
4. The rest of the world is scared to abandon the dollar as reserve/trading currency, since this will render their holdings of dollar debt worthless. BRICS implicitly recognises that the dollar system is unsustainable and is gradually transitioning to alternative arrangements.
5. China, Japan, Arab petro-monarchies, et al, are focused on reducing their holdings of worthless paper (US Treasury bonds), and using these dollar holdings to buy real assets (resources, infrastructure, productive capital).
6. If there is a run on the dollar, countries and private interests holding large sums of US-denominated debt instruments will suffer a precipitous decline in value of these "assets". BRICS countries and countries moving into the BRICS orbit understand this risk, and are employing a range of strategies to mitigate risk. They recognise that the demise of the dollar is not a question of "if" but "when", and are preparing for that day.
7. When the dollar inevitably loses its reserve/trading currency status, the empire will no longer be able to maintain its network of mafia-extortion military bases and covert operations covering the entire globe. Once this stage is reached, the dissolution of the US as a federal entity will be rapid.
As an aside, your assertion: "If the USD becomes exceedingly weak, it benefits the US and all the other countries... lose out on trade" is quite comical. Are you implying that all of the countries selling goods to the US in exchange for worthless US debt will lose out if this trade collapses? In the short term, yes, they will no longer be able to give away their products to the US for free, but that was never going to continue long-term anyway and they will find other markets where the buyers will pay in methods that have actual value. In contrast, the US will simply not be able to buy imports in excess of the revenue generated by exports, so a large downsizing of the economy will occur.
Stepher Walker, not only are you absolutely clueless in your understanding of economics and the financial systems, but you present MULTIPLE errors in critical thinking in your comment above.
Here's an explanation (point-by-point):
(1) US currency is not worthless (if it is, why don't you give me ALL your US Dollars?). Debt is a NECESSARY component of ANY/ALL financial systems. Please read up on HOW DEBT works. Too much to go into here, but -> the US Dollar is BACKED by the "force/power" of the US Empire AND the "trust" of the US Govt. (BTW, the same goes for EVERY currency on the planet)
(2) Again, understand WHAT "debt" is, how it works, what it is used for. I recommend reading David Graebor's "Debt: The First 4,000 Years" or Michael Hudson on debt discussions. The trade deficit is irrelevant to the US - in fact, if the US does NOT have trade deficits, all other countries will suffer. So your point is moot.
(3) Again, the trade deficit is inconsequential to the US. Please explain HOW a trade deficit harms the US? This has NOTHING to do with oil/gas/fracking, etc. The US CANNOT be a net exporter. WHY? Who will it export to? Who has the money to pay for the US's imports? Where does the world get the money to import from the US? Answer -> from the US. The US has the power to print unlimited amounts of money. This it then distributes under various guises (aid, loans, etc.). THIS money is then used to buy/import US products. WITHOUT the distribution (and circulation) of US currency, US exports WILL fall off the cliff.
(4) This point of yours is meaningless (i.e. non-sequitor). HOW is the dollar system unsustainable? Can you give EVEN ONE REASON as to how? Again, this has NOTHING to do with BRICS.
(5) >>"China, Japan, Arab petro-monarchies, et al, are focused on reducing their holdings of worthless paper (US Treasury bonds)"
Here is the reality -> WHY do you think MORE people are buying US debt (than less)? The trend is the opposite of your incorrect assumption. US Debt will keep growing -> there is a REAL demand for US Debt (and the interest payments). Maybe study the BOND MARKETS to understand WHO buys US Debt and WHY.
(6) Again, another STUPID/non-sensical statement. Too many IFs (without logic), too many faulty assumptions, not enough reality of how the financial system works.
(7) >>"When the dollar inevitably loses its reserve/trading currency status"
Seriously, what make-believe world are you living in? Are you argueing with FACTS or just wishful-thinking and alternate universe theories? HOW will the dollar lose its reserve/trading status? WHY? What are the probabilities? You need REAL DATA instead of wishes.
I could go on, BUT not a SINGLE one of your points make ANY SENSE. I've heard these narratives from many people that don't understand how the global financial system (and trading markets) work. There are many good books to explain the subject, and I would not be able to do justice to the topic in this limited communication medium.
It seems that your core argument is circular logic, which boils down to: “The US can print as many dollars as it likes forever because it can”. I’m sure that since you’re a self-styled economic genius, this logic will prove absolutely correct and that you’ve published numerous monographs to back up your immaculate theory.
You snidely ask me why I don’t give you all my dollars. It seems that in your insular world everyone has or buys or needs dollars. I don’t have or need dollars. I’m an individual living in another country. I’m not an enterprise engaging in cross-border trade. Maybe, just maybe, this provides a tiny kernel of insight on how the dollar might not be omnipotent forever more.
Yes the chaos that would/will accompany the loss of reserve currency status for the USD will hurt the entire global economy, not just the US, but I think the US will suffer more, and take longer to recover. I don't understand your arguments to the contrary:
"US is a net IMPORTER while other countries are net EXPORTERS."
Umm, yeah, so if the USD collapses US consumers will no longer be able to buy foreign/Chinese manufactured goods. And the US doesn't make most of these things anymore, so severe shortages/inflation etc. That's pretty bad for the US. China loses income, and suffers from excess capacity, but they have no shortage of physical goods.
"The best possible outcome (IMHO), is multiple reserve currencies (or a basket of mixed trading value)."
Sure, but that still means the USD loses its unique and very valuable status as reserve currency. US banks and financial players lose a ton of leverage and trading revenue. The US dollar suffers because foreign companies and governments no longer have to keep large US dollar reserves / US treasuries to facilitate trading etc. Seems to me your "best possible outcome" is still rather dire for the US.
forceOfHabit, I don't understand your "IF" scenarios (or the probabilities). One can literally say ANYTHING with an IF. If the sky falls, if nuclear war breaks out, if we get another super-charged pandemic 100 times stronger than Covid, if, if, if....
>>"if the USD collapses..."
Why would the USD collapse? Under what scenarios? What probabilities? What is the reality of that happening? (anyone can create IF scenarios ad-infinatum, but one needs probabilities attached to those scenarios).
AND, if the US Dollar collapses, BUYING "stuff" will be the LEAST of anyone's worries. There will be MUCH bigger issues to deal with.
Please give me REALISTIC probabilities (not wishful thinking) on any of your IFs. And if any of your IFs happen, what will the impact on the "rest of the world"?
Before I go further, let me clarify ->
I WANT the US (and its systems) to self-destruct, BUT with minimal IMPACT to any other entity. None of the scenarios you describe are realistic or of minimal impact/consequences to others.
Here is some (extremely simplified) logic for IMPORTS/EXPORTS->
(1) When the US exports, it takes payment ONLY in US Dollars (primarily). Similarly, when it imports, it pays ONLY in US Dollars (primarily). So where will countries get these US dollars to buy (import) US products? (a) by exporting to the US. When a country exports to the US, it gets US dollars. Hence, countries (especially periphery and semi-periphery countries) NEED to export to the US (to obtain these valuable dollars to pay for all the necessities that it needs to import) (b) Whatever extra "reserve" US Dollars remain with a country after imports with net exporter countries to the US (eg. China, Saudi Arabia, etc.), the US requires them to buy US debt (by military force if necessary, or sanctions, or a number of other strategies). Hence, its military power serves to maintain a deband for US Debt. (c) There is NO safer investment (in the world) than US Debt. If you don't think so, can you give me EVEN ONE REAL EXAMPLE of how it has been unsafe? And for whom?
Here are some more things to understand->
(1) The US controls the world with ONE MAIN WEAPON -> US Debt. Using this debt, it funds the military. Using the military, it exerts force/pressure on the rest of the world. Using this force, it compells others to CONTINUE buying US Debt.
(2) Interest payments are NOT a problem for the US (despite the false narratives in the media and by politicians). Please read/study MMT (modern monetary theory) to understand in detail WHY. Since the US can print unlimited amounts of money, it can continue paying interest on its debts - i.e. the US Govt. can NEVER run out of US Dollars. If the US decides not to pay interest, it can simply "steal/void" a country's foreign reserves that are held in USD, or sanction a country, or destroy a country, or a number of other strategies.
There's much more to it, but then it goes off-topic into many different tangents.
Not sure this is the place to debate economics but here goes. First, when you say
"Here is some (extremely simplified) logic for IMPORTS/EXPORTS->
(1) When the US exports, it takes payment ONLY in US Dollars (primarily). Similarly, when it imports, it pays ONLY in US Dollars (primarily)... "
True. Because the USD is the world's reserve currency. In the absence of a reserve currency, countries, the US included, would presumably buy things, from say China by paying Yuan (instead of the reserve currency or their domestic currency), and sell things to other countries in their domestic currency instead of the reserve currency.
This would be a great blow to the US because currently it profits enormously, financially and in terms of global influence, by having the reserve currency and having the bulk of international trading go through USD.
Now for you question about "IF the USD loses reserve currency status" and what I think the probability is. I think it's a virtual certainty (in the intermediate - roughly a decade-, not the short term) and I think the path to that loss of reserve currency status runs through BRICS. Now that BRICS is large enough in terms of population, resources (human and natural), it can become self-sufficient in terms of trading in domestic currencies between its members. Once that happens, goodbye USD reserve currency status and the boost to prosperity that accompanies it.
No I know that, I follow BRICS closely. But it can economically isolate the US and the west, which will be very bad for capitalists here. If it works like I hope it will the US will crumble under its own weight.
>>"But it can economically isolate the US and the west..."
That is a pipe dream not built on reality and how the world economic, financial and trading systems work.
That's one reason I dislike the likes of Ben Norton (who loves selling such dreams to his audience in hopes of increasing subscribership, etc.).
Better people to listen to on BRICS are Richard Wolf, Michael Hudson, etc. that really understand the interplay between economic systems and global trading relations.
Nothing that a bunch of strangers do, strangers we can't know, can't speak to, is going to be good for us. It will just be like jumping from the fat to the fire. No, we need a totally different strategy. Why don't we make our own currencies? Hmm?
yep. heres hoping BRICS has what it takes to topple this rotten empire. but its also a scary thought, because the US will lash out even harsher the more inevitable its collapse becomes
BRICS is a trading alliance that works WITH other systems. It is NOT a military/strategic alliance. Please understand BRICS (goals, how it works, etc.) before assuming/misunderstanding things.
BRICS may well topple the empire simply through economics, not necessarily military force. If the US dollar loses its status as reserve currency for the world, the economic collapse of the US will be astonishingly rapid. (Yes I know that is not one of the stated goals of BRICS but it might still be an inevitable consequence of strong multi-lateral trading arrangements not centered on the US.)
You are right about BRICS. Marco Rubio is a lying warmonger, but he spoke the truth when he said losing the dollar as the world's currency meant the U.S. will no longer be able to sanction as punishment those countries not doing it's bidding. The also won't be able to steal billions from any country in BRICS, as they stole a billion in gold from Venezuela and millions from Russia and others. The world is turning its back on the West and Israel. Pushed by Rubio, Trump wants to attack Cuba and Venezuela. So much for him not wanting war. Anyone who supports Israel is pure evil. That includes our Congressional cowards.
Panama Canal. In fact the whole of S. America is at risk.
Agreed, but my fear is that the US is not going to allow that transition without a fight. The sort of fight that might annihilate us all. Unless of course the Empire is foolish enough to have a poke at Iran in the meantime.
I hope so too, forceOfHabit, in spite of Chang's pessimism!
Indu, it's not pessimism - it's knowledge of what BRICS is, how it works, etc. and how economic and financial systems work.
Where's my comment?
You are exactly right. vansdan never mentions anything about a military alliance or bringing down the empire militarily, so it seems that Chang Chokaski has decided to employ a classic straw-man rhetorical tactic to imply that you are uninformed.
What exactly is the straw-man ?
Your reply to vansdan states that BRICS is not a military alliance. vansdan never said or implied that it is. You used a straw-man argument.
Vansdan states -> "BRICS has what it takes to topple this rotten empire"
What does that mean? Does it mean topple it militarily? strategically? economically? financially? He didn't specify.
My response: I explained WHAT BRICS is (trading alliance) and what it isn't (military/strategic alliance)
So again, I'm hoping you understand WHAT a strawman argument is - as there is NONE in my response.
>>"If the US dollar loses its status as reserve currency for the world,..."
If the US dollar loses that much value, ALL the countries that hold US dollars (including China owning trillions) will suffer much more than the US. You see, the world is held hostage by the US dollar. That is one of the LARGEST points of leverage the US has over others -> all the other countries have "skin in the game" in keeping the US dollar going (that's one reason why many countries have "fixed" exchange rates pegged to the USD instead of "floating" currencies/rates).
A whole book could be written on why OTHERS lose more than the US. Here is just one reason: US is a net IMPORTER while other countries are net EXPORTERS. If the USD becomes exceedingly weak, it benefits the US and all the other countries (especially periphery and semi-periphery countries) lose out on trade.
Also, why do you think the US has 800-1,000 military bases around the world? One reason is to maintain US Dollar hegemony/supremacy.
The best possible outcome (IMHO), is multiple reserve currencies (or a basket of mixed trading value).
So, your entire argument can be summed up as a *very* large game of chicken. Let's summarise the current situation:
1. The US issues copious sums of worthless fiat currency (debt) backed by nothing except mafiosi-style threats of violence.
2. The US uses this intrinsically worthless currency (debt) to buy massive amounts of imports from the rest of the world, thereby running up a huge, chronic trade deficit. In 2022, excess of imports over exports was $3,500 per capita.
3. The US trade deficit has been saved from falling off a cliff in the last 20 years by a boom in oil and gas exports, facilitated by hydraulic fracturing (fracking) technology. The fracking bubble is about to burst in 2025 as production from major oil and gas fields begins to decline. The rate of post-peak decline for fracking is much faster than conventional extraction methods.
4. The rest of the world is scared to abandon the dollar as reserve/trading currency, since this will render their holdings of dollar debt worthless. BRICS implicitly recognises that the dollar system is unsustainable and is gradually transitioning to alternative arrangements.
5. China, Japan, Arab petro-monarchies, et al, are focused on reducing their holdings of worthless paper (US Treasury bonds), and using these dollar holdings to buy real assets (resources, infrastructure, productive capital).
6. If there is a run on the dollar, countries and private interests holding large sums of US-denominated debt instruments will suffer a precipitous decline in value of these "assets". BRICS countries and countries moving into the BRICS orbit understand this risk, and are employing a range of strategies to mitigate risk. They recognise that the demise of the dollar is not a question of "if" but "when", and are preparing for that day.
7. When the dollar inevitably loses its reserve/trading currency status, the empire will no longer be able to maintain its network of mafia-extortion military bases and covert operations covering the entire globe. Once this stage is reached, the dissolution of the US as a federal entity will be rapid.
As an aside, your assertion: "If the USD becomes exceedingly weak, it benefits the US and all the other countries... lose out on trade" is quite comical. Are you implying that all of the countries selling goods to the US in exchange for worthless US debt will lose out if this trade collapses? In the short term, yes, they will no longer be able to give away their products to the US for free, but that was never going to continue long-term anyway and they will find other markets where the buyers will pay in methods that have actual value. In contrast, the US will simply not be able to buy imports in excess of the revenue generated by exports, so a large downsizing of the economy will occur.
Stepher Walker, not only are you absolutely clueless in your understanding of economics and the financial systems, but you present MULTIPLE errors in critical thinking in your comment above.
Here's an explanation (point-by-point):
(1) US currency is not worthless (if it is, why don't you give me ALL your US Dollars?). Debt is a NECESSARY component of ANY/ALL financial systems. Please read up on HOW DEBT works. Too much to go into here, but -> the US Dollar is BACKED by the "force/power" of the US Empire AND the "trust" of the US Govt. (BTW, the same goes for EVERY currency on the planet)
(2) Again, understand WHAT "debt" is, how it works, what it is used for. I recommend reading David Graebor's "Debt: The First 4,000 Years" or Michael Hudson on debt discussions. The trade deficit is irrelevant to the US - in fact, if the US does NOT have trade deficits, all other countries will suffer. So your point is moot.
(3) Again, the trade deficit is inconsequential to the US. Please explain HOW a trade deficit harms the US? This has NOTHING to do with oil/gas/fracking, etc. The US CANNOT be a net exporter. WHY? Who will it export to? Who has the money to pay for the US's imports? Where does the world get the money to import from the US? Answer -> from the US. The US has the power to print unlimited amounts of money. This it then distributes under various guises (aid, loans, etc.). THIS money is then used to buy/import US products. WITHOUT the distribution (and circulation) of US currency, US exports WILL fall off the cliff.
(4) This point of yours is meaningless (i.e. non-sequitor). HOW is the dollar system unsustainable? Can you give EVEN ONE REASON as to how? Again, this has NOTHING to do with BRICS.
(5) >>"China, Japan, Arab petro-monarchies, et al, are focused on reducing their holdings of worthless paper (US Treasury bonds)"
Here is the reality -> WHY do you think MORE people are buying US debt (than less)? The trend is the opposite of your incorrect assumption. US Debt will keep growing -> there is a REAL demand for US Debt (and the interest payments). Maybe study the BOND MARKETS to understand WHO buys US Debt and WHY.
(6) Again, another STUPID/non-sensical statement. Too many IFs (without logic), too many faulty assumptions, not enough reality of how the financial system works.
(7) >>"When the dollar inevitably loses its reserve/trading currency status"
Seriously, what make-believe world are you living in? Are you argueing with FACTS or just wishful-thinking and alternate universe theories? HOW will the dollar lose its reserve/trading status? WHY? What are the probabilities? You need REAL DATA instead of wishes.
I could go on, BUT not a SINGLE one of your points make ANY SENSE. I've heard these narratives from many people that don't understand how the global financial system (and trading markets) work. There are many good books to explain the subject, and I would not be able to do justice to the topic in this limited communication medium.
It seems that your core argument is circular logic, which boils down to: “The US can print as many dollars as it likes forever because it can”. I’m sure that since you’re a self-styled economic genius, this logic will prove absolutely correct and that you’ve published numerous monographs to back up your immaculate theory.
You snidely ask me why I don’t give you all my dollars. It seems that in your insular world everyone has or buys or needs dollars. I don’t have or need dollars. I’m an individual living in another country. I’m not an enterprise engaging in cross-border trade. Maybe, just maybe, this provides a tiny kernel of insight on how the dollar might not be omnipotent forever more.
Yes the chaos that would/will accompany the loss of reserve currency status for the USD will hurt the entire global economy, not just the US, but I think the US will suffer more, and take longer to recover. I don't understand your arguments to the contrary:
"US is a net IMPORTER while other countries are net EXPORTERS."
Umm, yeah, so if the USD collapses US consumers will no longer be able to buy foreign/Chinese manufactured goods. And the US doesn't make most of these things anymore, so severe shortages/inflation etc. That's pretty bad for the US. China loses income, and suffers from excess capacity, but they have no shortage of physical goods.
"The best possible outcome (IMHO), is multiple reserve currencies (or a basket of mixed trading value)."
Sure, but that still means the USD loses its unique and very valuable status as reserve currency. US banks and financial players lose a ton of leverage and trading revenue. The US dollar suffers because foreign companies and governments no longer have to keep large US dollar reserves / US treasuries to facilitate trading etc. Seems to me your "best possible outcome" is still rather dire for the US.
forceOfHabit, I don't understand your "IF" scenarios (or the probabilities). One can literally say ANYTHING with an IF. If the sky falls, if nuclear war breaks out, if we get another super-charged pandemic 100 times stronger than Covid, if, if, if....
>>"if the USD collapses..."
Why would the USD collapse? Under what scenarios? What probabilities? What is the reality of that happening? (anyone can create IF scenarios ad-infinatum, but one needs probabilities attached to those scenarios).
AND, if the US Dollar collapses, BUYING "stuff" will be the LEAST of anyone's worries. There will be MUCH bigger issues to deal with.
Please give me REALISTIC probabilities (not wishful thinking) on any of your IFs. And if any of your IFs happen, what will the impact on the "rest of the world"?
Before I go further, let me clarify ->
I WANT the US (and its systems) to self-destruct, BUT with minimal IMPACT to any other entity. None of the scenarios you describe are realistic or of minimal impact/consequences to others.
Here is some (extremely simplified) logic for IMPORTS/EXPORTS->
(1) When the US exports, it takes payment ONLY in US Dollars (primarily). Similarly, when it imports, it pays ONLY in US Dollars (primarily). So where will countries get these US dollars to buy (import) US products? (a) by exporting to the US. When a country exports to the US, it gets US dollars. Hence, countries (especially periphery and semi-periphery countries) NEED to export to the US (to obtain these valuable dollars to pay for all the necessities that it needs to import) (b) Whatever extra "reserve" US Dollars remain with a country after imports with net exporter countries to the US (eg. China, Saudi Arabia, etc.), the US requires them to buy US debt (by military force if necessary, or sanctions, or a number of other strategies). Hence, its military power serves to maintain a deband for US Debt. (c) There is NO safer investment (in the world) than US Debt. If you don't think so, can you give me EVEN ONE REAL EXAMPLE of how it has been unsafe? And for whom?
Here are some more things to understand->
(1) The US controls the world with ONE MAIN WEAPON -> US Debt. Using this debt, it funds the military. Using the military, it exerts force/pressure on the rest of the world. Using this force, it compells others to CONTINUE buying US Debt.
(2) Interest payments are NOT a problem for the US (despite the false narratives in the media and by politicians). Please read/study MMT (modern monetary theory) to understand in detail WHY. Since the US can print unlimited amounts of money, it can continue paying interest on its debts - i.e. the US Govt. can NEVER run out of US Dollars. If the US decides not to pay interest, it can simply "steal/void" a country's foreign reserves that are held in USD, or sanction a country, or destroy a country, or a number of other strategies.
There's much more to it, but then it goes off-topic into many different tangents.
Hi Chang,
Not sure this is the place to debate economics but here goes. First, when you say
"Here is some (extremely simplified) logic for IMPORTS/EXPORTS->
(1) When the US exports, it takes payment ONLY in US Dollars (primarily). Similarly, when it imports, it pays ONLY in US Dollars (primarily)... "
True. Because the USD is the world's reserve currency. In the absence of a reserve currency, countries, the US included, would presumably buy things, from say China by paying Yuan (instead of the reserve currency or their domestic currency), and sell things to other countries in their domestic currency instead of the reserve currency.
This would be a great blow to the US because currently it profits enormously, financially and in terms of global influence, by having the reserve currency and having the bulk of international trading go through USD.
Now for you question about "IF the USD loses reserve currency status" and what I think the probability is. I think it's a virtual certainty (in the intermediate - roughly a decade-, not the short term) and I think the path to that loss of reserve currency status runs through BRICS. Now that BRICS is large enough in terms of population, resources (human and natural), it can become self-sufficient in terms of trading in domestic currencies between its members. Once that happens, goodbye USD reserve currency status and the boost to prosperity that accompanies it.
No I know that, I follow BRICS closely. But it can economically isolate the US and the west, which will be very bad for capitalists here. If it works like I hope it will the US will crumble under its own weight.
>>"But it can economically isolate the US and the west..."
That is a pipe dream not built on reality and how the world economic, financial and trading systems work.
That's one reason I dislike the likes of Ben Norton (who loves selling such dreams to his audience in hopes of increasing subscribership, etc.).
Better people to listen to on BRICS are Richard Wolf, Michael Hudson, etc. that really understand the interplay between economic systems and global trading relations.
Nothing that a bunch of strangers do, strangers we can't know, can't speak to, is going to be good for us. It will just be like jumping from the fat to the fire. No, we need a totally different strategy. Why don't we make our own currencies? Hmm?