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.
>>"It seems that your core argument is circular logic,"
YES! EXACTLY! Except - its not just "logic", its reality, its the way the US Debt system works - i.e. it is a self-perpetuating system (and is sustained by that system). This is how FEEDBACK SYSTEMS work. They work (and are sustained) through circular self-reinforcing loops. (https://deming.org/systems-thinking-feedback-loops/)
Here's some REALITY from history:
US Debt in 1993 was $4.2T
US Debt in 2024 = approx. $37T
Compare this to the strength of the US Dollar. It fell during the financial crisis (2008-2011), but has regained its strength and not impacted by the outstanding US Debt.
Again, my recommendation (to understand how US Debt works) is to read Michael Hudson's books on a subject (and learning how MMT works).
>>"how the dollar might not be omnipotent forever more."
YES! The USD will NOT be omnipotent forever. No currency has been. I'm NOT suggesting "forever". What I'm saying is there are systems in place that keep the USD where it is. It will take VERY SPECIAL CIRCUMSTANCES (what they are yet no one really knows, though many people guess) to dethrone the US Dollar.
I (like most here) assume that the "dethroning of the US Dollar" will be GOOD for the world, but I don't know (events often have an unpredictable way of unfolding). All I know is that the US EMPIRE MUST END (somehow) - as that is the BIGGEST PROBLEM facing the planet AND humanity currently.
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.
>>"The US can print as many dollars as it likes forever because it can”
Again, your only antidote to understanding is learning how the US financial system really works. That's where MMT comes in (Modern Monetary Theory).
Here are some resources:
(1) The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy [https://www.goodreads.com/book/show/45731395-the-deficit-myth]
(2) https://www.vox.com/future-perfect/2019/4/16/18251646/modern-monetary-theory-new-moment-explained
(3) https://www.investopedia.com/modern-monetary-theory-mmt-4588060
(4) How Modern Monetary Theory (MMT) Actually Works (w/ Warren Mosler) [https://www.youtube.com/watch?v=W97s3zbFKvc]
(5) MMT Is Misunderstood | Warren Mosler [https://www.youtube.com/watch?v=LCUPBpSiISU} -> Check out the "Tax and Money" chapter
(6) MMT vs. Austrian School Debate [https://www.youtube.com/watch?v=cUTLCDBONok]
(7) Modern Monetary Theory and the Changing Role of Tax in Society [https://www.cambridge.org/core/journals/social-policy-and-society/article/modern-monetary-theory-and-the-changing-role-of-tax-in-society/B7A8B0C7C80C8F7E38D20BE4F5099C83]
-----------
This "printing unlimited money because it can" is NOT my theory -> it is proven (and explained) by MMT.
>>"It seems that your core argument is circular logic,"
YES! EXACTLY! Except - its not just "logic", its reality, its the way the US Debt system works - i.e. it is a self-perpetuating system (and is sustained by that system). This is how FEEDBACK SYSTEMS work. They work (and are sustained) through circular self-reinforcing loops. (https://deming.org/systems-thinking-feedback-loops/)
Here's some REALITY from history:
US Debt in 1993 was $4.2T
US Debt in 2024 = approx. $37T
Compare this to the strength of the US Dollar. It fell during the financial crisis (2008-2011), but has regained its strength and not impacted by the outstanding US Debt.
Again, my recommendation (to understand how US Debt works) is to read Michael Hudson's books on a subject (and learning how MMT works).
>>"how the dollar might not be omnipotent forever more."
YES! The USD will NOT be omnipotent forever. No currency has been. I'm NOT suggesting "forever". What I'm saying is there are systems in place that keep the USD where it is. It will take VERY SPECIAL CIRCUMSTANCES (what they are yet no one really knows, though many people guess) to dethrone the US Dollar.
I (like most here) assume that the "dethroning of the US Dollar" will be GOOD for the world, but I don't know (events often have an unpredictable way of unfolding). All I know is that the US EMPIRE MUST END (somehow) - as that is the BIGGEST PROBLEM facing the planet AND humanity currently.