More interesting is they are working on mechanism to bypass dollar. They will settle deals in their own currencies, perhaps pegged to Chinese renminbi. It is very bad!
Can someone pls explain the meaning of the term ‘pegged to the dollar’ (in context of oil)? If someone has boat load of cash in non dollar - but valid currency - they still cant buy oil? Why is that?
Because it will limit the circulation of USD and may have disastrous outcomes to the US financial system and the western world as we know it. The ability to expand money supply is directly dependent on where you could put this money into use. And it is not like there hasn't been an oversupply of EUR/USD lately.
So, where's the bad part, here? Oh no, a huge parasitic industry that comprises 9% of GDP but produces precisely nothing of value will be hurt?
Dollar demand will have to be predicated on real demand for actual American goods and services instead of relying on artificial demand driven by the forced settlement of trade contracts in dollars?
We'll have to actually produce value for the world instead of living profligately off the backs of Chinese, Korean, Mexican, and German labor? We'll have to actually put things into the empty containers leaving our ports? We'll have to actually work real jobs instead of being instagram influencers and optimizing click campaigns?
Yeah, I agree. Dad's a dick for taking the heroin away. It's definitely not our fault for becoming addicted in the first place. What a jerk.
It would have been nice if it was so simple. However, I don't think the process you described can be carried out without major turmoil in US/EU. It would probably include a default on the US debt or at least hyperinflation (soft default). People's income, savings and retirement will be affected (the latter two close to non-existent). Many may fall below the line of poverty. The elite will probably figure out how to keep their ruling position and disproportionate wealth once again at the expense of the rest. I am concerned that all this will have negative effects on democracy and human rights as well, because hard times you know ...
Oh, it will definitely be extraordinarily painful.
But the thing is, it's inevitable. And the longer we put off the day of reckoning, the more painful it will be.
The rest of the world should have de-dollarized and moved to floating reserve baskets and flexible settlements in 1971 after Nixon told everyone that if they expected their dollars to be backed by anything other than unicorn farts, they can go eat a dick.
Bretton Woods II was apparently too convenient for the world to discard. My personal tinfoil hat opinion is that certain very-low-time-preference East Asian powers encouraged adoption of Bretton Woods II specifically to make us soft and easy to topple a century later.
But now, it's too late. We can either start producing actual goods and services for export again and get our trade deficit down to a reasonable level, in anticipation of the inevitability of de-dollarization, or we could pretend it's not a problem, and experience a colossal currency crisis in 40 years ANYWAY.
Water fasting is by far the best, our body is naturally adapted to it. This "hacking" with oxygen tanks will just ruin your body. Read "The 4-Hour Body" if you want something that works.
I really hate location-based pay. Why should people from East Europe or Vietnam subsidize rich people in SF? If you can not afford your rent talk to city hall, get a van or change city! Do not export your problems to other parts of the world!
