He's been on a bit of a book tour recently and his name kept ringing a bell for me dimly every time I saw him pop up, and then one day it hit me, Rogoff is the economist who was found to have made a serious mistake in their paper about the effect of debts levels on GDP growth a decade and a half ago. The paper argued that the higher the levels of debt, the more gdp growth slowed down and reversed. This paper as used to support a lot of austerity policies in response to the GFC in the years following 2008. Some, at the time, grad students looked into though and found that there were lots of serious mistakes with the paper.
https://en.wikipedia.org/wiki/Growth_in_a_Time_of_Debt
Leaving a comment for others just in case others are experiencing that same mis-connect. As far as the article goes, we'll see! I'm inclined to think that is true, that the US is retreating from the world stage and the dollar will follow, but whether that happens now, later or never, I couldn't say. Interesting times!
To be clear, the error caused a 'kink' in the graph which made it look like there was a 'tipping point' at a 90% debt-GDP ratio. Correcting this error did not change the overall result, which is that a 'high' debt/GDP ratio caused reduced growth.
I don't think that's correct. The "overall result" was originally a marked effect, and the one after correction was pretty much noise. Yes, it pointed in the same direction, but without a notable impact.
It's like trying to convince your parents to let you stay home by faking a temperature on the thermometer, then when caught repeating the measurement and shouting about how it actually shows 98.9°F and you really do have a fever!
Consensus was and remains that public debt and GDP growth correlate very poorly if at all, and the book that claimed the opposite was simply wrong.
Given that it doesn’t change the overall result, is it really a “serious” error?
It did change the overall result. The claim was that there was a tipping point when government debt went higher than annual GDP that would cause growth to suddenly plunge. Turned out here was no discontinuity, it was almost entirely an artifact of motivated reasoning and their failure to use Excel.
The pretend claim the debt police went with later is that the paper somehow proves debt is inversely related to growth in some way. This is not an interesting claim, and certainly not proved by showing that low-growth countries are often also high-debt countries.
edit: there is absolutely no reason to think that government debt is related to GDP. That's why they resort to making statistical, associative arguments. The balance of payments is the important number, and it's an accounting identity that if holding the balance of trade steady, when government debt goes down, private debt must go up. The only thing you can be sure of when government spending goes down is that systemic investments by governments are being neglected, in favor of individuals borrowing money for personal consumption. Hello Temu.
Spending is important, GDP is a nothing burger and national debt means the country was captured by bankers.
I like how Richard Wolff put it: There is a reason business school and economics aren't in the same building.
But people are deeply invested in these ideas and would rather die than correct the mistakes.
The only thing I admire in Trump is his ability to change his mind. Maybe he can beach the ship before it sinks. I hope there is something to eat on the island. That would at least make the infighting worth it.
You're giving Richard Wolff as an example of someone who'll fix the problem? Listen to him for 5 minutes, he is very much a person that "would rather die than correct the mistakes". He is just on the other side of the argument.
His position can be summarized in that he is an extremist advocate of Marxism and the fact that that puts one person in control (ie. dictatorship) he describes as a positive. And he won't discuss ... see point 3.
Of course, that is not what he generally discusses, that part of his beliefs (but I'll credit him with at least not lying about it, or "failing to understand" that part). He is an expert economist and will point out every historical moral flaw in international relations in all of history AND blame it on capitalism. First, the criticism "sure, this was abuse, exploitation, but at the end of the exploitation everyone was much better off than at the beginning of it" is a point you can make about nearly every argument he makes (because he only complains about western influences which got us to our current world).
Second, he's selectively outraged. For example the Soviets, Chinese and especially Ottomans are, to put it mildly, a LOT worse than the states he complains about. In reality, exploitation is the norm in history, not the exception, but listening to Richard Wolff you will get the opposite impression.
Third, the Western societies that he complains did the exploitation are not exactly capitalist societies. They were dictatorships, in the best case mercantile societies. Capitalism had influence in these societies, but the case he makes, that capitalism controlled these societies is ridiculous.
And, of course, that the solution he advocates would take us back to authoritarian dictatorships, and it seems there is a lot of historical proof that this, to put it mildly, that won't end exploitation, is never discussed.
AND he's dishonest. There's no other word. He's making "American empire has fallen" announcements since the 90s.
Add to that that you can't listen to him for 1 minute without cringing. But hey, he's a professor, so I guess that's par for the course.
I like listening to other perspectives. Seems you did a great job at that too.
The general pattern i see everywhere is that in a society with layers of hierarchy each layer is amazingly ignorant about the things the ones above and below know very well. Not knowing the abstraction vs abstracting away important things.
No, I'm not sold on Wolff's new js framework.
Yep. It lead to a decade of austerity measures across the EU, which caused most European nations to fall behind the US, despite being head-on-head economically in 2007.
I'd say his paper was a convenient excuse for people who wanted to do austerity anyway. I mean, no government, with a sophisticated civil service department, including a ministries of finance and central banks packed to the brim with economists and statisticians should do anything based on a paper they didn't reproduce (all the data was public too).
I used to be the equivalent of one of those guys when I was a staffer - we don't actually do that much cross verification or due dilligence in that manner (aside from the guys at the CRS doing god's work - would have loved to work there).
One of the things to learn is that a lot of "think tank" content (including those at affiliated departments at universities) is just thought leadership used to drive an agenda. I've been guilty of doing that, and so is everyone else.
I sympathise, I would possibly do the same thing, but you can't then turn around and say "we did X because someone made a spreadsheet that told us so".
I think you may overestimate the abilities of our leaders. The guy who brought austerity to the UK, George Osborne was kind of a mediocre journalist with a second class degree in history and never much training or depth of understanding in economics.
I'm reminded of:
>John Maynard Keynes once said: “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
I mean not quite that but people who don't understand economics tend to pick up on something they read without great discernment. See for example Trump and deficits and tariffs.
Austerity measures across Europe are still continuing, just look at the UK
Also some fairly direct ties to the rise of right-wing movements and governments in Europe.
Yep. The rise of the far right in Greece due to resentment against the Troika should have been a warning, but hey, they're PIGS, us Dutch and German and Scandinavian voters pulled ourselves up by the bootstraps without any outside help /s.
Yes.
> I'm inclined to think that is true, that the US is retreating from the world stage and the dollar will follow, but whether that happens now, later or never, I couldn't say.
I don't understand why or how that would be a goal. Doesn't the US get / consume something like 25% of the world's production while having about 5% of the population? If they're consuming 5x their share, the bottom is way, way further down than anyone can fathom, isn't it?
I don't either, but the UK did exactly that (you know, scaled down somewhat) for similarly no good reason. It ended up a runaway political rhetoric, eventually they believed their own BS and pressed the Brexit button. 6% of missed GDP since 2019.
From afar I'd say it could be the same.
This is a really interesting comment. Most* of those who pushed Brexit in the UK were people rich enough to ride the fallout, and rich enough to become even richer by playing at disaster capitalism. Seems like a good shout that this could be the same goal.
* I say most, because obviously there were also an awful lot of useful idiots.
> Doesn't the US get / consume something like 25% of the world's production while having about 5% of the population?
It did this by running up an impossibly massive trade debt since Reagan. This is not something that can be done endlessly, unless you're going to "start" invading other countries for resources.
It is far, far from impossibly massive. It is, for example, entirely comparable to a typical mortgage:income debt ratio. It is lower than the debt:GDP ratio of several other countries (including Japan in the recent past) that did not fail as a result.
It also can't be done (in the sense of grown) endlessly if the only tools brought to bear upon it are the ones of heterodox economics and the historical policies of the two major US parties. You don't, however, need to invade other countries. You can take the sort of approach MMT advocates, for example.
Most of us don't really understand why, but that is apparently the goal of this administration.
I'm honestly not sure there's any grand design or even inkling of a plan. It's happening and we have to deal with the consequences
It's called The Mar-a-Lago Accord. When you google it, this is the summary:
The "Mar-a-Lago Accord" is a proposed economic strategy, often discussed in financial circles, suggesting a coordinated effort to devalue the US dollar and reduce the country's trade deficit. Essentially, it envisions a deal where the US would pressure its trading partners to weaken the dollar and lower US borrowing costs, potentially in exchange for continued US security guarantees. The idea is rooted in the 1985 Plaza Accord, where major economies agreed to jointly weaken the dollar, but with some key differences.
> weaken the dollar and lower US borrowing costs
I found this confusing as weakening the dollar and lowering borrowing costs would seem to be at odds. Apparently the "deal" involves central banks which hold US Treasuries swapping some large share of them for near-zero interest ultra-long Treasury bonds (50-100 years), to prevent yields on typical Treasury bonds spiking when rolling over debt. See https://www.cfr.org/article/mar-lago-accord-not-recipe-succe...
I'm still not sure how that's supposed to work to actually lower borrowing costs rather than blunt the increase. Maybe it's like the Laffer Curve where they rely on some very specific hypothetical conditions to make the numbers work?
China calls 100 year zero coupon bonds basically Technical Default on foreign debt, and rejected it.
If you think about, it really is a default, because US borrowers are being forced to exchange their cash into trust-me-bro letters.
Technically USD has been a trust me bro paper ever since Bretton Woods, but today the trust in the system is really at very low level, unlike before
That's the real damage Trump is causing. The US has traded on trust for the past 80 years, but they had that trust. Trump squanders that trust and then wants a new trust-based deal? That ship has sailed, and he's the one who sent it off.
The trust was undermined long time ago by inlimited printing and decades of forever wars where $36 trln of debt has been borrowed on behalf of US, with absolutely nothing to show for it
The reputational damage to the US is incalculable.
Speaking for the global community, so they can consume a fairer share, instead the 5% consuming 25% of the world's production? It's not just the US itself that sets goals about dollar's use as global reserve.
America also produces 25% of the world's production. If we went back to gold and silver, things wouldn't be much different on that front.
My bottom would be Americans consuming 4x their share. You don't have to get to zero or even close to reach a "really shitty for me" outcome.
America is literally following Trump into isolation. Why trade using a reclusive countries currency? Would you expect Finland to do international trade using North Korean WON?
I suspect Trump's goal is for the US to also produce 25% of the world's goods. Otherwise, Americans reducing their consumption to more reasonable levels sounds like a benefit to the world.
Thanks -- thus quote seems on the mark:
> Economics professor L. Randall Wray criticized Reinhart and Rogoff for combining data "across centuries, exchange rate regimes, public and private debt, and debt denominated in foreign currency as well as domestic currency," in addition to "statistical errors," and for lacking a "theory of sovereign currency".
Thanks for the link. My memory from that time had it as "merely" excel issues, but as described it is a fair bit worse than that.
Yep. Trusting a guy who made a rookie excel error is not something I think we should continue to do.
Especially when the consequences downstream of that error were so stark in terms of policy.
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And a forceful theter to gold for all major currencies/US partners would have just ended up in a state like the long depression of the 19th century, which would have probably killed the western block, so really the only choice was to let all money float.
Of course it is. The current administration is eradication all the soft power the US built up since WW2 under the mistaken belief they can go back to how things were in the 1950s, instead they're going to make things so much worse for themselves and the very smart big beautiful high IQ people who voted them in.
Americans must pay the consequences for electing the people they did and for having the duopoly political system with gatekeeping that filters out the worst kind of people, and for having politicians being for sale to the special interests group like the street walkers they are
Assuming this system is stable forever is just as unrealistic as trying to rewind history.
No one was assuming the system would be stable forever, just that it wouldn't start to fold in the first six months of 2025.
Ezra Klein had an interesting interview[1] with Kenneth Rogoff (the author) about this topic recently. It's worth a listen.
1. https://www.nytimes.com/2025/05/02/opinion/ezra-klein-podcas...
I watched it and I found him less convincing than Dalio's Principles of a changing world order, which I found to be extremely intuitive although not at all rigorous.
Ezra gave Rogoff a lot of push back and Rogoff came off as a guy who intuitively understands things but doesn't rigorously understand them so he looked kind of foolish multiple times. Rhetorically he was poor and if I hadn't already gone in agreeing with his general consensus, I would probably have been left fairly unconvinced. Of course, the curse of knowing a lot is that your knowledge of what you don't know is much larger than other people's knowledge so it's harder to confidently present things because you can think of exceptions or why they might not be true or how things could be much worse or much better than what seems most likely.
I find both Rogoff and Dalio interesting and useful. Useful because it is good to get my fellow Americans used to the ideas that US exceptionalism will slowly (hopefully slowly!) end and that a national debt much above 3% of GDP is a dangerous thing that will someday crush us economically unless some miracle happens and, for example, AI really does lead to hyper-productivity gains (I doubt this will happen, I guess I don’t listen to Sam Altman enough.)
Agreed, I left the episode thinking I didn’t take the right college courses to understand it. There were a lot of “proof is trivial” or “draw the rest of the owl” types of explanations
YouTube link without paywall: https://youtu.be/pT2cohNt6a4
> Treasury Secretary John Connally to meet with these leaders in Rome. They asked, “What do we do? Now that you’re not on gold, you can just inflate this stuff, and we’re stuck with it.” And Connally replied, “Well, it’s our dollar, but it’s your problem.”
Unrelated but this is John Connaly who was governor of Texas during the JFK assassination. One of the bullets -- possibly the one that killed Kennedy -- went through Connaly's wrist & ribs
If I am China I lend you money I would like get paid back in dollars because I can already print as many Yuan as a I want. Why should I lend to you in a currency I can turn the printing press on for. So it feels like the Dollar will be around for awhile as long as it is accepted, convertible, and the Government tries to slow down the printing press themselves.
Why would that be any better or worse than being paid back in paper that your counterpart can print with their own printing press?
If you pay me back say in Pesos and I can print Pesos then did you really give me anything at all because I have more all for free.
If I own a teddy bear factory and I give you 10 teddy bears and you give me back 11 teddy bears I would prefer 11 dolphins instead as they are something that I don't have and can't make.
To get those pesos to pay you back, he needs to get those pesos, which means selling you something and then giving back the money you used to pay for it, which means the real interest you got was those goods. That's real value that diluting your own currency doesn't get you.
You know… there are other alternatives to the Yuan, but your response makes it sound like USD is the only choice
The Euro may go for it https://www.bruegel.org/first-glance/more-eu-debt-issuance-w...
The Euro already is the second reserve currency of the world, and because it's already an international currency, no single country can just decide to print more. It's a far more attractive choice than the Yuan or arguably the Dollar.
It will be interesting if countries eventually move to crypto stable coins that aren't tied to individual powers
Shortly after JFK: https://wtfhappenedin1971.com
https://en.wikipedia.org/wiki/Bretton_Woods_system
It was the end of the bretton woods system/the gold backed US dollar.
The major consequences are inflation, which devalues savings and transfers the buying power lost from devalued savings to those who own assets, and removing the consequences of poor policy, letting the market remain more irrational and letting corruption fester longer before reality asserts itself.
Because the relationship between money and value are severed, it allows for wage stagnation and real economic production to stagnate while paper power and paper growth are allowed to metastasize because the supply of money can always be expanded rather than having to deal with the reality of potentially not being able to import things that fuel the engine of your economy.
So 1971 is when we started to hang ourselves with our exorbitent privilege: https://en.wikipedia.org/wiki/Exorbitant_privilege
Instead of only listing the disadvantages, could you list the advantages of decoupling the money supply from how quickly we can dig yellow rocks out of the ground?
There are quite a few of them, and you've conspicuously omitted them.
It's a bit like issuing a scathing review of the automobile by listing all the disadvantages of diesel engines compared to horses.
Yeah I could see why you would say that. I linked the article to exorbitant privilege which states some of those advantages.
If you are responsible with your levels of corruption, then fiat currency is generally very beneficial. So it ends up being like a drug. Appropriate amounts can improve your life, but abuse, which the drug will promote, can destroy it.
It's a form of power, and if you can use it responsibly it's good, and if you abuse it it's bad.
Rampant shortermism promoted by shareholder supremacy especially when compounded by government funded bailouts really amplifies our ability to damage our future with our monetary system.
If you can think in the long term then it's very net beneficial, but if you allow short term interests to dominate... the hangover will be devastating.
Thinking about it more, lack of inflation makes savings valuable and potentially implies deflation where saving/not spending money gives you more buying power than investing it. This takes money out of the market and reduces "dollar velocity"/the sum total of market activity which can devastate your economy.
The elephant in the room is that rich people need to be taxed and their wealth redistributed.
If that happens, then there is a mechanism that prevents systems of compounding power, and the wages "stolen" by inflation are put back into the economy rather than becoming part of someone's hoard. If wealth is redistributed then that allows for monetary inflation without changing power relationships.
If that does not happen, then power compounds and those with power will enact systems that benefit themselves since they will never have to experience the long term consequences of their looting of tomorrow for today. The poor will continue to get poorer and the rich will get richer, until the rich have so much power and poor have so little power, that law, the prevention of arbitrary exercises of power by the powerful, becomes meaningless and the rich will take what they wish unopposed. Some people will get so powerful that when a government says "you can't fish all the fish in the sea because we need to have fish next year" they pay enough money to replace that government's politicians with politicians that say you can, then next year there are no more fish left to fish.
Money is a note that denotes buying power, but that note is meaningful because there is a law that says it is meaningful and people with guns enforce that it is meaningful. So if people get powerful enough to subordinate people with guns it means that power is more effective at acquiring resources than money since someone with power can just take what they want without consequence.
So inflationary monetary policy is good because it means more money is active in the economy, but inflationary policy is bad because it also concentrates money/power and you must have a system to prevent the power concentration that inflation causes by default if you want the system to remain coherent.
That sounds nice in theory but the practical reality is that this so-called redistributed wealth is funneled back to "the people" through corrupt departments and NGOs because a corrupt system will stop at nothing to perpetuate the production through whatever mechanisms available. The only way this can be stopped is with a moralistic social movement.
I don't follow what you're saying.
If you're saying that people must empower themselves (by unionizing or the like) first because redistribution must follow power rather than power following redistribution, then I agree. If you're saying something else then I don't understand.
Since Reagan the upper 10% and corporations have been in the ascendancy. Add out sourcing of supply chains to cheaper countries without consequent benefit to the employees --- but a hell of a good time with stock buy backs and profit --- tack on stupid inflation in US health care, US housing, and US education ... and the pendulum has gone too far in favor of the upper 5% where all real income gains have gone.
I do not want redistribution; America is equality of opportunity not outcomes. It's politically unsellable smacking of far left politics. I could not care less that some guy has $10M or $10B. I'm happy in my life ... however I am pissed I am getting squeezed in the middle.
I damn sure want the upper 15% + all corporations to pay the same percentage of taxes per dollar I do. I'm near the top end but not enough to have a coterie of CPAs playing paperwork games. I'm with 100% with Buffet on this. I've been in the Cisco/HP/whatever corporate buildings in SV; ditto Apple. I was both surprised and not surprised (knowing corporations) to hear Apple was Irish in some sense for tax purposes. That's BS.
Finally, Congress is going to have to get off its butt and do something to make them credible again on spending what they take in. This is another serious up-hill climb before selling ``higher" e.g. fairer taxes. At least as far as rhetoric goes --- but not reality --- it's hard to move the GOP to fair I mean ``higher" taxes when the top ~10% already pay something like 40% of all tax income. That's just a hard sell.
> America is equality of opportunity not outcomes.
It would be nice if America had equality of opportunity, but it's not. Not even close. No country is, and the US less than many.
Do you think a poor kid gets the same opportunities in life as a rich kid? A kid with drug addicted parents the same as a kid with loving parents? A kid growing up in a criminal neighborhood the same as one in a safe neighborhood?
Real equality of opportunity is probably just as impossible as equality of outcome, but it's possible to get a lot closer than where the US is.
> It's politically unsellable smacking of far left politics.
Wealth redistribution is so unsellable that the US used it very effectively from the 1930s to the 1980s. It was a massive boon to US economic growth, gave the US a strong middle class, before Reagan decided to undo all of that and wanted more money in the hands of the rich.
The only reason you see it as far left is because you've bought into right wing propaganda.
> I could not care less that some guy has $10M or $10B. I'm happy in my life ... however I am pissed I am getting squeezed in the middle.
Who do you think is squeezing you? The middle class is getting pushed back to the bottom. And the fact that some people have billions give them more power over society, over politics, and that helps them squeeze you.
I am well aware how (to keep this short) that one's birth zipcode has a major bearing on outcomes. Some people don't have equal opportunity to good parents or schooling.
My family is an example. I'm the only one in my family with a uni degree. I paid for it. My father is the only one with a degree in his family. His father worked in copper mines. Still our family has made continual progress. My son is starting his masters in engineering. My better half had a degree.
Redistribution as a macro government policy is still not advisable. Government cannot allocate resources well however well intended. Think Bush junior and housing crisis; he wanted house ownership up.
Gov can deal with point problems: reduce cost of higher education (stop giving loans and grants to Harvard, yale), tell people what the expected roi on a degree is, tell people what other universities charge for the same degree (more is not always more), lower health care costs. Stop subsidizing corporate america. There I'd zelously advocate for gov involvement in addition to my other points
> Redistribution as a macro government policy is still not advisable.
Why not? It has worked very well in the past.
> Government cannot allocate resources well however well intended.
Your primary example is probably the US government, which hasn't wanted to do this well since Reagan. Instead, the focus has been to undermine its effect in order to justify cutting programs. But more benevolent governments have had much better success.
> Stop subsidizing corporate america.
I agree with that. The US has been redistributing wealth, but they've been redistributing it upward, rather than downward.
But the US could do a lot to improve equality of opportunity by providing better public education, more affordable advanced education, and more affordable healthcare. Those three are low hanging fruit with massive returns on investment.
You realize our government built nuclear bombs, went to the moon, and in 4 years produced a nuclear powered submarine from scratch?
Not to mention the interstate system, drinkable water in almost every home, and the world financial order as we know it today, the internet itself was a government project too. GPS?
We have almost eradicated many extremely harmful illnesses as a result of government programs, including something that neutralizes but does not cure HIV.
> Government cannot allocate resources well however well intended.
That's because the half of the government that says this is ensuring it is true in order to justify deregulation and privatization to make their 10B benefactors happy. Most of the people who say what you say feel confident saying it, not realizing that it's not structurally true, but only true because they believe it.
We appear to be living in an age were one's choices are 100% goverment all day all the time, or none. You're 100% Trump or not. You're pro-gun or not. You're pro-women rights or not. Well, I'm not having any of this simplistic baby pablum.
Government != corporation despite the fact they both need money. I'm for a well-funded government that I can hold accountable for their roles and responsibilities, ditto on the private site. See for example the Intel thread floating around on HN; there we see a corp losing their competitive grip.
Good lord: it will not kill America to have a decent linear combination of good and competent goverment and corporations. We need both.
That wasn't cogent. It didn't make any sense, nor was it a response to anything said.
Stock buybacks are a theft from the future. That's money not being spent on R&D, so it's another clear example of short term-ism. You see problems, but who do you think is going to solve those with what resources?
> 5% where all real income gains have gone.
Yes that's because wages are proportional to power, not output, and because poor people are getting poorer and rich getting richer, the power gap is widening resulting in fewer captured gains by those actually doing the work.
> I do not want redistribution; America is equality of opportunity not outcomes.
The problem with being against wealth distribution is two fold. One, and the more important part, is that you have to stop people from having too much, because having too much creates "too big to fail" situations which allow single individuals to compromise the government and be above the law. This was the age of robber barrons. Are you arguing we should support robber barrons?
The second, less important reason, is that people who have a better start early in life are able to contribute more taxes/more to the economy later in life. Today's poor people are tomorrows drug addicts and criminals or potentially entrepreneurs and scientists and money can influence that significantly. Many anti wealth redistribution people are pro nuclear family people, but money issues and overwork/stress break up families. Jesus, which many of those people also claim to be followers of, was very pro wealth redistribution.
Public schools are literally wealth redistribution, the most important kind. Do you really want to be in a country where it's the rule rather than the exception that people who cant do basic algebra can vote on tax policy?
> It's politically unsellable smacking of far left politics.
So it's wrong because it's left politics, but not wrong because it's a bad idea? Do you see how your description of it being wrong shows you're playing team sports. For you left and wrong are so close semantically that they're basically the same word which is why you don't realize how intellectually bankrupt that statement is. Everything conservatives claim to love, the teachings of Jesus and the constitution are extremely left ideals. Freedom isn't free is born out of left philosophy even though right wing people tend to be the ones saying it.
> I could not care less that some guy has $10M or $10B.
You really really really should. If a congress person costs 10M to compromise/primary/bribe/etc, the the guy with 10M guy can at most compromise one, while the 10B guy can compromise 1,000 of them. The 10B guy can buy a news Channel, the 10M guy can buy a commercial... The 10B guy can start a surveillance company in Palo Alto that makes use of all the pervasive surveillance collected from virtually everywhere and use it to support the politicians they prefer. The 10B guy can buy a social media company that algorithmically controls the political content people are exposed to.
> I damn sure want the upper 15% + all corporations to pay the same percentage of taxes per dollar I do.
The military, police, and social programs all contribute vastly disproportionately to their wealth.
> I'm near the top end
Well at least your point of view makes sense.
> Apple was Irish in some sense for tax purposes
But you have trouble connecting the dots that it's because they are an extremely rich corporation that they are able to buy or otherwise coerce themselves into being above the law?
> Congress is going to have to get off its butt and do something
Yet if they do, those 10B dollar citizens decide to devote their resources to primary-ing them in order to ensure a climate of de-regulation. Trump is literally in power to enact a policy written by the heritage foundation meant to "put government workers in trauma to prevent them from enacting regulation against oil companies." Literally stated like that. That's literally what the head of the OMB said.
The whole last statement alone doesn't make any sense and ignores America's history.
If I sell an apple for one gold coin, that gold coin will probably fetch me two apples in the future. Which happens for a resource whose need is growing while supply is limited. This also means my gold appreciated without me generating any value over time. It creates an incentive to save and not spend.
Therein lies the problem with gold, which is why a decoupled currency was required. A natural resource such as gold or bitcoin, appreciates as the economy grows, which in turn slows the economy down. With a printable currency, a country can control inflation or depreciate past value to create agony for people who have to continuously work to create more value. That is what forces nation-building and what capitalism helps with.
Dollar worked. And it won't be replaced with a fixed resource such as gold or bitcoins. But as the article mentions, it may not remain unique. That will be very interesting though, since the world has never experienced those dynamics before.
Isn’t the dollar dominance a bit of a blessing and a curse? Labor rate in U.S. is very high compared to other countries.
It inevitably brings us many benefits, but it does feel like the U.S. and other western countries are being hollowed out.
Maybe this is more of cost disease than dollar dominance. Maybe they are related in some ways?
Yes, this is the Triffin Trap or the Triffin Dilemma
It seems both backwards and perfectly sensible that the country with the biggest debts is also the country with the biggest stick. It’s backwards because it seems counterintuitive to any mafia-style arrangement where the guy with the big stick is collecting the money. But it’s sensible because the safest debtor is one that won’t default, and why would the country with the biggest stick ever want to default?
It’s almost like some twisted version of Mutually Assured Destruction mixed with economics and realpolitik. As long as you don’t try to collect your money, it’s safe and profitable to lend me more of it. Because of the implication…
my understanding is that yes it is, you cant make shoes in the US, but the power that comes from pretty much all finance flowing through the American pipes is a good trade off.
The USD as the world's reserve currency means, effectively, that other nations are lending the US money at the very low interest rates that Treasuries yield. Effectively, the US gets the best and biggest line of credit in the world, with which it had (until now) financed the most incredible expansion of industrial, financial and academic prowess the world has ever seen.
it also allows USA to export inflation to the entire world. Whole world will be experiencing inflation, thus, diluting the effect it has on the US population
You can get US made shoes, but they’re expensive. Made in USA New Balance pairs run $200, Red Wing boots are $350+, and Alden shoes and boots start at $700 and go up to $1,000.
> my understanding is that yes it is, you cant make shoes in the US
I love my US made RedWings and Aldens, just not cheap. :)
(and I’m not American)
Red wings and Rancourt & Company, here, plus Mexican and Spanish manufacturers (most search engines are terrible at surfacing these, you need to specify the country to find them) when I can’t find what I want in my price bracket in the US. Alden’s a bit rich for my blood.
Frankly, sneaker prices are getting so damn high that for the last couple years “expensive” leather shoes and boots from manufacturers that have resisted big price hikes have been looking more and more like a bargain…
> Frankly, sneaker prices are getting so damn high that for the last couple years “expensive” leather shoes and boots from manufacturers that have resisted big price hikes have been looking more and more like a bargain…
Red Wing in particular has only raised prices about 10% in the past 10 years.
Good quality comes with a price tag.
Indeed!
of course you can make shoes in the US. The problem is no one buys them because theyre not competitively priced.
> are being hollowed out.
What does this mean?
Rust belt. Many places where opportunity had dried up. Not just the north east, but even Tennessee. It’s low wage jobs or selling drugs, or both.
how come immigrants from Haiti/other 3rd world countries come to the poorest rural towns in USA and make it work, while US citizens drown in drugs and crime?
The opportunity is there, its just USA was supposed to use the reserve currency status to invest domestically in its own people. Instead USA made a business out of education (private schools and elite colleges).
This creates a situation where only high value jobs are feasible in the USA, but the education to do these high value jobs is too expensive. Now you have to import foreign talent, as well as goods, and this leads to erosion of the country.
China on the other hand, invested in its own people and developed industries domestically, rather than importing talent
It sounds like you're arguing we should invest more in the population's education? I'd agree with that.
> how come immigrants from Haiti/other 3rd world countries come to the poorest rural towns in USA and make it work, while US citizens drown in drugs and crime?
Any source(s) on this? First I'm hearing of this correlation.
Why blame this on globalization instead of their shitty culture? Immigrants find success in these areas.
That's mixing up dominance with high value. In theory there could be a world with a lower value dollar that's still stable and used for international trade.
The liberation day tariffs were definitely something. The tariff numbers themselves were chosen explicitly in reference to trade deficits. Trade deficits are an exact measurement of the strength of the US dollar as a reserve currency.
Reducing trade deficits to zero is exactly ending the dollar as a reserve currency since it implies that no country has dollars in reserve. There is a stated a goal of this ruling regime to return to the gold standard.
So who was being liberated? From what I could tell it was authoritarian countries from the consequences of the sanctions framework provided by SWIFT and trade predominately occurring via the dollar. Rogoff explicitly states that the dollar as reserve currency has incredible intelligence value and allowed for us to impose sanctions on other countries.
The number of ways to interpret liberation day in a dystopian way are large, and I can't really think of any American entity that directly benefits from liberation day "liberation" except potentially unskilled American labor who might be free to work sweatshop jobs that get re-homed, if they aren't automated or don't just disappear entirely.
Can't run a trade deficit if your country is broke and inflation is 100% a year like a banana republic and that's the era that MAGA wants to put us into courtesy of kompromat Don
At the end of the day, youre just moving an amount from one ledger to another. Its all digital now too. A reserve currency was always a technological issue. SWIFT is largely just FTP servers.
The fall back for a long time was that half of the problem was exchanging money between two countries, and then shipping the goods relied on a strong blue water navy.
The U.S. doesnt have the lead it used to in either area.
Sanctions didnt help either.
Another issue is the ongoing attacks on the rule of law and the courts. There was a reason why Russians kept so much money in British banks, it was the trust in the institutions that caused the inflow.
Its like a perfect storm to destroy your currency credibility.
Though BRICS may seem insignificant atm, it is off to an impressive start.
Could the world have two competing currencies? Possibly.
But the one way to guarantee that adversaries (I don't care who your adversaries are, I'm using that as a non-denominational term) don't get the upper hand, is to use a currency they can't control or manipulate.
ATM the US dollar, can be manipulated by the Fed, but also by the collaboration of other countries, and holders of debt, as recently shown by the US bond activity.
I know many on HN are going to hate to hear this, but a single, global, trust-less currency cannot be manipulated against any single group. So bitcoin may just be the answer here.
> Though BRICS may seem insignificant atm, it is off to an impressive start.
A semi-joke-y take on BRICS:
> Pretty straightforward really. You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money
* https://twitter.com/davidfrum/status/1665053372402081792
Of course more countries may enrol in the system, but that dilutes the influence of the five namesake nations of BRICS. But then you have to choose an actual currency(s), so you will they trust to be stable? Or perhaps go with a 'theoretical' currency likes Keynes' bancor?
Bitcoin is so concentrated in the hands of so few that its probably the simplest thing in the world to be manipulated
It is way more than this even.
The reserve currency needs to be so liquid that the average person doesn't feel nations buying/selling massive amounts of currency for trade.
To believe Bitcoin fits this is to be completely ignorant of reality.
It would be questionable if the Euro is even liquid enough for this because of the bond market.
If you look at the Real, Ruble, Rupee and Yuan vs USD, the BRICS would like something else because USD is too strong.
To look at those currencies and conclude it is over for USD is just absurd.
I think you're conflating the idea that a reserve currency needs to be the same currency that a person interacts with on a daily basis.
Commercial trade and government debt operate a such large quantities, that they are essentially a market unto themselves.
This is essentially how gold worked wrt the gold standard, except that with gold, a large find in one country increases the wealth of that country, or makes it subject to war, as other countries want to capture that value for themselves.
I see your point about centralization, but you could argue the same WRT fiat currency where a single entity can create more whenever they wish.
The issue is the Fed has some logic behind it's methods. We're also find that a clown in the White House can also devalue American currency, status, and inflate the economy with a few strokes of the pen when there is a do-nothing congress who are cowards.
BTC hasn't been seen as a viable global currency for about a decade. That's why it was pivoted to be a 'store of value'.
It's utterly unsuited to the task. Far too slow, vulnerable to quantum computing, concentrated and tending toward even further concentration, and with utterly useless environmental impacts. At it's core its a cool concept, but cannot be upgraded to match what's currently out there. It's whale oil in a world of fusion power.
Fee-less, mining-less, spam resistant, quantum resistant, decentralized and near instant technology exists, right now, and has proven itself over the last ~9 years. It's wild that people think the first-mover advantage extends so far as to accept something so vastly inferior.
I only learned this recently but Stephen Miran, President Trump’s chairman of the Council of Economic Advisors, in 2024 basically laid out the plan to de-value the USD and to encourage foreign nations to move to more diverse basket of currencies all while trying to balance the transition and mostly maintain the geopolitical power of remaining the reserve currency. Who know how it will play.
Yes, considering that it seems to be the semi-official blueprint for the current US economic strategy, it's surprising that it gets so little attention: https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...
One can certainly debate if it's a good strategy, but I'd highly recommend that everyone read this paper. A particular part that's surprising is that the headlines are constantly ~"US unable to stop decline of dollar" when according to this paper a weaker dollar is an explicit goal.
Edit: CountSessine has an excellent (and currently downvoted) set of posts about the paper elsewhere in this thread: https://news.ycombinator.com/item?id=43941376
what's going to replace it?
pretty much all economists and commentators state that the replacement will be a basket of currencies not a single currency, where each countries' basket will be weighted by the typical trade volume they have with other countries (more trade with Country X, then hold more of Country X's currency) plus some factor for stability/volatility/currency risk etc.
This, incidentally, is exactly how the value of the Singapore dollar is managed.
It literally says in the article that nothing is going to fully replace it. And the same way that it didn’t happen overnight for it to become the force that it’s today in the global economy, it won’t disappear overnight either.
America decided to politicize and weaponize the USD and so the rest of the world decided to reduce usage of USD in international trade. They can use currencies of their trade partners to trade, so that:
1. Currency flows are invisible to the Fed
2. US sanctions cannot ban mutual trade in other FX
I doubt it will be a single currency.
Something I think a lot of people miss in this discussion is that with computers and electronic markets dealing with currency conversions is fairly easy. In the past doing everything in USD vastly simplified everything, but today I think countries just trading with whatever currency works for a given market or transaction probably makes the most sense.
There is no other world currency that looks both large and stable enough to replace USD. Chinese Yuan/Renminbi is probably the closest but it's probably viewed by many as too easily manipulated. It's a pure fiat currency run by a single party state with little separation of powers.
A global currency has to have liquidity and availability and the Renminbi has none of those things. China doesn't seem willing to turn their country into a major importer (thus making the RMB more global) so I doubt it will replace the USD either. Probably all three USD/EUR/RMB will be around without a major takeover by a new entrant.
China is a major importer.Isnt 3 trillion dollars a year in imports "major" to you ?
China pays for their imports using dollars.
It's a much much big exporter.
Computers and electronic markets don't solve currency conversion so easily because it's not just about doing math.
If say a Thai company wants to buy cocoa beans from Nigeria, the Nigerian exporter doesn't have any immediate use for Thai baht if they aren't planning to buy something from Thailand. If exports and imports between two countries aren't relatively balanced there won't be a liquid market between their currencies.
What if countries form networks? If Nigeria has no use for Thai Baht they swap it with another country for US dollars, Euros, Rinminbi, whatever. It could all be done automatically in near real time.
So there's still an intermediate currency needed. Which is how it works right now. And the preferred intermediate currency when trading currencies with non-liquid markets is USD.[1]
It might be how it’s done now but I don’t see why that’s how it has to be done. It’s just math and database transactions. Not having a fixed intermediate does make things more complicated since it requires many-party transactions between floating currencies. But lots of math nerds with backgrounds in physics go into finance. I’m sure they can figure it out.
You could also create derivative instruments based on baskets of currencies and use those as intermediates.
My view is that the primary purpose of money is to enable balanced exchange of useful goods and services, and with that premise, "money" could be replaced by large information systems. In fact, that transition is long underway. Who uses cash anymore?
My guess is that initially it will get eaten away by parties that currently trade in US dollar for convenience shifting to trading directly in their native currencies. It's a pure cost / risk equation for them that they have to manage this third variable in their dealings and if that outweighs the benefits of using a common currency they will make an agreement to trade directly. This will happen slowly over a long time and eventually a new default currency will emerge as a result of these decisions.
Nothing. Even the price of bitcoin is measured in dollars.
By whom? If I wish to look up bitcoin exchange pricing, I look it up based on AUD. I wouldn't measure bitcoin in USD, that would hold no value to me or billions of others globally.
This is pretty rich considering the volume of Tether, USDC, etc. For whom? I'd say: the exchanges themselves, casinos, a litany of other things
There is a whole subset of the crypto community that says 1 bitcoin = 1 bitcoin.
What does it take to go from bitcoin being measured in US dollars to US dollars being measured in bitcoin.
> What does it take to go from bitcoin being measured in US dollars to US dollars being measured in bitcoin.
Just for Bitcoin to no longer be deflationary. Right now it's much too good a store of value to become an effective medium of exchange.
national currencies of other countries, which are backed by gold and their national reserves.
Can capitalism buy it's own goods it produces without inflation? I heard someone claim that the only way the system balances is by printing money. Workers are paid less than the value they produce, and they're most of the consumers. So governments encourages workers to borrow money from banks (home loans, car loans, credit cards, and so on) to buy the goods they produce. But in the end the government still needs to purchase the excess through deficit spending. Like we saw for example during covid. In Canada government doubled its debt. To keep things from falling apart. And inflation is the only way they made it go on. But it's not sustainable, because now good chunk of taxes go to paying previous government's debt, and citizens get less services in return for more taxes. Clearly this loop is not sustainable too many times.
The government is not borrowing foreign currencies to buy an oversupply of domestically produced goods.
I think your model depends on "workers" being the only people who are taxed, so if workers are being paid less than the cost of the goods they have to consume, the government + workers must be running at a constant deficit.
But you also tax employers and owners.
Inflation is a tool intentionally used by governments to quickly lower wage costs across the board. People at the bottom end can be subsidized, and productive people whose nominal worth just went up with inflation will negotiate for higher pay. Everybody else gets a pay cut.
Anything might be happening. Does anyone ever collect statements like this and see if they turn out to be true or not? Predictions like this show up in the news all the time and they’re pretty meaningless. They just slide out of public consciousness in a few days and nobody ever knows if they were right or wrong.
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We detached this subthread from https://news.ycombinator.com/item?id=43940978 and marked it off topic.
Arguably more useful than gold. But unfortunately perishable.
Mmmm delicious currency
has my vote
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You mean like the US President?
Aka a conflict of interest?
One of the grosser things the cryptocurrency mania did was convince people that you can only criticize things if you have a financial interest that aligns with your commentary. This is at odds with the very basics of journalistic ethics. Just patently absurd.
"Put your money where your mouth is" is a very old sentiment.
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The era of bitcoin should be coming right
Hasn't BTCs value always been strongly correlated with the strength of the U.S. economy?
I detect some sarcasm in OP's view of Bitcoin.
Thank you, you’re properly calibrated.
I've been reading this news headline since I was a teenager. I am over 50 now. Why is this time different?
I think this is the most incompetent administration USA has had in modern times, and it’s perhaps the second most authoritarian (next to WW2 era FDR). The current administration seems to be taking concrete steps to weaken USA’s financial dominance in a way that has not happened in the years since you were a teenager.
I suspect these forces will combine to significantly weaken the dollar.
The FDR administration two of the Treasury architects of Bretton Woods were Russian agents. One of them, FDR's chief economist, had his US passport and US citizenship revoked. He lived the remainder of his life in Columbia, presumably helping with their "monetary policy success".
Don't forget Nixon shock though. That was basically undoing Bretton Woods, but in an incompetent fashion that was amplified by low interest rate induced inflation, and produced "stagflation". https://en.wikipedia.org/wiki/Nixon_shock
The smartest guy we had was probably Lawrence Summers.
This too I’ve heard forever. Usually it’s voiced by alternating view points depending on if their guy is the occupant of the White House or not.
I sincerely question what you might mean by “heard forever” - much of what is being done here is so far beyond the pale of what has been done before that I can’t seriously understand how someone could look at it and say “ah this is the same as it’s always been, just standard partisan bickering”
If you sincerely question, then it should be easy for you to provide samples of what is "beyond the pale". There is no need for narrative building either, it serves no purpose other than aggravating the other person and making them smaller.
I think the “narrative building” is important here, since I am responding to an in-construction narrative.
Frankly I really struggle to see how someone who has been reasonably paying attention would need examples; they’re too many to mention.
Off the top of my head and in no particular order:
1.) Unilaterally and without the consent of congress invoking emergency powers to place broad tariffs on almost the entire world has never been done
2.) Frequently attacking and undermining the judicial branch, including by transparently punishing entire law firms that represent causes unpopular with the administration has never been done
3.) Brazenly abusing the office of the presidency to further personal financial gain by launching a meme cryptocurrency days before taking office has never been done
These are just some of the many examples, and that’s without going into the many things before Jan 20, 2025 that are clearly and undoubtedly unprecedented.
Except this is not true, unless you was reading some really weird far right stuff.
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I don’t think that “Sold us down a river” is not an appropriate summary of 100 yers of American executive governance.
Further, I don’t think there is any evidence that they are sincerely “trying.”
What exactly is the evidence of this? Debt/deficit? Seems like that's been going up and down forever. Because by every other metric the US economy was humming along until we decided to take a wrecking ball to it, to prevent future wreckage I guess?
Are they? None of the recent events point to any plan. It's pure and simple corruption. If by trying you mean trying anything without a clue, I can agree with that.
What do you think about the fact you can directly bribe the president through his memecoin or by buying dinners with him? That's "at least trying"?
Sometimes change for the sake of change gets you a circus on fire.
Trying to do what exactly?
Enrich themselves and punish their perceived enemies? After all, isn't that what government is supposed to be about?
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I don’t see how someone could draw a parallel between “pro-trump” and “anti-defecit.”
His administrations have overseen deficits balloon.
I think you are referring to the last administration when you use the term "balloon"
https://chatgpt.com/share/681e9040-edf8-8008-ae3d-370bb5a0d2...
We were probably doomed to see a major public debt crisis eventually when we cut taxes going into two extremely-expensive long wars under W Bush, the “probably” was upgraded to an “almost certainly” when we cut taxes again under Trump, then Covid happening removed the “almost” from that.
Now we appear to be trying to move the timing of the crisis from 20+ years out, to less than a decade out.
Federal Revenue actually went up after Trump Tax Cuts. I hope we can agree that there was some justification for a big spending bill in Covid time window. But after that, there was no justification IMO for the crazy spending that happened in the last 4 years.
Data: Table of Federal Revenue vs Spending: https://chatgpt.com/share/681e9040-edf8-8008-ae3d-370bb5a0d2...
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In other recent threads we’ve been attacked for “censoring” criticism of the administration, which we don't do (we've often intervened to restore posts that have been flagged/flamed by the community). But, nobody gets banned for making thoughtful comments pro or against the administration, and people are only banned for repeated breaches of the guidelines.
Fewer than 50% of people who voted, voted for him. He won a plurality, not a majority. (Of course fewer than 50% of eligible voters voted for him, but I’m assuming that’s not what you intended)
Less than 50% of the vote went to Trump, and you’ll find that he did very poorly among the well educated.
This is the first I’ve heard of any banning, but the facts are clear and frankly it makes sense that an echo chamber opposed to the president’s policies forms wherever well reasoned discussion happens among educated people.
Not true, I was saying conservatives in general wanted this and support this and no one banned me.
Some tho tried to argue with me, trying to make them sound innocent
I don't know about incompetent - there's plenty of smart people around Trump. The big problem seems to be that they all kind of disagree with each other and Trump ends up doing what the guy who talks to him most recently advises him to do.
The current "plan" seems to be to leave behind the largely-defunct WTO once and for all and build a selective free-trade alliance specifically excluding China, much like GATT was. I don't think this would really make the US "richer" (or any participant in the alliance) - in fact it would probably make us all a bit poorer. But it would make China much poorer which at this point is kind of the goal.
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...
But that's just today. Next week someone else might get Trump's ear before he speaks to the press.
Which "smart" person advised him to calculate tariffs based on trade imbalance for each country, including uninhabited islands? It's an utterly stupid idea that makes no sense at all.
If you read Miran's paper, the point of the tariffs is to bring US trade partners to the table to negotiate the alliance, so really they could be anything at all. It could have been 420% or 31.4159% or whatever, right across the board.
But the amounts are actually kind of clever and it reflects the fact that there's a more mature understand of trade barriers now vs when the WTO was negotiated.
How much do you know about trade barriers? Beyond tariffs, they're extraordinarily complicated and rely on regulations, trip-wires, and unequal application of rules.
Canada has "free trade" with dairy, but only on dairy imports up to a point, and after that heavy tariffs apply. But no one ever imports enough to incur those tariffs, so, that's free-trade, right? But actually, no one considers the Canadian dairy market worth the trouble without being able to import large amounts of dairy. So Canada can legitimately say that the trip-wire isn't applied, but it's a long ways from "free trade" because large importers are kept out.
China requires that foreign companies must partner with local companies to sell into the Chinese market. This effectively leads to a lot of technology transfers. It's not a tariff, but it's pretty clearly a "trade barrier" because companies that want to protect their IP are denied access.
In the 80's when US trade reps were negotiating with Japanese trade reps, the Americans would try to convince the Japanese that free trade was best for Japanese consumers. The Japanese reps would just respond, "how much do you want us to buy?"
The Japanese really didn't believe in free trade, and they were actively manipulating the value of the Yen at that point (it would be a few years still before the Plaza Accord), so they knew that just lowering tariffs wasn't going to make US goods sufficiently more competitive in Japan.
What's changed in 35 years is that the US doesn't really believe in "free trade" anymore either - not after all of the grief the WTO brought. The simple formulas are a no-bullshit approach to trade - the same ones that motivated those Japanese trade reps.
"I don't care how your trade barriers work - currency manipulation, tariffs, excess regulation, unequal rules - just fix your sh*t to reduce the trade imbalance."
> just fix your sh*t to reduce the trade imbalance
But why does each individual country's trade need to be perfectly balanced with the US? What are the odds of that happening for every single country? What are the odds of it working for every possible pair of countries?
I agree with you, but I also think you have this idea that trade is currently governed by largely linear and symmetric rules in Ricardian harmony, and that just isn’t the case.
Every industrialized exporting country in the world has optimized for exporting to the US, and there’s plenty of govt policy involved. Trade barriers are the norm, not the exception. If other countries optimize their trade rules, regulations, and money supply to optimize for a sizeable trade surplus with the US, they can change their policy to reduce the surplus.
The word “optimize” is being used a lot here, and I think it’s covering up the clear lack of a plan.
The USA exports plenty of goods, and in cases where there are these nebulous “trade barriers” being imposed, they should be investigated, discovered, publicized, and negotiated. That work was clearly not done here.
> I also think you have this idea that trade is currently governed by largely linear and symmetric rules
I didn't think that. Every country has tariffs and trade barriers to protect the industries they want to grow or protect. Even the US. Even before this administration or the last one, or the one before that. Sugar, for example.
> Every industrialized exporting country in the world has optimized for exporting to the US
Or maybe, more accurately, to earn US dollars. Possibly because of petroleum, which every country needs? I don't really know, I'm not an expert.
There is a surplus trade between the US and Australia and, yet our beef industry was called out as being imbalanced towards US beef.
… it was never about imbalances but protectionism and racketeering
Read the Miran paper. It’s not about imbalances. It’s about negotiating leverage. Australia in particular is going to be the most interesting case in the world.
Strategically, Australia is more sympathetic to the US, but your trade with China is many multiples of your trade with the US. If you join the US you’ll have to raise tariffs against China and if you don’t you’ll naturally fall into China's orbit. Interesting times!
The thing that I still don't understand is:
- These tariffs are permanent to rebalance trade
- These tariffs are temporary to use for negotiations
- US companies build factories
- Manufacturing comes back to the US
- China is left manufacturing what the US can't do locally
- China will dramatically up cost of resources US can't source elsewhere
- Nobody wins
- China waits out the storm
- Prices revert back to the mean
- Nobody wins
- Countries have divested US exports
- US has lost long term income
- US has lost soft power (and eventual hegemony)
- There's now a lot of pissed off people
I'd be keen to know your thoughts. And thanks - I just added the Miran paper to my Kindle, so thanks for the reference!
> Strategically, Australia is more sympathetic to the US, but your trade with China is many multiples of your trade with the US. If you join the US you’ll have to raise tariffs against China and if you don’t you’ll naturally fall into China's orbit. Interesting times!
As an Australian, I'd put the odds of Australia imposing strong tariffs on anyone at very close to zero.
After we gave up on tariffs about 20 years ago we've seen only growth. We are one of the few (only) western economy to have not had a recession in that time. It's not something we are likely to give up on easily. Both the major political parties have firmly re-iterated a "no tariffs" policy.
As for "moving towards China" - I don't see much evidence of that. Australia is firmly rooted in the West. But there has been a change. Right now, I think it's true to say Australia is wondering if Trump's USA is as firmed root in the West as rest of the OECD is. I guess it's possible Australia may drift away from the USA as a consequence, but it won't be towards China. And it won't happen in the short term as Trump's USA is viewed as a temporary thing that will end with Trump.
None of this has much to do with the topic the paper is discussing. Australia has also been on the receiving end of China's industrialisation, so I imagine most Australian's would look on with interest and sympathy at the USA's attempt to undo the worst effects.
The thought that there should be bilateral trade balance is ridiculous on the face of it. Vietnam and the USA _should_ have a trade imbalance.
That’s why all this talk of “forcing them to the negotiating table” is absurd.
Give up your whole notion of “should”. There is no “should”. The formula is for aligning incentives. It’s no longer enough for other govts to claim compliance with abstract requirements while clandestinely working against them - they need to be committed to helping importers succeed.
There is absolutely a “should.”
The only world where USA has a trade balance with Vietnam is one where USA isn’t importing as much as they “should” from Vietnam.
Negotiate about what? There isn't even a clear ask from the US side when they base everything on trade imbalances. Attempting to bring those to zero makes no sense and would do more harm than good. A country like Vietnam is not able to able enough expensive US goods to offset their exports to the US. Trying to squeeze these countries serves no purpose, and the absolute trade volumes with a lot of the smaller countries are so small that it's not even worth putting in the effort to attempt to negotiate anything.
So, what do they want? It is pretty clear by now that they don't even know. They started a massive trade war without a clear plan or way out, and now they are progressively walking it back and attempting to negotiate some quick, face saving deals like the UK one that barely does anything.
And if they really are worried about China, then they need allies to be able to isolate the Chinese and put enough pressure on them. Except, they have just alienated everyone who could have helped with that.
These are not the actions of some master strategist, but of someone who is in way over his head.
You're being downvoted because you're repeating trivially disproven, clear nonsense... which is unfortunately the official position of the whitehouse.
> "I don't care how your trade barriers work - currency manipulation, tariffs, excess regulation, unequal rules - just fix your sh*t to reduce the trade imbalance."
Except that that is NOT what is going on. Trump has been screaming something to this effect for weeks, but when it comes to actually negotiating something he tells world leaders that the tariffs are there to stay! He just did this with the Japanese PM, mere days ago.
Not to mention that many countries have actual, effective tariffs or "trade barriers" on the order of 1% with the US, which means that he can't possible negotiate anything that will improve things more than that.
Trump has no actual strategy. He can't possibly, because his stated list of goals are mutually incompatible. He also wants to eliminate income tax and pay for this with tariffs! He can't do that and return tariffs to 0% after countries capitulate.
He also keeps talking about bringing manufacturing back to the US (note that it never left, it just got more high-tech), but he's tariffing industrial machinery and robots imported from Germany!
This "policy" makes about as much sense as a first-year student's homework essay thrown together the night before it is due.
Anyone engaging in good faith debates is missing the point entirely. There is nothing of substance to engage with, as multiple world leaders are discovered.
PS: Trump apparently made 200 deals, more than the number of countries in the world, then 17, and now just 1 with the UK, where he reduced tariffs from 1% to 0.8%. Wooo! Winning!
Why did he tare up his own trade agreements that he signed himself during his first term?
Because Trump himself isn’t really that smart?
Like I said, he takes the advice of the last person who talks to him. He’s very suggestible. The best parts of his presidency, so far, have been when he follows the plan in project 2025, which you may not agree with, but is at least sane and coherent. The worst bits are when he adlibs, like the stupid tariff escalation with China.
Ultimately the biggest problem with Miran’s plan is that now that Trump is tearing up these trade agreements, no one has any reason to believe that the new one is worth the paper it’s printed on. He has no integrity and no one signs agreements with people who have no integrity.
> he takes the advice of the last person who talks to him
> Ultimately the biggest problem with Miran’s plan is that now that Trump is tearing up these trade agreements, no one has any reason to believe that the new one is worth the paper it’s printed on
And to apocryphally quote Game of Thrones:
> A Trump never pays his debt
Yep. Political opinions aside, these combined are his hamartia and so it will be interesting to see in the near future if he's able to maintain his reality distortion field over the GOP or we'll ever see Vance stab him in the back.
For the record, I'm not really sure how I feel about this plan. Free trade with China uplifted 700 million people (in China) from poverty.
OTOH, if you believe that China is basically Germany circa 1938 (and indeed, China in 2025 is the largest and most successful fascist state in all of history), then kneecapping China's economy makes plenty of strategic sense.
But we could always just keep buying Hitler's Volkswagens - that's the direction our incentive gradient points in. The US doesn't need to be the global police - we could always just let China have Taiwan, the Senkakus, the Ryukyus, etc...
I think what a lot of people miss when they talk about America being the “global police” is that almost always the law (so to speak) that the “global police” are enforcing is enforcing is the advancement of American interests.
And yet the near-term interest is to keep buying Volkswagens from Hitler.
If Trump’s anti-trade policies were targeted at China and China alone, this analogy would be applicable.
Read Miran’s paper.
I have read it, albeit not every single word.
The bond market, and blasé attitude towards national debt and default.
In the last 35 years, the US dollar has lost 60% of its purchasing power.
https://www.bls.gov/cpi/factsheets/purchasing-power-constant...
How does that compare to other major currencies?
This would be true if you left your $ in a vault or mattress ,which no one does. It also fails to take into account utility. How does one put a dollar value on a $10-30 GPT-4 pro subscription? Where does this fit in the 'dollar losing value' paradigm?
> How does one put a dollar value on a $10-30 GPT-4 pro subscription?
I’d estimate it at somewhere in the region of $10–$30, personally.
Exactly.
Modest inflation is good because it encourages investment.
Japan suffered fifteen years of deflation starting in the early 1990s. It wasn’t an economy anyone should envy.
Right, a burger and fries is $15 but a ChatGPT pro subscription is only $10, life is good!
2030: “Well a loaf of bread is $50 but a loaf of mostly-sawdust is $10 so we’ll sub that in the basket of goods as equivalent; the median house is $2m but girlfriend chatbots are too cheap to meter. Looks like yet another year of low consumer price inflation!”
I don't know why this example gets presented as absurd all the time. Food is a vital good. If you have a population with a certain calorie demand and don't have enough calories, in 3 months you no longer have the population.
Food: you literally die without it.
ChatGPT: nothing of value is lost.
Look at your iPhone and realize that in any desperate situations, the burger and fries gets more and more valuable.
Isn't that just 2.x% inflation?
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Gold. Which qualifies as a tier 1 asset in our Banking System.
Asset and commodity, not a currency today.
Wrong, Its literally defined as a tier one asset by our banking system.
Because this time is always different. There needs to be some accountability when pundits are wrong, just like in any other profession. I have read this prediction forever too. The dollar always has a recurring tendency of surging, typically when there is unrest or recession or any other reason, or even no reason.
Also, the dollar falling also does not make Americans poorer, as the implicit unit of wealth is the US dollar (e.g. the Forbes 400 list). Americans measure their net worth in dollar, not Euros. This would only matter if traveling oversea and purchasing power falls due to falling dollar. Otherwise, it does not matter.
Perhaps you’ve also followed politics since, oh, about 2016 or so?
You're not alone, someone in ancient Rome probably read a clay tablet saying the denarius was doomed. Centuries later, a merchant in Spain might've heard whispers about the decline of the Spanish real, and a banker in London likely scoffed at predictions of the pound’s fall from grace. Empires always feel eternal, until they’re not. History doesn’t repeat, but it does hum the same tune. Maybe this time isn’t different, just... next.
This time it isn't we will fail in our efforts to maintain a strong dollar. It's, US policy is no longer attempting to maintain a strong dollar.
We have an administration actively attempting to tank the US dollar as global reserve currency?
If you think this is a crazy thing to suggest, consider that there is a faction in the US that wants this to happen. They see a strong US dollar as harmful to manufacturing and the working class.
Great, Europe can use the yuan instead
Because the USA is rapidly losing it's place on the world stage.
Everything has been in a headline at some point. Perhaps all that experience is hindering your ability to discern what really matters. Too much noise from your past.
Because we have a complete clown show of juvenile seniors in the White House and Congress who follow an Orange Glow Clown who is actively doing the worst financial mistakes he could possibly doing without just flat out deliberately blowing up American banks and allies all over the world
Crypto is the new dollar, and it is very dollar-centric.
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USD Stablecoins could be driving real demand for USD, no?
"The total transaction volume for USD-pegged stablecoins in 2024 was approximately $27.6 trillion, based on industry reports from CEX.IO and other sources."
No. Stablecoins only exist because fiat <-> crypto trading is a massive pain. Nobody wants to own stablecoins, they want easier transactions. And if the USD becomes less popular, people will switch to, for example, EUR stablecoins - there's nothing special about the dollar here.
On top of that, transaction volume is meaningless. Those $27.6T could be $27.6T held in escrow being traded once, or $1 held in escrow being traded 26.6 trillion times. You can't derive USD demand from transaction volume.
You can certainly estimate the amound of USD held as StableCoin Collateral:
"The total market capitalization of USD-pegged stablecoins exceeds $220 billion, with over 99% backed by fiat currencies, predominantly the U.S. dollar." https://chatgpt.com/share/681e95fe-4308-8008-ab25-61be94a418...
RE: Nobody wants to own stablecoins, they want easier transactions. Agree but that does not mean anything. Stablecoins seem to be solving a problem, and there is not evidence of any traction by any currency other than USD.
So this phenomenon definitely runs counter to the conventional intellectual wisdom that USD is in decline.
I thought tax evasion was the use case for stablecoins.
Tax evasion could certainly be a use case until govt's sort out the implications. But the lasting use case I think is - fast and cheap transfer of money, anywhere.
Disclaimer: I have never used stablecoins myself.
Only if the other major world currencies take active (and successful) steps against stablecoins being backed by them.
If they don't, stablecoins would presumably make it even easier to convert holdings into stablecoins backed by another currency (as there is no new account to be opened etc.) as soon as the sentiment on a given world currency shifts.
According to your argument and the article of this post, there should already be prominent stablecoins backed by other currencies. Yet there is not such thing AFAIK. Reason is simple. USD is the common denominator for people the world over. Almost everyone know what a dollar is, and that is reflected in the dominance of USDT and USDC. And since this is a relatively recent phenomenon, it goes counter to the narrative of the decline of the US Dollar.
> USD is the common denominator for people the world over.
Yes, currently. This article is about a hypothetical in which this stops being the case. My argument is that stablecoins would not stop such a trend, and could possibly accelerate it.
I understand the hypothetical trend being mentioned, and I would even agree with it in absence of stablecoins. See, today, if China & Russia want to trade, they may trade in Ruble or Yuan. Ruble or Yuan don't have to be universally accepted for them to trade. But if I am transacting in stablecoin, I don't want to use anything that is not universally accepted from the get-go. Otherwise, I might as well use Ruble or Yuan. So, even if in theory the stablecoin could be backed by any currency, I am not going to use just any stablecoin, only the one most widely accepted.
In other words, I think Stablecoin is winner-take-all, and USD has already won.
> I am not going to use just any stablecoin, only the one most widely accepted.
But why?
Due to the existence of decentralized exchanges, all stablecoins are effectively equally widely accepted. Some blockchains even make it fully transparent by handling foreign exchange in the background for every payment where it's required, and for the ones that don't, most common wallets provide a "swap" feature directly in their UI.
Given that, why would people not hold the one that preserves their purchasing power best and that they have most trust in?
RE: why would people not hold the one that preserves their purchasing power best and that they have most trust in?
That is exactly what they are doing right now - USD.
But for arguments sake, what is the emerging alternative?
I'm actually converting to believing in bitcoin, and that usa politicians/financiers have used the dollar as a way to side step wide ranging problems in the USA, at the expense of currency devaluation. Bitcoin is a backstop, a way to step outside manipulated currency.
Just remember, the same things that make Bitcoin attractive are what make it really easy to steal. Namely that it has no "men with guns" to back it up and no government bank to make you whole.
It's also easy to declare it illegal, which will stop it being used for anything most people want to use currency for.
Bitcoin is not treated like a currency anymore, given recent trends. It's acted upon more like an equity. In short, it's seemed to tend to follow the stock market. Whatever that means to you, YMMV.
Bitcoin is a backstop, a way to step outside manipulated currency.
This seems like a phenomenally ironic claim to me. You're giving up government manipulation in favor of rampant individual manipulation and theft.
How are we supporting or encouraging theft? When the state increases inflation and the supply of money on a whim, they directly steal value from the little people and funnel it to the big people.
That's not possible with crypto.
That's just ignorance. In crypto "little people" is literally everybody, the "currency" is run by a handful of whales (largely quasi-criminal exchanges and casino mobsters), who have a track record of colluding to manipulate the market and hike up fees. And no, you cannot vote those people out of office. How is that _any_ better?
People frequently lose a significant amount of money due to hacking, fraud, or extortion with no legal recourse. This is not where you want your grandparents parking their life’s savings.
If someone said literally the same thing op said, but about cash, would you have the same response?
My credit card was skimmed and charged $2000 in the US a couple of months ago. I blocked the card from my phone, files a dispute and the charges were reversed.
The most annoying part was updating all my linked services, but I lost no money.
If someone literally robs the bank I have an account with, I also lose no money even if they actually steal some from the physical vault.
Is there a reason you're responding to this post about cash with a corporate credit anecdote?
What is the equivalent website to https://web3isgoinggreat.com for banks, and what is the relative %age lost/stolen on a daily/weekly/monthly basis? I'll bet it's WAY higher for crypto.
Crypto just has pump and dump schemes on a practically regular basis, but I guess that's completely different because the way it funnels value is slightly different.
It drives me nuts how many people support crypto for the right reason, and then miss the last step and support Bitcoin instead of Ethereum. Bitcoin is an enormous resource sink, on the scale of fiat system inflation. It doesn't have to be! The system works without it!
In the world right now, how many transaction per second in $USD are ongoing? 1000? 100,000? Visa can handle 20K/s, IIRC. Bitcoin can handle what, 3-7 per second?? Yeah, that'll scale up to "the world currency".
Bitcoin becoming the world reserve currency does not necessarily imply it also becoming the primary payment currency, nor would it somehow imply fully reserved banking.
Satoshi would probably shudder at the thought of Bitcoin-backed fractional reserve currencies, but that's about the only thing he could do about it.
There are many reasons to poo-poo on Bitcoin, but, please pick a valid one. The transactions-per-second problem has been solved for over a decade and is widely implmented:
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> It will still be first in global finance, because nothing is poised to fully replace it.
There are many countries with their own currencies, and all it takes is one of them to back it with gold, or a basket of commodities, and create infrastructure around it, and now there is something more attractive than the dollar to denominate debts in. That's all it takes. Everyone just wants to conduct business, get paid, buy food, etc. If the dollar is inflating away 10% every year, and there's something that fluctuates less than that, it's not exactly a hard choice. Especially if the choice is just a drop down in an app.
What may be more concerning, is it's not going to be a western democracy that sets up a stable-coin backed by commodities. They move too slowly, it's going to be an authoritarian regime that can move fast and wants to advance it's significance in the global economy.
Let's say some random country follows your advice and decides to go back to the gold standard – is that going to convince people globally to use their currency? Probably not.
Because even if the currency is on the gold standard today, what stops the country's government from switching back to fiat tomorrow and pocketing all the gold? Or, gradually doing so by introducing restrictions on gold redemption and slowly tightening them over time?
Whether a currency is fiat or backed, it is ultimately a statement that you trust the government which controls the currency to take good care of it – and in general, it is easier to have that trust with democracies than authoritarian regimes. And this is part of the argument for fiat currencies – if trust in the institutions ultimately counts for more than what the currency is backed by, why do we really need the backing?
Which is why replacing the USD is so hard. I think even if the US starts to go really downhill, people will be looking at currencies like the EUR, JPY, GBP as an alternative. If the IMF allowed private parties to use SDR as a currency – a move the US has always blocked as a threat to the USD, but in a global crisis the US might feel it has no choice but to change its mind – that might become a viable alternative global currency. CNY may become important in trade with China and its close allies, but who outside of China trusts the Chinese government enough to use CNY as a long-term store of value? Only as a riskier bet in a diversified portfolio including safer options.
Translated, this "all it takes is one of them to back it with gold, or a basket of commodities, and create infrastructure around it" amounts to "all it takes is to re-create the western finance system at scale and make it work better for a couple decades without falling back into developing world problems of corruption and instability."
Though we are doing a particularly spectacular job of messing that up this year.
The backing the US dollar has is the strength of the world's only superpower. It doesn't matter if it's backed by gold or commodities, what matters is whether people believe there's an entity backstopping the currency that can guarantee its stability. That means an entity strong enough to be fully independent, and governed by the rule of law, so that if you're holding a bunch of that currency you can be confident it'll be worth as much tomorrow as it is today.
It doesn't matter if Russia or China peg their currencies to gold reserves, no one trusts them keep the currency market-stable, because they're autocracies. And if Canada pegged its currency to gold or commodities, it wouldn't matter because it's not strong enough to maintain its independence by force, if it came to war.
The EU and the Euro might be a replacement for USD in terms of a currency backed by a big enough, stable enough entity to make it that trustworthy, but that's a long way in the future. Though, as US Treasuries lose their preferred status, European instruments will likely gain from that.
So if the USA was to lose its status as the world's only superpower, or if the world loses faith in its ability to back the dollar, or if the world is unconvinced that the US is governed by the rule of law, then that wouldn't bode well for the US dollar's position as the world's reserve currency, right?
Presumably, for the dollar to be the world’s reserve currency the world needs to have sufficient excess reserves to be able to buy lots of US Treasuries.
If there were some event or events that causes a dramatic contraction in world trade and set off financial crises around the world, many countries may be unable to buy treasuries in the same quantity.
A potentially scary thought exercise may be to figure out what the collective reduction in treasury purchases needs to be before it all blows up. I have no clue what that number may be.
But I have a feeling that if the dollar ceases to be the reserve currency, it will not be because the world has decided on something else.
Your second and third options, absolutely. For the first, it's a matter of whether the sovereignty of US could be credibly threatened militarily, which would is hard to imagine without a long, long fall in its military power. It's not the superpower status, it's the absence of credible military threat against it. Canada or Mexico (or Finland, or Vietnam or North Korea) can't guarantee the absence of instability by their military heft alone.
I posit that if the US loses their status as the dominant superpower, WWIII will swiftly follow.
> no one trusts them keep the currency market-stable, because they're autocracies.
Oh boy, I have some news about US and its trust. China seems more trustworthy right now, which is kind of achievement in the US side.
USA cant be trusted to ve stable nor to keep its contracts. Whether Euro collapses into the same state remains to be seen.
> It doesn't matter if it's backed by gold or commodities, what matters is whether people believe there's an entity backstopping the currency that can guarantee its stability.
Commodity backing is a mechanism by which a country can ensure the stability of its currency across different political administrations. It's a kind of social technology like a constitution or super-majority requirement that creates stability. It's a plus that the US is stable power, but you can bet that the dollar will inflate year over year. That is its own form of instability.
> Commodity backing is a mechanism by which a country can ensure the stability of its currency across different political administrations.
Historical data contradicts the idea that you get stability on the gold standard:
* https://archive.is/https://www.theatlantic.com/business/arch...
* https://www.moneyandbanking.com/commentary/2016/12/14/why-a-...
This is the logical conclusion, the rest of the whole debate about US monetary policy today is window dressing.
If this was true some country would have risen since the 70s when we completely left any semblence of that. Gold backed currency as the best path forward died in the 1800s
gold makes a horrible currency, very volatile. No one wants to settle debt in gold due to the volatility, number one goal of currency is predictability. You should be able to guess about how valuable a currency will be 10 years from now. This requires fiat.
Why does this really matter so much?
I think what matters more is national wealth, wealth per capita, and their growth rates. This is an interesting list: https://en.wikipedia.org/wiki/List_of_countries_by_total_wea...
It matters because it’s the main reason why the US is able to borrow money so cheaply and why the US doesn’t get a junk bond rating.
I thought the reason we are able to borrow cheaply, and ratings, is basically due to credit-worthiness, and not dollar as a reserve dominance. After all, during the debt ceiling crises, that's when our credit worthiness and ratings were downgraded, but it had nothing to do with the actual currency.
It has everything to do with the actual currency, if people weren't buying dollars at the rate they do to do commerce the US could never run the debt it does, it would have crushed any other country.
It also means Americans get to buy stuff from all over the world cheaper than anyone else, the moment this goes away inflation for imported goods will eat into people's salaries, there will be less investment as it will be risky to invest in a country in a debt crisis and folks will find out what it is like to live in Argentina for the past few decades.
The quality of life loss in the country if this happens will likely get people to stop talking about the great depression.
Knowing you will get paid back (i.e. credit worthiness) is part of it, but another part is that the currency holds its value, and the global demand for dollars is an important part of that. If the global demand for dollars decreases, then borrowing is more expensive because you need to offer a higher interest rate to entice people to purchase bonds, because they have other more attractive options to store/grow their money than US bonds.
One way to think of it is that the US benefits from the current world order by essentially taxing the rest of the world to pay for its spending by devaluing their currencies relative to the dollar.
Yes and no. US can just print more dollars and pay its debt, which it is doing since Nixon. It doesn't need to default on its debt ever, as long as USD is the reserve currency. Of course the rate rhis happens is a delicate thing. Too quick devaluation would upset the debtors. Though they own so much of US debt (like China owns 2 trillion dollars or sth) that they are incentivizes to play along.
Most US debt is still owned by the US though: 79% is owed to domestic holders[1]
[1] https://www.pgpf.org/article/the-federal-government-has-borr...
At the end of the day, somebody out there has to have a US Dollar and feel comfortable lending it to the US Government. The reserve currency status of the dollar means more people need it, which means there’s more supply of dollars to borrow without causing currency collapse.
As it turns out, when every country holds US dollars for use in global finance, it makes it very easy for them to park US dollars in American financial assets
Where else would they park it? The stock market is being automatically pumped by 401k auto purchases and similar investment strategies that amount to basically a tax with lipstick to subsidize the market. I don’t think any other nation is pumping their own assets to this scale. Maybe china but they don’t exactly let in outsiders to milk a good cash cow I wouldn’t think.
Also, the primacy of the American banking system allows the US to use it as a cudgel against foreign countries to make them do do all sorts of things. If some other currency is the global reserve, we lose a fair bit of soft power.
There are a lot of reasons we like being in the position we’re in, and I don’t think we know how bad losing it will be, if we do, but I think it’s unlikely to be positive. (Clearly our economists have largely agreed or we’d have gotten here sooner.)
The controller of dollars gets to mint new dollars, making existing dollars less valuable.
Other countries who use dollars do not have that privilege.
That is effectively a 2% annual tax on the entire world, paid to the controller of the dollar.
And we're going to blow it all up for no reason.
The people who are blowing it up are doing it for a reason. You can disagree with them (I largely do) but there will likely be some upsides. I don’t know if they’ll be worth it, but all the economists said the trade war with China was a bad idea in Trump’s first term but has come around to it by the time Biden got into office.
I wouldn’t say I’m optimistic but it’s possible it may work.
I think we have a madman at the helm leading sycophants who won't challenge him.
Is it not possible that the madman is actually hiring people who think these things and he agrees with them? You give the mad man more credit than I do if you think he’s the idea guy.
Literally nobody is holding dollars in cash. Everybody holds them via bonds which return more than inflation.
> wealth per capita
It matters a lot to those of us among the capita who hold our wealth in US dollars.
It doesn’t matter, it’s just a clickbait headline.