How Will the Economy Improve?

[ZiprHead]

I would actually support a plan with small tariffs used to finance local factory subsidies. I agree with bringing manufacturing back to the states.

New factories, the path to the future? And who's gonna work them, with Trump deporting every last person who knows how to work an honest job and is willing to do it for crap pay and no union?

Fuck Trump and his anti immigration policies.

 

[RVonse]

Which key performance indicators? What specific indicator(s) are you referencing?

By looking at the indicators in that table, you can get a pretty good picture of what a country’s debt risks are. You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing (which I won’t reiterate because it would be too much of a digression). From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status. You can also see that the Japanese central government has very large debts (which is a big risk) that are denominated in its currency (which mitigates the risk) and relatively large FX reserves (which reduces the risk). You can see that China has relatively big debt (which is risky), its debt is denominated in its own currency (which is risk-mitigating), it has relatively big reserves (which is risk-mitigating), it has a currency that is not widely accepted around the world as a storehold of wealth (so there isn’t much support from that), and the attraction of and usage of its capital markets by foreign investors—while it was moderately large—is falling fast (which lessens the protection it would get from having more). You can also see that Singapore, Norway, and Saudi Arabia currently have good income statements and balance sheets that have much more in liquid assets than they have in debts, and you can get that sort of picture for the other countries shown.

Using those and other previously described indicators, I measure both long-term risks (which I view like measuring the long-term risks of having a heart attack) and short-term risks (like measuring the heart attack actually happening and its damage) for both central governments and central banks. While short-term risks are often due to long-term vulnerabilities becoming manifest in problems (like a person with high long-term risks of having a heart attack actually having a heart attack), this isn’t always the case. For example, a pandemic (like COVID) could happen, or a war could break out, even if the underlying long-term vulnerabilities are low, which would lead to greater short-term risks that will show up in this risk gauge rising. My measures of both the long-term and the short-term risks are shown below. Please know that while these are good indicators, they, like most leading indicators of someone having a heart attack, are very imprecise for previously explained reasons.
https://x.com/RayDalio/article/1890097572095955002/media/1890095414642098176

 

[Swammerdami]

I'm sure that the bystanders are bemused by this peculiar "debate." I will add Mr. bilby to my Ignore LIst and assume that he will do the vice versa. But meanwhile I find it satisfying that he was unable to refute my reprimands without both abandoning his prior claims, and misrepresenting a simple sentence.

English lesson. What is the difference between the following two sentences?:

• The girl, who had green eyes, smiled at me.
• The girl who had green eyes smiled at me.

I'll Spoilerize the answer to encourage participation.
In the first sentence, 'the girl' already has an antecedent, or perhaps was the only girl in view. The remark about her eye color was like a parenthetical comment.
In the second sentence, the subordinate clause defines which girl smiled at me. Presumably there were two or more girls but only one had green eyes.
I don't know what the professional jargon is for this distinction. Here, we'll simply call the subordinate clause in the first sentence a "non-intrinsic modifier."

Note that "intrinsic value" in this context means "market value independent of any government fiat."

Is this sentence unclear? The qualifier "in this context" is a euphemism for "let's clarify this even more and try to pound understanding into someone's head. And I did hope for improved clarity with the NON-INTRINSIC modifier. Alas, it just confused the confusee even more!

You've been ranting about this for months or years. If you can't heed my words, why not try Google?

Silver is considered "intrinsic money" because it has value inherent to the metal itself, rather than being backed by a government or other entity. This makes it a form of commodity money, and unlike fiat currency, it has been used as a medium of exchange and store of value for centuries.

No mention whatsoever of the vital and central importance of the role of government, which can apparently also be played by an "other entity"...

Fiat money is, by definition, "money" if and only if a government says it is money. Intrinsic-value money, e.g. gold coins prior to 1931 or tobacco in the early Virginia Colony, have inherent worth whether endorsed by a government or not. I remain astounded that a bright boy like bilby can't wrap his head around this.

(It's true that precious metal coins might be valued at a slight premium over an equivalent weight of the non-minted metal. This is because the minting marks attest to the purity of the metal and thereby obviate the inconvenience of any assay.)

Or  Fiat money:

Fiat money is an alternative to commodity money, which is a currency that has intrinsic value because it contains, for example, a precious metal such as gold or silver which is embedded in the coin.

Still no mention whatsoever of your "Government" requirement...

You still don't want to admit that fiat money is issued by governments, while gold and silver are mined from the earth?

Any alleged mention of a '"Government" requirement relative to the term "intrinsic value" was in a non-intrinsic clause (see above). You seem to have trouble with elementary ideas, so I explain them carefully, with non-essential modifiers.

(I avoided the term "commodity money" which can cause confusion, e.g. wampum money in the Colonies which was treated like fiat money.)


Or https://www.yieldstreet.com/resources/article/what-is-commodity-money/

Commodity money refers to a physical item such as gold or silver, that possesses intrinsic value, whereby its value transcends means of exchange.

STILL no mention whatsoever of your "Government" requirement...

You and I BOTH fully understand that fiat money is issued by governments, while precious metals have values determined by supply and demand. Your insistence that a definition of commodity money or intrinsic-value money requires some "government assent non-essential" clause shows that you've been reduced to grasping at laughable straws. Santa Claus's assent is also non-essential; and neither is the Pope's. For your complaint to be sensical, the dictionaries and I should have mentioned them also! My mention of "government" as a non-intrinsic modifier was to help YOUR understanding.

 

[Swammerdami]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

 

[Elixir]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

Hold on - let me ask my dog.

 

[RVonse]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions, incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now. Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia. Their real fears that they might be next on a short list for the US seizing their dollars as will. Biden was certainly not the first US president to abuse our reserve status currency but what he just did has been about the worst.

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use. That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

 

[laughing dog]

Which key performance indicators? What specific indicator(s) are you referencing?

By looking at the indicators in that table, you can get a pretty good picture of what a country’s debt risks are. You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing (which I won’t reiterate because it would be too much of a digression). From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status. You can also see that the Japanese central government has very large debts (which is a big risk) that are denominated in its currency (which mitigates the risk) and relatively large FX reserves (which reduces the risk). You can see that China has relatively big debt (which is risky), its debt is denominated in its own currency (which is risk-mitigating), it has relatively big reserves (which is risk-mitigating), it has a currency that is not widely accepted around the world as a storehold of wealth (so there isn’t much support from that), and the attraction of and usage of its capital markets by foreign investors—while it was moderately large—is falling fast (which lessens the protection it would get from having more). You can also see that Singapore, Norway, and Saudi Arabia currently have good income statements and balance sheets that have much more in liquid assets than they have in debts, and you can get that sort of picture for the other countries shown.

Using those and other previously described indicators, I measure both long-term risks (which I view like measuring the long-term risks of having a heart attack) and short-term risks (like measuring the heart attack actually happening and its damage) for both central governments and central banks. While short-term risks are often due to long-term vulnerabilities becoming manifest in problems (like a person with high long-term risks of having a heart attack actually having a heart attack), this isn’t always the case. For example, a pandemic (like COVID) could happen, or a war could break out, even if the underlying long-term vulnerabilities are low, which would lead to greater short-term risks that will show up in this risk gauge rising. My measures of both the long-term and the short-term risks are shown below. Please know that while these are good indicators, they, like most leading indicators of someone having a heart attack, are very imprecise for previously explained reasons.
https://x.com/RayDalio/article/1890097572095955002/media/1890095414642098176

Neither the federal debt nor deficit are generally regarded as key performance indicators of current or future economic performance since debt is based past economic performance and the deficit is a mostly past policy inertia .

 

[Toni]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions, incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now. Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia. Their real fears that they might be next on a short list for the US seizing their dollars as will. Biden was certainly not the first US president to abuse our reserve status currency but what he just did has been about the worst.

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use. That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Your understanding of economics and the world political situation seems to be informed by Russia, Breitbart and pure ignorance.

 

[RVonse]

Which key performance indicators? What specific indicator(s) are you referencing?

By looking at the indicators in that table, you can get a pretty good picture of what a country’s debt risks are. You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing (which I won’t reiterate because it would be too much of a digression). From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status. You can also see that the Japanese central government has very large debts (which is a big risk) that are denominated in its currency (which mitigates the risk) and relatively large FX reserves (which reduces the risk). You can see that China has relatively big debt (which is risky), its debt is denominated in its own currency (which is risk-mitigating), it has relatively big reserves (which is risk-mitigating), it has a currency that is not widely accepted around the world as a storehold of wealth (so there isn’t much support from that), and the attraction of and usage of its capital markets by foreign investors—while it was moderately large—is falling fast (which lessens the protection it would get from having more). You can also see that Singapore, Norway, and Saudi Arabia currently have good income statements and balance sheets that have much more in liquid assets than they have in debts, and you can get that sort of picture for the other countries shown.

Using those and other previously described indicators, I measure both long-term risks (which I view like measuring the long-term risks of having a heart attack) and short-term risks (like measuring the heart attack actually happening and its damage) for both central governments and central banks. While short-term risks are often due to long-term vulnerabilities becoming manifest in problems (like a person with high long-term risks of having a heart attack actually having a heart attack), this isn’t always the case. For example, a pandemic (like COVID) could happen, or a war could break out, even if the underlying long-term vulnerabilities are low, which would lead to greater short-term risks that will show up in this risk gauge rising. My measures of both the long-term and the short-term risks are shown below. Please know that while these are good indicators, they, like most leading indicators of someone having a heart attack, are very imprecise for previously explained reasons.
https://x.com/RayDalio/article/1890097572095955002/media/1890095414642098176

Neither the federal debt nor deficit are generally regarded as key performance indicators of current or future economic performance since debt is based past economic performance and the deficit is a mostly past policy inertia .

This post was further clarification Swammerdami wanted from my original post referencing US trending comparing to China over time. So a debt amount or trade imbalance might not be useful by itself. But for predictive purposes the derivative of debt (or its delta) is very predictive especially when graphed against debt by other peer competitors.

And right now those performance indicators indicate a horrible direction. I can not find it at the moment but I have seen in the past where Ray Dalio actually graphs these performance indicators against China versus US over time.

 

[RVonse]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions, incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now. Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia. Their real fears that they might be next on a short list for the US seizing their dollars as will. Biden was certainly not the first US president to abuse our reserve status currency but what he just did has been about the worst.

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use. That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Your understanding of economics and the world political situation seems to be informed by Russia, Breitbart and pure ignorance.

If it is, it is not by design. I do admit that my sources of information is probably biased and faulty though. Mostly because I am too cheap to pay for media that might be better.

 

[bilby]

Intrinsic value is value a thing has regardless of the holder's ability to swap it for something else. So a US hundred dollar bill has the same intrinsic value as a monopoly money hundred dollar bill, in that both are a piece of paper that could be used to wipe one's arse, or start a fire, or write a short note upon (though a similarly sized blank piece of paper would be more vsluable for the latter purpose).

Extrinsic value is the additional value a thing had due to the holder's ability to swap it for something else. Extrinsic value arises because society contains feedback loops, in which people can be persuaded to swap the thing in question for more and more other things, on the basis that the increase in value will continue - the thing is valuable because other people value it, and other people value it because they see it as valuable. The initial seed for such feedback loops can be the acceptance of the thing in payment of tax (as with US dollars, for example); Or its appearance and prettiness (as with diamonds or tulips).

The error of believing extrinsic value to be intrinsic is just the same error made by all religionists. They like something, so they declare it sacred, and denounce anyone who points out that it's just a book, or a statue, or a flower, or a lump of soft yellow metal.

Gold has enormous extrinsic value, and likely will for the indefinite future, because adherents of its religion are legion. But anyone who thinks it has intrinsic value should ask themselves whether they would wish they had some gold, if stranded on a desert island.

The acid test for intrinsic value is whether a solitary person with no exchange interactions with others would want the thing in question. It's situational - if you have a beach-buggy or a generator, gasoline might be more intrinsically valuable, while if you don't, it is much less so. Ultimately, intrinsic value pits a floor under the collapse of a speculative bubble. If people stop valuing dollar bills as dollars, their value as paper stops them from becoming truly worthless.

Ironically, gold might be more intrinsically valuable if it wasn't used as a store of massive extrinsic value (via the greater fool theorem); It could be more widely used in electronics, for example, if only it were not so expensive. It's intrinsic value is therefore hard to determine, but is unquestionably a tiny fraction of its market value. It's more valuable than paper, just because metal that doesn't readily corrode has several good uses.

One of the things that makes anything a useful form of money is a low intrinsic value, coupled with a high extrinsic value. As such, gold makes a fairly okay choice to use for money, but fiat money is better.

Of course, if we redefine the word "intrinsic" to mean "extrinsic properties that have exhibited extremely long life and high durability", then everything @Swammerdami says about gold is true - but hugely confusing to anyone who uses "intrinsic" to mean common what it commonly means in English.

It certainly confiued the crap out of me; I genuinely thought he believed gold to have most of its current market value regardless of access to a market or exchange. Which would be utterly absurd. Unless he can eat gold.

 

[Toni]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions, incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now. Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia. Their real fears that they might be next on a short list for the US seizing their dollars as will. Biden was certainly not the first US president to abuse our reserve status currency but what he just did has been about the worst.

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use. That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Your understanding of economics and the world political situation seems to be informed by Russia, Breitbart and pure ignorance.

If it is, it is not by design. I do admit that my sources of information is probably biased and faulty though. Mostly because I am too cheap to pay for media that might be better.

I did not mean to imply that you were knowingly putting forth Russian propaganda but there are much better and less biased sources of information. I don’t know much about monetary theory but your assumptions seem wrong and so do the conclusions.

 

[Don2 (Don1 Revised)]

Which key performance indicators? What specific indicator(s) are you referencing?

By looking at the indicators in that table, you can get a pretty good picture of what a country’s debt risks are. You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing (which I won’t reiterate because it would be too much of a digression). ...

As Trump destroys alliances and guarantees that we will not be buying that much goods from other countries the frequency of use of our currency about the world will diminish.

A tariff-induced meltdown of U.S. equity and bond markets has been spooking financial circles. But stocks and Treasuries aren’t the only assets on the fritz—the U.S. dollar is also falling, with analysts warning of a global “de-dollarization” in response to the Trump administration’s frenetic foreign policy decisions.

...

Even as markets tank and bond yields rise, the dollar is down to a three-year low this week. In a more typical environment, markets would be “hoarding” dollars as a safe haven from the other noise, says Saravelos, and the dollar would be strengthening. But what Trump has unleashed on global markets is far from typical. Now, other countries are losing faith in the U.S. and actively selling down U.S. assets, possibly upending the dollar’s global reserve status.

The U.S. dollar is losing its status as a safe haven. What does that mean for investors? | Fortune

The dollar is taking a beating as Trump’s tariff policies cause widespread uncertainty, threatening its status as the world’s reserve currency.

fortune.com

 

[Toni]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions, incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now. Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia. Their real fears that they might be next on a short list for the US seizing their dollars as will. Biden was certainly not the first US president to abuse our reserve status currency but what he just did has been about the worst.

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use. That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Your understanding of economics and the world political situation seems to be informed by Russia, Breitbart and pure ignorance.

If it is, it is not by design. I do admit that my sources of information is probably biased and faulty though. Mostly because I am too cheap to pay for media that might be better.

I understand needing to be economical but it is poor economy to knowingly settle for what is inferior if it leads to faulty results,

As I type this, there still exist libraries which often carry publications that the public may borrow or read on site.

Also, many news sources allow X number of free articles. I’ve found that using a private browser helps one access more than the usual number of articles without actually paying for them. It can be cumbersome and it is less efficient, but it’s possible. I’ve done it.

Caveat though: it has led me to actually purchase a digital subscription….

 

[laughing dog]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

@RVonse -- In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions, incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now. Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia. Their real fears that they might be next on a short list for the US seizing their dollars as will. Biden was certainly not the first US president to abuse our reserve status currency but what he just did has been about the worst.

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use. That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Your understanding of economics and the world political situation seems to be informed by Russia, Breitbart and pure ignorance.

If it is, it is not by design. I do admit that my sources of information is probably biased and faulty though. Mostly because I am too cheap to pay for media that might be better.

There are public libraries. Please consider availing yourself of their services.

 

[Swammerdami]

You can see that the US has very large central government debts (which is a big risk) and low liquid savings/reserves (so it has little protection from them), but its currency is the dominant world reserve currency (which is a great mitigator of the risk), which the US is undermining by a number of things it is doing ... From all this, you can see that its financial well-being hinges on it maintaining its existing reserve currency status.

In your opinion

• Will it be good or bad for the USA if the dollar's status as the dominant world reserve currency is maintained over the next four years or so?
• What effect do you think Trump's behavior will have on that status?

It is obviously an advantage to our federal government to remain the dominant world reserve currency. I'm not so sure I would agree it has been so great for its middle class citizens though. In any case, to best maintain reserve currency:

1) The rest of the world has to have faith the US will not impose excessive and proliferate sanctions,

Do you consider TARIFFS (with or without Trump's deceptive "retaliatory" prefixed) to be form of "sanctions"?

incentivizing those other (BRIC) governments NOT to use our dollars. On that score I would give Biden the latest total failure for imposing ridiculous and ineffective sanctions on Russia. His Russia sanctions caused huge justifiable concerns from the other BRIC's nations desiring another reserve currency. You can actually measure this by how every central bank of the world is hording gold right now.

I found a good website for displaying Gold Reserves and FX by country and by fiscal quarter. (I lack Excel so it's inconvenient for me.)
I might post some of the interesting facts that turn up.
Will you help? Tell me which countries' gold purchases concern you.

The big Western countries (U.S., U.K., Germany, France, Italy) have NOT been buying gold.
Big East Asian countries (China, Japan, India) are "playing catch-up" but are still WAY behind the West in the size of their gold hoards.
Of the seven countries with largest reserves (FX+gold), only one has Gold/(Gold+FX) above 12%. That #1 is the USA at 75%. (This is as of Q4 2024 with Gold=$2609/oz. Note that US "FX" is misleading: Most world FX is US$, but $0 are included in US FX! )

Russia was a BIG buyer of gold during Trump-45 (683 tons); much less so during Biden-46 (37 tons).
(Another tidbit that intrigued me: Among the five countries that IMF(?) considers to have unusually high reserves (FX+Gold) relative to their economies, the largest in population is ... Thailand! (mostly FX, not gold))

Even if you are a country or an ally getting along with the US, Biden gave valid reason to wonder if dollars should be used in their future.... knowing what Biden just did to Russia.

Which major countries are considering naked aggression similar to Russia's criminal war against Ukraine?
Do you support barbos' thinking about that war?

2) The US has to remain big enough in world trade to justify using a currency that even makes sense for the world to use.

IIRC, about a month ago you discussed the "Triffin dilemma" and noted that the U.S. trade imbalance SUPPORTS reserve currency status.
Books do balance by the way: Foreigners buy U.S. stocks (etc.)
Be aware that focus on stats WITHOUT full perspective can misinform

That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Who's "pretending"?
Anyway, as per your desire US consumption (whether using debt or not) may indeed be reduced by Trump's behavior, if that leads to stagflation and erodes dollar dominance.

 

[Swammerdami]

OMG. I will wait 48 hours before putting @bilby on ignore. Assuming you, @bilby , want this Ignore ASAP, stop telling lies about me.

Of course, if we redefine the word "intrinsic" to mean "extrinsic properties that have exhibited extremely long life and high durability", then everything @Swammerdami says about gold is true - but hugely confusing to anyone who uses "intrinsic" to mean common what it commonly means in English.

I explained over and over and over and over and over and over and over and over and over and over EXACTLY what I meant by "intrinsic worth money." I gave TOBACCO and cigarettes -- lacking in "long life and high durability" -- as examples of such money in an (apparently vain) effort to pound understanding into your head.

Is the word "intrinsic" ambiguous? You betcha! I offered "inherent" as an alternative and asked you for suggestions. You couldn't be bothered by anything except to continue your pointless and inane rant against the word I used. Yesterday, I pointed to a Wiki page and other sites that use the word exactly as I do.

It certainly confiued the crap out of me; I genuinely thought he believed gold to have most of its current market value regardless of access to a market or exchange. Which would be utterly absurd. Unless he can eat gold.

I see you now use the past tense. Does this mean that finally you understand how I used the term "intrinsic value money"? Wow!

BTW, have you ever explained why the price of "worthless" gold soared when it was no longer used as money? Are you going to join with RVonse and blame the impending Fall of the Dollar on central bank's gold hoarding?

 

[bilby]

Does this mean that finally you understand how I used the term "intrinsic value money"?

Yes, it does; Indeed, I just explained that at length, along with a clear explaination of why:

a) Your (ab)use of the term means the exact opposite of what an English speaker would expect; and

b) My objections to your (mis)characterisation no longer apply, now that you have finally clarified that you are using a word to mean its exact opposite.

I shall not bother holding my breath while I await your apology for wasting everybodys time.

By the way, you are also mischaracterising my position by implying that I think gold is "worthless"; I explicitly said that I understand both its high (extrinsic) value, and the source of that value.

Gold lacks significant intrinsic value (using the mainstream meaning of "intrinsic"), for the reasons I already explained. You can, of course, confidently state that this is wrong, if we were to use your bizarre oppositeworld definition of "intrinsic" to mean "to do with the opinion of a wider market, rather than any property of the substance itself".

You are welcome to use words to mean whatever you like. If you define "dog" to mean "cat", that's your right.

But you shouldn't anticipate being understood, or even being thought non-crazy, should you make that choice.

Now, over to you for the last word; I am bored with the whole matter now, but you doubtless have further unjustifed condescension to throw up in a futile effort to mask your embarrasment, so knock yourself out.

 

[RVonse]

That is what the Trump administration is at least trying to fix though that outcome admittedly remains to be seen. But in the final analysis, the US has to actually BE a major GNP producer and not just a currency manipulator who pretends to produce using debt to consume.

Who's "pretending"?

Anyone who borrows to consume is pretending. The neighbor buying a flashy car on credit is pretending to be rich. Because in order for that individual or nation to be able to consume, someone else had to actually produce that item for consumption.

Genuine people (like movie stars) who produce but also can afford to live high off the hog are not pretending though. In that same vein, countries like Singapore, Norway, and China who produce more than they consume are not pretending. Those are governments who will live long and prosper, out living pretender (borrowing debtor) nations (like the US)who fall into the ash of defeat. A debtor nation like the US has to fix its foundation or it will soon realize it can not consume more than it produces forever. Despite the crowing of the democrats, DOGE is precisely focused on fixing the spending part of our problems. But the tariffs are an important revenue boost component too, especially if other nations are cheating.

 

[TV and credit cards]

Despite the crowing of the democrats, DOGE is precisely focused on fixing the spending part of our problems.

It'll amount to diddly squat unless Congress goes after defense contractors and allows the DoD to function in the manner the active duty military does.
If you've ever wondered why there is always bipartisan support for defense spending...