/biz/ - Business & Finance

It’s not based on the domestic military, it’s based on the foreign deployed military forcing countries to purchase oil in dollars


The problem is it’s a self-reinforcing feedback loop, and once it’s broken (by the fed hyperinflatinf it’s currency) it will collapse

This just gives me even more reason to hate it.

>>15470778
>forcing countries to purchase oil in dollars

China needs US dollars for its own internal survival.

The entire global trade infrastructure is based on and creates demand for the US dollar.

>>15470815
China wants oil and cars. It doesn't need your worthless token.

>>15470778
It's got nothing to do with what currency countries purchase their oil in. That was important a few decades ago, but financial markets have now become so sophisticated that it doesn't make any difference now.

Fiat's value ultimately comes from taxation, which will aways create a demand for it. That's why a lot of libertarians hate it despite its overwhelming superiority to other monetary forms. They're so opposed to the idea of taxation that they'd rather switch to something that doesn't theoretically rely on it, despite the economic carnage (and higher taxes) that would result in!

Meanwhile the long term value of currencies (in timescales of decades) is driven by countries' trade balances, and the short term value is driven by speculation.

>>15470899
Military dominance keeps speculation favorable.Your military is now out of date and you don't make anything.

>>15470899
>despite its overwhelming superiority to other monetary forms

>>15470899
>It's got nothing to do with what currency countries purchase their oil in. That was important a few decades ago, but financial markets have now become so sophisticated that it doesn't make any difference now.

What happens if the other countries decide to no longer trade in USD? There are far too many US dollars out there thanks to the Federal Reserve printing out so many of them. The US dollar will certainly lose its value by the significant drop in usage.

>>15471304
If everyone abandoned the USD completely, that would be very damaging to America. But that would also be detrimental to everyone else, so it will not happen.
But if someone sells oil in another currency, that would be trivial.

>There are far too many US dollars out there thanks to the Federal Reserve printing out so many of them.
False. The Federal Reserve only printed enough to cover the shortfall of the private sector printing* too few to balance the deflationary effect of automation. If there really were too many US dollars out there, the inflation rate would be much higher. And if a significant drop in usage does occur, the Federal Reserve could just respond by printing fewer of them.

*In this context, "printing" means borrowing into existence; I'm not suggesting the private sector is literally printing money.