all 5 comments

[–]magnora7[S] 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (4 children)

When this has happened in the past, either Russia or China dumping a lot of US treasuries, US banks will sometimes create entities in Belgium that will soak up all those Treasury Bonds, to the tune of billions, just to prevent that extra liquidity from screwing the price of the Treasury Bonds up.

Now with Russia dumping all the US treasuries bonds they have, this is surely putting tons of financial pressure on the US, who will have to struggle to keep the treasury bond rates, and thus the US dollar, stable.

There's quite a few triggers that could lead to a hyper-inflationary scenario with US currency. Dumping US T-bonds like this is one way. Another way would be for countries to move away from the US petrodollar system, where the US forces trading of oil all around the world to happen in US dollars, which keeps demand for the US dollar high, which allows them to print more and more without inflation hitting the US.

But once this system ends, all these dollars will come crashing back all at once, and that's a recipe for very swift hyperinflation.

This all has been known for decades, but it seems the moment may finally be coming to fruition... China still holds a lot of US Treasury bonds though and the petrodollar system is still 90% in place. But things are changing.

[–]d3rr 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (3 children)

I hope Trump's Chinese tariffs are Iranian agression will accelerate these changes. My dream is that a crash of USD will significantly change our foreign policy for the better. It's expensive being the world's police terrorists.

[–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

Yes a change of foreign policy would be nice. I'm worried it'll only make it more aggressive though, out of desperation. And then once "Pax Americana" is over, various factions like China and Russia will have flare ups all over the world in proxy wars, vying for control of pieces they were only restrained from taking because of US global military power.

Everything is such a balance... I don't like that the US has military bases in 186 countries around the world, and the US does some awful and manipulative stuff. But on the other hand, it has shut down the potential for huge huge wars as the US is so dominating. Just like Britian was during Pax Britiania, and Rome during Pax Romania. I guess it ebbs and flows like that.

Next up, Pax Sinica? It seems like the Chinese are in a strong position, but they're also in a huge housing bubble too and the government seems too brittle and rigid to run the world. The transition period will certainly be interesting as the next order becomes established as the US order dissolves.

[–]d3rr 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

Yeah good points. The decline of the US MIC could be lengthy and lead to more deaths than when it was dominant. "Pax Americana" is interesting... a "period of relative peace and stability". It doesn't seem that way to me, but I guess it is since we're not openly fighting any major players.

[–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Yeah... like combat deaths per year have been low compared to WW2 and WW1. But American agencies have overthrown 53 governments since the end of WW2. So it's a relative peace. Relative to the hells of intense world war. So not great either way. I think an era of peace can come, but only after the world culture deeply understands the dangers and insidiousness of the military-industrial complex and their profit-motive for war, and the mechanisms by which they capture governments.

Short of that miracle it's probably just going to keep being echos of this same refrain... But who knows. There's a million ways things could turn out