Politics
Out of context: Reply #15359
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- TheBlueOne0
deathboy the primary factor which never seems to get discussed or overlooked is that the US dollar is the global reserve currency, which makes it a special case. to say "live within a range" makes sense on a scale of economics to an individual or family or even a state like say Greece which has it's economy priced in another currency.
But the world trades in dollars - so therefore it behaves and works differently than a currency which is limited. When you ask " who exactly give us this 2.4 trillion in credit" it is in fact the global economy which does since everything is priced in US dollars for trading purposes. This gives the US dollar incredible freedom and power, but also applies soe limitations as well - in terms of forcing the US to do some fiscally strange things to maintain it's position. It's a bit of a Red Queen game. And printing more money with less inflationary pressure is something a global reserve currency holder can do.
One component of US dominance and it's ability to fund wars, etc. comes from the very special case/role that it's currency performs currently. I find it utterly amusing that the party in the US that a) believes that the US has a unique role in world history and b) loves to start expensive foreign wars is doing it's best to utterly ensure that the US global influence will decline dramatically because of it's attempt to crash the system.
It's a matter of scale. My favorite example is that the physic of flying in one sense are the same, but the engineering neccessities are different depending on circumstances. i.e. a biplane and a supersonic plane use the same things - lift, thrust, etc. but you cannot apply one design to the type of flight that the other does or it will crash - thus asking a family to spend beyond it's means (at supersonic) for too long and it will obviously crash. Ask a economy based around the global reserve currency to behave like a biplane and it will crash.
It is a special historical case, and one that will not last forever - countries with global reserve currencies can have hard or soft landings - re: how their home economies are effected after losing that status. The British Pound was the most recent reserve currency and they actually managed that situation comparitely well. But the Brits slowly dismantled their empire over a few decades and it was a process they were cognizant of.
These asshats in the US are pushing their foot on the accelerator pedal thinking the upsides will last forever, which they won't. (The US$ won't maintain it's reserve currency status forever - but there's a difference in losing it over the next 20-40 years versus in the next 5) But if this goes to Aug 2 without a deal the US will be in for a the start of huge hard landing which will utterly befuddle the average american as the global pricing in dollars starts to accelerate towards collapse and alternatives sought.
It's NOT like a minimum wage farmer in China buying a 500k house. It's as if the minimum wage farmer's strawberries were what everyone traded in in China (everything priced in strawberries e.g.) and thus the price of the strawberries were controlled in a sense by him.
Sorry if that muddles things more than it makes clear. There are many critics of this fiat currency system and call for a "return to gold". These same people seem to overlook the equally horrible economic/social problems using a finite source of currency as if wars, depressions, etc. didn't occur on gold based economies, albeit with different mechanisms.
- You could always look at wikipedia:
http://en.wikipedia.…TheBlueOne - but you shouldn't by any means stop thereTheBlueOne
- yea still a bit confusing, definitely have to do some reading on it, but gives me a direction were to go.********
- yeah, took me a long time to wrap my head around it myself...TheBlueOne
- To really blow your mind look what Brazil did: http://www.npr.org/b…TheBlueOne
- thx i'll check it out also when i get a chance.********
- You could always look at wikipedia: