Comment by gigatexal
2 months ago
Insane this administration wants pimp the US out to the highest bidder and let the crypto weirdos run the world. If we ever lost the reserve currency peg treasury bills will spike and it’ll be impossible to fund the government. We spend 7T every year and take in 5T in taxes. This admin is gutting the IRS and banking on tarrifs which are just taxes. So … without the ability to keep interest rates very low because everyone wants our debt …
My understanding is that it has happened. The oil market was tied to the USD. The BRICS have now implemented a payment system as robust as SWIFT system. Oil is now being paid for using that system.
Panics about how oil is being traded in non-USD terms are as old as the internet and, in all likelihood, even older than that. You can find usenet slop from 20-30 years ago about the petro-euro and the "tehran oil bourse". Here's an old site that is/was daily panics about the fall of the dollar, from 15-25 years ago. http://www.engdahl.oilgeopolitics.net/
Nobody is panicking. BRICS has gotten steadily larger and is gaining as an alternative banking system. This is competition. This just requires more thoughtful strategies.
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> Oil is now being paid for using that system
The petrodollar hypothesis has been a myth since the 1990s. With America a net oil exporter, it’s an entirely stupid model to keep running.
I wish you would elaborate how being a net exporter relates to it being a myth. I don't see the connection. My point is that global trade of which oil is a major component needs to settle the books nightly. If the books aren't reconciled in an efficient manner trade has to slow down.
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By forcing oil to be bought with dollars, the USD was pegged to oil demand, especially from developing nations whose consumption was growing.
Also SWIFT being a means of control of movement of funds.
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Are you trying to project this unto Trump when the Fed is doing everything it can to oppose his measures?
I'm only the crypto weirdo guy asking.
So gutting public institutions and the tarifs do not work as trump intended because the fed opposed it? What did they do achieve that? (Sorry if i come across as trump deranged.)
Have you ever thought it doesn't matter what the fed does to try to minimize the damage.
Trust needs to come from the top, and there is none there right now.
> Are you trying to project this unto Trump when the Fed is doing everything it can to oppose his measures?
The Fed isn't opposing Trump's measures, on the contrary, the Fed is doing everything to accommodate as much of his policies as possible without wider damage to the economy.
It's Trump who doesn't understand the risks of unhinged tariffs and low interest rates which he demands because of his personal conflicts of interest.