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Former Treasury Official Warns of Complete Economic Implosion if US Dollar Loses Global Reserve Currency Status


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  • Platinum Contributing Member

Think there is a bit a fear mongering going on with all this.  I keep seeing the prediction but no reasoning behind why it would happen. 

Makes it harder for us to borrow.....good.   Makes it harder for us to impose sanctions....could be good as well. 

https://www.cfr.org/backgrounder/dollar-worlds-currency

What are the costs?

The heightened demand for the dollar increases its value, but this comes at a cost. A stronger currency makes imports cheaper and exports more expensive, which can hurt domestic industries that sell their goods abroad and lead to job losses. During times of economic turmoil, investors seek the safety of the dollar, which squeezes exporters at an already difficult time. “When there’s a big international role for your currency, you lose control over it,” Meg Lundsager, a former U.S. executive director at the IMF, told NPR. Some experts argue that the cost of the dollar’s dominance to manufacturing-heavy regions such as the Rust Belt are too high and that the United States should voluntarily abdicate.

Some research has shown that the dollar’s outsize role in international trade can also have negative consequences for the global economy. As a country’s currency weakens, its goods exports should become cheaper and thus more competitive. But because so much trade is conducted in U.S. dollars, other countries do not always see this benefit when their currency depreciates. This phenomenon is likely to amplify the economic crisis caused by the coronavirus pandemic, IMF researchers said in a July 2020 report, as emerging and developing economies are unlikely to gain from the drop in their currencies’ value.

The United States is also harmed by currency manipulation—when another country holds down the value of its currency to maintain a large trade surplus. A country that is running a trade surplus can face pressure to let its currency appreciate, making its goods more expensive and curbing exports. It can instead keep the value of its currency artificially low by accumulating dollar reserves, hurting U.S. exporters in the process.

In 2012, when global reserve growth was high and many countries were intervening heavily in the foreign exchange market, economists C. Fred Bergsten and Joseph E. Gagnon of the Peterson Institute for International Economics (PIIE) found that foreign currency manipulation [PDF] caused the U.S. trade deficit to balloon by up to $500 billion per year, resulting in between one million and five million lost jobs.

China has been among the worst offenders, though most experts agree that it has not been heavily intervening to hold its currency down in recent years. Across Asia, however, currency intervention is on the rise again amid the coronavirus pandemic, as countries that have enjoyed relatively strong recoveries have been adding to their reserves.

 

Edited by Highmark
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4 minutes ago, Highmark said:

Think there is a bit a fear mongering going on with all this.  I keep seeing the prediction but no reasoning behind why it would happen. 

Look at who wrote the article and where it was posted from. Doesn’t hurt to stock up on gold though. 

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Just now, spin_dry said:

Look at who wrote the article and where it was posted from. Doesn’t hurt to stock up on gold though. 

Oh Foxnews loves their fear mongering.   They do it as well as anyone else just on different things. 

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15 minutes ago, f7ben said:

Fuck the USA , I hope it collapses tomorrow and faggot ass grey hair boomers all starve to fucking death. 

Boomers carry the majority of the wealth and can more easily pivot from currency to currency, practice asset adaptation, or simply pick up and move from this smoldering ash of a nation. Many many options. Boomers that have planned well won’t be the people starving. 

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13 minutes ago, spin_dry said:

Boomers carry the majority of the wealth and can more easily pivot from currency to currency, practice asset adaptation, or simply pick up and move from this smoldering ash of a nation. Many many options. Boomers that have planned well won’t be the people starving. 

Hey retard , boomers can’t do anything except microwave a fucking hot pocket or pot pie. You’d die in a week if shtf, you’re physically unable to do anything useful. Literal dead weight 

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