alt Hacker NewsIn simple terms, if you're the Philippines and you're selling fish to Russia, would you rather have Rubles or US dollars? Way back in time, US Dollars were one to one based on gold in fort knox. Right? But no country has a gold reserve now. Most countries have a dollar reserve to back the paper money they print themselves. This is the main reason the dollar hasn't collapsed already.
[edit] someone who graduated college with an economics degree please come and correct the following vague and possibly totally wrong perceptions I have as a subject of the American empire /edit
The value of a country's money is backed by a combination of how much they produce and how much foreign currency and assets from other countries they hold (euros, dollars, gold) they have on reserve. Only the US gets away with having no actual reserve ...because a combination of military might and cultural strategic dominance has allowed it to BE the reserve for everyone else. This is why it somehow makes sense for America's economy to be based entirely on consumption rather than production.
OP is right. Whichever superpower controls the levers of global trade is the one that can sell debt and enforce the currency regime.
Some of us think that it's a lucky thing that it's been America, rather than a more authoritarian power, who had held that control for the past 80 years. Europe would not have recovered from WWII otherwise, and be living behind an iron curtain. Anyone who controls global trade after America is likely to be worse from a human rights perspective.
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> Anyone who controls global trade after America is likely to be worse from a human rights perspective.
Next thing you know they might start sending innocents to megaprisons in El Salvador and lose track of them.
> if you're the Philippines and you're selling fish to Russia, would you rather have Rubles or US dollars?
I would have assumed the fisherman in the Philippines would like to be paid in Philippine peso.
> The value of a country's money is backed by a combination of how much they produce and how much foreign currency and assets from other countries they hold (euros, dollars, gold) they have on reserve.
I think the simplest way to think about it is simply supply and demand. Currently there is constant high demand for USD due to its reserve status as you said (supply is also growing btw , deficits, printing of money etc). If demand goes down, there will be too much supply so the Dollar will naturally weaken against other currencies. As far as I know the fact that one USD equals 0.95 Euros (or whatever) is simple market forces of supply and demand.
> Only the US gets away with having no actual reserve
Money is a credit. The US didn't get away with anything. Being a reserve currency has its advantages but the US is holding these liabilities with assets inside the country itself: https://en.wikipedia.org/wiki/List_of_countries_by_net_inter...
> In simple terms, if you're the Philippines and you're selling fish to Russia, would you rather have Rubles or US dollars?
I can easily see why Rubles would have been unacceptable several decades ago, but nowadays with the speed of financial markets why not set the price in the seller's currency and at payment time the buyer can trade enough of their currency for the seller's currency on the currency markets to get the payment?
> But no country has a gold reserve now.
Supposedly Zimbabwe's new currency ZiG is gold based. Not sure how many people would trust them though. They don't have the best experience with currency...
So how about a decentralized currency that no one controls? Preferably digital. If only we had the technology ;-)
I'm sorry, but the US has an abysmal human rights record.
It has a per capita incarceration rate lower only than Rwanda, Turkmenistan, Cuba and El Salvador (which is a prison subcontractor _for_ the US).
It has started more wars than any other country since the second World War.
It is the only country to have used a nuclear weapon in anger.
It has a death penalty.
It supports numerous regimes with abysmal human rights records, Israel, Egypt and Saudi spring to mind, but that's just `head(3)`.
It has bombed it's own population, shot its own students, had racial segregation in living memory.
Given its scale and reach, I'd suggest that the US is, in fact, the world's greatest human rights abuser.
I'm struggling to think of a country with a worse record.
Absolutely crazy when we see countries like China not be close to as bad as the most evil empire ever, the US. And yet somehow the thought is the US isn’t the worst with human rights.
It seems that other currencies have their own peculiarities; for example, when Russia sold oil to India for Indian rupees (to show that they don't want dirty American currency), they found out that you cannot transfer them outside of India or convert; you need to spend them locally.
I wonder can China use this to make Yuan a new world currency (we all buy Chinese things anyway) or they cannot do it or doing this is not beneficial to them?