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by cjbgkagh 79 days ago
The petrodollar confers a huge advantage to the US, which is the whole point of it. It soaks up liquidity and allows the US to export inflation which allows it to be in the insanely profitable business of printing money. An argument could be made that this is corrupting and economically distorting to society resulting in a net negative but there is no guarantee that the same corruption would undermine China in a timely manner. I think the effect would be rather muted provided that the US remains world hegemon but if the US would lose the petrodollar and credible force projection at the same time we will shift from the current looting stages of collapse to the free for all stage of collapse. Or put another way, from a managed decline to an unmanaged decline.
1 comments
d3ckard 79 days ago
It's not advantage, it makes for artificial demand for your currency, which completely screws up all the relevant metrics and makes you unable to actually inflate the currency when getting less competitive.

It's resource curse on steroids.

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cjbgkagh 79 days ago
We are assuming a resource curse on steroids, the ability to sell the ‘resource’ is used to distort the economy and pay for the cost of running an empire. The US chooses to do this because it is controlled by those who benefit from this not for the long term benefit of the country.

Saying it’s not an advantage is to assume those in control want to have manufacturing in the US, while such noises are made there is very little action beyond capricious crony capitalism tariffs that no normal business can possibly rely on.

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d3ckard 79 days ago
They very much want to have manufacturing, since it’s a requirement for war. They just don’t realize it. Plus, it is a conflict between all the extra money to spend and long term state welfare.
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cjbgkagh 78 days ago
These two statements don’t mesh “They very much want” and “They just don’t realize it.”

It seems both you and I agree that manufacturing is an essential component to war-fighting and the health of a nation, but I think it is safe to say that you and I have effectively no control over what the US does.

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