[aloha2436]

America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe...

[rapind]

> someone too stupid to understand

That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.

[IAmGraydon]

The fact that he has done countless things that are harmful to the US and not a single thing that is in the country's best interests tells me all I need to know. Either he's aligned with an enemy or he just hates the country and wants to destroy it.

[RobotToaster]

Or he and his associates can make a lot of money out of crashing the economy and buying up assets for pennies.

Never attribute to malice that which is adequately explained by greed.

[rapind]

Yeah I think the most obvious explanation is looting and ego (to explain the ballroom and putting his name everywhere). I also think there's an awful lot of foreign influence around him and his family and friends before and during his term(s). I mean if I'm a foreign actor seeing your leader's keen interest in looting, I'll probably make him an offer or two...

[salawat]

>Never attribute to malice that which is adequately explained by greed.

Not considering greed a blatant demonstration of malice has to be the single dumbest thing our society has normalized.

[berdario]

I think this is denialism of the profit that the USA extracts with its crimes.

The most recent example include the profits from Venezuelan oil:

https://www.bbc.co.uk/news/articles/ckgn7p7g79wo

https://venezuelanalysis.com/news/trump-administration-manda...

That money is held in a US treasury account. In February the estimated price from the first 50 M barrels was $2.8bn... with the USA+Israel bombing of Iran, the price of course would have increased since.

> It is not clear what portion of the revenues from the sale - which analysts expect to raise about $2.8bn (£2.1bn) - would be shared with Venezuela.

But let's assume that the USA is going to retain "only" 5% of it: that's still 140 million $ of money flowing in, in perpetuity.

Not to mention that having control of the whole 2.8 billion $ also buys further room for loan and deals made on the USA's preferred currency and preferred terms... Or the expropriation of CITGO.

Of course, that money flowing in will be mostly in the pocket of Trump itself, of the billionaires surrounding him, of the military industrial complex (you have to replenish the weapons stockpiles, after all) and all of the federal contractors (that includes most of the FAANG!)... Lots of people in the USA "labor aristocracy" are going to see material benefit from it.

Ultimately, there's still going to be lots of poor people in the USA who won't be able to afford insulin, and there's going to be lots of resentment abroad (not only in Venezuela)... And one could split hair that Maduro's kidnapping is in the USA's interest, but not in its "best interest" (or similarly trying to argue a no-true-scotman for the definition of "USA's interest")

Not to mention, but it's not only Trump's: it's everyone who he surrounds himself with: JD Vance, Pam Bondi (until a few days ago?), Pete Hegseth, the military generals that didn't get kicked out by Hegseth, etc.

They're all complicit, and they're all going along with him.

And of course, if the Democrats will return to power in the next few elections, I don't expect them to relinquish the leverage and resources that Trump got them, just like Obama and Biden didn't pull out of Afghanistan for several years.

Of course, we saw with AIPAC and JStreet that US lobbying is seeing tons of money from abroad: but those are two different faces of the same medal: the oligarchs and the bourgeoisie have common interests across different countries, and the USA is definitely influencing politicians abroad as much, if not more, than moneyed interests abroad are influencing politicians in the USA.

The problem is not only Trump

[mr_toad]

> That money is held in a US treasury account. In February the estimated price from the first 50 M barrels was $2.8bn... with the USA+Israel bombing of Iran, the price of course would have increased since.

That’s chicken feed compared to the amounts that have been wiped off the stock markets.

[AngryData]

I mean on their own those are nice numbers, but you also have to add in the extra military costs of blowing crap up and it starts to seem like chump change to me. We just had a 1.5 trillion defense spending proposal.

[9dev]

> that's still 140 million $ of money flowing in, in perpetuity.

Oh hey, that's roughly enough to cover for Trump's new renovation plans!

[rapind]

> The problem is not only Trump

Trump, if the US makes it through this administration, might be a boon longterm if it wakes up the populace. The blatantly obvious corruption and grift might just do the trick. Those are some pretty big ifs though.

[hax0ron3]

I disagree with probably the majority of Trump's main policy ideas, but I think a strong case can be made that his immigration policies are in the country's best interests. Not all of them, but as a whole.

[idiotsecant]

Immigrants are the lifeblood of America and always have been. Reject them and you lose what literally made America great.

Do you think, on average, a native born American is more useful to America than one who moves here?

[hax0ron3]

Currently, probably yes. If American immigration policy was reshaped to favor immigration of people from high-performing societies, then it would be the opposite.

[idiotsecant]

What color are the people in these 'high performing societies'? I think I have a guess.

Did 'high performing societies' build the railroads? Mine the steel? Forge it? Did 'high performing societies' build the culture we enjoy today?

Here's a secret that you should know but evidently life has never taught you: people who have to struggle to survive are generally smarter, more vigorous, more honorable people. They understand the toll in sweat and blood that the wrong decision takes. They are exactly who we need.

We don't need a nation of pampered trust fund man-children, turning up their delicate noses at everyone not a member of a 'high performing society'.

[InsideOutSanta]

Immigration in general is good for a country, and relatively uncontrolled immigration is one of the reasons for America's prior economic strength.

Even if you disagree, Trump's policies have not been effective at anything, apart from creating headlines.

These same headlines have secondary negative effects for the US, like hurting international tourism.

[Larrikin]

Why do you think that?

[hax0ron3]

Illegal immigration brings masses of people from more corrupt, disordered, and perhaps lower average intelligence societies into the US in conditions that make it hard for even the ones who are capable of assimilation to assimilate. It also constitutes a massive flouting of the law for the benefit of business, which sets a bad precedent and lowers public trust in institutions. It also contributes to rising racial tensions that encourage the growth of ethnic tribalism and weaken trust in liberalism.

[avidiax]

If you really want to get rid of illegal immigrants, you don't need ICE doing sweeps.

Just make them unemployable. Setup an effective employment eligibility system, and require that employers verify the workers in the system before any payment over $100. Collect biometrics from workers and verify against IRS records. Employers that flout this get fines of 10x wages paid, up to N% of revenue, and maybe jailtime for owners and managers that knowingly violate.

What we have in the U.S. is a bunch of people and politicians loudly decrying illegal immigration and illegal employment, but enjoying the fruits of that illegal employment while paying a fraction of what legal workers would have to be paid.

There's huge appetite for a police state against the little guy, and no appetite for that same police state against business owners and managers.

[9dev]

> perhaps lower average intelligence societies

This is nothing but racism. Intelligence is distributed evenly across humanity.

On an unrelated note, how high do you think the rate of American citizens with literacy level 1 is?

[throw0101c]

> Illegal immigration brings masses of people from more corrupt, disordered […]

"When Mexico sends its people, they're not sending their best. They're not sending you. They're not sending you. They're sending people that have lots of problems, and they're bringing those problems with us. They're bringing drugs. They're bringing crime. They're rapists. And some, I assume, are good people." — Donald Trump, June 16, 2015

* https://archive.is/https://www.washingtonpost.com/news/the-f...

Never mind that illegal/undocumented immigrants have lower crime and incarceration rates than native-born Americans:

* https://www.cato.org/blog/why-do-illegal-immigrants-have-low...

* https://www.pnas.org/doi/10.1073/pnas.2014704117

[rapind]

What blows my mind is how liberals and progressives (of which I count myself a member) don't see to care that this is the policy that pushed Trump into office. Without it he would have flopped with just his MAGA core.

All you need to do to fix illegal immigration is to go after the employers. You know, actually enforce the laws. Streamline it. Declare it a national emergency and put more onerous requirements on businesses to verify legal status. Send ICE to businesses to investigate them instead of kidnapping people.

You'll probably find out pretty quickly that agriculture is extremely dependent on illegal labour, but so be it. Bring it into the light and have an actual debate. The current approach is all for show, or at worst, intimidation.

[rootusrootus]

The dems spend a disproportionate amount of effort courting tiny voting blocs (e.g. trans) and immigrants unable to vote at all. It is frustrating.

But it does seem to be what their base wants. Keeps the higher moral ground without the irritating responsibility to govern.

[yosefk]

While we're at it, when did central banks start to buy lots of gold and under which POTUS? Could it have something to do with the freezing of hundreds of billions of some sovereign assets?

[gpt5]

There is something awfully bad happening to the internet, including Hacker News.

It seems like rage-baiting, polarizing titles and vibe based comments are being upvoted, with no interest in the facts. For example, in this case:

1. The growth of the gold reserve in comparison to US Treasuries have very little to do with growth in gold acquisition, and has everything to do with gold more than doubling in price in a year.

2. To make it even worse, gold has since fluctuated in value, and treasuries overtook gold momentarily just a week ago. These price fluctuations has nothing to do with geopolitics.

3. Central bank buying of gold has been trending down in the last year, down 21% from 2024. So far in 2026 it's been going even lower.

4. Gold owned by central banks was higher than US treasuries in the 90s (this is mentioned in the article at least).

This is a little meta - but the thing that bothers me is that this low quality discussion like in this thread is spreading everywhere with the same mechanism - bring politics and polarization into every place, no matter how tangentially related it is.

[washadjeffmad]

Side stepping a little, but the Twitter and Reddit exoduses brought in a lot of people with established culture and communication dynamics at discrete periods. I considered writing an extension that collapses comments of accounts based on keywords and creation date, but ultimately decided that was regressive.

I think it's important to recognize how much the world has changed in a short period of time. HN was created when SV was unique, a large fraction of the globe was not on the internet, and web tech was new and novel. Everyone was still figuring out how to handle outreach and networking (I was positive it was a scam when the Omiyadar Network cold contacted me - "who does that?"). Today, I meet kids who made their first commits at the same age I was just trying to find friends in town who had computers. Now, our advanced is their common, and they're growing up primed for engagement-forward networking and self-promotion.

HN isn't a calcified relic of the era when it was created, it's a product of its people. We're seeing the new generations connecting from all over the world at a time when the foundational HNers are fading away, and sometimes when there's friction with my expectations of civility and etiquette in discourse and it feels like the noise is drowning out the signal and I yearn for the smaller, quieter days, I take that as my queue that I need to step back and appreciate that this is their time, too.

[bdelmas]

I think there are less experts on HN than years ago or a decade ago. And the culture of HN is getting slightly changing to a more Reddit culture every year.

It’s too bad because it’s the only place I know where you have experts in tech but also in other industries. And where I got very interesting discussions.

[kilroy123]

I think a larger problem is that a lot of YC folks just use Bookface instead of HN.

[whamlastxmas]

People have been claiming HN is turning into Reddit for over a decade to the point it's in the guidelines to not make the comparison

[mancerayder]

There's unfortunately someone who is posting some HN articles in a hackernews subreddit. I think that's contributed to the rise of Mr. Hot Take One-Liner Mic Drop, that posts something with 20 one liner replies, always at the top. If that continues happening I'm out.

One interesting factoid, since I can remember on HN, if you ever likened a conversation to Reddit they'd downvote you to grey. There are two ways to read that - Reddit is fine, don't criticize it; Reddit is embarrassing, don't diminish the conversation by comparing us to it.

[j-bos]

Thanks appreciate the broader context in this post. As to your meta comment, besides bots, I think a lot of people are facing a great deal of pain and fear. They're emotional and even in hn a critical mass has switched to reading and writing with their gut. Good vibe project, analyse the level of emotionality in comments over time, I'd bet it's gone vertical in the past few months.

[LeChuck]

Also, never explicitly stating their point. Only asking leading questions.

[ptero]

I agree with your "sensationalism is bad" take; especially as meaningful, non-incendiary comments now often get quickly downvoted for viewpoint, not tone (IMO downvoting should cost 0.1-0.3 karma). But not with "nothing to see in CB gold holdings fluctuations" view:

R1. But central bank gold holdings are rising organically, and partially at the expense of US treasuries. CB gold holdings have been dropping for 35 years, until about 2015. The price rise of gold from 2005 to 2015 did not reverse this trend. From 2015 to 2019 gold price did not rise, but reported holdings did. The recent doubling of the gold price muddies things a little, but the trend is clear.

R3. Reported gold purchases have trended down in 2025 and 2026, probably due to price doubling. But they are still positive. Emerging markets did not sell into this strength to build up more liquid holdings (UST) as more effective tools to support their economies against future malaise. Even "trending down" part is muddy, too, because some countries CB do not report it. China, an elephant in the room, started better obfuscating its holdings, including gold, since COVID.

R4. Yes. Gold owned by CB strognly trended down since 1980. That trend stopped in 2005 and reversed somewhere between 2005 and 2015. And likely accelerated in the last few years.

As a side note, I personally see USTs losing dominance as a reserve asset as a good thing. USG needs some checks on its spending, and world being willing to buy long dated treasuries at below inflation rates incentivizes the "we do not need to solve real problems, we can just print more money" mindset. My 2c.

[afpx]

Well, having tracked soft-science experts for 30 years, I have to say they're wrong over 50% of the time. Moreso, if it's coming from media that's owned by the same country that is causing evil.

https://www.reuters.com/business/finance/russias-central-ban...

[whamlastxmas]

Since the advent of the internet, and in fact conversation any in format, people have not overly cared about facts. This isn't a new phenomenon

[temp8830]

Low quality: when someone insinuates that the part of the establishment who play "good cop" are not saints.

[vitaflo]

Reddit has been leaking into HN for years. It’s just finally reached equilibrium.

[mikewarot]

>everything to do with gold more than doubling in price in a year.

Gold's price doesn't change, it's 42 2/9 US Dollar per fine troy ounce[1], and has been since 1973.

The problem is that this exchange rate hasn't been enforced, or adjusted since then. This allows the spot price to set the effective price of the dollar in a reciprocal arraignment.

Since, the "Gold Window" was closed by executive order, I posit that, In theory, Donald Trump could get a bunch of conspirators together, with 10.4 Billion in cash (the "Book Value" of the US Gold Reserves), and direct the Secretary of the Treasury to re-open the gold window, in private, and drain the US reserves, personally.

Edit: Nope... the law changed, thank goodness.

If the US somehow re-anchored the Dollar to Gold, the deflationary collapse would crush the economy everywhere, instantly, as all dollars outstanding would increase in real value by a factor of >100, and all debts would crush most people, companies, and economies.

So, realistically, if we wanted to re-anchor the dollar, the new value would have to be greater than the current spot price. To fully back all dollars outstanding, it would be somewhere between 50,000 and 150,000 US Dollars per fine ounce.

I had previously expected this to happen a generation from now, but thanks to the complete collapse of institutional memory, and the current administration, I now expect it to happen before the end of the next administration.

[1] https://www.federalreserve.gov/faqs/does-the-federal-reserve...

[expedition32]

Everything is politics. Which makes people who want to avoid it look delusional.

As for polarization that's been the modus operandi in my country for at least 500 years. Everyone hates everyone but the alternative was the French, English or Spanish so what can you do? Turns out you actually really don't need to love your neighbour.

[rapnie]

> Everything is politics.

This is mentioned often, but is also such a broad generalization that it is not constructive in any meaningful way. If everything is politics, then it can be eliminated from both sides of the equation. Focus on real and immediate problems at hand and providing concrete solutions need not have "politics" label slapped onto it by default, esp. where the ideological infighting this attracts complicates having open and frank discussions based on the facts. "Politics" has become a weaponised word often used to derail good initiatives, and with great success. The mindset that everything is politics may be contributor to that.

[Fricken]

This is just HN. We're explicitly not productive or constructive. We're not solving the world's problems. We're just shooting the shit. This is a forum for wasting time. I guess it wouldn't be HN without the delusions of self-importance.

[manuelmoreale]

> Everything is politics.

Everything you want to be politics is politics. Caring for other people shouldn't be politics. Being a decent human being shouldn't be politics. There are plenty of things that aren't politics unless you decide you want to turn them into politics.

[lazide]

The issue is when you get down to the edge cases, you get into politics again.

Is ‘caring’ (what does that mean exactly?) for someone on death row good or bad? You’ll likely find splits in answers along ‘political’ lines, especially depending on things like the nature of the crime, who the victim was, etc.

Is ‘caring’ (again, in what way?) for someone in Palestine good or bad? Or worth how much money to do? Similar split. How about Iran?

What about someone in the inner cities? Who doesn’t work?

Etc.

Hand wavy general statements are easy to have, but when it gets down to actual implementation is when real groups of people start to have very different concrete opinions on how it should be done.

You’ll also find lots of shaming among the group and against ‘outsiders’ trying to enforce idealogy. And if you think that part doesn’t happen, just read your own comment - it’s a mild form of that!

That is politics.

[scruple]

So it's a controlled demolition? In this view, is the goal to devalue our own debt? Extract value while it still has value?

[rapind]

> In this view, is the goal to devalue our own debt?

I'm sure that'll be some quacks argument, but I think the goal is simpler. Straight up looting by those in power and their rich friends.

[ZeroGravitas]

One less conspiratorial but more pernicious angle, is that attacking things that are good but complex is a great strategy for troll politicians who don't care about the success of their country but just like the attention.

See Brexit, and free trade in general.

It's a good way to get "the establishment" to gang up on you and defend something complicated while you present simple but wrong alternatives and promise the world.

I also think he's up for sale (as are all the other similar politicians) to a multitude of buyers, foreign and domestic.

[vintermann]

For Brexit in particular, it seems clear to me that EU politicians, but the UK ones in particular, used EU as a scapegoat for unpopular economic policy that they themselves actually want, but can't justify effectively to their constituents. "We can't help it, it's an EU requirement" when leaving out that in the EU, their guys totally supported it.

That was bound to backfire at some point or another.

I think you're right that politicians prefer not to defend complicated (and possibly good) policy to the public. But if they choose easy ways out to avoid it (and they do!) then they're to blame too when it collapses. To blame the public for not blindly trusting them won't do.

[0x3f]

The public is almost fully to blame, and gets the government it deserves. I only hedge a little because education is in control of the state, so to some degree people don't choose whether to be educated on the relevant matters.

It may be familiarity breeding contempt but I find members of the British public in particular very myopic in obtaining benefits for 'their group'. There's very little interest in society as a whole.

Politicians simply bend in order not to upset any of the key voting blocs. But you understand that's a selection bias: you wouldn't exist as a successful politician if you didn't do this. All those who go another path are doomed to obscurity.

[throw0101c]

> The public is almost fully to blame, and gets the government it deserves.

Which has been a popular argument against democracy since at least Plato: just look at the average voter/person and their intelligence, understanding of the world, and their character.

[dijksterhuis]

> The public is almost fully to blame, and gets the government it deserves.

I'd frame this another way -- the public are largely responsible, but we put all the blame on politicians/government. we vote for these people while we all know they're all talking complete and utter nonsense just to get past the job interview. it is the game. i wish it wasn't. i wish i could stand in the house of commons during PMQs and point out every BS line every single one of them says. stand up during question time and shout at all the idiots on the panel, disproving every single bullshit line they've fed the audience with stats and analysis and data [0]. but then we'd probably end up everyone in the country showing up to PMQs/question time shouting over each other all at the same time... which wouldn't really work lol.

the system is not perfect, but it's what we've got.

> I only hedge a little because education is in control of the state, so to some degree people don't choose whether to be educated on the relevant matters.

> It may be familiarity breeding contempt but I find members of the British public in particular very myopic in obtaining benefits for 'their group'. There's very little interest in society as a whole.

yeah, like, i'm kind of lucky that i don't have children or any other dependants and i went to posh schools, got a decent academic education [1]. i can afford to sit around, pontificate and moralise about what the large scale right or wrong way of doing things should be. i earn enough and don't have kids. hell, i'd be happy if they increased the rate of tax in the top bands. more money to spend on public services for everyone else who actually needs it. seriously, take my spare disposable income! i'm only gonna spend it on expensive food and cigarettes that's gonna make me overweight and have lung cancer and become a drain on the nhs anyway!

my mate with three kids doesn't have the time for that. she just wants the school to give her daughter the help she needs and has to fight through a bunch of bureaucracy to get there. bureaucracy which exists because the system is under strain because lots of people are asking for the same resources and they've got to figure out some way of apportioning out the resources. same with my mate who is a single parent to a son with pretty hefty ADHD. it's no wonder they fall into the "my group first" attitude and/or rhetoric with, for example, immigration. they're constantly told there's all this money is being spent elsewhere on "some other people" and then they look at their kid's school struggling with one support worker for hundreds of kids and it's like ... well, wtf. same thing with income taxes etc. "we need money for our kids, why on earth is my tax money being spent on X, Y, Z" etc.

to be clear: i don't agree with the political views of my friend, and i don't really care to debate the politics either. i'm responding to the "myopic" comment from my own perspective, having previously noticed the interesting differences between myself and my friends. they're really lovely people! really nice and kind and loving folks. but they have a selfish/fear-based-protectionist side to them, like all humans do.

that last bit is the important bit for me. fear leads selfish behaviour. people are worried, the "system" is unstable and constantly under strain. and that makes them act in their own selfish interests because they're having to jostle for position within the "system" :shrug:

> Politicians simply bend in order not to upset any of the key voting blocs. But you understand that's a selection bias: you wouldn't exist as a successful politician if you didn't do this. All those who go another path are doomed to obscurity.

this has always been the critical problem from where i sit. like, we're forced to vote for people who, ultimately, may only be in the job for a maximum of 5 years total. we don't get to vote on the next 30 years cos the next lot could just undo it all. just look at upcoming negotiations with the EU apparently might involve us moving back towards the single market again, which was the whole "once in a generation" brexit vote thing. turns out it's not quite so "once in a generation" [2]

the trouble for me is that the commonly implemented "long term" model for governance tends to be stuff like authoritarianism, dictatorship etc. ... so...

--

i wrote way more for this than i thought i would lol

[0]: yeah! let's properly hold them to account! i can finally use my autistic powers of calling bullshit for the benefit of all! instead of getting into trouble with my boss at work. again. o_o

[1]: the non-academic parts were really damaging though. expensive doesn't always mean good. highly rated academically doesn't always mean good.

[1]: thankfully lol

[AngryData]

As a side note if you did just get fat and smoke you wouldn't be a drain on the NHS because being fat and smoking disqualifies you from many procedures and you are likely to die right around retirement age, after you paid most of your lifetime taxes but before you start consuming the very expensive age-related healthcare.

Ironically it is the unhealthy that are overpaying and the very healthy who are underpaying because age related care is such a huge proportion of lifetime medical costs, and that is still before adding in potential sin taxes paid.

[rwmj]

The alternative is everything falling apart at home and our manufacturing industries declining dramatically. Maybe the "unpopular economic policy" wasn't such a bad idea after all.

[simmerup]

The people that voted for Brexit aren't affected by any of that.

In fact, they're so protected they'd probably prefer a recession.

[rwmj]

It's true, pensioners are very isolated from the problems of working people.

[pjc50]

Well, that's the brexit outcome.

[sph]

"For every complex problem there is an answer that is clear, simple, and wrong."

The issue is that the stupider the politician, the more likely they are unable to understand why their clear, simple answer to the ills of the world is also wrong.

Brexit, whatever is happening in the US, is caused by narcissism (a common trait among politicians) paired with a great deal of stupidity and ineptitude, not only among politicians, but among the populace as well.

[duskdozer]

the politician doesn't necessarily have to be stupid, just know that there are enough stupid voters

[ejoso]

Say more

[BobbyJo]

Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when the checks stop coming. We're basically the national equivalent of a middle manager who's forgotten all the skills that got him there, and we can voluntarily move back down and start to work in earnest again, or wait to get laid off with no severance.

[cmcaleer]

It's as much a gun to adversaries' heads if they hold lots of your bonds (China used to hold over $1T in USTs) so they would have an interest in not having that blow up by not annoying the US so much they refuse to pay foreign bonds.

It's also kind of neat as a financial MAD instrument, because China obviously can't just get everyone to go into their brokerage and market sell a trillion in USTs so they get a lever to pressure the US with but they can't go nuclear without also vaporising their own value. So it works as a melting ice block on which diplomacy is forced on both sides.

The death of the UST as a reserve instrument would be a catastrophically bad loss, the only silver lining is that the melting ice block might still be enough by the end of this admin that the new admin might have enough to stand on to rebuild it should they realise the value of it.

[ghywertelling]

After the US Dollar with Luke Gromen

https://youtu.be/OOW-oSruO80?t=4072

Luke's key point lands at about 1:08:27–1:08:33, where he says that instead of selling treasuries outright (which would draw attention from the American embassy), China can use them as collateral — and the American banks are happy to take it. He then lists what China gets in return: "I'll take Pereus. I'll take that oil field. I'll take that copper mine. I'll take all that gold." He then adds that this works because the incentives align on both sides — the Chinese want to understate their strength, the Americans want to overstate theirs, and the American banks are happy to accept dollar collateral without asking too many questions.

[scruple]

Aren't these things just legal fictions that only exist because/as long as the US government allows it?

[californical]

Damn that’s actually a crazy thing to think about but makes perfect sense. Thanks for sharing

[BobbyJo]

> It's as much a gun to adversaries' heads if they hold lots of your bonds (China used to hold over $1T in USTs)

There is a complicated dynamic at play to consider there. Treasuries and the strength of the dollar only matter to wrt international trade, for both China and the US. You have to ask yourself if the value of the dollar went to 0 for that use case, who would be in a worse position, the one that sells dollars to support consumption, or the one that buys them as a tool for trade with 3rd parties?

[IsTom]

They can also just not roll them over. That takes time, but it's a good % of holdings each year.

[fakedang]

> by not annoying the US so much they refuse to pay foreign bonds.

The problem with this is that a country can only refuse to pay their foreign bonds once. But the buyer can always dump them and scoop them up later for cheap when shit hits the fan.

[gus_massa]

Hi from Argentina!

[lesuorac]

But why?

If you just don't run a mega defict every year you can afford to use the interest other countries would have to pay you to borrow dollars to subsidize your own economy.

[BobbyJo]

"the interest other countries would have to pay you..."

That's the problem, they don't have to, and they can choose not to.

The fiscal deficit is a whole separate matter, but I think it is a downstream effect of the kind of policies and economy that develop when you run a huge trade deficit selling your currency for goods and services.

[fnordpiglet]

As someone who lives a day to day life, I’m pretty happy for things that are good for my day to day life. Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch. I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate. Effectively most technology, especially software, but hardware as well, is concentrated in the US. Some aspects of the heavy manufacturing and assembly line happens elsewhere but I’d level the middle manager more at the EU.

No, we are taking our advantages and lighting them on fire for no obvious reason. Backing into a rationale doesn’t make it rational. Its Christian nationalism fueling raging narcissism made malignant due to senility. Theres no experts, no adults, no experienced people - they’ve all be fired and replaced with sycophantic photogenic personalities. This is not good, there is no upside, it’s Nero hosting UFC while the empire burns.

The only out I see is nature helping end this or a total seismic change in Congress and removal from office. Then rebuilding can start and maybe there’s something to salvage. But I doubt it, and I expect the next generations will exist in the rubble of the colosseum.

[fc417fc802]

I'm not going to take a side in the broader discussion here, however your response fails to engage with what was previously written.

> Some abstract quasi moralistic reason

What was presented was neither abstract nor moralistic. The argument was one of driving towards a cliff and taking preemptive action before reaching it.

[theossuary]

No, it was driving towards a cliff and deciding to jump out of the car instead of pressing the breaks. If you're costing at work, worried about being laid off some day, the last thing you do is just quit; you job hunt and try to change habits. Pretending like we have to feel immense pain to strengthen the economy is the quasi moralistic reasoning of a moron

[BobbyJo]

> Some abstract quasi moralistic reason that things should be tougher so we compete harder feels a little out of touch.

I don't see how any of those descriptions fit what I've said. Also, note, things should indeed not be tougher. A consequence of our economy being so focused on financialization of overseas productivity is that the wealth created from that activity tends to be much more concentrated than that produced from manufacturing, at least historically. Though, who knows if that would hold if onshoring took off in earnest.

> I’d note that it’s not the case the US produces nothing, or that it’s lost its capacity to innovate

Never said either of those things. I only stated that it makes domestic production harder/less profitable. Though, I'd also like to point out that that the largest companies in our economy are wholly dependent on the output of an island with grave geopolitical risks hanging over its head. China could collapse our economy overnight due to unchecked offshoring. That's not quasi, abstract, or moralistic, just a state we've created.

> No, we are taking our advantages and lighting them on fire for no obvious reason. Backing into a rationale doesn’t make it rational. Its Christian nationalism fueling raging narcissism made malignant due to senility.

I mean, I have named several, and all of which were put forth prior to Trump's term starting. I'm not a fan of Trump, but it would seem to me you are creating a narrative for yourself that doesn't fit history.

> Theres no experts, no adults, no experienced people - they’ve all be fired and replaced with sycophantic photogenic personalities.

I think Bessent is pretty good.

> This is not good, there is no upside, it’s Nero hosting UFC while the empire burns. The only out I see is nature helping end this or a total seismic change in Congress and removal from office. Then rebuilding can start and maybe there’s something to salvage. But I doubt it, and I expect the next generations will exist in the rubble of the colosseum.

Idk about rubble, but corruption does need to be curbed IMO. The current administration has not been good for the rule of law, in spirit. I do think some level of that is unavoidable however, as the judicial branch and executive branches have been sucking power from the legislature for going on 50 years, which also needs correcting.

[watwut]

Bessent is great example of sycophantic photogenic personality.

He knows he is lying and he knows he is harming the economy and people in it. But, that does not matter to him.

[fnordpiglet]

I think the way you phrased your point was quasi moralistic - perhaps not intentionally.

However I’d note that the economic theory of comparative advantage says the rational move is countries and states and cities specialize in what they have a comparative advantage in and by doing so the entire system becomes optimal. Everyone trying to be self sufficient within themselves, and the absurdity of the trade imbalance as a measure, is grossly inefficient for everyone and pulls the entire planet down. Obviously this doesn’t account for instability, but it does explain why our economy has focused in areas we have a comparative advantage while depending on other economies for theirs. This is a feature of modern economic theory, but perhaps has flaws in practical political senses.

Bessent is a complete idiot who equates having money with intellectual supremacy. He’s a sociopath in real life, a sycophant in political life, and a moron who does well following orders of someone smarter than him. He was successful at other people’s funds but when he started his own he totally flopped. He has a gentleman’s degree is political science from Yale, and his uncle was convicted of corruption and spent time in prison while in the US House of Representatives- demonstrating the apple doesn’t fall far from the tree. See his corruption regarding mortgages and investment properties for proof.

I do agree we had been dismantling our advantages for a while, but what I said was Trump lit them on fire. In a little over a year every structural advantage the US has enjoyed post WWII is gone and we are hated by allies and enemies alike. We have no leverage with anyone on anything, everyone who might have let us have advantage is seeking a backstop away from us, and any sense we had engendered as a place for people to come to pursue opportunity is gone. We’ve dismantled institutions that took generations to build in months, and eliminated all good will across the planet with literally every human being that uses fossil fuels in any way. This is the most breathtakingly destructive frittering away of advantage for zero gains I could imagine short of simply declaring nuclear war on ourselves.

[deanputney]

They are arguing that Trump is controlled by a foreign adversary and doing these things at their direction.

[skippyboxedhero]

Not aware of what happened in the 70s then with Bretton Woods? Not aware of what happened pre-08? It has gone wrong multiple times before just for the US and the US exporting inflation is not good for either the US or the rest of the world.

As with NATO, I am not sure what the argument is...yes, other countries should take more of a role in their own defence...yes, other countries should take more of a role in their own economic governance/financial stability.

On this topic specifically though, I will also point out that whatever the faults of the US, no-one had a problem when Germany was exporting crippling levels of deflation (this is one of the main issues that wasn't solved after WW2 despite being identified by Keynes: deficit countries will be told they need to rebalance, but not surplus countries). Germany have solved that problem with catastrophically bad foreign policy destroying their economy (once again) but before this, they were the main source of global financial instability (China, to their credit, is probably one of the only countries ever to rebalance from surplus to deficit country...Germany has done this multiple times over the years and has blamed other countries every time).

Other countries using gold instead of US debt is good for both the US and those countries. Most of the "increase" has been due to gold rising in value and, fundamentally, it cannot solve the problem because the price cannot rise as much as it needs to but it should be part of a mix with SDRs and other securities.

[the_gipsy]

gibberish

[skippyboxedhero]

Nope, just economic history.

People think the "new thing" is new...this has happened many times before. Macro tourists come in and think ten minutes with ChatGPT has turned them into an economist. Basic knowledge.

[the_gipsy]

What's your point tho

[epolanski]

US will have to refinance $ 10T of debt next year. That's a gargantuan amount of money and I see no scenario in which this won't have quite higher yields than the expiring one, remnant of the low rate decade.

With foreigners and hedge funds less prone to buy US debt right now it's going to be quite interesting to see what will happen.

[Gud]

It’s going to be a couple of humbling decades for the USA.

The western world was happy to keep the USA as a global police force, as long as they didn’t step too far out of line and at least paid lip service to international law.

With that gone and now caring only about brazen self interest, there is little reason to support the USA as an ally, so they have been demoted to a trading partner(unwillingly).

Honestly it’s much better to do trade with literally anyone else besides the USA.

[bijowo1676]

elections have consequences...

[epolanski]

And yet the current administration is fixated with trade balance (which conveniently ignores the most important US export that's not accounted: services).

Look at them countries sending food, cars, machinery for pieces of paper. They taking advantage of us!

[expedition32]

A lot of countries have their gold reserves in the US.

It was a good idea once but there's no doubt in my mind that the Americans will confiscate it all.

[mothballed]

Not your keys, not your coin.

America did it to its own people too.

[cringleyrobert]

Just make sure it’s real gold, not just a number on a spreadsheet, or a golden Twinkie made up of tungsten! India got caught with their heads in their asses with that one!

[CGMthrowaway]

Scott Bessent is literally the guy who broke the pound, I think he understands

[neonstatic]

I think pinning this on one guy is a gross oversimplification driven by personal dislike for that guy. In my opinion larger forces are at play. I don't mean it in a conspiratorial way; simply put, the structure of global trade, economy, military power, etc. have shifted to such a degree, that this process has become inevitable.

[ferfumarma]

The Clinton administration ran a budget surplus

[dannyfritz07]

He ran a surplus by (In Bill Clinton's own words) "ending welfare as we know it". This was his description of the Personal Responsibility Act he signed. That attack on labor and bolstering of the financial markets was a huge contributor to our economic disasters. Keynesian was never meant to be a permanent solution to a growing capitalism system. And the Hayekian system we have now is just pillaging by neoliberals.

[tasuki]

> ending welfare as we know it

> That attack on labor

How is ending welfare an "attack on labor"?

(I live in a welfare state and am quite happy about it, despite it having very real financial consequences for me. Welfare state does not benefit "labor", but rather benefits the various people who either can't or don't want to perform labor)

[dannyfritz07]

Why do laborers have to work for the right to live when capitalists only have to provide capital and are always assumed to be worthy? Capital and labor is combined to produce new capital. Yet we only expect labor to prove their worth. We're always holding labor's feet to the fire and killing them through policy that allows their poverty by assuming they are lazy.

There is basically zero consequence for capitalists when they decide to withhold capital from laborers. Therefore taking away labor's ability to generate new capital. They took down the entire rust belt by doing this. Why shouldn't we hold them accountable? Why does everyone blame labor and say welfare is only for people in poverty?

[tasuki]

> Why do laborers have to work for the right to live

I don't know why, but this is sort of the definition of a laborer, no? Someone who labors.

People who live on welfare are – by definition – not laborers. That was my whole point: "ending welfare" is not "an attack on labor", it's an attack on non-labor.

[neonstatic]

Again, that's a domestic issue. It was at a time, when all US adversaries were either in trouble or not stabilized yet.

[throwaway315314]

Because such a system isn't just sunshine and rainbows like OP mentions and has real costs like ever increasing debt burdens and wealth and social inequality which naturally create political instability as lower classes and institutions become increasingly stressed. Trump is just a symptom of sentiment created by these consequences.

[LightBug1]

There is nothing inevitable about strategically moronic war, a super power supporting an ethno-religious genocide, and an orange dildo ripping up international order.

[neonstatic]

You insist on making it about this administration and your dislike for it, when I am talking about wider shifts like China's ascent, America's de-industralization, Europe's stagnation, drone revolution, shale revolution...

This admin's shortcomings don't need to be listed, anyone with eyes can see. I will just remind you about Biden's "minor incursions" comment, that opened to the door to invasion of Ukraine...

[LightBug1]

I'm not insisting on anything.

I'm fully conscious of tectonic plates shifting and creating huge change and the need for response. But, again, none of what we've seen the current admin engaged in has been inevitable.

And no, comparing to Biden will not do here. I couldn't care less really about which side is in power (except when there is significant spillover like now). I'm outside of the USA. But I have never seen anything so ridiculous as the current "strategic" choices of the current admin.

[neonstatic]

I am outside of the USA too. And I don't care either. Plus, once again, when I said inevitable, I meant the process of US losing it's primacy, not whatever this admin is doing.