[cman1444]

To be honest this comment kind of reads like anti-US fanfiction.

>That diversification helps everyone else, but will hurt the US, which hurts financial markets, and thus everyone else.

These are huge jumps in logic, I'm not even sure where to begin. I guess the most glaring question is: If other countries are actively diversifying from US assets as you claim, why would they still be so hurt by a US financial market downturn?

>And once they're all divested, the diversification will add risk and losses.

Since when does diversification ADD risk, and how would losses be incurred?

>which of course China is leading the world in, as nobody cares about "better", they care about "cheaper"

Also a huge claim to make. You'll find plenty of people who want the best models and are pretty price-insensitive, especially among those who get the most economic value out of AI.

[throwaway2037]

I too laughed when I read the response. If anything, the more bat shit crazy the response, the more it validates my original point.

    > To be honest this comment kind of reads like anti-US fanfiction.

You said it better than I could. The best analogy I could dream up: This post feels like it was written as an editorial for an anti-US newspaper, like The Global Times.

About the weak diversification argument: If people really do invest much less into US assets, then other available high quality assets will also become more expensive and result in lower yields. In turn, the US assets will appear "cheap" and attract new capital. This feels like a mirror of the global soybean trade. If China says they won't buy US soybeans (primary used to feed hogs), but buy Canadian or Brazilian, then other buyers just shift where they buy from. In the end, the global demand for soybeans has not fallen, rather a brief game of musical chairs was played.

[0xbadcafebee]

> If other countries are actively diversifying from US assets as you claim

It's not a claim, it's been reported for years. US foreign exchange reserves are at a 30-year low. Central banks have bought ~900 tonnes of gold in 2025, nearly matching the historic high during the pandemic. Central banks' holdings in gold now surpass US Treasury holdings (and we all know that gold is nearly 5x its price from last year). Poland, Turkey, India, Czech Republic have all been hoarding gold instead of dollars. France repatriated its gold. Saudi Arabia didn't renew their oil-for-tbills protectionist agreement with US in 2024. Big oil deals are now being done in Rupees and Yuan. Canada dumped its US treasuries. BRICS is already operating a new banking system independent of the US dollar. mBridge and CIPS allows China to settle payments with other countries solely in Yuan. Japan made a $75BN swap deal with India to deal in Rupees if it needs to avoid the dollar, with similar deals with Indonesia and Thailand. Japan is also working with UAE on non-dollar oil deals in the future.

> If other countries are actively diversifying from US assets as you claim, why would they still be so hurt by a US financial market downturn?

Because the global economy is one gigantic system of systems standing on top of the US financial system. When the US has a gigantic economic shock it ripples worldwide. But de-dollarization is gradual, so it will be a gradual drawdown in international economies.

> Since when does diversification ADD risk, and how would losses be incurred?

The US is where people put their money because putting it elsewhere was riskier. But now the US might be more risky. So you diversify... to the places that were risky before. So you can only move to risky places. That risk eventually leads to some loss. It's a "least-worst option" situation, but the end result isn't going to be great.

> You'll find plenty of people who want the best models and are pretty price-insensitive

That's now how capitalism works, that's how rich people work. The echo chamber of HN is full of upper-middle-class people with disposable incomes that are happy to waste money to feel emotionally better about their choices. But businesses aren't emotional, they're competitive. They want lower costs and higher profits. That means spending less. If a business can use a model that's 1/6th the price to get approximately the same results, they're going to do that, in order to gain a competitive edge. China is the place you go when you want to cut costs.

[cman1444]

>Because the global economy is one gigantic system of systems standing on top of the US financial system. When the US has a gigantic economic shock it ripples worldwide. But de-dollarization is gradual, so it will be a gradual drawdown in international economies.

This is where you're losing me. You seem to be suggesting that de-dollarization will cause a US financial pain large enough that it will cause significant pain to other countries, AND that it will happen so fast that the de-dollarization itself (which was the impetus for this pain!) will not be sufficient to shield them from it.

>The US is where people put their money because putting it elsewhere was riskier. But now the US might be more risky. So you diversify... to the places that were risky before. So you can only move to risky places. That risk eventually leads to some loss. It's a "least-worst option" situation, but the end result isn't going to be great.

Lots of assumptions here: 1. That the US is in fact becoming a much riskier place to invest (mostly only true for countries at risk of sanctions). 2. Other countries have stayed as risky as they always have been (do we know this isn't the case?). 3. That despite the inherent risk advantages of diversification to a wide range of countries/currencies is not significant enough to overcome the level of risk that the US has increased recently.

>That's now how capitalism works, that's how rich people work. The echo chamber of HN is full of upper-middle-class people with disposable incomes that are happy to waste money to feel emotionally better about their choices. But businesses aren't emotional, they're competitive. They want lower costs and higher profits. That means spending less. If a business can use a model that's 1/6th the price to get approximately the same results, they're going to do that, in order to gain a competitive edge. China is the place you go when you want to cut costs.

It is how capitalism works sometimes. If the cost of using the new technology is very cheap AND top-of-the-line options result in significant productivity increases, most companies will be willing to pay higher multiples of cost for even marginal increases in performance.

If I'm so-and-so software company spending millions on various business costs, I dont care if I'm spending .5% of my costs on claude code when I could be spending .1% on deepseek. I want the best one (even if it's just slightly better) because the costs are marginal anyway.