Germany Secretly Planning On Joining BRICS

You really are a sucker.

How does it feel to fall for these useless stories?

Always wrong but you keep on reading the bs out there.

 

If the US is perceived as a responsible steward of the world economy BRICS is no threat. If we're perceived as a completely self-interested and irresponsible overseer then BRICS is just the tip of the iceberg.

It's on us now to convince the world that the dollar is an acceptable reserve currency moving forward. The dollar is backed by nothing but our good standing in the world.

Think about it.

 

It's a misspelling. They are secretly planning to join Barcs

 

The dollar stopped being an acceptable world currency years ago. The US military was the only reason not to abandon it. The more countries that decide it's not a viable currency and find allies, the less that military matters.

 

What do you mean by "acceptable" world currency? And why do you think the US military has been the reason not to abandon it?
(Yes, this is gonna be one of those times when we'll have an argument. It's all good though, and nothing personal.)

No other currency has the scale or liquidity of the US dollar, and it is by far the most commonly held asset in foreign exchange reserves. It's considered the most stable and liquid currency, and it can be used to buy what is considered the world's safest asset, US Treasuries- that's why it's the world's reserve currency. It's not because countries are afraid the US would bomb them if they started hoarding rubles, yuan, or whatever instead. The Euro is the second reserve currency, but it's much less commonly held than the dollar.

The world's reserve currency tends to be that of whatever is viewed as the world's largest and most stable currency, but even after it's surpassed it still takes decades for the world to switch over- as happened when the USD overtook the pound sterling during World War I (the US was militarily weak at that time, it should be noted.) The yuan can't overtake the dollar as long as China is pegging the yuan to the dollar- a reserve currency has to be freely floating, otherwise it's just indirectly based on the other currency. And China is afraid that if they stop pegging it to the dollar, the yuan will appreciate too rapidly, causing their exports to become more expensive- putting their factories out of business and turning millions of factory slaves workers into angry protestors. So they can't do it, they're stuck with trying to let it appreciate slowly, and gradually diversifying into Euros. Russia's ruble is based on the price of oil and natural gas- which are dollar-denominated resources. Since almost all of what the Russian economy exports is natural resources, their currency is inevitably based on the dollar, albeit unintentionally.

The other reason you can't just dump the dollar is that you've been hoarding trillions of them. You start selling en masse, flooding the market- and now that enormous wealth you've accumulated becomes worth much less. You've got to convert those dollars into something else if you don't want to use dollars anymore- but there really aren't any other good options other than the Euro, since Europe's collective economic might is much greater than that of the United States.

 

You don't sell dollars when you are hoarding them in the billions and trillions. You turn them into other assets and you choose not to sit in on the next few treasury auctions, redeeming the securities instead of rolling them over to maintain international liquidity.

The game plan for the Chinese or any large sovereign wealth fund is going to be to buy first world assets with dollars and then carefully reduce their presence at the treasury auctions after that. Depreciation of the overall fund will occur but it will be relatively small and incremental and the hard assets purchased, like mineral and agricultural producers, will hedge and offset much of the loss as the value of the asset appreciates against a newly weaker dollar.

Then when you've gotten to a position where your dollar reserves and treasuries are no longer the linchpin of your sovereign wealth fund you're more free to explore a potentially de-stabilizing attempt to promote another currency as the world reserve standard.

 

When you turn those dollars into other assets, by any means- you have to put them somewhere. When the treasuries mature, you have to do something with them or else keep the pile of dollars.

At the rate things are going, it will take the better part of a century before the Chinese will be able to wean themselves off the dollar. That's okay by them, they're patient. The notion that they're just going to switch in 5 or 10 years is very ill-founded.

If they reduce their presence in treasury auctions too swiftly, again, they will devastate their existing reserves' value. They have to do it VERY slowly. As in, over decades, not years. I think you'd agree.

A lot can happen in decades- China will likely not continue indefinite +7% annual growth. Manufacturers are diversifying away from China and towards countries like Vietnam and Thailand that have lower wages. Higher value producers don't trust China with their IP, and it's widely known that their government actively supports corporate espionage. If you set up a car factory there, 18 months later a Chinese company will start making a virtually identical Chinese version and the government won't do anything to stop it (they helped steal the data.) That limits their economic potential.

And there's a limit to how advanced you can get without starting to allow the unfettered open exchange of ideas. They have to devote an outsized portion of their national attention and economy to controlling the flow of information, and shoring up support for the oligarchy. They have to contend with brain drain, as entrepreneurs and scientists increasingly favor going abroad. The black winds of Western thought sweep in with the generations of leaders educated at Harvard and Oxford.

They will grow in economic, military, and political might- and perhaps even become the biggest force in those areas. But they have no real ideology like the Soviets' populist communism or America's democratic idealism. Their culture does not extend beyond their borders the way that America's music and movies do. Soft power matters.

China is also relatively insular, taking very little interest in global events. They're perceived in much of the developing world as being interested in economic development at all costs, and many African countries deeply resent the Chinese companies that cut deals with the dictators and destroy their environment gathering natural resources.

As China continues it's rise I can see other countries pushing for closer relations with the US.

 

I mean acceptable world currency as in a currency that is printed by a third party not affiliated with the US government printing US dollars to chip away at a deficient dollar value that is hurting the economies of other countries. That is exactly what has been happening for decades.

The liquidity of the US dollar went away a long time ago. Unless you want to talk about liquid diarrhea.

What exactly is backing the US Treasury? The Federal Reserve has yet to prove that it has anything other than clout to back it's power. Germany tried to withdraw their gold from them and got a huge runaround, was shown one room of gold that proved to be not theirs, and was told it would be close to 20 years before they would ever see their invested gold.

BRICS is working on a neutral currency that countries can trade with. Germany is about to align with them.

The US govt has been using military and government agencies to try to balance monetary power in their favor. Russia is being a nuisance. They own natural gas in Europe. Qatar has one of the biggest natural gas reserves in the world, but they can't sell it to middle eastern countries. Turkey has already built an outflow for a NG pipeline that leads to their border with Syria. The only thing holding this back is Russia and Assad. Where do you think the US military comes in?

Yeah, ISIS and all that bullshit.

Next we come to water. Rich US entrepreneurs have bought up aquifers around the world. Water may be the new oil. Nestle, who has been aided by the US government for three decades, owns almost half the aquifers in the southern hemisphere. Fuck, the Bush family bought one of the biggest aquifers in south America (or is it Murica?) a few years ago and there wasn't a peep about it.

The US is trying to use military and monetary power to control the world economy in shady ways, and people are just ignoring it.

The US dollar has been worthless for years. Our government has been trying to hide that. Apparently they fooled you.

Investments in the US dollar are more fragile than Wall Street pending a crash. And none of those countries are dealing with stock market law.

 

I didn't take you for one of those conspiracy guys. We see the world quite differently.

 

You haven't been here long lol.

 

Hey, it's easy to dismiss an argument that you don't like. I don't like the incessantly repetitious dialogue that is referenced to protect the status quo of our revered country, one which has committed multiple offenses against it's own period and then used the press to create distraction.

Yes, we do see the world very differently.

 

Don't forget to mention how you don't think about anything but ways to make more money, it's like reading the world views of a child with a drug dealing mother.

 

Right- well, I feel like we have such different perspectives that we won't be able to have a meaningful discussion. We will spend the entire time arguing about certain underlying assumptions each has about the world- that the other rejects completely out of hand.

When I read most of what you wrote I thought "Oh boy, I don't even know where to begin.." But the thing is, I think you had the same reaction reading most or all of what I wrote in this thread too.

I'm cool with that, and I think it's best to let it go- we both know we're not going to "enlighten" the other on this.

 

You're a very intelligent person, I saw that from your very first post. I saw your ideas in this thread and thought that we'd end up hating each other after an argument, but I'm glad you're smarter than me, because you know a fruitless argument when you see it. Thanks for that.

 

And you'd probably kick my ass, but I don't care.

 

Right now it is just a handful. The potential of it could be devastating.

You should be dreading it instead of gloating, soxxx. It's a terrible proposition. For everyone in this country.

 

Don't forget the reptilians.