this post was submitted on 17 Jul 2023
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[–] [email protected] 10 points 1 year ago (1 children)

What makes you think that the dollar will collapse? Lol

[–] [email protected] -5 points 1 year ago* (last edited 1 year ago) (4 children)

BRICS is slowly gaining steam, Saudis no longer selling fossil resources exclusively in Petro Dollar, African nations are calling for their members of parliament do derisk of a US dollar collapse by selling whatever dollars they're still holding, inflation is rising due to the FED raising interest rates.

Probably won't happen this year but I'd be surprised if the dollar didn't start dipping in 2024.

[–] [email protected] 13 points 1 year ago (2 children)

inflation is rising due to the FED raising interest rates.

That's probably the most none-sensical statement I read for quite some time.

[–] [email protected] 0 points 1 year ago (2 children)

Yeah this person just lined up a series of completely idiotic statements. The FED raising rates lowers inflation, and inflation in the US is back down to 3% as of this past quarter. They also claimed BRICS was taking off when it's literally quite the opposite. BRICS is never going to happen with its member countries basically in opposition of one another.

[–] [email protected] 3 points 1 year ago

BRICS is never going to happen with its member countries basically in opposition of one another.

Can you lay out precisely how its member countries are in opposition of one another?

[–] [email protected] -3 points 1 year ago

I think your assessment of what the Fed is doing is either based on underestimating the complexity of the monetary system or you've been misinformed by people who don't have your interests at heart. Please check this comment where I provide a source for my assessment of what the Fed is doing: https://lemmy.ml/comment/1684511

[–] [email protected] -5 points 1 year ago (1 children)

Check yesterday's comment of mine: https://lemmy.ml/comment/1684511

Feel free to provide me with better sources that aren't like "everything is fine, don't worry, your money is safe and the Fed is doing this in your interest" without providing meaningful data to support that.

[–] [email protected] 3 points 1 year ago* (last edited 1 year ago) (1 children)

Inflation rates are sinking. That's it. No need to also debunk your bullshit about why inflation is rising when it isn't. Or do I need to google the US inflation rates for you?

[–] [email protected] 7 points 1 year ago (1 children)

Wait, you're claiming inflation is rising because of increased interest rates? That's a first. Cite?

[–] [email protected] -2 points 1 year ago

One example with insightful graphs: https://www.lynalden.com/inflation-vs-interest-rates/

Some quotes:

At first, raising interest rates in the face of high deficit-driven inflation can slow inflation down, which makes it seem like it’s working. This is because the Fed can potentially reduce the rate of bank lending, and thus slow the economy down a bit, even as those fiscal deficits keep pouring in. In other words, they’re not affecting the primary cause of inflation, but they’re subduing enough other things that they’re able to push back against the primary cause, indirectly.

Over time, however, raising interest rates and keeping them high in an environment where runaway government deficits and high government debts are causing inflation runs the risk of exacerbating inflation. High interest rates on large amounts of government debt (>100% of GDP) will result in even bigger runaway deficits, because now they are dealing with ballooning interest payments on the debt, and this ironically pushes more money into the economy.

However, high interest rates also exacerbate deficit-driven inflation, specifically during eras with unusually large sovereign debts and deficits (e.g. >100% debt-to-GDP and >7% structural deficits-to-GDP). Each increase in interest rates puts some disinflationary pressure on the private sector, but also results in even larger public sector deficits pouring money into the economy. If those public sector deficits are big enough, then high interest rates can actually be inflationary.

[–] [email protected] 1 points 1 year ago

Brazil has historically been untrustworthy from a geopolitical standpoint. Russia is currently invading another European country. India could be stable, but they have a long way to go in terms of both development internally and on an international stage. China has essentially allied with Russia as they invade another country and is projected collapse in population to 800 million by 2100. And Saudi Arabia is soon to become nearly uninhabitable due to global warming and their main revenue stream is being phased out in many parts of the world.

The countries that are "worried" about the USD as international standard currency are mostly countries that are politically misaligned with the west or are developing countries that want to focus their reserve in more regional currencies to help insulate them from international crises. Any other countries that are shrinking their percentage of USD in reserve are probably doing so to diversify their "portfolio" like any sane person would that holds significant value in the stock market.

The USD may lose value in the next decade or so, but until there's a concerted effort by the EU,G7,UN, etc. The dollar will almost certainly remain the standard. It's a massive and stable market that's still projecting population growth into the 2100's.

[–] [email protected] -3 points 1 year ago (2 children)

BRICS is slowly gaining steam

Hahahahahaha

[–] [email protected] 1 points 1 year ago

Not sure what's so funny about that. China still has a bigger economy growth than the US (6,3% vs less than 3%). India is also above 6%. So yeah, these two alone will get closer to the US.

[–] [email protected] -3 points 1 year ago

Thanks for the constructive insight!