In my layman understanding: all the trade surpluses from non-US entities has allowed non US banks to create surplus credits in USD. There is no interest for the foreign entities to convert the surplus back in local currency for fear of devaluing the US currency such that it will position their surpluses to deficits. This creates the symbiotic trade relationship such that the US continues to export credit surpluses while continuing to hold on to its currency strength. The only potential disrupter to this system could be either China and BRICS and digital currency but according to this professor it’s not a significant enough issue and we don’t need to worry about them. Since the credit system is inherently political a great test to disrupt this system could be China taking over Taiwan and what the US response would be. I’m wondering why not look at US response in Ukraine and Israel as a precursor to a Taiwan?
IMHO the USA needs the circulating foreign $ to keep the wheels turning. Like oil to the gears. The $ is used in many ways to "affect" foreign countries right down to creating hyperinflation there! Anyway, reduce/cut off the lubricant is a good start. Other effects than Political ones are also happening.😊
Excellent lecture. Thank you. However, Prof. Schwartz seems to believe, almost by faith that the current international order will continue indefinitely, that dollar dominance will not end anytime soon. He doesn't offer any insight into the international finance system of the future. Instead, he provides a decent description of the pillars of dollar dominance that came into existence after WWII. So his analysis is backward-looking, and he can feel comfortable that there are no threats on the horizon without realizing that this comfort comes from his stare in the rearview mirror. Note that he never mentions whether the financing of the US budget deficit (USD 1 trillion every 100 days) through the issuance of US treasuries is sustainable or the imposition of a more progressive tax system in the US is politically feasible. Those who worry about the size and growth of the issuance of US treasuries and the structural inability of the US Federal Reserve in lowering long-term interest rates cannot but be fearful about the future of US dollar dominance. In any case, I respect Prof. Schwartz's intellectual honesty, even if he is unable to look straight ahead through the windshield.
You were doing awesome until you made a gross error. No one knows if Taiwan will lose to China and using your analysis, China would be in serious trouble if an attempt is made to go across the straits for Taiwan. There are some people who have every thing down but then screw up their standing with an extremely immature comment you made at around the one hour mark. What a dork.😬
In my layman understanding: all the trade surpluses from non-US entities has allowed non US banks to create surplus credits in USD. There is no interest for the foreign entities to convert the surplus back in local currency for fear of devaluing the US currency such that it will position their surpluses to deficits. This creates the symbiotic trade relationship such that the US continues to export credit surpluses while continuing to hold on to its currency strength. The only potential disrupter to this system could be either China and BRICS and digital currency but according to this professor it’s not a significant enough issue and we don’t need to worry about them. Since the credit system is inherently political a great test to disrupt this system could be China taking over Taiwan and what the US response would be. I’m wondering why not look at US response in Ukraine and Israel as a precursor to a Taiwan?
IMHO the USA needs the circulating foreign $ to keep the wheels turning. Like oil to the gears.
The $ is used in many ways to "affect" foreign countries right down to creating hyperinflation there!
Anyway, reduce/cut off the lubricant is a good start.
Other effects than Political ones are also happening.😊
Did the presentation get cut off at the end (comment period)? Very interesting insights.
He was talking too much 😂😂
Excellent lecture. Thank you. However, Prof. Schwartz seems to believe, almost by faith that the current international order will continue indefinitely, that dollar dominance will not end anytime soon. He doesn't offer any insight into the international finance system of the future. Instead, he provides a decent description of the pillars of dollar dominance that came into existence after WWII. So his analysis is backward-looking, and he can feel comfortable that there are no threats on the horizon without realizing that this comfort comes from his stare in the rearview mirror. Note that he never mentions whether the financing of the US budget deficit (USD 1 trillion every 100 days) through the issuance of US treasuries is sustainable or the imposition of a more progressive tax system in the US is politically feasible. Those who worry about the size and growth of the issuance of US treasuries and the structural inability of the US Federal Reserve in lowering long-term interest rates cannot but be fearful about the future of US dollar dominance. In any case, I respect Prof. Schwartz's intellectual honesty, even if he is unable to look straight ahead through the windshield.
You were doing awesome until you made a gross error. No one knows if Taiwan will lose to China and using your analysis, China would be in serious trouble if an attempt is made to go across the straits for Taiwan. There are some people who have every thing down but then screw up their standing with an extremely immature comment you made at around the one hour mark. What a dork.😬
1:04:47 He lost me with the "Bitcoin is Garbage" comment .. all FIAT currencies eventually go to 0
Kryptos too
In the long run, we're all dead.