Thank you, Ryan, excellent work! As you mention about Bessent, as per his “economic statecraft” against Iran, the world’s hegemonic bully is perpetually devising new schemes to undermine any “adversary” - meaning any nation not willing to be a vassal. Even if you had a full treaty ending a kinetic war with the U.S., they would still be hard at it on every conceivable front still in attack mode. No amount of defeat is enough to cause a learning experience with those people, that’s just who they are.
Yes, in building an alternative currency, a lender of last resort is advantageous, as is filling the pool before people can swim (dispersed liquidity) and various swap mechanisms. The usual means of filling the pool is by trade deficit or foreign aid at scale. The flip side of that is funds returning by investment - capturing the savings of the world. China could, however, operate on a forward cash basis which doesn’t need foreign investment along with the drag on the economy of paying interest on foreign debt.
I would guess that China, being a productive economy while the U.S. is an entitlements economy, could weather this storm. The U.S. can’t understand the limits of its power; in fact, they firmly believe there to be no limits to their power. So they go headstrong into another round of war against Iran while being short of munitions. In grabbing for the petroyuan lever, they may be grabbing the wrong end of the stick, which, if the world is lucky, China can use to knock the wobbly legs out of the U.S. financial scheme. That, however, endangers the entire world financial system with all those central banks ending up holding worthless U.S. T-bills.
A mad scheme to break China would mirror the failed “regime change” in Iran - if China is taken out, who could replace that manufacturing? Nobody. If China could knee-cap the U.S. Dollar, there would be a global depression, but in the long run, to everyone’s benefit.
Excellently put. It think the reason they are unwilling to accept the limits of their power is the existential nature of the crisis of capital in which they are in. In essence, flipping the board at this point is perhaps preferable to losing the game. There was discussion of building an alternative non-country-currency payment system among the BRICS nations but it stalled under Brazillian leadersgip of BRICS and has remained stalled under Indian leadership. I have heard this under external pressure. As I wrote about in Blowback Machine the US is not in a strong position here.
Excellent points, thank you, Ryan. Unfortunately, they are too stupid to appreciate the perils to the entire world of “flipping the board” just as they were too stupid to see the perils of attacking Iran (against their own intel advisories). There are major problems with initiating a collectively-owned world currency, esp when one power remains dedicated to exploiting any vulnerabilities in everything, and governments persist in meddling in trade and commerce. The BRICS notion of the “Unit” fails by being heavily gold-backed; metalist notions of money neglect the ability to grow the monetary base with economic and/or population growth. Before a commons-controlled world currency could work, an end to hegemony is required, as per the Xi/Putin summit calling for a new world security arrangement, with all nations working together for the betterment of all. https://kathleenmccroskey.substack.com/p/a-proposed-un-dollar
I agree. Did you see the discussion review I posted a couple of weeks ago. I think h the at would really interest you if you haven’t already. The Geopolitics of Finance. It was a fascinating discussion and I was very lucky to attend. I think generally there was agreement that something like Keynes Bancor would be the best option.
This is indeed disconcerting. How the different monetary/financial infrastructure b/w China now and Japan then would affect the ramification of this (potential) scheme is what I'd like to know first.
Thank you, Ryan, excellent work! As you mention about Bessent, as per his “economic statecraft” against Iran, the world’s hegemonic bully is perpetually devising new schemes to undermine any “adversary” - meaning any nation not willing to be a vassal. Even if you had a full treaty ending a kinetic war with the U.S., they would still be hard at it on every conceivable front still in attack mode. No amount of defeat is enough to cause a learning experience with those people, that’s just who they are.
Yes, in building an alternative currency, a lender of last resort is advantageous, as is filling the pool before people can swim (dispersed liquidity) and various swap mechanisms. The usual means of filling the pool is by trade deficit or foreign aid at scale. The flip side of that is funds returning by investment - capturing the savings of the world. China could, however, operate on a forward cash basis which doesn’t need foreign investment along with the drag on the economy of paying interest on foreign debt.
I would guess that China, being a productive economy while the U.S. is an entitlements economy, could weather this storm. The U.S. can’t understand the limits of its power; in fact, they firmly believe there to be no limits to their power. So they go headstrong into another round of war against Iran while being short of munitions. In grabbing for the petroyuan lever, they may be grabbing the wrong end of the stick, which, if the world is lucky, China can use to knock the wobbly legs out of the U.S. financial scheme. That, however, endangers the entire world financial system with all those central banks ending up holding worthless U.S. T-bills.
A mad scheme to break China would mirror the failed “regime change” in Iran - if China is taken out, who could replace that manufacturing? Nobody. If China could knee-cap the U.S. Dollar, there would be a global depression, but in the long run, to everyone’s benefit.
And I’ve just realized you spell Bessent correctly and I consistently spell it “Bessant.”
Excellently put. It think the reason they are unwilling to accept the limits of their power is the existential nature of the crisis of capital in which they are in. In essence, flipping the board at this point is perhaps preferable to losing the game. There was discussion of building an alternative non-country-currency payment system among the BRICS nations but it stalled under Brazillian leadersgip of BRICS and has remained stalled under Indian leadership. I have heard this under external pressure. As I wrote about in Blowback Machine the US is not in a strong position here.
Excellent points, thank you, Ryan. Unfortunately, they are too stupid to appreciate the perils to the entire world of “flipping the board” just as they were too stupid to see the perils of attacking Iran (against their own intel advisories). There are major problems with initiating a collectively-owned world currency, esp when one power remains dedicated to exploiting any vulnerabilities in everything, and governments persist in meddling in trade and commerce. The BRICS notion of the “Unit” fails by being heavily gold-backed; metalist notions of money neglect the ability to grow the monetary base with economic and/or population growth. Before a commons-controlled world currency could work, an end to hegemony is required, as per the Xi/Putin summit calling for a new world security arrangement, with all nations working together for the betterment of all. https://kathleenmccroskey.substack.com/p/a-proposed-un-dollar
I agree. Did you see the discussion review I posted a couple of weeks ago. I think h the at would really interest you if you haven’t already. The Geopolitics of Finance. It was a fascinating discussion and I was very lucky to attend. I think generally there was agreement that something like Keynes Bancor would be the best option.
Thank you, haven't seen that, I will look it up from your home page. One thing for certain, a world currency must NOT be in the hands of a malicious actor. Here's an overview on the war on China: https://kathleenmccroskey.substack.com/p/sacrificing-america-to-break-china
This is indeed disconcerting. How the different monetary/financial infrastructure b/w China now and Japan then would affect the ramification of this (potential) scheme is what I'd like to know first.
I’ll answer this later today.