> But now I’m sitting on this cash, and like Matthew McConaughey says in wolf of Wall Street , they’re fucking addicted
Only point of contention is that when you have a currency experiencing sustained inflation over any medium/long term time horizon, it makes sense people would want to hold anything over than cash. Anyone who saved in cash (even using Term Deposits) from basically the 70s to today in any currency has had their purchasing power destroyed.
I swear some Americans seem to think the world they live in is from 1955 or 1975 or something. The US is just one player amongst many, a very important one but by no means the paramount one for every country in the world. The idea it is simply isn't backed by facts on the ground.
So yea, if forced to choose between USA vs Rest of World virtually every country will choose RoW. Americans are delusional if they think they can just snap their fingers and everybody else will jump to attention.
> Given a choice between an embargo by the US or embargo by the rest of the world, cuba and every country in the world would choose 'the rest of the world'.
You really think countries will willing choose to trade with the USA over the rest of the world when it isn't the biggest destination for their exports nor their major source of imports? Why would they do that exactly?
And this has been a major problem for them since then. Look up the "Triffin Dilemma". If a nation's currency is the reserve currency it pretty much must run a trade deficit and one of the major impacts will be loss of manufacturing prowess. Happened to Great Britain when the Pound was the reserve currency too.
I think "follow the money" is the correct call but not like this. I think having the reserve currency be the USD means there is more demand for the currency than is needed to trade with the USA (because USD is used for all sorts of other international trade as well including things like buying oil). This makes the USD relatively too strong which makes their exports relatively too expensive.
This then has all sorts of flow on impacts throughout the manufacturing process and incentives inside the country.
My base case is still that the USD being the reserve currency is the problem. There will persistently by more demand for USD than is justified by the need to purchase American exports, so the currency is artificially high. This makes their exports more expensive than they should be relative to others, which hurts manufacturers.
Having a currency that is too strong for your economy always does this, look at the situation in European nations under the Euro.
> But now I’m sitting on this cash, and like Matthew McConaughey says in wolf of Wall Street , they’re fucking addicted
Only point of contention is that when you have a currency experiencing sustained inflation over any medium/long term time horizon, it makes sense people would want to hold anything over than cash. Anyone who saved in cash (even using Term Deposits) from basically the 70s to today in any currency has had their purchasing power destroyed.