31 sats \ 1 reply \ @justin_shocknet 14 Aug \ parent \ on: MicroStrategy, IN-Q-TEL, & the CIA conspiracy
Dollar became reserve not because is could produce stuff, but because the US was stable
You can't produce stuff if you're unstable
Lack of natural resources, including defensible geography, demographics, and rule of law, are requirements for stability
Chinas manufacturing can disappear overnight, unlike when Europe was bombed out and US had leverage... China has no such leverage, it has bad geography, demographics, no expeditionary force... it's not even remotely comparable.
That's the point, fiat is temporary, not just the current fiat. All fiat. There's no where to run after the dollar, because we no longer live in the world in which it was created.
US was 'stable' in part because of its distance from Europe and the devastation of WW2. USA only entered WW2 after it was invaded but never suffered the destruction of its main industrial base.
The world is now dependent upon Chinese manufactured goods. The USA cannot declare war on China because that would bankrupt many of the USAs biggest corporates who are so seriously dependent upon Chinese production chains. Fiat money is a form of state leverage- leveraging upon the monetary wealth of your citizens to wage war or expand your economy or to fund whatever woke project. China is using fiat capital issuance to build a global trade infrastructure network.
In the west the banks have become parasites capturing fiat capital issuance and using it to rentseek non productive fiat debt- a lot of it housing debt. The governments of the west have become subservient to the banks while China still maintains control over banks and direction of capital flows. China is now supporting proxy war military attack upon Western backed territories and intends to expand its sphere of dependent states as the logic of hegemony dictates. IMO the outcome cannot be easily predicted or prejudged.
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