Comment by SllX

Comment by SllX 2 days ago

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> Should the US become an unfriendly power to the rest of the western world, it will find the demand for its currency plummeting, which I don't want to outline is a big issue.

Right now this is much more of a maybe, possibly, eventually, over a long enough time horizon.

As of the end of 2025, USD still made up 57% of foreign reserves vs 20% for the Euro and 3% for the Chinese renminbi. Nearly all commodities are still priced in USD and about 50% of trade invoicing is done in dollars, closer to 60% if you exclude the Eurozone. USD also makes up about 60% of SWIFT transactions.

So the demand is still there today and de-dollarization is not really a thing in aggregate as of January 2026, despite all of the events of the past year or so.

So if this time is different, I’m not seeing it yet.

panarky 2 days ago

The international "rules-based order" is a good idea when most nations play by the rules most of the time, and when the most powerful at least pretend to follow the same rules as everyone else.

A world order based on rules makes it possible to live at a much higher level of abstraction.

Abstractions like rule of law, democracy, government currencies and stock exchanges are intangible and imaginary. They're mostly just figments of collective belief. But these wispy and unreal ideas that everyone believes in make it possible for most people to live longer, healthier and less difficult lives.

The "rules-based order" was always partly mythical, but as long as everyone kept pretending, it mostly continued to function.

But when we devolve from the rules-based order to the old order of pure power and might-makes-right, kings and dictators, when there's no more collective belief that the rules apply to the rich and powerful, then the tower of abstractions collapses, and we're back to the cold, hard, brutal and difficult real world.

People will find out that life in the real world is a lot poorer and more miserable than life at the top of the tower of abstractions, even if your brokerage account appears to double.

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  • jmward01 a day ago

    I generally agree with your comment except the 'back to the real world' part. This is just the difference between a world with the gains that cooperation give verses a world with just the maximized minimum return that distrust leads to. A trusting world is the real world we have seen for decades. It is a real world we can choose to keep pushing for.

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    • nradov a day ago

      Who is the "we" who can choose? People training this from places like the USA and India have at least some modicum of choice. In China not so much.

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  • Lutger a day ago

    Neither is 'real'. The power of might depends on belief just as much as the power of rules. You need a whole lot of compliance, even when forced by fear and terror, to just keep up a police state. The belief consists of where people think other people assign authority to, at large. But that can be just as brittle as a meme stock if the time is right.

    Social reality is always constructed. No single construction is more real than any other.

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    • panarky a day ago

      A system that is closer to physical, tangible reality is more "real" than one built on many layers of concepts, beliefs and ideas.

      Just as "real assets" like buildings, machinery and metals are more "real" than abstract assets.

      Abstract assets like shares of a corporation, intellectual property, cash in a bank account, promises to deliver a commodity in the future, and other intangible concepts only exist because we collectively believe they exist and trust each other to follow rules.

      There are real weapons and prisons at the bottom of this stack of abstractions to force people to comply, but it's mostly collective belief, trust, culture and tradition.

      When we devolve from a rules-based order to might-makes-right, those layers of abstraction between us and the weapons evaporate, and ordinary people like moms and ER nurses get gunned down in broad daylight by agents of the state asserting raw power.

      Abstractions like law and due process evaporate, and the "real world" underneath is nasty, brutish and short.

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      • hunterpayne 12 hours ago

        "rules-based order to might-makes-right"

        These are the same. They are the same because someone has to enforce the rules. The reason why this entire discussion is so obtuse is because you refuse to accept this. If I was wrong and they were different, you wouldn't treat the US and others (say China) by the different moral standards. To bring this back to an individual level, this is the same as saying police don't deter crime. You wish these two concepts were different so you let your political bias blind you to reality. That doesn't effect reality though. Police do deter crime and whoever (the US) enforces the rules based order has to do so (from time to time) kinetically.

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        • panarky 10 hours ago

          > you refuse ... you wouldn't ... you wish ... you let your political bias blind you ...

          You don't know anything about me, but the strawman you're describing sounds like a real dipshit.

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  • mmooss a day ago

    > Abstractions like rule of law, democracy, government currencies and stock exchanges are intangible and imaginary. They're mostly just figments of collective belief.

    > But when we devolve from the rules-based order to the old order of pure power and might-makes-right, kings and dictators, when there's no more collective belief that the rules apply to the rich and powerful, then the tower of abstractions collapses, and we're back to the cold, hard, brutal and difficult real world.

    Many have absorbed and believe the argument of the might-makes-right crowd that their vision is 'real' and their enemies' vision is 'imaginary'. Unless people believe in what they seek, they are lost.

    There's nothing imaginary about it; that theory is paper thin and doesn't survive simple examination. Obviously, humans are social animals that live in groups, have powerful intellects, and therefore have tremendous ability to cooperate and work together toward greater good; we've done it many, many times. Freedom and democracy have appealed powerfully to people worldwide, in a tremendously wide variety of cultures. That model was created by people who had experienced WWI and WWII; they knew more of your 'reality' than probably you or I ever will, and with that knowledge and experience they created this order.

    And the greater good long predates that; religions and similar ethical codes based on the greater good long predate modern democracy and the rules-based order. Rules-based orders predate it. The Gospels in the New Testament are an easy, very familiar example, from 2,000 years ago (and a significant basis of modern freedom and democracy). Similar is true for abstractions like law, government, justice, etc.

    We all are biologically the same, essentially, as the best of humanity and the worst - both are in all of us. It's our choice, our moral choice, what we do. That is also a fundamental that long predates the post-war order, democracy, the Englightenment, etc. Inevitability is a cheap tactic long used by those whose ideas are undesireable and don't withstand scrutiny.

    Our choice is easier than those who survived WWII, and their predecessors. Our ancestors gave us the tools, the institutions, etc. They had to build them from nothing for a skeptical world.

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    • throwthrowuknow 21 hours ago

      Religion isn’t based on “the greater good”, it’s always explicitly about the will of the god or gods involved and obeying or appeasing them.

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      • mmooss 17 hours ago

        About religion, I don't think we can say "always" or anything near to that.

        I agree that religions commonly use the god/god's will as the reason, but I don't think we should take that at face value. It's the argument to trump all others - rulers often claim to be chosen by the will of the supernatural - but not the reason the rule was made, which is a product of the cultures involved.

        And humans often come to the same ethical conclusions: The rules against murder and rape, the priority on justice and fairness, as examples, are universal across cultures regardless of religion (look up 'cultural univerals').

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    • Lutger a day ago

      The source of truth in fascism is not popular support or inquiry, thus they always need to channel some privileged connection to reality, or claim to voice the true will of the people and authentically represents the pure will of the nation.

      Its a farce, of course, but one that can sometimes muster enough support to keep the signs in the shop with just a bit of intimidation and violence to back it up.

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  • majormajor a day ago

    The US has played by different rules, might makes right, in the western hemisphere for a long time.

    Screwing around with Greenland shit, on the other hand, seems riskier.

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    • [removed] a day ago
      [deleted]
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    • mjanx123 a day ago

      In practice the US could already do whatever it wanted in Greenland/Canada etc. The options for the motivation behind the theatrics I see. 1. Instill fear in the vassals->support for militarization rises there->they become more useable as proxies against RF/China 2. Just another Trump silliness

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  • dwoldrich a day ago

    [flagged]

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    • mlsu a day ago

      Buddy if you think financial crashes were bad today, you should see what happens when banking is not regulated (great depression). Or, if you think war is bad today, you should see what happens when the world becomes multipolar and countries start carving up the world for territory (WWII).

      Like please, read a history book.

      I'm sure I agree with you that there are many problems with this system but life without it can get so much worse. The green agenda? 4G? That's the worst thing you can imagine?

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    • RGamma a day ago

      What do you propose instead? Why don't the things that you condemn in "liberal democracy" happen there?

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      • dwoldrich a day ago

        Why do they happen now and why are you fine with them?

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    • pegasus a day ago

      Actually, what you're listing above is just another set of beautiful (to you) abstractions. No, "banksters" are not "100% parasitical". The percent is definitely less than 100. But, you know, as they say: the devil is in the details.

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      • dwoldrich a day ago

        Definitely less than 100? What do you know about it? How is what they've accomplished not monstrous crime so total, and we haven't even properly named it? It's systematized, bureaucratized, anti-human. "Clown World" is the meme, but that is not sufficient.

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        • direwolf20 a day ago

          Even Hitler wasn't 100 evil, because he planted flowers.

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  • YZF a day ago

    The rules based order is mostly a fabrication of recent history. Perhaps between the fall of the Soviet Union, China becoming more open, and the general peace and prosperity it seemed like it existed.

    Politics between countries has always been around interests. Countries have no interest in giving up their sovereignty. They may pretend to respect these "rules" when it suits them and then ignore them when it doesn't. Everyone is focused on how "bad" the US is but a) the US has always more or less done whatever it wants b) Russia and China (and many others) have never even pretended to play or accept these "rules".

    Canada's Carney whines about "international order" when just a few years ago China simply abducted Canadians in response to the supposed "orderly" arrest of the Huawei CFO to be extradited to the US. So Canada basically abducts the CFO of a major Chinese company and China abducts Canadians in retaliation and that's a rules based order to who exactly? And we can put together an endless list of an endless number of countries. So when exactly was there ever a rules based order except as a tool for countries to bully each other and for the poorer dictator led countries to try and get a seat at the table because they can vote in the UN general assembly.

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    • tpm a day ago

      > Russia and China (and many others) have never even pretended to play or accept these "rules".

      This false. They have pretended to play by the rules, and when breaking them, to at least manufacture some pretext, or to deny it was a state activity at all.

      One example I can give you is that when invading Czechoslovakia in 1968, the Soviet Union convinced a few Czechoslovak politicians to write a letter inviting the forces for "brotherly help", thus manufacturing a case that it's not really an invasion. They didn't have to do it, the force differential was overwhelming, but they did it because they could point at the letter on international stage.

      All this may seem a bit pointless but binding them in international structures brought interesting fruit in the wake of Helsinki conference on human rights. After that they were forced to at least somewhat follow the signed documents which lead to significantly better conditions to dissidents behind the Iron Curtain. And there are many examples like this, when pointing at international rules actually made things better. So let's not throw that away.

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      • direwolf20 a day ago

        Russia fabricated an attack on Russia by Ukraine before invading Ukraine. So this is still occurring.

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        • tpm 21 hours ago

          Possibly, though that was perhaps more for internal reasons, as at the time it was afaik illegal to start an attacking war per Russian law.

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      • panarky a day ago

        >> Canada's Carney whines about "international order" when just a few years ago ...

        > They have pretended to play by the rules

        @YZF is unwittingly agreeing with Carney. The rules-based order is partially a fiction. Relevant snips from Carney's Davos speech.

        "The system's power comes not from its truth, but from everyone's willingness to perform as if it were true, and its fragility comes from the same source."

        "For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection."

        "We knew the story of the international rules-based order was partially false ..."

        "This fiction was useful, and American hegemony, in particular, helped provide public goods, open sea lanes, a stable financial system, collective security and support for frameworks for resolving disputes."

        When the US invaded Iraq, it at least pretended it was following the rules. It appealed to the UN for approval, it justified the invasion in the name of freedom and democracy.

        It was all bullshit, but at least the US sustained the myth of a system of rules and a moral order.

        But the US no longer pretends. It invades Venezuela and publicly states it was all about oil.

        So even the pretense is gone now, and the benefits that came from pretending are gone. That's the "rupture" Carney is talking about, that sustaining the myths is not longer useful, so it's time to stop pretending.

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    • cjfd a day ago

      Incorrect. The rules based order was first attempted after the first world war and then created after the second one. These are lessen that have been bought with blood. Lots of blood. Megaliters of it. The incredible stupidity of throwing that away is absolutely disgusting.

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      • farss a day ago

        The "rules-based international order" was a fiction popularized by US policy makers who wanted to quietly substitute it for international law, so they could violate said laws, while still vaguely gesturing at moral authority.

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      • JPLeRouzic a day ago

        I acknowledge that the 20th century was marked by much bloodshed, but this wasn't limited to the world wars and it continues violently into the 21st century.

        If the world is governed by rules, why does the United States maintain a considerable number of military bases around the world, far exceeding the total number of military bases of all other countries combined?

        Why is the American military budget so much higher than the combined military budgets of all other countries?

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maxglute 2 days ago

>demand is still there today

Not all demand the same. There are broadly 2 types of USD buyers

1. price insensitive: sovereign banks, who buys for liquidity/storage

2. price sensitive: hedge funds, private buyer who buys returns

Type 1 buyers are bailing out of treasury. Type 1 are marginal buyers, the close auction regardless or rate, this keeps rates low -> debt servicing low. They artificially depress yield to non market rates, without them rate go up because you have more price sensitive buyers who buy for returns. This increases borrowing costs, hence US debt repayment rising massively.

Type 1 buyers, i.e. US allies (and historically even adversaries) soaked up treasuries are now de-dollarizing / buying gold in lieu of _more_ USD. Type 1s underpin the "privilege" part of exorbitant privilege. The more they de-dollarize the more dollars become exorbitant, aka debt like everyone else. Type1, sovereign held 60% of USD to 40% in last 5 years. This large part of why interest tripled and debt servicing went from 350B to 1T in 5 years. Type1s exit to 20% in another 5 years and maybe interest goes to 5%, debt servicing 2T+. It's the difference between 10%/20%/30% debt servicing as % of federal revenue.

This not to mention USD reserve ticking down at 1% per year means meaningful changes in our lifetimes, and velocity may increase with developments like Saudi no longer locking oil to dollar. Less USD as % of global reserve = more network effects of alternate payment = increased potential velocity of USD reserve drop. This doesn't mean other currencies pickup all slack, i.e. central banks seem to be going in gold / commodities with no counter party risk for new storage. The net result is USD will still be around, in large volumes, but the cost/debt to sustain the system will be "normalized" while US budget is historically is built around USD debt being privileged. AKA difference between borrowing money from family vs payday loans.

>Nearly all commodities are still priced in USD

PRICED as in benchmarked in USD, but =/= USD is being spent to settle them. There's a fuckload of commodities where PRC alone buys 30/40/50%+ of global production, and while quoted in USD, increasingly settled in rmb/CIPS, bilateral currencies, BRI infra or other swaps mechanisms that bypasses USD. This one of the largest source of dedollarization - PRC went from single digit % to plurality of cross-border settlements in RMB/non USD. Though this is just very recent leading indicator that USD is functionally circumventable.

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  • cbdevidal a day ago

    There is another type of demand that I rarely see mentioned. Not only does the United States owe trillions of US dollars, other nations do, as well. They hold many trillions worth of loans denominated in US dollars. They must be repaid in US dollars and not in any other currency.

    And not just to the United States but to other nations, as well. South Africa owes US dollars to Australia, Australia owes US dollars to Brazil, Brazil owes US dollars to Argentina, etc.

    These nations are hungry for every dollar we print. Even if every trading partner dropped the dollar for trade tomorrow, and if everyone who owned Treasuries all sold them at once, there would still be demand for US dollars to repay their loans.

    The IMF made them an offer they couldn’t refuse, and spun a sticky web of a debt trap as a result.

    Three minute video: https://m.youtube.com/watch?v=_SaG9HVXMQg&pp=ygUQZG9sbGFyIG1...

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    • maxglute a day ago

      >They must be repaid in US dollars

      IMO this one of those cases where dollars is ultimately benchmark than requirement, IOU/settlement forms can always be restructured/renegotiated if USD is no longer lender of last resort, i.e. alternative payment systems enables take it or leave it deals in medium/long term.

      USD/reserve status snowballed because US controlled techstack postwar which US leveraged (along with military hegemony) to USD controlling primary energy (petrodollar). Civilization/modernity was locked behind USD. Money followed existential goods provider, that's the real USD / unipolarity moat. There's no take it / leave it from US company scrip because leaving eurodollar system = technical default (most usd loans hardcoded on newyork/english law) from eurodollar western financial system = death sentence. Once that lock/dependency erodes all kinds of force majeure geopolitics can rationalize breaking dollar contracts. AKA multipolarity.

      If alternate techstack/payment systems pops up and reach tipping point, country A can just say to country B who only wants USD (due to alignment or whatever), I don't have enough USD, here's RMB & cips/Brics+ & mbridge basket of equivalent value. This geopolitical layer, if BRIC+ can offer fossil, food without US and PRC can offer renewable energy, capital goods, consumer goods, technology, including 80% as good semi and civil aviation... etc if chokepoint goods are no longer exclusively under USD perview, then USD enforcement mechanism simply dies.

      If we're talking about loans/aid, IMF is really pittance, low hundreds of billions. It's why PRC is now using their 3T USD surplus to basically do their own shadow USD lending without IMF conditionalities... countries now don't need to buy USD from US. And somehow PRC currently lending / providing swaplines with their USD at lower rates than US treasury. Incidentally, this dollar recycling also lowers demand for new USD bonds, further reduce type1 margin buyers. This circles back to other nations own trillions of USD to each other... when you remove type1s, you're left with type2 private sector / non bank financial institutions - these are the buys where each USD bought increases triffin burden, i.e. they are the exorbitant curse / payday loans traps that makes USD reserve more expensive to maintain. Their demand is a trap, not a benefit.

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      • AnthonyMouse a day ago

        > If alternate techstack/payment systems pops up and reach tipping point, country A can just say to country B who only wants USD (due to alignment or whatever), I don't have enough USD, here's RMB & cips/Brics+ & mbridge basket of equivalent value.

        Alternate payment systems aren't even required for this. If other countries are trying to divest US dollars and country B is owed "US dollars" and country A wants to pay in something else, country B would want to accept the something else of equivalent value because it's trying to reduce its US dollar holdings and would just be immediately turning around to resell them anyway.

        Conversely, if country B is insisting on US dollars for alignment reasons while other countries don't want them then that's only providing country A with the opportunity to divest its US dollars by using them to pay the debt. Then country B ends up with them, but now what is it supposed to do with them?

        The real reason those sorts of debts result in stability is that all the countries owed a lot of US dollars are going to do what they can to prevent the US dollar's value from declining.

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        • cbdevidal a day ago

          > The real reason those sorts of debts result in stability is that all the countries owed a lot of US dollars are going to do what they can to prevent the US dollar's value from declining.

          That’s the crux of it. Nations can proclaim they are ready to dump the dollar—and indeed, it is happening slowly—but politicians still have a strong appetite for USD-denominated loans.

          I am not optimistic for the dollar in the long run, but I no longer fear waking up tomorrow to see hyperinflation.

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      • cbdevidal a day ago

        > alternative payment systems enables take it or leave it deals in medium/long term.

        Assuming of course that the lender is interested in the alternative payment currency. Or that the borrower is willing to accept the consequences of default.

        I don’t see accepting other forms of currency to be relevant in the short term—there is little use for the Yuan outside of China, for example. I suppose creditors can use them to buy more trinkets, or trade for dollars with people who want more trinkets.

        And defaults can happen at any time, but the credit rating system is still widely respected.

        Things can certainly change, but I doubt overnight.

        > It's why PRC is now using their 3T USD surplus to basically do their own shadow USD lending without IMF conditionalities... countries now don't need to buy USD from US.

        So they’re using US dollars, not Yuan.

        That trend is changing; before 2021, most of China’s loans were in USD. After COVID, loans denominated in RMB have grown to 20%.

        Again, I can see how that would change conditions in the long term, but not overnight.

        I am not optimistic for the dollar in the long term but I used to fear waking up one morning to hyperinflation. Not anymore.

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        • maxglute a day ago

          Yes, hence "medium/long term", though for me that's potential 10-20 year horizon.

          > buy more trinkets

          RMB buys capita goods, energy goods... and as PRC domestically moves way from oil, it still has massive refining/petchem infra generating surplus, so they'll likely be net hydrocarbon seller (refined products), as in RMB can even buy oil / oil products. This part important, 2025 PRC has parity/exceeded the US as worlds largest crude refiner by capacity. Together with massive, massive SPR for storage... aka they have like 1B+ barrels of oil in storage which gives them pricing power (as in they have artifical oil field to influences oil prices). They will not be retiring all the oil infra as they electrify, they'll use freed up surplus for reselling hydrocarbon in rmb. Right now, outside of high end commercial aviation and semi conductor, PRC can underwrite 99% of development goods for affordable prices. This not 10/20 years ago where countries still had to through host of western industries to get factory/city off ground, PRC more or less one stop shop now. The TLDR is rmb buys entire physical layer that enables modernity.

          > credit rating system is still widely respected.

          Respecting western credit rating =/= fear of being locked western credit rating. People don't default from eurodollar because they fear losing access to energy, food, commodities. Things already changed in the sense RU has demonstrated BRICS makes surviving outside of western finance system feasible. Fear is what enforces/maintains system. Respecting is about keeping options open not avoiding death sentence anymore.

          >US dollars, not Yuan.

          They're doing both, refinancing or inking new contracts in RMB. But main point is PRC shadow dollar lending is part of their dedollarization effort = getting rid of / recycling / lending their surplus USD at expense of US treasury. People may keep using USD, but US gov not getting exorbitant privilege. As long as USD is being used, and as long as PRC can maintain trade surplus, PRC can feasibly maintain pool of USD to ensure USD liquidity remains costly. It's like the oil/SPR reserve, PRC having pool of USD to reprocess/recycle gives them some pricing power to undermine oil/and USD.

          >hyperinflation

          IMO this more likely than not, and not really something to fear. Not end of society hyperinflation but if US debt gets too unsustainable, geopolitically much better to inflate away debt and fuck creditors than default. Like it's still reputationally technical/soft default, but less "embarassing", and more importantly, because dedollarization takes time, mechanically US can inflate debt faster than holders can ditch USD without crashing value. If things get desperate to that point, USD has the dollar is our currency but your problem nuclear option. Not saying this good for US, but least bad for US.

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BobbyJo a day ago

> So if this time is different, I’m not seeing it yet

Compare those numbers to 5 years ago. Remember, this is the timescale of a country, not a beagle. America has run on the strength of the dollar for decades, and the symptoms of that collapsing are likely to play out over decades.

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dyauspitr 2 days ago

That number has been dropping by a percent every year for USD over the last 10 years. It used to be 65% USD in 2015

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  • SllX 2 days ago

    Sure, and in 1992 it was 46%, and in 2000 it was 71% and in 2013 it was 61%.

    USD foreign exchange reserves have definitely declined from their peak, but by “declined” we’re talking about going from “overwhelmingly dominant” to “merely dominant” to potentially in a few years “equal to every other foreign currency reserve in the world combined”, and maybe USD foreign exchange reserves will decline even further beyond that point.

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    • somenameforme a day ago

      There's some major historical events here. It's not just random movement. Here is a sort of visualization of key points and the USD share of global reserves with the events attached. The number in percent is the USD share of global reserves.

      1970 (85%) - Up until 1971 [1] the USD was backed by gold by the Bretton Woods system. Other countries could trade USD in for gold at a fixed rate and in exchange would peg their currencies to the USD and trade in the USD. The idea was to prevent the US from ever being able to exploit their power in this system because if we printed too many dollars other countries could just hoover those dollars up on the cheap, convert them to gold, and make a bunch of money. Nonetheless we did print excessive amounts of money and abuse the power this system was granting us. So France dutifully hoovered up those dollars and made a gold call. We said 'nah', defaulted on our debts, and withdrew from Bretton Woods. This led to the famous quote from Nixon's Secretary of the Treasury: "The dollar is our currency, but it's your problem."

      1990 (47%) - Following those events, the USD began seeing rapid inflation, and other countries were rapidly dropping the dollar. This 'peaked' around 1990. But then in 1991 the USSR collapsed. This not only left the US as the undisputed and sole 'king' of the world, but also led to these former nations beginning to dollarize once the dust had settled. The USD suddenly again starts to see mass adoption.

      2001 (72%) - The adoption reaches its peak in 2001. At this point not only was there the dotcom bubble, but the world order begins clearly shifting with China and Russia developing increasingly rapidly and looking to become viable world powers once again. And there's been a gradual process of de-dollarization since then declining to where it is today to less than 57% and very much trending to where we were right before the USSR collapsed.

      2025 (57%) - Where we are today. We're very much trending towards 1990, only 10 points away, which is the level when everybody was dumping the USD, the US economy was shaky at best, and there was another major superpower in the world and nobody was quite sure who would 'win.' This is far more significant than 'random noise' you're implying.

      ---

      I am leaving out plenty of relevant happenings including the transition to the petro dollar, South American economic crisis, and so on - but these only contribute to eras I think, while the above are the main drivers.

      [1] - https://wtfhappenedin1971.com/

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jacquesm a day ago

The end of 2026 was remarkably different to the world of today, and it that's logical it is - checks calendar - already 31 days ago. Now imagine another year of this.

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