Quote from: pooya87 on Today at 05:11:32 AM

Quote from: Ludmilla_rose1995 on April 20, 2024, 12:30:06 PM

➥ They Bet Against the Dollar. Now They’re Paying the Price.

Whoever wrote that article has no understanding of the economy Cheesy

Specially since they are comparing USD with Japanese Yen and interest rates.

Let me put it simply.
When Japan prints money (lets say a million dollar equivalent) that money is only going to be used domestically inside Japan and it only enters Japanese economy. Simultaneously when the Japanese government wants to sell any bonds they pretty much sell it domestically to Japanese so that also stays domestically.
On the other hand when US prints money (a million dollar) that money is used globally and enters global economy. When they increase interest rates and sell bonds they also sell it globally.

So for example the $1 million US printed is going to be used by Saudi Arabia to sell its oil to Japan and the bond US printed and dumped on the world is also going to be bought by Japan. So now Japan is facing 2 inflations: First is the one caused by the $1 million they printed themselves and Second is the $1 million US printed and they used. Meanwhile they are also using the little money they have left to buy US bonds to help US economy stay up instead of using that domestically to improve their own economy Grin

This is not called "US economy booming", it is called a Ponzi scheme at its peak.

Otherwise a healthy and booming economy does not have:
1. A high inflation
2. A high interest rates
3. A government that prints $1 trillion every 100 days
4. A massive trade deficit
5. A massive national debt ($35 trillion) and growing

So things are pretty much the same as 6 years ago when you started this topic.
The more the world dedollarises, the more they decouple from the Ponzi scheme known as US economy so the more their own respective currencies strengthen and the more US dollar weakens.

If they do the opposite and do less dedollarisation, use more US dollar and increase their dependence on the Ponzi scheme, the more their own respective currencies dumps and the more their economies weaken while US dollar strengthens.
This goes on until we see another catastrophe like 2008 when the Ponzi scheme falls apart and it significantly and negatively affects global economy. More effects on those who didn't dedollarise...

While it is true that the actions of different countries can have varying impacts on their own economies and the global economy, characterizing it as a Ponzi scheme might be an oversimplification. Let's break down the points you mentioned:

1. Printing money domestically: When a country, like Japan, prints money, it does enter its domestic economy initially. However, the effects of increased money supply can also spill over into the global economy through trade and investment flows.

2. Selling bonds domestically: While a government may primarily sell bonds domestically, foreign investors can also purchase these bonds. The global bond market allows for the participation of international investors, which includes buying bonds issued by other countries.

3. US dollar's global role: The US dollar is widely used in international trade and is considered a global reserve currency. This means that when the US prints money, it can circulate widely in global markets. However, this doesn't mean that the US is solely benefiting from this. The global use of the US dollar can also have advantages for international trade and investment, as well as challenges for the US, such as currency fluctuations and managing its debt.

4. Impact on Japan's economy: In your example, Japan may face inflationary pressures from both domestic money printing and the inflow of US dollars. However, it is important to note that countries often consider a range of factors when making decisions about monetary and fiscal policies, including economic stability, trade relationships, and geopolitical considerations.

It is crucial to approach the topic of global economics with a nuanced understanding, as it involves complex interactions and interdependencies between countries.

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