When visiting Shrewd'm with a laptop, it can be pleasant to hold Command (or Ctrl with Windows) and '+' a few times. The site scales to allow any font size, and the larger font can be pleasant to read even for Shrewds with perfect sight! For luxury Shrewdness, you can combine that with setting the browser to full screen. You'll then find yourself Shrewding a lot.
- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 3
https://www.economist.com/leaders/2025/04/16/how-a... (or
https://archive.is/TV1y7#selection-1265.197-1265.2...)
The crisis scenario laid out is uncomfortably plausible, it feels almost inevitable. If I'm being entirely honest, the article felt too optimistic
*
"The courts are likely to stop him sacking Fed governors at will, but he will be able to nominate a pliant new Fed chair in 2026." "likely" and "pliant" are doing some heavy lifting.
*
"Meanwhile, the president’s other policies [...]make it possible to think that foreign creditors’ rights could suffer." again, "possible" is not letting the souls of Strunk and White rest peacefully.
* There is not a single mention of the Yuan. They allude to cryptocurrency, but not the gorilla in the room.
No. of Recommendations: 2
There is not a single mention of the Yuan
Are you implying that it would be the main currency? If so, I can't see that ever happening. As messed up as the US is, and I certainly can't stand Trump, the Chinese economy is mostly made up of fake numbers. Building unpopulated cities, releasing numbers that are not remotely correct. China has as many if not many more issues than the US does.
No. of Recommendations: 0
China has as many if not many more issues than the US does.
Spankee is actively trying to emulate China--30+k lies in first term. 120+k second term?
No. of Recommendations: 3
> "Are you implying that it would be the main currency?"
I honestly don't know. I think my perception of China is a little different than yours. It is not rosy, but unfortunately they are taking the lead from the US in terms of the largest economy in all metris. They are clearly the most important manufacturing economy in the world. They are likely to be or soon be at least on equal footing militarily.
And while China's not a notable champion of freedom, they feel like a more reliable partner than the US does currently.
From the perspective of the article, CNY feels far more relevant than any cryptocurrency does for reserve status. Countries will already have need and use for CNY in trade. I think that it is more likely that a number of countries that considered the US reliable enough to use as an exclusive reserve currency won't feel that way and will increasingly use a basket of USD, CNY, and EUR. OPEC obviously contains literal enemies of the US and they would like nothing more than to break the petrodollar. The US will have much less leverage, and won't be able to finance it's debt as easily... and it will have a snowball effect on our economy which may shift reserve basket weights, etc, etc.
I don't know that the perception of China's financial troubles are much worse than the US's perception post-"Global Financial Crisis". I think it is more likely that countries will be concerned their prior leverage of economic deals and partnerships with weaker countries in Africa and BRI projects. It would also seem like a nonstarter until they let the CNY float freely, which seems unlikely.
No. of Recommendations: 2
There is not a single mention of the Yuan
Are you implying that it would be the main currency?
Does there have to be a single “main” currency? I know it’s been that way since the end of the war (the big one, the one we won), and there was a single main currency before that: the Pound, but I wonder does it have to be one and only one?
Why couldn’t there be two, or three currencies that are seen as a haven of safety (or some variant thereof) for some period of time? I don’t know my economic history well enough to know if there was any competition for the Spanish dubloon back in its day (or whether that was even a concept back then) - and I freely admit maybe it’s the natural order of things to have “just one” (network effects, and all), but I can see a large part of the world (including investment houses which are politically agnostic to this sort of thing) coming to rely on the Renminbi (Yuan) if the dollar should nosedive thanks to the stupidity of Caligula-in-Orange. I’m sure there would be a period of hedging between several including the dollar, but I have to ask: why the $, one and only?
No. of Recommendations: 7
The crisis scenario laid out is uncomfortably plausible, it feels almost inevitable.
I have long thought that the notion of the US losing its dominant role was a little over-hyped. But of course, events sometimes make one revise one's certainties. Quite a few of them, this year.
I think a key point in the article is that around 1/6 of all outstanding US bonds are held by individuals (not institutions) outside the US, a group that "cannot be cajoled by diplomacy or threatened with tariffs" (or changes in military alliances). If they don't want to be invested in the US dollar or the US economy, they can sell, as I did.
That by itself won't change the centrality of the dollar's roles, but if they do sell it could have pretty major effect on the US dollar level and US treasury yields. Those could have knock-on effects: all kinds of trust have eroded, but there is a special kind of pecuniary trust afforded to an asset that hasn't plunged in market value in living memory.
Jim
No. of Recommendations: 7
Off Topic:
I ordered some woodworking tools from a Canadian company yesterday, called direct instead of ordering online as I had some questions. The man who answered was the owner, same guy who made the utube vid's displaying how to use the jigs. Super-nice, and smart. We talked for about 10 minutes about the situation in America. I told him I was not a Trump supporter, and that there are a lot more like me, growing in numbers, too. I started apologizing to him about the 51st State BS, he thanked me and said he did not think it was the will of most Americans to do that.
But we both share the same worries about things getting worse.
I also told him I was thankful that his prices have not gone up ( I had made my 1st purchase
last Fall ), and he said that sales under a certain dollar amount were not yet subject to
tariffs. So my American dollar had the same purchasing power, for now. I, personally,
am seeing the dollar buy less groceries, coffee and fresh produce are definitely up.
Of course, Trump posted that groceries and eggs are way lower, maybe too low,lol.
Man, Goebbels is turning over in his grave with jealousy.
No. of Recommendations: 3
given trump's lack of strategy and cowardice, i believe he will effectively back down from china as exemptions will be expanded for all meaningful items.
but there was an interesting post elsewhere regarding retaliation against any drastic steps that china may take on american bond holdings.
they proposed trump would seek to delist all chinese ADRs (not those military-adjacent), and place restrictions as were done on russian equities. this would suck not a small amount of liquidity out.
at this point, whether trump has authority versus whether trump would try seems decoupled.
No. of Recommendations: 29
but there was an interesting post elsewhere regarding retaliation against any drastic steps that china may take on american bond holdings. they proposed trump would seek to delist all chinese ADRs (not those military-adjacent),
Hmmm, that sounds like countering a tank with a bag of groceries.
I think that at some point the folks around Mr Trump will realize that he is not the one holding the cards in this case, as he likes to say. Some say that he was expecting a rapid surrender phone call from the Chinese when the high tariffs were first announced, and didn't get it--如果电话没响你就知道是我. ("if the phone don't ring you'll know it's me").
The US buys only a little over 14% of Chinese exports, and they are happy to endure pain as they don't particularly care if Chinese business owners squeal. The imports from the US are mostly commodities. A lot of Chinese exports to the US are mostly high tech and/or hard to replace. The Chinese do not need Americans to buy their bonds every day. The US will have to lose this particular fight, and then call it a win.
Jim
No. of Recommendations: 0
article seems correct in value ADRs > value china holds in u.s. debt, by ~30%.
just speculation, but wrong tool for a job is par for MAGA strategy.
it could end up as a bargain for investors\countries that dont mind less american holdings...which today seems more than since the asia commodity boom.
https://underhood.substack.com/p/from-i-sold-baba-...
No. of Recommendations: 0
Why couldn’t there be two, or three currencies. ...
There could be. However it adds a lot of complexity to certain things. For example, how would the world quote the price of oil each day? Would there be 3 prices? One in Yuan, one in Euro, and one in US$? When you buy or sell oil futures, would you have to also choose the currency in which to do so? And when settlement occurs, does it have to be in that currency, or would you have to do a conversion or multiple conversions to reach the currency you need to reach? And when selling/buying futures, and you are taking into account the interest rate for the period of the future, which interest rate do you use? The one you are transacting in or the one you eventually want or some combination? Etc.
No. of Recommendations: 3
I have long thought that the notion of the US losing its dominant role was a little over-hyped.
Why? All empires, without exception, have ended. Some end with a whimper, and some end with massive upheaval, but they all eventually end.
I answer the same way to those who fearfully exclaim that the human race will end in some cataclysm someday. All species end eventually (99.999+% of all species have gone extinct), so why would anyone expect Homo Sapiens to be any different?
No. of Recommendations: 11
I have long thought that the notion of the US losing its dominant role was a little over-hyped.
...
Why? All empires, without exception, have ended.
The comment was in the context of US dollar dominance as the global reserve currency in this era, not the dominance of the US.
The reason that I have long been dubious about "the end is nigh" quacking on the dollar domination front is because there isn't at present a viable alternative to the US dollar. The RMB isn't convertible, the Euro has no functioning buyer of last resort or single sovereign backer, and the others are mostly too small. So I figured it wouldn't really be feasible to push the dollar off its perch in any reasonable time horizon.
However, it seems that the US administration has managed to convince me that we live in a brave new world of possibilities...anything can be accomplished if you really set your mind to it. "The dawn of a new error".
Jim
