I agree that the global economy has put too much faith in the U.S. political and financial system. Diversification would encourage competition as well as increase systemic resilience. The present situation, where a U.S. default literally means the implosion of the current world order, is encouraging previously taboo debate to come out into the open.
A collapse of the U.S. dollar today shakes up a world in which China is ascending. I'd get mad if someone threatened to flip the game board just as I started getting ahead, too.
You don't actually believe that? The sole function of the US military is to protect US interests - no one else's! How would you feel if the Chinese navy parked itself in the Gulf of Mexico claiming to protect the free flow of global commerce? You would correctly proclaim that to be nonsense. Some goes for the US military. Don't believe the propaganda...
Certain oil-producing nations aside, this isn't mercantilism, and if the EU and East Asia had a problem with our military presence then we'd probably hear more than token protests about it.
I hate politics.
Wall Street was pretty chill through the middle of last week [2]. Once it started calling it became apparent that there was little it could do [3].
The expectation appears to be that Obama will prioritise payments after 17 October to avoid a default. Once a critical point is reached he will use "creative accounting," in the IMF's words, to come up with a solution. Him failing at that, the expectation is the Federal Reserve will find a way to credit the U.S. Treasury's account. All these options, it should be noted, involve the selective suspension of the rule of law - the lesser of the evils.
[1] http://www.reuters.com/article/2013/10/02/us-usa-fiscal-obam...
[2] http://dealbook.nytimes.com/2013/10/09/complacency-on-wall-s...
[3] http://www.nytimes.com/2013/09/04/business/economy/business-...
The debt ceiling has nothing to do with meeting ones obligations to creditors.
If the debt ceiling isn't raised, simply prioritize what the country's money is going to be spent on.
One of the most active navies in anti-piracy operations off the Horn of Africa is.. the People's Liberation Army Navy. They have had a presence on-station since December 2008.
http://yalejournal.org/2013/06/12/who-authorized-preparation...
The phrase the US seems to be preparing for war against China implies that there is political will behind the idea of actually putting plans into practice and going to war.
That isn't the case, and I find it extremely unlikely that will change in current environment.
And then think about pg's point #3 about why a government would have created Bitcoin: "because they felt their currency would never become the standard reserve currency, and they felt it was better that no one's be if theirs couldn't be" (https://news.ycombinator.com/item?id=5547423).
It won't be proof that BTC came from China if China suggests using BTC as the reserve currency, but pg's point will be proven to me, at least.
I expected your next word to be "gold."
How sure are you that there won't be any significant breakthroughs in bitcoin-mining math/tech over the next 30 years? 100 years?
Or are you talking about breaking the crypto primitives like ECC and SHA256? If there's adequate warning (months? years?) then it's possible to transition to new algorithms, otherwise, yeah, that could be a problem.
It can even split out multiple ways (think: one currency per company instead of per country/region). Pay your AT&T bill with AT&T Fun Bucks which have an exchange rate against Apple Awesome Bucks which have an exchange rate with Euros which have an exchange rate with Safeway Safe Way to Pay Coins.
The current bitcoin madness is just an experiment in how many ways you can say "THIS PAPER HAS VALUE," sign it, rip it into bits, then make people think each piece is a valuable part of the whole (which had imaginary value in the first place derived only out of scarcity—bitcoin isn't even shiny).
And even if a large number of people use AT&T's blockchain, it ceases to belong to them once they sell their coins.
The dollar is a sort of "proprietary currency" owned by one "monopolistic" country now. The goal of a "competitor" would be to create an alternative that is very open and decentralized (anyone can use), to disrupt that country's power and control over the world through its currency.
Sounds good to me.
If US want to keep them its a choice they make, the problem its that other countries cant do nothing about that, even if this stupid behaviour is affecting everybody else and burning down the middle class all over the world
I could tediously go on...
It is like Putin deciding to give Snowden asylum. Free poke at the gorilla, look he can't reach over here and hit back.
Of course a more open dialog is good, but nobody, especially the Russians or Chinese actually want a world government. That would take all the fun out of being a dictator.
Look no further than the Euro to see how challenging it is to manage a currency. And note that the countries in the EU are co-operating. Imagine how hard it would be if Greece or Spain was actively trying to siphon money out of Germany because of treaty obligations. If a recipe can be figured out for managing the Euro, then there will be a call for doing the same thing world wide, but until then its just a free poke at the US for being stupid.
Congress has the power, with a 2/3 vote, to expel a member. How about, instead of playing chicken with the world economy and our jobs, they put their own jobs on the line: scrap the existing debt limit and replace it with a rule of procedure in both houses that says if the House and Senate can't prevent breach of the debt ceiling (moved as they feel is necessary) they're all expelled.
Obviously it'd need to be worded such that a veto couldn't force out congress, but that sounds doable.
The problem isn't the people in congress, its the people they represent.
I propose a new digital currency be created according to certain eigenvectors[1] and allometry[2] features of trading network flows or simply the internet traffic flows.
The progress of Complex Network[3] theory may tell us more about how to build a solid algorithm for this kind of "evolving coins" to make them decentralized and evolve along with real economic activities.
I've been investigating the theory in part time and I dare say somebody with sufficient knowledge is able to figure out a model eventually.
IMO, bitcoin is the start of inventing a better currency, not the end.
[1]http://en.wikipedia.org/wiki/Centrality [2]http://www.nature.com/scitable/knowledge/library/allometry-t... [3]http://en.wikipedia.org/wiki/Complex_network
* Treasury notes and bills are widely used as collateral and upon maturity they turn into reserve currency cash.
* China, the oil producers run budget and trade surpluses and don't have a history of providing safe assets, like the US, Japan and some EU countries.
* Having a reserve currency causes your currency to appreciate, which isn't good for exporters.
* On the flip side too much spending will cause inflation, which plagues developing countries, but not the developed.
* So they cannot afford to spend as much, without their CB raising interest rates to fend-off inflation, which causes.. currency appreciation and trade deficits.
Which country will provide reserves AND safe assets? And what will China do to back this organization in these circumstances?
And the UN has no moral authority at all.
2) peg the currency to physical goods (gold, oil, etc). Fiat currencies have distinct advantages which make it optimal for modern trade.
3) use treaties to regulate government sovereign bonds with the global currency
