Link is celebrating by flying to the clouds.
this post was submitted on 16 Jul 2023
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Ironically, the efforts to fight inflation are actually driving dedollarization by making it more painful to borrow dollars.
Then, because global demand for dollars falls due to dedollarization, inflation necessitates continued tight monetary policy.
Not looking good for the US.
Yeah, it's fascinating to watch the feedback loops nobody anticipated come into play. The speed at which the world is dedollariziing is absolutely astonishing. And I expect that dedollarization will continue to become easier the more countries do it because all the networks for alternative trade will be in place making it easier for other countries to follow suit.
Inflation, surprisingly, has slowed down recently. I definitely expected it to continue at an elevated rate forever as dedollarization accelerated. It might just be a false plateau before something else causes inflation to spike again, but if not then this hypothesis (dedollarization is driving inflation) might not be sound.
I think part of it could be US cannibalizing Europe right now by luring away industry which is creating a short term economic boost we're seeing.
Possibly! Which, in turn, would weaken the USs positive relationships with those countries as they're pressured on multiple fronts (losses from trade competition, fallout from the Russian conflict, growing unrest from within the country) and thus accelerate dedollarization and then inflation. That would take time, though, and require another point of rupture that I certainly can't predict!
indeed
tH1ISS Isz n0T7Tt DeDO0LLla4r1ZasitIónnN!1!1!11
the copes are getting more and more desperate :)
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