Problems in International Economy: The Triffin Paradox

[Tom Paine 1949]

I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?

 

[Pete7469]

Can't say I would argue with anything, but I can't pretend like economics are something I've studied in depth.

I do find it amazing that the dollar has the buying power it does now that it is literally nothing more than electrons in a computer, with some paper script for people to pass among each other. If the day ever does come where it no longer is accepted at face value, a lot of people are going to starve to death.

 

[toobfreak]

I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?

I couldn't agree more about most of that, Tom, not because I want to see it, but because I believe that greed and exploitation always prevails like the buffalo until the market is simply run into the ground. And then, America will pay a price. As to the dollar losing global favor, that is up to US. It doesn't have to, but again, I think excessive greed and exploitation by fat, stupid and greedy politicians to buy votes will cause its fall if it ever happens.

Indeed, they may actually DESIRE that because many of them are socialists lobbying for the global market and we may indeed be seeing that happening RIGHT NOW.

 

[Olde Europe]

I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?

Yeah, "Triffin dilemma"... or whatever.

A trade deficit results if you are buying more from the rest of the world than you can competitively produce and sell. Quite frankly, I don't give a rat's posterior on any currency-related theory to blame for the trade deficits.

Why can't a median American worker afford a TV set manufactured in the U.S.? That has to do with purchasing power, which again has to do with workers' bargaining rights. If at least half the population is living paycheck-to-paycheck during the best of times, slave labor is necessary to supply them with low-cost goods, and that kind of labor is currently being found abroad.

So, the main reason for the trade deficit is a plutocratic caste mostly making money off money, and seeking and drawing rent, who see workers as a cost factor to be suppressed as much as possible, not an asset to invest in, and paid accordingly. They are the true heirs of the slave-owner class, and not likely to drop their habits and predatory, exploitative predilections.

The best trick is plutocrats raking it in from slave labor abroad, the slave wage labor at home, while mostly extracting themselves from the cost of maintaining decent living standards and the common good stateside, and buying a political class pointing at, and blaming, everybody and everything else to explain the "dilemma": Immigrants, Chinese tricks, lazy U.S. workers who should work "harder", moochers, mostly minorities, "currency" issues, socialism, or what have you. The most disheartening thing about all this is a (mostly White) working class largely buying that garbage, increasingly irate to the effect of destroying the last protections they have under the motto "best tear it all down", which amounts to the biggest, most dangerous challenge to that experiment of enlightened self-government since at least the Civil War.

That's when mayhem ensues, the U.S. becomes with world center of a pandemic, producing face masks and swabs - SWABS! - in sufficient quantities becomes problem, disinformation by the Carnival Barker tops the "News", and armed-up goons determine States' policy choices with the support of the aforementioned Carnival Barker. Yeah, I know, but the "Triffin dilemma". Whatever is needed to avoid looking at supremacism, internally and internationally, so as to avoid to realize what's really going on.

 

[EdwardBaiamonte]

exploit weaker economies via keeping them in debt and subservient to our finance capital.

??? Trump got elected because he thought, and we agreed, we were getting exploited by other countries like China, Europe, Canada. What weaker economies do you imagine we are exploiting??

 

[EdwardBaiamonte]

It has proven profoundly corrupting of our society,

??? losing 30 million jobs to China has been profoundly corrupting???

 

[EdwardBaiamonte]

which again has to do with workers' bargaining rights.

Under Republican capitalism workers have great bargaining power in China which is why 800 million were just ushered into the middle class out of socialist starvation poverty. Do you understand? Shall I explain further??

 

[Tom Paine 1949]

exploit weaker economies via keeping them in debt and subservient to our finance capital.

??? Trump got elected because he thought, and we agreed, we were getting exploited by other countries like China, Europe, Canada. What weaker economies do you imagine we are exploiting??

It has proven profoundly corrupting of our society,

??? losing 30 million jobs to China has been profoundly corrupting???

which again has to do with workers' bargaining rights.

Under Republican capitalism workers have great bargaining power in China which is why 800 million were just ushered into the middle class out of socialist starvation poverty. Do you understand? Shall I explain further??

I’m afraid you can “explain“ nothing because almost everything you “understand“ is wrong.

 

[EdwardBaiamonte]

I’m afraid you can explain nothing because almost everything you understand is wrong.

can you give your best example and explain why it is wrong???

 

[Tom Paine 1949]

Not really. You might be able to figure it out eventually, if you keep your mind open and review my old comments, and continue to read my new ones ... and if you are young.

I don’t really mean to sound arrogant, but I wouldn’t know where to start.

 

[EdwardBaiamonte]

Not really.

so you said I was wrong but lack the IQ to say why???

 

[Tom Paine 1949]

You are right. I am probably not smart enough to convince you of anything, especially just in a moment by giving you a “best example” and explaining why I think you are wrong. Sorry.

 

[EdwardBaiamonte]

You are right. I am probably not smart enough to convince you of anything, especially just in a moment by giving you a “best example” and explaining why I think you are wrong. Sorry.

so why be here if you lack the ability to explain why an opponent is wrong. Debating requires more than your feeling that an opponent is wrong; it also requires a reason to think he is wrong. Do you understand?

 

[Tom Paine 1949]

Alright. Quickly —

1) “Weaker economies” mean weaker economies, especially less developed and smaller economies. I was not referring to China.
2) “Losing 30 million jobs to China” is not what I said was corrupting — if you read what I wrote you would see I was talking about the effect on our (arrogant and once relatively far more productive and powerful) society of being able to “monetarize” debts. This is a chicken and egg problem you obviously don’t get.
3)“Republican capitalism” as a description of modern China ... makes no sense at all.

Why not read my post again, the link, and some of the links within the link until you understand what I’m talking about? Hint: It’s not socialism.

 

[EdwardBaiamonte]

of being able to “monetarize” debts.

ok so we can monetize debt and our trading partners it. And????????????????

 

[EdwardBaiamonte]

3)“Republican capitalism” as a description of modern China ... makes no sense at all.

they used to be socialist and 60 million starved to death, then they got the idea to switch to Republican capitalism thanks to Adam Smith, Milton Friedman and others. How would you describe modern China's economy??

 

[EdwardBaiamonte]

Why not read ...... until you understand what I’m talking about?

ah, we all want others to read until they grasp our wisdom don't we?

 

[georgephillip]

I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?

Michael Hudson has written extensively on this subject:
From 2002:

https://michael-hudson.com/wp-content/uploads/2010/03/superimperialism.pdf (P. 3)

"Michael Hudson’s Super Imperialism: The Origins and Fundamentals of U.S. World Dominance explains how the dollar’s being forced off gold in 1971 led to a new international financial system in which the world’s central banks are obliged to finance the U.S. balance of payments deficit by using their surplus dollars in the only way that central banks are allowed to use them: to buy U.S. Treasury bonds.

"In the process, they finance the U.S. Government’s domestic budget deficit as well.

"The larger America’s balance-of-payments deficit becomes, the more dollars end up in the hands of European, Asian and Near Eastern central banks, and the more money they must recycle back to the United States by buying U.S. Treasury bonds..."

"Foreign governments have been obliged to hold U.S. bonds whose interest rates have fallen steadily, while their volume now exceeds America’s ability or willingness to pay."

 

[Toddsterpatriot]

I would love to see an end to U.S. balance of trade deficits ...

BUT that is very unlikely to happen so long as the U.S. insists on maintaining its dollar supremacy in world trade. The Triffin Paradox — Triffin dilemma - Wikipedia — means that a country whose currency dominates global trading must almost necessarily run trade deficits. The exception being conditions like after WWII, when there was no serious competition to U.S. products on world markets. The global supremacy of the dollar means we can “monetarize” all our debts, use our fiat money on world markets without limit, exploit weaker economies via keeping them in debt and subservient to our finance capital. It has proven profoundly corrupting of our society, which moreover is addicted to meddling overseas to protect this monopoly and way of life.

Harder work, more education, less Wall Street speculation and crony capitalism, less waste and more institutional efficiency — these are what is needed to improve U.S. competitiveness. MORE not less world economic and financial integration is needed. Less U.S. imperialism. Of course adjustments can be made along the way, tariffs put in place here or there, but dollar supremacy in the end will likely fade, and so will the relative weight of American economic and military power. China and the RMB is not ready to replace the U.S. and the Dollar — and never will be if we act intelligently. But the days of Federal Reserve ability to monetarize U.S. debts unilaterally is coming to an end.

What do you think?

Michael Hudson has written extensively on this subject:
From 2002:

https://michael-hudson.com/wp-content/uploads/2010/03/superimperialism.pdf (P. 3)

"Michael Hudson’s Super Imperialism: The Origins and Fundamentals of U.S. World Dominance explains how the dollar’s being forced off gold in 1971 led to a new international financial system in which the world’s central banks are obliged to finance the U.S. balance of payments deficit by using their surplus dollars in the only way that central banks are allowed to use them: to buy U.S. Treasury bonds.

"In the process, they finance the U.S. Government’s domestic budget deficit as well.

"The larger America’s balance-of-payments deficit becomes, the more dollars end up in the hands of European, Asian and Near Eastern central banks, and the more money they must recycle back to the United States by buying U.S. Treasury bonds..."

"Foreign governments have been obliged to hold U.S. bonds whose interest rates have fallen steadily, while their volume now exceeds America’s ability or willingness to pay."

the dollar’s being forced off gold in 1971 led to a new international financial system in which the world’s central banks are obliged to finance the U.S. balance of payments deficit by using their surplus dollars in the only way that central banks are allowed to use them: to buy U.S. Treasury bonds.

No one is obliged to finance our balance of payments deficit.
You don't want to hold dollars, don't. Use them to buy US made goods and services.
Use them to buy commodities. Use them to stuff your pillows and mattresses.
Burn them as fuel. Or save them. So marxist twats like Hudson can whine that
the United States is forcing you to do something......DURR

 

[Supposn]

Tom Paine 1949, I’m among the proponents of the improved foreign trade policy described in Wikipedia’s “Import certificates” article; refer to Import certificates - Wikipedia .

The unilateral and substantially market (rather than government) driven proposal would significantly reduce, if not eliminate USA’s chronic annual trade deficits of goods while increasing our annual GDP’s more than otherwise.
For any given extent of a nation’s aggregate purchases, trade deficit nations reduced, and trade surplus nations increased their annual GDP’s more than otherwise; otherwise being if the polarity of their trade balance had been otherwise.

Annual trade deficits indicate that their nation’s annual purchases exceed the value of their entire production; they spent more than they earned. Annual trade deficits are particularly detrimental to their nation’s total numbers of jobs and the purchasing power of employees' median wage.

Nation’s annual trade deficits, similar to lighting cigars with hundred-dollar bills, are practices more easily sustained by those more wealthy.
But annual trade deficits are detrimental to their nations’ economies and to using $100-bills as torches are detriment to the payers' aggregate wealth.

Respectfully, Supposn