Go and sit on the naughty step!

Sure, that is a good way to solve the problem. Provide even more incentive to abandon the dollar by threats of economic violence against those that do. Just look at how successfully Russia has been at containing the expansion NATO using a similar strategy.

Hawkwin
The beatings will continue until morale improves.

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The US has a mixed record on being able to bully other sovereign states.

It worked after WWI. The US had financed it’s own, and all it’s allies, from April 1917 on. After the war, the US came on like a loan shark, demanding payment. The stick the US used to bring it’s former allies to the table to negotiate repayment schedules was being denied access to US financial markets if they didn’t.

Didn’t work so well in 1932. When the depression started, France defaulted on the war debt immediately. The UK and Italy made partial payment, paying as much as they could manage in the circumstances. The US Congress passed another law, saying that partial payment was the same as default, punishable by exclusion from US financial markets. On that go around, the UK and Italy told the US to get stuffed and defaulted.

This article makes for interesting reading.

Neither a Borrower nor a Lender Be: America Attempts to Collect
its War Debts 1922-1934.

https://dc.etsu.edu/cgi/viewcontent.cgi?article=2554&context=etd

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We saw how to inspire confidence in the dollar: a balanced budget and a stable government, like we had in the late 90s. Gigantic debt and deficits, massive corruption, and coup attempts do not inspire confidence.

Steve

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Politics is banned on METAR. I have flagged this post for removal.
Wendy

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I saw it as an economic subject, quite an interesting one.

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I first noticed a mention of the dollar’s popularity in a Fed. note last year which i have managed to find:

However, over a longer horizon there is more risk of a challenge to the dollar’s international status, and some recent developments have the potential to boost the international usage of other currencies.

Several commentators argued that sanctions imposed by the United States and its allies on Russia following the invasion of Ukraine may make the dollar less attractive as a reserve currency as geopolitical adversaries fear exposure to U.S. sanctions when relying on the U.S. dollar as a reserve currency.

A sort of nothing to worry about, but we though that we would mention it anyway. People are taking notice.

I thought this part of the article was interesting:

Several commentators argued that sanctions imposed by the United States and its allies on Russia following the invasion of Ukraine may make the dollar less attractive as a reserve currency as geopolitical adversaries fear exposure to U.S. sanctions when relying on the U.S. dollar as a reserve currency. However, Weiss (2022) documents that about three-quarters of foreign government holdings of safe U.S. assets are already held by countries with some military tie to the United States. Furthermore, other prominent reserve currencies such as the euro, Japanese yen, and British pound, are all issued by close U.S. allies, who also participated in sanctions on Russia. Thus, geopolitical adversaries do not have many attractive alternatives to the U.S. dollar.

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interesting certainly, but don’t forget who wrote the article. They could hardly say much different could they?

That’s an interesting rejoinder, except aren’t you the one who put the article in play in the first place?

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I’m not quite sure what your point is. I just made the point that this was the first time I’d seen a Fed. Note mention this and dismiss it. I’m interested that they found it necessary to do this.

It is creeping into the financial press. I think a while ago Bloomberg called the BRICS efforts to replace the US dollar “an exercise in futility” :slight_smile: