Replies (58)
Chapter 13 - nice double meaning there too 😁
Gm ☀️
Chp.13 is too far from me
Thanks Lyn. Incredible as always.
Thank you
If you’re picking on a small country, yes.
If you’re going after an economy of similar size whose industrial base would take two decades to replicate, no.
I wonder though did the administration actually identify this problem beforehand and this was their solution? Or did they just draw up some policy they liked without much thought and we collectively drew the more logical conclusions about the logic behind it?
This goes for the previous admin as well btw, making policy that someone is a fan of without much thought for practicality.
Idk, maybe that doesn't make sense, but I feel like the whole globalization narrative shifted after the "solution", not before.
@preston this would be a great discussion to have as a stand alone podcast. How about it you two?
This.
GM! ☕ ☀️ 🫂
Very good read!
There’s one more step to that, which the chapter covers.
When Americans traded their dollars for stuff, the foreigners take those dollars and buy a larger share of our companies from us. We gradually trade away parts of appreciating capital assets for depreciating goods. They keep selling us depreciating goods and own a gradually larger share of our appreciating assets.
I have a photo from a Roman tomb that depicts Dionysus and Araidene that I saw in the Louve. Very cultured of you to include this content in your book Lyn!
Exactly we aren't trade our Dollars for goods, we're trading our country's productive assets for depreciating goods.
The dollars are just the medium of exchange.
But isn't that trade deficit anyway just fictional? Only the trade in manufactured goods or raw materials are taken into account and it doen't include the whole service economy, from which the US exports a lot. Or am I mistaken here?
and your country‘s productive assets are appreciating because foreigners bet their dollars on them
Maybe in the grand scheme, that's what's happening. Most of "we" are not trading productive assets for foreign goods, though. We're trading our dollars for foreign goods and we aren't accepting foreign currency for our products. That's the discrepancy in currency demand from one being the reserve and the others not.
It's the next step where holders of dollars (foreign or domestic) invest in dollar denominated assets. The first imbalance leads to the next.
I'm almost to that chapter, I've been making my way through your book and it's glorious.
People need to understand how complex systems work: Structure gives rise to behaviour which gives rise to events. As long as the structure remains the same, nothing will actually change.
System behaviour arises from internal structure, not external influence!
System structure, in turn, is governed by the underlying predominant mental models and beliefs.
I bet they are enjoying those gains
Exactly, it is the first imbalance leading to this one, which is why it is important the first imbalance is addressed.
But to be clear, any time you buy foreign goods you're feeding the continuation of this trade pattern.
yes you are mistaken.
Perfect timing- excellent primer to get better hand on current macro - maybe folks gonna be having more nuanced discussions - I want to be able to bandy about words like mercantilism and trade deficits 😆 many thanks for this Lyn
View quoted note →So they would need to get rid of dollar's reserve currency status to solve the underlying problem. How could this be achieved?
I happened to just read Ch. 13 of Broken Money, a few days ago, just before this tariff tsunami started. It's got very relevant background information, very helpful, I've been recommending this chapter to folks.
Brilliant content, brilliant move to make it available for free now!
View quoted note →Shouldn't importing lots of cheap goods and services by printing money, make their companies very competitive and somehow compensate the difficulties of their low margin exporting companies ?
As usual you point in the right direction
as much as you are
Thanks 🙏 - I’ll read it while i wait..
Love your action figure. You've made it now 😜
Includes:
• Mini Fed printer
• Signed copy of Broken Money
• Express train (no brakes)
• Trillion-dollar coin (non-redeemable)
You are not mistaken. You nailed it. There’s no trade deficit!
Being superticious gives you bad luck... But chapter 13? 😏😶😂
"That trade deficit is the cost of maintaining the benefits USD system as currently structured. "
View quoted note →And Linkin Park has "Heavy is the crown" :-)
Gm🫡
Huge error that her left ear is visible though
Yeah that’s an imposter! Bizarro Lyn Alden!
Important to remember 90% of Americans only hold something like 10-7% of the US equities.
which is more than people in other countries who also tend to have a higher percentage of non-us stocks than Americans
The new hit single by Linkin Park - Heavy is the crown
Want
I started with chapt. 1, then skipped to read some of the later chapters, including this one. The main thing is, as I read it I get it, but afterwards I don’t really remember it. So I think it takes re-reading and taking notes.
not in other countries, and also not for Taylor Swift or her fans.
So let’s say you know that the reserve currency was about to change.
Would you try to reverse policy beforehand or nah?
Thanks for the reminder about this important chapter. I'm re-reading and annotating this time so I can help myself recall themes and data points for friends that think they "get it" but not like
@Lyn Alden "gets it." Cheers!
I would argue that fixing the trade balance is more important than maintaining the status of being the only global reserve currency.
I’d emphasize a multipolar currency world and neutral reserve assets.
Neutral reserve assets....
Thanks Lyn so yes there we go.
This is pretty much exactly what would be happening before a global monetary reset.
I was thinking the same #lulz
Heard a lot of this for the first time from my good friend
@Enoch Root 🫶🏼
Thanks for sharing Lyn!
I honestly believe you are giving Trump WAY to much credit in this hypothesis
He has little understanding of any of this, but hopefully he and leaders that come after him can learn enough to soften the inevitable impact the US is headed towards
The truth. The ability to print money is more like the Lord of the Rings
Google can buy cheap chips („depreciating asset“/tool) and use them to offer better services in part because the dollar is more valuable than it should be. But the American worker becomes more expensive and less eager to work.
On the other hand, foreigners move to the high paying US to work and build companies. This braindrain starves the rest of the free world of their entrepreneurs.
Some people say China or India is going to be the next super power, but those aside, I don’t see any country that is in better position than the USA.
We are being *asked* to kindly share this 🖇️ association at this time.
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