The US produces a lot of things others want to buy, including stability and security, and that is why non Americans want USD and hence others give Americans purchasing power.
They are not given a choice mate, the US has shown itself quite willing to unilaterally dispose of any government it feels to not be doing exactly what they want. And is on record to at least plan to kill it's own citizens to justify such actions.
The narrative that we all have peace because of the US is well and truly broken, the propoganda can't cover the smell, it stinks to bad.
And the US allows articles to be written about China and Saudi Arabia considering buying and selling oil in Yuan, ostensibly to provide cover for the fact that the US is actually forcing both China to buy in USD and Saudi Arabia to sell in USD.
It couldn’t possibly be that Iran trusts USD to have a more reliable purchasing power than an Indian Rupee, or that Saudi Arabia would rather bet on stability from USD rather than the Yuan.
Trade balance shows US doesn't produce that much others wants to buy while others produce a lot of things US wants to buy. You almost never see "Made in USA" outside of USA, except some agricultural products like almonds from California.
Look at the biggest software tech stocks. They generate enormous amounts from exports. Same for pharma. Same for AMD, and most of their final product is manuf in Taiwan, Malaysia, and Korea. Made in X will most often be seen on clothing and cheap consumer goods. Those are low value products, produced in poorer countries. Even the iPhone is mostly assembled in China, but where do most of the profits land? With Apple.
Trade balance isn’t going to show a lot of what the US offers, which is not readily convertible to a numeric figure.
Changes in currency exchange rates are the best way I know of to get a pulse on what the collective population of the world thinks about what the US offers.
Things like choosing to do business in the US because they overall trust the courts, or investing in US companies because they overall trust the management and SEC oversight. Or even just investing in US land because they trust the internal stability and lack of external threats.
> Changes in currency exchange rates are the best way I know of to get a pulse on what the collective population of the world thinks about what the US offers.
No it isn't, many non-American companies trades in US dollars without anything ever having to do with the USA. The world doesn't change what currency it trades in that easily, people will stick with the dollar until USA screws up majorly, like every previous world currency did.
A French bank was fined $9 billion by the United States because it routed Iran-France trade payments through US banks in dollars, violating American law (despite the trade being legal internationally), demonstrating the power of the US dollar as the global reserve currency.
When Will De-Dollarization Happen? Explained by Kishore Mahbubani
> The continued strength of the USD is just a vote of confidence in the buying power of the USD in the future.
Right, but that buying power comes from buying Chinese goods, so a European likes USD since China accepts it and you can buy stuff from them with it. Nobody buys American so that isn't a factor.
If China stopped accepting USD the demand for the currency would drop like a rock, since it is the main exporter in the world.
And why does China want USD? At the end of the day, demand is demand. One or multiple people want to use USD, and why would people want to use a specific currency? Because they trust it to get them something else they want in the future.
China has yuan, Europe has Euro, why can’t they trade that? Clearly, they don’t want each other’s currency, and the best option for both appears to be USD.
(Assuming the premise is true, I don’t know how eurozone countries pay China).
China isn't a free market, the government does strange things for reasons other than maximizing their own wealth. That completely screws over your analysis, companies go to where there is the most profits but undemocratic governments do not.
It is perfectly possible that China does this to weaken the US production industry making it more dependent on Chinese exports since it lets US buy Chinese goods with printed dollars instead of having to deliver anything in return. Then by suddenly ending this agreement it would devastate the US who is now unable to get those goods while China is left with the whole production pie.
> I don’t know how eurozone countries pay China
Europe exports to US and buy China, they are on average trade neutral since USA buys their stuff and they buy Chinese stuff. USA is the source of money and China is the source of goods.
It isn't like China is buying a lot of American stuff, but China hoarding USD makes everyone want USD at least. I'm not sure why they do it, your guess is as good as mine, but at least the world isn't getting USD to buy American stuff, they do it to buy Chinese stuff.
US is the very reason why there is instability around the world. US touts security for itself as reason while causing insecurity for other nations, (either through military adventurism or social engineered coups) so that they can't rise.
That's like saying the government is the biggest source of instability since they are sole entity performing the most violence.
Saying the US is preventing other countries from rising in the same thread where people are complaining about US industrial decline is paradoxical, it's precisely those industries were given to developing countries to foster their rise, what the neoliberals underestimated was how that convergence would lead to resurgence of palingentic ultranationalism that is why the world is so unstable today.
US is happy if a country becomes its vassal state just like G7, EU and Japan. US likes if other countries don't have independent thought or freewill.
There is nothing largesse about US in this "those industries were given to developing countries to foster their rise". If it wanted to help others, it would have helped Africa the most. I can't believe the amount of brainwashing people have undergone.
How the U.S. Uses Wars to Fuel Perpetual Consumption｜Yanis Varoufakis
Except Africa has in fact received billions in aid. Building factories & infrastructure like the BRI was all tried in the 60s, it never worked out due to failures of ISI development and weak governments and instuitions.
We've had 40 years of learning hard mistakes, if you believe the Western System is exploitative then the logical conclusion would be that isolation from that system would provide better outcomes, when in reality those that did stagnated. Domestic consumption markets are far too weak initially to drive growth, it's only through the focus on export surplus capacity to sell to open foreign markets that one can provide the impetus for growth.
But that's only possible so in as far the West or really the USA willingly chooses to open it's markets and let it's industries and blue-collar workers decline. From a global perspective, with the assumption that these developing markets would open their markets eventually would have been optimal in providing a path for everyone to develop. Except in reality, many of these countries especially now in the 2020s never intended to open their markets, they're perpetuating the massive trade imbalance with their neomercantalism. Which Varoufakis himself btw points out in The Global Minotaur as unsustainable.
Can you really say the USA is the oppressor in this instance or the victim in maintaining that massive trade deficit? If America decides to go protectionist (which is happening with Trump), the entire damn system collapses and the pathways for development will be closed for future nations.
It's not a question of whether China is building infrastructure or cheap cars for developing nations, it's whether they will be willing to let their industries be gouged by future upstarts. And with economic nationalism, the answer will always be no. And that goes for most of the "global south" for that matter. A zero-sum world for a zero-sum worldview. Compared to that, I would argue that America's attempt at positive-sum world was alot more charitable.
Why is Yellen crying loud about "overcapacity" in China then? According to market principles, overcapacity is good and people will get cheaper goods. Maybe US has overcapacity of WMDs.
