it would be better if the stock market crashes us into a consensus to impeach and remove before the dollar and US Treasuries are permanently discredited.
@interfluidity short term doomer perspectives on the harms of quantitative easing (which I assume you're referring to here?) almost never pan out.
@realcaseyrollins no, i’m not referring at all to quantitative easing, which is at this point ordinary and nondisruptive. i’m referring to madly scribbling and rescribbling tariffs, negotiating in ways that even usually reserved allies describe as extortion, generally behaving in ways that abruptly convince the rest of the world they don’t want to hold US paper. that might be good for trade balance, could even drive us into surplus! but via a miserably disruptive path.
@diego okay. but political consensus in the US would be badly shaken by a stock market crash, which even people who have little understanding of the stock market know is a disruptive event that reflects and portends economic difficulty.
but in fact, stock market fluctuations are far less dangerous than what’s happening to the dollar, US Treasury bonds, and gold.
it’s less costly, but more politically salient, so a useful signal.
@interfluidity @diego Yeah people know that generally red=bad
Also it shouldn't be underestimated how correlated bad #stockmarket seasons are usually correlated with a poor economy and high prices, it's a big deal because it truly affects everyone
@realcaseyrollins @interfluidity @diego
Lots of ignoring facts and ignorance in this disucssion.
The US dollar has been on a path to collapse for a very long time. Look how much value it has lost in the last 100 years.
The "allies" that are complaining about extortion, have been ripping off the US for almost that same 100 years.
Even the guy who came up with the theory of comparative advantage, David Ricardo, on which free trade is based, acknowledged that it wasn't absolute and 1/2
@realcaseyrollins @interfluidity @diego could not survive if it was unidirectional, without destroying the nation that was open without getting openness in return.
Suppose we buy 100 trillion dollars worth of goods from other coutries and only sell 50 trillion. 50 trillion dollars goes out, reducing our money supply, which than has to be increased. This deficie is partially funded with asset sales and partially with debt and partially with expansion of the money supply. first 2 lower our 2/3
@realcaseyrollins @interfluidity @diego
lower our wealth, the last is very inflationar and erodes the value of the dollar.
Brics was created long before tariffs and was a portent of the dollar losing its position as a world currency.
The exponentially growing national dept is also destroying the value of the dollar and will all on it's own, lead to collapse eventually.
The status quo is the problem. Restoring trade balance and high wages is the SOLUTION, not the problem.
@Phil @realcaseyrollins @diego The dollar was not on remotely a path toward collapse until your movement put it there. Sure, a dollar has lost a lot of value over the last hundred years, if you kept it in a mattress. If you put it anywhere else — earned short-term, credit and interest-rate risk free Treasury bill rates — its value has increased.
From me, https://www.interfluidity.com/uploads/2017/10/Fiat-Is-Effective-Minitalk-light-edit-to-share.pdf 1/
@Phil @realcaseyrollins @diego It’s true that there’s a strong case for keeping trade in general in overall balance, though there are reasons for time-limited exceptions.
I’ve spent the last month making that case:
https://drafts.interfluidity.com/2025/04/20/keynesian-compromise/index.html 2/
@Phil @realcaseyrollins @diego But there is no coherent case for insisting upon and imposing *bilateral* rather than *overall* trade balance. Which is what this administration has absurdly, destructively, I’m sorry but stupidly, tried to impose. 4/
@Phil @realcaseyrollins @diego The United States should broadly buy roughly as much as it sells. It matters not a whit if it buys more from Lesotho than it sells to Lesotho as long as it sells to somebody else more than it buys from them. 5/
@Phil @realcaseyrollins @diego The overwhelming majority of ways the world could be in overall balance — all countries in overall balance — involve a lot of offsetting bilateral trade imbalances. That is the space we want markets to explore and optimize over. Insisting on bilateral balance between all countries is the international equivalent of barter. You only trade where there is a double coincidence of wants. 6/
@Phil @realcaseyrollins @diego But the Trump Administration wants to personalize international trade into trade partners taking advantage, or ripping us off, when the only party that could have intervened to insure the US remained in overall balance was the US itself, and it would not have been hard, we just didn’t want to do it, persuaded ourselves (wrongly!) that we shouldn’t. 7/
@Phil @realcaseyrollins @diego So it destroys friendships and alliances, and takes down the US economy, by idiotically deploying tariffs intended to immediately bring all trading relationships into bilateral balance. 8/
@interfluidity @realcaseyrollins @diego
This is all BS.
You have something wrong with your thinking. In your mind, somebody can smack you around, but if you smack back you are destroying the friendship. This is your argument and it's retarted.
And you can not achieve this overall balanced trade, with out addressing individual trade imbalances. There is NO MECHANISM in which to do it, so it is also a retarded argument.
@Phil @realcaseyrollins @diego For Christ sake, read a little bit. I just linked to a mechanism, a foreign payouts tax:
The entire Bretton Woods order that prevailed from 1945 through the early 1970s was a mechanism.
Your movement is not “smacking back” because we need to. It is smacking back because it is full of people who like to smack.
@interfluidity @realcaseyrollins @diego
1945 to 1970 doesent really apply to today. during that time, the US had a near monopoly on industrial production as a result of the war.
And this method of taxes, will do damage to foreign companies producing stuff in the US.
It is not the panacea you think it is.
And if tariffs are so stupid, why does everybody use them?
@Phil @realcaseyrollins @diego Developed countries tariff one another very little, until now. Tariffs extraordinary limited role should be sectoral, not country by country. It might (usually not, but it’s not incoherent) make sense to, say, tariff batteries to protect an infant industry in the US. (Subsidies are usually preferable.) Bilateral tariffs make basically no sense, basically ever.
@Phil@freeatlantis.com@interfluidity @realcaseyrollins @diego
I have heard people make that statement my whole life, nobody has every proved it and it contradicts a whole bunch of data and history. So I dismiss it as bs. Under certain circumstances bilateral tariffs make a whole bunch of sense. These are those circumstances.
The only think better is no tariffs or non tariff trade barriers at all as long as it's bilateral.
@Phil @realcaseyrollins @diego Non-tariff barriers are what the administration says have been so unfair (because formal tariff rates of many partners it’s punishing have been low)! But any policy is a nontariff barrier or subsidy. Almost no policy or regulation is orthogonal to trade. The only way to address misunderstandings and disputes over nontariff barriers is to adopt a norm of balance. Then they stop mattering.