Comment by JavaBatman | Hacker News Reader

Comment by JavaBatman | Hacker News Reader

Even if we transition to a multipolar world order and renewed great power competition, America will still be the strongest and most secure global power. It has hegemony in the western hemisphere through its enforcement of the Monroe Doctrine; it is protected by the two largest oceans; it has historical, linguistic, and cultural ties to two regional powers on both sides of the ocean (UK and Ireland in Europe, Australia and NZ in the Asia Pacific, Five Eyes, etc.); it is by far the leader in soft power (music, movies, TV, technology, English language, etc.); and most importantly, it has the strongest military by far. Despite strategic defeats in the Middle East and South Asia, US officers gained tons of battlefield experience and the ability to test its weaponry. So even if the US now has to deal with a hegemonic challenger in East Asia (China) and more assertive one in Europe (Russia), its geography and demography give it advantages no other great power has.

>America will still be the strongest and most secure global power.

>and most importantly, it has the strongest military by far.

"America" (The U.S.) will likely collapse from internal conflict, possibly precipitated or accompanied by external provocation (cyber warfare, infrastructure attacks, propaganda), that will divide the country and the military. Imagine the U.S. during the Civil War/War between the States. This time there won't be borders between the sides. How is a country facing such internal strife going to be able to control, let alone worry, about global affairs beyond it's borders?

I think the key unmentioned weakness of the United States is our economic system and monetary policy. Especially because of our ever increasing debt and deficit spending.

What do you pose is the implication of that?

Yeah, I don't really get that either. If push comes to shove and we (the US) devalue our currency, then all the other foreign debt holders are left holding the bag while we just suffer through a couple years of recession.

Usually beneath the veneer of such questions it seems to be some sort of libertarian/crypto fan/anti fiat currency ideologue. Rarely based on sober analysis.

I think it would represent a fairly strong change in global power structures, but like you I don’t think the sky would fall.

I'm the GP and I responded to another comment that my views are influenced by the in-depth articles written by Lyn Alden: https://www.lynalden.com/fraying-petrodollar-system/

It's quite a long read, but I can tell you it doesn't come from a libertarian perspective. It does touch on Bitcoin, but near the end in one of a few theoretical "where things could go" perspective.

>"I think it would represent a fairly strong change in global power structures, but like you I don’t think the sky would fall."

Agreed, it would be shocking but life would go on. We would just have to live with a new international monetary paradigm.

I’ve read Alden’s analysis before. I can’t say that I have found any particular weaknesses with it.

But as she says, such a change could take place in different ways, with different implications. If it were to happen suddenly it would be a shock, but that isn’t necessarily the case.

Most signs point to a multipolar world order isn’t he future, and outside a complete internal political collapse, the US would in all likelihood be one of those poles.

> If push comes to shove and we (the US) devalue our currency [..]

Against what, and by what means?

(Perhaps naively) I'd always assumed the markets decide the exchange rates of (most) Western currencies against each other.

Obviously with a dollop of central bank intervention here and there(!)

Exchange rates are indeed set by markets, but then all a central bank has to do to devalue its currency is to sell its own currency for another (or buy assets denominated in another currency, which is essentially the same thing with extra steps)

At the crudest level, what do you suppose would happen if the U.S. Treasury/Federal Reserve suddenly decide that every dollar-denominated account of $n got a "stimulus payment" of $2n?

That’s a very indirect way to devalue a currency for foreign exchange purposes. Sure, you’d be massively increasing that supply, but it’s doesn’t necessarily follow that said supply would flow directly into forex markets.

You mean a bit like this

https://fred.stlouisfed.org/graph/?g=KT86

but overnight, rather than over several years?

This is a terrific, albeit deep dive into the topic. https://www.lynalden.com/fraying-petrodollar-system/

Broadly speaking, the US has to run trade deficits in order for the rest of the world to have the dollars they must use to buy oil. This severely handicaps our ability to manufacture and produce things domestically. During the past century the US Government took on lots of debt with the understanding that our economy would naturally grow to cover the obligations. But given this international monetary system, I struggle to see how the US can manage to grow it's way out of all the debt we've made for ourselves. I would like to go on, but Lyn is a far better writer than I.

Alden’s analysis is certainly thought provoking, but it doesn’t made broad statements about the impact on US global power, which is the topic at hand here.

Gotcha. The article itself doesn't go into the global power aspect, but I was looking at it through the lens of implications. Mainly, how the trade deficit has made us particularly vulnerable to supply chain disruptions and how the domestic knowledge to produce certain vital things (like chip manufacturing) has been gutted. Confidence in the US and it's ability to deliver on it's obligations also diminishes as the debt grows and the growth of our economy stalls. I just don't see how we can grow our way out of debt after reading just how badly the deck is stacked against non-tech and non-intellectual sectors of the economy.

The implication of the article, though, is that eventually the regime will end, and the structural factors that force the US in trade deficits will end. This will allow the dollar to finally be devalued, and the value of exports to rise, resetting the ability for the US to build its industrial base.

Also, the notion that domestic knowledge on how to build things like chips has been gutted is just flat out false. Intel is still close to the cutting edge in chip fabrication, they just aren’t #1 anymore.

This "buy oil" stuff is a non-sequitur from an economic POV. A current-account deficit is the flip-side of a capital-account surplus, i.e. of money flowing into the U.S. as investment, from whatever source. Far from handicapping "ability to produce and manufacture things domestically", a persistent trade deficit may thus be a reflection of that very ability.

Every (at least most) past conflicts that toppled the dominant players brought with it a new type of combat that those players were not ready for. Troop tactics, air power, etc. In the next one, it will be cyber.

We have opened a direct line for all of our enemies to be able to attack us without any regard to geography whatsoever. Critical infrastructure is all online and barely protected by even the most basic security. We’ve already seen multiple utilities go down due to hacks, and those were probably accidents where the attackers were overzealous. It’s not unreasonable to assume that we’re already completely pwned, with foreign interests just sitting back and waiting for the right time to flip a switch.

Military and geographical advantages are irrelevant in this scenario.

A lot of people don't realize the United States has the second largest air force in the world.

Oh, it has the largest too -- the US Air Force.

It's just the second largest air force in the world belongs to the US Navy.

https://worldpopulationreview.com/country-rankings/largest-a...

I see oddity of article in comparing America to Portugal, France, Soviet, and Britain as well. The unique and original system of Democracy and Repbulicanism that have continuously forced politicians to innovate further protects America from collapsing, unlike China and its virtual dictatorship.

Reply on news.ycombinator.com