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Comment by matheusmoreira | Hacker News Reader

> My theory is that other countries' trade is so closely tied to the US Dollar that when the Federal Reserve prints money it's not just diluting the US Dollar but all currencies. The US is effectively taxing the world, to pay for its own spending.

Yes.

The BRICs economic group has been trying to launch their own currency for a while now. This is one of the reasons for it. Trump has threatened to impose 100% tax on them and on anyone else who ever tries.

https://www.msn.com/en-us/money/markets/trump-threatens-100-...

https://www.bloomberg.com/news/articles/2024-12-02/south-afr...

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> BRICs economic group has been trying to launch their own currency

It's only been Russia (and to a certain extent China).

India and Brazil have both vetoed any attempt at a "BRICS Currency".

Brazil's president Lula certainly wants this. He's been pushing for it for years now. I see it in the news every other day. I suppose it's possible that he's just the fall guy for the machinations of China and Russia. Who knows.

I'm ambivalent about it. Having our own currency is good, even better if it's not backed by USD, best of all if it's backed by precious metals like gold. On the other hand, I hate Lula and everything he represents so much I actually want him to piss Trump off to the point he sanctions the entire Latin American continent until Lula and his fellow communist dictator friends drop to their knees and beg for mercy.

You do know that we used to have currencies backed by gold, and it was so awful that it caused the great depression right?

The USD to gold exchange guarantee ended in the early 70s, long after the great depression. And there have been many economic meltdowns since then. The two are not related.

When the economy is backed by something real, credit generally keeps up with the broader economy. It can't expand beyond reserves of real resources. Now that the money is not backed by anything, credit can expand infinitely. Credit generates most of the inflation which is a direct and ever increasing tax on the poor. It has been going on for half a century and shows no sign of stopping. The best part is even the mere attempt to stop it will cause a meltdown since the economy is addicted to credit.

We had metal standards way after the great depression, till 1971. Bretton Woods system made USD an international reserve currency, but its convertibility to gold was guaranteed. In 1971 US gov decided to not guarantee that anymore, because it gave a ridiculous advantage to US. Germany was rhe first county to left Bretton Woods, France sent a battleship to collect gold in exchange for US dollar reserves etc.. and the system collapsed. It's called Nixon shock I think.

So, leaving the international system helped the European economies greatly then. It makes sense some other countries are having the same idea now.

We had currencies backed by gold for hundreds of years before the great depression without anything equivalent happening. The great depression happened soon after US momentary creation was handed over to the private Federal Reserve.

The Panic of 1837 (followed by a five year depression) would like a word. And the panic of 1873 (four year depression), the depression of 1882, the panic of 1893, and the panic of 1907.

> The great depression happened soon after US momentary creation was handed over to the private Federal Reserve

Correlation =/= Causation.

The Great Depression was caused by American overproduction and a lack of domestic buyers who could afford to purchase American goods (sound familiar?). This was back when America was still functionally a developing country.

BRICS will never introduce their own currency anyway, so any threats by Trump are moot. Can you imagine India and China actually agreeing on a new currency structure? Lol, it's a total fantasy.

I can certainly imagine China creating their own and making the others use it. I can also imagine Brazil trying, though I can't imagine it succeeding.

Brazil has gone through numerous currencies. They have all gone to zero due to hyperinflation. One of the top Brazil stories on HN is about the way the government conned the population into believing that this time it was going to be different. We are also about to launch our very own central bank digital currency.

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