12 Comments
Apr 2, 2022Liked by Joseph Politano

Useful article on sanctions and their ramifications on givers and takers and neutral s in between.

Expand full comment

Good post, as always. One thing left unanswered: what are the prospects for a Bancor-like global reserve currency system? Could recent events make it so India, Russia, China etc press for something like what Keynes proposed at Bretton Woods?

Expand full comment

Very convincing and clear position on a captivating but not so easy to catch topic (at least for an amateur). I read this blog for the first time, following a link in Adam Tooze’s Chartbook, and I think I will come back for other posts !

Beyond the big question of the statute of reserve currency change, could be a realistic pathway that the Sino Russian trade moves from the “88% of Russian exports to China [were] priced in dollars or euros” to trade flows mainly on an renminbi basis, especially as they are relatively complementary trade flows (commodities vs. manufactured products) ? Eventually, could an Eurasian trade area outside Dollar/Euro influence develop in such a way (the economic reflection of the Shanghai Cooperation Organisation) with some level of isolation from the global system ?

Of course, it would to some extent epitomize and foster a vassalization of Russia to China, but could it be a first realistic step (well ahead of shaking the dollar leadership) ?

Expand full comment

Excellent article. It just shows how complex the issue is beneath the surface. I think Bill Gates said something along the lines: people overestimate what’s possible in a year and underestimate what’s possible over 5 years. It’s all about timeframes, and we need to be thinking in decades.

Expand full comment

What about a less extreme scenario where China moves out of UST and into gold and BTC over ten years as a hedge against wanting to take over Taiwan

Expand full comment

The "crumbling" of the "dollar order" periodically surfaces. From 1995: "If the administration does not change its laissez-faire dollar policy and cut the budget deficit, boost savings, and take a hard line on trade, the 50th anniversary of V-J Day will signify its collapse."

https://thefaintofheart.wordpress.com/2011/08/07/the-myth-of-the-strong-dollar/

Expand full comment