Russian invasion of Ukraine

[Mayhem]

It doesn't really work that way, because the dollar milkshake theory extends to debt as well (when shit hits the fan, the dollar is THE currency to get). The US dollar is the defacto leader as the reserve currency of the world. The EU has the problem of having nations with different types of economies sharing one currency, a destabilizing bond market for example can pop the debt balloon much sooner.

But the country that is flailing shit at the fan is the US. Why the fuck would the rest of the world keep propping up the USD while reasonably expecting to be manhandled by this soon-to-be dictatorship?

On the other hand, @Nymrohd correctly mentions that the US economy is heavily reliant on their hyperinflated stock market, but indicators are showing it will take at least half a year for that balloon to pop, namely because the FED has done an unexpectedly awesome job at managing a soft landing so far after they instigated the COVID inflationary crisis. As long as unemployment numbers are good, and they don't increase their debt to GDP ratio to screw up the bond markets, the US should be good. I'm still 100% expecting for inflation to make a big comeback in the next 3 years though.

The us is currently in the process of making a bonfire out of its soft power. They're severing ties that benefit them and continue to put people in place of internationally crucial positions who by all due respect should be in urgent care facilities but not anywhere near a government job.

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When I say lack of political will to see it through is exactly that, or that is what I meant by it. As a country they can pledge do this and that but politically it's not feasible and it's going to get even worse with how elections seem to be going.

Got it, just to make it clear for the international audience that it wasn't the current government that wasn't willing but the opposition blocking it probably out of spite because Merz is an asshole.

[hellhamster]

But the country that is flailing shit at the fan is the US. Why the fuck would the rest of the world keep propping up the USD while reasonably expecting to be manhandled by this soon-to-be dictatorship?

The us is currently in the process of making a bonfire out of its soft power. They're severing ties that benefit them and continue to put people in place of internationally crucial positions who by all due respect should be in urgent care facilities but not anywhere near a government job.

Because the US economy moves the world, and if that fails, their military. It's the way it's always been and that will probably not change in the foreseeable future. All Trump or the FED has to do, when the USD takes a nosedive, is to say something that will rattle the markets, and the dollar becomes a safe haven once again. It's that easy, which is also evidenced by the DXY movements of the past weeks.

The Trump administration faces the impossible problem of having to lower the government debt to GDP ratio, while also maintaining dollar dominance. You can't really have one without the other. You need to denominate your currency just enough to pay off some outstanding debt and try to pass as much of it down to the next president. It's the way it's always been, and I honestly doubt Trump will be the first president in history to devalue the dollar so much that the Euro or the Yuan become better. Unless inflation nuking the bond markets becomes such a big issue that he will have to, but I really don't see it happening as things stand.

[Nymrohd]

Imo much of the US economy is an illusion. It is propped up by vastly inflated tech stock not to mention an entire sector of the economy that actually offers minimal utility (health insurance). Remove the artificial production and US would easily slip below China and the EU in GDP. And China absolutely has the potential to pop the tech bubble earlier than expected.

[Mekh]

Without the attempt being found out?

Absolutely.

Cloud cuckoo land.

Irrelevant if you've already spent hundreds of millions on your shiny new gear. This is not an administration that considers what they have to lose.

[PhaelixWW]

Irrelevant if you've already spent hundreds of millions on your shiny new gear. This is not an administration that considers what they have to lose.

Not irrelevant if it's before that hundreds of millions are spent. Also not irrelevant if it can be fixed for pennies on the dollar.

[KrayZ33]

When I say lack of political will to see it through is exactly that, or that is what I meant by it. As a country they can pledge do this and that but politically it's not feasible and it's going to get even worse with how elections seem to be going.

I can't quite follow here though.
I also didn't understand your previous post.
the 100b are basically "gone". ~20% is gone for real and out of the 100b, 80b are bound in contracts.

That being said, the AfD, while they are RU cucks, want to re-introduce general conscription and increase military spending, and more imporantly, remove the required outlay of procurments above 25 million, basically giving the military free reign over their budget entirely.

[Gorsameth]

This is a misunderstanding of debt. You can have lower gdp to debt percentages and still not have the fiscal space. Bc the fiscal space is limited by your ability to issue debt and that debt be reliably bought at good interests rates (defined as your ability to get it below your economic growth). Developing nations dont have 100% debt to gdp and they tend to default due to the inability to issue new debt when they hit a rough patch.

Italys bonds are a tier above junk bond, does Italy have the fiscal space to help build a military? Will Germany foot the bill for the spending in Italy? Does France have the fiscal space to build a military for the EU or something like that?

And like the most important question, does Europe even have the will to take on such a project? Worth mentioning that it wasn't until the official Russian invasion that most NATO members didnt meet the guidelines.

Europe is too far gone IMO. Its unpleasant to hear but Europeans built decades of dependency on the US. There was a brief stint with China that is slowly unwinding as China is once again putting pressure on European companies. And like its chill, you guys have generous welfare spending, good pensions, good healthcare and live good. As far as client states go I dont think you can ask for a better master than the US

At this point China is objectively a more attractive ally then the US.
China doesn't threaten invasion of its allies.

Russia would practically be a better ally then the US because while they are utter and complete shit that provide nothing to their allies they are atleast reliable, in a bad way, and can be predicted and depended on.

The US is making complete and utter 180's every couple of years, its utterly schizophrenic and prone to self destruction.
What you want in a long term strategic and economic ally is reliability and dependability and the US is everything but.

As for the EU's dependency on the US that was by design. The US loved having the EU reliant on it's military because while the EU is unable to operate full scale wars on its own it was the US and only the US that dictated where the West went to war. A more independent Europe is a Europe that can chart its own course and oppose US direction if it suits it. Once upon a time American politics understood this, but hey elect stupid people, win stupid prizes.

[caervek]

Most logistics issues don't take nearly that long to resolve. Six months to two years, if they're got half-way competent officers in power and the country is functioning at all.

The big logistics issue for Russia is that they never embraced pallets or any semblance of modern shipping/transportation. Their logistics still operates on a 19th century model only with horse-carts replaced by trucks.

[LeGin v4]

Its unpleasant to hear but Europeans built decades of dependency on the US.

It's almost as if Afghanistan never happened, isn't it. 1,160 of the 3,621 coalition deaths were non-American. I wonder how Blair feels now - pretty fucking stupid, I hope.

May you live in interesting times, and all that. US repositioning itself entirely. I'm off to defecate on Trump's golf course, vandalise Teslas and harass some tourists.

Russians know no different - if it wasn't the Czars it was the communists, now it's a straight-up psychopathic criminal thug shackling them to the yoke - but a substantial number of Americans voted for this.

[Mayhem]

Because the US economy moves the world, and if that fails, their military. It's the way it's always been and that will probably not change in the foreseeable future. All Trump or the FED has to do, when the USD takes a nosedive, is to say something that will rattle the markets, and the dollar becomes a safe haven once again. It's that easy, which is also evidenced by the DXY movements of the past weeks.

It fell, by 2%

Compared to the EXY which rose by 1.8%

So that would indicate more sellers than buyers.

The Trump administration faces the impossible problem of having to lower the government debt to GDP ratio, while also maintaining dollar dominance. You can't really have one without the other. You need to denominate your currency just enough to pay off some outstanding debt and try to pass as much of it down to the next president. It's the way it's always been, and I honestly doubt Trump will be the first president in history to devalue the dollar so much that the Euro or the Yuan become better. Unless inflation nuking the bond markets becomes such a big issue that he will have to, but I really don't see it happening as things stand.

Ok, not sure what you mean by the EURO not becoming better because when I was visiting the US in 08, the Euro was about 30% more valuable than the Dollar. We had a blast. Everything was fucking cheap.

[hellhamster]

It fell, by 2%

Compared to the EXY which rose by 1.8%

So that would indicate more sellers than buyers.

Ok, not sure what you mean by the EURO not becoming better because when I was visiting the US in 08, the Euro was about 30% more valuable than the Dollar. We had a blast. Everything was fucking cheap.

I have no idea what charts you are referring to, unless you mean weekly charts or whatever (which Trump had pumped previously).
DXY is up by 2,5% since the November elections, EXY is down by -4%. The DXY seems like it's falling for now though.

Because a currency is more valuable than the other, it doesn't mean it's more dominant... The Kuwaiti Dinar would otherwise be the most powerful currency in the world.

Also when you went to the US, the dollar had nosedived to its lowest point of all time.

[Gorsameth]

Because the US economy moves the world, and if that fails, their military. It's the way it's always been and that will probably not change in the foreseeable future. All Trump or the FED has to do, when the USD takes a nosedive, is to say something that will rattle the markets, and the dollar becomes a safe haven once again. It's that easy, which is also evidenced by the DXY movements of the past weeks.

The Trump administration faces the impossible problem of having to lower the government debt to GDP ratio, while also maintaining dollar dominance. You can't really have one without the other. You need to denominate your currency just enough to pay off some outstanding debt and try to pass as much of it down to the next president. It's the way it's always been, and I honestly doubt Trump will be the first president in history to devalue the dollar so much that the Euro or the Yuan become better. Unless inflation nuking the bond markets becomes such a big issue that he will have to, but I really don't see it happening as things stand.

Why on earth do you think Trump is trying to lower government debt to GDP? Don't tell me you still fall the Republican trap of believing they are 'fiscally conservative'. A reminder that Trump massively grew the debt during his first term.

[hellhamster]

Why on earth do you think Trump is trying to lower government debt to GDP? Don't tell me you still fall the Republican trap of believing they are 'fiscally conservative'. A reminder that Trump massively grew the debt during his first term.

This time Trump absolutely has to after an inflationary wave. The FED managing a soft landing would demand the government to immediately lower their debt to GDP ratio (or at the very least keep it stable), or the long term bond yields will skyrocket, as they have many times in the past during the 60's and 80's, which will irrevocably signify a financial crisis and much bigger inflationary waves.

Anyway this thread is not about this, but whether the EU has the means to follow through with bigger defense expenditures and the fallout of the upcoming Russia-Ukraine peace treaty (if it ever happens).

I don't think we have.

[Poopymonster]

This time Trump absolutely has to after an inflationary wave. The FED managing a soft landing would demand the government to immediately lower their debt to GDP ratio (or at the very least keep it stable), or the long term bond yields will skyrocket, as they have many times in the past during the 60's and 80's, which will irrevocably signify a financial crisis and much bigger inflationary waves.

Anyway this thread is not about this, but whether the EU has the means to follow through with bigger defense expenditures and the fallout of the upcoming Russia-Ukraine peace treaty (if it ever happens).

I don't think we have.

I find it more than slightly amusing that you think Trump has to do anything.

[Endus]

Because a currency is more valuable than the other, it doesn't mean it's more dominant... The Kuwaiti Dinar would otherwise be the most powerful currency in the world.

USD has been an international trading standard not because it's valuable, but because it's stable. Was stable. The USA collapsing into recession or depression because Trump's playing with the dials and doesn't know what they do would just mean the world shifts back to using a different currency, like the Euro. Before the USD, it was UK pounds sterling. These things are ephemeral and always up for change at the drop of a hat; pretending they're somehow unchangeable facts is absolute fucking nonsense.

[NED funded]

At this point China is objectively a more attractive ally then the US.
China doesn't threaten invasion of its allies.

Russia would practically be a better ally then the US because while they are utter and complete shit that provide nothing to their allies they are atleast reliable, in a bad way, and can be predicted and depended on.

The US is making complete and utter 180's every couple of years, its utterly schizophrenic and prone to self destruction.
What you want in a long term strategic and economic ally is reliability and dependability and the US is everything but.

As for the EU's dependency on the US that was by design. The US loved having the EU reliant on it's military because while the EU is unable to operate full scale wars on its own it was the US and only the US that dictated where the West went to war. A more independent Europe is a Europe that can chart its own course and oppose US direction if it suits it. Once upon a time American politics understood this, but hey elect stupid people, win stupid prizes.

Dont get it twisted. I think the US is torching good will right now. I am just pointing out that the EU has had the opportunities to built its military over the last 20 years or so. Russia took over Crimea in 2014, it continued its aggression of its neighbors throughout all of the following years and peaked its aggression with the invasion of Ukraine.

There were multiple points in time that were wake up calls for Europe to do something. They chose not to. And that is totally fine. Living under the wing of America is pretty comfy. You get to debt spend into cushy pensions, welfare systems, heavy handed regulations and healthcare. The idea of starting a military now it's a bit of a joke. Not only is there no political will for the project, but Europe has pension liabilities looming over its head, its getting old fast and its economies are failing to compete with American and Chinese companies. So Europe doesnt have fiscal space, it doesnt have young people and its economy is struggling to pick up after COVID. Whatever fiscal space there was is going to need some time to recover after the COVID stimulus they did.

Time flows and Europe is no longer in a position to wean itself off. It surrendered decades ago.

And like I said. Thats fine. Ive been to Madrid, its a pretty beautiful place and the people are super chill, friendly and relaxed

[Mayhem]

I have no idea what charts you are referring to, unless you mean weekly charts or whatever (which Trump had pumped previously).
DXY is up by 2,5% since the November elections, EXY is down by -4%. The DXY seems like it's falling for now though.

Because a currency is more valuable than the other, it doesn't mean it's more dominant... The Kuwaiti Dinar would otherwise be the most powerful currency in the world.

Also when you went to the US, the dollar had nosedived to its lowest point of all time.

Well you were talking about weeks, not months and Trump is in office only for a few weeks so why would I consider anything before that time?

[Iphie]

USD has been an international trading standard not because it's valuable, but because it's stable. Was stable. The USA collapsing into recession or depression because Trump's playing with the dials and doesn't know what they do would just mean the world shifts back to using a different currency, like the Euro. Before the USD, it was UK pounds sterling. These things are ephemeral and always up for change at the drop of a hat; pretending they're somehow unchangeable facts is absolute fucking nonsense.

Well, isn't part of it also that oil is purchased in dollars, creating a steady demand for dollars? (or am I now mixing up things again?)

[Corvus]

So Trump and pootie are going to decide the fate of Ukraine in Saudi arabia with no Ukrainian representation being their. It's Czechoslovakia all over again.

[Kaleredar]

So Trump and pootie are going to decide the fate of Ukraine in Saudi arabia with no Ukrainian representation being their. It's Czechoslovakia all over again.

I mean they can plan all they want; ultimately it's Ukraine that makes the decisions and I highly doubt they're going to accept whatever half-assed partisan bullshit Trump "offers" them at Russia's behest.

And I think Zelensky is smart enough to not idly hope for something good to come of Trump's political quackery. Hopefully they're coming up with their own plans moving forwards, despite Trump wanting to surrender to Russia.