El Señor tacaño

@sentacano

Just an anon duck. Stampeder. #Quack

Klondike, White Agony Creek

Joined February 2021

159 Following

149 Followers

429 Posts

sentacano retweeted

Documenting Saylor

@saylordocs

6 months ago

In 1929, a man named Roger Babson predicted the crash that would devastate the American economy. Wall Street laughed. 47 days later, they lost everything. Babson wasn’t lucky. He identified a five-stage pattern that appears before every major financial collapse. The same pattern appeared before 1987. Before 2000. Before 2008. And today, four of the five stages are flashing red.

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sentacano retweeted

Sonny Mulder

@MulderSonny

about 1 year ago

As someone new to finance, you might wonder why the U.S. dollar is so important worldwide and how it affects trade. Here I will try to explain the dollar’s role as the world’s main currency, why it leads to trade imbalances, and how it can cause problems. 👑Why the Dollar Is King 👑 Since 1971, the U.S. dollar has been the world’s top currency for trade and finance. Think of it as the global “money language” that countries use for: - Pricing Deals: A Japanese company buying oil from Saudi Arabia often prices it in dollars, even though neither uses dollars at home. - Borrowing Money: Countries like Brazil or Turkey borrow in dollars, creating $18 trillion in dollar debts outside the U.S. - Saving Reserves: Central banks store dollars (often as U.S. Treasury bonds) to back their own money or pay debts like an emergency fund. - Currency Trades: About 90% of currency exchanges involve dollars. To trade Korean won for Indian rupees, you swap won for dollars, then dollars for rupees. This makes the dollar very valuable, like the most trusted coin in a global game. But it also means the U.S. buys more from the world than it sells, creating a trade deficit of $500 billion to $1 trillion each year. 💸Dollars Don’t Just Buy Goods 💸 You might think the U.S. sends dollars abroad to buy things like clothes or electronics, and that’s it. Not so simple! Countries like China or Germany, which earn dollars from selling to the U.S., often use those dollars to buy U.S. assets: - Stocks: Shares in companies like Apple or Amazon. - Bonds: Loans to the U.S. government or companies. - Real Estate: Buildings or land. Foreigners now own about $61 trillion in U.S. assets! It’s like trading pieces of U.S. companies for TVs or cars. Over time, they gain more profits and influence over U.S. businesses. 🖨️Why Does the U.S. Print Dollars? 🖨️ Sometimes, the world runs short of dollars, especially during crises like the 2020 pandemic when trade slowed. Without enough dollars to pay debts or trade, countries sell U.S. assets, which can crash markets. The Federal Reserve (U.S. central bank) prints dollars to: - Stabilize the U.S. Economy: Extra dollars keep banks lending and businesses running. - Help the World: The Fed lends dollars to other countries to prevent panic sales of U.S. assets, protecting markets. And if you are wondering ''Why don’t countries spend dollars on goods instead of assets?'' They do buy some things (like oil or tech), but: - They Save for the Future: U.S. assets are safe and grow in value, like a savings account. - They Need Reserves: Dollars or bonds are kept to pay debts or support their currencies. - Not Enough U.S. Goods: The U.S. doesn’t make enough cheap goods to absorb all the dollars. 🤑Who Wins and Who Loses?🤑 The dollar’s global role helps some in the U.S. but hurts others: ✅Winners: - Wall Street: Banks profit from foreigners buying U.S. assets. - Wealthy People: In cities like New York, they enjoy cheaper imports and growing investments. - Government: A strong dollar funds military bases and borrowing. ❌Losers: - Factory Workers: The strong dollar makes U.S. goods expensive, so factories in places like Ohio lose business. - Midwest Regions: Towns suffer as jobs vanish, while wealth moves to cities. - Security Risks: A weak industrial base slows U.S. weapon production. 😡Why It Can Get Messy 💢 The system is fragile. There’s only $5.8 trillion in “real” dollars but $18 trillion in dollar debts abroad. If trade stops, dollar shortages make countries sell U.S. assets fast, crashing markets. In 2020, the Fed printed trillions to stop this. Printing helps, but it means foreigners own more U.S. assets, increasing their control. 🐐Why Keep Doing It? 🐐 The U.S. prints dollars to avoid economic crashes and keep the dollar’s global power, which brings benefits: - Cheaper imports for Americans. - Influence for the government (like sanctions). -Profits for banks and investors. But it’s a trade off.. The trade deficit and asset sales hurt factory workers and give foreigners more U.S. ownership. It’s like lending your phone to keep a party going. You might not get it back, but stopping the party feels worse. The dollar’s role as the world’s currency drives trade deficits, foreign ownership of U.S. assets, and a fragile system that needs constant dollar printing. It helps some Americans but harms others, and crises can spark chaos. That is also exactly why de-dollarisation will take a long time to achieve and why the U.S. is likely to remain the powerhouse for the time being. Like and retweet to spread awareness. 🙏 #dxy #dollar #finance #Stocks

MulderSonny's tweet photo. As someone new to finance, you might wonder why the U.S. dollar is so important worldwide and how it affects trade. Here I will try to explain the dollar’s role as the world’s main currency, why it leads to trade imbalances, and how it can cause problems.

👑Why the Dollar Is King 👑

Since 1971, the U.S. dollar has been the world’s top currency for trade and finance. Think of it as the global “money language” that countries use for:

- Pricing Deals: A Japanese company buying oil from Saudi Arabia often prices it in dollars, even though neither uses dollars at home.

- Borrowing Money: Countries like Brazil or Turkey borrow in dollars, creating $18 trillion in dollar debts outside the U.S.

- Saving Reserves: Central banks store dollars (often as U.S. Treasury bonds) to back their own money or pay debts like an emergency fund.

- Currency Trades: About 90% of currency exchanges involve dollars. To trade Korean won for Indian rupees, you swap won for dollars, then dollars for rupees.
This makes the dollar very valuable, like the most trusted coin in a global game. But it also means the U.S. buys more from the world than it sells, creating a trade deficit of $500 billion to $1 trillion each year.

💸Dollars Don’t Just Buy Goods 💸

You might think the U.S. sends dollars abroad to buy things like clothes or electronics, and that’s it. Not so simple! Countries like China or Germany, which earn dollars from selling to the U.S., often use those dollars to buy U.S. assets:

- Stocks: Shares in companies like Apple or Amazon.
- Bonds: Loans to the U.S. government or companies.
- Real Estate: Buildings or land.

Foreigners now own about $61 trillion in U.S. assets!
It’s like trading pieces of U.S. companies for TVs or cars. Over time, they gain more profits and influence over U.S. businesses.

🖨️Why Does the U.S. Print Dollars? 🖨️

Sometimes, the world runs short of dollars, especially during crises like the 2020 pandemic when trade slowed. Without enough dollars to pay debts or trade, countries sell U.S. assets, which can crash markets. The Federal Reserve (U.S. central bank) prints dollars to:

- Stabilize the U.S. Economy: Extra dollars keep banks lending and businesses running.

- Help the World: The Fed lends dollars to other countries to prevent panic sales of U.S. assets, protecting markets.

And if you are wondering ''Why don’t countries spend dollars on goods instead of assets?'' They do buy some things (like oil or tech), but:

- They Save for the Future: U.S. assets are safe and grow in value, like a savings account.

- They Need Reserves: Dollars or bonds are kept to pay debts or support their currencies.

- Not Enough U.S. Goods: The U.S. doesn’t make enough cheap goods to absorb all the dollars.

🤑Who Wins and Who Loses?🤑

The dollar’s global role helps some in the U.S. but hurts others:

✅Winners:
- Wall Street: Banks profit from foreigners buying U.S. assets.

- Wealthy People: In cities like New York, they enjoy cheaper imports and growing investments.

- Government: A strong dollar funds military bases and borrowing.

❌Losers:
- Factory Workers: The strong dollar makes U.S. goods expensive, so factories in places like Ohio lose business.
- Midwest Regions: Towns suffer as jobs vanish, while wealth moves to cities.
- Security Risks: A weak industrial base slows U.S. weapon production.

😡Why It Can Get Messy 💢

The system is fragile. There’s only $5.8 trillion in “real” dollars but $18 trillion in dollar debts abroad. If trade stops, dollar shortages make countries sell U.S. assets fast, crashing markets. In 2020, the Fed printed trillions to stop this. Printing helps, but it means foreigners own more U.S. assets, increasing their control.

🐐Why Keep Doing It? 🐐

The U.S. prints dollars to avoid economic crashes and keep the dollar’s global power, which brings benefits:

- Cheaper imports for Americans.
- Influence for the government (like sanctions).
-Profits for banks and investors.

But it’s a trade off.. The trade deficit and asset sales hurt factory workers and give foreigners more U.S. ownership. It’s like lending your phone to keep a party going. You might not get it back, but stopping the party feels worse.

The dollar’s role as the world’s currency drives trade deficits, foreign ownership of U.S. assets, and a fragile system that needs constant dollar printing. It helps some Americans but harms others, and crises can spark chaos. That is also exactly why de-dollarisation will take a long time to achieve and why the U.S. is likely to remain the powerhouse for the time being.

Like and retweet to spread awareness. 🙏

#dxy #dollar #finance #Stocks

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