The Tyranny of the U.S. Dollar
bloomberg.com
bloomberg.com
- US Dollars are the first thing frozen by US Banks in an RIAA/MPAA dispute. that such a small lobby has such a critical control over a world currency is shocking.
- Arbitrary domestic political pandering can, and has, frozen a number of assets for countries with literally no other enemy but the US
- We can and do deny credit processing and financial transactions using broad-stroke legislation without real due process (wikileaks) other than a senator suggesting we should.
- Republicans shut down the US Government four times under the last president. our credit rating was lowered and government debts could not be serviced. the only thing that was immediately resolved was most airlines abilities to ferry senators home for the weekend.
The shutdowns during Obama's term as just as much the Democrats fault as the Republicans. Regardless, the US paid its debt. There have only been two federal defaults, one in 1790 and one in 1933.
Reserve currencies must be freely exchangeable. Free capital flows imply giving up control over exchange rates (and/or monetary policy) [1]. That means an idiot government halfway across the world can mess with your currency, credit and export markets at any time. Including around leadership transitions. For countries with a history of violent leadership transitions, where such transitions are tightly controlled, that is terrifying.
Now I'm sure the Congress would love to control the dollar in the months preceding an election. But there are powerful (read: wealthy) interests opposing that. Those people have this power because America is a country where the state is balanced against private interests, specifically, private property rights.
One thus gets a currency which can be trusted to remain freely convertible. Because its powerful private interests, unafraid of a currency crisis triggering violent insurrection, are aligned in maintaining it.
This administration is bringing a serious rift in transatlantic relations, and that is a bad thing for both sides.
1) convenient defaults. People trade in dollars for the same reason they speak English - because it's mutually convenient between two different countries with their own language and currency. This is partly due to sheer size and partly due to successful cultural export.
2) clearing and settlment. This is not well developed globally, so in practice a lot of smaller countries, foreign banks, and multinationals keep US bank accounts so they can more easily handle payments. This system plays by US rules, which is why the EU is constructing a parallel one to trade with Iran.
3) "eurodollars". I don't fully understand this aspect but apparently this market is coming under regulatory pressure.
One of the more comical illustrations of this is that the US passed a law during the Bush administraron authorizing invasion of the Hague if US officials were to be tried in the ICC. Less amusing is story after story of US-authorized violence to depose governments perceived as hostile to US business interests and slaughter supporters of the deposed governments.
You might find this comical, but many dutchmen find it absolutely abhorrent that the US is willing to enact suchs an aggresive policy into law, especially as the dutch have been close allies with the US for a very long time.
authorizing invasion of the Hague if US officials were to be tried in the ICC
But Russians get paid in local currency. If that crashes in relation to the usd, go ahead, make the $280 mortgage payment. It will be xx% more expensive this month while your salary and expenses stayed the same.
The benefit comes mainly from lower borrowing costs. The harm comes from the higher exchange rate that hurts competitiveness of US exports.
https://www.mckinsey.com/featured-insights/employment-and-gr...
>In a “normal” year for the world economy, we estimate that the net financial benefit to the United States is between about $40 billion and $70 billion
As one specific example, the low rate of saving by US consumers is a direct consequence of the use of the dollar as a reserve currency. It's not clear to me that lower borrowing costs, even if those are present, outweigh even that one harm.
And to be clear, "the United States" as a whole that's benefitting in the mckinsey report you link is an average. The actual benefits and harms from the use of dollars as a reserve currency flow to different people, and as far as I can tell that contributes to worsening inequality in the US, which is an effect (benefit or harm, take your pick) the mckinsey report doesn't seem to mention.
US has floating exchange rate and it adjusts automatically the international balances. Because US has no debt denominated in foreign currency, it is shielded from hyperinflation and other issues that Venezuela and other countries suffer.
Maybe you'll find a 2-3 obscure banks giving mortgage loans in USD in Russia. Although I'm not sure about even that.
And in the last 10 years you won't find a sane person that will apply for loan in USD in Russia.
I'm always surprised when people from the West discuss the economical/political issues in Russia while they know absolutely nothing but the typical media propaganda. Typically: "The only truth about Russia can be found in our media, not even the Russians themselves know anything about politics, economics, banks, loans, etc in their own country".
The article is mostly a scareticle warning that americans focusing on america endangers the “special perch” thd dollar enjoys as international currency.
Petrodollar hypotheses get the dollar's hegemony in international trade backwards. Petrodollars (i.e. oil producers' surplus revenues invested in U.S. dollar denominated instruments [1]) don't cause the hegemony. The United States being (a) the only advanced economy not bombed to the 19th century post-WWII and (b) the world's largest single consumer market [2] created and create international holders of U.S. dollars. (In the initial case, thanks to Bretton Woods. In the recurring case, since Americans pay with U.S. dollars.) Those holders, in turn, drive demand for dollar-denominated investments.
The interaction between these processes, international consumption by Americans and the reinvestment of international dollars, drives economies of scale in the American financial system. (It is why, until very recently, it was cheaper and faster to send U.S. dollars between two European capitals than initiate a Euro-denominated transfer.)
[1] https://en.wikipedia.org/wiki/Petrocurrency
[2] https://en.wikipedia.org/wiki/List_of_largest_consumer_marke...
When reinvestment of foreign American dollars back into Wall Street hiccuped in 2008, the cycle started to break - now there are deflationary winds blowing around
Oil is quoted and traded in all kinds of currencies. It tends to be exchanged in dollars for the same reason that when Lufthansa bought Airbus jets in the last decade, they did the deal in dollars: Fedwire was, until very recently, the world's only international real-time high-volume electronic money transfer system. (Now Europe has a competitor.)
The Hussein euro thing is a conspiracy. In what currency do you think British North Sea oil being shipped to Europe is paid for?
The United States did not invade Iraq because it was threatening to switch to Euros. If anything, American banks would have been thrilled at the prospect of new FX revenues.
> Oil bourses trade in dollars
Oil bourses? Oil futures are mostly traded on exchanges, but oil the commodity is mostly traded over the counter. It's privately negotiated. Those private negotiations reference whatever they want to, whether Brent in USD, Brent in EUR, WTI in USD, COM in JPY, et cetera.
These exchanges trade what is referred to as 'light- sweet' crude oil and a single contract, or 'lot', calls for the purchase or sale of 1,000 barrels of oil. Traders can buy and sell oil for delivery several months or years ahead'
https://www.telegraph.co.uk/finance/newsbysector/energy/2790...
the US has by far the largest army on the planet to enforce with
https://en.m.wikipedia.org/wiki/List_of_countries_by_number_...
A better way to look at this is let's imagine a world where copper was currency. Today, US copper has the following characteristics:
- Most efficient electric conduction
- Most widely available
- Most widely accepted outside US
- Fair and just producers
Suddenly, a new CEO of US copper Inc comes in and says, we are losing coppers to other countries (disregarding that they bartered something for it).
New CEO implements policies that reduce external supply of US copper. That changes the characteristic of US copper to:
- Still most efficient electric conductor but only locally
- Not as widely available outside the US
- Slowly, causing US copper to not be as widely acceptable outside the US since there's no use for it outside US (vicious cycle of fewer people wanting US dollars and availability of dollars)
- Unfair and unjust producers who use US copper as a threatening and bargaining chip, causing entire countries to starve. This is perhaps the biggest threat to that commodity being valuable.
Would any buyer buy US copper if it risks their populace? Sterling used to be a major reserve a hundred years ago. Its colonialism and world wars went too far and it has eroded so much now. What makes anyone think the US will remain the same?
Look at the history of civilization and the history of reserve currencies. When Britain had the reserve currency, how did we describe that? It was called the British Empire. When Spain had the reserve currency, what did we call that? It was called the Spanish Empire. Go back for thousands of years, the history of reserve currencies is the history of empires.
Until, supposedly, we get to this great break in history with America's dominance. Which supposedly is not an empire but is based on some superior ideology or system. Is it not remarkable that up until now history was one way, and now the age of empires has gone away. And only America's luck, or ideology, or democracy, or some technical economic bullshit has supposedly created the massive advantages for America and American citizens.
There has not been a break with history. The United States is the most dominant, powerful, and yes brutal Empire the world has ever seen. Reserve currency status has been maintained by rigorous continuous ongoing military campaigns involving both overt, covert and financial means. Libya is one extremely obvious example.
The question is not something like, are we being nice enough, or are we 'leading the world'. The question is can and will any group really take geopolitical action against this domination by force? If and when they think that it is safe enough to do so then they will.
Which is exactly why the US should and will continue to project power all over the world. What you're really saying is that given a power vacuum, other countries will try to step in. Are there any other countries you would prefer to be projecting power?
Its hard to speculate, but the next situation may not be controlled by a particular country per se. It may be some AI blockchain distributed political system that goes through an app that becomes popular in China but the Chinese government hates it. I think general purpose AI and distributed technologies will factor into geopolitics in some major way. Possibly.
Aside from the speculation, I do know that we're not going to get into a better situation if we keep bullshitting ourselves about what's really going on.
Just this statement
> and yes brutal Empire the world has ever seen
shows how little knowledge you have of history. How anyone can say the US is the most brutal empire the world has ever seen when not even 100 years ago the Belgian Congo existed is beyond me.
These "tyranny of the US dollar" articles always bring out the worst conspiracy theorists.
The US dollar is the most popular currency simply because the US is an extremely stable country. Few countries exist that have had the same government for more than 200 years. No countries exist that have similar clout to the US and have had a stable government for 200 years.
When you trade something for US dollars you know exactly what you are getting. An asset that will depreciate at a fairly consistent 2% every year. Few currencies can claim that.
EDIT: oh how silly of me to think that atomic weapons would be considered brutal.
It is true that such action had to be rationalized in order to support a fictional world in which America rules by virtue rather than deadly force.
The most obvious example of what exactly? Are you going to give comparisons to other atrocities that show that the US is the worst and most brutal empire in history? Also how does "Nagasaki" even qualify as imperial activity?
>EDIT: oh how silly of me to think that atomic weapons would be considered brutal.
You claimed the US was the most brutal empire in history not that the bombing of Nagasaki was brutal...
It's hard to take that as a serious argument for US imperialism since that particular war wasn't even started by the US.
This is pretty well accepted by historians because it would have have to have proceeded by a firebombing of the invasion target to make it even possible to land the marines on the shore.
And then there would have been the very long, very deadly fight all the way to Tokyo, with many many many civilians dying along the way in addition to the soldiers.
Also, Nagasaki is a cautionary tale about starting wars, and probably applies more to Japanese imperialism than American.
"Such an action" is easily rationalized by realizing that in the context of total war, against a fanatical and brutal enemy, dropping atomic weapons on Japan was more humane than the results of letting the war drag on for many more months.
The only ones who don't understand that are bleeding-heart revisionists.
More brutal than the Assyrian Empire and the Mongol Empire? 5% of the world's population is estimated to have been killed by the Mongol conquests. https://en.wikipedia.org/wiki/Destruction_under_the_Mongol_E... and even in absolute numbers, the Mongol Conquest is only behind WWII in absolute numbers of people killed.
The United States has its moral issues, but being the most brutal empire in history is not one of them. In fact, of all the global empires in the history of the world, the United States "Empire" has probably been the most benign and benefited the most people.
Also remember, at the end of WWII, the United States was the sole possessor of the atomic bomb and had the best developed long range bomber fleet. They could have easily used that advantage to outright conquer a massive empire, but they did not.
which they did use to kill more people at one time then ever before in history
They seriously considered it.
Remedy this, and the EUR will become a serious threat to the USD.
The U.S. doesn’t have perennial debates about breaking up or bits breaking off. If your Euro bank deposits are at risk of suddenly turning into drachma or lira, that’s a problem.
Hell, the break-California-up initiative made it to the ballot this year, was removed for this year by the CA Sup Ct, and has a non-zero chance of being back on in 2020. E.g., https://ballotpedia.org/California_Proposition_9,_Three_Stat...
One of the questions I was asked in a State Attorney General Office interview in 2009 was: "What state would you kick out of the union and why?" (The secession debates were raging in certain circles after Obama was elected, and I guess some AGs wanted to know if incoming lawyers were inclined that way?)
Will Texas ever secede? Will CA ever actually break up? I have no idea, and I doubt it. But the debate and even the effort is there.
The United States set a precedent for insolubility in the Civil War. Secession is not an option. The EU, on other hand, has an official exit mechanism. Texas talks about it in the same way New York and California talk about it; it's punchy, funny and rallies a crowd pissed off at whoever is in power.
Breaking up is not a realistic medium-term risk for the United States. It is for the EU.
The Marshal Plan gave much less money to Germany than to anyone else, per capita.
Greece received, per capita, about 3 times what Germany got. The UK, with a smaller population than Germany, received 3,297 million, while a larger Germany got 1,448 million.
Especially in the early days of the EEC/ECSC, rebuilding (west) germany was important for many other european nations at the time to increase their export markets. (Benelux especially).
Can you please elaborate a little? I'm wondering about 'destroying' part.
Yes.
> The US legal system
The US legal system is not some global shining paragon of how a judicial system should operate. See the shitshow around Kavanaugh how the highest court of the US judicial system has become a plaything of partisan politics. Remember that for a proper trias politica, there needs to be clear separation between the two.
> a free press
America is 45th in Freedom of Press rankings, behind Burkina Faso, a country that was a dictatorship until 2014, under military control until 2015, and still somewhat in turmoil.
> a long-standing calvinist work ethic
Most of NW Europe has 'a long-standing calvinist work ethic'.
> continued financial infrastructure investment
It is not as if the rest of the worlds' financial infrastructure is in disrepair. The reason why the US has such a huge finance industry isn't 'continued upkeep' but the absurd freedom the financial industry gets to do whatever it wants. The strange thing is that the US doesn't even have the most lax regulations - they just have absurdly weak enforcement of those regulations. For a prime example look up how absurdly lightly HSBC got away with their criminal behaviour.
> These things have proven impossible to reproduce - in aggregate - anywhere else.
There are two reasons for the US dollar being the main reserve currency: WWII and the petro dollar. Your claim is pretty much a perfect example of American Exceptionalism.
'American exceptionalism is an ideology holding the United States as unique among nations in positive or negative connotations, with respect to its ideas of democracy and personal freedom'
Many forms of money have been tried, and will be tried in this world of sin and woe. No one pretends that the US dollar is perfect. Indeed it has been said that the US dollar is the worst form of money except for all those other forms that have been tried from time to time.
Lots of other countries have great economies and different advantages over the US. But that the set of advantages above isn't more widely replicated points to more than just first mover advantage.
https://www.washingtonpost.com/world/national-security/iran-...
> The power of U.S. sanctions lies in the use of the U.S. dollar in most international transactions. A foreign company that sends its proceeds from trade with Iran through an international bank would likely face sanctions because part of it would be conducted in dollars. An international company with an American employee who has something to do with a transaction, no matter how inconsequential, could also run afoul of U.S. sanctions.
> Only a handful of countries agree with the U.S. decision to abandon the nuclear deal. The European Union said Monday that its member countries would establish a system to allow oil companies and private businesses to keep trading with Iran. But many international corporations have already stopped doing business with Iran because so much international business is conducted partially in U.S. dollars.
Say you buy my house for 100 Acme Dollars.
Due to hyper-inflation (or some other factor), the next day, houses are now worth 1,000,000 Acme Dollars. You now have currency that is worth 1/10,000th of a house, I still have a house.
You could also substitute "house" with "USD"
If the US wanted to maximize their fiscal gain above all else they would essentially give up sanctioning as peak stable currency. Whether they would want to or it would be separate questions.
It also points out why China would fail at their endeavor of replacing long term. Not even their own officials want to be in fiscal strangling reach. Nobody would believe they can reference Taiwan as a country and still remain part of their banking system let alone whatever else could draw their wrath.
I can only think of the euro, yen, renminbi, rupee and perhaps the pound as currencies that are backed by strong enough political forces to be considered as reserve. But there are many threats which each of these routes, do you trust the Chinese central bank? Is India stable enough? Is the EU stable enough? They are losing a prominent member in March 2019, will the UK recover post-brexit for the pound to be attractive??
Even then, as stated other nations have deep ties with the US which increases the risk of moving from the dollar. We provide for Japan's defense, we are the biggest funder of NATO, etc. While Trump has moved the US away from international institutions during his term I have no doubt that the US will continue to dictate global economic policy after his term is complete.
In many ways, while it's fun to speculate, I don't see the rest of the world having the will or options to move away from the dollar as a reserve currency.
The only existing "currency" I could see is some kind of opening up and expansion of the SDR[1] (China has pushed for this as an alternative way to replace the USD as a reserve currency)
China's black box central banking is a complete sham.
Let's not forget that the EU is not a nation-state on the same level as the US, but a supranational type of goverment. (and currently being the only one at that).
Brexit is a lot easier to achieve politically compared to texas seceding because the US is an inherently far "stricter" type of political entity.
That's the point.
The reality of brexit suggests neither the Euro nor the GB-Pound is a stable substitute for the dollar as a reserve currency.
The Yuan (with China's exchange rate manipulation and general economic manipulation)?
The Yen (with Japan's 10-20 year malaise)?
Crypto? (how much volatility and market manipulation are you willing to accept?)
Gold/silver standard? (It has certainly had a tiny fraction of the inflation of the US dollar, but there are other challenges)
What's far more likely is the US's status dropping to other's level. If the US continues in the track that it's been on with the Gov't shutdowns and antagonistic policies towards other nations, people are going to want to rely less and less on the US. We've got a lot of inertia, but that can be overcome.
That is, America would shrink rapidly just like the U.K. did when it happened to them.
It is what fuels American growth.
Whether that is a good thing is whether you want the U.S. to be a global superpower or not.
Provided you don't buy into the conspiracy theory that the US won't allow countries to price oil in other currencies, you have to ask why Iran doesn't do what you say. Perhaps it's because the dollar is bigger and more powerful than the political rhetoric that comes out of Washington.
(Because surely someone was going to bring it up)
There are some primary use cases that crypto solves in regards to international monetary transactions, but there are big questions in terms of technological maturity, and most especially around governance.
I love crypto, I think its potentially transformational. But it just isn't a contender yet. It needs to scale and it needs to mature.
This is your friendly weekly reminder that the government does not print money in almost all countries, with a very few interesting exceptions.
Money is instead created by ordinary privately-owned commercial banks, or by consortiums of privately-owned commercial banks aka the owners of central banks [0].
The spirit of the parent's point stands, which is of course that somebody is ripping you off. But that somebody is manifestly not a government.
[0] https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
See the key quote in bold on the first page: "Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money."
The point is, it's due to the govt that the money supply is increasing hence we have inflation.
Unfortunately, inflation can also occur when too much money floods a system. We see this in the case of college tuition. Giving college loans to anybody with a heartbeat floods the system with money, causing tuition price inflation.
This does happen with countries as well. Every dollar that a government borrows and then spends, is money creation. The act of selling the treasury notes allows them to obtain money today for the promise of paying it back with interest in the future. That new money is spent into the system and much of it takes the form of bank deposits which can then be inflated 10:1.
So is every dollar repayed back to the FED money destruction?
And the problem with this is?
Canada has no reserve requirement. The US value of reserves in the financial system is so high that banks are no longer reserve constrained.
The absolute quantity of money doesn't matter; the supply and demand for the currency does. That's why so many people got it wrong by claiming Quantitative Easing would result in massive inflation.
Inflation doesn't cause devaluation; it is devaluation. It's an increase in the exchange value of goods to cash.
And whether or not you get "ripped off" by inflation depends on what side of the trade you're on.
Yep, Canada does it for them!
Citation? He may not be some people's ideal of the leader of the free world but I wouldn't say he has retreated.
IMO this marks a retreat from many previous administrations.
Historically the U.S. has avoided drilling much of its reserves preferring to use oil from foreign sources first, knowing that it would have its own remaining if those ever dried up, either literally or because they became untenable to access for whatever reason.
If the U.S. uses up its reserves and doesn't drastically cut its consumption, it's no longer a net exporter.
One potential solution:
Use local reserves in the short term while redirecting military spending toward building sustainable / clean energy infrastructure domestically to avoid a scenario in which the country runs out of domestic reserves and is no longer able to obtain oil from foreign sources.
And of course the US is neighbors with another huge oil producer up north that happens to have a small population. Mexico also likely has a lot of oil it's unaware of, near Texas, in the form of shale. Given it only has 500m people, North America is an energy reserves monster.
Historically, shale oil was not economically viable. This has drastically changed the equations because suddenly available supply has shot up, rendering the old calculations moot.
(Note I am not implying anything further other than what I said. There are good aspects to that, there are bad aspects to that, and there will be disagreement about which is which. I'm just saying the old strategy has been obsoleted by practical shale extraction.)
Which means it needs to buy things from the outside, and trade something people want in return - that means oil. If you want to be stable on oil, it's either competing with international market or you're throwing up price controls and export restrictions to try and keep the price down. Do that, and your currency starts devaluing anyway making all those things you want more expensive.
A more appropriate equivalent would be standing for mayor of your town and saying you will be a good leader, but you will be putting your family’s interests ahead of everyone else.
Is diluting your vote on your nation's policies to include the rest of the world a necessary cost for having a free world?
There's no evidence of that. The President is a citizen figurehead (with limited powers) which has to fight a monumentally massive bureaucracy made up of other branches and citizens. Trump is not a godhead or even going to be considered important in the long run (a generation+). Curb the sensationalism.
The logical assumption is that the US President is not in fact a leader of anything outside of the US and only the pride and arrogance of the citizenry would lead to that title. Alternatively, it could be true that the US President is indeed the dictator of the rest of the world, but then it would be more fitting to call him a dictator rather than some Americanized version of "Great Leader".
Take the PRK. Will it collapse any time soon? Probably not. The government disarmed the populace. They are internally too weak to oust Kim. Does bringing the PRK into the less violent world benefit people? Yes. The US would have to spend far less on Korea. So the US could save anywhere from 350 million to 1 billion by not having to be there. [1]
TPP was terrible for rights of the individual. It was a promotion by the media companies, among others, to strip ownership rights. It also pushed a greater term for copyright, which at the current levels already stagnates the economy.
Reducing NATO has the benefit that it's making EU members start to think about spending their money on defense. The US has funded the EU social systems for too long. The EU countries mock the US saying, "If you spent less on your worthless bombs, perhaps you could provide good medical systems to your population." I'm tired of this lie. They don't spend much on their defense. They don't spend what they should with Russia parked on their front lawn. Is it good leadership to have your crew, who appear to be of little worth, make you spend on every outing?
Initiating trade conflicts is not necessarily wrong if the deals are bad. Are Americans better off under these new deals? I don't know; not enough details nor time. If they are, isn't pushing such negotiations ago thing? Could the same ends been achieved with different means?
1 - https://www.quora.com/How-much-does-the-US-spend-on-defendin...
On the idea of free trade https://youtu.be/rw7PUrgU3N0
Imagine if Canada had to actually spend real money on defense to keep Russia from going after its northern most territory (Russia has begun getting aggressive there). They're spending 1.3% of GDP on their military, with no ability to actually secure their own territory if Russia decides to start claiming some of their land in the Arctic region. Who are they going to look to as Russia gets more aggressive? The US of course, nobody else can do anything about it.
On the back of threatening NATO, the US approved the largest increase in defense spending ever. To what end? Who are your enemies in a world where you apparently don't plan to commit to NATO and are going to reduce foreign imperialist activity?
The US military is largely worthless in a true asymmetric war without our territory. There are better options in both law enforcement and the true concept of the US citizenry being part of an independent State militia. If we let the EU fall or stand on its own, the US could get rid of the majority of its standing military. We wouldn't need friendly bases because we could scrap the idea of a volunteer army. Such armies make foreign adventures palatable since the soldiers asked to join. An army that is mostly conscripted does not go abroad unless it has too. A conscripted army is not large enough to threaten the homeland.
If we collapsed our military to just Navy and Air force, enough to keep trade routes open and secure our airspace, we could free up 300-400 billion dollars. The US could pay down some of its 20 trillion dollar debt year after year after year.
And why would an expansionist China let any country in its sphere of influence give preferable trade deals to Americans at all? The point of an empire is to get it to pay tribute to you, which is what the US currently does via it's various economic relationships backed by its military.
The reality is that if other country's build up their military's, then any money from trade the US is getting is diverted since what are they going to buy from you? The first thing you do for a self-reliant military is build your own industries, or make military alliances with your neighbors to share industrial capacity. All of which would have lost any reason to bother with US hardware.
[1] https://en.wikipedia.org/wiki/Permanent_Structured_Cooperati...
While you won't find a citation of him saying "I'm no longer interested in being the leader of free world" you will find that he rejects the concept of "the free world" by decrying "globalists" as being the cause of a perceived decline in America's influence and power.
Not to mention his bashing of allies on trade, security and a variety of other issues - making it clear he's not interested in "leading" but rather ... dominating(?)
So to me, retracting from the global economy, bashing allies, and complimenting authoritarian monsters would seem to indicate he's cool with "retreating" from that role.
However, he may think he is being a "tougher" leader than before.
Soft power is great when it works. Soft power leaves personal and bilateral relationships largely undisturbed and reinforces stability. The problem is this... it doesn't work when both sides do not share a strong incentive (or the same timeline) to reach a negotiated agreement. Hard power is required and not inherently bad when gridlock, urgency and incentives justify its use.
But also, this is an opinion piece, no need to take it too seriously in any measure. The responses you are getting are aligned opinions.