> America doesn't make anything worth buying
> US weapons—even if they were even available—look shoddy
Also, his examples about Saudi fall apart very quickly.
For example, "Saudi sells oil to the USA, which pays for it in USD. Saudi doesn't know what to do with this USD, so it buys US Treasuries".
KSA has plenty of uses of USD outside of buying treasuries. That same USD they collect is what the KSA in turn uses in it's FDI globally, to purchase Eurofighters (the KSA has largely moved away from American systems because of Obama-era limits on ethical constraints of weapon systems), and develop domestic infra.
Or "The most expensive weapons in the world won't even subdue the poorest people".
Weapons don't win wars. This is the same reason the US lost in Vietnam, the USSR lost in Afghanistan, and KSA lost in Yemen. The reality is no one cared enough to put enough boots on the ground in Yemen (excluding Abu Dhabi), and UAE stole KSA's thunder by completely co-opting the Southern leadership in Yemen to be their vassals [1]. This annoyed the KSA as they basically were fighting a war but UAE got much in the benefits, leading to their rift [2] along with KSA ending their war in Yemen
There is a case to be made about regional powers increasingly gaining capabilities that can help give them strategic autonomy, but this article ain't it, and the whole "White Empire" paradigm just doesn't make sense.
[0] - https://indi.ca/how-israel-will-end-by-2027/
[1] - https://www.chathamhouse.org/2020/07/risk-perception-and-app...
[2] - https://arabcenterdc.org/resource/the-uae-saudi-arabia-rival...
The reason China can issue USD bonds at such a low premium is that it holds huge amounts of US govt bonds. it is not really replacing the US.
Eurodollar deposits and the like which have existed since the cold war and represent a similar loss of control by the US over USD financial markets. Its more of a sign of the continued dominance of the currency than anything else.
That being said, the US does offer a deal (as in carrot) along side its stick. They did raise interest rates at the expense of your average american in order to pay the shareholders (ie: the Saudis) and while the interest is low (if you consider real inflation), there isn't much of a good looking alternative in the world. Most of the "developing" world is literal garbage with no governance and the promising ones are over-subscribed.
On the US not producing stuff: This was one of the costs of being the reserve currency; and it's a big cost. And this is in my opinion why China doesn't want the CNY to become a reserve currency.
The fundamental premise here is wrong. People hold assets in USD because at the core they trust the US to keep the dollar valuable. There’s nothing wrong with them switching to another currency they just have to trust that regime instead.
At the end of the day either you have to trust your own ability to wage war and defend your interests or trust that your interests are aligned with someone else’s ability to wage war.
This supposed analysis hand waves it all and uses inflammatory language for no reason but the only insight here is that the Saudis can trust the US or China, or pick one and hedge their bets a little with the other.
If , fundamentally, currencies are backed by a preponderance of coercive force, or the ability to wage war, as you posit, then it seems like alternative instruments such as bitcoin may be more meritorious than many people give them credit for.
This is assuming, of course, that the threat or reality of war is an unequivocal bad thing.
I wonder if the inconveniences of volatility for a spendable currency could be mitigated by some kind of frictionless middle layer that -wasn’t- a state backed fiat.
Bitcoin is backed by a less universally held belief that it will be valuable in the future, and that’s it.
One of these things is just a much smaller subset of the other.