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Comment by jmyeet | Hacker News Reader

It didn't even start out interesting. The main product of the US is weapons not "the dollar". Electricity generation is a metric for what exactly? China's popoulation is rapidly urbanizing. That's all that shows.

But the killer is the gold standard. The author seems to be confusing this with fractional reserve banking. Interestingly, they're anti-crypto, which is kinda odd because most gold bugs became crypto bros.

China's foreign policy is very different. China invests in creating infrastructure in countries to help make them future customers for Chinese products. US foreign policy is simply to loot the Global South and to use foreign aid as a form of economic imperialism.

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He doesn't even see that the value in gold is what we assign to it. Almost no different to the value of cryptocoins. He doesn't notice the contradiction:

> Back the dollar by gold (not socially constructed crypto)

Gold is worth so much in dollars because everyone thinks everyone else also wants it. Sure you can process it for some industrial use, but most of the worth is because "Someone else will also find this worthy").

I have a 100 trillion dollar note (Zimbabwean) in my wallet, is it worth anything? Just the novelty value. Is the $100 (US) note worth anything? Well I can buy $100 worth of groceries, which at the moment is probably 20 cartons of eggs, but the way Musk is doge-ing the nation, it could be only 4 cartons in the near future...

To be fair, you can't just manufacture more gold. I mean you can dig more up or buy more but you're limited to how much gold there is. That's the argument used. There seems to be over 200,000 metric tons of it ever mined.

What many gold bugs and crypto bros don't seem to understand is that:

1. The US dollar was never 100% backed by silver (originally) or gold;

2. What really backs the US dollar is the US military. This was true with the gold standard and it's true now;

3. The ability to manufacture more dollars and thus control the money supply is a feature not a bug;

4. Fractional reserve banking is so stunningly successful, it's impossible to ignore; and

5. A lot of the problems detractors point to are really symptomatic of unfettered neoliberalism, not abandoning the gold standard.

Of course the same can be said for BTC: finite supply, needs to be mined.

Unlike gold, the "finite supply" of BTC is socially constructed.

That's my whole argument for gold. The finite supply isn't socially constructed, and getting more requires building real infrastructure.

1. The supply is nonetheless constrained and immutably fixed; what is the relevance of whether it is by contract or law of nature?

2. What do you mean by "real" infrastructure? Crypto-mining rigs are no less real than actual mines.

My argument would be that gold's value is as much a social construct as that of crypto; value is just a function of supply and demand.

I'm guessing you might post that there is a third input: utility. "Currency" is one use for gold, but can certainly serve many purposes, whereas crypto coins are strictly used as currency. That fact is presumably taken into account by a coin's price; nonetheless, it still has whatever value the market says it has at any time.

Except none of the crypto "currency" is used as currency at all, and never will. It's used as a crypto asset. For speculation. Or even worse, straight up fraud. The only time I heard crypto was used as currency, is the infamous pizza a decade ago

Computer programs and algorithms are the last thing that I would call "socially constructed".

The meaning behind them are, though. When car alarms was a big thing, it might wail, and the idea was people would have a look to see if somebody was trying to steal your car, but at the end it was mostly false alarms. So the wailing got the reaction of "Not that shit again!".

Meanwhile a TSA scanner's beep get treated as "this person is bringing a problem.".

Gold has a limited supply and it's a precious metal, so it has nice properties, can't be easily destroyed and lasts forever.

> The main product of the US is weapons not "the dollar"

I interpreted it as - the US "exports" debt in exchange for the import of goods and services. It's a deficit country, it consumes more than it produces.

China (not only China) is a surplus country, they produce more than they consume. They store that surplus into US financial assets but also increasingly into other places, like developing countries. I've read that their investments into developing countries are often unprofitable. Previously they've been using the excess production to invest into real estate and infrastructure but those were often money-losing investments too (empty houses, under-utilized high speed rail with high maintenance costs).

A lot of people think we didn’t have fractional reserve banking when we had the gold standard. Alas: we did.

> China invests in creating infrastructure in countries to help make them future customers for Chinese products ...

Really? Because the vast majority of "Belt and Road" destinations connect China to raw resources. I'm sure that's just a coincidence. China is making it pretty damn clear that they do not intend to pay for those resources, or at least not in money, especially now that the "Belt and Road" initiative has turned into yet another Chinese money pit so deep it makes Trump look like a great businessman, and on top of that it made China so unpopular it makes it look like Europe loves Trump. And everyone reports another problem: CCP officials, even low level ones, make Trump look like a humble man.

Locals seem to hate the Chinese, and Chinese investments, everywhere the Belt and Road goes, whether it's Pakistani in Balochistan, Greeks in Piraeus, in Madagascar the people pretty much kicked out the government, largely over Chinese presence, China is now negotiating in Australia by openly threatening with warships in Sydney harbor firing live ammunition in the direction of the city and even their military base in Djibouti is not popular, despite being right next to a US, a French and a Japanese military base that ARE popular (despite middle eastern tensions. You know, you'd think the US base would be in the locals' bad graces given the last 2 years. It's not).

If this is supposed to build to a long lasting mutually beneficial trading relationship between China and these countries, they're not off to a great start. Not on the economic aspects, not on the political aspects, not on ...

But frankly, the answer to this weird state of affairs is brutally simple: China has no intention to turn this into a long lasting mutually beneficial trading relationship, and neither do those countries or those peoples.

China offers significantly better terms than the IMF and it comes with far less onerous conditions, most notably the IMF imposes "economic reforms" that tend to be absolutely devastating in the same way that economic austerity measures in the developed world have been devastating to working people and nothing more than a vampiric drain on the economy to the benefit of the wealthiest.

The IMF (and World Bank) is economic imperialism doing things like preventing African countries from growing crops to feed themselves. Instead they need to produce export crops and then they can buy excess food created by Europe and the US. This has resulted in famines and utterly destroyed, for example, the economy of places like Somalia [1].

Yes, China is seeking preferential access to natural resources and considering the strategic importance of the borrower. But the general consensus seems to be China's terms are better than the West's.

[1]: https://twn.my/title2/resurgence/2011/251-252/cover06.htm

I read this article. Is this serious? This is Russian pseudo-communist propaganda meant to attack globalization. It is well written, remarkable even, but totally unreasonable:

1) Chossudovsky criticizes subsidized grain imports for undermining local markets, but in contexts of hyper-inflation or economic collapse (e.g., Somalia’s public sector wages dropping to $3/month), external food aid was the only means for households to survive. Criticism that it destroyed the market is dishonest. Markets ALSO don't survive if the customers die off. Obviously.

2) While imposed austerity measures that worsened inequality and local economies, the alternative—total state insolvency—would have been far worse. A teacher wage of $3 is still far superior to a collapsed state offering a wage of $0, and probably forcing locals to wage war on each other. PLUS the state needs to get back to surviving on it's own, without external help, or it would just delay total collapse instead of fixing it.

I was curious about this article. So well written, but it's a totally unfair attack piece, it's lunacy ... and here is the wikipedia page on the author:

https://en.wikipedia.org/wiki/Michel_Chossudovsky

"Michel Chossudovsky (born 1946) is a Canadian economist and author. He is professor emeritus of economics at the University of Ottawa[1][2] and the president and director of the Centre for Research on Globalization (CRG), which runs the website globalresearch.ca, founded in 2001, which publishes falsehoods and conspiracy theories.[3][4][5] Chossudovsky has promoted conspiracy theories about 9/11."

"In 2017, the Centre for Research on Globalization was accused by information warfare specialists at NATO’s Strategic Communications Centre of Excellence (STRATCOM) of playing a key role in the spread of pro-Russian propaganda.[12] A report by the U.S. State Department in August 2020 accused the website of being a proxy for a Russian disinformation campaign."

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