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Comment by impossiblefork | Hacker News Reader

Personally I believe that the days of the reserve currencies are close to over, and that they will go away with the going away of the oil trade.

The present situation is one where if one wants oil, which everybody does and has nothing to trade directly with the oil countries, must export something to someone else who either exports or sells something to the oil countries, or who in turn exports or sells something to someone who exports or sells something to the oil countries. I believe that once this ends trade itself will become less important. Today it's mandatory to get oil, but once we don't need oil, the export of goods to acquire dollars to buy oil becomes optional.

Consequently I see the future as one in which people will manufacture what they themselves need or want, instead of what sells abroad.

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Won’t the reserve currency simply switch to being “backed” by some other fundamental productive input? And by switch I mean the world’s most militarily powerful country will ensure that countries producing this fundamental input denominate their exports of it in their currency, if they don’t want to risk being “liberated”.

Personally, my money is on semi-conductors. It’s currently sitting at #4 in total international trade value, behind automobiles (which are increasingly reliant on semi-conductor inputs), refined oil, and crude oil.

Certainly casts a new light on contention over Taiwan.

I don't think that can be done. A whole lot of countries, even some quite small ones, so it won't be possible to directly bully them all.

Secondly, these technologies usually have stages developed by different people. Microchips are a chain: different components from Europe, Japan and the US are put together into actually usable factories in Taiwan, South Korea, the US etc. The whole chain is needed. Obviously the US recently succeded in some bullying against Taiwan, but I think it was mostly about demand, threats of tariffs, that kind of thing, and I think that kind of threat again matters only because exports are necessary because of the oil trade. It'll be harder to bully with tariffs when trade matters less.

I also think bullying countries capable of doing useful semiconductor work is less possible, and I also think countries like China will catch up, so that much will be commoditized.

I see thing as being like the end of the bronze age. With iron there's nothing to control, so there's no path to power, with decentralization and independence as the result.

Most countries can’t produce what they need.

And even when they can, comparative advantages are still a thing.

That being said, I do agree that with a reduction in the need for oil, the importance and use of a reserve currencies will reduce even if they don’t go away fully.

Yes, but if you're not manufacturing a bunch of stuff for export, then you can also dedicate the resources used for that to build what you actually want.

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