junebug2 [comrade/them, she/her]
i do try and proofread my comments a few times to make sure i’m not saying anything too sectarian or jargon-y, and i would be happy to answer questions about anything i say in comments or pms. my issue with shipwreck/ xiaohongshu and what i see as a habit of willfully missing the point so they can restate their thesis aside, i am happy to discuss anything
i don’t agree, and moreover you aren’t replying to my point in general or to the aspect that you quoted. i literally did not say what you claim i am saying. this is, i feel, a consistent issue of yours. the marshall plan is irrelevant when half the reason Nixon ended the gold standard was France buying up too much USamerican gold with Vietnam dollars. its doubly irrelevant when the only reason it worked was the direct damage of the second world war and the lack of “efficiency” in European markets prior to the war.
i do not, at any point claim that China is on track for hyper-financialization. in fact, i explicitly argue that China is taking advantage of the US already having done so. America did not decline during de-industrialization, it ascended. if the common (white, cis, straight) working joe hadn’t been screwed over completely by finance, the American project would have ended in the 70s. you are conflating together three different currency regimes of USamerica, none of which are analogous to China’s current situation.
i do not associate the issues you are talking about with bretton woods. Polanyi’s The Great Transformation laid out everything that was going to happen before it did, long before the Austrians got involved. the connection between dollars and trade deficits has nothing to do with Keynesianism, an ideology/ economics program that has never been relevant in the USA. fully most of what you lay out here is the exact argument of the re-dollarization people that you have spent hundreds of words and many days arguing is farcical dogshit. what am i supposed to think you are saying?
In the spirit of discussing the Chinese dollar bonds, i’d like to talk about “China’s Foreign Exchange Reserves: Past and Present Security Challenges” by Yu Yongding, published first in July 2022 (so 5 months after Russian forex got seized) and translated here. It concludes, amongst some other things, that “[China] should strive to avoid becoming a creditor as much as possible”.
The internationalization of the RMB is a good for security in the long term, but in the short term “even if China’s foreign exchange reserves consisted entirely of RMB assets, their security would not change.” Why? “Because the key to the problem does not lie in the currency that China’s foreign exchange reserves are denominated and settled in, but in whether China owes the United States money or vice versa.” If the US does not want to service the debt, then China is left in the lurch/ bag-holding even if the $1 trillion US dollars in China’s reserve magically turned into RMB. The security threat outlined in this article is China being stiffed to the tune of trillions, and the security solution outlined is to stop being owed anything. The author repeatedly notes how China’s current foreign exchange reserves generate negative investment returns, largely because they are over-leveraged. Most countries have much smaller reserves of dollars on hand. So Mr. Yu advocates for getting dollars out of the country in a way that generates positive investment income.
But why does China have so many US dollars? Shortly after China’s opening up, “the shortage of foreign exchange was the main bottleneck”. As such, the RMB was devalued sharply. In 2003, financial turmoil caused China to delay the appreciation of the RMB until 2005. As a result of the late appreciation, “China’s trade surplus increased sharply, and, on the other hand, the domestic asset bubble and the strong expectation of RMB appreciation led to a large inflow of ‘hot money’. China’s capital account surplus once exceeded the trade surplus and became the primary source of new foreign exchange reserves. It is fair to say that China’s failure to let the RMB appreciate in time and its lack of exchange rate flexibility were the conditions that led to the country’s excessive accumulation of foreign exchange reserves.”
Why can’t the RMB just replace the dollar? “In short, for the RMB to become an international reserve currency, China must fulfill a series of preconditions, including establishing a sound capital market (especially a deep and highly liquid treasury bond market), a flexible exchange rate regime, free cross-border capital flows, and long-term credit in the market. In short, China must overcome the so-called ‘original sin’ in international finance and be able to issue treasury bonds internationally in RMB. Otherwise, it will be difficult for the RMB to become an international reserve currency and RMB internationalization will remain incomplete.”
China will not do many of those things, because that would be giving up control of the economy to financial markets. But that’s the rub, isn’t it? China can’t establish itself as the world’s reserve currency, not least because its financial institutions are not ‘advanced’ enough. The USA is a decrepit shell that has spent 40 years hollowing itself out to be the best financial market possible. The current proposal seems to be using both of these facts to China’ advantage.
De-dollarization is a non-starter unless the US goes apeshit crazy with SWIFT sanctioning. SDRs are cool, but the World Bank and IMF are USAmerican puppets for shock therapy. A bancor would require a lot of diplomatic work that no one will want to do for a while. Too many debts already exist denominated in dollars. The proposal with re-dollarization is to take advantage of the facts that China has too many dollars and some nice manufactured goods and that most of the Global South has commodities or other inputs for manufacturing and too much dollar debt. The US wants to be the turbo-finance hub of the world. Now, many of us here would argue that’s a broader manifestation of USamerica standing in the role as the current hegemon in a capitalist world and the tendency of the rate of profit to fall. At the ground level though, the finance people are blind dogs chasing blood, and they could not care less from where it flows. If the debts are getting paid, there shouldn’t be anything to complain about. And i personally doubt that the ‘Art of the Deal’ President is going to be some savvy financial genius. i think some guy once said something about capitalists selling the rope to hang themselves. As it is currently argued, China is setting up a win-win-win that slowly de-leverages their oversized dollar reserves and other countries’ debt.
Saudi Arabia may be mostly aligned with the West and the dollar, but that is a role they were forced into, not one they chose. The whole idea of the petrodollar comes from when OPEC tried to grab the “West” by the balls in the 70s and 80s, and then ended up with too much money to do anything with. Cash alone doesn’t do much in the desert. The US won that fight, because the Gulf States ended up recycling all of that money into US debt. Oil price spikes, a global recession, and soaring interest rates were the ingredients in the very first neoliberal shock. Interest rate and currency exchange rate manipulation led to IMF loans conditional on reforms, and the accompanying mass privatization and austerity. The US in 2024 has nowhere near the industrial or political capacity to pull off a second global financialization, mostly because there’s nowhere left in the world that hasn’t already been financialized. Even Russia and China represent financial markets outside the US’ control, not fully untapped markets. After 2008, quantitative easing, and the acceleration of money printing since 2020, domestic investors, banks, and the stock market depend on the federal interest rates in a way they really never have before. The snake is eating its own tail.
If anything, China’s attempts to do literally anything other than buying more US debt represents learning from the 80s. i do not see this as an obvious China L, though it may turn out to be.
then google it. mr. klein has been publicly feuding with hasan for months. people here are broadly familiar with that. you pushing the glasses up on your nose and saying, “um, actually, if events aren’t mentioned in the article from fox news, then they didn’t happen,” is asinine. no investigation, no right to speak
countries on the persian gulf exported around 18 million barrels of oil per day in 2022 (according to wikipedia). now, ~1.8 million of those were from Oman, who’s kinda on the outside, and Iran themselves. i think there’s an argument for this collapsing the global economy specially because of knock-on effects with China’s oil imports almost entirely coming through the Gulf, but i think there’s an earlier problem.
crude oil has ‘flavors’, namely light or heavy (referring to the length of hydrocarbon chains) and sour or sweet (referring to the relative amount of sulfur). the upshot of that is that oil refineries are built to take in specific flavors of oil. part of the reason Chevron is so mad about Venezuela is that, for fairly obvious geographical reasons, Venezuelan oil fits the refineries for the USA pretty well. shorter carbon chains have higher boiling points (more butane and less boat oil) and sweet oil does not need to have the sulfur removed from it. for instance, Saudi Arabia’s most common crude oil export is called ‘Arab Light’, which is a medium and sour crude oil. if Iran strikes at oil rigs, refineries, and distribution centers, there is no guarantee that other, unaffected infrastructure can actually do the same job. refineries built for sweet crude can not refine Arab Light. there could be barrels and barrels of oil sitting on boats and in pipelines, unable to be refined.
all of that is to say, depending on how and where Iran strikes oil infrastructure, the issue could very quickly become whether or not certain petroleum products are available at all, not just if the price is spiking. the price would also spike. there would be rationing and restrictions on international trade, most likely. in the areas most affected (hard to predict without knowing details), there would be pressure to declare ‘move it or lose it’ wars, with ‘it’ being all the fuel you currently have in stockpile. desperation and material interest can erase all alliances. the flip side of what could be several regional wars is that people are aware that those wars could happen. Saudi Arabia recently denounced genocide in Palestine (too little too late), and had meetings with the Iranian military. it’s certainly not a coincidence that Saudi Arabia didn’t start changing its tune until after True Promise II. Iran discussing strikes on oil infrastructure is as much a diplomatic tool as actually striking the infrastructure
they claim that the Luxemburg was an anti-militarist who wanted to achieve communism through democratic institutions. in order to ‘follow in their footsteps’, you have to complete focuses called “Civil Liberties” and “Embrace Democratic Institutions”. the shit-cherry on top is that your reward is to turn your neighbors into special puppets called “Volkskommissariats”.
now first off, Rosa Luxemburg is probably most famous for her 1899 book Reform or Revolution. she was opposed to reformism, and argued conclusively. i would not personally describe her as “embracing democratic institutions”. she is called by some a dem soc, and many argue that the lesson of the Spartacus League is that it was too much democracy, but paradox isn’t putting any nuance into this. they physically put this part of the tree right in the middle between communism and democracy. someone else could probably explain the details of her politics better.
the Volkskommissariat thing is actually the worst part. they are obvious reskins of Reichkomissariats, a game mechanic representing Nazi Germany setting up puppet regimes in occupied Europe. These were real institutions broadly responsible for managing forced labor and ethnic cleansing, but due to paradox policy against depicting war crimes, they are puppets that are easier to exploit. using the term ‘volk’ instead of people is always a weird red flag. it’s especially odd because in real life the USSR called their departments people’s commissariats (though that is not featured in the game). they somehow managed to smear Rosa as both a liberal and a fascist
they also explicitly added decisions to sell uranium to the highest bidder and focuses that sell Congolese gold and diamonds to fund Belgian reconstruction. both of these things are portrayed as buffs/ positive for the Congo. they also added the ability for Belgium to alter their colonial policy up to annexing and coring the Congo in a few months, ez pz. every single focus tree they add outside of the main area of WW2 is just creating save bloat, and of course paradox has to create racist and historically illiterate save bloat. don’t even get me started on what they did to rosa in this new dlc
i found an article mentioning thermobaric Shaheds from December 2023. The source is pretty mediocre. i also found this article from yesterday, which has some good technical information. Apparently, the factory that makes this particular warhead was hacked, so there’s a lot of information about what it can do.
In war reporting, i think thermobaric explosions or fuel-air explosions are often brought up to sound bad. It brings to mind terrorism and a cruel-seeming death. When the USA uses them though, they are precision weapons on account of the fact that a rapidly expanding explosion is more devastating to bunkers and fortifications than open air (it still obliterates things in the open air). As Russia moves through the last defensive lines from before 2022, i would expect them to use and need fewer anti-fortification strike tools.
43% of the votes have been counted. That 53% ‘no’ vote represents about 23% of the total expected votes. Broadly speaking, the first votes counted are from small and rural areas, and the last votes counted are from mail-in and urban areas. The first group tends to lean conservative, and the last tends to lean liberal or progressive or whatever. California is frequently pretty dogshit politically, but we aren’t going to know any results until like tomorrow afternoon at the earliest. People are happy to call it for Harris because it’s California, but for actually competitive issues it takes hours if not days. Something like 30% of votes were mail-in this year, and they couldn’t legally open those until the physical polls were closed.