Exorbitant Privilege vs Infinite Patience || Part 1
May 2, 2020, 8:17 p.m.
This is not so much a 'deep-dive' or analytical post, but more so a primer post on a topic that I believe will only gain more importance and attention as time goes on. As I'm sure you can infer from the title, that topic is the longstanding and festering Sino-American conflict and its implications on the US Dollar's stance as the Global Reserve currency. Unfortunately, I have a strong tendency to write gobbledygook, and I wrote a bunch of it back in 2018 on a drafted piece called ['The Implications of PetroETH'](https://docs.google.com/document/d/11tSl5od_SUYLRJqZsd-kffwDJurHvkfxML4Y4vckpfs/edit "'The Implications of PetroETH'"). While it may be difficult to surmise what I'm really aiming to achieve in that piece, it largely centers around three broad themes; the Petrodollar economic system, the global hegemony enjoyed by the United States Dollar, and the pending implications of non-USD digital currencies. The development of each one of these topics & systems has taken decades of work from governments, multilateral institutions, mechanisms, agreements, and applied research, and as such it will certainly take a significant amount of time and a significant amount of change to alter these systems. However, I believe it's worth exploring these systems in-depth for two key reasons: 1. The future makeup of the global economy will largely rely on how events related to these topics unfold 2. It's always a good idea to explore the past when seeking to understand what the future holds > As Richard W. Hamming and Bret Victor say in ['The Art of Doing Science and Engineering: Learning to Learn'](https://www.amazon.com/Art-Doing-Science-Engineering-Learning/dp/1732265178 "'The Art of Doing Science and Engineering: Learning to Learn'"): 'The past was once the future and the future will become the past.' Additionally, each one of those topics is complex enough to pursue a Ph.D. in, and I would be foolish to attempt to fully explain their intricacies or interdependences- whether tangible, perceived, and/or potential - so I won't do that. Instead, I intend to explore some of the ideas and opinions that other (much more intelligent) people are saying about these topics. Luckily, the present-day events, tensions, and conflicts are giving us plenty of content to examine, scrutinize and reflect on where things stand in the great balance of power. Let's start with the awesome 'Principled Perspectives' newsletter Ray Dalio of Bridgewater Associates is currently writing called ['THE CHANGING WORLD ORDER'](https://www.linkedin.com/newsletters/principled-perspectives-6648615071662522368/ "'THE CHANGING WORLD ORDER'"), in which he explores some of the key components of big debt cycles and the rise & fall of empires over the last 500+ years. I really cannot recommend this enough. The legendary investor is famous for distilling complex ideas down into easily understandable & digestible bite-size pieces, and so far he has hit the nail on the head with these newsletter posts. In addition to Dalio's posts, I highly recommend reading some of the Project Syndicate posts on related topics. A few that have hit-home for me include: - [Project Syndicate: Dollar Losing Global Hegemony]( https://www.project-syndicate.org/commentary/dollar-could-lose-global-hegemony-by-barry-eichengreen-2018-10 "Project Syndicate: Dollar Losing Global Hegemony") - [Project Syndicate: Global Economic Governance After Bretton Woods](https://www.project-syndicate.org/commentary/global-economic-governance-after-bretton-woods-by-arminio-fraga-2019-03 "Project Syndicate: Global Economic Governance After Bretton Woods") - [Project Syndicate: Trust in Multilateralism has Eroded](https://www.project-syndicate.org/commentary/sustainable-development-crisis-opportunities-by-zhenmin-liu-2019-04 "Project Syndicate: Trust in Multilateralism has Eroded") - [Project Syndicate: Post-American Networks](https://www.project-syndicate.org/commentary/post-american-global-networks-by-anne-marie-slaughter-and-elina-ribakova-2019-07 "Project Syndicate: Post-American Networks") - [Project Syndicate: The Pandemic is Shaking the Dollar’s Supremacy](https://www.project-syndicate.org/commentary/covid19-trump-failures-shaking-dollar-supremacy-by-benjamin-cohen-2020-05 "Project Syndicate: The Pandemic is Shaking the Dollar’s Supremacy") Lastly, on the topic of non-USD digital currencies, here are a few posts that I believe are worth exploring: - [The Growing Challenges for Monetary Policy in the current International Monetary and Financial System - Mark Carney](https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf "The Growing Challenges for Monetary Policy in the current International Monetary and Financial System - Mark Carney") - [Foreign Policy: The Greenback Needs a Digital Makeover](https://foreignpolicy.com/2020/01/24/dollar-reserve-currency-united-states-china-crypto-digital-currency/ "Foreign Policy: The Greenback Needs a Digital Makeover") - [IMF Blog: From Stablecoins to Central Bank Digital Currencies](https://blogs.imf.org/2019/09/26/from-stablecoins-to-central-bank-digital-currencies/ "IMF Blog: From Stablecoins to Central Bank Digital Currencies") - [The Hill: Iran Explores Launching Digital Currency to Side-Step US Sanctions](https://thehill.com/opinion/technology/430276-iran-faces-a-long-road-before-using-blockchain-to-evade-us-sanctions "The Hill: Iran Explores Launching Digital Currency to Side-Step US Sanctions") - [Reuters: Yuan-based Petro Payments](https://www.reuters.com/article/us-china-oil-yuan-exclusive/exclusive-china-taking-first-steps-to-pay-for-oil-in-yuan-this-year-sources-idUSKBN1H51FA "Reuters: Yuan-based Petro Payments") Over the course of several future posts, I hope to dive into these topics more thoroughly to: (1) better understand the potential implications for myself; & (2) provide some insights &/or conflicts for a lively discussion with whoever may read this. For now, thats it. Adiós!
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