this post was submitted on 21 Oct 2026
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A crash into what alternative? If people are trading away their USDs, what are they trading them for?
I've been hearing people say this since Reagan. "This is the end of the road! The End of History, even!"
But what's the alternative? Does the US just pop out of existence? Do all those creditors take a massive inflationary haircut on their outstanding loans? Does the US suddenly shift to an export economy to get... Japanese Yen? Russian Rubbles? Mexican Pesos? Nigerian gold bars?
Why does there have to be an alternative for the USD to implode? Why would a lack of an alternative sustain an unsustainable system which appears to be cracking under it's own weight right now? The US govt being forced to issue debt at unsustainable interest rates is the only cause of death you need if people don't think they'll get their money back. They will figure out an alternative in that situation.
USD's supremacy isn't just from being the "safest" asset you can hold but also that you need it to buy energy from the middle east, since they agreed to only trade in USD in exchange for US military protection. Also because everybody else uses it. I doubt BRICS will be the alternative though, even if it is a half hearted attempt to get around SWIFT and USD.
And right now it seems to be gold. China has been dumping US treasuries since 2020 and moving heavily into Gold. France did the same. Althought thats not a viable alternative... there simply isn't enough Gold. In an ideal world we would move towards a Keynsian basket of goods as the international unit of exchange instead of a domestic currency but we'll probably pick the dumbest, least painful in the short term, most painful and debilitating in the long term answer... nobody plants trees anymore.
Because value is relative. In order for the value of the USD to fall, the exchange rate has to rise. And that implies people are trading a surplus of USD for another thing.
What is that thing?
The same goods and services but massively increasing amounts of USD diluting its own value because interest rates are so high for US treasuries they enter a death spiral borrowing more (printing) to pay for the borrowing they already did, especially as debt rolls over from 1-2% to 5%+?
It's not looking good... there's no debate that the debt is growing faster than the US economy. Trump blew up the tacit deal requiring USD for energy. Now UAE and others are willing to trade oil in chinese yuan or rubles. Their security agreements with the US apparently weren't worth the paper they were printed on considering the US did the exact opposite of what they promised to those OPEC nations, in fact they actively caused this dumb war with Iran that's destroying plants and infrastructure in the gulf. Thats worse than reneging on your security promises...
Do you think the USD is headed in a positive direction? What do you think is going to happen?
Who has a super abundance of USD that wants to purchase such enormous volumes of consumer goods?
Lets stay on the topic of your original gripe with my comment, which implied that without an alternative the USD system can't collapse, and you've heard these complaints since the 80s. Why do you think that is? Why can the USD system only fail in one way? You never addressed that besides going "nu uh"
Historically that would be the US itself since they hollowed out domestic industry since they could import everything with their exorbitant priviledge. What would stop them from printing even more to keep doing that if it's also the expedient answer? Which is also the core of my whole point here... they're cutting down the trees planted for them by prior generations and we're at the can now.
Overall it seems to me that you're arguing swans can only be white as all swans are white, and there's no evidence of black swans existing. You don't make an alternative to the USD if the USD is working well... I think you have it backwards. An alternative will be made to get around the USD whicj will kill it. Not because of the alternative existing but because the USD failed in it's promises to those that use it. But thats not the only way it fails...
Besides, any time a reserve currency has been replaced historically there usually isn't anything waiting to take up the role right away. It develops after the global trade currency devalues so much it stops being useful for international trade. The pound failed progressively over decades and was replaced with domestic forex temporarily until Bretton Woods solidified the USD as the replacement post WWII.