shawn1122

Global South wouldn't be a fair example since you'd have to factor in historical (and current) exploitation by Western nations. This tends to bolster corruption by having leaders sell out their population to align with Western prerogatives, enriching themselves in the process.

The social democracies in these nations is generally an attempt to protect the populace from Western capitalism moreso than domestic capitalism.

One example would be when the US overthrew the Shah in Iran back in the 50s because they socialized ownership of their oil reserves (previously owned through exploitation by a Western coporation). They staged a coup d'etat to install a pro Western leader so that the Western exploitation could continue. This inevitably led to the Iranian revolution, playing a significant role in Iran's current state as a theocracy.

The Global South, particularly South America, has countless of examples of this. The term banana republic is used to describe this very situation.

This is by no means an indictment on Western culture, just that the global rich will inevitably be in a position to manipulate the global not-so-rich for their own gain. Western nations are the global bourgeoisie.

Nordic nations are a better example of social democracies as they are not subject to the same type of meddling.

Generally any tariff over 50% eats into profit margins sufficiently to end trade altogether.

Any escalation in tariffs above that is essentially just a symbolic dick measuring contest. China is being the adult in this situation by not engaging.

he will destroy the Republican Party’s electoral prospects for decades

That's what they said about Nixon. Look at how that's turned out.

China has a much greater tolerance for pain than the US for a multitude of reasons. China is also in a position to bolster trading relationships with other nations since it has not gone scorched earth like the US.

The US holds disproportionate purchasing power for its size but it's still has far less than 50% global purchasing power. China and most other countries will find other partners to trade with while the US isolates itself further.

The only reason the US holds 20% of global purchasing power is because of mutually beneficial relationships with other countries. Purchasing power will slowly erode over time if Trump continues on his current path.

The US is really overestimating its leverage here and, being a fairly overmiliatarilized nation, one can only hope it doesn't turn to violence once things go south.

Trump wants to devalue US currency. He sees US dollar supremacy as why the US is not competitive in the export market and part of the reason why manufacturing has left the country.

Most countries take the US dollars they make on exports and stockpile them in US treasuries which keeps the dollars value high relative to other currencies.

Essentially he sees the high value of the US dollar and trade deficit as bubbles that will eventually burst and collapse the US economy. Which is an issue he thinks he can fix/prevent with tariffs.

The interest rate isn't fixed, the bond yield (in dollars) is fixed.

Its presented as a percentage interest rate which can be variable.

For example let's say you have a $1000 bond that pays a $50 dollar yield at maturity. The rate would be 5% (50/1000).

If the market is flooded with bonds, their value would decrease due to increased supply. Now that bond may only be worth $900 but still pays a fixed yield of $50. The interest you get paid in this scenario is now 900/50 = 5.5%

This is great if you are a lender. When you buy bonds you are essentially lending money the government and now your yield will be higher.

But many ordinary people are more often in the position of borrower. The interest rate for mortgages, car loans etc. are based off of bond rates. So if that rates goes up, many major purchases become more expensive over time. Small businesses are also heavily impacted by increased borrowing costs.

Generally, higher bond rates represent decreased confidence in a government entity's fiscal responsibility. When US federal bonds are sold off collectively, the rate goes up, signalling that investors have lost faith in the US government reliably paying back its debts.

Found it, for anyone reading don't bother. It is still images with an AI voiceover. I was hoping for half baked AI generated video.

Anyone have a link to the video? Looking for a good laugh.

Bonds offer fixed interest.

Let's say a $50 bond offers $5 dollar yield at maturity (10%).

If those that currently own bonds sell en masse, the bond becomes less valuable (let's say $40) but the yield is still $5.

Now the interest rate is 5/40 = 12.5%.

The 30 year treasury bond interest rate is closely tied to mortgage rates.

A higher bond interest rate makes it more expensive for businesses to borrow money.

If other countries sell off US bonds (which are purchased in US dollars), they flood the market with US dollars which ultimately diminishes the dollars value.

Trump and his ilk like to act like the US subsidizes many of its allies when that is very clearly an oversimplification. Many of the US's allies own US debt (in the form of bonds) because the US is an extremely reliable borrower. If those countries decided the US is not reliable enough to lend money to anymore, it would be extremely problematic for the American economy.

Tl; Dr: Canada, Japan and the EU could twist American home buyers and businesses by the balls by selling off bonds and, if they took it far enough, even devalue the US dollar. America spends a shit ton of borrowed money from its allies and even China.

Ah yes having to lick the boot of an autocrat with no freedom to dissent. That sure sounds like its working to me.

China controls 90% of global production and refining capacity of rare earth minerals. They started investing in the 1980s.

This was going to be tough for the US even with allies by their side.

The nightmare scenario is China cuts the US off completely and the US responds with some form of military action.

China was smart by creating their own versions of all the services the US offers.

The only reason the US is the nation that holds the most purchasing power in the world (20% of global purchasing power) is because it's a net exporter of services and much of the world respects its intellectual property.

The minute people start wiping their asses with US IP, it's game over.

Why can't there be a EU/Canadian/South American etc version of Uber, Netflix, YouTube, App stores, Visa etc? Even if the world moves away from their services just on the basis of principle, it will have an enormous impact.