You know when we buy things from India or import products from a third world sweatshop, the money doesn’t disappear right? A simplified way of demonstrating what happens is to say that we pay USD to the importer of the product, who pays the Indian sweatshop owner who produces the products who pays the workers earning $2/hour. The only reason they want USD is if they will have plans to purchase US goods, or buy from someone else using those USD who then plan to buy US goods. If they plan to buy US assets like stocks or bonds, same situation, they’re trying to generate a return to then buy even more US goods or buy from someone who will buy US goods. Of course the technicalities of this process occur through currency broker dealers, so the dollars would be swapped for the local Indian currency before it gets to the workers, but this doesn’t change the fundamentals because whomever swaps Indian rupees for USD has plans to buy U.S goods (or buy from somebody who will).People here talk about repatriations and foreign imports like they're black holes of money, like the money just vanished. The funny thing is even if this narrative was true, it would still be good for us. It means we are giving up worthless dollars that we can print at whim in exchange for real products produced by foreign slaves
>>519823692Too long didn't read. Here is a response from an LLM**The core problem:** Your model assumes foreigners will perpetually want dollars to "eventually buy U.S. goods." But what happens when:1. **The U.S. hollowed out its manufacturing base** and can't produce goods competitively anymore. We literally had to beg China for masks during COVID. The "exorbitant privilege" of reserve currency status became an "exorbitant burden"—we offshored our industrial capacity and now depend on potential adversaries for critical supplies, including military components.[1][2][3]2. **Foreign central banks stopped buying Treasuries around 2014**. Despite continuing to run trade surpluses, they redirected dollars into gold (1,000+ tons/year since 2022), Belt and Road infrastructure, and direct commodity deals. The recycling mechanism you describe simply doesn't function anymore.[4][5][6][7]3. **Peak cheap oil changes everything**. When energy costs rise, dollar holders watch their purchasing power in energy terms steadily decline. Why hold Treasuries yielding 4% when oil inflation runs higher? This is precisely why China stopped accumulating Treasuries after 2011-2013.[8][9][10]4. **The debt trap is real**. At 120%+ debt-to-GDP with interest expense plus entitlements consuming 108% of peak tax receipts, the U.S. faces impossible choices. We can't actually print "at whim" without consequences—either path (defend the dollar via rate hikes OR print to suppress rates) leads to currency debasement.[11][12][13][14]**The "free lunch" illusion:** Yes, theoretically we could print dollars for real goods indefinitely—but only until trading partners realize they're accumulating claims on an over-indebted, de-industrialized economy that can't honor obligations without massive currency debasement. That realization already happened, which is why we're seeing "gold recycling" replace "petrodollar recycling" as the global settlement mechanism.[7][15]
I'm not reading all that. To trade with others implies weakness and that they're equal to us. We permitted the world to improve along side us and it was a mistake.
>>519824026(continued from above)The system you describe worked 1974-2011. It's been breaking down ever since.[1](https://www.youtube.com/watch?v=cl32TIpiVrk)[2](https://www.youtube.com/watch?v=DenTTuvGx6o)[3](https://www.tftc.io/tftc-china-us-debt-spiral-rare-earths-luke-gromen/)[4](https://www.thegreatsimplification.com/wp-content/uploads/2023/10/TGS91LukeGromenTranscript.docx.pdf)[5](https://www.macrovoices.com/podcast-transcripts/887-luke-gromen-u-s-dollar-deep-dive)[6](https://www.itmtrading.com/blog/luke-gromen-us-braces-for-capital-controls-as-global-trade-reset-begins/)[7](https://www.youtube.com/watch?v=xerrmgzBXDE)[8](https://www.youtube.com/watch?v=bIq0o40Jo80)[9](https://www.resilience.org/stories/2023-10-04/luke-gromen-peak-cheap-oil-and-the-global-reserve-currency/)[10](https://www.thegreatsimplification.com/episode/91-luke-gromen)[11](https://ingoldwetrust.report/special/from-trade-restructuring-to-monetary-reset-luke-gromen-debates-louis-vincent-gave/)[12](https://adamtaggart.substack.com/p/luke-gromen-darius-dale-why-money)[13](https://www.idnfinancials.com/news/55869/luke-gromen-us-government-will-allow-dollar-to-devalue)[14](https://dailyhodl.com/2025/07/13/macro-guru-luke-gromen-predicts-us-dollar-devaluation-says-government-will-sacrifice-usd-amid-high-debt-levels/)[15](https://www.youtube.com/watch?v=0FqXODbjrEk)
>>519824051>>519824026Just read the first three and it’s a typical “come up with a counter argument” response and it’s completely riddled with fallacies.
>>519824130That wasn't my prompt. But yeah whatever. I don't like wasting my time with idiots like you.
>>519824026>**Peak cheap oil changes everything**. When energy costs rise, dollar holders watch their purchasing power in energy terms steadily decline. Why hold Treasuries yielding 4% when oil inflation runs higher? This is precisely why China stopped accumulating Treasuries after 2011-2013oil is cheaper now than 2011 silly llm
>>519824026add to that no one can validate any of that debt or claims to it are not priority creditors
>>519824532Agreed. That part of the argument broke since China started buying Russian oil.
>>519824390You use A.I slop, you’re stupid. And I’m not looking at anything else you read
>>519824729That's OK there are other people on this thread besides you.
>>519824532This doesn’t even contradict anything I wrote. Even if people started selling their treasuries, they’d have to put their dollars somewhere, and they’d have to find a buyer for their treasuries.Treasury yields would rise in nominal terms but that wouldn’t change the point. The same fundamentals would apply
>>519823692>It means we are giving up worthless dollars that we can print at whim in exchange for real products produced by foreign slavesthis is a good system until it stops working
>>519825157It’s not at all the system, it was a hypothetical to describe how ridiculous many of the mercantilists on this site are. Nobody is giving us valuable products for worthless dollars, they’re giving us valuable things because they value the things the dollars can buy.
