Let's what-if a scenario where the Fed is made subservient to the President and the President wants the dials turned to 11, let the next guy deal with the consequences.
The dollar isn't indestructible. If not the Euro, what?
I was referring to Europe and america together -- and I think your conjecture is real -- what if we move to a projection of holographic economy over the real one. The answer is, whichever gets the most people to cooperate and support that holographic system will survive. In general collective weak systems tend to not work well there. But hyper centralized systems tend to over index on projection. Which is why we have the separation.
If The US goes to war against China, we are screwed, because we outsourced our manufacturing to China. We cannot quickly ramp up our manufacture of ships, tanks, aircraft or ammunition. Not only do we lack manufacturing capacity, the entire supply chain is in China / Asia.
In addition, China leads in the critical technologies need for drone oriented warfare, like we are seeing in Ukraine.
In particular, the pentagon has so many suppliers in China. Oh, the KPIs (key pharmaceutical ingredients) are produced by China too. We even had shortage of saline solution when China was having a supply crunch. So when a conflict, let alone a war, broke out with China, what do we do? We ask China to supply us the war logistics?
A fun story, China has the best automated seafood processing factories that meet all kinds of regulations in the world. It's cheaper, a lot cheaper, for Japan and Alaska to send their seafood to China to process, and then sell back to the domestic market. And it has nothing to do with cheap labor but deep R&D of China. So, when war broke out, many people won't be able to enjoy cheap seafood either.
I don't understand how people can ignore a simple fact (is it Milton who pointed that out?): Manufacturing is a "doing" business, not a "knowing" business. Our expertise is forged on the shop floor, not dreamed up in a boardroom, and certainly not bought through outsourcing. There is so much tacit knowledge that manufacturing capability is a living system. It lives in the collective experience of the workforce and the rhythm of the line, not in static documents.
Oh maybe this is the time to quota Thomas Joseph Dunning: With adequate profit, capital is very bold. A certain 10 per cent. will ensure its employment anywhere; 20 per cent. certain will produce eagerness; 50 per cent., positive audacity; 100 per cent. will make it ready to trample on all human laws; 300 per cent., and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.
> Why is manufacturing so special? As opposed to something like software?
I assume that dollar will be strong if people want to buy stuff from the US, which requires using the US currency. Software indeed is a strong sector. I'm just not sure (as due to my ignorance) if they compensate sufficiently the trade deficit. For instance, if advertisers use Instagram in Europe, they wouldn't need the US dollar to pay for the service, right? If there's no virtual export happens, I'd assume there won't be any need for the US currency either.
> Also, manufacturing in the US is growing not shrinking. For a long time.
What about market share? I remember that the US had more than 65% of the manufacturing marketshare 25 years ago. Actually, I'm more concerned about the long-term national security and prosperity of the US, and I think they are tied to a robust manufacturing sector. But that's different topic.
Software can leave your country in a fraction of a second. Manufacturing is infrastructure. This is also basic. Manufacturing in the US is shrinking, comparatively with other countries that actually make things. People just think they can just play with numbers, categories and dollar values to hide it.
The US has been playing a currency game since 1980 to make up for the loss of the free money it got for reconstructing Europe and Japan, and using that money to buy things from impoverished workers in China. And as China got on its feet through careful planning and management, it moved to India, Pakistan, Mexico, Indonesia, the Philippines, anywhere that was willing to stomp on its workers and pollute its air and water.
Now China has gotten to the point that it is a viable alternative to the US, so the US can't unilaterally set terms anymore for its suppliers. It's dumping US treasuries. It's competing for natural resources in countries that the US just tried to topple and steal their natural resources through sieges that ironically served to cut the US's legs from under them, giving China a huge discount. The game is up.
China going from nowhere to the greatest economy on the planet in 50 years is what happens when you manage and cultivate manufacturing. US real estate and an economy run on luxury consumption is what you get when you outsource manufacturing and play word games to cover it up. We literally can't tariff China significantly, they could crush our economy just by embargoing us like we freely embargo everyone else. That's the power of a manufacturing base. We might want to fix our bridges, too.
Case in point, it's news that Canada leaned toward partnering with China when having dispute with the US, but it would be a joke 20 years ago. It's a humiliation that the US brought upon itself: you can't produce things that people need, then don't blame that people will have leverage in other places.
There's two forms of manipulation mentioned. One is changing the market to influence public perception, that does become harder as the market grows in size.
The other is accepting the bribe, sorry, taking the other side of the bet, and making something happen. That only becomes worse with scale. When you're in the position to accept a million dollar payout to cause the press conference to only last 64 minutes, or to invade a foreign country, suddenly you have a million new reasons to do so.
On any prediction market where a reasonably small group of humans decide the outcome, and there's enough money to matter, "betting no" is better understood as offering a fee to make it happen, conditioned on damages should someone accept your offer and fail to do so. "Betting yes" is better understood as agreeing to facilitate the outcome - or assisting in the price discovery mechanism that says facilitators are over charging.
That only really holds if reporting on the manipulation bets is not turned into effective propaganda for skewing events towards the manipulation outcome.
So the main argument of the article holds IMO.
Edited to add: I'd like to rephrase that a bit actually. It doesn't even have to help bring about the particular outcome being bet on. It's enough that it can be used to shift public opinion in some way that's worth the cost to the manipulator.
Sure, but events where that kind of "skew" is effective are going to be quite rare. And even then, the incentive is just for everyone to try and "skew" the event as early as possible, where factors other than monetary cost or reward then become dominant. No different from what usually happens with no prediction market at all.
> It's enough that it can be used to shift public opinion in some way that's worth the cost to the manipulator.
This has been tried in the real world and is just not very effective. It's just too hard to move the price in ways that will shift public opinion when literally anyone else has a huge incentive to bet against you.
Right now, they're all thin traded at their open. As soon as they are created is when you see the volatility that makes them enticing. Once you get volume, there doesn't seem to be as much value to be had.
No, completely wrong. Deep markets are not more accurate.
People who are unfamiliar with how regulated gamblings works assume that the "market" is just lots of informed people rationally trading with each other. This is not how it works. Bookmakers post lines to a small group of syndicates up to a limit, they will often do this non-publicly, and this is how prices are set. They are not set by the "wisdom of crowds", they are set by people who have invested hundreds of millions of dollars in predicting the outcome because bookmakers have an economic need for accurate lines.
When lines open to the public, there is often no significant movement after opening prices set by syndicates. That is because the public has no idea what the actual price should be, they are just uninformed noise traders clicking buttons randomly...that is the product too, the purpose of the product is entertainment not economic efficiency.
It is true that some lines are set incorrectly but the public is not able to benefit from this, because they do not have the information. I would guess that 95% of money made from gambling has been made by under 50 people. And, perhaps counter-intuitively, most of the time these people trading does not have an impact on price because they deliberately trade in a way that does not impact price. Again, the purpose is the same: they trade to make money, not produce economic efficiency.
The people who think prediction markets are useful in any way are people who never traded any markets and couldn't predict if the sun is going to come up tomorrow. If gamblers are noise traders, these people are noise speakers. These markets are completely pointless, gambling is economically pointless outside of the pleasure that people get from entertainment.
Noise traders ultimately create an even greater incentive for accurate prediction. The fact that the odds are set at the start and never change just proves that there's very little change in relevant information about upcoming sport games, races etc. where regulated bets happen. That's totally normal. Bets about real-world events are a rather different matter though.
No, they don't. If you have a line that is beatable, that line has been open for a long time, and you have informed people profiting from that line, it will usually not move. People who have information will disguise their flow, they won't bet with places that will move the line against them when they bet (if you bet this with Pinnacle, for example, they will work out you are beating their line immediately, they have quants who can work out how you are beating their line, and you have permanently destroyed your edge) so you put money down at soft book somehow and they will likely not move line against you...meaning the line doesn't move.
Again, it is fairly common assumption that people make that it must be noise traders who are incentivizing syndicates. This is the case at open but not after, and there is a significant distinction between noise traders and noise traders through retail books. Retail books do not set the lines, they do not post lines early to syndicates, their product is completely different. There is literally no incentive for accurate prediction because the economic gain from noise trading does not accrue to anyone who has information. 95% accrues to firms with the greatest marketing advantage, again...this is entertainment, it is not about accurate prediction, you are misunderstanding at a very fundamental level what is going on here. It is like going to see the Minecraft Movie and thinking this is artistic expression on the level of Tokyo Story.
This would all be different if there were real markets underpinned by economic demand for this risk but there isn't. This is why Betfair failed. This is why these "prices" you see aren't actually real prices.
> People who are unfamiliar with how regulated gamblings works assume that
I work in the regulated gambling industry. Prediction markets like Kalshi and Polymarket do not work like the regulated gambling industry. You don't know what you're talking about.
The solution is baked into the problem. If prediction markets become generally embraced by the public (mentioning them on CNN is part of that evolution) then they will be much harder to manipulate. Size matters.
You are assuming everyone stay rational & this becomes a pre-election itself (like poll) but it can change and multiple reasons
You got to give even a 1000$ or something in this bet, you are gonna be so vocal about support, manipulation of data to convince unconvinced voters to join you or other details
The unconvinced voters are simply gonna bet on the voting side after sometime. For context, a third of the population in US iirc doesn't vote so what's gonna happen is that a difference of few %'s Lead could turn into something massive
And that few % can easily be rigged by an irrational actor. You are thinking 1 person = 1 vote (yes/no) but I may be wrong but how these work is in the aggregate and so a rich person can cause much more disruption within the voting system "legally" as well.
The point here is the legal part where what can end/what would end up happening is that elites around the world with irrational money can basically get political bases & favours established around the world for their purposes
Suppose an election is at 49 A / 51 B but now a rich guy contacted A and said to invest x$ to now make the odds 51 A / 49 B and then this news gets to twitter or any platform and now people get false news and some undecided voters might go bet on 51 itself too so now it might be 53/47 and in real voting election 51 A/49B
Some Elections are really close so I am pretty sure something like this is bound to happen sooner than later
There are ways in which the Trump admin is aiding Ukraine right now that cannot fit the narrative though.
If Putin controlled Trump outright, Ukraine would not be using US intel to more effectively strike Russian oil infrastructure. Trump blocked this intelligence sharing for a little bit during the initial "Peace talks" but now we are back to helping the find routes for weapons that won't be intercepted.
That is in line with Trump being sympathetic to Putin's narrative, but not in line with Trump following Putin's orders.
That infrastructure is critical for Russian state budget, something that is very strained, and for maintaining cheap energy internally to keep the populace apathetic.
Putin would also not have wanted the US to waltz into Venezuela unopposed. Makes Russia look very weak to have an ally who they supply with military aide be so comprehensively owned.
Unfortunately, Trump just idolizes Putin for being a powerful and oppressive dictator, because he likes power and wants that for himself. He has no moral qualms with the immoral things done by Putin. He loves the fake "Manly" persona. He's jealous of how effective Putin propaganda is.
It can still fit the narrative. There's a game theory to blackmail; if Putin publishes (hypothetical) kompromat then he loses his leverage. So as long as Trump remains less hostile to Russia than the alternative, he can do what he wants.
Also, support for Ukraine is very popular in the US, and Trump is clearly concerned about his image. Also about a potential revolt in the GOP. Cracks are showing already.
The simplest conclusion is that Trump has a narcissistic disorder and everything he does is related to that. All of his actions are well explained by this.
Of course, he can be a Russian asset to some extend at the same time.
No bone in this fight, but in this day and age, when someone levels an accusation of unspecified "code of conduct violation", I automatically think "oh, geez another sex pest". And of course start reading because I can't resist tabloid gossip either.
Some amount of defense is appropriate just to clear the air. Maybe this has gone too far, but hey, we're all still reading. I don't even know what a Teensy is.
The dollar isn't indestructible. If not the Euro, what?
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