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To: stuffbug who wrote (5335)	8/30/2022 2:45:09 PM
From: Sun Tzu	Respond to of 10601

The weighings should be relatively stable or at least formulaic so they are transparent and predictable. In the short term central banks may hold the basket constituents as a reserve. Longer term, this can be managed as a set of smart contracts tied to other currencies and commodities. Having smart contracts will lower the carry costs. What the US loses in such a scheme is the ability to weaponize currency and trade. What is gained is the simplicity of managing the economy free from global considerations. I'd argue that USD should have never been used as a bludgeon and that the gains in managing the economy soundly and free from geopolitical and global financial impacts far outweigh the losses that the State Department will endure. Furthermore, the industrial hollowing out that the US suffers from is a direct consequence of printing the reserve currency. Every dollar that is printed is an IOU to someone which is typically redeemed as a purchase of American companies and/or offshoring of the business. Here is a chart of the US net international investment position. It is not a coincident that it started going downhill after WTO.