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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (5338)	8/30/2022 5:11:26 PM
From: russet	Respond to of 10623

I would argue that the Fed does not directly affect Korea, but does so through the American consumer, as Korea is selling goods and services to the American consumer. If the consumer were to ignore the fed rate hikes, Korea would see no need to change policies. ECB countries are concerned with the purchasing power of the Euro to import goods (especially energy). They don't care about the U.S. dollar except to make them more competitive to export to that massive American consumer. Opec will quote oil in any currency you want. They use the U.S. buck as a yardstick to publish prices, but they will accept other currencies for payment. If EM countries want loans, they take the money from whoever gives them the best deal. They can easily convert the loan money they get to other currencies for import purposes. I would argue that U.S. financiers gave them the best deal for the loans and supplied them with other goods and services making it the best deal. So they got caught offside when the U.S. dollar rises against their home currency. That is their stupidity to accept the terms of the American financiers. This type of stupid decision making is similar to the stupid decision most of Europe made to rely on Russia to supply the bulk of their energy needs thinking they would soon become energy independent with windmills and solar panels. Now they are forced to switch back to coal. China deals with all these EM countries in Africa, Asia etc., and they don't want U.S. dollars. They want "influence" and commodities. U.S. market crashes occur when the U.S. consumer slows down the buying of goods and services. That only seems to happen when money becomes tight and interest rates rise. This is only happening now because inflation has gotten out of control and everyone is aware of it so the Fed has no choice but to tighten and raise interest rates. You can travel almost anywhere in the world and buy goods and services in almost any currency you want. Money changers are everywhere. In many countries, even street vendors and businesses carry a cell phone and a calculator to deal with you in any currency you want. Restricting yourself to deal in only U.S. dollars mean you lose sales to your competitor. People decide what currency they want to use. History shows people decide what will be the global reserve currency or decide to accept any currency for payment. I believe the decision has already been made for most transactions and the reserve currency concept is dead.