[znt]

It is fake.

The thing is is your average American would never even consider the ultimate possibility of a foundational collapse of their economy and currency.

And it's not just the average American. Nearly all hedge funds etc have USD as their basis.

Bitcoin, Gold, Stocks, real estate etc has a value tag that's denominated in Dollars.

You open up your portfolio and be happy when the USD value goes up in a nice green color.

But what happens when USD gets diluted and debased so much that it's not possible to stop anymore. Are we not past point of no return already?

Debasement of currency marked the end of the Roman empire, why would American empire be any different?

Because US has nukes?

Because they can force the rest of the world to keep using USD at gunpoint?

For how long?

[chollida1]

> Nearly all hedge funds etc have USD as their basis.

This is false, many have CAD, EUR, and other currencies as their basis.

> Bitcoin, Gold, Stocks, real estate etc has a value tag that's denominated in Dollars.

This is false as well. You can measure BTC,Gold, stocks or realestate in any currency you want.

Do you really think Canadians denominate their real estate in USD? Why would BTC, Gold or stocks be any different.

The US denominates BTC, Gold, Stocks and real estate in USD. The reset of hte world uses their own currency.

[thereare5lights]

> Debasement of currency marked the end of the Roman empire, why would American empire be any different?

The fall of the Roman Empire had so many causes that to attribute it to one thing is misleading at best.

[csomar]

> Because they can force the rest of the world to keep using USD at gunpoint?

And the alternative? The EUR which is held by an EU that will likely break in the future. The CNY which is held by China (great idea :) ) or Russia's currency which is inflating like there is no tomorrow.

Bitcoin/Gold could be a hedge but it's quite volatile to preserve value especially for short/medium term holding periods.

There is no alternative to the USD at the moment.

[samatman]

Bitcoin would no longer be volatile if it expanded to represent an appreciable global fraction of liquid value.

Which is a huge if! That's the maximalist bet, and I still have trouble believing in it even as I've watched intermediate predictions come true.

If the BTC chain became a Schelling point, where all market players see it as their best move to hold some, then eventually a satoshi could be worth about a 2021 US cent. It would then be unlikely to fluctuate more than a fraction of a percent in BTC/fiat pairs per day, unless one of those fiat coins happened to be hyperinflating.

If both of those things happened, then pricing things in satoshis would be more stable than pricing them in fiat, because that's what hyperinflation is: it's when inflation in a currency gets so bad that it becomes a bad unit of account.

The fact that there's no alternative to the USD at the moment is the best argument for the BTC chain forming that Schelling point. But! It hasn't happened, and contrary the maximalists, there is no law of nature which says that it will.

[cwkoss]

The total value of all gold ever mined is just 10.5x greater than Bitcoin's market cap. It was only 6.1x at the peak in April.

From my maximalist perspective, we aren't that far from Bitcoin becoming a viable global reserve currency (El Salvador just made it legal tender, other countries are investigating doing the same).

The moon may not be that far away.

[jkhdigital]

The legal tender point is the most important, as to whether or not Bitcoin will become a global reserve currency. The tipping point comes when entire chains of real economic activity can be settled in Bitcoin, and the friction of using Bitcoin for working capital fades away.

[cwkoss]

Yeah, if this move plays out in El Salvador's favor, other countries are going to try to emulate it, and we'll start seeing significant trade flows settled in Bitcoin. That's when things will start getting really exciting.

That seems like a bright future to me, but my cynical tinfoil hat worries that the US will find some pretext to invade El Salvador to 'root out terrorists' or whatever so that dollar hegemony is not threatened.

[imtringued]

Countries that want to run a budget surplus without taking the surplus from their domestic economy must take it from another country. No government wants to take money out of their domestic economy in a way that harms it.

What happens is that these countries buy the safest bonds possible and those are issued by governments. You are relying on the ability of the government to collect taxes to pay the debt and that ability correlates with military power as having a weak military would be a risk vector. A destroyed government is unlikely to honor its debts as seen with the Weimar Republic.

The rhetoric that the US is going around the world with guns to force people to buy their bonds (and therefore USD) doesn't make sense because countries are voluntarily selling products for USD and then buy US treasuries with the USD. They actually want the military protection.

[TMWNN]

>Because they can force the rest of the world to keep using USD at gunpoint?

People and countries outside the US don't use the dollar because of the US military, any more than they use the Swiss franc because of the Swiss military. They use both currencies (and the UK pound, and the Euro, and the Japanese yen) because decades of experience show that the countries that issue said currencies are the least likely to default on their financial obligations, and are most transparent about their own financials.

Russians and Chinese themselves avoid using their own countries' currencies when abroad as much as possible because they are most aware of this. To put another way, the primacy of the dollar isn't a supply issue (something that the US directly forces), but a demand issue (it's the currency everyone else prefers to use).

(This is where you'll bring up the "petrodollar". No, the petrodollar isn't real. Well, it's real in the sense that oil is, like almost every other product, usually denominated in US dollars when sold internationally. What's not real is the theory that the US has a particular need for (say) Iraq back in the day to denominate its oil sales in dollars, as opposed to Euro. Or that Venezuela attempting to denominate its oil in yuan today surely augurs the collapse of the US economy tomorrow.)

[jkhdigital]

Countries started using the dollar because the US was the most powerful economy left standing after WW2 and thus the only trustworthy issuer of currency. The petrodollar system helped things along even after economies were rebuilt, as it meant that anyone who needed oil (i.e. everyone except OPEC) would also need to keep dollars on hand to pay for it.

After decades of this, we've reached the point where the US Dollar is so deeply embedded in nearly every global supply chain that everyone needs it all the time. I don't think it has anything to do with being transparent about financials or unlikely to default; it's just accepted everywhere and has a better stock-to-flow ratio (i.e. stability) than the alternatives.

[bubbleRefuge]

I think for as long as the rest of the world wants to export its goods and services to America in exchange for dollars. Maybe a better question is who in the world wants to be the importer of last resort ? Who wants to run trade deficits ? Trade deficits are a real benefit to the importer and real cost the exporter, but it seems the rest of the world doesn't get this. They want to manufacture using sweatshops, polluted air, local natural resources, so that we can have our Iphones and Teslas and they can have electronic digital dollars in the bank. We should keep doing this till they stop.

[jkhdigital]

https://en.wikipedia.org/wiki/Triffin_dilemma

[bubbleRefuge]

In a floating fx currency regime that we practice, China, et al, have to hold/buy dollars in order keep their exports cheap and foreign fx exchange rates stable.

[imtringued]

Unfortunately none of what you said makes sense.

Other countries are dumping their deficit into the US and we are the ones pretending that the US is doing something wrong.

[runawaybottle]

Life is relative. Every economy worldwide has been using monetary easing.