Jon Stewart got an ex-Fed CEO to describe the US economy as a faith based system [1] when trying to get him to explain why the USA can't just "print money" to pay off the national debt. There's a lot of "trust us" in the foundation of millions/billions of peoples lives; ironically "In God we trust" is literally written on USD bills. I'm assuming the ex-CEO didn't exactly mean what he said but Jon's response is pretty relatable.
HN comments are 'worried' that Tether (and other Stable coins) injecting money into the bitcoin/crypto markets are artificially inflating prices and makes the whole thing a scam. Yet that's pattern is the underlying premise of Quantitative Easing that kept the stock market from crashing (or inflated the bubble depending on your point of view) for the past 2 years.
I'm open to a conclusion that both are a scam. I'm also open to a simple and understandable explanation for how these two approaches are fundamentally different from each other. But if someone's viewpoint is one approach is better then the other because a) USD has worked fine for USA up to this point or b) USD is back by USA govt and it's military, then i think they should realize that those are factors are not some unalienable truth that's guaranteed to continue forever. An anti-fragile system would consider hedging against them.
Every monetary system is based on a shared belief of value, therefore "faith". That does not mean that any cryptocoin is the same as USD. For example, there is no independent auditing to help assure me that Tether actually has the reserves they claim. And there is no transparent way to know where this money supposedly is, making it much easier to scam people than a traditional bank. If there is a problem with a bank, there are several legal and financial consequences for everyone involved, enforced by the government. The government also will, as it has, try to undo the mess even if it is at the expense of inflation or debt.
So yes, USD, Tether and my poker chips at home do share a fundamental characteristic of any method of exchange, a subjective belief about their worth that is ultimately decided by collective agreement. That does not mean they are anywhere close to the same thing, or scams.
My point is less about tether and more with the assets tether is inflating. I'm saying the narrative that BTC is inflated/manipulated because of tether, means that many other assets are also inflated due to accepted government fiscal policy.
> If there is a problem with a bank, there are several legal and financial consequences for everyone involved, enforced by the government.
What if that bank is the central bank? Which entity is responsible for judging the actions of that bank and deal out consequences if their actions cause more harm then good? And who would end up on the receiving end of those consequences (guessing not any individuals)? Time will tell if the doomsday folks (3 sigma bubble) are right or the mainstream folks (everything will go back to normal after a few interest rate hikes) are right but I'm pretty certain nobody will face meaningful consequences for being wrong.
HN comments are 'worried' that Tether (and other Stable coins) injecting money into the bitcoin/crypto markets are artificially inflating prices and makes the whole thing a scam. Yet that's pattern is the underlying premise of Quantitative Easing that kept the stock market from crashing (or inflated the bubble depending on your point of view) for the past 2 years.
I'm open to a conclusion that both are a scam. I'm also open to a simple and understandable explanation for how these two approaches are fundamentally different from each other. But if someone's viewpoint is one approach is better then the other because a) USD has worked fine for USA up to this point or b) USD is back by USA govt and it's military, then i think they should realize that those are factors are not some unalienable truth that's guaranteed to continue forever. An anti-fragile system would consider hedging against them.
[1] https://youtu.be/psSYiidw-v0?t=279