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I feel cryptocurrencies in a time of corona are interesting. In March, the US injected a 2.2 trillion dollar stimulus package. Just a bit ago, a new stimulus pa
by mettamage 6y ago
I feel cryptocurrencies in a time of corona are interesting. In March, the US injected a 2.2 trillion dollar stimulus package. Just a bit ago, a new stimulus package of 900 billion dollar was dropped. The US debt is 27.7 trillion dollar [1]. I don’t know what that entails but that sounds like a big number that you might want to have smaller.
I wonder if this is accelerating some flight of capital into cryptocurrencies as the US dollar is also heavily devalued compared to the euro (1.23$ for €1 at the moment).
I am not a crypto fundamentalist, but currently I have a few percent of my net worth in it in order to hedge.
I am watching with curiosity how this story will unfold. I wonder if nation-backed currencies will be as pervasive as they were in the 20th century. It might be that we will have secondary or tertiary currencies (crypto or not).
Some musings from yet another armchair economist (nah, I am not even that, just a guy on the web).
[1] https://www.pgpf.org/national-debt-clock https://www.pgpf.org/national-debt-clock
- zapdrive 6y agoThere's speculation that US will enter a "soft bankruptcy", and will not pay back all, or part of, the 27 trillion.
- sz4kerto 6y agoHow would that make any sense at all? States can't really go bankrupt if their debt is denominated in the currency they control.
- deleted 6y ago[deleted]
- jjoonathan 6y agoLegislative dysfunction knows no bounds.
- rapsey 6y agoMoney does not work that way. The debt literally is money. Paying it back would mean there would be no money.
- howeyc 6y agoThat's not gonna happen. Right now the government/fed essentially "rolls" their debt. They sell $30,000 in treasuries for $29,999, and in 3 months time sell $30,001 in treasuries for $30,000 to buy back the old one. (numbers not to scale, for illustration purposes) This is how the debt increases via the interest rate on treasuries. The more likely "disaster" scenario is instead of "rolling" they just print, buy and don't issue a replacement treasury.
- patentatt 6y agoObligatory MMT link: https://en.wikipedia.org/wiki/Modern_Monetary_Theory https://en.wikipedia.org/wiki/Modern_Monetary_Theory