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“The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar.” Does he not see the audacity of the hubris an

“The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar.” Does he not see the audacity of the hubris and irony in his statement? “Like my Ponzi but not their Ponzi” is what it reads like to me. Is Doge good money? No, because it has uncapped supply. But real crypto like Bitcoin, despite all its flaws will never have more than 21 million of them created out of thin air by some necktie, and I find that very comforting.

daenz 5y ago
How is the US dollar a Ponzi scheme? I have no incentive to get other people to use the dollar.
- reedjosh 5y ago
  > I have no incentive to get other people to use the dollar. Ponzi != Pyramid
  - daenz 5y ago
    Thanks, TIL. So the basic difference is it seems like the pyramid nature is concealed in a ponzi scheme.
- rafale 5y ago
  You do. You just don't have enough dollars to realize it.
- andybak 5y ago
  > I have no incentive to get other people to use the dollar. I live in a country that doesn't use the dollar. I have a large incentive to persuade the world to use my currency in favour of the dollar. (It's only the enormity of the task that prevents me taking immediate action)
- nszceta 5y ago
  It's similar but more guns are involved. As David Graeber wrote in “Debt,” “Nixon floated the dollar in order to pay for the cost of a war in which he ordered more than four million tons of explosives and incendiaries dropped on cities and villages across Indochina… the debt crisis was a direct result of the need to pay for the bombs, or, to be more precise, the vast military infrastructure needed to deliver them. This was what was causing such an enormous strain on U.S. gold reserves.” For the first time in history, the world was in a pure fiat standard. The dollars held by central banks across the globe lost their backing, and there was a geopolitical moment where U.S. dominance was called into question and where a multipolar financial world was a distinct possibility. Adding even more pressure, in 1973 the Arab petroleum exporters of OPEC decided to quadruple the price of world oil and embargo the U.S. in response to its support for Israel during the Yom Kippur War. In just a few years, a barrel of oil rose from less than $2 to nearly $12. Faced with double-digit inflation and declining global faith in the dollar, Nixon and his Secretary of State and National Security Advisor Henry Kissinger came up with an idea that would allow them to keep “guns and butter” going in the post-gold standard era and alter the fate of the world. In 1974, they sent new Treasury Secretary William Simon to Saudi Arabia “to find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth.” Simply put, a petrodollar is a U.S. dollar paid to a petroleum exporter in exchange for oil. As a Bloomberg report says, the basic framework was “strikingly simple.” The U.S. would “buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.” This was the moment that the U.S. dollar was officially married to oil. From https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-petrodollar https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...
  - 8note 5y ago
    "lost its backing" is an odd statement. Its not like gold is backed by anything. The taxable product of the USA is way more valuable than some gold, especially since you an eat some of it
admax88q 5y ago
The US dollar loses value over time on purpose. Doge is being pumped via hype so that the early adopters can cash out.
- eMGm4D0zgUAVXc7 5y ago
  > The US dollar loses value over time on purpose. Sure it does that on purpose. But a purpose as desired by one entity is not necessarily a good purpose for another. Is it a good purpose for the US government's need of financing their country? Yes. Good for people who want to save money? No.
  - AlexandrB 5y ago
    > Good for people who want to save money? No. But it encourages investing in assets like real estate, equities, and (ironically) Bitcoin instead of holding cash. Suppose USD appreciated over time and often "beat the market". Why would anyone invest in startups or existing companies instead?
    - eMGm4D0zgUAVXc7 5y ago
      Again the same: The purposes of startups and existing companies who want to find investors are not necessarily the same purposes as of those who just want to put money aside for saving. They surely may benefit from cheap inflated dollars. But that does not mean savers benefit. Like with software, one person's feature is another person's bug. Bitcoin users consider inflation as a bug, so that's why they use it.
  - rualca 5y ago
    > But a purpose as desired by one entity is not necessarily a good purpose for another. Inflation is a very basic and proved tool to not only stabilize the value of a currency (you know, what a currency is supposed to be) but also to provide incentives to avoid stockpiling production potential and lower unemployment rates. Crypto speculators might desire to exploit their first-mover advantage to speculate their way into riches without creating anything of value to a society, but that does not mean that the interests of these speculators are aligned with society's best interests.
paulpauper 5y ago
There are a finite number of pogs and beanie babies too
- stickfigure 5y ago
  Any factory in china can crank out as many beanie babies as anyone wants for a few cents each.
  - AlexandrB 5y ago
    That's like saying I can crank out as many of my own alt coins as I want. So what? They're not "genuine" in the same way that my blockchain is not Bitcoin.
    - stickfigure 5y ago
      The difference is that you can't tell the difference between a counterfeit beanie baby and a real one.
scandox 5y ago
That is not hubris. That is a statement of fact: that Ponzi scheme is backed by the military, industrial and economic power of nations. Hubris is thinking you can make some shit up and get people to accept it ... Without force.
- rualca 5y ago
  It's important to note that a nation's official currency has intrinsic value simply because the nation's economic output is, by law, required to be expressed in terms of it, and each and every transaction involving the state, whether it's paying for goods and services or paying salaries owed to state employees, are expressed in terms of the official currency. So, it's hard to hand-waive around the fact that an official currency, unlike a so-called cryptocurrency, does have intrinsic value because by definition certain units of account do buy you certain goods and even the work of full-time employees.
jrochkind1 5y ago
Yeah, what the chairman said about monopolyis indeed not quite it. A monopoly in creating something isn't even enough to guarantee (or even make it more likely) something will have enduring value. bitcoins indeed have capped production, which kind of serves like a monopoly on producing it (or perhaps even better, it's supply is completely predictable). But as long as the only reason it's trading so high is because everyone is hoping to sell it to someone who will buy it even higher -- that's not why people acquire dollars, and I can see the ponzi scheme analogy. Ultimately, I'd say the reason the dollar has value is because the US Government charges taxes denominated in dollars, and accepts only dollars in payment of them.
yarg 5y ago
The US government does not actually have the monopoly. The Federal Reserve does. The Federal Reserve is not Federal - it is a private bank that mints the dollar, lends it to the government and charges them interest. (I'd really rather be wrong on this; but if I've just been listening to idiots on the internet, I'm sure someone's going to let me know.)
- JumpCrisscross 5y ago
  > US government does not actually have the monopoly. The Federal Reserve does The Treasury operates the U.S. Mint [1]. That said, most dollars are created privately by banks when they create deposits through their lending. The Fed oversees all of this while also creating dollars through similar mechanisms (albeit higher-powered ones). > Federal Reserve is not Federal - it is a private bank that mints the dollar The Federal Reserve was created by an act of Congress. Its leadership is appointed by the President. Its profits remit to the U.S. Treasury. It's a creature of the government in everything but name. [1] https://www.usmint.gov https://www.usmint.gov
  - yarg 5y ago
    And the member banks (genuine question)?
    - 8note 5y ago
      From 2008, it looks like they're subject to nationalization if the government wants
reedjosh 5y ago
> No, because it has uncapped supply. Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That said, I'm more of a Monero and BTC guy myself. > For example, there are now 128 billion Dogecoins in circulation. The rate of increase in the number of Dogecoins, once mined, is no more than 5 billion per year. https://investorplace.com/2021/02/dogecoin-has-an-inflationary-supply-trait-making-it-ideal-as-a-cryptocurrency/ https://investorplace.com/2021/02/dogecoin-has-an-inflationa...
- rualca 5y ago
  > Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That, alone, renders dogecoin unsuited as money. Money is, by definition, expected to be stable, not only to serve its purpose as a store of value but also as a standard of deferred payment.
  - reedjosh 5y ago
    With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-2-percent-from-april-2020-to-april-2021.htm https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-... And again, that's just the CPI. Many other metrics have it higher, and asset prices like housing have skyrocketed.
    - rualca 5y ago
      > With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. It makes absolutely no sense to claim that a historical high inflation rate of 4.2% renders the dollar unsuited as money, when your everyday cryptocurrency, the so-called magic alternative to all money problems, sees far higher fluctations on a daily basis. Take dogecoin for example. Today alone dogecoin's price tanked 23%. That's a drop in a 24h period. This is the sort of argument that eats away the credibility of any argument made regarding cryptocurrencies as an alternative to money. It's pretty clear that we have a small army of early joiners eagerly awaiting to cash out and to ensure they keep the pumping part of the pump-and-dump scheme they make this sort of absurd claims that doesn't pass the faintest of scrutinies.

daenz 5y ago

How is the US dollar a Ponzi scheme? I have no incentive to get other people to use the dollar.

reedjosh 5y ago
> I have no incentive to get other people to use the dollar. Ponzi != Pyramid
- daenz 5y ago
  Thanks, TIL. So the basic difference is it seems like the pyramid nature is concealed in a ponzi scheme.
rafale 5y ago
You do. You just don't have enough dollars to realize it.
andybak 5y ago
> I have no incentive to get other people to use the dollar. I live in a country that doesn't use the dollar. I have a large incentive to persuade the world to use my currency in favour of the dollar. (It's only the enormity of the task that prevents me taking immediate action)
nszceta 5y ago
It's similar but more guns are involved. As David Graeber wrote in “Debt,” “Nixon floated the dollar in order to pay for the cost of a war in which he ordered more than four million tons of explosives and incendiaries dropped on cities and villages across Indochina… the debt crisis was a direct result of the need to pay for the bombs, or, to be more precise, the vast military infrastructure needed to deliver them. This was what was causing such an enormous strain on U.S. gold reserves.” For the first time in history, the world was in a pure fiat standard. The dollars held by central banks across the globe lost their backing, and there was a geopolitical moment where U.S. dominance was called into question and where a multipolar financial world was a distinct possibility. Adding even more pressure, in 1973 the Arab petroleum exporters of OPEC decided to quadruple the price of world oil and embargo the U.S. in response to its support for Israel during the Yom Kippur War. In just a few years, a barrel of oil rose from less than $2 to nearly $12. Faced with double-digit inflation and declining global faith in the dollar, Nixon and his Secretary of State and National Security Advisor Henry Kissinger came up with an idea that would allow them to keep “guns and butter” going in the post-gold standard era and alter the fate of the world. In 1974, they sent new Treasury Secretary William Simon to Saudi Arabia “to find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth.” Simply put, a petrodollar is a U.S. dollar paid to a petroleum exporter in exchange for oil. As a Bloomberg report says, the basic framework was “strikingly simple.” The U.S. would “buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.” This was the moment that the U.S. dollar was officially married to oil. From https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-petrodollar https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...
- 8note 5y ago
  "lost its backing" is an odd statement. Its not like gold is backed by anything. The taxable product of the USA is way more valuable than some gold, especially since you an eat some of it

admax88q 5y ago

The US dollar loses value over time on purpose. Doge is being pumped via hype so that the early adopters can cash out.

eMGm4D0zgUAVXc7 5y ago
> The US dollar loses value over time on purpose. Sure it does that on purpose. But a purpose as desired by one entity is not necessarily a good purpose for another. Is it a good purpose for the US government's need of financing their country? Yes. Good for people who want to save money? No.
- AlexandrB 5y ago
  > Good for people who want to save money? No. But it encourages investing in assets like real estate, equities, and (ironically) Bitcoin instead of holding cash. Suppose USD appreciated over time and often "beat the market". Why would anyone invest in startups or existing companies instead?
  - eMGm4D0zgUAVXc7 5y ago
    Again the same: The purposes of startups and existing companies who want to find investors are not necessarily the same purposes as of those who just want to put money aside for saving. They surely may benefit from cheap inflated dollars. But that does not mean savers benefit. Like with software, one person's feature is another person's bug. Bitcoin users consider inflation as a bug, so that's why they use it.
- rualca 5y ago
  > But a purpose as desired by one entity is not necessarily a good purpose for another. Inflation is a very basic and proved tool to not only stabilize the value of a currency (you know, what a currency is supposed to be) but also to provide incentives to avoid stockpiling production potential and lower unemployment rates. Crypto speculators might desire to exploit their first-mover advantage to speculate their way into riches without creating anything of value to a society, but that does not mean that the interests of these speculators are aligned with society's best interests.

paulpauper 5y ago

There are a finite number of pogs and beanie babies too

stickfigure 5y ago
Any factory in china can crank out as many beanie babies as anyone wants for a few cents each.
- AlexandrB 5y ago
  That's like saying I can crank out as many of my own alt coins as I want. So what? They're not "genuine" in the same way that my blockchain is not Bitcoin.
  - stickfigure 5y ago
    The difference is that you can't tell the difference between a counterfeit beanie baby and a real one.

scandox 5y ago

That is not hubris. That is a statement of fact: that Ponzi scheme is backed by the military, industrial and economic power of nations. Hubris is thinking you can make some shit up and get people to accept it ... Without force.

rualca 5y ago
It's important to note that a nation's official currency has intrinsic value simply because the nation's economic output is, by law, required to be expressed in terms of it, and each and every transaction involving the state, whether it's paying for goods and services or paying salaries owed to state employees, are expressed in terms of the official currency. So, it's hard to hand-waive around the fact that an official currency, unlike a so-called cryptocurrency, does have intrinsic value because by definition certain units of account do buy you certain goods and even the work of full-time employees.

jrochkind1 5y ago

Yeah, what the chairman said about monopolyis indeed not quite it. A monopoly in creating something isn't even enough to guarantee (or even make it more likely) something will have enduring value. bitcoins indeed have capped production, which kind of serves like a monopoly on producing it (or perhaps even better, it's supply is completely predictable). But as long as the only reason it's trading so high is because everyone is hoping to sell it to someone who will buy it even higher -- that's not why people acquire dollars, and I can see the ponzi scheme analogy. Ultimately, I'd say the reason the dollar has value is because the US Government charges taxes denominated in dollars, and accepts only dollars in payment of them.

yarg 5y ago

The US government does not actually have the monopoly. The Federal Reserve does. The Federal Reserve is not Federal - it is a private bank that mints the dollar, lends it to the government and charges them interest. (I'd really rather be wrong on this; but if I've just been listening to idiots on the internet, I'm sure someone's going to let me know.)

JumpCrisscross 5y ago
> US government does not actually have the monopoly. The Federal Reserve does The Treasury operates the U.S. Mint [1]. That said, most dollars are created privately by banks when they create deposits through their lending. The Fed oversees all of this while also creating dollars through similar mechanisms (albeit higher-powered ones). > Federal Reserve is not Federal - it is a private bank that mints the dollar The Federal Reserve was created by an act of Congress. Its leadership is appointed by the President. Its profits remit to the U.S. Treasury. It's a creature of the government in everything but name. [1] https://www.usmint.gov https://www.usmint.gov
- yarg 5y ago
  And the member banks (genuine question)?
  - 8note 5y ago
    From 2008, it looks like they're subject to nationalization if the government wants

reedjosh 5y ago

> No, because it has uncapped supply. Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That said, I'm more of a Monero and BTC guy myself. > For example, there are now 128 billion Dogecoins in circulation. The rate of increase in the number of Dogecoins, once mined, is no more than 5 billion per year. https://investorplace.com/2021/02/dogecoin-has-an-inflationary-supply-trait-making-it-ideal-as-a-cryptocurrency/ https://investorplace.com/2021/02/dogecoin-has-an-inflationa...

rualca 5y ago
> Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That, alone, renders dogecoin unsuited as money. Money is, by definition, expected to be stable, not only to serve its purpose as a store of value but also as a standard of deferred payment.
- reedjosh 5y ago
  With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-2-percent-from-april-2020-to-april-2021.htm https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-... And again, that's just the CPI. Many other metrics have it higher, and asset prices like housing have skyrocketed.
  - rualca 5y ago
    > With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. It makes absolutely no sense to claim that a historical high inflation rate of 4.2% renders the dollar unsuited as money, when your everyday cryptocurrency, the so-called magic alternative to all money problems, sees far higher fluctations on a daily basis. Take dogecoin for example. Today alone dogecoin's price tanked 23%. That's a drop in a 24h period. This is the sort of argument that eats away the credibility of any argument made regarding cryptocurrencies as an alternative to money. It's pretty clear that we have a small army of early joiners eagerly awaiting to cash out and to ensure they keep the pumping part of the pump-and-dump scheme they make this sort of absurd claims that doesn't pass the faintest of scrutinies.