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It doesn't have underlying physical assets, it does have the backing of large stable government. This is largely the same reason why the USD is more stable than
by pwagland 4y ago
It doesn't have underlying physical assets, it does have the backing of large stable government. This is largely the same reason why the USD is more stable than, for example, the Kenyan Shilling.
- medvezhenok 4y agoIt also has a de-facto underlying physical asset, since the Kingdom of Saudi Arabia will only sell oil to you in USD since ~1974 (based on the backroom deals between US & Saudis). That's why our system is called the Petrodollar system.
- traveler01 4y ago"Large stable government". Define "stable", because the USA has been anything but stable last few years. The currency itself is being quite volatible as well due to the inflaction going on right now. Also, the fact that they can just print money of out thin air (which caused the inflaction) should scare people way more than it did.
- piva00 4y agoNot that I like the petrodollar system but please, go ahead suggesting a better and more stable system, I'm sure if you find it you'll get plenty of support and boatloads of literal money.
- raincom 4y ago> The fact that they can just print money of out thin air (which caused the inflation) should scare people way more than it did. Yes, crypto bros are scared, that's why they invest in crypto. However, every exporter out there want to swap his/her physical assets with US dollars. That's the difference between the crypto crowd and others.