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This is just a bunch of online rant type nonsense. The fundamental premise here is wrong. People hold assets in USD because at the core they trust the US to ke
by CPLX 2y ago
This is just a bunch of online rant type nonsense.
The fundamental premise here is wrong. People hold assets in USD because at the core they trust the US to keep the dollar valuable. There’s nothing wrong with them switching to another currency they just have to trust that regime instead.
At the end of the day either you have to trust your own ability to wage war and defend your interests or trust that your interests are aligned with someone else’s ability to wage war.
This supposed analysis hand waves it all and uses inflammatory language for no reason but the only insight here is that the Saudis can trust the US or China, or pick one and hedge their bets a little with the other.
- K0balt 2y agoThis is an interesting paradigm. If , fundamentally, currencies are backed by a preponderance of coercive force, or the ability to wage war, as you posit, then it seems like alternative instruments such as bitcoin may be more meritorious than many people give them credit for. This is assuming, of course, that the threat or reality of war is an unequivocal bad thing. I wonder if the inconveniences of volatility for a spendable currency could be mitigated by some kind of frictionless middle layer that -wasn’t- a state backed fiat.
- CPLX 2y agoThe USD dollar is backed by the universal belief that it will continue to be valuable, plus the entire productive capacity of the US economy and the war making ability of the US government. Bitcoin is backed by a less universally held belief that it will be valuable in the future, and that’s it. One of these things is just a much smaller subset of the other.