4 ms·

didn't you just explain the USD game? (fleecing the poor worldwide through inflation...) stablecoins don't change much in this.

bilbo0s 1y ago
...fleecing the poor worldwide...stablecoins don't change much in this Just Devil's Advocate, but isn't that a reason not to use stablecoins? I mean, I can participate in the fleecing of the poor without changing anything at all apparently.
- scotty79 1y ago
  It's a reason not to use dollars in any form if you are outside of US (and probably inside as well).
  - gus_massa 1y ago
    Usually the local money is even worst. (Hi from Argentina! Not so bad this year so far...)
    - ethbr1 1y ago
      This is the worry of globally-available USD stablecoins. By swapping the volatility from crypto to lower USD volatility, they effectively create a funnel from riskier currencies into dollars. Which is the same state that previously existed... except now facilitated by the crypto industry's global accessibility/UX and with less international regulation. Blessing USD stablecoins at the US federal level was a smart move (from the US-perspective) as it creates a much bigger demand for dollars, and if the US didn't do it then China or OPEC would have eventually gotten around to it as an end-run around dollar hegemony. Winners: - Crypto industry (more volume to skim) - US Treasury (more demand for debt) Losers: - Countries with less-stable currencies (lose further control of monetary policy) - China / OPEC (miss opportunity to push dedollarization further) TBD: - Money laundering (once volume grows, KYC and traceability will follow)
    - attila-lendvai 1y ago
      sure, but there's something twisted in ripping off e.g. poor africans from the other side of the world... sure, it couldn't happen without the local warlords, but still...
    - vid 1y ago
      Is it really "usually?" I think that people often think of the worse cases (Argentina, etc). Looking at https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?most_recent_value_desc=true https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?most_rec..., the US is at 103, there are 102 countries with worse inflation, and 215 with better. From https://www.macrotrends.net/global-metrics/countries/wld/world/inflation-rate-cpi https://www.macrotrends.net/global-metrics/countries/wld/wor..., the Global Average Inflation rate for 2023 was 5.7%, more than the US but not out of control. I don't know what the effect is called, but suddenly some unrest in some country or inflation in another calls for creating a whole new money system. It seems unreasonable and I'm a bit suspicious of where it comes from.
      - gus_massa 1y ago
        "Usually" in the countries that need it. The problem with the 102 countries with less inflation is that some years it may be less, but other much more. IIRC in hindsight at the beginning of 2024 the best was to exchange all your saved dollars to pesos, invest them in bonds or the bank, and exchange them for dollars at the end of the year. Probably you can get a 20% yoy increase. But there was a risk or many unexpected problems that would let you with a lot of monopoly money that is worth only a 50% of the initial value... So the safe option was to keep your savings in dollars. Euros are another safe option. Pounds are very difficult to exchange. The money of nearby countries is sometimes better, but they may have unexpected surprises too. > I don't know what the effect is called, but suddenly some unrest in some country or inflation in another calls for creating a whole new money system. It seems unreasonable and I'm a bit suspicious of where it comes from. I agree.
scotty79 1y ago
Aren't they sort of printing new dollars privately accelerating the fleecing? Or am I wrong?
- toast0 1y ago
  Not anymore than a USD deposit account. Just with extra steps.
  - JumpCrisscross 1y ago
    > Not anymore than a USD deposit account These typically pay interest. (Or have retail servicing costs attached.)
    - toast0 1y ago
      Oh yeah, if you get a USD savings account from major nationwide banks you'll be getting exciting interest rates of up to 0.02% [1], assuming you have a 'relationship bonus'. BofA gets up to 0.04% [2], with the right tiers. [1] https://www.chase.com/personal/savings/interest-savings/interest-rates https://www.chase.com/personal/savings/interest-savings/inte... [2] https://www.bankofamerica.com/deposits/savings/savings-accounts/ https://www.bankofamerica.com/deposits/savings/savings-accou...
    - 1oooqooq 1y ago
      not anymore, this is not guaranteed in the "app age". and the interest was always negligible.
jcfrei 1y ago
Having access to USD is still a lot better than whatever local currency most of these countries have. All those without any real central bank independence (though FED independence has become more questionable in the US as well).

bilbo0s 1y ago

...fleecing the poor worldwide...stablecoins don't change much in this Just Devil's Advocate, but isn't that a reason not to use stablecoins? I mean, I can participate in the fleecing of the poor without changing anything at all apparently.

scotty79 1y ago
It's a reason not to use dollars in any form if you are outside of US (and probably inside as well).
- gus_massa 1y ago
  Usually the local money is even worst. (Hi from Argentina! Not so bad this year so far...)
  - ethbr1 1y ago
    This is the worry of globally-available USD stablecoins. By swapping the volatility from crypto to lower USD volatility, they effectively create a funnel from riskier currencies into dollars. Which is the same state that previously existed... except now facilitated by the crypto industry's global accessibility/UX and with less international regulation. Blessing USD stablecoins at the US federal level was a smart move (from the US-perspective) as it creates a much bigger demand for dollars, and if the US didn't do it then China or OPEC would have eventually gotten around to it as an end-run around dollar hegemony. Winners: - Crypto industry (more volume to skim) - US Treasury (more demand for debt) Losers: - Countries with less-stable currencies (lose further control of monetary policy) - China / OPEC (miss opportunity to push dedollarization further) TBD: - Money laundering (once volume grows, KYC and traceability will follow)
  - attila-lendvai 1y ago
    sure, but there's something twisted in ripping off e.g. poor africans from the other side of the world... sure, it couldn't happen without the local warlords, but still...
  - vid 1y ago
    Is it really "usually?" I think that people often think of the worse cases (Argentina, etc). Looking at https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?most_recent_value_desc=true https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?most_rec..., the US is at 103, there are 102 countries with worse inflation, and 215 with better. From https://www.macrotrends.net/global-metrics/countries/wld/world/inflation-rate-cpi https://www.macrotrends.net/global-metrics/countries/wld/wor..., the Global Average Inflation rate for 2023 was 5.7%, more than the US but not out of control. I don't know what the effect is called, but suddenly some unrest in some country or inflation in another calls for creating a whole new money system. It seems unreasonable and I'm a bit suspicious of where it comes from.
    - gus_massa 1y ago
      "Usually" in the countries that need it. The problem with the 102 countries with less inflation is that some years it may be less, but other much more. IIRC in hindsight at the beginning of 2024 the best was to exchange all your saved dollars to pesos, invest them in bonds or the bank, and exchange them for dollars at the end of the year. Probably you can get a 20% yoy increase. But there was a risk or many unexpected problems that would let you with a lot of monopoly money that is worth only a 50% of the initial value... So the safe option was to keep your savings in dollars. Euros are another safe option. Pounds are very difficult to exchange. The money of nearby countries is sometimes better, but they may have unexpected surprises too. > I don't know what the effect is called, but suddenly some unrest in some country or inflation in another calls for creating a whole new money system. It seems unreasonable and I'm a bit suspicious of where it comes from. I agree.

scotty79 1y ago

Aren't they sort of printing new dollars privately accelerating the fleecing? Or am I wrong?

toast0 1y ago
Not anymore than a USD deposit account. Just with extra steps.
- JumpCrisscross 1y ago
  > Not anymore than a USD deposit account These typically pay interest. (Or have retail servicing costs attached.)
  - toast0 1y ago
    Oh yeah, if you get a USD savings account from major nationwide banks you'll be getting exciting interest rates of up to 0.02% [1], assuming you have a 'relationship bonus'. BofA gets up to 0.04% [2], with the right tiers. [1] https://www.chase.com/personal/savings/interest-savings/interest-rates https://www.chase.com/personal/savings/interest-savings/inte... [2] https://www.bankofamerica.com/deposits/savings/savings-accounts/ https://www.bankofamerica.com/deposits/savings/savings-accou...
  - 1oooqooq 1y ago
    not anymore, this is not guaranteed in the "app age". and the interest was always negligible.

jcfrei 1y ago

Having access to USD is still a lot better than whatever local currency most of these countries have. All those without any real central bank independence (though FED independence has become more questionable in the US as well).