pull down to refresh
52 sats \ 12 replies \ @SimpleStacker 21 Oct \ on: What Will the Next Gold Bust Look Like? econ
Interesting words. How would a total loss in the fiat currency system play out? Bitcoin will surely be a beneficiary
For sure. Bitcoin/lightning is the only remotely viable alternate payment rail.
The early stages of losing confidence in fiat entail dumping it for real assets. I think that means smaller savings accounts, less demand for dividend bearing equities or bonds, and less interest in cashflow investments like rental properties.
If they're correct about this situation, then we'll likely progress through the stages of hyperinflation, as described by @didiplaywell.
reply
I really don't think so. The US as been in this position countless times. Over and over again, the rest of the world has performed so, so much worse, that the deficiencies of the US dollar are top performance anywhere else. Perhaps the US government is well aware of this and likes to play this cycles at the expense of the greater stupidity of the rest. Can't really argue against that, not only it's well deserved, but it's a fair cost to pay for the favor of having the US lessening the damage. Most the US will get, as always, is a recession. Then the next cycle will start all over, for has long as the rest of the world remains as stupid.
reply
The US dollar enjoys the position of being "the cream of the crap", in the sense that even if people are losing trust in the dollar, they're probably losing trust in other currencies more.
reply
The progression here will likely be slower because of that but we are now in the fiscal death spiral.
They can't afford to service the debt without printing more money. That means the inflation target is no longer relevant, which we're seeing now as they cut rates while CPI > 2%.
reply
Oh by no means I mean "you shouldn't worry at all". Do worry in all seriousness and do voice your concern, so that more voices join you. I just wanted to clarify that there's an abyss between your worst case scenario and what we have lived in Argentina. But, the only way to keep standards high is to defend your line, no matter how far ahead.
reply
Exactly. You can see that everywhere. I can confirm that for the entirety of latin america.
reply
This could be a good case for to argue why companies should get on board early in integrating bitcoin payments. Even if there isn't much demand for it now, it should preserve your ability to operate in a scenario of global distrust in fiat currency.
That being said, if bitcoin adoption isn't widespread while the economy is going through these tremors, I wonder if populist anger would turn on bitcoiners and suspected bitcoiners would get attacked in the streets in an attempt to coerce their keys
reply
I don't know, but it wouldn't be the worst thing for us to preemptively cultivate a very prosocial reputation.
reply
cultivate a very prosocial reputation
haha not sure how good a job we're doing with that
reply
Bitcoin/lightning is the only remotely viable alternate payment rail.
Really?
Not stable coins?
reply
Stable coins are supposedly backed by fiat so I don't think it would help in a situation where trust in fiat erodes
reply
For trade payments SoV is not so important as acceptance.
SWIFT is the vehicle of USD/petrodollar hegemony and it is via trade payments that USD/SWIFT dominates.
If you want to make trade payments currently you must hold USD or be excluded from the overwhelmingly dominant global trade payments protocol- SWIFT.
This is why central banks globally must hold USD- or be excluded from the dominant trade payments protocol.
Stablecoins do provide an alternative.
Nowhere are Bitcoin trade payments taken seriously.
MoE is the basis of monetary power.
SILENCE.
reply