Tether's Circle of Death odysee.com/@TraderUniversity:a/tether%27s-circle-of-death:5?r=8T2xqWjtafHWYGxQBSsrbw1wQPm7sWRq

633 sats \ 36 comments \ @Undisciplined 13 Aug econ

From Matthew Kratter's Bitcoin University

Video Description

In this video, I discuss how Tether and USDT help to extend US dollar hegemony, while simultaneously helping to fund US government wars and covert operations.

Tether is one of the fastest growing exporters of US dollar colonialism. Here's how it works:

Encourage more people in the global South and elsewhere to use USDT
More global demand for USDT leads Tether to buy more US Treasuries to back new USDT
The issuance of more US Treasuries helps to fund US overseas adventurism, war, and CIA coups which hurt the very people in these countries who are buying USDT.

It's the circle of death:

You buy our USD deathcoin.
We'll use it to fund US government activities.
The US government will destabilize your country through war and coups--
Thus leading you to need more USD because your local currency has been destroyed--
So you buy more USDT and the cycle repeats.

What's a much better and more ethical way to spread Bitcoin adoption? You onboard people directly into Bitcoin, not the USD dollar or USD stablecoins. This is what is taking place in Bitcoin Jungle, where a real circular Bitcoin economy is developing.

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71 sats \ 4 replies \ @grayruby 13 Aug

Yes, I still prefer it to USDC.

1429 sats \ 3 replies \ @Undisciplined OP 13 Aug

There are no solutions. There are only tradeoffs.

73 sats \ 2 replies \ @grayruby 13 Aug

Dammit. I forgot I switched to random zap to play the random zap game. Haha.

I did like the comment but maybe not that much. Haha. Enjoy the gift.

32 sats \ 1 reply \ @Undisciplined OP 13 Aug

As they say, "play stupid games, win stupid prizes."

71 sats \ 0 replies \ @grayruby 13 Aug

I am going to random downzap you for being an ass. Just take your free sats.

https://m.stacker.news/45622

89 sats \ 11 replies \ @Cje95 13 Aug

For your first point over dollar colonialism, I have a couple of points

Are we going to blame the USD for foreign government failures? The dollar is the world reserve currency and with countries facing huge internal and monetary issues, the USD to them is a savior. Who are we to tell them no if that is what they want?
You are right in that USDT increase leads to USD demand increase which is another reason why you have seen several crypto companies like Riot Platforms and Marathon Digital talk about dollar continuing to be the world reserve currency.
This is a huge stretch... They are at $130 billion and I mean look we have a $35 trillion hole we are looking at. $130 billion isn't funding hardly anything when it comes to adventurism, war, or coups. I mean honestly with our recent Ukraine aid what we send is the stuff we have in the boneyard and pay to upkeep. Now we are getting rid of it. The same with the missiles they are the ones that are about to expire that we would otherwise have to pay Raytheon to disassemble. We are honestly saving money right now.

Circle of Death

The dollar isn't called a blood dollar or a death dollar so you link it suddenly to a deathcoin is a wild stretch.
I don't know what to say but yeah of course that the treasuries are used for?
I mean again... that is a huge stretch in today's world given what we have seen from Russia, China, and Iran they are all destabilizing countries around the world so why is this a dollar-only thing?

31 sats \ 7 replies \ @Undisciplined OP 13 Aug

These aren't my views, unless I'm Matt Krattert in disguise. They are the video description.

To your first point, there is a perception around the world that transacting in other currencies gets you overthrown; a la Gadhafi or Hussein. True or not, that's a far cry from legitimate demand.

To your third point, I get that it's a small share of the total debt, but they auction bonds in the hopes of people buying them, so this is clearly aiding that effort. Perhaps it's of an insignificant magnitude at the moment, but that can change.

40 sats \ 6 replies \ @Cje95 13 Aug

My bad I misread your comments! I am at work was I was only able to read what you had said and I had written recently about this very thing since Tether owns more Treasuries than Germany for example.

For every Gadhafi, there is also India which has long played the game of using its own currency for trade with Russia even during the Cold War. China and Saudi have also done the same off and on but the issue remains that they are much more volatile compared to the USD so esp. for international trade it is a safer bet to go with the stable one.

US debt/treasuries are an interesting issue because still the US Public owns as of Jan 1 of this year 79% of them. Now its not the public as you would think but below is a breakdown. Could it be an issue in the future of course but I think we have much more pressing needs to be addressed

https://m.stacker.news/45640

0 sats \ 5 replies \ @Undisciplined OP 13 Aug

I agree with you that there is a lot of organic dollar demand, from other countries managing their currencies even more poorly than the Fed does.

My preference would be that no one lend to the state, because I think they generally use those resources to make the world worse. If the video is somewhat hyperbolic, that is still the basic point.

35 sats \ 4 replies \ @Cje95 13 Aug

As someone who works for the state I can tell you the state is way way to big at the moment. There are numerous issues that if you had at your company you would either be fired or go bankrupt. By far the biggest one in my eyes is how there is currently a fight going on over clawing back unused COVID funds. Republicans want to use these unused funds that are sitting around for various other things while Dems are stonewalling so the government is having to take out even more loans to be able to do pretty basic crap. It is wild and annoying as all get out.

0 sats \ 3 replies \ @Undisciplined OP 13 Aug

I'm curious if you expect to see financial regulations, at some point, that will require large public funds (like pensions or university endowments) to hold some minimum amount of treasuries. That seems like an obvious place to look to temporarily prop up this debt situation.

28 sats \ 2 replies \ @Cje95 13 Aug

I am not sure if we will see regulation to require it so to speak. Currently a ton of retirement funds hold these already and continue to purchase them. They are the target funds that people will by or that their 401k automatically puts money into for when you target to retire.

Its my belief that that already serves to prop it up as it is. Stablecoins are just another avenue to find a place that is hungry for them. It will be interesting though that as the working force shrinks how it will affect US bonds because there might not be as much internal demand if that makes sense.

0 sats \ 1 reply \ @Undisciplined OP 13 Aug

That makes sense.

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21 sats \ 2 replies \ @Nuttall 13 Aug

Thanks to loans in USD those countries fail in their own currency because you have to pay back the USD loans with USD THAT YOU BORROW AGAIN.

10 sats \ 1 reply \ @Cje95 13 Aug

Well the US is consistently forgiving loans so eh. Also if you want money from X country why would they not lend you their own? You went to them did you not?

36 sats \ 0 replies \ @Nuttall 13 Aug

Of someone wants to lend you money is because you have resources that they want for cheap and you are too stupid to understand hegemony.

The central mismanagement of the already mismanaged country are the ones making the decisions not the end users who are tricked into working for a system. Decision makers who are on the take only reap the reward and never the punishment.

30 sats \ 0 replies \ @TheBTCManual 14 Aug

Sadly this will fall on many deaf ears, people will trade future pain for todays relative stablity all day long

41 sats \ 12 replies \ @didiplaywell 13 Aug

I can not see evidence of it working that way, at all. Countries that have officially adopted USD as local currency have never suffered any of the symptoms described but all the contrary. That's why here in Argentina we are on our path to adopt it as well. What's more: absolutely no country on earth has the economic power to "help" the USA war machine other than the USA itself. All of the little 3rd world countries, combined, are dwarfed by the USA domestic economy. And yet even more: not even USA domestic tax hikes are up to pace with govt spending. Let it be 50% of your income, and that can help the USD lose half its value, yet, it has lost 99% of its value since the inception of state-controlled banking in the USA. How did you transitioned from a factor of 2 to a factor of 100 without greater taxes? Criminal level of money emission. The USA govt only imposes heavy taxes because that allows it to confiscate property legally (a 50% tax rate means that the state shares half of your property rights and reserves the final right to confiscate it), not because it needs the money, they have the infinite money machine for that, to which no little 3rd world country can "help", let alone the USDT niche within 3rd world economies, it's a joke.

0 sats \ 7 replies \ @Undisciplined OP 13 Aug

When they deficit finance by auctioning bonds, do you think they're hoping more or fewer people bid on them?

You have to think on the margins with this stuff, not in absolutes.

That said, my sense is that Krattert had the Middle East in mind, more so than Latin America.

58 sats \ 2 replies \ @didiplaywell 13 Aug

Let's do take the Middle East. Why do the Emirates do so well? Why are they unscathed while their profit on their resources? Even Russia is, amidst a war, still selling its resources, specially titanium, to the USA. If they do commerce even being sworn enemies, why would the USA govt turn allies into foes anywhere else? The same "destabilization" theory as been repeated here tirelessly and when you go to the sources it turns out it's never true. I'm not saying that the USA govt is an angel, but those "death spiral" theories are just flawed, numbers don't add up.

20 sats \ 1 reply \ @Undisciplined OP 13 Aug

I'm not as familiar with this as you seem to be. I recall reading about this in Development Econ courses I took a long time ago, but it wouldn't surprise me to learn that reality differs from what was being taught.

41 sats \ 0 replies \ @didiplaywell 13 Aug

We too were early indoctrinated into this "destabilization" theories, as an explanation for Argentina's pitfalls. The first clue is realizing that those "destabilization" schemes exclusively appear as an excuse dying socialists regimes instigate into its population. How does it come it never happens in democratic, capitalist countries, is a mystery.

We are fortunate enough to have people from those "destabilization" times still living, and by a fortunate alignment of planets so I happened to cross many in my path. None of those theories were true, not one, not once. The reason for my fortune in my early awakening was my decision to study Aeronautical Engineering, which as a remnant of the old regimes is tied exclusively to the Air Force, which thus was tied exclusively to politics. So I met the very people that lived in those times, and they are always roaring outspoken in their indignation at how obscene are the lies people were told, but that was pre-X era so their reach was always tight as if it was a secret. It also shocked me that the truth was calmly walking there in plain sight all the time yet invisible due to limited reach.

46 sats \ 3 replies \ @didiplaywell 13 Aug

I'm not understanding your point, could you expand please?

0 sats \ 2 replies \ @Undisciplined OP 13 Aug

With thinking on the margins, I'm saying that even relatively small holdings help support a more manageable financing cost for US debt. Over time that adds up and enables more spending. It's not about comparing the impacts of huge aggregates.

48 sats \ 1 reply \ @didiplaywell 13 Aug

I agree but you used as an example USA bonds and that's what I was saying: the USA use their own people to pay for such massive expenses, not the little 3rd world economies which have the level of just one Argentinian province and we still are underdeveloped and dwarfed against Brazil, not even thinking about comparing to the USA.

41 sats \ 0 replies \ @Undisciplined OP 13 Aug

Ok, I didn't get that you were excluding countries like Argentina and Brazil. When people talk about "smaller" economies in the US, they usually mean anything significantly smaller than Russia.

0 sats \ 3 replies \ @Bell_curve 13 Aug

60 percent of transactions in Latin America are dollars and usdt?

21 sats \ 2 replies \ @didiplaywell 13 Aug

In the case of Argentina it should be close to 30%, because that's the percentage of international trade respect to total GDP, of which the majority is made in dollars (the sole exception is Brazil, which prefers to transact in its own currency).

10 sats \ 1 reply \ @Bell_curve 13 Aug

What about domestic commerce? Black market transactions?

21 sats \ 0 replies \ @didiplaywell 13 Aug

It has to be nearly the same 30%, because that's the USD that's moving. The mass of the people uses Pesos, but that 30% moves when people buys USD to save, or spend it to cover unexpected expenses, and by far and large it's used for greater transactions in the farming and real-state industry, which involves fewer people but greater amounts.