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0 sats \ 5 replies \ @Undisciplined 17 Mar \ parent \ on: Saylor's Grand Strategy: Sell Dollars USDT & Recapitalize the Entire US on BTC bitcoin
Right, but this is a dollar that has no relationship with bitcoin, yet. If dollars are essentially just being printed up to buy bitcoin, that changes the game for everyone.
My understanding and correct me if I'm wrong... is that dollars are being 'printed up' all the time. Not necessarily by a central bank, but by commercial banks in the course of 'credit creation'.
When people borrow they are borrowing deposits... creating 'credit' out of thin air at a given interest rate. When the interest rate is 'lower' the borrowing the faster. When it's 'higher' the borrowing is slower, more cautious.
If the US exports its currency (it does) and the dollar-holders buy bonds (which they do) they are lowering the interest rate on those bonds... driving up demand in other words influencing the yield and overall cost of borrowing. A lower cost of borrowing or 'interest'... speeds up the rate of credit creation throughout the economy.
A faster rate of credit creation means 'easier money' and 'easier for the US government to borrow' at a lower interest rate to... among other things Buy Bitcoin.
That was the point of Paul Ryan's op-ed in the Wall Street Journal:
- "Promoting dollar-backed stablecoins would follow a well-trodden path and offer clear near-term benefits. There would be an immediate, durable increase in demand for U.S. debt, which would reduce the risk of a failed debt auction and an attendant crisis."
Lower risk, lower yield... in other words stables reduce the cost of borrowing I think that's what P Ryan is saying. Stables can be 'printed up' at no cost... so why not?
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I definitely get why the US wants as much dollar demand as possible and how stable coins potentially help that.
I’m unsure how much dollar demand there will be after the announcement of a policy that explicitly prints dollars in order to buy bitcoin.
It’s pitched as front running Bitcoin’s eventual value, which makes sense on its own terms. However, why wouldn’t other nations skip the middle man and front run the US by buying bitcoin instead of stable coins?
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every time we see the 'exchange rate' of bitcoin go down that means people are 'selling it'... right?
why? i mean sure buying something with it i understand that that makes sense.
but selling it? isn't that the same question basically?
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I don't think it's the same question, because the dollar and bitcoin aren't currently linked by any official US monetary policy. That's the part that's tripping me up.
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have you read this? #908760
You should see the comments it's just from a week ago
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