The Bitcoin Matrix: Peruvian Bull - The Dollar Endgame: Financial Gravity and the Fed's Dilemma
Today we’re going to dive into the electrifying world of finance and economics in "The Dollar Endgame: Financial Gravity and the Fed's Dilemma" with as we explore the inevitable negative feedback loops of Keynesian economics, Modern Monetary Theory, the T...
Oh dear. Need a new language for this one. Translator, please.
Triffin's Dilemna in a nutshell is
"The dollar could not survive as the world's reserve currency without requiring the United States to run ever-growing deficits."
Triffins Dilemna is what prevents any other currency from challenging the dollar as a reserve currency, they would have to run bigger deficits than the US Dollar.
One of the requirements for Triffin's Dilemna is that you have a centrally issued currency. Crypto solves that problem, it's issued internationally, now the big thing to look at is the distribution.
There are so many logica problems with this assertion, so lets break them down one by one.
It starts with the unsaid assumption that being a world reserve currency is a desirable thing. The only people who would want their currency to become the world reserve currency are imperialists who want to financially dominate the world. The only people who would allow such a thing are those who are ignorant, and destined to be enslaved.
So assuming, for some reason, we still want a world reserve currency, the causal relation ship with ever-growing defecits is reverse:
A benign world reserve currency would not require ever-growing defecists. Always print dollars only based on how much Gold reserves you have, and make the dollars fully convertible, and you will have a reserve currency system without the need for ever-growing deficits.
However, if the intention is to dominate the world, then you require ever-growing deficits (to run wars and psyops around the world - like vietnam war, korean war, the original New Deal, socialist agenda, welfare state etc etc). And if you require ever-growing deficits, you then require control of a world reserve currency - a malign one, one that is FIAT.
So the relationship is:
Want to dominate the world - which requires - Unlimited fiat currency - which requires control of a world reserve currency - which requires enforcing it on the world through artificial scarcity (like petro dollars) and with the blade of the sword.
No matter where the currency is issued, the problem would still remain, as long as currency is issued without being underpinned by something of real value. The problem is NOT who issues it, but what the issued currency represents.
A FIAT usd represents the trust and faith in the US government - which is worth toilet paper.
A crypto represents a algorithmic scarcity and expended energy / algorithmic concensus. I will leave it to people to figure out what its really worth.
Ultimately, there is ONLY ONE thing in the world of real value. Everything else is just based on perceived value. That ONE thing is the human labour.
You also forget the Cantillon effect which is something to keep in mind as well once you become the world reserve currency.
The labor in the country that issues the new world reserve currency immediately becomes the most expensive labor. This creates a demand for foreign trade.
How The Cantillon Effect Kills The Economy | Uneducated Economist
https://www.youtube.com/watch?v=LPEtaXBMG6s
Again, Cantillion effect (just like Triffin's Dilemna) exposes that a world reserve currency is unsustainable. The answer is not to replace one world reserve currency with another, but rather to over haul the entire system (which is what is going on) so that there is no more world reserve currencies, and their evil effects on the world.
Lets finish debating the Triffin's dilemna first before delving deeper into this, if you still feel this needs to be delved into deeper.
You need to look deeper into Triffin's Dilemna. If it was so desirable to be the worlds reserve currency China would've been gunning for it by now but they purposely inflate their currency to keep themselves under US dollar.
What Is The Triffin Dilemma?
https://www.youtube.com/watch?v=9ghoJ0d3cTQ
You're right to an extent but how do you safely store that value on an efficient way? Gold and silver is safe but not efficient. Fiat isnt safe but is efficient.
Neither of those allow you to secure your wealth without 3rd party involvement when making international purchases. Someone can also always fudge the numbers.
Crypto changes the whole game.
Okay lets do that, lets go to the source and understand exactly what Triffin was saying (and more importantly doing)
This is the real Triffin Dilemna for a world reserve currency. And here is what he proposed as solution:
What Triffin did was, to claim that if there is a world reserve currency it has to be FIAT currency.
If we were to believe this claim, and agree that Triffin Dilemna is true, then for any distributed crypto currency to become a world reserve currency, it is neccesary to be able to issue unlimited amount of cryptos and make the liquidity available for the countries as they need to expand.
This is the exact opposite of what the original video is claiming. In fact, according to Triffin, crypto currencies can never become world reserve currencies without causing the international economy to collapse due to lack of liquidity.
And, if we are to believe that there is a crypto currency that can act as world reserve currency, without allowing any central entity to issue the cryptos, then we are essentially saying that Triffin was wrong.
The reality is, Triffin was half correct and half wrong. He was correct that USD as world reserve currency was unsustainable.
He was wrong in the solution for this - making it FIAT. The real solution would have been to push for a complete overhaul of the international economic system, decouple all countries from relying on a single reserve currency, and encourage each country to issue their own, resource backed, currencies.
This would have meant a massive slowdown in the world economy, which is a good thing because that artificial growth fueled by fiat is what has brought out world to this unsustainable mess.
Yes I agree with this.
I also think this is true, there was no crypto in Triffin's time. There is no single country that crypto is issued to. Triffin's Dilemna doesn't work with Crypto.
Not true. You can still have a crypto that is used by the majority of the world and is used as an exchange between currencies. It would also be kept in reserve by governments.
You can have all countries using resource based currencies but there won't be a central banking solution. Crypto will be much more voluntary since you can take the open source code and add to it and/or create a new crypto with the same layout. If something goes wrong with the crypto, it's much easier to remedy.
So when countries want to expand and require a lot more of this crypto, how will they go about issuing that?
They'll have to take out a loan in crypto and in that loan they'll have to put up collateral and pay the loan off over time.
But there is a limited amount of the crypto so they can't go unlimited borrowing all the time. They also cant go unlimited printing either or they devalue their currency and people on the ground will just pay in Crypto instead. It will act like gold and silver did over 100 years ago.
When the US govt printed out too much money as gold/silver backed economy, traders would just redeem the dollars for gold/silver and trade the gold/silver in another country to get a profit.
So unless you have this crypto stuff, you can't buy a loaf of bread? We have a problem, Houston.
Silver and gold will be important too for local purchases. But for international trading, its going to be crypto.
Look into Cardano.
Anyone who pushes a platform to safely store your Bitcoins is, imho, not a benign player. Why would anyone want any platform when you can keep your cryptos in your own wallet?
I agree, hardware wallets are best. Notably Trezor wallet whose code is open source and audited.
I disagree.
Hardware wallets are as good as the companies behind it. Unless every byte in their firmware is open sourced, its not secure.
The only secure way is to generate the private key on your own, running on a computer that is not connected to an internet (and will never connect to an internet), and using the wallet based on that key to store your cryptos.
Which is exactly why I think Trezor Hardware wallet is the best wallet to get.
It is open sourced and you can generate keys offline.
It is not enough to just generate the keys offline. The device used to generate the keys should never be connected to Internet except when you are ready to empty the wallet.
Well that is Trezor. Have you ever looked at Trezor? It only interacts with Trezor Suite and doesn't go online unless doing some kind of transaction.
The password and pin can only be input on the device.
A password scrambles the keys even more adding another layer of complexity. Even if somebody had the device if they don't have your password they'll find nothing.
This is the worry. If there is the hardware ability to connect to a network, you can bet that there will be backdoors. I am wise enough over the past 3 years to know, not only is this possible, I am willing to bet that it is already present and dorment. Like I said, when companies claim "open source", they are almost never top to bottom open source, including their firmware.
Personally, I only trust my old laptop with ethernet modules disabled, with my own code to generate the keys. And I dont use it for transactions - only to accumulate crypto for long term. When I need to ever move it out for any reason, then I will do it from a different computer, and move the remaining remaining crypto into a new similar secure wallet.
But thats just me.
That's pretty safe, I agree. Unfortunately a bit too technical for general folks though.
IOG who are the primary builders of Cardano have been talking about making a simple offline paper wallet that is open source so regular joes can use that too. We'll see what happens.
Anyone else collecting BottleCaps yet? FalloutKek!
I mean. Unless they can get a handle on the extreme volatility. Near Constant Scams and rugpulls. And the Crypto market plummeting every time an exchange goes belly up or is shutdown over criminal concerns.
Crypto at least of the non-central bank variety probably isn’t going to see anywhere near the adoption or acceptance necessary towards filling the role Crypto Bros insist it can fill.
Bitcoin and Cardano have had no hacks or scams.
Cardano uses Haskell Functional Programming Language (made back in 1990). Haskell is special because functional programs can separate out side effects (inputs from outside the program I.e. a user input or some outside DAT input) from the rest of the program in order to ensure the safety of the program.
Haskell can also be used to mathematically prove a program will do what it says it'll do because of the strong type system Haskell employs.
The near constant scams have been mostly Ethereum Ecosystem, Solidity Dapps and meme coins dumb people fall for. You have to do your own research and TAKE RESPONSIBILITY FOR YOUR MONEY. THAT IS THE MARK OF A FREE MARKET.
The extreme volatility is because the crypto market is small and big money in Wall Street can play games with less at stake.
Crypto market goes up and down wildly because of government intervention too and I also suspect when certain exchanges go down it is comma for others in Big Finance to move money around.
You should look into it more rather than shallowly gazing from far away. I see Bitcoin and Cardano having very bright futures.
That's where you're wrong. The way you can get crypto adoption is an assurance and history of its safety. This is why I say look at Cardano and Bitcoin, their history is pretty squeaky clean.
Ethereum and Solidity is where you get most of your hacks from. Most other blockchains running smart contracts are Ethereum clones and program in Solidity. Cardano isn't, it runs a completely different transaction model that Ethereum can't copy and completely different programming language made for safe programs.
Here is also a dump of super useful materials on Solidity Exploits and Security: https://twitter.com/asen_sec/status/1652211063612485633
Attack vectors - https://github.com/sigp/solidity-security-blog
Database of attacks by @1nf0s3cpt - https://github.com/SunWeb3Sec/DeFiHackLabs
More attacks by @QuillHash - https://github.com/Quillhash/Solidity-Attack-Vectors
More exploits - https://github.com/ZhangZhuoSJTU/Web3Bugs/tree/main