I've been hearing chatter about this for the last few months ever since the Circle IPO: the theory being that the US mainly wants stablecoin issuers like Circle to thrive so there is massive market for US treasuries as demand wanes in the traditional system. My question is what is the mechanism by which the US can reduce/dissolve its debt via this route?
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42 sats \ 2 replies \ @BlokchainB 3h
They become a buyer of US bonds. A new buyer
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21 sats \ 1 reply \ @Undisciplined 3h
Basically, yeah.
As I understand the idea, it allows the government to spread out the impact of devaluing the dollar over more of the global population. So, the soft default of money printing is easier with these stablecoins.
I've seen stronger claims that didn't make sense to me about how they could do a bait-and-switch devaluation like they did after the gold confiscation, but those don't make sense to me. That would involve getting everyone on stablecoins and then changing the peg with the dollar.
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49 sats \ 0 replies \ @BlokchainB 3h
Yeah plus all the outstanding debt has owners that is freely traded on the market. If a new market participant comes and bids up the price yields fall by supply and demand dynamics thus the US government can issue new debt to pay off old debt and keep yields pegged to the lower side. Plus all existing bond holders get a capital gain due to the price rise of the bond securities
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21 sats \ 0 replies \ @grayruby 3h
How does increased demand for debt issuance dissolve debt?
It could reduce interest on the debt if you are able to issue new debt to retire higher interest debt but it doesn't reduce or dissolve the debt it increases it.
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51 sats \ 0 replies \ @fourrules 1h
This isn't even slightly hidden, just listen to Michael Saylor or David Sacks. Its by far the dominant narrative about the benefits of StableCoins to US dollar dominance in international trade, and it just so happens to massively benefit the PayPal mafia and Stripe, because they're biggest cost burden is fraud. StableCoins are cryptocurrency, so NYKNYC is just as valid for USDT and USDC as it is for Bitcoin. Pushing that burden onto the consumer gives consumers cheaper online payments in return for responsibility, cutting out Visa and MasterCard, which is why Visa and MasterCard are rushing to adapt to this new US monetary strategy.
By establishing dollar backed StableCoin cryptocurrency as the dominant medium of exchange for international trade the US are attempting to route around national governments by selling their treasuries indirectly to their citizens, who either want access to dollars for store of value (over their own inflationary currencies) or for international trade and remittances, they intend to uphold demand for US treasuries, meaning they can continue the Ponzi scheme by paying off old creditors with the income from new ones, thereby exporting US inflation.
USD inflation is global taxation.
But this whole scheme is a massive scam run by the tech bros, the PayPal mafia, venture funds who want to break the regulatory barriers to keep the incumbents in place. Their motivation is to increase the efficiency of online payments, so this works for them.
But the problem for the US government is that the dominant player is international StableCoin issuance is Tether, who are hardcore Bitcoiners. They don't store their own wealth in USTs. All of their own substantial profits are converted to bitcoin and investments in the ecosystem around it. And if they could easily do it they would create a euro backed StableCoin, if euro bonds register. That's why people like Senator Lummis have been attacking them, trying to bring them to heel on behalf of Trump.
If the real market is international buyers of US treasuries, to keep USD inflation offshore, then USDC is a bit player,a rounding error.
The other problem is that national financial regulators are not toothless. Brazil and India's digital payments are far superior to those in Europe and the US.
And esteem for the US is deeply intertwined with the demand for USD, the integrity that the political system in the US has relative to those in other countries. But Trump is now looked on as a clown, a buffoon, a Boris Yeltsin figure, compared to Mikhail Gorbachev. Gorbachev may have been responsible for many tragedies, but respect for the Russian political elites only collapsed with Yeltsin. Trump's self-sabotage in international relations matters in terms of the dominance of USD in international trade. If I'm an Indian, I can say what I like about Modi, because he's my president. But if you insult him, as an American, you insult my country and me by proxy. Same for Brazilians, Australians, Canadians, Mexicans, even the Iranians, and all the "shit hole" countries.
This is so obvious that I have to question whether Trump's backup plan is in fact the collapse of the USD, a scorched earth strategy that will promote Bitcoin as the dominant world reserve currency, in combination with gold, allowing massive inflation in the US to wipe out the debt, while lubricating online payments through efficiencies provided by StableCoins, cryptocurrency, and the tokenisation of debt and equities markets. This would be like the shock therapy approach in the Russian federation in the early 90s, which impoverished a generation and lead to general societal collapse temporarily. This would be absolutely brutal, dystopian, but there are accelerationists in the administration who crave this over slow decline.
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7 sats \ 0 replies \ @0xbitcoiner 1h
Putin Adviser Alleges US Will Use Stablecoins to Address Debt #1214800
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0 sats \ 10 replies \ @justin_shocknet 2h
Not a theory, Trump told you in 2024, Bessent, Lutnick, and Miran have been building it out
Dollars are debt, banks hold debt and issue dollars against it.
The banks have leverage limits and market limits set by globalists to protect their other franchises in other countries.
Along with allowing banks higher leverage, and exporting dollars via stables, more of that debt can be monetized into dollars... Dollars that can buy Bitcoin.
Bitcoin then soaks up the excess dollars in the economy such that they don't inflate things like housing and energy.
This slowly turns the dollars from from a liability to an asset and saves the US from the Triffin Dilemma.
This is why the national security apparatus created Bitcoin, a transparent battery for dollars and global trade that can insulate the US during a transition away from globalist monetary policy.
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21 sats \ 9 replies \ @fourrules 1h
Its much more mature to assume that there is nobody at the wheel, no sophisticated grand strategists and tacticians in one perfectly integrated entity.
Some people are smart, they can see the big picture, strategists. Others are great at execution, the tacticians. But these people usually find it exceedingly difficult to align over long time periods.
So in reality there are lots of people reacting to events and each other. Its perfectly plausible that every part of your comment is true without bitcoin being created by the US national security apparatus. If it were then how do you explain the hostility of the Dems and the way the national security apparatus has been going after Trump?
The truth is it's lots of actors who sometimes have interests that align sufficiently for partially and temporary coordination and even conspiracy, but these alliances fracture quickly when the context shifts.
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0 sats \ 8 replies \ @justin_shocknet 1h
No, that's just naive. Just because you can't plan your way out of a paper bag doesn't mean that the people with nearly unlimited resources are as inept.
Intel agencies literally exist to effect what you deny.
Yes, that's why government is a battlefield of factions, factions that spare no expense to form battle plans.
Battlefield. Not as clearly demarcated as NSA vs CIA or party vs party, either faction has assets deployed among the other. If the apparatus was aligned against Trump he'd never have made it into office, he has to be protected by a faction within it.
It's not politics, it's a clandestine civil war, and Bitcoin is a COunter INsurgency operation... The insurgents being globalists.
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31 sats \ 0 replies \ @halalmoney 1h
Most Bitcoiners: Satoshi acted alone. Bitcoin has nothing to do with the 3 letter agencies
Shocknet: Intel agencies literally exist to effect what you deny
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10 sats \ 1 reply \ @Solomonsatoshi 43m
US exceptionalists cannot accept that they have squandered their global exceptional privilege- but they have- they FAILED COMPLETELY to see China building its mercantile empire and now controlling most strategically important supply chains.
The USA is fucked, with only its legacy hegemony over monetary protocols sustaining its hegemony in the near term- and China is building its alternatives and implementing them. Oil exporters are now receiving trade payments in Yuan via mBridge and CIPS and holding their wealth in gold, investments or Bitcoin, not USTs.
USTs are worthless shitcoins and forcing stablecoin issuers to buy them is all that might buy the US empire time as it inevitably declines.
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0 sats \ 0 replies \ @justin_shocknet 35s
Trump and Xi loyalists are working together against the globalists to defend their own countries national sovereignties.
Enjoy the psyop and buy some NSA coin.
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0 sats \ 2 replies \ @fourrules 39m
Receipts please or GTFO.
All of the evidence suggests that there is nobody at the wheel. Its a psychologically infantile position to believe that government all-knowing and all-powerful.
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0 sats \ 1 reply \ @justin_shocknet 21m
https://www.dni.gov/
It's a psychologically infantile person that believes in coincidences
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0 sats \ 0 replies \ @fourrules 16m
There is obviously demand within government for a unified and coherent strategy in intelligence. So obviously there is some committee or whatever that entity is.
Its a far cry to jump that to the ludicrous idea that they are actually successful at that given the size and scale and complexity of the US government.
Smaller national governments that serve populations sub 10 million are woefully inefficient. Scale doesn't breed efficiency typically. It just means bigger bureaucracies, more bullshit.
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0 sats \ 1 reply \ @fourrules 41m
Nobody has that
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0 sats \ 0 replies \ @justin_shocknet 9m
Where's the limit?
They print the money, blackmail the CEO's, backdoor the chips and software, license the media, regulate the ISP's, permit the transports, make their own ballot machines, control the schools and colleges, appropriate the energy, threaten the judges... They have more agencies than you can name, more front organizations than real ones.
The only limit is their ambition.
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0 sats \ 0 replies \ @Solomonsatoshi 3h
Its not so much dissolving debt as maintaining demand for USTs are global demand declines.
Stablecoin issuers are required to hold USTs and so they create a huge potential demand.
USTs also give USD digital payments speed and efficiency as the traditional SWIFT payments network struggles to compete with new protocols like Chinas mBridge and CIPS.
Stablecoins are a quasi CBDC but in PPP form.
Trump associates are positioned to make huge profits while the stablecoins potentially enable USA to remain solvent a bit longer than it otherwise would.
To understand more check this out- https://cryptohayes.substack.com/p/buffalo-bill
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