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102 sats \ 0 replies \ @Undisciplined OP 9h \ parent \ on: Stablecoins as Inflation Drivers econ
I'm not sure they have it right, either. I reread that part several times and was hoping you'd chime in since you know the mechanics of these operations better than I do.
Here's what I came away with:
- Somebody has some ordinary fiat and would rather have some stablecoin
- When they exchange fiat for stablecoin, they exchanged one MoE for another, so they have the same purchasing power as before (assuming the same things can be purchased with each and neither carries a discount)
- Stablecoin Inc. uses that fiat to create an equivalent amount of stablecoin, so there are now twice as many units of currency as before
- I don't think it matters what the government uses the fiat for, it's enough to say that it was used to purchase bonds that allowed for the creation of new currency units
- The buying of bonds bids up their price and no other prices should be immediately impacted by this transaction.
So, there seem to be more currency units (classical inflation) and higher prices.