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31 sats \ 10 replies \ @028559d218 OP 16 Mar \ parent \ on: Saylor's Grand Strategy: Sell Dollars USDT & Recapitalize the Entire US on BTC bitcoin
It's not about them 'paying'... it's about (if the above is correct) the world 'recapitalizing' around the Bitcoin and the US's ability and desire to front-run that.
If US companies have Bitcoin, US private citizens, and the American government and the government sell stablecoins to "buy Bitcoin"... it's a massive speculative attack.
Isn't that a way of having the rest of the world pay? I'm not saying there's nothing more to it, but rather that this is what would appeal to this administration about the approach.
I don't quite understand why the rest of the world would go along with this, instead of buying bitcoin themselves. Why sit back and let yourself be front-run?
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Why does the rest of the world 'want dollars'?
The crazy thing is that in the 'global south' (take el Salvador for example) the demand for stables is at least as high as that for Bitcoin. Stablecoins are a huge business and you don't have to 'convince' people in the developing world of the value of USDT.
But Bitcoin is widely misunderstood/underutilized all throughout South America... it was in el Salvador becuase the state 'chivo' wallet was terrible and education was non-existent and it's the same everywhere.
If they want stables then... sell them stables that's Saylor's "evil genius" strategy but take the revenue/yield control and capitalize it indirectly for BTC.
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I should have clarified: I understand the short term interest in stable coins.
Once this bitcoin acquisition strategy is in place, though, the continued strength and stability of the dollar becomes inexorably linked to the prospects for bitcoin, right?
In that situation, I don't understand why you'd opt for the clearly inferior stablecoins, which will perform worse than bitcoin by design.
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"clearly inferior stablecoins..."
The world doesn't understand that though yet. From the Wall Street Journal today
Trump’s New World Order Tests the Dollar: Investors are more optimistic about Europe while tariffs cloud the U.S. outlook
https://www.wsj.com/finance/currencies/trump-trade-tariffs-us-dollar-value-814cbe37?mod=hp_lead_pos2
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"In another scenario, the dollar could continue to weaken and Trump could achieve his goal of shrinking the gap between U.S. exports and imports, but only because the U.S. economy is suffering, Setser added.
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Foreign investors might be tempted to shift money out of U.S. assets. But the alternatives, including Europe, have problems of their own.
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All of this is creating uncertainty,” said Robert Rubin, who served as Treasury secretary during the Clinton administration and once co-led Goldman Sachs. “On the other hand, where else do foreign companies and investors go?”"
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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.
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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?