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Board Speculation
Re: Counter to "Why Bitcoin is dropping ...buying." AMA format / doomsday debunked
by
btc_n_economics
on 06/01/2015, 14:15:54 UTC
As long as oil is priced in USD, the US government can continuing printing dollars to pay for it and to maintain reserve currency status. If the oil agreement folds, the US can continue printing money, but the economy will suffer. This is one of the ways the US became so big so quickly.

The US looks like its suffering from Dutch Disease with its export being currency and not natural resources. Once the currency well dries up, banks will lose some power and the US will begin a multi-decade race to once again ramp up manufacturing (Made in America TM) to try to mitigate the loss. Problem with this will be that because of the eventual USD decoupling, it will be a race to the bottom.

This is where I believe Bitcoin comes in. SDRs under the guidance of the IMF are nothing new; essentially, a world currency basket to hedge currency volatility. Dump all your country's debt into an SDR and well, you know the rest.

The US does not need oil to be priced in USD to "print money".  This is a fundamental misunderstanding of the way our monetary system works.  It is not something that can be argued because it is a fact like 1+1=2.  The Federal Reserve can create reserves out of thin air.  This is what people call "printing money".  But it is not actually money printed into our economy as you say.  The banks have to lend in order for new money to be created outside of the federal reserve system.  Banks only lend if qualified borrowers want to borrow.  This is why we have not had inflation despite the Fed "printing" trillions of dollars over the last few years.  The reserve simply sit on the banks balance sheets, there is no mechanism to turn them into cash besides market forces like demand.

Why would the US not be trying to ramp up manufacturing now, and instead waiting for some event?  They are manufacturing more today.  Every individual company tries to maximize profits, there is not one God of USA that says hey, we should all do manufacturing real good now.  It's thousands of companies that work independently in the economy to make a buck.

I'm afraid I do not know the rest.  What I do know is that you are talking about getting rid of volatility with BTC which is down 70% in a year.  That makes no sense.  Look at a chart of the USD over the last ten years and compare it to BTC - which would you rather hold your $ in if you are looking for stability and not wild speculation?  You have ideas about FX and the USD but they are not based on facts and are non sequitur.