If the Lord and monetary policy are your interests I highly recommend this book-- https://www.amazon.com/Thank-God-Bitcoin-Corruption-Redemption/dp/1641991216 (Disclaimer I personally have not read this but the authors are very solid people in Bitcoin that I trust for reliable information.

Can Crypto Escape the Dollar’s Gravity?

COMMENTARY
By Marc Chandler
April 16, 2021 1:02 pm ET



Elon Musk, no stranger to controversy, raised eyebrows when he said that his company bought $1.5 billion of Bitcoin. Shortly afterward, he confirmed that people can buy Tesla cars with Bitcoin. A payment system to make exchanges like this possible is springing up. Between credit card companies, banks, and hybrids like PayPal, room is being made for a new currency. Will these efforts displace traditional money? You can lead a horse to water, they say, but you can’t make it drink. There is good economic reason to believe that Bitcoin will not be used for transactions outside of the odd case.

Assume the best: Bitcoin is the real deal. Its limited supply and blockchain authentication make it better than fiat money like the dollar, which is constantly being diluted by a politically driven printing press. Gresham’s law states that bad money drives out good. That means the depreciating dollar will be used for transactions, and Bitcoin will be hoarded.

While cryptocurrencies are traded, they are not being truly used as a means of exchange. The daily volume is minor compared with their market cap. Studies have found that a high percentage of Bitcoins have not changed IP addresses for a couple of years. The more they are hoarded, the less they can achieve the networking effect that bestows money-ness, making it more of an asset than a currency, which is how the Internal Revenue Service regards crypto.

The dramatic rise in the price of Bitcoin and crypto more generally is a Rorschach test. One’s own hopes and fears are projected. It is providing new words for the old song about the decline of America and the role of the dollar. The linkages are not articulated, and the actual data are frequently not explored.

The International Monetary Fund’s latest report on the allocation of reserves showed that dollar holdings by central banks stood at a record high of a little more than $7 trillion at the end of last year. The dollar’s decline after surging at the pandemic’s onset bolstered other reserves when measured in dollars. Nevertheless, just the increase in dollar holdings in the past two years is greater than the total reserve holdings of the Chinese yuan.

The Federal Reserve offers custodial services to foreign central banks for their Treasury and agency holdings. In March, these holdings reached a record high of nearly $3.58 trillion. Contrary to the cries of doom and gloom, the lesson drawn from the 1997 Asian financial crisis, the 2008-09 financial crisis, and last year’s pandemic experience is that, when looking into the proverbial abyss, everyone wants dollars. A Bank of International Settlements study of dollar-funding of non-U.S. banks concluded that the dominance of the dollar in international finance and the attendant policy issues are likely to endure.

For all of its flaws, the greenback remains the most important invoicing and vehicle currency. Supply chains are often dollar-funded. The U.S. dollar is still on one side of more than 85% of the transactions in the $6.2 trillion-a-day foreign-exchange market. The dollar knows no rival. There is simply no compelling alternative. The Chinese yuan is not convertible and its markets not sufficiently transparent to take on a significant role. Europe’s monetary union is far from complete; progress toward a fiscal union is stuttering at best. Its bond market remains fragmented, appearing more like the U.S. municipal bond market than the Treasury market.

Former Bank of England and Bank of Canada Governor Mark Carney came to America’s heartland to attend the Fed’s Jackson Hole confab in 2019 and declared that the dollar was the cause of financial instability. He suggested a digital iteration of John Maynard Keynes’ idea of a bancor supranational currency proposed at Bretton Woods. Yet, it was the Fed’s swap lines with nine foreign central banks that helped stabilize the global capital markets a few months later. These dollar swap lines provided a powerful response during the 2008-09 financial crisis, as well.

Even many Americans who may disdain centralized authority in general concede some prerogatives to the state, like the provision of justice and the legitimate use of force. The power of coinage also resides with the state. History shows that centralized finance emerged to address the shortcomings of decentralized finance. The dollar’s role in the world economy is secured by several considerations outside of inertia: the security, transparency, and size of the U.S. Treasury market and the lack of a compelling alternative. The primary reason that crypto is even thought of as money is because it says it is, not because of its use. Its rival, as Fed Chair Jerome Powell noted, is with other non-interest-bearing assets like gold, not the dollar. That said, the public should reap the benefits of the new technology, and digital central-bank money is a likely expression. Public fiat will be preferred to private fiat.

Marc Chandler is chief market strategist, Bannockburn Global Forex.

https://www.barrons.com/articles/wi...exchange-51618592524?mod=hp_COMMENTARY_1

This paragraph and many like it in corporate media will someday be as infamous as ....

I don't believe I would use Paul Krugman as an example or comparison to anything

He's the perfect example of the entrenched elite that are either completely ignorant or evilly trying to steer the society towards more centralized control.

He's a shifty eyed little puke. If people's eyes are shifting while they're talking, they are scared of being boxed in, lying through their teeth, or both...

Men like Krugman are directing our monetary policy. The Chinese Yuan may not be ready yet for reserve status but it won't be long, especially if the Chinese or the BRICS nations in concert come out with a gold-backed currency. It's anticipated that by 2028 Chinese GDP will pass the US, more than likely it will be sooner.

The only "shortcoming" of decentralized financing is that the free market is in control and not governments. Most of the ills faced today wouldn't be an issue with a decentralized currency.

Once the dollar finally fails, most in the US will blame the Chinese and Russians when in reality they should be looking in the mirror.

Anyone buy in on COIN? Offered last WEDNESDAY. My understanding is the block chain technology to help make transactions easier for cryptocurrency between banks retailers etc....

I haven't purchased any COIN yet although I expect I will.

I'm not even remotely close to a blockchain guru but its about much more than that. Even if bitcoin, cryptocurrencies and banking disappears, blockchain technology is here to stay

I don’t understand much of any of this at all. My son tried to explain Bitcoin to me. Over my head. I plan on joining the COIN crowd this week

Are you talking about buying the stock ??


I agree with Steven. The real, and maybe only, benefit of Bitcoin is the blockchain technology

Yes. Coin Stock But since it just became available last Wednesday. It may still be on the slide down. So I will just sit and monitor it. I have stock in a Block chain company already. As usual I bought on the high. It slid and holding at a buck. The technology stocks I am not comfortable at all investing in them. I just read this morning Coin stock spooked Bitcoin. OMG. So now they are all going down. Where who knows. I guess invest for the long haul. But I hate buying high and then it tanks. After the GEO tumble. Just an FYI. I did recoup that blunder. White. Buy the hairs on my chinny chin chin.

LOL !!! Well that's good news !!

I think the COIN IPO proves that the old view of markets as rational.......is completely wrong. But I also believe that markets can remain irrational longer than most people can stay solvent.

We are in some treacherous waters IMO

Invest in traps. Fur might go up again.

Wayne, I'm not sure you understand what COIN does, it's not a technology company. It doesn't have anything to do with developing blockchain or other tech. It's sole reason for existence is to be a platform that facilitates the trading of cryptocurrencies. Maybe you do understand, just wanted to make sure.

I doubt if COINS listing played a part in bitcoin dropping in the last 36 hours. More like typical volatility in this market.
Now let us discuss investing in COIN. Me, I'll trade it. Invest? Nah, I consider investments a long-term play. I think that if someone is going to play COIN long term they may as well buy bitcoin, it's superior IMHO.

Ken will disagree lol.

Free markets are rational, crony capitalism not so much. There is a reason it takes over 3 dollars of stimulus to raise gdp one dollar.

I understood I thought that is what COIN was. Like how CC swipes are transferred. I have only been trading on my own for 4 yrs. I did it solely due to nothing available for interest in a regular saving account. My rule is to invest in companies that pay dividends. This will be used for income down the road. I also trade. But now with this new administration and there policies and politics I am finding it difficult. But as anything. The harder you try the luckier you become. But I do appreciate the advice and explanations. From you both. Thank you. I will watch COIN stock this week. Maybe get it a little cheaper since the hype hopefully has cooled.

I bought exactly 3 shares of COIN, at $334., to keep it on my radar. I will probably sell it next week, up or down.
This is a great time to buy more Berkshire Hathoway.

According to The Block, roughly 9 billion in long positions were liquidated early sunday. Since then BTC has recovered about half the loss. According Coindesk there was a rumor floated that the Treasury was going charge some institutions for money laundering with cryptos and CNBC brought reposted a story about India possibly banning cryptos there and other outlets ran with the story

I DO disagree While I think COIN has a viable business in the long run, I don't have that belief about Bitcoin. Too much political risk.

On the other hand I would not buy COIN unless the price dropped by 50% or greater. When you consider that COIN listed on NASDQ ......and that at the current share price it is worth more than the entire NASDQ business, I find that to be ridiculous. COIN exists on fees it earns facilitating trades between BTC players. That's all well and good but do you think that other exchanges are not going to compete with lower fees and thus take market share ?

Look at the way that online brokers have reduced retail trading costs to zero. That same fee structure will find it's way into the business of COIN> No way IMO is COIN worth a hundred billion dollars at this point..........but that is what its share price is telling us.

It may very well continue to climb. That doesn't mean it's worth owning....at least not for me.

AK Viking is correct that Berkshire Hathaway looks better all the time........at least relative to COIN
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