bitcoindollar on Nostr: LynAlden is right, but the US administration does not tell the Americans the truth. ...
LynAlden (nprofile…u7e3) is right, but the US administration does not tell the Americans the truth. So they blame it on the others, Chinese and Europeans and unfair tariffs. De-industrialization and structural deficits are the price the US pays to be able to run the “empire” and pay for the “forever wars” without destroying the purchasing power of the dollar in relation to other currencies. This was the US “exorbitant privilege”. This was based on the Petrodollar recycling system. This is over now.
Trump knows that and he is trying to save the fading hegemon from collapse by playing the last cards in a new game few have really understood:
- he tells the Chinese to take their money and leave
- he uses tariff threats to try to bring back home some critical strategic productions
- since all this damages global dollar flows, which is incompatible with dollar hegemony, he needs to create an alternative to the Petrodollar system to support US debt and force global dollar flows back into US Treasuries. And this can only be achieved by using a neutral reserve asset globally denominated in dollars because China, India, Russia and most of the global south will stay away from US Debt and US assets. The neutral reserve asset is #bitcoin and Trump will force stablecoin issuers to buy US Tbills and continue financing US deficit spending. To make this a functioning virtuous loop the US will need to push up #bitcoin prices which will attract more dollars into #tether which will flow into Tbills. This is the birth of the #bitcoindollar system. Beware that gold cannot be used in this case because only stablecoins issuers are able to channel dollar flows into US debt. This is the critical point.
GM.
Chapter 13 of Broken Money is called "Heavy is the Head that Wears the Crown".
It focuses on the US trade deficit and why it arises structurally. In short, since the USD is the global reserve currency (for reserve assets, international contracts, FX trading pairs, and cross-border funding), there is tremendous automatic demand for USD in the world compared to other fiat currencies.
To supply the world with that ever-growing need for USD to service all sorts of needs, the United States runs structural trade deficits with the rest of the world. That's how the USD spills out to the rest of the world for them to use. And the mechanism for that is that the overvalued USD boosts Americans' import power, reduces Americans' low-margin export competiveness, and basically forces open that trade deficit.
That trade deficit is the cost of maintaining the benefits USD system as currently structured. The fatal flaw is that those who bear the cost (e.g. industrialists in the Rust Belt) are not the same as those to gain the benefits (e.g. Wall Street and Washington DC folks). And those costs and benefits accumulate over decades, resulting in rising populism and pushback, which is now front and center.
The challenge that the administration faces is that they have identified a real problem, but are tackling the surface issues rather than the underlying structural issues.
Anyway, I uploaded that chapter 13 on my website for free reading:
https://www.lynalden.com/wp-content/uploads/broken-money-chapter-13.pdf
Published at
2025-04-10 13:22:12Event JSON
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