If not having money in crypto, then in what?

[OKboomer]

I've seen doomsayers predict the end of the EU, EUR US, USD, and so much else for many, many years now. None of them turn out to be right. But some of them make money selling advice and services to libertarian nutjobs.

The only difference between financial doomsday prophets and religious ones is the subject matter. The accuracy seems to be just about the same.

Erm, wouldn't the USD losing 99% of its purchasing power over the last 100 years qualify as "the end"? So dollar as a concept does exist and probably will, but its value has diluted so much that treating it as a meaningful store of value (or even express value in its terms) needs critical reassessment.

@OKboomer will you ever come back and tell us about your findings?

I wrote my "findings" in the bump post made a week or so ago. Nothing new. Crypto so far still seems to be overall the best to me. Everything else is even less promising

does taxation of account balances, wealth taxes and restrictions on convertibility between fiat and assets like gold and crypto count as a doomsday? I'm worried it's pretty real

Yes. I wonder if coronavirus will lead to even more aggressive tax policies in large economies.

Inverse ETF's have some costs that's true, but the questions were what is out there for hedging during a crisis (I guess the author meant short or medium hedge, not for years)

Yeah, I was asking about medium to long. And when I started this thread, Corona was not yet a thing...

 

[Sols]

Erm, wouldn't the USD losing 99% of its purchasing power over the last 100 years qualify as "the end"? So dollar as a concept does exist and probably will, but its value has diluted so much that treating it as a meaningful store of value (or even express value in its terms) needs critical reassessment.

You're right. This is why no international trade (including trade that doesn't involve the US) is conducted in USD and why no country uses USD as a foreign exchange reserve. No central bank would do that, because financial geniuses have figured out that the USD is worthless and, effectively, over.

 

[Educate]

You're right. This is why no international trade (including trade that doesn't involve the US) is conducted in USD and why no country uses USD as a foreign exchange reserve. No central bank would do that, because financial geniuses have figured out that the USD is worthless and, effectively, over.

And unlike USD other fiat currencies doesn't suffer from inflation?

 

[OKboomer]

You're right. This is why no international trade (including trade that doesn't involve the US) is conducted in USD and why no country uses USD as a foreign exchange reserve. No central bank would do that, because financial geniuses have figured out that the USD is worthless and, effectively, over.

Wait , but aren't US treasury bonds essentially USD ? And haven't most major economies amassed trillions in those from their trade? So effectively USD is used as a reserve , no?

 

[JohnLocke]

Not sure if this thread still belongs to the Bitcoin forums or rather in the General business forum... thread is subject to monitoring.

 

[Martin Everson]

Wait , but aren't US treasury bonds essentially USD ?

Yes they are. In the sense that China hold its USD cash reserves in US Treasuries and so does Warren Buffets Bershire Hathaway hold his cash reserves in US Treasuries and pretty much all major companies who hold USD cash hold it in treasuries either directly or via a liquidity fund invested in US Treasuries.

And haven't most major economies amassed trillions in those from their trade?

Yes

So effectively USD is used as a reserve , no?

Yes

 

[LouisB]

You're right. This is why no international trade (including trade that doesn't involve the US) is conducted in USD and why no country uses USD as a foreign exchange reserve. No central bank would do that, because financial geniuses have figured out that the USD is worthless and, effectively, over.

It's a very strange and misleading comment as the part of foreign reserves denominated in USD is still over 60% and it is just because European countries keep mainly EUR for an obvious reason. British pound, Japanese Yen, Swiss franc and others have only a few %

 

[KJK]

Yes, most of foreign currency reserves are in USD.
However, I expect the power of USD / US of A to decrease in the future.

They can lose importance faster than you may think; just consider what Fed is doing right now. It is acceptable only due to historical reasons and the reserve currency status.

https://en.wikipedia.org/wiki/List_...n-exchange_reserves#Foreign_exchange_reservesThe top table doesn't differentiate between currencies but what's more important are the top 5 listed countries - 6.3 trillion USD reserves held by China, Japan, Switzerland, Russia and Saudi.

None of these countries are probably very excited about the status of the US dollar.
- China for a long time was undervaluing its own currency, basically the Chinese worked so that the Americans could consume, largest export of USA was consumption and debt. Now the Chinese realize there are other options as well, e.g. a strong internal local economy
- Japan probably believed they will do better by buying US assets and US currency rather than the local economy (which already is nationalized and in stagflation anyways)
- Switzerland has a lot of money so they just have to put it somewhere, probably aren't huge fans of Euro as a concept...
- Russia has large reserves because it went through crisis and as a result it has been loading up on foreign currencies and gold. Putin last year declared that "role of dollar should be revisited in global trade", he wouldn't love anything else more
- Saudi Arabia has local currency pegged to USD and the petrodollar system benefits them hugely compared to their enemies in the region. They get dollar and keep it. However if oil is too cheap, they will get hurt a lot by the currency peg.

So what is the solution to that?
One interesting idea are SDRs created by the International Monetary Fund, a basket of currencies
Another idea was Facebook's Libra, a funny combination between cryptocurrency and SDR that will probably never launch.
Then you have Bitcoin, however what country would willingly switch to a decentralized currency that makes your monetary policy useless?


USD worked in the past because there wasn't anything better really. The situation may be different now.

 

[Sols]

It's a very strange and misleading comment as the part of foreign reserves denominated in USD is still over 60% and it is just because European countries keep mainly EUR for an obvious reason. British pound, Japanese Yen, Swiss franc and others have only a few %

I think my sarcasm wasn't clear enough. I found OKboomer's message preposterous and tried to show that by taking the line of thinking to its extreme.

 

[JohnLocke]

There are still Diamonds, Gold, Silver and a lot of other great investment opportunities beside the USD! To believe the USD is something that will survive when anything else fails is naive.

Turning this to a USD discussion may not be what OP initially wanted so I will close this thread.