As the title suggests, I really don’t know anything. And because I don’t know anything, what I’m going to say is only truths or subjective personal truths, making this accurate Gone-zo journalism. You’re welcome. Socrates would be proud, because I really know that I don’t know. You know?
So, what is a Backstop?
In Finance, Backstops are steps taken, measures, or actions used to support a fund or value or float. In this case, these are steps and measures used to support the US Dollar. To prevent, idk, free floating the US Dollar instead of rigging it via market mechanisms and interests to make a value in a show of Financial Strength.
Here is my AI Chat log;
AI got a little “don’t be ridiculous” with me. So I reworded my question to logically sequence and sequester out some possibilities before this scenario became more ‘likely’.
Interest rates, bonds, Money Printer go BRRR, Buybacks, subsidies and bailouts, trade policies and tariffs, taxes and tariffs, more bailouts, Socialism (like just take over industries, wtf?), and then Sacrificing Pension Funds.
Idk about you, but I feel like sacrificing Pension Funds is probably more likely to happen before Nationalization of Key industries. Also, Money Printer going BRRR doesn’t really sound like it would ‘help’ backstop the US Dollar. . .
I don’t fault AI, but it seems a bit sus to put Socialism before Sacrificing Pension funds. To be fair, without pension funds, people would probably riot. Turns out, Pension Funds are someone’s literal life savings, and if they don’t have that, then their future isn’t secure which breeds uncertainty which breeds fear. Also, it’d be utterly fucked for old people to have their Pension Funds go up in flames after investing for so long.
I didn’t really like that list so I asked a follow up;
So the other options could include;
Gambling in developed nations, tariffs (seems like taxes are the “go to” answer to keep a currency afloat), Regulate Commerce, export more goods and services, Actually sticking to the budgets (lmao), mess with interest rates again, subsidies, more subsidies and tariffs, de-regulation and less taxes (I like this answer), Exporting strategic reserves, -WTF. . .
Create a Sovereign Wealth Fund by using Surplus Revenue to invest in Foreign assets.
Like, holy shit, that came out of AI? The AI basically just suggested creating a sort of International Monetary -uh- Fund to globalize reserves and trades and develop nations through investments disguised as ‘angel loans’ and ‘bail outs’ of foreign governments while also privatizing the Nations’ industries to Foreigners such as the Sovereign Wealth Fund. . . Yea, pretty slick suggestion.
Maybe the Government can invest in gaming like that whole Cyber Punk investment by the Polish Government, idk, seems like a pretty interesting trend that Gubernments are funding vibeo gamus. Or like how Norway has their own Sovereign wealth Fund invested in shit like Oil and stuff. Or maybe it’ll be like the CCP and how China has laws implemented to have controlling stakes over all companies and enterprise doing business in China. Yea, I see the ups, I see the downs. Lmao
Not Gonna lie, I was not expecting AI to say that. Bold move cotton. Technically speaking, Sovereign Wealth Funds can also be Pension Funds, so it would actually work in favor of supporting Pension Funds AND Backstopping the US Dollar. . . That’s all hinged on if it’s managed correctly though. Ha, No Safe Bets.
Knowing America we’d invest in Big Tech, Oil, Pharma, and Military. Nice.
The last suggestion of AI was,
To use CBDCs, Centrally Backed Digital Currencies.
Yes, Because the Federal Reserve that helps to set interest rates resulting in Large Hedge Funds buying up entire housing developments as a hedge for the Money Printer Going BRRR is exactly what I need. I totally need the Fed Reserve to directly control the inflationary value of the money in my wallet, instead of raining sparkling economic pain through their fiscal policy and interest rates. But -uh- “Don’t fight the FED” as they say. Ha (Sarcasm).
A bunch of selling points for CBDC’s being the Bankies’ favorite weapon of choice. “It’ll help the Bankies help people”. Yes, because I trust the institutions that gamble actual pension funds and retirement funds in money market accounts that yield less than a CD from the 80s. Yea, those guys are so gunna help me out after charging their vig and making billions from over draft fees. Such a great idea giving Bankies the Financial Weapon of CBDC’s, no down sides at all. (Sarcasm again).
CBDC’s are like Bitcoin but backwards, because it’s Centralized and tracked and taxed and kinda awful. This would allow too much government control and honestly, to try and make it a Stable Coin, is really dumb.
To Float the US Dollar and have a US backed shit stable Coin that could back the US Dollar?
Stable Coins? They are anything but.
Did we not learn that there is no such thing as a ‘safe bet’?
Any currency can’t preach stability, because by nature, currencies are used to arbitrate value and scalp and trade. There is an exchange of value, and price fixing the value of currency makes the currency less volatile and less valuable. And I’m speaking of a utilitarian value or a value other than it’s quantized form.
Which will eventually lead to abandonment daddy issues or an explosion of value in the negative direction.
See exhibit A;
The Fact that there were online degenerates shoveling their life savings into a ‘stable coin’ to then try and stake and arbitrage for money is beyond retarded. They literally played the financial equivalent of Russian Roulette with a Semi-Automatic. Like what the fuck were you thinking trying to ‘Game’ and ‘Get Rich Quick’ off of an investment vehicle touted for stability?
Anyways, here’s some more Examples;
You might cry that these shit coins are all scams and that “CBDC will be built different”. Truth be told, everything is a bubble. Inflation ain’t the only thing that is ‘transitory’. Even our lives are bubbles -and one day, that shit is gonna pop. The music will stop, the chairs will drop, and the fat-lady will sing. Even nations will implode. Empires too. Everything is a bubble and we’re only can-kicking because we want to be immortal grasping at straws in hopes of a lifeline to renew our lease on life. For a fleeting moment, we want to hold onto the reigns of our stardust-minute-made lemon-lives before fading into the nether that is the void of time and doubting our purpose the whole ride down. That’s essentially the nature of trying to backstop the US Dollar.
So would CBDC’s be stable? Ha, fat chance. Although, to use them as a second currency would be interesting.
To have CBDC’s back up the US Dollar would add more robust layers and POSSIBLY strengthen the dollar (or do the opposite because fuck CBDCs). But then we have Fiat paper backing up Fiat Shit Coins. And they’re spiraling around eachother in value, pegging up and down, floating here and there. That’s like having Treasury Bonds and Reverse Repo Markets and. . . Oh wait.
Stupidity;
The “Scary” part about all of this, is that it’s believable. I wouldn’t doubt the bottomless capacity and potentiality for Human Stupidity. And any sort of economic policy or whatnot will have it’s boons and drawbacks. I personally don’t like the decisions of the people who are driving this ‘economic’ ship, and judging by the ‘Money Printer go BRRR’ memes, it seems that other people feel the same way.
What I’m saying is, these very dumb possibilities mentioned above are very plausible. Because the humans in charge are humans, and humans are dumb, so they’ll probably make a dumb mistake and choose something stupid like instituting a CBDC to back up Fiat Money. Lmao.
CBDC for stability is dumb, and intrinsically value itself can’t be stable for it to be valuable. That’s a discussion on the philosophy of value, simply put, you don’t know what something is worth without losing it. If Value itself is pegged, it becomes less and less valuable due to emerging markets that exploit that ‘anchor’ of value. I mean, just look at the US Dollar and ask yourself if ‘inflation’ is real or artificial. It’s probably both, so the value of something strong gets exploited and becomes less strong due to time and ’emerging markets’. You see my point?
Stable coins are shit, government backed ones are more shit. This is a bad move. Whatever.
In Closing,
Again, I have no idea what I’m talking about. Hehehehe. . .
But the chances of Banks, Monetary funds, and Governments sacrificing Pension Funds or ‘cutting’ Pension Funds is very real.
Hell, just pay attention to the news over the last ten years, it’s regularly talked about.
So, yea. Chances are;
Pension Funds are Sacrificed for Backstopping the US Dollar.
This method of backstopping the US Dollar is probably applicable to a local scale, like a city or state. You know, your local police or fire fighter’s pension funds. This is backstopping the US Dollar locally. Heck, Federally too, with the mention of defunding the police or literally the USPS system. I mean, ain’t that a bitch?
Now, what is the Dollar Backstopped on a global scale? like Backstopping the US Dollar Globally as the Global Reserve currency? Idk, lemme ask you this;
Are we still calling them green-backs or petrol-dollars?
*Not Valid Financial, Legal, Life, or Any Advice
Post Script;
I do dig that Sovereign wealth Fund idea.
But it also opens up to a lot of downsides.
You’d have to structure and charter it properly so that the government, in government fashion, doesn’t fuck over the people.
But that’s a tall ask, especially when you got millionaires talking about how ‘hungry dogs are obedient dogs’ and the high score for theft is caused by fortune 100 Corporations that lobby America.
So, uh, tall ask. For a Short Bid. lmao
Wouldn’t bet on it.