"At the start of 2020, the dollar’s run had endured 100 years. That would have been reason to question how much longer it could continue." This crude instance of the gambler's fallacy is one of many reasons why I find Ruchir Sharma's FT piece unconvincing:

Another is his suggestion that, although "When the pandemic hit, the US dollar was as mighty as ever," the pandemic has changed that. To paraphrase Mark Twain, rumors of the end of the dollar's "exorbitant privilege" are much exaggerated.
In fact the demand for dollars rose to exceptional levels early in the crisis; if it has declined somewhat since, it is only from that unusual peak: https://t.co/0kUWbMDI8v
Then there is this glaring non-sequitur: "US officials were thus confident that...they could print the dollar in limitless quantities without undermining its reserve currency status. ...But a new class of contenders is emerging: cryptocurrencies."
But? The rise of cryptos has practical no bearing on how many dollars the Fed can create without undermining the dollar's int'l appeal or otherwise resulting in its "debasement." Sure, many Bitcoin fans _think_ the dollar is going to crash. But that hardly means it will!
In short, it simply isn't true that "The pandemic has made those crypto-pitches sound less like pure digital hype." The only change is that the FT is now adding to that hype!
Ruchir then appeals to growing U.S. indebtedness."The dollar’s reign is likely to end," he says, "when the rest of the world starts losing confidence that the US can keep paying its bills." It's enough to make this MMT skeptic think, where's @StephanieKelton when we need her?"
If he take Prof. Kelton's word for it that the world isn't about to quit paying its bills, Mr. Ruchin ought to read @dandolfa's more mainstream treatment of the limits of U.S. indebtedness: https://t.co/1p02e9dp0p
Ruchir assures us that "Bitcoin is also starting to make progress on its ambition to replace the dollar as a medium of exchange." Well, if you watch a snail long enough, you will see it "make progress on" circumnavigating the globe.
For a recent, down-to earth assessment of Bitcoin's (very limited) medium of exchange progress, I recommend this @jillruthcarlson essay: https://t.co/2xABXBdpfO
Finally, like too many Bitcoin enthusiasts, Mr. Ruchir seems not to appreciate the powerful "network effects" that make it exceedingly difficult for any upstart would-be monetary standard to pose any great threat to the bad-old USD: https://t.co/BiSBAnhsGA
@DanAwrey @dandolfa @DavidBeckworth @nic__carter @norbertjmichel @michaelsderby

More from Crypto

Excited to share our 2020 #Bitcoin review.

2020 will be remembered as the year the long fabled institutions finally arrived and #Bitcoin became a bonafide macroeconomic asset.

Below are the top highlights of each month for Bitcoin’s historic year.

1/


Bitcoin is now at all-time highs capping off an extremely successful year.

But it was by no means stable ride up.

2020 was a historically volatile year.

@YoungCryptoPM and I provided a detailed overview of every month of 2020 in all its

Jan.

3 days into the new year the US assassinated Iran’s top general Soleimani.

BTC surprisingly reacted to the events behaving like a safe haven as the risk of war increased.

The events provided the first hints of BTC potentially having graduated to a legitimate macro asset.


Feb.

COVID-19 reached a tipping point causing markets to crash.

BTC’s correlation with the S&P 500 reached an ATH in the following weeks.

This is when everyone learned BTC was not a recession hedge, it was a hedge against inflation and loss of confidence in fiat currencies.
https://t.co/JB7dJ3qp6M


Mar.

Financial markets in free fall.

The liquidity crisis was so severe BTC experienced one of it’s worst days ever.

Now known as Black Thursday, on March 12, BTC plummeted as much as 50% to below $4,000 at its lowest point on the day.

BTC closed the day down 40%
Michael Pettis @michaelxpettis argues that it is not always obvious who (China or the U.S.) adjusts best to "turbulent changes."
Bitcoin answers that question.
Thread:


World economies currently suffer four major redistribution challenges:
The most important is increasing government stealth use of the monetary system to confiscate assets from productive actors.
/2

That process is exacerbated by "Cantillon Effect" transfers to interest groups close to government ("the entitled class," public sector workers, the medical industrial complex, academia, etc....), which is destroying much of that wealth /3

The shadow nature (see Keynes) of government inflation makes the process unidentifiable, un-addressable and undemocratic.
The biggest victims (America's poorly educated young) are unequipped to counter generational confiscation tactics of today's wily senior beneficiaries. /4

Government control of the numéraire in key economic statistics (GDP, inflation, etc...) makes it impossible for economic actors to measure progress and liabilities. /5
1/ A thread on Nexgen’s Arrow & the #uranium cycle ($NXE)


2/ Given the scale and cost structure of Arrow, it makes sense that investors are intensely focused on its delivery timeline. This thread will discuss possible timelines, current market expectations (i.e., what’s “priced in”) & how different Arrow scenarios will impact the mkt.

3/ As you can see from the litany of responses to Michael’s tweet, there is great skepticism in the market regarding Arrow’s timeline. This is largely due to a bearish narrative conveyed by competing CEO’s whose assets only hold value if Arrow is substantially delayed.

4/ Those who played “King of the Hill” as a child would remember that it is the person at the top who is constantly attacked, not the kid sitting at the bottom of the hill in the mud. No one cares enough about that kid to attack them. This is a good parable for $NXE & Uranium.

5/ First a quick note on “this cycle” – Segra generally defines this cycle as the deficits forecasted from the mid-2020s to late-2030s. When people imply an asset producing in the mid-to-late 2020s will “miss the cycle”, they clearly have not done any real S/D modelling.

You May Also Like