The plain little turtle called Satoshi
The US dollar’s monetary policy looks a lot like Yertle the turtle. If you don’t remember from your childhood I’ll give you a brief synopsis of the plot.
Yertle the turtle was king of the pond, but he wanted more. So he inflated the size of his thrown literally on the backs of his turtle subjects. This all went quite fine until a plain little turtle called Mac at the bottom of the stack sneezed. This plain little action reverberated through the thrown of king Yertle sending him crashing to the ground.
While not a perfect analogy I think there are enough similarities. I’d like to state that I’m not a doom lover. The idea of the USD not being the global standard isn’t good for the US. As a proud American I can’t bring myself to enjoy the idea that we loose standing in the world. However I am a realist and believe it’s always worth looking at things from an outside perspective
With our global economic picture looking so uncertain, and tensions on the rise all over the world, it’s not hard to see a few scenarios in which $USD starts to take a back seat.
“To what? The Yuan? Come on!”, I hear you say.
Well, yeah. The massive amount of dollars pumped into the system is unprecedented. What’s most damaging in my mind is that is opens up the ability for other country’s to start using whataboutisms. The US has always had the higher ground of monetary policy to stand on. While nowhere near the level to which China manipulates their currency, this recent action is a blow to our dear greenback. This is not to mention the digital Yuan which has a chance to create competition as a reserve in some places.
The real issue for the USD is Bitcoin (cue laughter). But when you think about it, Bitcoin is and will always be a fixed to solid foundational monetary policy. One that can be understood by everyone. When we finally start to see bitcoin backed banks as Hal Finney posited, we’re going to be in trouble. Much like Yertle before his thrown building spree, being a king on a plain old rock ain’t so bad.
The success of MakerDAO in the Ethereum ecosystem show that it’s possible to make a stable digital asset out of nowhere. It’s going to be hard to keep Bitcoin banks down when they get on this train. That is, if Bitcoin maximalists don’t have a conniption fit in the meantime.
Suffice it to say that one small sneeze from Satoshi has created a wave that will reverberate throught the entire fiat ecosystem. It’s just that the $USD tower is so large it may still take a while to reach old Yertle up top. But it will.
