America’s Credit Rating Helps Make Case for Bitcoin

Of course, printing money to repay debts does not let governments off the hook. Doing so depreciates the exchange rate and reduces the currency’s purchasing power via inflation, thus imposing a form of tax on both the domestic population and foreign creditors. That undermines confidence among foreign investors and beads mistrust among taxpayers as a self-perpetuating cycle of collapsing exchange rates and higher prices arises.

In fact, because international sovereign credit markets largely trade in debt denominated in dollars, it’s the U.S. – the very same country that Fitch just declared to be a less-than-perfect credit risk – that most gets to shape those assessments, creating distortions in what should be a free market. It’s another way the dollar’s reserve status affords the U.S.’sin this case the power to influence geopolitical outcomes and push for the profit-interests of its banks.

Banks, meanwhile, with the help of perhaps the most powerful lobbying entity you’ve never heard of – the DC-based International Institute of Finance, or IIF – regularly emerge out of negotiations with their assets more or less intact. It’s a giant, international version of the “corporate socialism” that was observed in the U.S. following the massive bank bailouts during the mortgage crisis of 2008.

Thanks to Bitcoin, the citizens of developing economies can now opt out of this undemocratic and distorted international system in which they are caught between their own corrupt, domestic government models and a Washington-Wall Street nexus of self-serving power. What should the U.S. do about it? It could exercise fiscal discipline, abandoning counterproductive debt ceiling standoffs for bipartisan efforts to sensibly reprioritize spending and taxation. But that currently sounds like an impossible utopia.

Source: Digital Coin News (digitalcoinnews.net)

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