Gradually, then Suddenly

July 19, 2022

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July 14, 2022

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Changing Tides

July 05, 2022

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First Order Derivative

June 30, 2022

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digital daily: If I Had a Trillion Dollars

Macro Monday – If I had a trillion dollars: Atmosphere, character, and tension are the key three elements of any drama. The play on the US debt ceiling is writing itself these days. Can the “trillion-dollar coin” project be the plot twist that saves the day? It sure is tempting. The Treasury mints a “trillion-dollar” coin, deposits it at the Fed, and draws cash to pay its bills. What could be simpler than minting a trillion dollars to pay the bills? It’s not a new idea, either. A Nobel Laureate took it seriously in 2013 and still does. Janet Yellen thinks it’s a gimmick (because it’s a gimmick). Moderates think it can’t make it past the Supreme Court. As the odds of US debt default rise to historic highs, crypto-asset markets are being disturbed. Take US dollar stablecoin. Stablecoin assets not only survived but thrived in an unprecedented stress test last year. Higher rates, a crypto asset crash, fraud, and poorly designed assets like Luna being extinguished did not lessen the stablecoin use case. Onchain transaction volumes were a record $49.5 tillion in 2022. This year, crypto assets are having to navigate risks imposed by conventional markets. First, it was the risk of banks defaulting on deposits. Now, it’s the risk of the US Treasury defaulting on T-bills. Stablecoin issuers are managing their liquidity to avoid the June potential default date and migrating liquidity back to the banking system! If I had a trillion dollars, I’d buy more love…because irony is freely available these days.