This is quite common sence in fiat-world / fx trading for years now
The race to the bottom
Now, the FED has pumped and started the engines - to finally win
USD will drop to 0, but when will that phase transition (of trust) will go like described in phyiscs ? Second order singularity?
The race to the bottom
Now, the FED has pumped and started the engines - to finally win
USD will drop to 0, but when will that phase transition (of trust) will go like described in phyiscs ? Second order singularity?
I feel like you imply something interesting here, but, unfortunately, I can't get it.
Imo if FED were "issuing" 1 trillion new USD per day, it would take around 3 years until purchasing power of USD would drop by 50%. And still it would be far from being zero.
My estimates are based on this fact:
There is approximately US $37 trillion in circulation: this includes all the physical money and the money deposited in savings and checking accounts.
Money in the form of investments, derivatives, and cryptocurrencies exceeds $1.2 quadrillion.
Money in the form of investments, derivatives, and cryptocurrencies exceeds $1.2 quadrillion.
But what do you think? Can USD purchasing power drop to zero much earlier?
Also, let's imagine it equals zero. What do you mean by the "second order singularity" in that case?
Afair a first order singularity is a hard change described by a step function like 1 -> 0 for a given value in time / temperature... but that is some ideal model that doesn't exist in real world, so that smoothes out to a Dirac function that has not a ideal singularity, but sth more realistic. To describe a real point (in time or pressure) temperature of trust in the USD is quite near I bet, and the FED does a lot that the house of cards is overloaded and trust crashes soon as domino bricks
Well, I thought by singularity you meant something like this
In mathematics, a singularity is in general a point at which a given mathematical object is not defined, or a point where the mathematical object ceases to be well-behaved in some particular way, such as the lack of differentiability or analyticity.
in the sense that when the trust in USD would become zero something unpredictable could happen, a phenomenon that could not be described and explained by the laws of economics. And, being an optimist, I thought it could be a good thing, it could be something that helped the world economy to rise to unprecedented heights.
