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    927 points smallerfish | 14 comments | | HN request time: 0.54s | source | bottom
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    portaouflop ◴[] No.42926658[source]
    IMF gave them 1.4 billion to abandon the “experiment”:

    > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described.

    —-

    I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself

    replies(30): >>42926697 #>>42926752 #>>42926769 #>>42926916 #>>42927021 #>>42927075 #>>42927122 #>>42927290 #>>42927312 #>>42927357 #>>42927505 #>>42927532 #>>42927536 #>>42927642 #>>42927745 #>>42927985 #>>42928058 #>>42928513 #>>42928720 #>>42928756 #>>42928806 #>>42929654 #>>42929949 #>>42930337 #>>42930726 #>>42930753 #>>42930779 #>>42930984 #>>42934734 #>>42935466 #
    1. awnird ◴[] No.42926752[source]
    If bitcoin was such a success then why did they need an enormous loan?
    replies(3): >>42926794 #>>42926871 #>>42926952 #
    2. ToValueFunfetti ◴[] No.42926794[source]
    If the USD was such a good currency, why does the US operate at a deficit?
    replies(5): >>42926868 #>>42927147 #>>42927598 #>>42928026 #>>42928764 #
    3. Arainach ◴[] No.42926868[source]
    A deficit is not a loan. The USD and the historical strength and faith on the US allowed the US to offer its own securities, not ones pwned by and with terms dictated by external entities.
    replies(2): >>42927437 #>>42927517 #
    4. CamelCaseName ◴[] No.42926952[source]
    El Salvador and their Bitcoin experiment are ultimately both quite small. This loan is multiple times larger than their total BTC holdings
    replies(1): >>42927291 #
    5. JumpCrisscross ◴[] No.42927147[source]
    > If the USD was such a good currency, why does the US operate at a deficit?

    If the U.S. needed a bailout, the dollar would become a trash currency.

    6. josu ◴[] No.42927291[source]
    They hold 6k BTC, around 600M USD. So just a bit over 2x.
    replies(1): >>42931306 #
    7. 2030ai ◴[] No.42927437{3}[source]
    It smells, looks and quacks like a loan.
    replies(1): >>42928711 #
    8. whimsicalism ◴[] No.42927517{3}[source]
    the US borrows money. sure it can monetize its own debt at any time but that would have its own set of very high costs
    9. fsckboy ◴[] No.42927598[source]
    >why does the US operate at a deficit?

    are you talking about a trade deficit (the US operated at a trade deficit virtually the entire time it grew from 13 former colonies to the post WWII economic colossus. Lending money to a growing economy so it can turn around and purchase the equipment you are selling which it will use to be more productive is the secret sauce of a growing economy)

    or are you talking about a budget deficit? many countries around the world operate with budget deficits; "socialist" governments generally have higher deficits as they spend to maintain living standards whether the economy justifies it or not. The size of the deficit (they will grow all the time) does not matter, what matters is "as a %age of GDP".

    none of this, btw, has much to do with monetary policy, the maintenance of the currency.

    "strong" or "weak" currency really makes no difference. The strength/weakness of the currency how the books are balanced after the fact of what has happened in the actual economy. A country with a strong currency will find imports inexpensive, and will have trouble selling its goods, and citizens will be incented to buy imports. A country with a weak currency will have difficulty importing goods, but will have less trouble exporting. It's the currency that balances these books.

    replies(1): >>42934334 #
    10. adgjlsfhk1 ◴[] No.42928026[source]
    If you can get a 10 year loan at 2% interest rates (below inflation), you would be an idiot not to take it.
    11. __MatrixMan__ ◴[] No.42928711{4}[source]
    Smells more like a tokenomics scheme than a loan to me.
    12. sudosysgen ◴[] No.42928764[source]
    The USD, being the world reserve currency and currency of trade, must operate at a deficit. It's only through a USD deficit that other countries can grow their reserves commensurately with economic growth, which is how the USD stays the reserve currency. The USD operates at a deficit because it's such a good currency.
    13. askl ◴[] No.42931306{3}[source]
    2 is a multiple
    14. ToValueFunfetti ◴[] No.42934334{3}[source]
    This is essentially my point, I guess too briefly put- a country getting a loan is not an indictment of that country's currency; that is a huge leap to conclusions as evidenced by the world's best currency being maintained by a country that is borrowing 5% of its GDP each year.