Thread by @HigherManas

1/9 Why did the German mark in the Weimar Republic hyper-inflate? Why hasn’t the USD hyper-inflated? The obvious reason is the USD is used globally. The mark wasn’t. But it’s not that simple and those seemingly opposing facts tell us something very important about the developing

2/9 relationship between fiat currency and cryptocurrency. A money supply can grow and it will have an organic supply and demand influence on the value of that currency. But value compared to what? Herein lays the answer. The German mark didn’t hyper-inflate because so much was

3/9 printed. Though that seems like the logical outcome. It hyper-inflated because the exchange peg arrangements with foreign currency were adjusted to accommodate that printing. This change meant it costed more for Germany to import goods and their exports collected less.

4/9 Exchange rate pegs don’t change organically. They are hard set or allowed to fluctuate within a range or band. These bands can be adjusted. This is why the USD hasn’t hyper-inflated with the massive expansion of supply. The USD is the global reserve currency and all other

5/9 currencies are held within an exchange arrangement band, or trading range, with the USD. We know that the plan is to run fiat currency and CBDCs parallel to one another, with CBDCs interoperating with the evolving digital ecosystem. With this premise in mind, it doesn’t

6/9 serve anyone’s interests to crash the old system when you can transition all liquidity from old to new digital through a series of incremental exchange rate arrangements between fiat and CBDCs and between CBDCs and specific private institutionalized digital assets. This could

7/9 take until 2030 to complete. Eventually everything will go digital and everything will be tokenized. The value and liquidity that is unlocked with massive tokenization will absorb the large amount of world fiat debt today as exchange rate pegs/bands are adjusted and deep

8/9 digital liquidity pools develop. Modern Monetary Theory, or MMT is built on the premise of managing exchange rate bands and will be instrumental in growing the digital economy. One large digital ecosystem that slowly absorbs everything fiat and no foreign power to adjust

9/9 exchange rate arrangements against. It’s complicated but also simple in its application. There will be no hyperinflation event of fiat. But there will be an incremental disconnection from that system. It has already started. The crypto revolution has begun.