89.3 The Real Reason El Salvador went Crypto
———Ep 89.3 Summary———
El Salvador announced its crypto intentions seemingly out of the blue. But a closer look reveals the nation had run dangerously short of (euro)dollars in early 2021. It went to the IMF for a bailout. Now it heads to the crypto world for one. Just like people did in the 14th-century. Wait, what?!
———Ep 89.3 Topics———
01:39 El Salvador may be the first nation to accept bitcoin as one of its official monies – why?
02:07 Three months prior to the bitcoin announcement the nation was asking the IMF for money.
04:50 El Salvador dollarized (accepting the US dollar locally) in 2000 because of globalization.
08:12 El Salvador dropped below the IMF’s red line for foreign obligations in March/April 2021.
09:46 Throughout history money shortages are a regular occurrence: 14th, 19-21st centuries.
11:49 Cryptocurrencies are a modern ledger money, like in the 14th century with ghost money.
17:50 There is a dollar shortage because private banks have restricted credit growth.
18:45 Concluding thoughts on crypto and its fundamental value versus its bubble value.
———Ep 89.3 References———
Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski. Art by David Parkins.