What The US Dollar Truly Is And How Most Misunderstand It
What is the US dollar? The answer from most will be a currency (or the reserve currency). What if I told you that is not what it is?
In this video I explain the nature of the system and how there are no dollars involved in most transactions. Hence, the US dollar is not what people think.
▶️ 3Speak
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Hit the nail on the head with this one. Crypto needs a dollar standard as a unit of measure to compare the relative value of the different tokens to each other.
Summary:
In this video, the speaker discusses the misconceptions and mistakes people make with the U.S. dollar, highlighting that it is not actually a currency but a unit of measurement. He explains that the Federal Reserve does not deal with actual money, emphasizing that the dollar is more like a mile or liter used for measurement. The speaker goes on to explain how transactions and financial systems operate without physical cash, focusing on ledger-based money and the use of U.S. dollars as a standard for balance sheets and debt. He delves into complex financial instruments like repledge agreements and how international banks access dollars without physically obtaining them. The video aims to shift the viewers' perspective on the U.S. dollar and money in general.
Detailed Article:
The video begins with the speaker challenging the traditional notion of the U.S. dollar as a currency, asserting that it should be viewed as a measurement tool rather than as physical money. He points out that the Federal Reserve, despite its significance, does not deal with money directly, but rather focuses on other aspects of the economy. The speaker argues that while the dollar is commonly perceived as a currency, it primarily serves as a unit of account, similar to a mile or liter in measuring distance or volume.
Furthermore, the speaker discusses how modern financial transactions operate without physical cash, relying on digital numbers and ledger-based systems. He explains how employees are paid through direct deposit without the exchange of physical money, highlighting the virtual nature of most monetary transactions in today's digital world. The speaker underscores that even when individuals pay bills or make purchases, no physical currency is involved, as everything is done through electronic transfers and digital records.
Moreover, the speaker delves into the financial intricacies of international banking, touching on concepts like repo agreements and repledge agreements. He emphasizes that these financial instruments do not require the actual possession of the underlying securities or assets, as long as they are denominated in dollars and serve as collateral for various transactions. The speaker stresses that international banks access dollars through these instruments without physically owning the currency, enabling them to engage in dollar-denominated loans and transactions.
In conclusion, the speaker challenges the common perceptions and misconceptions surrounding the U.S. dollar, advocating for a shift in understanding towards viewing it as a unit of measurement rather than physical currency. He sheds light on the complex nature of modern financial systems, where virtual numbers and ledger-based money play a significant role in global transactions and balance sheets. Overall, the video aims to educate viewers on the evolving nature of money and the U.S. dollar in today's digital and interconnected financial landscape.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.