We've all seen how crypto media looks at the Tether foundation. It's always accusation after accusation as to whether or not they can be trusted and if they are running a fractional reserve or not.
Why do we care?
Well, the idea is that if every Tether minted doesn't have a dollar backing it up, then the whole system could go belly up and everyone left holding Tether would be carrying a zero value bag.
The problem with all of this is that no one ever talks about how deep into the red that Tether is getting. Are we really worried about Tether running an 80% or 90% fractional reserve when actual banks are getting away with 5%-20%? Think about that for a minute. What has a better chance of going under? A traditional bank or Bitfinex?
I've got another brain buster for you: what happens if Tether is 100% collateralized in a bank with 5% collateral? The fractional reserve risk of Tether is nothing compared to the risk of whichever banks it is using to hold that collateral.
As more and more stable coins begin to enter the scene and more Tether 'scandals' are brought to light, this puts increasing pressure on Bitfinex to get their shit together and stay as legit as possible.
People make way more of a deal of it than it actually is (including me). Oh, it's a centralized product? Like the other 99.99% centralized products out there? We aren't deep enough in this game to complain yet, and ironically if we were we'd simply be using another product and forgetting all about this 'problem'.
I've never even used Tether before. I'd rather build a history with my wallets of supporting this cause on a political level. Still, there are so many stable-coin options out there now, if one diversifies out there is no way they'll get burned on any significant level.
The question we have to ask ourselves is not whether stable-coins are trustworthy, but if the underlying asset (usd) is trustworthy. I trust that we already know the answer to that question. Stable coins are simply an extension of USD.
I've been thinking about this for a while now, and honestly what is making the most sense to me at the moment is that everyone at the top knows fiat is on it's last legs. You'd think this would be bad for them, but they know when it's coming and can cause it to happen really at any time. The rich, for the most part, can always sidestep these catastrophes and even turn a huge profit by scooping up the assets of the poor dirt cheap during the most desperate times.
I believe one day soon™, the world reserve currency USD, will intentionally cannibalize itself in a last ditch effort so suck every last drop of value out of the 7 billion slaves we've cultivated on this planet. I wish everyone good luck when that day comes.
How does one prepare for such an event? Crypto might save you, but really we should all be thinking about how much grid reliance we depend on and what that means to us if/when the grid is no longer serving us.