Loans are generally repaid in currency, paying back a loan creates even more currency as the additional currency created by the interest becomes an asset against which loans can be issued.
Meanwhile, BTC gains and loses 50 - 80% of its value in a single day. I wonder which is more stable.
It would have been in the 70s -- which is why USD support has remained despite the Nixon shock for a few more decades. By now, most central banks and governments are increasingly, dare I say "prepared" or slowly preparing for the possibility without it impacting their economies or trade too badly. Nobody wants to see the USD fail or die --- but day-to-day economic / monetary policies on US soil should become less and less of a rest-of-the-world economic worry, concern or impact compared to previously.
Now, the last remaining problem is savings of millions tied up in USD promises worldwide. Still a big problem, and rest assured the USD will continue to get "support" to the proportion that these savings haven't "migrated" over to "something else" yet.
Anyway, one day all these notes the US has been "exporting" globally for many years will come home one way or the other. Hope the new cash supplies won't, ahem, "overwhelm" a struggling domestic economy at that time, shall we?
But more importantly, is there any real sign that that time is soon? Global financial crisis...and the world's investors are literally paying the US to take their money with the current returns on US treasuries.
But it's hardly the USD "collapsing" - it's a gradual process over time, which crucially doesn't effect the buying power of individuals over meaningful timespans to them (decades, not days - unlike BTC).
And, probably more importantly, whatever replacement reserve currency comes to the fore (and what would it be, exactly?), it won't be something like BTC.
USD collapse would certainly be a far reaching global event but that doesn't mean it will not happen. I'm sure all prior entities with reserve status also thought their position unasailable.
http://www.zerohedge.com/sites/default/files/images/user5/im...
Global support for it is waning. China is doing direct currency swap deals and is no longer supporting USD by stacking treasuries at the rate it was. Russia is dishoarding treasuries too. The current trade deficit is propped up by the Fed buying USG bonds and suppressing interest rates. USD is not long for this world in its current form.
People don't go around predicting the decline and fall of the Australian dollar for example.
In the short term you are probably right. In the long term you are almost certainly wrong.
Agree mortgages didn't pop due to being paid back.
