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Nearly three months ago, as America’s first huge coronavirus relief packages reached full swing, Bitcoin advocates struck on one of the most resonant memes in the cryptocurrency’s already meme-heavy history: Money printer go brrr. The meme is a concise summation of the ‘sound money’ thesis, which holds that the post-Breton Woods detachment of the global monetary system from the gold standard creates inevitable temptation for governments to debase their currency by, in technical terms … letting the money printer go brrr.

There is now what could be taken as evidence that the memers had it right: the U.S. dollar has been slumping on foreign exchange markets. It had its biggest monthly drop in a decade in July, with one index measuring a nearly 5% decline. In trading terms, the dollar in July dropped 1.6% against a basket of currencies, and has lost a staggering 7.5% against the Euro since March. (The dollar saw a slight rebound in early August). On the other side of the equation, both Bitcoin and gold are surging, reflecting lack of market trust in fiat currency globally.

So, blame the money printer?

Maybe not. Bitcoiners and other hard money advocates are laser-focused on domestic inflation, not foreign exchange rates. The most cited examples of inflation-driven currency collapse include Weimar Germany and Zimbabwe. (Also worth noting: Those flailing states literally printed unbacked money. The U.S. Fed doesn’t do that – it issues redeemable debt. Not the same thing.)

The distinction between forex and inflation is key. According to traditional economics, domestic inflation is driven by relatively straightforward supply and demand – inflation means too many dollars are chasing a fixed supply of goods. And domestic U.S. consumer inflation has stayed relatively in check, with the latest data showing the consumer price index growing just 0.6% in June. That was held down in part by of a lack of demand, particularly for energy, amid the coronavirus lockdown. One motivator of the U.S. relief programs that made the money printer go brrr was old-fashioned Keynesianism, an attempt to increase the money supply through debt-funded government spending, in hopes of replacing that missing demand and staving off a fate vastly scarier than inflation: domestic deflation.

Foreign exchange markets have a different, more complex logic than domestic consumer prices, taking into account not just monetary supply, but broader measures of national economic strength and leadership – factors domestic spenders can’t fully take into account at the grocery store. Much of the dollar’s historic strength is based on its status as a ‘safe haven’ currency, which actually helped the dollar surge against other currencies in March, driven by early virus fears.

So more than fear of the money printer, the dollar’s drop can be read as the expiration of early hopes that the U.S., and its financial system, would weather the pandemic better than other countries. Instead, the U.S. has by many metrics done worse than nearly any developed country. That health failure is now turning into a dramatic economic failure, especially with the U.S. legislature so far failing to extend pandemic relief measures. That failure unfolded at the same time as much of the dollar’s late-July forex slump – and at the same time that the E.U. approved a huge financial recovery package.

If the real issue were an expanding money supply, then, it should have been the Euro that dropped with new spending on the horizon, while the dollar’s tightening purse-strings bolstered international trust. Instead, we saw exactly the opposite. In short, the U.S. dollar might be losing steam not because of the budget deficits caused by relief packages, but by the government’s current inability to keep that money printer going brrr.

David Z. Morris

@davidzmorris

david.morris@fortune.com

DECENTRALIZED NEWS

Credits

Fidelity quotes Satoshi Nakamoto in an investor guide ... Global bank BBVA partners with Google to offer digital banking ... Square's Bitcoin revenue soars 367% ... Remitly raises $85M at $1.5B valuation ... Affirm working on IPO at up to $10B valuation ... CoinCenter head Jerry Brito launches new discussion board ... SEC solicits smart contract analysis tool.

Debits

Crypto hedge fund Neural Capital shutters after losing half of investor funds ... Tetras Capital does one better, folding with 75% losses ... Justin Sun's Poloniex lists 4chan-linked Tendies memecoin ... Russian blockchain voting data allegedly for sale on darkweb ... China's monsoon season isn't helping crypto miners as much as usual.

FOMO NO MO'

Every day brings darker signs Lebanon has rarely seen in past crises: Mass layoffs, hospitals threatened with closure, shuttered shops and restaurants, crimes driven by desperation, a military that can no longer afford to feed its soldiers meat and warehouses that sell expired poultry.

Despite a devastating civil war that in the 1980s turned capitol Beirut into a synonym for mass destruction, Lebanon has now spent nearly three decades earning praise for innovation, pluralism, and political freedom against the odds. But now, that progress is unraveling. According to AP's Zeina Karam, the current crisis is "largely of Lebanon's own making," the product of "corruption and greed by a political class that pillaged nearly every sector of the economy," leading among other things to immense public debt.

A more proximate cause of the crisis is the collapse of Lebanon's currency and, in turn, its banking system. A two-week bank closure last year led to a run on the banks, a shortage of foreign currency, and capital controls. The Lebanese pound, nominally pegged to the U.S. dollar, has lost at least 80% of its real value since then, with the purchasing power of a soldier's salary declining from $900 to $150 per month. Lebanon's finance minister resigned on Monday, August 3, warning that lack of reform threatened to turn the country into a "failed state." And a bailout, whether from the IMF, U.S., or Middle Eastern neighbors, appears unlikely.

BUBBLE-O-METER

$765 million

The amount to be loaned to Kodak by the U.S. government in a deal that briefly put rocket boosters on the micro-cap stock of the (shell of a) film manufacturer. Now that loan is under SEC investigation, with an apparent focus on the timing of disclosures of the loan to the media: News of the loan was allegedly leaked to local news outlets ahead of its official announcement on July 27. This might have been as simple as a typo, though, with some news releases sent by Kodak reportedly omitting an 'embargo date,' or a coordinated time for release of the news.

Intentional or not, the early leaks may have created an opportunity for insiders to profit, though there's little evidence of that so far. The once-mighty company does have a recent association with odd equity moves, through its January 2018 announcement of KodakONE, a highly speculative blockchain project. That initiative also gave Kodak's stock a short-lived bump ... even though it was largely a brand licensing deal rather than an in-house Kodak project.