But here we are as Crypto Andys are learning the hard way why the financial system is the way it is.
Which is why, in the case of the Soros story, it was the Bundesbank that broke the BoE, not Soros.
The Bundesbank refused to issue DMs to buy up spare GBP liquidity. And that broke the peg.
For a peg to work the currency issuers on both side of the fence need to act in unison, since intervention can only cap, not collar. If both play their part then the peg will be unimpeachable.
Until the Federal Reserve decides to maintain stable coin pegs by buying them up in return for new dollars when the dollar strengthens against them, then the whole concept is doomed.
It's not the market that decides whether a peg survives. It's the currency issuer on the strengthening side.
Emphasis on liquid money. You know, the reason why central banks started QE is that banks don't want to invest into long term assets and just keep their reserves at the central bank. QE effectively turned a fixed term asset like treasuries into a short term overnight asset that you can sell and buy instantly.
Looking at the history of markets to try to understand the difference between pegs that can withstand the shifting tides of market sentiment vs those that cannot is a useful exercise. I am pleased to see this article on the HN front page.