Bitcoin, more than anything, is a bet *against something*. It's a bet against the status quo, inflationary and repressive monetary regimes. And it's a bet on the secular decline in power of the USD.
Buying Bitcoin is a put on the USD.
Buying Bitcoin is a put on the USD.
In 2016, the economist wrote an article on "King USD". Since then, the dollar has been falling from grace, in what I feel may have been the top. Below are some reasons why:
(this is going to be a running thread, please let me know if I missed anything)
(this is going to be a running thread, please let me know if I missed anything)
US Public Debt to GDP is over 100%. Don't get me wrong, this can go a lot higher.
But add in entitlements, and the numbers get ridiculous. $211tn in liabilities (prob higher today) and rising as 10k people retire a day. Tax deficits are simultaneously rising as both expenses rise and receipts fall.
From a GDP standpoint, we also have an aging population and the total size and labor force participation is falling. Not a good sign for US GDP growth.
When faced with overly burdensome liabilities, throughout history, governments have always chosen inflation. We will pay our debts IMO, but they will be with massively inflated USD.
Even Snow Crash predicted this. Deflationary deleverages are too politically dangerous.
Even Snow Crash predicted this. Deflationary deleverages are too politically dangerous.
We're already seeing the process of debt monetization starting. Our monetary base has skyrocketed since 2008.
W. the Cantillon effect in action, this first inflates assets where it enters -- the Financial markets--driving populism and inequality. Then it proceeds elsewhere.
W. the Cantillon effect in action, this first inflates assets where it enters -- the Financial markets--driving populism and inequality. Then it proceeds elsewhere.
Trump is also heavily incentivized to weaken the USD to bring "manufacturing" back to america and make america great again. Trump tarrifs also likely lead to less demand of USD products. Look at 1930s for a comp
Rock bottom interest rates are also not helping. But we've backed ourselves into a corner and increasing them may not be possible.
GS estimates that a 1% rise in rates will lead to a $1.1tn sell off in bonds. Thats more than the total loss during the great financial crisis.
GS estimates that a 1% rise in rates will lead to a $1.1tn sell off in bonds. Thats more than the total loss during the great financial crisis.
USD as a reserve currency has made this possible, providing indiscriminate demand for USD. This has allowed us to accumulate more debt, control SWIFT and shape global trade.
However, amidst our declining macro landscape other countries have been posturing for power.
However, amidst our declining macro landscape other countries have been posturing for power.
Much of the USD strength comes down to oil. Since 1971, all oil trade has been conducted in the USD.
The Saudis agreed in exchange for protection they would price oil in USD. Every time a country has challenged this authority we have attacked
The Saudis agreed in exchange for protection they would price oil in USD. Every time a country has challenged this authority we have attacked
China and Russia despise the fact that their foreign trade is at the whims of the US. This is likely changing.
In a massive geopolitical move, they launched Remnibi oil futures to foreign markets in March.
In a massive geopolitical move, they launched Remnibi oil futures to foreign markets in March.
China has also surpassed the US as the worlds largest petro importer. They're starting to have more sway in the oil markets
China actually tried and abandoned this in 1993. This time is different as the IMF has officially added Remnibi to SDR basket in 2016.
Argentina is going to be bailed out in terms of SDRs and China is going to swap for USD.
"China plays go while the rest of us argue how to setup the checkers board" -- @MarkYusko
"China plays go while the rest of us argue how to setup the checkers board" -- @MarkYusko
Their clearly stated goal is to become a world power by 2050. It's the USD's game to lose at this point.
Europe has also jumped on the bandwagon and is using EUR to pay Iran for Oil
What becomes the next global reserve currency? Both China and Russia are clearly incentivized to push their own currency given how much power it gave the US.
But what's more likely is that they compromise on an a-politcal one. Chinese and Russian gold reserves have skyrocketed.
But what's more likely is that they compromise on an a-politcal one. Chinese and Russian gold reserves have skyrocketed.
Other countries seem to be following: Gold held at NY fed is at lowest level ever recorded as more countries continue to redeem.
Turkey just repatriated all of their gold from the US
Gold has been the world's best apolitical, uninflatable SOV. Since the 1970s, its price has risen dramatically as a result
But the problem with gold is its specie makes it seizable. If we adopt gold, the government will probably ban it again just like in 1933 and w. E-Gold
But the problem with gold is its specie makes it seizable. If we adopt gold, the government will probably ban it again just like in 1933 and w. E-Gold
In 2009 gold's exclusivity as the only apolitical, trustless and hard money was challenged. BTC was introduced to solve for where gold had failed
This won't be easy. If you understand the power dynamics at play it's clear why decentralization is so critical for BTC
This won't be easy. If you understand the power dynamics at play it's clear why decentralization is so critical for BTC
We're currently in a transition period. Either we move to another global fiat reserve currency like RMB or SDRs, or we capitalize on this once in a millenia opportunity to move to an apolitical hard money.
BTC is the only option to create an uninflatable, unseizable, globally scalable, potentially untracable, and immutable currency
This is a much bigger oppty than creating a mere digital coffee payment mechanism or ICO platform.This is reshaping the global financial infrastructure
This is a much bigger oppty than creating a mere digital coffee payment mechanism or ICO platform.This is reshaping the global financial infrastructure
And the best part about bitcoin is that its most formidable enemies are also the first to dismiss it as a toy.
"We can't take it out of the hands of government, all we can do is by some sly roundabout way introduce something they can't stop" -- Hayek
"We can't take it out of the hands of government, all we can do is by some sly roundabout way introduce something they can't stop" -- Hayek
