The USA is broke and the USD is getting raped. The US government added no less than 11 trillion USD to its debt since 2020 (AKA COVID19) and there is no sign it will stop stacking up debt on debt on debt…
Bitcoin and the crypto complex will ride a ocean of liquidity higher than most can imagine as 2024 approaches mid year (don’t ask about timing the move – if you know for sure please send an email – we are stocking up on sardines).
Unfortunately, the world will burn as nations create money to fight each other in new and terrible ways.
When BTC hit $20,000 in 2017 – the talk of bubbles was everywhere. Now, BTC is WELL ABOVE $60,000 and there is every sign that it will blast into the 6 or 7 digit range in the coming bull run.
What people in this game won’t tell you is that a horrific war is coming. Most sane people don’t like all out global war – but over the next few years – we might see one. You can look at what is happening in Eastern Europe or the South China Sea as evidence of this trend.
War costs a lot of money – fiat money – from the USA, EU and UK. Of course, China and Russia also spend on warfare. Here is the nasty part – when major nations fight – expensive stuff gets blown the f**k up. That is kinda the point of war.
As mentioned above, the USA, UK and EU are all broke. These nations are the most indebted they have ever been. In fact, these lovable Western rascals have created more money (measured by purchasing value) than in any other time in human history.
Many people who like cryptos know that fiat money is debt and nothing more.
So as the West mulls mandatory military service for its young, and creates amounts of money that the human mind can’t understand beyond abstract terms, assets that are not subject to sovereign counterparty risk will explode in fiat terms.
Ok But The USD Will Die Right?
Rumors of the USD’s death have been greatly exaggerated. While it has lost a little ground to some of the other “dead man walking” currencies like the GBP and EUR – the USD is still very much a big part of global trade.
In fact – even with all the talk of a BRICS CBDC – Russia and China are using USDT to settle trade via Hong Kong. Seriously!
Get this – the US declares economic war on both China and Russia (and by some measure kinetic war on Russia) and these two “devil nations” are still using a USD proxy to settle bilateral trade. You know Russia has its own international clearing system right? So does China!
Are you getting the picture – the USD has outrageous power – and it isn’t leaving the global stage anytime soon. The “exorbitant privilege” that the USD still enjoys shows no sign of abating – which means the Pentagon can spend whatever they want fighting the very nations that still use the currency which empowers a direct enemy.
No, no, the USD isn’t going anywhere. But it will lose value versus non-printable goods and services. And of course, cryptos.
Higher Prices And Less To Buy
The US Federal Reserve (The FED) has a dual mandate. Its mandate is to promote maximum employment while keeping prices stable. It has a few tools to achieve its mandate, and most people are familiar with the interest rate it sets a few times per year.
The FED can’t control spending by the Pentagon on a growing global war. If the FED tried to maintain the value of the USD at the expense of the US Military, a few of the FED governors would end up like JFK or that P2 guy who the cops found hanging in London under the bridge
Don’t mess with the Pentagon!
So don’t worry so much about where the FED puts the interest rate. It really doesn’t matter. USD liquidity will grow and flow no matter what. Dollars will flow to the four corners of the earth in the form of soldiers, bombs, and some of the best weapons money can buy.
This time there won’t be war bonds – this time the enemies of the US will be trading with the same USD (or USD proxies – looking your way USDT) that the FED is creating to keep the US “economy” (read: war machine) humming.
The coming inflation will be the stuff of legends.
The real issue is that people still see fiat currency as a form of wealth. It is anything but. Western fiat currency is now a measure of how much exposure you have to a global currency system that is approaching failure as anything but a means of supporting global conflagration.
War and economic mismanagement destroys value. BTC is going to $500,000 – and higher. But what will that pile of USD buy…a can of sardines?
If you are lucky…they aren’t radioactive!
We are getting in early on the action in non-radioactive sardines…and learning how to make crackers.
