Go Get Bitcoin!!
governments have been the best marketers for cryptocurrencies so far
Go get him!, President Biden screamed at the end of his first State of the Union address yesterday night.
Wait, but who are we getting? Does he mean himself or Clinton or Obama? Putin? Xi Jinping? Zelensky? Boris? Von der Leyen? Draghi? Trudeau? Klaus Schwab? George Soros? Epstein? or maybe he meant Inflation? Bitcoin?
His speech assured many of the further decline of the American economy, the destruction of SME’s with his doubling down on Build Back Better policy advocated by the WEF. Adding to this, was his incoherent ramblings that is emblematic of America’s collective cognitive decline.
With respect to the economy, his proposed solution to fight inflation is to get prices under control. In other words, we should expect more empty shelves, longer queues, scarcity and hyperinflation at our friendly supermarkets and local shops.
Quoting Romesh Vaitilingam’s article for voxeu.org, some economists argue that this is a terrible idea as it distorts price signals and is only a temporary panacea with long term far reaching consequences;
James Stock at Harvard argues: “There might be some ephemeral success because of the way inflation is measured, but longer-run, price controls would be ineffective.” Abhijit Banerjee at MIT states: “I worry that the implementation will be a huge challenge, as it was in the 1970s.” And William Nordhaus notes: “Perhaps could reduce inflation in short run as 1970s. Would only cause more shortages and a terrible idea.”
With the global economy in a free fall, we are witnessing our leaders making desperate calls for idiotic policies that prop up the debt riddled economy which only widens the inequality gap as the central banks will have to flood the markets with more liquidity to drive asset prices higher. A BULLISH case for Bitcoin and alternative cryptocurrencies as a hedge against hyperinflation and government policy. Also exacerbating further dedollarization.
On the other hand, we have the weaponization of finance in the form of the sanctions placed on Russia with the latest measure creating a devastating effect for the Russian government. The erasure of $600 billion of foreign reserves in dollars, euros, pounds and Swiss francs by their respective central banks. We are learning that these exist only on spreadsheets and are digital IOUs. And, right now, these central banks are choosing to renege on their duties and stated goals and play politics.
In essence, Russia has been rugged!
According to Byron Gilliam of Blockworks;
The biggest threat to financial systems occurs when what people think is money turns out not to be money. Russia thought they had $400 billion of foreign reserves. And now they don’t. Traditional bank runs start in the same way — when a dollar of deposits is suddenly worth less than a dollar. And they finish with unpredictable consequences.
The rugging of Russia’s reserves is likely to have similarly unpredictable knock-on effects. Financial ones, for starters: What happens to delicately balanced monetary systems when hundreds of billions of USD collateral is suddenly frozen?
And, more worryingly, geopolitical ones: What does Putin do when his mountain of strategic reserves is suddenly $400 billion smaller?
A SWIFT ban was considered an extreme measure as recently as just last week, and now we’ve taken the much more consequential measure of freezing central bank assets. The abrupt escalation is forcing central banks, oligarchs and even normal investors to rethink their assumptions around property rights and the nature of money.
This explains the bump in new Bitcoin addresses and the price with a daily candle from yesterday making a parabolic rise from about $37k to $43,500 yesterday and now approaching $44,500 (at the time of writing).
This is showing us that many are being onboarded to the Bitcoin train at a fast pace. Government policies have been the best marketing tools so far as many are realizing that money in the bank is not really yours and can be frozen or confiscated at any time and at the instance of politics.
We are living through times of immense changes, wars are a step in that direction towards historical forks in the road.
Could digital assets like Bitcoin de-risk the world?
Seems to me like a case for crypto is on the horizon.
See you tomorrow!
- Ope