Bitcoin and what the CCP is doing, in China. Plus, has anyone noticed Saudi Arabia. They just ended the petrodollar!
The world is truly off it’s axis to put it mildly! Today’s blog will look at China and Saudia Arabia. These two countries will have a major impact on the future value of the US Dollar. First, lets look at the DXY index, (US dollar index):
It’s 108.5 and climbing! European economies are collapsing fast due to out of control inflation, they are fleeing to the USD! Not to mention the Fed is still raising rates. As we mentioned in past blogs, this strengthens the dollar. Remember, the Euro has now reached dollar parity. This will also cause flight to the USD. However, the US is at 128% debt to GDP, top five in the world for that debt ratio. Since the sanctions against Russia were levied, the Ruble has strengthened along with the USD. Europe is the loser in all this as are Africa and Latin America.
Then, along comes the BRICS nations. Brazil, Russia, India, China, South Africa. They are now gaining interest from Argentina, and SAUDI ARABIA! The Saudi’s were forced to trade oil for US dollars after WWII. This created the petrodollar system. Now, Saudi Arabia is seriously considering joining the BRICS nations and selling oil for their currencies which, by the way, are backed by Gold! Click here to view an article about it.
Meanwhile, China, is doing this at the present time:
We believe, Bank of China is attempting to stop a bank run. So they use these electronic bracelets to keep depositors home, by force! Sri Lanka, & Argentina have already seen financial collapse, Turkey, Greece, & most of Europe are in similar bad shape, financially. As for China, it gets confusing what they will do. On the one hand they joined the BRICS nations who are for Gold backed currency. On the other hand, they were the first country to come out with a CBDC, the digital yuan. This is a digital version of fiat currency. Two opposing views at the same time. It would appear the CCP is going one way, and Xi Jinping is going the other way, aligned with Russia. We see anything not associated with central banking as allowing freedom. Gold backing and the Bitcoin lightning network for fast payment rails. Here is the Federal Reserve of Cleveland in a letter about the Bitcoin lightning network, and how it has successfully made Bitcoin, money!:
The Lightning Network: Turning Bitcoin into Money
FRB of Cleveland Working Paper No. 22-19, 2022
18 Pages Posted: 22 Jun 2022
Anantha Divakaruni
University of Bergen
Peter Zimmerman
Federal Reserve Banks - Federal Reserve Bank of Cleveland
Date Written: June 21, 2022
Abstract
The Lightning Network (LN) is a means of netting Bitcoin payments outside the blockchain. We find a significant association between LN adoption and reduced blockchain congestion, suggesting that the LN has helped improve the efficiency of Bitcoin as a means of payment. This improvement cannot be explained by other factors, such as changes in demand or the adoption of SegWit. We find mixed evidence on whether increased centralization in the Lightning Network has improved its efficiency. Our findings have implications for the future of cryptocurrencies as a means of payment and their environmental footprint.
Keywords: Bitcoin, blockchain, cryptocurrency, Lightning Network, payments
JEL Classification: E42, G10
Like it or not, money is changing and fast. It is smart to stay abreast of what is happening globally to money. Getting ahead of this will allow investors to prosper by being early. Basically, Bitcoin, Gold, and Land are three scarce investments we believe in very much! We have written about real estate crashing this fall through 2024. Land investments in 2024 will be at low prices. We may be off on timing slightly. Real Estate is much slower to move than equities are! Be patient with Land prices!
See this Fed pivot indicator chart below. This is for the US. At this high level (average of 5yr bond yields, fed funds rate x national debt), a Fed pivot would avoid a debt death cycle. This chart goes back to 1986. Tomorrow the CPI inflation rate announcement comes out, it is expected to be 8.8%. Around July 15 the Fed will announce the next rate hike. Although this chart below shows that it is time for the Fed to reverse, we don’t see that happening yet. There will be a transition into a new monetary system and the old one needs to come down! However, hard that is to hear, the truth is the truth. There are signs. Here is the Fed Pivot Indicator:
If, after the 15th we see the Fed has reversed and pivoted. Then we can easily expect massive inflation increases. We doubt they will do that yet. If, after the 15th we see the Fed raised rates 75 bps. As expected. Then, they are continuing to bring down the current, old monetary system and it is intentional. Again, hard to hear, but facts are staring you in the face! The exit liquidity will be Bitcoin and to a lesser extent, Gold and Land. Art, classic cars, rare watches. Anything scarce. Prepare ahead of time, or be forced into these changes after the elites have already made early investments! We are not financial advisors, and this is not financial advise. We have shown you the guideposts for where this is going for a long time. We still think a pivot could happen at some point. We are not there yet, and either way (Fed pivot or not), Bitcoin will receive a lot of the exit liquidity. That is the best store of value for after this shakes out. Don’t believe us, see where the Bitcoin price is by late 2024, early 2025!
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