When Nixon reneged on Bretton Woods in 1971, the world entered unprecedented monetary territory – as for the first time, not a single currency was backed by anything but the “full faith and credit” of the thieving, inflating governments that issued them.
As expected, the experiment has been a disaster - yielding record debt, inflation, and social inequality that SURGED when Greenspan led the world’s Central banks in a money-printing frenzy after the dotcom bubble and 9/11…and EXPLODED after the system permanently broke in 2008, as epitomized by Mario Draghi’s 2011 promise, that seven years later he continues to enforce, to do “whatever it takes” to “save” the Euro. In other words, trillions of Euros’ worth of QE, and more than four years(and running) of negative interest rates.
The consequence of buying a few years of faux prosperity, that 1% of the world’s population has garnered the lion’s share of, is unfathomable amounts of Tower of Babel-like debt…plus record high stock and bond valuations that only 24/7 Central bank monetization have been able to sustain. And of course, crashing fiat currencies the world round – from BRICS nations like Brazil, Russia, India, China, and South Africa; to the third world, and the Euro itself; the latter of which, is in sever e danger of splintering, due to expanding political and financial crises in Italy, France, and other “leading” nations.
In turn, the dollar is inexorably rising against nearly every currency, despite its leading role in creating and fomenting the aforementioned political, economic, and monetary crises. The reason being, that sadly, no alternative currency has been able to overcome a status quo in which the dollar has been viewed as the principal safe haven asset, despite its horrific fundamentals and outlook.
For 16 years I’ve followed the saga of Precious Metals – which for millennia held the undisputed title of safe haven and inflation-protection kings. Holding essentially my entire liquid net worth in the space; working for mining companies and bullion dealers; and being a leading global commentator on the topic, I watched front and center as “PMs” were destroyed by a combination of propaganda, paper dilution, and Bitcoin – to the point that gold and silver have for all intents and purposes, become the ugly red-headed stepchild of the financial world. Trading at all-time inflation-adjusted lows, they appear to be acting as if they are no more valuable than industrial commodities – which cumulatively, have fallen to their lowest levels in decades. And given the accelerating pace of global economic decline, it’s very possible that further declines are in the cards.
https://www.marketwatch.com/investing/index/crb/charts?countrycode=xx
In response, Central banks will of course step up money printing and financial asset monetization - but at this point, so much “ammunition” has been used; damage done; and reputation lost; it’s hard to believe it can buy much more time before a REAL, 2008-like crisis occurs…which is why it’s so puzzling that the dollar, which will be printed more than any other currency, has retained its status as the leading safe haven asset.
Some people in the Bitcoin community claim you should “value your wealth in Bitcoin” – just as I once tried, mentally, to “value my wealth in ounces of gold.” However, monetary religion doesn’t hold water in the real world, where the purchasing power of Bitcoin, gold, and other “wealth preserving assets” have plunged , amidst conditions when they SHOULD have surged; particularly Bitcoin, which had every imaginable fundamental factor in its corner before it ignominiously collapsed last week. This, amidst news that SHOULD been viewed as wildly Bitcoin POSITIVE; i.e, the BCash civil war that yet again proved Bitcoin has no monetary competition in the crypto space.
In other words, sadly, the dollar has won…for now. Sure, gold COULD have a sudden, shocking resurgence after inexorably declining for decades; and sure, Bitcoin COULD miraculously recover, retaking the “Hoffman Line” with a flourish (i.e., the $100 billion market cap level that attracts institutional investment). However, given recent trends, both scenarios seem to have very long odds – at least, for anyone with a reasonably short investment time horizon; and frankly, I think gold and silver have PERMANENTLY lost their monetary value.
In other words, if Bitcoin is to accomplish what it SHOULD; i.e., what appeared to be a DESTINY of monetary leadership a year ago; it will need to turn the tide against extremely powerful headwinds that are unlikely to stop blowing anytime soon. I hope for the world’s sake it succeeds - but given what has occurred in the crypto space this year, the journey to individual monetary sovereignty via Bitcoin has unquestionably been made more difficult – and at the least, longer and more arduous.