Has The US Given Every Country An Excuse To Move To A Bitcoin Standard?

The US and Europe have hit Russia with some of the hardest economic sanctions we've seen in the history of the fiat system. In the news you'll probably see things like Mastercard or Visa cutting ties with Russia, that the SWIFT system doesn't work, that they are now cut off from FIFA or cinemas and streaming sites.

These are all gestures, in my opinion, the real harm in my eyes was the seizing of funds held by the Russian central bank. Over half a trillion in foreign reserves were seized as they were held in the form of European and US treasury bonds.

In the world of central banking, your reserves are seen as sacrosanct, no one should be able to touch them, or you corrupt the entire system falls apart as faith in the safety of those reserves is obliterated.

Something I think the western governments have now done.

Casting doubt on central bank's validity

If I was a non-G-7 nation right now, I would be looking to reevaluate my position in holding government bonds. Why would I want to keep foreign reserves that can be taken from me, if I don't follow party lines?

Especially when it's highly unlikely that a G7 nation would have the same thing happen to them. If the US and Nato were to invade a country, do you see their central bank funds being seized? No, you don't!

If you're a non-G7 nation, you play by the rules, they make up, while these countries can skirt the rules, a system that could annoy more countries as time goes by and as the Russia Ukraine fighting continues.

When faith in central banking fails

The way the system works is countries create real products, commodities, and services, and the US pays them in USD. Some of this USD is kept as foreign reserves to defend the country's fiat currency in the forex market, while the rest is given back to the US in return for US Bonds, or in the case of the EU, European bonds.

Countries around the world are effectively funding the major powers by storing their excess savings in debt-backed government bonds.

If countries around the world now feel spooked and want to sell these bonds, who is going to buy them? The US and EU governments, of course, they will have to defend their bond markets by issuing even more credit and devaluing their currencies.

If not interest rates to hold those bonds would spike and obliterate many of the overleveraged markets basing their existence on the price of money and credit in the system.

Hard assets for hard times

If countries who are not part of the elite club want to continue to play pauper to the G-7 nations, so be it, but if you're looking to hedge against them, you would be smart to start beefing up your military, stacking gold and of course bitcoin.

While I still think most countries will not act on this, they are looking at how these sanctions pan out and if Russia gets clobbered, it could be a good time to start packing in on getting insurance in the form of hard money.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

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