Cover created in Canva
This is a special publication, some time ago I wanted to write about this, about how the
"dollar" from certain events in the past, began to die and how "United States" began to abuse its status as issuer of the world reserve currency. I must make something clear, this publication does not intend to blame any nation, or anything like that, I will only base it on the facts and actions that changed the economy forever and that from that point to the present has led to the bankruptcy of one of the most prosperous nations in the world, in my personal opinion.
Of course, these are facts that are in history and I will write them down so that anyone who does not know them, will take into account the current state of the economy and how the facts that changed everything happened. On the other hand, and turning everything around, this also benefits all
"Cryptocurrencies" enthusiasts to a great extent and as they are, they are the solution to all our problems, especially
"Bitcoin" which is a digital currency that meets all the requirements to be a world reserve currency, where no third party has control of its issuance, making it a deflationary asset and a refuge of value, in short, thanks to these people will be able to obtain true freedom, which is not available since governments put it above the population and the free market.
The Beginning of Economic Change | The Broken Bretton Woods Agreement
Before the dollar was the world's reserve currency, before
"Bretton Woods", all central banks had their own
"Gold" reserves and each currency was backed by it. After World War II, the "United States" was the country that had the most gold in the world, this was because their production was like the best in the world, which made them the richest creditors globally. Therefore, when they met to design the new world economic order at Bretton Woods, decidió́ it was clear that all currencies would be backed by the dollar, and the dollar in turn would be backed by gold. In that sense "the US" was really rich (not like now), así́ that the other countries accepted this agreement.
But at the time when the world decidió́ trusted the dollar, they really started abusing it, particularly in the
1960's when the government had huge deficits due to the Vietnam War, the war against poverty, the mission and the mission to the moon. The creditors became suspicious. Wait a minute, the US is creating all this money and it's not possible that they have enough gold to back it up! Then some creditors, France in particular, began to exchange dollars for gold, and then on the verge of bankruptcy because the US gold reserves were disappearing, Nixon abandoned the gold standard, instead of doing the right thing
(which was to cut government spending, devalue the dollar, and así́ prevent gold from continuing to escape), Nixon almost destroyed the dollar, which led him to violate the Bretton Woods agreement.
The United States experienced one of the worst inflation rates in its history
Richard Nixon broke the Bretton Woods agreement and stopped exchanging dollars for gold, the US experienced one of the worst inflation in its history. The dollar lost two-thirds of its value against other currencies, but lost even more value against gold. Somehow, the dollar managed to survive, even though there was no longer any gold backing its issue. At that point, the
"United States" really did comenzó́ abuse its privileged status as an issuer of the world's reserve currency; and that abuse brings us to the present: More than
26 Billion in public debt, never-before-seen budget and trade deficits, and massive printing of Fed money.
What will happen to "United States", Gold and Cryptocurrencies
The dollar will collapse
(along with the rest of the currencies) and the world volverá́ to a gold standard or it could be in this case very different and that is that the Bitcoin has become gold 2.0, so it has great potential as a reserve currency of value. The rest of the countries will discover one day that the US is broke, that the Federal Reserve will never be able to raise interest rates to normal levels without that causing a massive bankruptcy, and that what was a temporary and extraordinary measure, Quantitative Expansion
(meaning in short "massive money printing") has become a permanent and necessary measure to keep the stock market and the bond market standing.
The only reason the US can pay its debt is because the interest is around 1%. Greece also paid its debt when the interest was low. But when the creditors discovered its problems and demanded higher interest, Greece collapsed, the same thing happened to Argentina, and the same thing will happen to the US. Interest rates will rise and the US will only have 2 options:
- Default on its debt
- Print money to pay for it, cause hyperinflation and kill the dollar.
Conclusions | Conclusiones
This is what I really think about how things are with the current economy, sincerely the
"Cryptocurrencies" have come to change all this world full of power and corruption, these digital currencies based on what is the Blockchain technology, empower people, gives them true freedom, such is the case of my home country
"Venezuela", The vast majority of the population is protecting their holdings in cryptocurrencies, especially Bitcoin, they see it as a reserve of value, besides, thanks to the crisis in the country, we have not become the nation that more Bitcoins are bought and sold globally through P2P exchange platforms such as
This has changed my life, this project called LeoFinance, which is the community for which I write these lines and all my knowledge is changing the way we can all work and converge in the same community with the same ideals. One of my goals is to
expand LeoFinance to as many people as possible mainly in the Spanish speaking world, to make them understand that this is a powerful project that they can tackle as a real job and that together we can make it even bigger.
LeoFinance is a Blockchain based social networking community for Crypto & Finance content creators. Our tokenized blog platform LeoFinance.io allows users and creators to participate and share content in the blockchain while earning token rewards LEO.
If you are new you can join the game under this LINK
Live the BraveBrowser Experience. Browse fast, safe while earning BAT tokens.
Please download the browser using my Referral Link.
Communities I support and promote
Join the official Discord community
Go to the Discord server community officer in Spanish
Posted Using LeoFinance Beta