Posted on 03/12/2022 6:36:53 AM PST by Browns Ultra Fan
Zoltan!
Credit Suisse’s Zoltan Pozsar wrote an interesting research note on how the Russia invasion of Ukraine and the G7’s response is causing a major upheaval of the global financial order.
The Russian-Ukrainian war will create a new world financial order from which Bitcoin is set to benefit, according to Credit Suisse.
Zoltan Pozsar, global head of short-term interest rate strategy at the giant investment bank, wrote in a Monday report that Western sanctions on Russia are likely to cause a paradigm shift in the way the world organizes money and reserves, a “Bretton Woods III” kind of scenario.
“We are witnessing the birth of Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West,” the report states.
Meanwhile, US Treasury Secretary Janet Yellen said the U.S. dollar is in no danger of losing its status as the world’s dominant reserve currency as a result of sanctions imposed against Russia over its invasion of Ukraine.
“I don’t think the dollar has any serious competition, and is not likely to for a long time,” Yellen told reporters in response to questions following a speech in Denver on Friday.
Some commentators, including Credit Suisse Group AG interest-rate strategist Zoltan Pozsar, have warned sanctions that blocked Russia’s access to its foreign currency reserves could drive other countries away from the dollar.
Well, what Zoltan says may be true, but not so far. Bitcoin has been plunging since November 2021 as inflation keeps rising.
Zoltan: “..and Bitcoin (if it still exists then) will probably benefit from all this.” The US Treasury yield curve is listing towards inversion, a signal of impending recession.
(Excerpt) Read more at confoundedinterest.net ...
Tucker Carlson had a story last night about Bitcoin.
The guest was in the Bitcoin business, the discussion was about how Bitcoin would benefit from the situation in Ukraine.
One of the questions Tucker asked was if the Federal Reserve created their own digital currency, what would happen to Bitcoin.
The guest stated that Bitcoin was entrenched now that it would be very hard if not impossible to eliminate it.
Tucker said, at one time gold was entrenched as a currency and it was outlawed from private ownership at one time.
Bottomline, Bitcoin can be outlawed if/when the Federal Reserve deems it a threat to it’s standing.
Bitcoin was designed to be virtually impossible to outlaw (or at least to enforce a ban) because as long as you have access the internet and one country in the world allows it to be mined you can access it, might have to end up using a proxy server or something to do it and avoid government detection, but they would have a very hard time shutting it down completely.
However, I could see them banning companies from accepting it, which would be almost as good as a ban (a currency is pretty worthless if nobody will accept it for goods or services). There would probably be work arounds even for that, such as some offshore third party service that converts bitcoin to dollars when a transaction is processed. But that would add extra layers and costs to every transaction. And at some point it would be so difficult and cumbersome to use, that most people wouldn't bother.
That is true, instead of improving the health of the US Dollar, the easy thing for Federal Reserve and US Government is to make Bitcoin so hard to use it becomes almost impossible. I have no doubt the USA will attempt to take the easy way out.
Well we won’t have to report every transaction over $600 since the IRS will surely have electronic access to every bitcoin transaction around the world.
“Zoltan: “..and Bitcoin (if it still exists then) “
Come on Zoltan, you are smart enough to know it won’t exist then.
“Bitcoin was designed to be virtually impossible to outlaw”
Murder is impossible to cause it to cease to exist by making it illegal. That doesn’t mean it available to practice BY NORMAL PEOPLE.
“Bottomline, Bitcoin can be outlawed if/when the Federal Reserve deems it a threat to it’s standing.”
Anyone who has watched Shark Tank for any length of time knows Kevin OLeary’s response to say a custom potato chip entrepreneur that’s trying to blow smoke up his butt how they will capture a good pecentage of market share in that space.
“You guys are tiny, like ants and that is why the big plsyers ignore you. But if you ever got big enough to give them any competition, they would crush you like cockroaches!”
And so it will be with any hobbyist crypto and the world’s central banks.
yeah, it has to grow to the point where the relation is inverted without the central banks noticing. The potential is there, and with world economic catastrophe, maybe it could happen quickly. If a central bank or two were to quietly go into "libertarian finance” there might be a silent pressure.
My take is it’s worth it to understand crypto decentralized finance or “defi” as it’s called, but it’s more likely that it will be embraced and extend the existing system rather than result in some anarcho-capitalist outcome...
“without the central banks noticing”
That’s simply not possible. It is being watched like hawk.
in principle yeah, but my inner contrarian is reminding me the possibility is remote. Not impossible, but extremely unlikely. Unknown unknowns, y’know.
Ditigal currency can take the form of crypto but this is just government responding to a “Universal Store of Value” beyond Government’s control.
First, Crypto currency is based on blockchain in the crypto world. Government can mimic the model but will the Regional Federal Reserve banks each issued their own blockchain similar to Bitcoin with a limited 28M... or will the Government trick people into accepting a digital currency with none of the underlying technology of Crypto currencies in order to move citizens away from these new stores of value, speculation or innovattion.
Government will stall the crypto industry on the work/innovation side; it will also dry up the investment and kill many other coins.
The beauty of crypto startups today is that nothing is in stone. What dymanics (beyond greed) that each one has in common is different platforms or different solutions to the same problems across different types of blockchains and business models.
Crypto offers people a non-governmental store of value widely accepted across borders without Government-Setting-Valuations. Banking is Government. Stocks are Government. Government controls stocks and banking, and Government regulation will eventually destroy crypto. But that day is a long way off. Were crypto outlawed worldwide today, we will be reading about politicans from today being charged with illegal financial transactions 50 years from now, simply because it can be hidden from the public.
Bitcoin will be between 120-160K in 2022. Etherum will be 7-10K in 2022. Once it hits the first level of 120 or 7 I will sell 25%.
“might have to end up using a proxy server or something to do it and avoid government detection, but they would have a very hard time shutting it down completely.”
I believe you are just a little optimistic. If the government decides there will be no bitcoin, they go after it as they do against drugs and money laundering. Do they kill it off entirely? No. But if you go out and buy an illegal drug and the government finds it your cost is going to be very high (jail time). Ask people who socked away money in secret offshore bank accounts and then the IRS/US goes to those offshore banks and they say, give us your list of US depositors or else. Those lists instantly appeared.
So, while the government may not completely stop bitcoin, they will reduce the demand by over 90% and put you at great risk if you don’t comply.
At one time, gold was nearly universally owned in the USA.
FDR with the stroke of a pen issued an executive order that basically banned the private ownership of gold. It wasn’t until Gerald Ford was POTUS that private citizens could own gold.
Bitcoin is sort of the modern day gold, in the last few days Biden ordered the Secretary of the Treasury to review bitcoin with for the purpose of regulating it, aka kill it at some point in time in the future.
If you want to order anything from Russia you have to use cryptocurrencies. It has been that way for years.
The problem with the way western governments are behaving is other countries are seeing that they must get away from the dollar and the American/European axis. If they don’t they will have no autonomy lest their economies be destroyed.
There was talk about two weeks ago of putting sanctions on India. Fortunately that did not happen, but just the threat means countries such as India, Brazil, etc. got the message. So now the dollar’s days as the world’s reserve currency are likely rather short.
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