Inflation and Government Financial Threats Will Fuel the Rise of Bitcoin

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While most articles predict mass adoption of cryptocurrencies by focusing solely on the merits of blockchain technology (which certainly looks promising), this article focuses on the two most immediate real-life events that will push the majority of the world toward lightning-fast adoption of cryptocurrencies, with Bitcoin predicted to be the biggest winner. 

Reason #1: Inflation as a result of flawed government response to COVID-19 pandemic 

Reason #2: Geopolitics, rise of government tyranny and debanking of dissenters, both domestic and international. 

Let’s start with the reason #1. While the current Administration blames inflation on Russia, the truth is inflation in the United States started well before Russia became the 24/7 topic on the news. While the economics of inflation are rather complex, the three main causes of inflation are: 

Demand-pull inflation: is the upward pressure on prices that follows a shortage in supply where too much money is chasing too few goods. This drives the aggregate demand for goods and services in an economy more rapidly than the economy’s capacity to produce. The government’s response to the pandemic caused both the increase of money supply (the government printed 40% of ALL U.S. dollar supply in 2021), and the economy’s reduced capacity to produce (the extended business lockdowns and vaccine mandates decimated the U.S. economy). All of a sudden, the U.S. economy (people) had 40% more cash, to spend on a vastly reduced amount of goods produced. The 7% inflation we are experiencing right now is only the beginning. 

Cost-push inflation: (aka wage-push inflation) occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Higher costs of production can decrease the aggregate supply (the amount of total production) in the economy. Since the demand for goods hasn’t changed, the price increases from production are passed onto consumers creating cost-push inflation. 

Built-in inflation: describes what happens when people expect inflation rates to continue going up for the foreseeable future. For example, workers demand higher wages to be able to afford those higher prices (this has been happening ubiquitously during the past two years, with multiple states passing high minimum wage laws). This makes inflation a self-fulfilling prophecy. If workers demand higher wages, the cost of production goes up, which means that operators will raise prices for the consumers, in order to maintain their profitability. 

The past two years have created the perfect storm for record-level inflation in the present and the near future. The annual inflation rate in the U.S. accelerated to 7.9% in February of 2022, the highest since January of 1982. 

As consumer inflation and asset inflation is rising to at historic levels, smart money is looking to hedge against this inflation with a liquid asset that has a hard cap on supply, and an independent monetary policy: Bitcoin and possibly other cryptocurrencies. 

The other reason why Bitcoin is a very attractive option in 2022, is because Bitcoin is apolitical, and no government, foreign or domestic can confiscate your Bitcoin or shut down your Bitcoin wallet. 

The biggest unreported story of 2022 is the impact Western governments’ actions will have on the U.S. Dollar and the Western banking system in general. 

Two events stand out: 

  • Canadian Prime Minister’s Justin Trudeau’s decision to invoke the never-before-used Emergency Act to outright confiscate citizens’ cash and freeze their bank accounts for protesting against his COVID-19 policies. This short-sighted action sent the message to Canadians as well as Americans and others around the world, that the government has the power, authority, and most important, the will to shut down your account and take your money, for simply protesting. This is outright tyranny. 
  • The U.S. and Europe-led sanctions against Russia. In another shortsighted move that will have long-lasting effects, the U.S. and EU confiscated Russia’s FX reserves, confiscated Russian citizens’ moneys and assets in the Western hemisphere, and kicked Russia out of the SWIFT banking system. These actions have effectively sent a unified message to the world: The U.S. Dollar is no longer an asset; it is now a liability. It can get confiscated and taken away at will, for going against the will of the U.S. government. 

The largest impact of these sanctions (which still have not stopped Russia’s invasion of Ukraine), is that they undermine the credibility of dollar debt as an international savings device. For decades, the dollar has been considered the safest form of collateral in the world for two reasons. First, because most of countries of the world have to buy U.S. dollars, in order to purchase energy (Petrodollar). Second, because the U.S. dollar has never been used as a weapon. 

It might have looked like a smart move to weaponize the U.S. Dollar and the Western banking system against Russia, but with its actions, the Biden administration has officially forced the de-dollarization of the world. 

At the international level, other countries are watching with increasing concern how the U.S. or Europe will confiscate their reserves, default on their debt, and punish their citizens by stealing their monies and assets, if these other countries dare disagree with U.S. or Europe’s foreign policies. 

The message was heard around the world: if you ever want to have a dissenting opinion internationally, your country will get punished, and potentially canceled out of the monetary system. 

Their solution is understandable: they will de-dollarize their assets and wealth. They will sell their dollar reserves, divest their investments and holdings away from America, from Canada, from Europe. 

In divesting away from the U.S. dollar, other countries and governments have two options: align with a different dominating currency (i.e. China’s Yuan), or decide on an apolitical asset that is out of reach and cannot be controlled by other countries and politicians; something that cannot be taken away by anyone else: Bitcoin. 

Efforts of moving away from the U.S. Dollar system and breaking the U.S. Dollar’s dominance in the world are already underway. In a devastating blow, Saudi Arabia indicated they are now considering pricing oil in Chinese Yuan as opposed to U.S. Dollars. This might have barely made the news, but it could be the final deathblow to the Petro Dollar system – the very system that had backed the U.S. Dollar ever since President Nixon took the Dollar off the Gold Standard. This action alone will severely reduce U.S. influence in the world in an unprecedented way, if acted upon, as it is estimated that almost 80% of all global oil sales are priced in dollars. 

While choosing a different currency as the dominating trading tool of the world could happen in the short term, the reality is most countries are exploring ways of introducing their own national cryptocurrency (i.e. digital dollar, digital yuan). However, all those national cryptocurrencies are expected to be issued by each country’s central bank, giving their respective governments an even tighter control over their currencies. 

While I do not believe Bitcoin will become the world currency anytime soon (if U.S. Dollar falls, it looks like the Yuan will take over), I do believe Bitcoin will become an asset used by most countries and individuals to store their wealth, as opposed to FX accounts, Swiss bank accounts, and other financial instruments. This makes sense for all the reasons listed above: Bitcoin is apolitical, no one country can control its price, no governments control access to Bitcoin in order to kick others out, and equally as important, it is liquid and has a hard cap on its supply – no one can dilute it. 

With individual citizens as well as governments all over the world looking for alternative ways to store their savings and assets, in this new world of financial threats and monetary cancellations, Bitcoin could be the biggest winner, with a large portion of citizens’ and countries’ financial reserves looking for a safe home. 

However, before the adoption of a cryptocurrency as a potential world reserve currency there are formidable problems that must be overcome and the required change in infrastructure are intimidating. All foreign-exchange marketplaces where the dollar is the world reserve currency would have to be necessarily modernized, and supporting a new reserve currency can’t be achieved overnight. 

There are also numerous problems and obstacles associated with any cryptocurrency serving as the world reserve currency that would preclude them from being a sovereign, effectual, and universally acknowledged as the unit of exchange. A cryptocurrency system based on blockchain is fundamentally 

burdened with high-tech problems (i.e.: ledger size, power consumption, limited supply, computing power, etc.), price volatility and anonymity relating to regulatory issues (banking insurance, taxation, and illegal usage) that must be overcome. 

In short despite its advantages, cryptocurrency as the unit of value replacing the U.S. dollar has a hard and long road to travel before its universal acceptance as the worlds reserve currency. 

Resources:

  • Trading Economics – United States Inflation 
  • CoinDesk – Inflation Worries Top Concerns before Fed Meeting 
  • Policy – Saudia Arabia Considers Using the Yuan instead of Dollar for Oil 
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Our Chaotic, Biased, Dishonest News Media — Threats, Mistakes and What to Do About It

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When Walter Cronkite read the news in the 1960s and ‘70s he was “the most trusted man in America.” There were not very many choices in those days, the three networks, a few major newspapers, and then some local newspapers who depended on the AP and UPI for their national news. We believed them because they largely agreed and there was nothing else to believe.

In today’s age of the internet and social media, we have tens of thousands of news outlets. Trust of the media is down to 36%, everyone is accusing everyone else of fake news.

The cacophony of voices should create a massively robust news system with an ever-converging relationship between reported news and the truth.  Instead, we have a media bifurcated between political parties, motivated by marketers who are interested in the eyeballs of like-minded, narrowly focused individuals.  Giant pools of political bias have formed and feeding them what they want to hear is profitable. Unfortunately, integrity, objectivity, and honesty are not part of the profit equation.  Facts and commentary become indistinguishable, and fiction is easily interweaved.

Today’s media has vast currents of fake news. Deciding which storylines are real and which are fake can often depend on your point of view.  This applies top to bottom, the large media outlets, CNN, MSNBC, Fox News, New York Times, etc. are not immune.  Any given topic is victim to the spin from a myriad of news outlets customizing the news to a splintered audience. One can imagine these as influence vectors adding up to a public opinion that is informed, not by the resolution of chaos into truth, but in many cases by the highest bidder who can afford the most eyeballs.

This leaves us vulnerable, so readily manipulated that our enemies, from without and within, constantly do so with ease.  We have seen where the Russians have experimented successfully with interfering in our elections.  My own research tells me that China has done substantially more, but with subtlety such that it is not part of the public perception (yet).

But it is the internal threats that are the most influential. They include the acolytes of George Soros, the Koch brothers, well-funded political action committees (PACs) and so many more on both sides of the political fence.  Our current crop of fact-checkers are incompetent and hold biases worse than the biases of those they check. And they have no lasting clout.

And worst of all are those who call for censorship. They are not concerned with facts, integrity, honesty, or objectivity.  In almost 100% of the cases, they are calling for the censorship of the opposing political view, whether or not the news is fake is not even relevant.  Winning public opinion at the cheapest cost is the goal.

And these calls for censorship are not just threats. They have been implemented by the likes of Google and Facebook, whose experience in deploying their software in totalitarian countries like Russia and China has been brought home to censor Americans.  Add to that Twitter, Spotify, and so many more, silencing important voices because they happen to hold views that are not of the proper bias.

So you see, very few unelected men have the ability to control or massively influence public opinion.  And with it, they control votes, resources, world events and lives.

What is the solution? How do we change the weakness to strength? How do we harness the power of tens of thousands of media sources with their points of view, their investigative abilities, their bulls&^%t detectors into a powerful media that defends America by arriving at truth?

I can tell you what is NOT the solution.

On February 7th, 2022 the FBI issued a “Summary of Terrorism Threat,”  that said in part, the following:

“…heightened threat environment fueled by several factors, including an online environment filled with false or misleading narratives and conspiracy theories, and other forms of mis- dis- and mal-information (MDM) introduced and/or amplified by foreign and domestic threat actors”

If you understand the implication of this, then these words are chilling.

It means now that the FBI will be the arbiter of what is real and what is fake news with the ability to investigate it as a form of terrorism.  Remember that we already have such big guns as Facebook and Google censoring “fake news” that has often turned out to be not fake.  Now the FBI will judge the news and if you do not have the proper biases (i.e. those of the current administration) you are a TERRORIST!

Another statement from this advisory should make you angry at the ignorance:

“…the proliferation of false or misleading narratives, which sow discord or undermine public trust in U.S. government institutions”

Forget about the first few words. The government’s interpretation of “false or misleading” depends on which political party is in office at the moment.

Realize that the purpose of the “Fourth Estate,” (one with integrity, honesty, and objectivity) is to keep an eye on the government, to comment and criticize, and to inform the public of the performance of elected officials so that, if it is necessary, they are prepared to throw the bums out in the next election.

In short, the true purpose of the media is indeed to “sow discord and undermine public trust in U.S. government institutions.”  These are not acts of terrorism, they are part of the design of America, a self-correcting factor, a crucial feedback loop.

You already know this; you were taught this in your high school civics class.

But it only works if the job is done with honesty, integrity, and a certain measure of objectivity (biases are allowed, indeed they can’t be avoided – they will balance out). This is the weakness that must be overcome. It is the reason that the media is so easily bought and manipulated.

The problem is that the media is capitalist. Profits rule.

How about if we fix it with capitalism? Suppose we try this:

Journalists make money by writing for their fans. What if someone were keeping track of when they misrepresented commentary as fact, or when they manipulated data to express the opposite of what it was supposed to, or when they committed any of the hundreds of logical fallacies that mislead their audience.  And what if this track record followed them and was presented such that the reader could see a reputation score before an article was read? Perhaps your newsfeed could even filter out writers with reputations falling below a certain point, effectively decreasing their eyeballs. Would these writers be upset?

The psychology is simple. Organizations like CNN, Fox, NY Times, and others are criticized constantly – another organization criticizing them will be ignored like the rest. But an individual article is the product of an individual writer. Forcing that writer to bear the responsibility of false or misleading material under their byline could be devastating.  Perhaps CNN can stand the criticism, but can it stand calls to fire one of its writers who has a reputation for being consistently wrong?  The avoidance of pain is basic to human behavior. Writers will be more careful and diligent industry-wide.

We need a profitable company  (or several) that inserts itself into the media feedback loops and redirects profits away from bad writers and toward good ones.  Not based on biases, but based on writing integrity. This is not an easy solution, but it will work.  Capitalism usually does.

The FBI has neither the expertise, the objectivity nor the resources to do such a job.  In fact, since the FBI is a rightful target of the media, any action the FBI takes is a conflict of interest. Never mind that the natural course for FBI involvement in this way leads to some of those nightmare scenarios predicted by Orwell.

I’ve always said that business is smarter than government.  We can do this. Change my mind.

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2022: Why Capitalism is the Only answer to freedom, prosperity and well-being.

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Frankly, I don’t know what’s happening to America anymore. I am just afraid we have become a nation that has lost its common sense and collective mind.

  • We see other countries going Socialist and collapsing, but it seems like a great plan to us.
  • Somehow it’s un-American for the census to count how many Americans are in America.
  • Universities that advocate race equality, discriminate in favor of African-Americans.
  • Some people are held responsible for things that happened before they were born, and other people are not held responsible for what they are doing right now.
  • Criminals are caught-and-released to hurt more people, but stopping them is bad because it’s a violation of THEIR rights.
  • People who have never owned slaves should pay slavery reparations to people who have never been slaves.
  • People who have never been to college should pay the debts of college students who took out huge loans for their degrees.

We are clearly living in an upside-down world where right is wrong and wrong is right, where moral is immoral and immoral is moral, where good is evil and evil is good.

Welcome to SOCIALISM in America…. This is unsustainable.

We at the Financial Policy Council and within our ZSharks group of warriors want America to succeed. Every individual should succeed….not to take orders from a socialist government that never succeeded before in the history of humanity but keep spending trillions of dollars on projects going nowhere and on bailing out failed policies.

So how do you REDEFINE CAPITALISM to mount this growing threat out there?

Well… I am here to give you a little bit of what the world is holding back from you.

The god dam truth about Darwin, scarcity and the world you actually live in.

It is not the warm place your parents and teachers told you about.

It is populated by people who will tear you apart.

Nature did not select them. They selected themselves by harnessing their nature.
You wanna prosper and thrive; not just survive? Be bold, be hungry, be a shark, subjugate and conquer. Yes… this is who we are. That’s what we are. No one is here to help you but yourself

There is never been a better time in human history than today to make real money with all the technology and asset classes out there. Yet, so few have embraced capitalism. On the contrary, the whole world is headed today towards socialism and the radical left. People are smarter, more aware and better educated than ever …. yet have no clue how to monetize their assets and knowhow other than slaving for wages … if you call this “money”.

Instead of creating a whole new world where capitalism is embraced by all; it is today only embraced by the very few who call the shots ….while the gap between the rich and poor is only growing.

Governments worldwide are obsessed in creating jobs rather than creating an environment conducive to wealth creation.

So what do you do? Do you lift everyone up to become true capitalists or bring everyone down to embrace socialism and government dependence?

I made my choice…. You’d better make yours before it’s too late.

Capitalism… is better than any other economic model on earth. Everything we have is because of capitalism…. cause someone out there had an incentive to get up off his ass and outsmart others less capable, less intelligent, less ambitious and less lucky to make those capitalistic dreams come true.

The Financial Policy Council is just the beginning of a movement in the making. A place to answer the real tough questions, resolving issues and creating REAL WEALTH. Short on words and long on actions. All that matters.

The NYT recently wrote an op-ed advising us not to think. They say thinking requires using your unreliable brain and will lead you into conspiracy theories. What a load of crap.

Klaus Shwab; Chairman of the elitist World Economic Forum tells us you won’t own anything and you will be happy. Heard it directly from the horse’s mouth last time I was in Davos

Same broken record from the Council of Foreign Relations…. All plotted over a decade ago by global elitists such as Zbigniew Brzezinski and the likes. I witnessed it personally as a member of the Council … not anymore.

It is all about power, money and control. Either you have it and control your destiny or they have it and control yours.

All the rest is just noise, Propaganda and brainwashing. Nothing else

So how do you avoid all this crap and thrive when capitalism is under siege?

Well… it boils down to one thing no matter who is President and the status of the market; whether it is up or down.

Look for megatrends and how the dollar is moving and its correlation with other asset classes.

Technology is moving so fast that it’s really hard for the average person to keep up. By the time they hear about it from the mainstream media, it’s already too late. Plays already in place. And the big money has been made.

For that reason, a lot of people end up missing out on big investment deal making opportunities…. And that’s where we at the Council can help.

At the end of the day, make no mistake about it. Money is first and foremost about freedom and not about acquiring things nor flaunting them in front of family and friends. Money is about the freedom to do whatever one wants, whenever they want.
There is nothing fair in this world. So get used to it

FIVE THINGS I strongly recommend you to start practicing in your journey to Wealth Creation.

  1. Change Your Attitude – Stop apologizing you are privileged, a capitalist or a free spirited guy. Nothing to apologize for . PUSH BACK or you will get pushed
  2. Better Control your time – Stop wasting your valuable time on social media bullshit amplifying the propaganda of COVID 19 and vaccines. Change the narrative. Don’t play in their hands.
  3. Learn how to Manage your network/career smartly. Successful people build networks not slave at jobs
  4. Lose the emotion when managing your assets. You will never make REAL Money by being a wimp and crumbling every time you see volatility in the mark
  5. Never pitch an idea where you don’t have Skin in the game

THIS IS WAR…I hope you are ready for it.

Now if you are a dumb ass good for nothing and still cannot grasp any of the above, then do yourself a big favor and get married to a similar dumb ass billionaire’s girl and have your kids memorize the above …. You will thank me for it for the rest of your life.

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