Fiat currency is by definition a Ponzi scheme – that for the first time, went GLOBAL when the gold standard was abandoned in 1971. Technically, the U.S. reneged on the Bretton Woods Agreement when it “closed the gold window” - which Nixon, LOL, deemed a “temporary” measure. However, not one Bretton Woods signature complained – as their “leaders,” too, wanted to print “money” at will.
Due to the advent of advanced financial engineering – like futures markets and derivatives; Frankenstein-like monetary policy – like ZIRP/NIRP, and QE; gold and silver price suppression - via “paper” proxies like COMEX futures and the GLD/SLV ETFs; and ultimately, 24/7 market manipulation – by Central Banks and “PPT” operatives; the post-1971 fiat Ponzi lasted longer than any other before it. The problem being, that this extra time simply bought was a bigger disaster down the road – due to the massive, unprecedented debt, inflation, capital misallocation, and wealth inequality it caused.
Eventually, something had to give – and that something is giving NOW, in the form of collapsing “emerging market” currencies, exploding debt, multi-year high inflation readings…and collapsing commodities. Including, I might add, the newest additions to the pure industrial metals list – gold, silver, and platinum, which have been PERMANENTLY usurped by Bitcoin as monetary assets. In fact, gold has less practical use than any industrial metal – and thus, could be under price pressure for decades, as the older generations that own the bulk of it pass it on to younger generations…who in turn, will sell it as quickly as possible for Bitcoin and other cryptocurrencies.
As I write, dozens of fiat currencies are in freefall mode – of BIG countries, with BILLIONS of citizens. This is VERY bad for confidence in fiat currency – and attitudes toward the U.S. dollar, given that the Fed’s heinous abuse of the “world’s reserve currency” is the reason inflation is EXPLODING worldwide.
However, the REAL danger – far more so, than even yesterday’s ALL-TIME LOW of the Indian Rupee – is the Chinese Yuan collapsing below the historical “Maginot Line” of 7.0/dollar. As I write, it’s nearly 6.94 – and whether it breaks 7.0 in the official onshore, or unofficial offshore Yuan markets, a breach of this 25-year level will signal the onset of surging Chinese inflation, and exploding Sino-U.S. trade wars.
Under such a horrifying scenario, at a time when commodities are crashing, debt has gone parabolic, and rising inflation expectations will make it EXTREMELY dangerous for Central banks to attempt new QE/ZIRP/NIRP schemes, a worst-case scenario could indeed break out – at a time when Precious Metals have clearly DIED, and Bitcoin has PROVEN its value by maintaining the “Hoffman Line” of a $100 billion market cap throughout a massive, year-long bear market.
So, what are the world’s deepest-pocketed institutions thinking right now? For one, a MAJOR fiat currency crisis may well have started – as Precious Metals have clearly shown themselves to no longer matter. This, as the Bitcoin network’s size and strength continue to grow – with a price temporarily suppressed (but not below $100 billion) by NON-FUNDAMENTAL factors like the Mt Gox Trustee (done) and Bitmain (done, or nearly so). As I tweeted this morning, we may well be on the cusp of monetary history – with an “end game” commencing, that will result in a Bitcoin-led DIGITAL AGE.
I think gold and silver still matter to the Russian and Chinese governments, don't they?
Nice work, wish I had access to your Twitter feed