Economic DEFLATION hasn’t stopped Bitcoin from reaching nearly $50,000USD, Bankruptcy filings COMPOUNDING, U.S Businesses not being replaced – August 29, 2021,
So, from my standpoint and knowing what I know about some of the new investors in crypto-currencies, any of whom have a lot of money, the price is from my vantage point is clearly being manipulated, but… that could also be a good thing depending on how you look at.
crypto-fiat price manipulation aside, Bitcoin has been resilient in the face of economic deflation, currently, Bankruptcies in the U.S are compounding, by that I mean companies that went bankrupt in 2020, aren’t coming back in different variation in 2021, they’re still closed for business and being that Joe Biden is not only making the cost of living higher with his new regulations, which include energy price hikes, he’s also started a new war.
Now wars tend to generate economic activity, but not the type that benefits the U.S consumer, so although bankruptcy numbers are slowing in 2021, unlike in the past, bankrupt businesses aren’t being replaced, which actually equates to bankruptcies compounding.
For myself and the data that I use, this all points to economic deflation, economic deflation requires more fiat dollars that ultimately will have less purchasing power, being that Bitcoin is more of an improvement to the current DIGITAL fiat system, I don’t see how economic deflation benefits bitcoin.
Bitcoin and other decentralized cryptocurrencies are leveraged bets for the most part and if people and private entities are running out of fiat dollars at near zero percent interest rates, that’s a telling sign for ECONOMIC deflationary pressures.
Being that the Private banks are still unwilling to lend, the money that comes into the economy will have to come from Joe Biden, and for the most part, that money from the government will be malinvested. People who are dependent on STATE Universal Income tend to malinvest the money they get from the government every month, now that the Federal Government has gotten involved in Federal Universal Basic income one can expect the same behavior.
This appears from a distance to spell doom for the U.S dollar, and doom for the U.S dollar also equates to doom for fiat currencies, as fiat currencies have no history without fiat money, I’m not sure how you measure the value of cryptocurrencies without the U.S dollar?
The U.S fiat dollar is a derivative of the prior gold redeemable standard, in the event, the U.S dollar begins to take its marching orders from Bitcoin? Everything in the world would then be priced in Bitcoins, but how would that work? Because with Gold there’s an intrinsic value, with Bitcoin, its value is based on how many U.S DIGITAL dollars people are willing to pay for it?
Furthermore, a bitcoin standard changes lending entirely and a Bitcoin standard doesn’t necessarily equate to fewer regulations on the U.S or Western economies, being the Bitcoins could be broken down into Satoshis a Bitcoin Standard might accelerate government spending, and being that it’s digital, would also facilitate a U.S digital dollar from monitoring every transaction in the U.S economy, making matters, because with a Bitcoin tax as an example the Government would actually be confiscating Bitcoins and then feed the U.S and global citizens with their centralized digital dollar.
Under the gold standard, using physical gold was replaced with government banknotes, if we’re to believe that digital U.S dollars will be backed by Bitcoin, governments would of course begin building their own digital Fort Knox. Already more and more companies are positioning themselves to take a portion of Bitcoins for every transaction, meaning that if I buy something in Bitcoins, the middle man takes my bitcoins and does the transaction in fiat digital currencies, when that occurs, the middle man is also subject to a tax from the government, which under a Bitcoin standard will equate to a very interesting scenario.
I think money should be anything people are willing to accept, but the numbers surrounding Bitcoin aren’t making much sense, because fiat money from which cryptocurrencies are derived doesn’t make any sense. The U.S dollar mirroring the gold standard is supposed to represent the U.S dollar being tied to some sort of commodity.
The U.S dollar is often called the petro-dollar, because of its relationship to oil, if that relationship is severed and the U.S dollar is linked to the confidence of cryptocurrencies, how does that change the dynamics of a medium of exchange? Now, I comprehend why people in the banking and financial sectors would like Bitcoin because, under the current rules of money in which asset prices rise because of guaranteed lower interest rates, financial institutions would have free reign to purchase as many bitcoins as possible and profit from them.
But if the fiat system is replaced by the bitcoin system, we’re right back to where we started, except things are 10 times worse as central banker policies as well as government spending will have an immediate effect on the price of bitcoin and worse than what we have now, everyone will be trapped in this digital currency world.
At least now I can have decentralized physical cash and decentralized physical Gold, under a digital money standard, not only are your transactions monitored, but you’re also a slave to potentially bitcoin and the central banks.
Typically a person bounces back from bankruptcy if regulations are loosened because despite what people think, you don’t need a loan to start a business, what you need is the government to cut regulations, which brings the cost of doing business down. If there’s shrinkage in government and interest rates are NORMALIZED, I don’t see any value in Bitcoin, where I see value in bitcoin is if government oppression escalates and just like the Chinese Communist Party, Bitcoin is used as a template for Central banks.
Just like a Gold Standard, the government could use the popularity of Bitcoin to get physical cash and physical gold out of the hands of the people, in China a lot of people hoard cash in other currencies, which is one of the reasons why the Chinese Communist party took Hong Kong by force.
Hong Kong was the place most Chinese people went to in order to exchange their Yuan for USD, Canadian dollars, Aussie dollars, EUROs, pounds, and Yen and the Chinese Communist Party had no means of monitoring these transactions, well now with the Digital Yuan the CCP is slowly finding ways to better monitor how Chinese people spend their money and China already has a social credit score.
In Western countries, they’re already implementing vaccine cards, which if you only have digital money, you can not purchase things at particular private establishments without your vaccine cards. Now, if people in western countries use Cash, there’s little the government can do with these vaccine cards.
but if let’s say we’re on a bitcoin standard and by bitcoin standard, I mean central digital banknotes are backed by bitcoins and any intermediaries(example PayPal) in any transactions actually have to forfeit their bitcoins to the government and in exchange are given centralized digital fiat dollars which they then will pass the cost of this transaction over to the consumer.
You’ll quickly see how Bitcoin could accelerate tyranny, because with every satoshi transaction the government is getting its cut of satoshis, thereby eventually making the government the biggest hoarder of Bitcoin, I personally compare it to building a cryptocurrency fort Knox
I hope you’re following me here, because that’s why I worry about Bitcoin, even today when people spend their Bitcoins, they’re actually spending digital fiat money and those middlemen could easily be replaced by government intermediaries who will be consuming bitcoins and giving the rest of us fiat digital dollars
Bankruptcy filings fell in 2021, but post-COVID ‘shadow debt’ may spell trouble | marketwatch.com
Interesting times ahead!