The global rebellion against the dollar revives the specter of a world war. To avoid this, Bitcoin must become the next international reserve currency.
From Allyate to Satoshi
Minting coins has always been a show of force. The first metal coins appeared in Babylon around 2000 BC. Nearly 1,400 years later, King Allyate II of Lydia had the idea to mint the coins.
The Lydian king used electrum (a natural alloy of gold and silver) to melt coins that he struck with his seal. The major innovation was that the weight of the coins was certified by this official stamp. This standard gave Allyate coins a huge advantage over other coins.
The powerful Greek cities soon followed suit with their own pieces. They even had the idea of not accepting any other currency within their walls. This made it possible to charge an exchange tax to foreigners. The combination has not aged a bit…
Coining coins even became a sacred royal right in the Middle Ages. For a duke to mint his own gold coins represented a rejection of the king’s authority. It also meant granting oneself the right of seigniorage. That is to say, the fat tax levied for the coinage of pieces of gold or silver.
Which usually ended in a war.
The exorbitant privilege of the dollar
Today, monetary seigniorage has turned into interest rates benefiting bankers.
Globally, it is the United States that enjoys a privilege. And this since the Bretton Woods agreements, when the dollar, supposedly “as good as gold”, became the world standard.
This privilege increased in 1975, when Washington imposed on Saudi Arabia to sell its oil exclusively in dollars. Foreign exchange reserves in dollars have never ceased to thicken thanks to globalization. They now reach 6,470 billion dollars.
Clearly, the Americans’ right of seigniorage manifests itself in the possibility of having a chronically negative trade balance without the dollar’s exchange rate collapsing.
The reason being that the foreign exchange reserves in dollars return to the United States in the form of investment in the public debt (to earn interest). Hence the neutral impact on the exchange rate despite an abysmal trade deficit.
Controlling the international currency also blackmails the rest of the world. The $6.47 trillion is a Damocles sword. Any country that refuses to align itself with Washington’s imperialist foreign policy runs the risk of losing everything.
Iraq, Afghanistan, Iran and Russia know something about it. The EU and Uncle Sam did not hesitate to “freeze” 300 billion dollars (and euros) of reserves belonging to the world’s leading nuclear power!
Not to mention fines, embargoes, speculative attacks on exchange rates, disconnections from the SWIFT network, etc.
The end of the dollar empire
The dollar is a weapon offering incomparable advantages. The current account deficit that it facilitates is an incredible source of wealth. Over the past 12 months, Americans have been able to siphon off the equivalent of $943 billion from the rest of the world. That’s the equivalent of 10,000 Airbus A380s…
Americans will have to settle for a more reasonable lifestyle if the dollar’s share of foreign exchange reserves were to collapse. The depreciation of the greenback would result in a reduction in imports as well as high inflation. It would be a forced diet.
We are getting there fast. Even Donald Trump has resigned himself to it…
The refusal of the countries of the South to apply Western sanctions against Russia has clearly provoked a flashback which has triggered a global rebellion against American monetary hegemony.
Duma Deputy Speaker Alexander Babakov declared on March 30 that the BRICS club is working on the development of a “new currency”:
“The transition to settlements in national currencies is the first step. The next step is to allow the circulation of a currency […] fundamentally new in the near future. I think that the will to carry out this project will be announced at the next BRICS summit. »
Matching deeds to words, Brazil and China signed an agreement last week to trade in their own currencies. And what’s more via the Chinese CIPS rather than the SWIFT network.
bitcoin for peace
For the first time in a long time, the international monetary system will change. Unfortunately, there is little chance that the Atlantic Alliance will remain idly by. Especially if the BRICS currency were to offer privileges to its creators.
The West could be persuaded to play on equal terms, but not to be at a disadvantage. But this would be the case if Alexander Babakov is telling the truth and the BRICS back their currency to the value of gold and “other product groups such as rare metals or agricultural land”.
Indeed, the West is not particularly rich in raw materials. It is in its interest to preserve the existing world order, even if it means sounding the drums of war.
Joe Biden indeed declared in February: “The idea that we would send tanks to Ukraine is called World War III”…
Xi Jinping, who according to Reuters refuses to speak to his counterpart, for his part told his generals that they should ” dare to fight “.
We must seriously consider bitcoin as the next international reserve currency. Stateless, a store of value and an uncensorable payment system, it is the perfect currency to oil international trade.
An energy-backed currency would be fair. Bitcoin is the fairest currency since it is backed by the most common element: the electron. Not all countries have gold or lithium mines, but all can produce electricity.
On the other hand, a currency backed by agricultural land and other commodities would only replicate the experience of the dollar. Trust will eventually be broken.
Do not miss our article on the palpable fears expressed on CNN and Fox News regarding the twilight of the dollar standard.
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