Bitcoin (BTC) - Week 39

Nuclear war, sabotage of gas pipelines, victory of the Eurosceptics in Italy, explosion of borrowing rates, collapse of currencies, inflation. Keep calm & buy Bitcoin.

Fratelli d’Italia

The Italian government’s 10-year borrowing rate is at its highest since the European debt crisis of 2014. We hit 4.75% on the heels of the victory of the coalition of Italian right-wing parties Fratelli d’Italia.

The Italian brothers, led by Giorgia Meloni, won 26% of the vote, making the Roman the first female Prime Minister. Europe’s third largest economy is now run by a Eurosceptic who inherits debt representing 25% of all Eurozone arrears.

Fiercely anti-globalist, Giorgia Meloni, however, hinted that she would continue to support Ukraine. She also went back on her previous statements, saying that she unequivocally supports Italy’s membership of the euro zone.

His electoral program, signed by Salvini and Berlusconi, also promises “respecting commitments [de l’Italie] as a member of NATO” and “full adherence to European integration”…

But despite this facade communication, the fact is that Italexit is closer than ever. Especially since Berlusconi and Salvini (lega party) both have links with the Russian president. Salvini notably condemned the sanctions against Moscow.

Berlusconi has charitable words for Vladimir Putin, arguing that he had been “pushed” to invade Ukraine. Il cavaliere, however, watered down his wine this weekend by saying that his point of view had been “too simplified”. “Ukraine’s aggression is unjustifiable and unacceptable, our position (of its Forza Italia party) is clear”did he declare. “We will always be with the EU and NATO. »

And while the Kremlin has cut ties with the Élysée, the boot will probably become the privileged interlocutor of Russia, which is mobilizing 300,000 reservists and threatening to use nuclear fire. “It’s certainly not a bluff”said former Russian President Dmitry Medvedev.

Ukrainian intelligence expects the Kremlin led “Massive cyberattacks against the critical infrastructure of Ukrainian companies and its allies”. “The attacks will target companies in the energy sector”can we read in its latest report.

We must therefore expect more inflation, especially since the NordStream II pipeline has just been sabotaged. It will therefore be physically impossible for the EU to turn around this winter, when the population will be in the streets to demand an end to the sanctions against Russia.

Here is what Bank of America tells us about inflation:

“Once annual inflation exceeds 5% in advanced economies, it takes an average of 10 years for it to come back down to 2%” – BofA

All this to say that this Europe of war is the perfect opportunity for Rome to jump ship. The single currency would take for its rank. We wrote about this two years ago:

“By leaving the euro zone, Italy will signal the end of the second international reserve currency. In a context of de-globalization and de-dollarization, this call for air will have to be filled. It is hard to see how Bitcoin could not gain traction. »

Chaos in the markets

The euro continues to decline against the dollar. One euro is now worth 0.96 dollars. Lowest since 2002.

The yen lost 20% over one year. The central bank of Japan (BoJ) was forced to intervene in the foreign exchange market. This had not happened since 1998, during the Asian financial crisis.

The Japanese currency plunges because the FED raises its rates while the BoJ refuses to do so. And for good reason, the Japanese public debt reached 266% of GDP. Raising rates would be tantamount to defaulting since interest would simply become impossible to pay.

Sterling is at a 37-year low… Down 12% since the Governor of the Bank of England advised bitcoiners to prepare to “lose it all”.

“Bitcoin volumes against GBP were at US$881 million yesterday. When a FIAT currency is threatened, investors start to favor Bitcoin. »

The City of London did not appreciate the tax cuts radical decided by Kwasi Kwarteng, the new Chancellor of the Exchequer.

Indeed, less tax revenue means more debt to finance the budget. A very expensive debt since the Bank of England plans to raise its key rate to 6%, which will ultimately result in even more debt.

So, in the long term, the rising cost of money is not a threat to bitcoin. This will only accelerate the Ponzian headlong rush since the States will not reduce their spending. The UK has already said it will borrow over £60bn to pay the energy bill.

As much money as it will be necessary to print, again…

The United States, although self-sufficient in energy, is not left out. The debt reaches 30,000 billion dollars. That’s $245,191 per American taxpayer.

Add state and local government debt. Plus any unfunded pledges (retreats). More personal debt. And you get a grand total of $851,223 in debt per US citizen. Or $2.2 million per American taxpayer.

Enough to put the abyss in perspective… So that there are not 36 scenarios to avoid being overwhelmed by debt:

  • 1st method: Reduce the size of the States.
  • 2nd method: Default on the debt. This means the ruin of savers and hyperinflation. The result would be a colossal drop in production, famines and mass unemployment.
  • 3rd method: Maintain high inflation (between 10% and 20%) for a decade or more (wars, energy shortages, cyberattacks, sabotage, anything is good to take…).

Inflation has the effect of reducing the weight of debt in relation to GDP because it boosts VAT receipts while artificially increasing GDP. But the nominal debt is not falling, let us specify.

We are at the beginning of a spoliation of savings and a drastic reduction in purchasing power. It is also possible that the monetary system will collapse in a great Great Reset from which extremely authoritarian policies such as CBDC (Central Bank Digital Currency) would emerge…

Speaking of which, Jerome Powell said this week that the CBDC will not be not anonymous. Christine Lagarde thinks that the CBDC is essential in order not to return to the time of the “free banking”when there was no central bank.

“ECB Director Ms. Lagarde says she would not like to see a new era of ‘free banking’ emerge because of cryptocurrencies.
Central bank digital currencies (CBDCs) are necessary to maintain the role of central banks. »

It’s time to get your money out of this financial system pushed to the brink of inflation by unsustainable energy prices.

Most public policies create stagflation and there is not much we can do about it. The only thing to do is buy bitcoin and hold on until the rest of the world realizes that bitcoin is the world’s best store of value.

Glassnode On-chain Bitcoin Report Summary

Among the interesting information of reportnote that the pace of bitcoin adoption has fallen below the level reached during the great exodus of Chinese miners in May 2021. In other words, the bull run is not yet in sight, for lack of new bitcoiners.

However, another metric is promising: the median volume of transactions. An increase in this volume generally means an increase in the participation of individuals.

The decline in these volumes is coming to a halt. Which indicates “that the network is close to a complete detoxification of speculators”. So the ground is preparing for… the next wave of speculation… Aka, the bull run.

Bitcoin: Median Transfer volume
Median bitcoin transaction volume

See you next Tuesday to comment on geopolitical and monetary news related to Bitcoin.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential!

Similar Posts