Blistering economic sanctions that threaten to ruin the ruble may leave Putin with little choice but to ally himself further with China and challenge the dollar head-on.
What is not pointed out (or very widely known) is that the BRICS (Brasil/Russia/India/China/South Africa) economies are ready to move away from SWIFT and onto the Chinese-created CIPS platform. This was agreed at the 2015 BRICS summit, and further moves made and agreed in September 2021 at BRISCS13.
These economies also 1) suffer from "dollar deficit" in trade with US and EU, and 2) have almost all global reserves of un-mined gold with which to back non-dollar central banks. This terrifies those who rely of the current inequities of the dollar system, and when the moves are made these will be the "1st world" economies, not the ones currently top of the pile.
It's fashionable to crap on America because we don't trust our decaying institutions (and rightly so), but Russia and China are in far worse institutional shape. Anyone with boots-on-the-ground experience will tell you. While certain states are shedding population in the US, Russian emigration will continue and only accelerate. The divide between rich and poor there is horrendous. Their demographics are the worst by far. The deaths of despair have been catastrophic for decades (although we're catching up rapidly with 100k opiate deaths annually!). The propaganda painting Putin as some sort of savior of the country only functions on the backdrop of rightful criticism of US Imperialism and CIA abuses, which has been honed since Soviet times. They are not interested in building up alternative systems or strengthening the financial position of their countries. The elites have fled and continue to flee to the West. These arguments assume these leaders have some sort of grand motive beyond greed and realpolitik. Xi at least is an open Communist/Marxist, so maybe some of that is true. Which raises the question of why anyone would trust him with their money.
+ countries rich in natural resources NOT just gold by order (might find a reshuffled list, but the mix is the same)
1. China
2. Saudi Arabia
3. Canada
4. India
5. Russia
6. Brazil
7. US
8. Venezuela
9. Congo
10. Australia
Push comes to shove, US straightens up Canada. Now US has 1. largest gold and BTC reserves. and 2. sizable natural resource pool. US was recently world’s #1 energy exporter and COULD return to that position if need be. Russia has a GDP smaller than California and Texas. China makes stolen IP, terribly crafted products—proof in that, even as the world’s largest exporter, they’re a net importer of cars 😆.
Not only that, as you pointed out to us in earlier articles, China has been under-reporting/hiding the amount of gold reserves it has. Why do you need to do that if you’re China? What benefit of hiding outweighs the economic bump/shore up from displaying it?
China and Russia de dollarization is just an excuse for the Fed to create a digital based currency. The fix is in by the crazy leftists in our government. The excuse will be, "if they can do it why shouldn't we?
The outcome of this is very simple -- Bitcoin will become the world's reserve currency. There is no other international, permissionless, global, neutral money in existence. Therefore it is the only solution available to anybody in the world who wants to transact freely -- including Russia or any other Nation-State (despite the fact that Nation-States will be an barely understood relic of the past by the end of the century).
Bitcoin is the only good money that exists in the world. No other money makes sense. And it is the greatest technological development mankind has ever known.
Gold is a useless money technology. You cannot send it anywhere in the world 24/7 with the push of a button. You cannot travel with it across any international border. You always have to trust someone to store it for you. Governments lie about how much they have and end up producing more currency than they have backed up.
NOBODY WANTS TO USE A GOVERNMENT CURRENCY ANYMORE. Especially seeing as how Governments use their currency to control people (and other Governments) literally nobody in the planet Earth wants to use a Government currency. Nobody.
And because people can literally work from anywhere in the world that they feel like -- nobody wants to use a money that cannot be used anywhere in the world.
Well -- as I have said above -- ONLY ONE MONEY in all the world fixes this problem / addresses these needs. Bitcoin.
Therefore there is only one single outcome that could possibly conceivably occur -- everyone on Earth will default to Bitcoin and it will become the global reserve.
Not because some country decided so -- but because nobody wants to use a Nation's currency anymore.
It's outdated tech and everyone hates it.
You think anybody born after the year 1970 will ever use gold over Bitcoin?
Give me a break.
You think subsequent generations born into the digital age are even going to understand the concept of Governments controlling currency or paper notes backed by a hunk of metal?
This is literally out of Klaus Schwab's book "COVID-19: The Great Reset." Reading your post made me go 😳
Here's the relevant section, sub-titled, "The fate of the US dollar." On page 74:
"Are there any viable alternatives? The US remains a formidable global financial hegemon (the role of the dollar in international financial transactions is far greater, albeit less visible, than in international trade), but it is also true that many countries would like to challenge the dollar's global dominance. The Chinese renminbi (RMB) could be an option, but not until strict capital controls are eliminated and the RMB turns into a market-determined currency, which is unlikely to happen in the foreseeable future. …As for a global virtual currency, there is none in sight yet, but there are attempts to launch national digital currencies that may eventually dethrone the US dollar supremacy. The most significant one took place in China at the end of April 2020 with a test of national digital currency in four large cities. The country is years ahead of the rest of the world in developing a digital currency combined with powerful electronic payment platforms; this experiment clearly shows that there are monetary systems that are trying to become independent from US intermediaries while moving towards greater digitization."
Given how much Schwab and Jinping seem to be buddies, I would not put it past them. I think your sources and perspective help indicate there are some shady dealings occurring and Russia seems to be looped in. It's scary to think about.
Another EPIC blunder by leaders in the West, more damaging if not worse than their Covid policy blunders. These sanctions have more issues than National Geographic and need to be dialed back.
What a spot-on turn of events to what some of us have feared is an eventuality. Global warming might not be such a huge concern with what seems to be coming. Thanks for all the insights Chris.
I’m skeptical that China would go down this path with Russia. China’s owns >$1 trillion in US treasuries and who knows how much in other dollar denominated assets. Doesn’t this give them a massive stake in the USD’s reserve currency status?
Also, Russia is a glorified gas station with a smaller GDP than California. Their demographic outlook is horrendous and productive immigrants aren’t desperate to live in Russia either. So Russia has virtually nothing to offer China some additional leverage in negotiations with the US and Europe. I bet China would gleefully sell Putin down the river for lower trade tariffs.
My point is that I’m not sure Russia is nearly important enough to China to justify a massive joint effort to reconstruct global finance. The existing one has worked out splendidly for China so far.
Fiat Currency Zero Hour: Russia And China Might Collectively Challenge The Dollar's Reserve Status
What is not pointed out (or very widely known) is that the BRICS (Brasil/Russia/India/China/South Africa) economies are ready to move away from SWIFT and onto the Chinese-created CIPS platform. This was agreed at the 2015 BRICS summit, and further moves made and agreed in September 2021 at BRISCS13.
These economies also 1) suffer from "dollar deficit" in trade with US and EU, and 2) have almost all global reserves of un-mined gold with which to back non-dollar central banks. This terrifies those who rely of the current inequities of the dollar system, and when the moves are made these will be the "1st world" economies, not the ones currently top of the pile.
This piece gives, what I believe, to be the most accurate breakdown of why Russia is acting -- https://www.tabletmag.com/sections/news/articles/ukraines-deadly-gamble
It's fashionable to crap on America because we don't trust our decaying institutions (and rightly so), but Russia and China are in far worse institutional shape. Anyone with boots-on-the-ground experience will tell you. While certain states are shedding population in the US, Russian emigration will continue and only accelerate. The divide between rich and poor there is horrendous. Their demographics are the worst by far. The deaths of despair have been catastrophic for decades (although we're catching up rapidly with 100k opiate deaths annually!). The propaganda painting Putin as some sort of savior of the country only functions on the backdrop of rightful criticism of US Imperialism and CIA abuses, which has been honed since Soviet times. They are not interested in building up alternative systems or strengthening the financial position of their countries. The elites have fled and continue to flee to the West. These arguments assume these leaders have some sort of grand motive beyond greed and realpolitik. Xi at least is an open Communist/Marxist, so maybe some of that is true. Which raises the question of why anyone would trust him with their money.
+ countries rich in natural resources NOT just gold by order (might find a reshuffled list, but the mix is the same)
1. China
2. Saudi Arabia
3. Canada
4. India
5. Russia
6. Brazil
7. US
8. Venezuela
9. Congo
10. Australia
Push comes to shove, US straightens up Canada. Now US has 1. largest gold and BTC reserves. and 2. sizable natural resource pool. US was recently world’s #1 energy exporter and COULD return to that position if need be. Russia has a GDP smaller than California and Texas. China makes stolen IP, terribly crafted products—proof in that, even as the world’s largest exporter, they’re a net importer of cars 😆.
This is why I pay the subscription fee. This article alone makes the annual fee worth it.
Will China want to seriously damage the ability of the USA to import goods made in China?
Not only that, as you pointed out to us in earlier articles, China has been under-reporting/hiding the amount of gold reserves it has. Why do you need to do that if you’re China? What benefit of hiding outweighs the economic bump/shore up from displaying it?
Russia options wane? What have you been drinking? I want some of that too. Look for yourself. Civil war is coming to US.
China and Russia de dollarization is just an excuse for the Fed to create a digital based currency. The fix is in by the crazy leftists in our government. The excuse will be, "if they can do it why shouldn't we?
dozod-sa@yahoo.com saw your tweet for that free lifetime sub!
The outcome of this is very simple -- Bitcoin will become the world's reserve currency. There is no other international, permissionless, global, neutral money in existence. Therefore it is the only solution available to anybody in the world who wants to transact freely -- including Russia or any other Nation-State (despite the fact that Nation-States will be an barely understood relic of the past by the end of the century).
Bitcoin is the only good money that exists in the world. No other money makes sense. And it is the greatest technological development mankind has ever known.
Gold is a useless money technology. You cannot send it anywhere in the world 24/7 with the push of a button. You cannot travel with it across any international border. You always have to trust someone to store it for you. Governments lie about how much they have and end up producing more currency than they have backed up.
NOBODY WANTS TO USE A GOVERNMENT CURRENCY ANYMORE. Especially seeing as how Governments use their currency to control people (and other Governments) literally nobody in the planet Earth wants to use a Government currency. Nobody.
And because people can literally work from anywhere in the world that they feel like -- nobody wants to use a money that cannot be used anywhere in the world.
Well -- as I have said above -- ONLY ONE MONEY in all the world fixes this problem / addresses these needs. Bitcoin.
Therefore there is only one single outcome that could possibly conceivably occur -- everyone on Earth will default to Bitcoin and it will become the global reserve.
Not because some country decided so -- but because nobody wants to use a Nation's currency anymore.
It's outdated tech and everyone hates it.
You think anybody born after the year 1970 will ever use gold over Bitcoin?
Give me a break.
You think subsequent generations born into the digital age are even going to understand the concept of Governments controlling currency or paper notes backed by a hunk of metal?
No -- that concept is going to sound insane.
Buy Bitcoin. It's the only thing you have left.
This is literally out of Klaus Schwab's book "COVID-19: The Great Reset." Reading your post made me go 😳
Here's the relevant section, sub-titled, "The fate of the US dollar." On page 74:
"Are there any viable alternatives? The US remains a formidable global financial hegemon (the role of the dollar in international financial transactions is far greater, albeit less visible, than in international trade), but it is also true that many countries would like to challenge the dollar's global dominance. The Chinese renminbi (RMB) could be an option, but not until strict capital controls are eliminated and the RMB turns into a market-determined currency, which is unlikely to happen in the foreseeable future. …As for a global virtual currency, there is none in sight yet, but there are attempts to launch national digital currencies that may eventually dethrone the US dollar supremacy. The most significant one took place in China at the end of April 2020 with a test of national digital currency in four large cities. The country is years ahead of the rest of the world in developing a digital currency combined with powerful electronic payment platforms; this experiment clearly shows that there are monetary systems that are trying to become independent from US intermediaries while moving towards greater digitization."
Given how much Schwab and Jinping seem to be buddies, I would not put it past them. I think your sources and perspective help indicate there are some shady dealings occurring and Russia seems to be looped in. It's scary to think about.
Another EPIC blunder by leaders in the West, more damaging if not worse than their Covid policy blunders. These sanctions have more issues than National Geographic and need to be dialed back.
What a spot-on turn of events to what some of us have feared is an eventuality. Global warming might not be such a huge concern with what seems to be coming. Thanks for all the insights Chris.
Most Sunday afternoons I read the blogs and the news and enter orders for the next week.
Was a bit surprised that they (whoever "they" is) have yet to list strike prices <$5.00 in RSX puts.
I’m skeptical that China would go down this path with Russia. China’s owns >$1 trillion in US treasuries and who knows how much in other dollar denominated assets. Doesn’t this give them a massive stake in the USD’s reserve currency status?
Also, Russia is a glorified gas station with a smaller GDP than California. Their demographic outlook is horrendous and productive immigrants aren’t desperate to live in Russia either. So Russia has virtually nothing to offer China some additional leverage in negotiations with the US and Europe. I bet China would gleefully sell Putin down the river for lower trade tariffs.
My point is that I’m not sure Russia is nearly important enough to China to justify a massive joint effort to reconstruct global finance. The existing one has worked out splendidly for China so far.