This financial thing: what if it’s *all* just BS?
Today bitcoin jumped north of AU$16, 000 for the first time in 18 months. Some people think it’s just hype and there’s no asset-backing. That’s OK. Also today the gold price jumped over AU$2, 000/ oz for the first time in history. Some people think it’s just hype. But what if it’s not?
Supply and demand run our economy. If more people want it, the price goes up. If fewer people want it, the price goes down. But what if it’s a see-saw?
When you value oil or gold in $US, it may seem like the price of oil or gold is going up; but what if the cause was not the asset going up, but the $US going down?
Stay with me here. If you were six feet tall when the government announced they were going metric, you are now 182 cm tall. Your height did not change, merely the unit of measurement was decreased (from a one-inch unit to a 2.5cm unit)
Is it a coincidence that bitcoin and gold both hit record highs on the same day? One market seems pushed by younger, high-tech risk-takers; the other market seems pushed by older, conservative traditionalists. **Why do they both seem to agree?**
Perhaps it is not really the object which has changed, but merely the unit of measurement.
What if, the prices of these unrelated entities seem to be hitting record highs, because the value of the $US is going down?
What if many people are selling their $US to diversify into other things (gold for some, BTC for others)? Supply & Demand economics would indicate that if more people are selling $US, the price will continue to fall.
If you have time, check out the last 12 months price of the Japanese Yen, or the Chinese Yuan, or any other reliable non-US currency. They seem to be rising also. But what if it’s an illusion? What if all of these things seem to be going up, because the $US is going down?
The $US has lost 90% of its value since it left the gold standard in 1971. Anyone buying $US now has faith in the US government. Anyone buying gold or bitcoin has faith in tangible assets or immutable math.
Whilst the USA relies on military might and rattles its sabre against Iran (one of the three remaining countries without a central bank), the Chinese and Russians are building a cryptocurrency financial settlement centre on Bolshoy Ussuriysky Island, a small “offshore” location which is between the Russia-Chinese border.
Those who have studied history know that Germany was soundly trounced in WW2, and even the “winners” faced heavy financial losses. Switzerland, who stayed out of WW2 entirely, lost nothing and got richer :)
When Russia & China work together to create an ‘offshore’ bank between them, which is crypto-backed and not $US-backed, it would seem as though they are sandbagging and staying the heck away from the $US and any US wars, whether military or financial.
Interesting times indeed! Do Your Own Research (DYOR) and do not be fooled: if you’re now 180cm instead of 6 feet, you didn’t increase in height. If everything seems to be going up in value, something, somewhere must be going down. In the financial world, as in the actual world, “everything is connected”. Or maybe, it’s all a Belief System (BS) :)