By Neenah Payne
In the October 19, 2020 video The Bitcoin Life Raft: The End of Monetary & Fiscal Policy As We Know It Raoul Pal, CEO and Co-Founder of Real Vision, discusses the end of the US dollar and the growing shift to digital currencies by Facebook, governments, and global institutions to address the escalating financial crises. Pal says that Central Bank Digital Currencies (CBDCs) will be game changers. He believes they will be rolled out over the next three years and after mass adoption in five years, there will be no cash. However, Pal explains that while the CBDCs will solve several important problems, they will also force people to give up their privacy and freedom. He shows that CBDCs will also be a threat to your savings.
Pal says that bitcoin and gold are the best ways now to protect your savings, privacy, and freedom. He has gold, but prefers bitcoin. Pal predicts that some nations will adopt bitcoin as their currency. Pal says bitcoin “is going to be a bigger revolution of money than the internet was for everything from emails to videos, to shopping, to everything”. It just changed the world we live in. He says that bitcoin is “too powerful for even governments to overcome”. Pal describes bitcoin as “our life raft and our way out”.
He points out that Michael Saylor, CEO of MicroStrategy, invested $425 million in bitcoin. Pal discusses Kraken, the first crypto bank. He says that bitcoin offers options for pension systems and for Millennials. He says that bitcoin has the best risk-reward aspect of any asset class he’s ever seen. Pal advises people to learn about bitcoin now before it’s too late and also to buy some gold now.
Bretton Woods 2: IMF Digital Dollar
The Bretton Woods Agreement in 1944 established the US dollar, backed then by gold, as the world’s reserve currency and all other currencies were pegged to the dollar. The Bretton Woods Agreement was a kind of economic constitution for the globe which created the International Monetary Fund, the World Bank, and much of the way business and finance are conducted today.
When President Richard Nixon severed the dollar from the gold standard in 1971, the dollar became a fiat currency backed by nothing. WTF Happened In 1971? site discusses the torrent of destructive changes released as a result of Nixon’s de-coupling the dollar from gold.
Later, the US stuck a deal with Saudi Arabia, the largest oil producer, that they would sell oil only in dollars. That gave birth to the petrodollar. The dependency of the dollar on the control of oil sales has led to countless wars this century as Iraq, Libya, and other Middle East nations threatened to sell their oil in other currencies. The BRICS nations collaborated to create an alternative to the dollar which came increasingly shaky after the bailout of the big banks following the 2008 housing crisis.
On Thursday, October 15, the IMF published a speech written by the IMF’s Washington, DC managing director, Kristalina Georgieva called “A New Bretton Woods Moment.” The article has caused sound money and free-market advocates to grow concerned that a big change is coming and possibly a great financial reset… A few days later on October 18, macro strategist Raoul Pal said Georgieva’s article alludes to a “huge” change coming to the global financial system.
“If you don’t think Central Bank Digital Currencies are coming, you are missing the big and important picture,” Raoul Pal tweeted on Sunday morning. “This is going to be the biggest overhaul of the global financial system since Bretton Woods. This IMF article alludes to a huge change coming, but lacks real clarity outside of allowing much more fiscal stimulus via monetary mechanisms. And tomorrow, the IMF holds a conference on digital currencies and cross-border payment systems.”
Imminent End of The Dollar
In Their Secret Plan To Take Over Our Lives | Here Now, Mark Moss explains what’s coming, when, and why — how people can protect themselves financially against those plans. Mark condenses what he said in his 2-hour webinar on October 21. He says the International Monetary Fund (IMF) just called for a Bretton Woods 2 Agreement. He explains that this is a call for a global government with the IMF as the world’s bank controlling everything — just as the World Health Organization took control of most of the world’s response to COVID.
Fourth Monetary Shock: End of Physical Currency
The War On Cash Is Over – Do This Now discusses the financial shocks in 1907, 1933, and 1971 when President Richard Nixon severed the dollar from gold. Are You Prepared For Imminent US Digital Dollar? points out that since the establishment of the Federal Reserve in 1913, the value of US dollar has declined so much that it is worth almost nothing now. Mark warns that the Fourth Monetary Shock – the end of physical currency is imminent and could devastate people who have not prepared by diversifying with bitcoin and/or other cryptocurrencies.
Fed’s Digital Dollar
Bank of America: Fed Will Use Digital Dollars To Unleash Inflation, UBI And Debt Forgiveness is an October 23, 2020 article that says:
When we recently described the upcoming “Unprecedented monetary overhaul” which will come in the form of the Fed sending out digital dollars directly to “each American”, we explained that absent a massive burst of inflation in the coming years which inflates away the hundreds of trillions in federal debt, the debt tsunami that is coming would mean the end to the American way of life as we know it.
And to do that, the Fed is now finalizing the last steps of a process that revolutionizes the entire fiat monetary system, launching digital dollars which effectively remove commercial banks as financial intermediaries, as they will allow the Fed itself to make direct deposits into Americans’ “digital wallets”, in the process enabling truly universal basic income, while also making Congress and the entire Legislative branch redundant, as a handful of technocrats quietly take over the United States.”
The article concludes with links to the following articles:
- Did The Fed Just Reveal Its Plans For A Digital Dollar Replacement?
- The Fed Is Planning To Send Money Directly To Americans In The Next Crisis
- House Stimulus Bill Creates “Digital Dollar” To Send Virus-Aid To The ‘Unbanked’
- ECB Trademarks “Digital Euro” As It Begins Experiments On Digital Currency Launch
- The Circle Is Complete: BOJ Joins Fed And ECB In Preparing Rollout Of Digital Currency
- Fed’s “Direct Money Transfers” Are Coming: Brainard Says Fed Collaborating With MIT On “Hypothetical” Digital Currency
- In Unprecedented Monetary Overhaul, The Fed Is Preparing To Deposit “Digital Dollars” Directly To “Each American”
- DoubleLine: The Pandora’s Box Of Fed’s Digital Currency Will Ignite An “Inflationary Conflagration”
Fall of The Banking System: The Rise of Cryptocurrencies
Simon Dixon is an ex-investment banker and economist who dedicates his time to changing the rules of money and banking. Dixon is the co-founder and CEO of BnkToTheFuture, the largest global online investment platform. He and his wife Bliss created it as an alternative way for people, businesses, and investors to fund, borrow, raise funds, and invest in each other without banks.
Dixon is the author of Bank To The Future: Protect Your Future Before Governments Go Bust. Amazon says:
We are in a time like no other. Those who play the game by the new rules understand that seven highly disruptive new technologies are changing the rules of work. Those who understand the rules of money and finance also know that we are sitting on a debt trap that is proving increasingly hard to finance….Those who do not understand the new rules of finance, technology, and money will lose out. This book explains the rules…and how you can prosper, during and after the massive change ahead.
Simon Dixon: The Fall Of The Banking System – The Rise Of Cryptocurrencies! is a blog on Dixon’s site. Dixon discusses how to end the banking system and how individuals can replace it with decentralized blockchain alternatives. He explains the centralized global cashless society system pushed by global elites and the vast differences between that and decentralized cryptocurrencies. Simon discusses bank bail-outs and bail-ins and the abolition of depositor’s insurance in a cashless society as central banks attempt to raise interest rates to avoid going negative in the coming, inevitable fiat dollar crash.
In IMF calls for Bretton Woods, Max Keiser interviews Dixon who explains that the International Monetary Fund is calling for Bretton Woods 2 to introduce their Central Bank Digital Currency (CBDC) before China and other nations get their CBDCs adopted. Dixon warns that the IMFs CBDC will allow for total control of individuals. The IMF CBDC will be able to automate negative interest rates, tax collection, and surveillance. The CBDC could be connected to compulsory vaccines or any goals and agendas the IMF may have. Dixon explains that banks are on the verge of collapse. He warns that the FDIC insures only 1% of deposits. People may be required to download the IMF’s CBDC app.
MicroStrategy CEO Discusses $425 Million Bitcoin Investment
US Dollar Is Almost Dead — What’s Next? links to two short videos about the decision by Michael Saylor, chairman & CEO of MicroStrategy Inc., to invest $425 million of his firm’s cash in bitcoin this summer.
In Bitcoin Infiltrates Corporate America, Saylor was interviewed by Raoul Pal, Real Vision CEO, to discuss MicroStrategy’s bitcoin acquisitions. This video provides a much more comprehensive view of Saylor. Saylor describes his first encounter with cryptocurrencies and how his views have evolved over the years. Saylor explains the power and value of bitcoin and its unique ability to convey “100 million dollars across 100 years.”
Saylor says that if you’re holding currency, you are experiencing a 25% inflation rate! He came to the horrible conclusion that his firm was sitting on a $500 million ice cube that was melting at 6% before — but at 25% this year! Saylor explains how he decided to buy bitcoin which he describes as “software eating money which is only going to get more powerful”.
Saylor is looking at the long term to be able pass an inheritance to his family. He says that gold was the best idea in the 19th century. However, gold is not going to get smarter because it just a lump of metal. He says that bitcoin is smarter, stronger, and faster than gold. Saylor describes bitcoin as “dematerialized gold”. Saylor describes the ease of buying, storing, and using bitcoin compared to gold.
Saylor said that it was not difficult to convince his firm to invest in bitcoin because he discovered that half of his board has already invested in bitcoin personally! He points out that now it’s just a matter of watching to see how long it takes for other companies to buy bitcoin. Raoul calls bitcoin “the new gold standard”.
PayPal’s Controversial Adoption of Bitcoin
PayPal just joined an increasing list of bitcoin announcements from major corporations that focus on turning cash reserves into bitcoin. PayPal, which has more than 26 million merchants and 346 million accounts, announced it will integrate bitcoin. It’s a game changer for both PayPal and the overall trend of Bitcoin adoption. PayPal will extend the Bitcoin integration to Venmo in early 2021. Now we’re clearly reaching a tipping point in which large corporations are starting to adopt bitcoin.
On Wednesday (October 21), the Bitcoin price surged past $13,000 for the first time in over 15 months thanks mostly to an announcement from PayPal that it is launching support for cryptocurrencies. In the past one-month period, Bitcoin has steadily moved higher from the low of $10,365 it reached on September 22. Probably the main catalyst for Bitcoin’s gain during these past few weeks has been optimism surrounding a COVID-19 fiscal stimulus deal in Washington, which is something that should increase interest in Bitcoin as an inflation hedge.
The article adds:
Around 11:30 (UTC) on Wednesday, Bitcoin was trading as low as $12,191, when suddenly came a huge announcement from PayPal: that it is going to allow its customers to “buy, hold and sell cryptocurrency directly from their PayPal account.” Initially, the supported cryptoassets will be Bitcoin, Ethereum, Bitcoin Cash, and Litecoin — users will be able to buy, sell, and hold these cryptocurrencies “directly within the PayPal digital wallet” — and the only supported jurisdiction will be the U.S. PayPal is planning to “expand the features to Venmo and select international markets in the first half of 2021.”
This news helped the Bitcoin price to surge from $12,191 — at 11:30 (UTC) — to the intraday high of $13,219, which was reached around 23:00 (UTC) on Wednesday, which means that the Bitcoin price had surged just over 9% vs USD in a little over 12 hours. Currently, Bitcoin is trading at $12,853, up 5.71% in the past 24-hour period.
After Paypal’s news, every major bank is having a meeting about how to support bitcoin. It’s no longer optional….Twitter user Vijay Boyapati opined: “It did not escape Paypal’s notice that Square was making a very large fraction of its profit allowing users to trade bitcoin. More and more financial institutions and payment processors will figure this out soon. The fiat on-ramps are getting bigger quickly.”
However, the article points out:
Lawyer Jake Chervinsky similarly cautioned: “Look, I understand the temptation to just be excited about Paypal & ignore the fact that they prohibit transfers to other accounts & withdrawals to self-custody. But if you can’t hold your own keys, is it even bitcoin? How much will we sacrifice in the name of ‘number go up?’
Twitter user Hope Freiheit was not impressed by Paypal’s announcement, stating:
They won’t even allow users to withdraw the bitcoin they buy – it’s just a closed platform for speculation, likely with the users getting charged an arm and leg with fees. Bitcoin doesn’t need Paypal.
Paypal’s Crypto Embrace: Morgan Stanley Says Move Boon for Mass Adoption, Critics Say Payment Giant Violates Crypto Principles issues similar cautions. It says:
The entry of Paypal into the cryptocurrency industry continues to expose the divide between traditional crypto space players who are less enthusiastic and non-crypto players who endorse the move. Non-crypto players like the analysts at Morgan Stanely are agreement with the notion that the payments giant’s move will lead to greater adoption of cryptocurrencies….
Garlinghouse and others seem to be taking issue with the payments giant’s clarification to customers that “you own the cryptocurrency you buy on PayPal but will not be provided with a private key.” According to Satoshilabs, that statement shows that Paypal’s purported embrace of digital currencies instead “undermines key principles of cryptocurrency.
What Is DeFi? says
DeFi is short for “decentralized finance,” an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries. Bitcoin and many other digital-native assets stand out from legacy digital payment methods, such as those run by Visa and PayPal, in that they remove all middlemen from transactions. When you pay with a credit card for coffee at a cafe, a financial institution sits between you and the business, with control over the transaction, retaining the authority to stop or pause it and record it in its private ledger. With bitcoin, those institutions are cut out of the picture.
So, there’s a real irony with PayPal supplying bitcoin! PayPal is trying to put the middleman back into DeFi. It is centralizing decentralized finance. Banking on Bitcoin provides the most comprehensive understanding of the origins of bitcoin which arose out of the culture of the cypherpunks. After the 2008 housing crisis destabilized the world’s economy, a cypherpunk using the name “Satoshi Nakamoto” introduced a new system to assure financial freedom and privacy. The article explains that bitcoin is beyond a currency. It is a monetary revolution! U.S. presidential candidate Kanye West says bitcoiners “really have a perspective on what the true liberation of America and humanity will be.”
Bitcoin Goes Mainstream
The financial world is going through a radical paradigm shift this year. Forbes’ July article The OCC’s Notice On Crypto Is A Really Big Deal says:
Last week, the Office of the Comptroller of the Currency (OCC), a branch of the Treasury that supervises national banks and thrift institutions, issued a bold interpretative letter outlining how US banks can interact with cryptoassets going forward. The letter…is remarkable in its progressive embrace of the crypto industry, explicitly permitting banks to both custody cryptoassets for customers and provide banking services for crypto-oriented businesses.
In The Palm Beach Presentation, Teeka Tiwari says institutions across the financial industry are now accepting cryptocurrencies as another asset class to be held with stocks and bonds. He makes several recommendations based on the following news.
- Banks are now allowed to accept cryptocurrencies because of the new OCC rules.
- PayPal which has 346 million customers announced last week that it is allowing its customers to hold cryptocurrencies in their PayPal accounts.
- Fidelity which has $7 trillion in assets under management just launched its first bitcoin fund.
- MasterCard and Visa announced collaboration involving cryptocurrencies.
Millennials Pour Into Cryptocurrencies
Nearly a year ago we highlighted a schism in generational views toward “fiat alternatives”: whereas older Americans would buy physical gold and precious metals, younger generations, including Millennials and Gen-Zers would primarily purchase cryptocurrencies such as bitcoin. To this point, Charles Schwab showed that the Grayscale Bitcoin Trusts is the 5th largest holding in Millennials retirement accounts (including 401(k)s) with almost 2% of their assets tied to the success (or failure) of the largest cryptocurrency.
And now that Bitcoin is back over $13,000 for the first time since the infamous “spike” of Dec 2017, breaching the previous high of June 2019, following this week’s endorsement by Paypal – which in turn followed corporate support from Square and MicroStrategy – none other than JPMorgan’s quant Nick Panigirtzoglou writes in his closely followed Flows and Liquidity that all of this “is another big step toward corporate support for bitcoin, which in our opinion would facilitate and enhance over time Millennials’ usage of bitcoin as an “alternative” currency.”
Which brings us to the focus of the JPM quant’s note, which is rather familiar as it is precisely what we discussed back in 2019: namely the divergence between the behavior of the older vs. younger cohorts of the retail investors’ universe in their preference for “alternative” currencies. As the JPMorgan strategist writes, echoing was we said last December, “the older cohorts prefer gold, while the younger cohorts prefer bitcoin as an “alternative” currency. Both gold and bitcoin ETFs have been experiencing strong inflows this year, as both cohorts see the case for an “alternative” currency.”
The article adds:
Furthermore, as recent corporate forays into the cryptocurrency demonstrate, the market value of cryptocurrencies could eventually rise beyond what could be justified by only valuing them as a store of wealth; as JPMorgan explains, unlike gold cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment: “The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value.”
JP Morgan Sees Millennials’ Bitcoin Preference Over Gold as Foundation for Its Long Term Success.
As gold rose about 30% from March to August this year, bitcoin soared about 130%.
How To Buy Bitcoin
The number of Americans invested in cryptocurrencies almost doubled from 7.95% in 2018 to 14.4% in 2019, an increase of 81% in one year. The easiest way to get started is to ask someone who has invested in bitcoin for help. It’s remarkable how easy it is then. Finder’s Guide to Cryptocurrencies provides key terms. The free 7-day online Bitcoin Crash Course is also a good way to learn about bitcoin.
You need a “wallet” to buy, store, and sell your bitcoins and there are several kinds of wallets. Coinbase is an exchange that provides an easy wallet to start with. However, your funds will not be as secure online as in a hardware wallet. In 2019, a record-breaking $4 billion was stolen from cryptocurrency exchanges, underscoring just how critical it is for you control your own assets.
BEST Crypto Wallets 2020: Top 5 Picks explains the importance of choosing the right wallet for your goals. Its top recommendation is the Ledger Nano X hardware wallet. It is the most secure wallet and allows you to trade on the go. See How To Use A Bitcoin Hardware Wallet: Ledger Nano X and the unboxing tutorials. A back-up pack provides extra security. The videos stress the importance of buying from Ledger. However, Amazon has several helpful videos about the Ledger Nano X. It also sells a case for the Nano S which may be good for storing the Nano X.
After you get a wallet, you can buy cryptocurrencies. It is not necessary to buy a whole bitcoin – which is nearing $14,000 now. See the current price at CoinMarketCap. The satoshi is the smallest unit of the bitcoin recorded on the blockchain. It is a one hundred millionth of a bitcoin (0.00000001 BTC). So, one bitcoin is 100,000,000 satoshis. The unit was named for Satoshi Nakamoto who is credited with creating the blockchain and introducing bitcoin in 2009.
If you use a private online wallet like Jaxx.io, secure your 12-word Back Up Phrase! If you lose it, you will lose all your cryptocurrencies in that wallet! There will be no way to recover your password or your money! So, keep a printed copy in your safe or another secure place you will remember. Jaxx Wallet Beginner’s Guide. DeFi vs CeFi: How DeFi Measures Up discusses some of the risks.
The purse.io site is another great site to explore a practical use – it offers a minimum 5% discount for purchases on Amazon made with bitcoin (BTC) or bitcoin cash (BCH).
How To Invest in a Bitcoin IRA: The 5 Best Crypto IRAs says you can shelter up to $7,000 tax-free in a bitcoin IRA each year. You can use Coin Stats to track your portfolio.
Also, join the Counter Markets Newsletter to keep up-to-date with the crypto world. You save 40% if you pay with a cryptocurrency!
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex, and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators’ websites before making any decision. The author may have holdings in the cryptocurrencies discussed.
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