Is Bitcoin A Reaction To US Dollar Hegemony?

Authored by Federico Pieraccini via The Strategic Culture Foundation,

Blockchain technology and the birth of the so-called cryptocurrencies finds deep roots in three contributing factors:

  • the advance of technology:
  • the manipulation of global economic and financial rules;
  • and the persistent attempt to weaken the national economies of countries that geopolitically challenge the US power system.

In this first article I address these issues from a financial point of view, in the next analysis I intend to dive into the geopolitical aspects and broader the perspective on how Russia, China and other nations are taking advantage of a decentralized financial system.

 

https://www.zerohedge.com/sites/default/files/inline-images/20180117_hege.png

Many national economies seem to have begun the process of protecting themselves from what seems like an inevitable economic trend. De-dollarization -- dumping dollars for other goods of value -- has become popular not only with countries but also with ordinary individuals as a result of global technological growth and increasing access to the Internet. The financial markets are generally reflecting this same trend.

The US dollar is the world’s most dominant reserve currency. The planning and financial rules that accompany this situation are decided in the United States for the benefit of Washington and a few of her allies. This has been reflected in the creation of the petrodollar, the abolition of the gold standard, and the most recent financial crisis of 2008, with the senseless process of quantitative easing. All these economic decisions have been made with the precise aim of prolonging American domination of the global economy, artificially propping up an unsustainable financial system.

The practical consequences of this unsustainability have led over time to thoughts of a practical alternative, both to escape from the domination of the dollar and to re-anchor the economy to real value. The need to circumvent this situation has become especially urgent for countries with a large amount of dollar-denominated debt, or where they face the prospect of being excluded from the SWIFT international payment system.

It is therefore not accidental that countries like Iran and Venezuela, but also Russia and North Korea, have resorted to alternative methods to operate in the global economic space. Washington’s political decision in 2012 to remove Iranian banks from SWIFT immediately set off alarm bells for several countries. The need to escape from the possibility of being excluded from SWIFT became urgent for countries under the threat of Washington. An alternative payment system was thus born in 2015, christened the Cross-Border Interbank Payments System (CIPS), unsurprising founded by China. Basically a copy of the SWIFT system, it serves the role of being a backup system should the Americans seek to exclude from SWIFT recalcitrant countries. A more radical solution has been sought by Venezuela, with the country creating its own virtual currency. President Maduro has announced the creation of a crypto state currency based on the value of oil and supported by barrels of oil worth over five billion dollars. Venezuela has been forced to take this step because of a scarcity of US dollars in the country brought on by the economic warfare visited on the it by Washington, which has succeeded in driving the country into a deep crisis.

This search for fresh liquidity is a gamble for Maduro, who even hopes to be able to trade with allied countries in the new currency, thus circumventing international bans. Even North Korea is said to operate in bitcoin, thereby circumventing the international system of prohibitions and blockades.

The sanctions on Russia, and the influence that Washington exerts with the dollar on the global economic system, has led Moscow and Beijing to a de-dollarization agreement, establishing the yuan gold standard. Russia sells hydrocarbons to China, which pays for them in yuan, then Russia immediately converts the yuan into gold at the Shanghai Gold Exchange, in the process bypassing Washington's sanctions.

This situation is being replicated in country after country. The United States increases financial and economic pressure on countries through such international bodies as the IMF and the World Bank, then these countries organize amongst themselves to push back against the interference. Technology has facilitated this strategy of decentralization against the center that is London and Washington, the financial heart and primary cause of manifold global problems. Firstly, the possibility of the unlimited printing of dollars has distorted global economies, inflating stock markets and causing national debts to grow out of control. Even the gold markets are manipulated by virtue of the abundance of easy money and such ponzi-scheme tools as derivatives and other forms of financial leverage. All too predictably, as seen in 2008, if it all comes crashing down, the central banks are going to bail out their partners through the mechanism of quantitative easing, guaranteeing unlimited cashflow and leaving taxpayers, along with the small players in the financial markets, to carry the burden.

It is probably too early for the common man to understand what is happening, but in fact the dollar is depreciating in relation to some more tangible assets. But gold continues to be corralled by parallel financial mechanisms and other financial instruments created for the sole purpose of manipulating the financial markets on which the common man depends in search of modest gains. As with others, the gold market suffers from the combine power of the US dollar, centralized financial institutions and market manipulation. Entities such as the FED (and their owners), criminally colluding and working with private banks, hedge funds, rating agencies and audit companies, have made immense wealth by driving the world into a debt scam that has stripped normal citizens of their future.

What is happening in the cryptocurrency markets in not only occurring in parallel with the spread of the Internet, smartphones and the increasing ability to operate in the digital world, but is also seen as a safe haven from centralized financial regulators and central banks; in other words, from the dollar and fiat currencies in general. Whether bitcoin will prove to be a wise long-term investment is yet to be seen, but the concept of cryptocurrencies is here to stay. The technology behind the idea, the blockchain, is a definitive model for decentralized economic transactions without any intermediary that can manipulate and distort the market at will. It is the antidote to the debt virus that is killing our society and spreading chaos around the world.

Washington is now left to deal with the consequences of its demented actions against its geopolitical adversaries. The decision to remove Iran from the SWIFT system, and the ongoing economic war against Russia and Venezuela, have pushed the People's Republic of China to obviate any direct attacks on its financial system by creating an alternative economic system. The goal is to warn the United States and her allies that an economic alternative exists and is already operational, ready to be opposed to the Euro-American system if necessary. Washington does not seem to want to renounce the role of manipulator and ruler of world speculative finance, and the obvious result of this is the creation of a financial system that is slowly working against the current one. Lack of anonymity and the centrality of systems seem to be the two fundamental elements of the current financial system that orbits around London and Washington. An anonymous, decentralized and technologically reliable system could be exactly what Washington's geopolitical adversaries have been looking for to end the US-Dollar hegemony.

Comments

BobEore stizazz Wed, 01/17/2018 - 23:52 Permalink

The US dollar is the world’s most dominant reserve currency. The planning and financial rules that accompany this situation are decided in the United States for the benefit of Washington and a few of her allies

The planning and financial rules that accompany this situation are decided in the United States - for the benefit of its ruling Russo-talmudic mafiyas... and their HQ in the s e Med... for whom the US$ is nothing more than a temporary tool for the advancement of their schemes for global hegemony.

Strategic Culture = barking dogs of the new 'crypto-capitalist-roader clique.

In reply to by stizazz

OutaTime43 lester1 Thu, 01/18/2018 - 05:41 Permalink

Smart money is switching to Ethereum.   

Bitcoin is dumb crypto-currency while Ethereum is faster, more scalable , with smart contract and data storage functionality. I really don't think many of these "smart" old Wall Street guys have a clue as to what this smart currency is all about. It will make many of their jobs obsolete within 10 years. No need for middlemen with smart contracts on a decentralized block-chain. 

 

In reply to by lester1

sessinpo OutaTime43 Thu, 01/18/2018 - 12:01 Permalink

BTC is version 1.0 

Ethereum is version 2.0

Vetsion 3.0 is currently under development with contenders like qtum, cardano and hashgraph, probably in that order.. 

No one knows which will win. Qtum is probably the best bet right now as they take the core of BTC (security) and combine it with aspects of ethereum (smart contracts).

In reply to by OutaTime43

Baron von Bud Sabibaby Wed, 01/17/2018 - 23:11 Permalink

Save in gold and spend in dollars. Is that a reasonable solution? Of course that''s assuming you believe the government is run for the personal profit of the few, that the social welfare system will fail, that millions of uneducated illegals may not be a good thing and Hillary Clinton ripped off mega millions and will never see justice. If you believe those things to be true then you know damn well where we're headed.

In reply to by Sabibaby

XBroker1 Sabibaby Thu, 01/18/2018 - 00:16 Permalink

Well, for one you certainly don't want to help them w/ their agenda even though you might ascertain a profit. That's the whole idea behind their agenda. Dangle some cheese and catch mice. Dr's and other health care agencies are paid BIG MONEY to vaccinate children and adults (flu shots). Does the end justify their means? At some point we have to pull back from the brink of this deception.

The cell tower martix is also part of it. I tried to warn people when that was happening. I got the same reaction. At what point will people agree there needs to be a pull back? When they're in the stack and pack 400 sf apartment w/ thin walls and rationed water and food?

 

https://youtu.be/hMWzgkxmK5E

In reply to by Sabibaby

khnum Wed, 01/17/2018 - 22:39 Permalink

A wise fellow once told me the true value of something is what you would get after the auditors have finished and the lights go off for the last time with regards to this asset ask yourself that question.

Dragon HAwk Wed, 01/17/2018 - 22:51 Permalink

what if people minted a silver token/coin, that they could exchange among themselves. that had nothing to do with Government, that would scare the banks

Yen Cross Wed, 01/17/2018 - 23:00 Permalink

  Don't look now. The $usdx is grinding back up through that 9-08-17 low @  90.775.

  The eur/usd is struggling to hold the  1.22xx handle, and there's massive options @ 1.21 handle for the N.Y. cut.  [some estimates are $1.5b]

Mr Toad Wed, 01/17/2018 - 23:30 Permalink

The hashrate is still going up, which means more asics are being deployed and more power used for a similar return in BTC (but less $). Amazing.

https://bitinfocharts.com/comparison/bitcoin-hashrate.html#1y

Gets interesting if/when the $ price and $ breakeven point start to converge. Breakeven is around $3k to 4k with $ 0.08 per kWh electricity at the current hashrate last time I looked. Breakeven roughly doubles (ignoring fee and hashrate changes) to around $8k next 'halving'.

Cost in $, income in BTC = potential problem.

Kretenoid Mr Toad Thu, 01/18/2018 - 02:20 Permalink

The ASIC cost for you , me and Dupree is  MIND-numbing , and the ROI just is not there.

Buut (a big ,hairy , smelly one) - for the Chinese , and people who know people who know people who OWN the shitholes called electronixx factoly in thele get them at their real price ....
I mean , this shit IRL looks like some 5th grader built in in HandCrafting with electlonix class - this has to tell ya the "real value" of the ASIC.

Also - they are made UN-serviceable - encapsulated , unopenable .....
So one does not see the 8088 CPUs  that are running the shit show , or ...GASP .... make one of their own design for fraction of the plice.

In reply to by Mr Toad

alphasammae Thu, 01/18/2018 - 01:34 Permalink

I do not believe anymore that there is such a thing as a decentralized exchange. It is all controlled by centralized power flowing down from the top. The recent weak actions of the crypto-currencies (BTC, LTC, XRP, ETH, etc) 25% to 40% coinciding with the 1st Futures expiration of BTC plus all the media and bitconnect closing after screwing investors of 2-3 billion, to me it was a planned centralized Ponzi conspiracy starting from London, Central Bankers trickle down to Wall Street.  

Ink Pusher Thu, 01/18/2018 - 02:41 Permalink

Before crypto even existed , the USD has been under threat as the WRC.

Now that the USA has a BBB+ rating, it's starting to become obvious to the oblivious.

Crypto is NOT the answer, it's a desperation play and or a greed play for market outsiders who are going to get fleeced or completely wiped out via massive fraud and or regulation + taxation.

Anyone buying into crypto is playing a volatility game that very few will win.

 

Kretenoid Ink Pusher Thu, 01/18/2018 - 02:57 Permalink

Yay , someone with  a brain .

Years of QE and ZIRP money created the perfect petri dish for this to fester .
And the biggies on all sides of the story are now reaping big gains -from the manufacturers of HW - check the price of a lets say - ultimate gaming rig nowadays- how about 3-4x what it used to be not long ago , right past the scammers , on we go by the ELECTRIC companies , and we stop with the handful at the top who laugh as the sheeple slaughter themselves.

 

This really is going to be fun to watch from the sidelines.

In reply to by Ink Pusher

Kretenoid Thu, 01/18/2018 - 02:50 Permalink

Honestly , how does a crypto-zealot brain functions (maybe it does not ??).

All of the sane people here (and I bet on multiple other places) have told you that this smells of a ponzi scheme like the rest of the shit , with added swag and fancy derpinology , and even more UN-explained  1337 sp3@k so it can trick the mind of the herd .

Now , when finally "The Hand" (le magic one)  shows how it all breathes , farts , takes a dump - does all the jazz - LIKE the Sock Xchange (which is also fraudulent beyond what normal person can envision) ...
What is your answer .....

PRIVATE COINS ...

Like really , explain this ?

Private as in PER PERSON personalized coins ?Private as in NOT listed anywhere and Famously UNKNOWN ?

How could this work ? How Ivan is gonna come and convince me that HIS SHITOSHI SCAMAMOTTO costs EQUAL , OR MORE THAN MY SHITOSHI SCAMAMOTTO ?
What will give such piece of turd value ?
I am out of memes to describe how idiotic the concept is .

P.K.Snosage Thu, 01/18/2018 - 03:20 Permalink

If only one could ascribe such sophistication to it.

It is not by chance that the main customers for Bitcoin are men under 40 in Japan who previously traded FX on credit and highly addicted gamers in

South Korea - the link, of course, - Dopamine.

 

Increased voltility, leads to unexpected gains, and increased irrational trading; until that is the magic money tree gets chopped down.

Jack Oliver Thu, 01/18/2018 - 03:26 Permalink

Actually - Bitcoin IS US hegemony !! 

All run by the same FUCKING Zionist’s - in pursuit of their ‘one world currency ‘ which - of course - would give them TOTAL control !!