The global monetary system attributed to Bretton Woods is at an end. This is what Vladimir Putin said at the 25 ᵉ international forum in St. Petersburg. A good omen for bitcoin (BTC)…
New world order
A new world order will emerge from the proxy war between the West and Russia in Ukraine. The Russian tsar predicts the end of the dollar as an international reserve currency. His demonstration was implacable:
“When I spoke at the Davos Forum a year and a half ago, I stressed that the era of a unipolar world order was over. […] This era has come to an end despite all attempts to preserve it at any cost. »
For the Russian President, “the same principles of the global economic system have taken a hit”.
” The inviolability of property and confidence in world currencies have been damaged he declared, referring to the confiscation of property belonging to Russian citizens as well as the freezing of its foreign exchange reserves denominated in dollars and euros ($300 billion).
V. Putin warned that these sanctions turn out to be a double-edged sword: “We see social and economic problems worsening in Europe, as well as in the United States, where the prices of food, electricity and fuel are rising. The quality of life in Europe is decreasing and companies are losing their competitive advantages. »
The European Union is accused of having lost its political sovereignty to the profit “bureaucratic elites who dance to someone else’s beat, to the point of harming their own populations, economies and businesses. »
Other passages of the speech were intended to debunk Western propaganda about “Putin’s Inflation”:
“The galloping inflation of products and raw materials is not new. It is years of irresponsible macroeconomic policies taken by the G7 countries that are responsible for this, in particular the uncontrolled recourse to debt. »
Even the Fed Chairman agrees:
V. Putin castigated Western chancelleries, unable to do anything but“to print money to fill unprecedented budget deficits”.
“Over the past two years, the money supply in the United States has increased by more than 38% and c it of the EU by around 20%, i.e. 2500 billion euros“, he struck before returning the knife in the wound:
“So the West has printed a lot of money, but where has it gone? It was obviously used to buy goods and services abroad. This is where the newly printed money went. Imports from the United States amount to 350 billion dollars per month, against 250 billion two years ago. That is an increase of 40%, as much as the growth of the money supply printed at the same time. America has gone from being a net food exporter to a net importer. In other words, Washington prints money to buy raw materials and food around the world. EU import growth is even faster. Obviously, this increase in demand not covered by a reciprocal supply from the West [balance commerciale déficitaire] a trigger for a wave of shortages and global inflation. »
Faced with this inflation, the Russian president says that many developing nations are asking a good question:
“Why exchange goods for dollars and euros whose value melts like snow in the sun? »
The Russian president was very specific in recalling that ” world currency reserves amount to 7,000 billion dollars and 2,500 billion euros“, and that they “are currently devaluing at the rate of about 8% per year”. “Furthermore, they may be confiscated or stolen at any time in the event of non-alignment with United States foreign policy.”
The former adviser for international affairs of the city of Saint Petersburg insisted that keeping its foreign exchange reserves in these currencies is a “real threat to many countries” .
This speech is particularly interested in bitcoiners in that V. Putin has shown himself certain that nations will convert their foreign exchange reserves held in dollars and euros for tangible things like food, energy and electricity. other raw materials.“Obviously, this process further fueled overall dollar inflation”he warned.
In sum, the Kremlin expects the world to move away from US and European debt as a store of value. But then, what will this store of value be?
We saw the beginnings of a response at the first Eurasia Economic Forum held last month in Bishkek, Kyrgyzstan. Sergei Glazyev, Russian minister responsible for the Eurasian Economic Union (EAEU), is currently coordinating efforts to design a new monetary system. The journalist Pepe Escobar speaks in this paper of a “Bretton Woods III, in cooperation with China”.
According to Mr. Glazyev, the forum “exposed a new global settlement currency made up of a basket of national currencies and commodities.“The introduction of this monetary instrument in Eurasia led to the collapse of the dollar system and the permanent weakening of the military and political power of the United States.»
Yours truly thinks that this currency has little chance of convincing the whole world. Conversely, bitcoin, the stateless currency par excellence, is just waiting to prove itself.
It is hard to see the United States and Europe agreeing to trade with a currency created by Russia and China. Gold is also not an option, as it performs the essential functions of an international currency very poorly. It is very expensive to move not to mention foundry fees to verify its authenticity. Besides, everyone knows how the Gold Standard ended.
Nations need a currency that does not depreciate (fixed money supply), that moves at the speed of light and whose transaction costs are almost free.
World foreign exchange reserves amount to 13,000 billion dollars. A conversion of this bonanza into bitcoin will propel the value of a single bitcoin to over $500,000.
Bitcoin will also end up swallowing a good part of the stock of global debt whose value is destroyed by inflation. It is then nearly 100,000 billion that will fall into the hands of bitcoin.
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Journalist reporting on the Bitcoin revolution. My solicited papers of bitcoin through geopolitical, economic and libertarian prisms.