Good Morning Everyone,
The sanctioning of Russian central bank reserves by the G7 marked the end of the Bretton Woods II monetary system (1971-26/2/2022). As a result, the world is going to continue to transition away from the petrodollar and the US T-bill standard and toward a new monetary order as yet unknown.
What this new monetary order will be, nobody knows for sure. We can only speculate for now. Something that just struck me when thinking about this transition is that a major symptom of this change, will be for the mainstream crowd to go down the rabbit hole on money.
The average person is still unquestioning about the nature of money. Be it the paper, or plastic in Australia’s case, that you can hold it in your hand, or the one’s and zero’s that appear on the screen of your online banking app. Most just unequivocally and unflinchingly utilise the technology like it’s almost invisible and never stop to question it. Which is fine when it works i suppose. Arguably that’s the ideal outcome. That the system is so seamless and so effective, that we need not waste a moments thought on it. Just as the oxygen we breath is invisible and the body autonomously breaths in and out without any need for conscious intervention on our behalf.
This would be great. But this is not where we’re at.
It seems highly probable that in the short term countries will continue to trust each other less. Much less. Each individually wants to use their own fiat currency more. We have already seen Russia move to selling gas for Rubles, and having already sealed a 30 year deal with China for Gas in euros.
The problem with using commodities as money, is that commodities have a very critical utility to humans. Commodities like oil, gas, and coal are the primary hydrocarbons that power grids around the world, and that enable many to heat their homes, run their cars, and cook their food. The use of such items as money will lead to much higher prices, and major shortages. We’re already seeing significant market shocks in energy and food markets. This will be a painful education process for many as to why these items are terrible “money”, but the education process will none the less happen.
This breakdown in global trust and cooperation, while being painful and devastating for many, has the very real potential to be a catalyst for a seminal shift in mainstream understanding of money and may infact propel the mainstream down the rabbit hole many of us have been thrust into thanks to bitcoin.
Assuming the level of internet censorship does not significantly worsen, which is a big if at this point, there will be no shortage of educational material to help people come to a more informed understanding of the technology we call money. While central banks and governments are likely to continue to try and maintain power as a result of their political currencies, there is no doubt in my mind that as the mainstream descend into the rabbit hole of money, they will inevitably arrive at bitcoin.
No one said the road to a neutral monetary protocol would be an easy one, infact, it is likely to get much worse before it gets better unfortunately; but there is no question that it’s made less bad once you understand and embrace what Satoshi gifted the world with.
Bitcoin is the mission.
Hope you have a great day. I’ll talk to you tomorrow.
AK
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