The currency appeared in Asia Minor, in the kingdom of Cresus. It was adopted by powerful Greek cities and the Roman Empire quickly made it a symbol of power. Roman gold coins traveled the Silk Roads to China! Today, the Chinese “coins” are on the way to reverse. The middle kingdom wants to internationalize its currency and cryptoyuan will be at the heart of the new silk routes. A pharaonic project at 70 trillion yuan over several decades. How does Beijing plan to become the first world power? What role will currency play in its imperial strategy and why Bitcoin could end up winning the bet?
Three Cassus belli
The middle empire is at war with the United States. A seemingly deadly war, but a permanent war, for a power without division on the world. A currency war.
Hostilities began when the FED has set in motion its printing press (the famous “Quantitative Easing”), in the wake of the 2008 crisis. Which China didn’t appreciate at all as it saw its dollars invested in US debt depreciate visibly. China then began to accumulate gold with the ambition to restore the Gold Standard.
The second cassus belli was not made wait. Two years later, China stopped investing in Uncle Sam’s debt. Since then, its foreign exchange reserves in dollars have stagnated around $ 1 trillion, or barely 4.6% of the US public debt (23 687 billion in total).
China now realizes 1/3 of its foreign trade in yuan and it will be said in a few years that the monetary war took a turning point in 2018. It is this year that China launched its own petroleum benchmark. An index denominated in yuan AND CONVERTIBLE INTO GOLD.
In other words, countries that agree to be paid in yuan will be able to exchange them for gold if they wish. A return of the Gold Standard in short. Third Cassus Belli…
“Gold is still the last form of payment in the world. In the worst case, fiat money will no longer be accepted by anyone, while gold will still be. “
Alan Greenspan (President of the FED)
It is ostensibly about compete with the oil indices chained to the dollar what are the Brent (London) and the WTI (NY). A winning bet since the volume of contracts denominated in yuan has already exceeded that of Dubai crude. The Shanghai Futures Exchange, where these oil contracts are negotiated, does not intend to stop there and also plans to trade rubber, metals and other raw materials.
This success was predictable because the only real currency in this world is gold, even if the United States tries to make us forget it #NIXON1971 Gold Standard. It is only a matter of years before gold returns to the heart of the international monetary system. It goes without saying for your servant that Bitcoin will end up knocking down the yellow metal pawn, if only because it is difficult to teleport gold bars to the other side of the world in 10 minutes …
One Belt One Road
China wants internationalize its currency and it is through this prism that we must analyze the project of the new silk routes.
Well, there is still a long way to go … If we look at the statistics of the SWIFT network, the Yuan represents only 2% of payments made worldwide.
A statistic to take, however, with chopsticks because China has launched its own international payment system. A question of economic survival when you know that Washington did not hesitate to disconnect Iran from the international banking system. Iran, a country that, like Venezuela, categorically refuses to sell its oil in dollars … And given that China is currently the only country in the world that defies the monetary embargo of the United States on Iran, it is better to secure its back …
Oil is the most traded raw material in the world with an annual commercial value of approximately $ 14 trillion. To put it another way, whoever controls the currency in which oil is sold (plus the SWIFT network) is master of the world.
Faced with an American empire that will absolutely everything to preserve its monetary hegemony, China has therefore launched their own Marshall plan. It is a question of inciting the countries being along the new silk routes to invest in their infrastructure thanks to loans in… .. YUAN. Some talk about predatory debt diplomacy and they will not be wrong …
We are not talking here about a few caravans carrying a little caviar, silks, Persian carpets or spices. The project is titanic since it is planned to connecting 4.4 billion people and 65 countries whose subsoils contain most of the remaining energy resources.
China’s goal is to get recipient countries to increase the share of their trade denominated in yuan. To do this, China lends them yuan in bond form “perpetual“. That is to say that it will not be necessary to repay the principal but “only” interest perpetual. And to find the yuan necessary for this perpetual tribute (for very long decades), they will have to agree to be paid for their exports in yuan. The goal is obviously to enjoy the same exorbitant privilege as the United States, namely to exchange goods for paper. CQFD.
The petro-yuan and the revival of the gold standard are deadly threats to the old petrodollar system forged by Henry Kissinger. Clash between the two superpowers is inevitable and the trade showdown with customs duties between the two nations is an offshoot of it.
The Chinese Central Bank has postponed the launch of cryptoyuan planned for the first quarter this year due to coronavirus.
But fear not, Chinese shitcoin will eventually see the light of day. It is already written that the Chinese authorities will justify the end of physical money by accusing the banknotes and coins of being vectors of the Covid19 propagation. Never spoil a good crisis like the other would say. Electronic payment systems Alipay and WeChat are already replacing the fluid in all major cities.
Cryptoyuan will have many advantages for totalitarianism. Every purchase, every internet search, every job search, every visit to a doctor, every call, every aspect of life can be recorded and sieved by AI.
Cryptoyuan is necessary for mass surveillance required by the Orwellian citizen rating system. (We were talking about this in this article). By the way, this transformation of the Chinese Communist Party into a Big brother will be the main factor driving Bitcoin. Yes, the Chinese will quickly have to find the parade to pay for their little anonymous pleasures… For aspiring traders, forget about Halving, watch out for the introduction of cryptoyuan …
Beyond this internal social dystopia, cryptoyuan will also be used for the internationalization of the Yuan because a blockchain can act as currency but also as a payment system. Two in one. Cryptoyuan will therefore be a new way of bypass the SWIFT system subservient to American interests.
The Bitcoin Empire
Bitcoin is to cryptocurrencies what the dollar is to fiats. Monetary hegemony is always a moral strugglet… Many creators of shitcoins have successfully refourgued their imitation blades but the dominance of Bitcoin is again close to 70%…
In the world of PQ rolls, you can be sure that the United States will wage a trench war against the Chinese yuan and its alliance with the global geopolitical-energy nexus that represents New Persia.
The American way of life – which is pumping its last drops of shale oil – depends almost exclusively on OPEC. The cartel continues to sell its fuel oil in green notes but an M-16 on the temple, which may annoy in the long run … let’s remember that China is the world’s largest importer of black gold while the United States has become almost self-sufficient.
To put it another way, the empire (annual military budget of $ 700 billion) will not let the yuan become the main international currency without doing anything. If the two (nuclear) powers come to blows, everyone will understand that the proxy war will take place in Iran. China needs huge Iranian oil reserves to empower itself. Hence the signing with Iran of hundreds of billions of investments to develop its oil export capacities. The construction of a Chinese military base on its territory is also under discussion …
Bitcoin would avoid this unnecessary war. If it is certain that the United States will not accept that China seizes the exorbitant privileges which the dollar offers, perhaps they will accommodate themselves to fight with equal arms. That is, using a neutral, apolitical currency for international trade.
Some argue that this currency could come from the International Monetary Fund or the UN. But given the deplorable state of international relations and the increasingly pronounced inclination of peoples in favor of demondialization, it is a safe bet that Bitcoin has every chance. It has the advantage of having existed for more than 10 years …
And then, the IMF is made up of humans who will sooner or later degrade the currency, unlike Bitcoin whose money supply will never exceed 21 million. The reason for Bitcoin is not to duplicate. It is not a source of inflation, this hidden tax.
Others say that it is gold that will return to the center of the international monetary system. Certainly. Bitcoin is gold. Digital gold.
Child of Satoshi, the alchemist who turned a cryptographic algorithm into gold.
I’m talking about monetary geopolitics, not shitcoins.