Governments continue to operate under the belief that they can salvage their inflationary monetary systems. Historically, we first had The Gold Standard, which was largely abandoned by World War I. Following the devastation of World War II, the developed world ushered in The Dollar Standard. This system has lasted barely 80 years, and we are already witnessing the first significant cracks.
The United States, the architect of The Dollar Standard, is now shouldering $38 Trillion Dollars in debt. The annual cost of servicing this debt, with an estimated $1.1 Trillion going toward interest payments alone, now surpasses the entire US Military Budget. While carrying significant debt can be managed by the world’s leading economy, the US no longer holds supremacy in every key metric. China and India lead in population by a substantial margin, and China surpassed the United States in Purchasing Power Parity (PPP) way back in 2014.
While the Dollar Standard will likely persist for a little while longer, other countries are actively seeking an opportune moment to shift the geopolitical balance.
The New Global Order and GDP Clusters
As the influence of the United States slowly diminishes, other nations are mobilizing to fill the resulting power vacuum. We are now observing the formation of distinct GDP clusters, each roughly equating to 25% of global GDP:
- The United States ≈ 25%
- European Union ≈ 25%
- China, Russia, Iran, North Korea ≈ 25%
- The Global South ≈ 25%
This four-way division means that no single cluster can enjoy complete supremacy over world affairs. This is the driving force behind the anti-globalization trends we are seeing, with each cluster establishing a “walled garden” by selectively blocking or restricting cross-border Internet access, visas, and trade. While cooperation between these clusters will still occur, it is increasingly likely to take the form of narrow, single-issue-based alliances. In this new world order, the cosmopolitan elite may continue to enjoy their privileged lifestyles, insider trading, and black caviar, but the majority of the population is facing severe economic strain.
In the United States, the purchasing power of the average salary has stagnated, while the real value of essential assets like housing has surged by 200%–500%. There is a simple fix for this: legally prohibiting institutional investors like BlackRock from purchasing single-family homes would cause prices to drop IMMEDIATELY. However, the US government appears unable to enact such a policy because the illusion of growth provided by firms like BlackRock is considered MORE important than the well-being of the average American. Although we enjoy cheaper electronics compared to three decades ago, one must ask: Is it better to own your own land and home or a cheap iPhone that cooks you pancakes? Personally, the former is the clear choice.
The Bitcoin Reserve Dilemma
This brings us to the potential of a Bitcoin Reserve. If the United States were to completely abandon the Dollar Standard and replace it entirely with the Bitcoin Standard, the current fiscal system could theoretically be saved. Such a move would immediately prevent the government from printing money to subsidize fiscally irresponsible programs. The Bitcoin Standard would fundamentally force the US government to balance its checkbook every single year.
The truth, however, is that this transformation will likely never happen. Consider that 10% of Americans receive SNAP benefits. What was intended as a temporary measure for struggling families has, for some, become a multi-generational income source. Furthermore, entitlements like Social Security, Medicare, and Medicaid consume 50% of the US annual budget. These programs are organized as literal Ponzi Schemes that only work if the paying population increases with every generation. Since the United States is experiencing a declining birth rate, a significant influx of immigrants is precisely what the system needs to remain viable 30 years from now. Yet, as we observe, the current political climate favors lowering immigration. The United States is currently at peak immigration levels, and many fear that any further increase would fundamentally alter the nation’s social fabric.
The government is thus caught in an impossible situation: it can either save the entitlement programs or cut down on immigration, but it cannot do both. The entire system is an INTERTWINED MESS. How can officials introduce the Bitcoin Standard without the political will to completely eliminate entitlements? They cannot. Such a move would be deeply unpopular, and the people who have paid into the system would vote against it. This makes the adoption of The Bitcoin Standard a half-measure, not a complete overhaul of the existing system.
The Bitcoin Reserve Solution
The people pushing for the Bitcoin Standard are often motivated by nothing more than seeing their personal wealth increase. While this offers short-term speculative opportunity, the long-term solution requires a return to the concept of the circular economy.
The path forward has three steps:
- DO NOT speculate on crypto. If you truly believe in a project, simply buy and hold. Day trading is strongly discouraged, as it significantly increases the chance of losing everything you have. Remember, the game is stacked against you!
- Become a crypto steward. Spread the “crypto gospel” to your family and friends. Convert every single person you know into a crypto believer. The days of the Fiat Standard are nearing their end; the flood is coming. Are you going to be on the Ark, or will you be left behind?
- Become a crypto adopter. Do not just buy crypto assets for the sake of making money. Actually use the asset to exchange it for goods and services. Utilize the asset within your community to facilitate local trade.
