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The Root Of Evil And Blockchain

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How the US is sawing away at the status of the dollar as the world’s dominant reserve currency. China’s strategic choice, the battle for succession status and the solution offered by blockchain technology.

from Elias Michalas

The end of World War II revealed an undisputed winner. The United States, with its “show” of force in Nagasaki and Hiroshima, showed friends and foes alike who was boss.

The other major Western powers had no inclination and no way of not accepting the new emerging empire, making sure of course to maintain excellent relations with it.

By the 1920s, the dollar had already begun to displace the pound and the pound sterling as the dominant reserve currency and currency of international trade.

Bretton Woods

In the summer of 1944, while the war was still far from over, the representatives of the 44 countries on the side of the victorious allies attended, at the invitation of the United States, the Bretton Woods Conference, where the agreement on the future economic and monetary course of the world was to be reached.

The conference was a “bow” of the others to the acceptance of the world domination of the USA. Bretton Woods ‘gave birth’ to the IMF (from its inception to the present day, totally controlled by the US) and officially ‘christened’ the dollar as the currency of world trade.

Creation of the Bretton Woods System
Creation of the Bretton Woods System | Source: FederalReserveHistory.org

The US from that point in time onwards, looked like the landlord holding the keys to the food warehouse. He would certainly never go hungry! The rest of us, if we want access to the pantry, ought to get along with the “key holder”.

War in Vietnam

In 1971 the US went a step further. The war in Vietnam (apart from thousands of dead), cost in today’s exchange rates more than 1.2 trillion dollars.

The Western allies, especially England and France, had accumulated incredible amounts of dollars and seeing the rampant money minting by the US, became alarmed.

Their apparent willingness to convert dollars into gold, which of course was not in stock at the US Federal Reserve, resulted in President Nixon’s “pirate” decision to announce the release of the dollar issue from the guarantee of equivalent amounts of gold.

In a recital of cynicism, the American deep state, through its president, informed the rest of the planet that the US, as the most powerful country and economy in the world, would no longer account for the amount of money it would issue.

The Petrodollars

The next big stunt was the agreement with Saudi Arabia (followed by the rest of OPEC) to pay exclusively for oil in dollars (also known as petrodollars).

Against this, the US guaranteed the security of the country and made sure that there would always be sources of tension in the Middle East, so that the “protection” they would provide would be necessary.

The USSR

Having the unique global privilege of paying for energy in its own currency and constantly expanding (again with dollars) its military power, the US was undoubtedly the world superpower, with the only rival being the then Soviet Union, which understood early on that the only (even minimal) balance against this unbalanced system was the development of weapons systems with the same destructive capability as those possessed by America.

The development of the USSR’s nuclear arsenal was, until its dissolution, perhaps the only stable doctrine. The metropolitan Russia that emerged after the dissolution was also the heir to this formidable arsenal, which was the only “thorn” in the side of the US omnipotence.

Soviet Atomic Program
Soviet Atomic Program – 1946 | Source: Atomic Heritage Foundation

Freezing Your Dollars

Time has passed and we have arrived at the present day. 51 years after the US coup d’état, for the first time the dollar is in immediate danger of losing its global dominance. The unilateral freezing of Russian funds in dollars by the Americans as part of the sanctions of the Ukrainian war will probably be the beginning of the end for the hitherto dominant currency.

The US itself, in a highly controversial and unconventional move, has shown everyone that its dollars are at any time in danger of being pegged if it does anything to annoy the emperor’s nostrils. The move to freeze dollars because of sanctions is considered odd because it has awakened the reflexes of China primarily and other countries secondarily.

China

The Chinese, undoubtedly on the path to crowning the new emerging empire, know that the succession will not be bloodless. The link between the Chinese and US economies is so unnaturally intertwined that neither dares to contemplate that it will “break”. But the relationship is unequal.

Pelosi’s visit to Taiwan, where she knowingly could have caused far worse developments than the impressive Chinese military exercises, was another oddity in all the oddities that are happening.

Most of us noticed that in the US, there were many opposing voices to Pelosi’s visit. From Biden himself, to almost all of the “reputable” media, the embarrassment was evident as everyone saw the obvious. An untimely provocation that could light the fuse for an equally untimely World War III.

Faltering Economy

The global economy is faltering. No economic analysis gives any hope of recovery as long as this very suspicious war atmosphere continues in every corner of the globe.

Why suspicious?

One cannot conceive that the US operated with such amateurism in the “Biden era”. From the moment of his election onwards, it is as if he lit a fuse in the world. A fuse that is left to burn even though chaos can be seen in the background…

One guess would be that the US has now understood that the “overprinted” dollar is time to take a dive into the void.

So, they are causing as controlled a “mess” as possible through warfare, to somehow “zero out” the debt and launch a new digital currency, (the e-dollar), on the same (if not better) starting point than the nascent Eastern currency, which we mention below.

A World Split In Two

It is now a given that the world is splitting in two. China, seeing that the US, in order to maintain its acquisitions, will not put the brakes on anything, made a strategic choice.

The alliance with Russia, under certain conditions, activates to its advantage the largest nuclear arsenal on the planet. Their common goal? The end of the American empire.

The military balance between US vs China – Russia, which is the one issue, is probably so close to being in place, (after the Russian nukes are added), that there is no point in looking for who has the upper hand.

All together, with simple conventional warfare, they have the potential to destroy 5-6 Earth-like planets. Besides, if we get that far, it’s futile to discuss everything else.

Dollar is the Enemy

But the main target of China and Russia, in the war against the authoritarian US pan-empire, is none other than the dollar.

At an unsuspected moment in 2020, Russian Foreign Minister S. Lavrov had called on China to disengage from the dollar exchange rate in their dealings with each other.

At the time, most people brushed it aside or countered that the dollar-energy link was enough to maintain the absolute dominance of the US currency.

Today, we are one step closer to that very decoupling. The first act was played out with Russia’s demand for ruble payments. The sequel will be even more interesting.

Blockchain Technology

Here necessarily we must pause to consider a new parameter that did not exist before in the monetary economy. Until 2009 when Bitcoin appeared, there was no way to issue currencies unless they originated from a state.

The problem until then, was that there was no other “issuer – manager” of money, other than the classical banking system, than the twin state – banks. The problem was solved with the emergence of blockchain technology.

The blockchain is an incredibly disruptive invention in the way monetary values will be produced from now on. The use of this technology, has long since surpassed the cryptocurrency ecosystem where it originally flourished.

It has now begun to be widely used by the traditional banking system as well. On the flip side (and just to keep in mind), get your head around how the dollar works and make the comparisons yourself.

A possible common currency of China, Russia, India and many other countries crowding into the BRICS backyard would restore “monetary order” since its value would be tied to what we call “critical goods”.

BRICS Leaders
BRICS Leaders | Source: DW

In short, each currency unit in circulation will have to correspond to some other value, but not necessarily linked to the dollar’s exchange rate. This complex linking of values and algorithmic analysis of exchange rates is the “job” of the blockchain.

The same “job” of blockchain, is both the security of transactions, and the speed (features that until now only banks have offered).

Final Words

A reversal like this is a worst case scenario for the US. On the one hand a “toxic” currency like the dollar and on the other hand a currency with no promising prospects if it does not follow the mistakes and opportunism of the US currency.

The US knows that such a development would leave the empire half-naked. Their effort will not be to take back the lost clothes. It will be to keep the empire from being left completely naked.

To most people, the devaluation of almost all currencies at this time against the dollar is seen as a victory for the American currency and a further strengthening of its dominance.

For those who see it superficially, this is interpreted as an even greater strengthening of the dollar. But the reality is different. If it doesn’t stop (and it doesn’t seem to be stopping), this imbalance will bring about the swan song of the global economy as we know it to date.

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