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Created de facto by Richard Nixon in August 1971, then legalized by the Jamaica Accords in early 1976, the current monetary and financial system suffers from seven deadly sins that will lead to its downfall. This system is a losing game for 99% of the world's inhabitants.
This is a reality that will shock many people, but it is something that needs to be understood if you really want to take care of your money future.
The current system places you in a vicious circle of generalized impoverishment from which you will have a hard time getting out if you don't open your eyes quickly. Everything is done in the educational system so that you never open your eyes. That's why the educational system doesn't teach you anything about money and how the current system works.
And here I am only talking about the people who are placed in the vicious circle of generalized impoverishment. For hundreds of millions of people living in emerging countries, this system is not even accessible. This system excludes all these people by giving them no hope for a better future.
In what follows, I will quickly detail in 6 points why this system is a losing game for 99% of the inhabitants of the earth. A way to help you to open your eyes faster to the inconvenient truth rather than staying in a comfortable lie.
Central banks are printing money out of thin air. Governments are going deeper and deeper into debt.
Central banks have the ability to print as much fiat money out of thin air as they deem necessary. A minority of people who are not representative of the people, therefore, make decisions that harm the vast majority.
Since the beginning of the COVID-19 pandemic, the Fed has printed nearly 25% of all American dollars in circulation.
The Fed has also taken the opportunity to lower its key interest rates to zero, while the European Central Bank has already had negative rates for several years. The institution chaired by Jerome Powell is also conducting a massive buyback program on the financial markets, which has caused the Fed Balance Sheet to explode:
It now exceeds $8.1 trillion. It has more than doubled in the last twelve months.
Meanwhile, the governments of the world's major economic powers have taken advantage of the situation to take on more and more debt in order to finance ultra-expensive stimulus plans.
The prize probably goes to the United States, whose debt now exceeds $28,473 billion. And this before Joe Biden's infrastructure plan is accounted for. By the end of 2021, the United States will have a debt of well over $30 trillion.
The days when having a public debt to GDP ratio below 100% was the norm are over. All the world's major economies are above 100% overall. The world debt has even reached $277T at the end of 2020. The situation looks explosive for the months and years to come, as it is clearly unsustainable over time.
The price of assets is skyrocketing.
The Fed's ultra-aggressive monetary policy had the effect of creating a TINA effect ("There Is No Alternative") among retail investors who were massively pushed into the equity market in search of yield. As US Treasury bonds were no longer attractive enough, other solutions had to be found to protect themselves from this great monetary inflation.
The price of assets therefore exploded. This led to a FOMO (Fear of Missing. Out) effect on the stock market where a Tech bubble was formed.
The S&P 500 and the Dow Jones are at record levels at the beginning of the second half of 2021. For many, it is time to watch carefully for the big warning signs of a stock price crash. In my opinion, it is getting closer and closer.
This asset price explosion has affected the real estate market, but also the gold market. This makes sense, as everyone is looking to protect themselves against the measures taken by the Fed and other major central banks.
Inflation is taking over the world.
Central banks have printed more than 12,000 billion dollars in the last twelve months. This great monetary inflation is bound to have disastrous effects on the world.
Many seemed not to want to believe it, starting with the Fed, but price inflation is now sweeping the world.
The hardest-hit country is the United States where inflation exceeded 5% in May 2021. The situation is not likely to improve in the coming months. This high level of inflation is likely to continue. The Fed may want to reassure that this is only temporary, but Jerome Powell is not fooling anyone.
The Fed will have to change its monetary policy in the coming months, well before the 2023 deadline recently set.
The problem is that when the Fed changes its policy, the financial markets may not like it at all. A big crash in the stock market could be the immediate result.
Those who hold assets get even richer.
Those who can hold appreciating assets will necessarily get even richer. Unfortunately, we are only talking about the richest 1% of the planet.
It is no coincidence that entrepreneurs like Jeff Bezos or Elon Musk have seen their fortunes explode in 2020.
The Tech bubble in the stock market has benefited them fully. Jeff Bezos has taken the opportunity to recover some cash by selling some Amazon shares during the second quarter of 2021. A logical decision as the bursting of this bubble threatens the stock market.
The poorest people can only suffer without any hope for a better life. This is where the injustice of the current monetary and financial system becomes clear.
The vast majority who do not have assets are inexorably impoverished.
The poorest people who do not have access to the stock market, to real estate, or to gold will see their money devalued ineluctably. What I am telling you here is not a scoop, the Fed knows all this very well.
Throughout 2020, Jerome Powell has confirmed all of this repeatedly.
Unfortunately, the Fed continues to do this despite common sense. This explains why the current system has reached its limits. Everyone recognizes its great injustice, but no one is ready to revolutionize it to put it back at the service of the people.
Because that is where the problem lies. The current system does not serve the interests of the people, but rather those of a minority who have been profiting fully from it for several decades.
The Cantillon effect is at work: the rich keep getting richer, the poor keep getting poorer.
The phenomenal drop in the velocity of the U.S. dollar since March 2020 confirms that all the money injected into the system did not circulate in the hands of those who needed it most. This money has simply enriched the richest.
This is the famous Cantillon effect described by the 18th-century economist Richard Cantillon.
As you can see, this is nothing new. But nobody wants to do anything about it. Everyone who gets out of this system ends up criticizing it because they know what it is. The problem is that when they are in charge of it, they prefer to take advantage of it rather than take the risk of revolutionizing it.
This system obviously cannot last forever. Something has to change. We cannot remain in a situation where the rich get richer and richer, while the poor keep getting poorer and poorer.
Bitcoin fixes this.
The good news is that the great monetary revolution that people around the world have been waiting for has begun since January 3, 2009. This revolution has a name: Bitcoin.
Bitcoin addresses the problems of the current system by starting with a simple initial choice: a monetary supply fixed at 21 million units no matter what. To this, Bitcoin adds a programmatic monetary policy that does not depend on the arbitrariness of any human being.
Bitcoin responds only to its computer code and its users.
That's why Bitcoin is the people's currency backed by the people. Everyone can benefit from the Bitcoin system without needing permission from more powerful people to run the system.
Bitcoin belongs to the people.
It is a winning system that offers everyone on earth hope for a better future with money. A future where everyone has the chance to protect the fruits of their labor and live life on their own terms. Bitcoin is an opportunity that humanity cannot afford to miss.
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