The collapse of Silicon Valley Bank in the US was the beginning of the end of the sovereign debt super bubble and the fiat currency scam.
When it comes to the crypto world, the smart move for the US government would be to pass clear and constructive crypto regulation and support the USDC stablecoin as much as possible for 2 important reasons:
1. It would prolong the hegemony of the US dollar. A vast new Euro Dollar
(= offshore) market would develop as the Global South adopts dollar crypto rails instead of using their vastly inferior local fiat currencies
2. The parent company of USDC, Circle, is already holding tens of billions of dollars in US treasuries.
Circle's business model works like this: Pocket the approximately 5% yield on the bond portfolio, while users of the stablecoin get nothing.
With the government supporting USDC, Circle would hold an order of magnitude more treasuries, which is ever more important as large players like China look to completely exit their huge treasury positions.
The US bond market is on extremely shaky legs. Of the $30 trillion in obligations, more than half need to be rolled over within the next 3 years!
This means not only much higher debt service costs for the US government, but they also need to find buyers for this gigantic mountain of debt.
In summary, pushing dollar-based stablecoins forward would extend the power of the US dollar and help to stabilize US finances.
Never mind the fact that crypto is unstoppable and crypto-negative jurisdictions will simply lose relevance over time.
However, I started this article with an oxymoron. Smart and US government should never be in the same sentence.
The US hegemony has long passed the point of no return.
There is no slowly turning around of the ship. This is not how fourth turnings work.
The titanic is going down.
Seemingly insane political decisions will continue to be made and US institutions will at first slowly and then all of a sudden collapse.
Don't expect what makes sense. Expect the opposite.
Once you look at the world around you through this lens, everything makes sense.
The assassination of Signature Bank (an important crypto on/off ramp in the US) in broad daylight is another example of this madness.
Actions have consequences. Excluding the social consequences and focusing primarily on the financial aspects, this means:
Over the short and medium term, the US dollar will lose relevance. We're already seeing this now as the Chinese Yuan made a massive leap forward in international trade during 2022 thanks to the sanctions placed upon Russia.
As a side note, a new competitor is entering the arena. A Chinese Yuan based stablecoin is in the works.
Huge, highly complex systems don't quietly disappear in the night.
For the rest of this decade, expect unforeseen consequences and rising volatility culminating in panic.
A total collapse of confidence in the US government is only a matter of time.
This goes hand in hand with the end of the dollar as the global reserve currency.
Simultaneously, we'll see the rise of the Blockchain Ecosystem as the fundamental pillar for global commerce, finance and social media.
Despite all of this, the dollar is still much stronger than most other fiat currencies.
The Grim Reaper Is Coming To Europe
The European financial system is an even bigger house of cards. I wouldn't hold any significant amount of money in an EU bank.
Socrates, a financial AI system with a good track record, is already predicting a death spiral for 2025. There is a directional change in the Euro in 2024 and a panic cycle in 2026.
In other words, you have until 2024 to get out of the Euro and out of European Banks.
This is not just a global crisis we are heading towards. It's a financial paradigm shift and everything is about to change.
The sooner you understand this and move yourself to the right side of history, the more you will benefit.
How can you protect yourself and even benefit from this calamity?
For the modern speculator, cryptocurrencies are the number one tool for financial survival.
Cryptos will completely protect you from the inflation fire that will obliterate the fiat world. Plus, cryptos give you true sovereignty and you no longer have to depend on the banking system or any other middle men.
To get started, I recommend watching this video.
To sovereignty and serenity,
Marco Wutzer