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Dollar collapse, bullish?

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There have been many fundamental shifts in the global economy in my lifetime. As an American child of the Reagan Presidency, I recall things like the fall of the Berlin Wall, the first Gulf War, the Oklahoma City Bombing, the Columbine Massacre, the brutal government overreach at Ruby Ridge, and the Branch Davidian complex in Waco, Texas. I was in 9th grade when the 9/11 attacks happened, and I had close friends who fought in Iraq and Afghanistan. I even knew a handful who died in combat or who still carry permanent disabilities from the war zone.

During all those years, I also recall influencer after influencer talking about the imminent collapse of the dollar. From Lew Rockwell to Peter Schiff to Ron Paul and dozens of others, as we have watched the tidal shift of foreign policy, stimulus, natural disasters, and a pandemic reshape the global economic landscape, an entire generation of economists predicted the fall of the dollar to no avail.

The notion used to scare me, but over time, I have realized that the dollar’s collapse won’t likely be a singular event. Now, I’ve taken it a step further, and it might even be a net good for freedom, the West, and maybe even the United States if the dollar slowly collapses. Thinking back to some of my earlier analogies about Bitcoin, the “de-dollarization” of the global economy might be a little bit like how the Protestant Reformation put the Catholic church in check without conquering it, and then created new room for science and enlightenment to be a cornerstone of the era. Oh! And also, the Catholic Church is still here and strong, but the reformation helped make it voluntary, which is definitely a good thing.

 An Old lesson and a current affair

An old man typing a letter

The BRICS nations, an alliance comprising Brazil, Russia, India, China, and South Africa, represent a potent force in the global economy. Much like the myriad threads that come together to form an intricate tapestry, these nations have woven into a cohesive alliance, poised to challenge the prevailing dominance of Western economic hegemony. Each member of this formidable group brings its unique strengths and resources to the table. Yet, they all share a common aspiration: to reshape the global financial landscape and assert their influence on the world stage.

At the heart of this grand narrative lies the U.S. dollar, the veritable protagonist in our collective (but also my personal) economic tale. For decades, it has maintained its status as the global reserve currency, wielding influence akin to the once-mighty Roman Catholic Church: an anchor of trust and cohesion that unites people from otherwise very different cultures. Countries across the globe hoard dollars as a store of value and utilize them for international trade, securing their place as the linchpin of the world economy for most of the last century.

How does the dollar preserve this exalted status? The answer lies in a confluence of factors: a stable political system, the sheer size of the U.S. economy, the vast network of global trade conducted in dollars, and of course, the American military machine, which has maintained a size of many multiples of the rest of the world’s militaries combined for most of the last generation. This intricate web of forces fortifies the dollar’s position, much like the Latin-speaking Roman priests once held a monopoly over the interpretation of Scripture, the right to collect and distribute the tithe and grant forgiveness for sin.

However, much as Martin Luther’s actions disrupted the church’s centralized control, the BRICS nations are poised to challenge the dollar’s dominance. If these economic titans were to collectively adopt an alternative currency for global commerce, the ramifications would be profound, sending ripples throughout the macroeconomic landscape, and in the last few months, we are seeing them do exactly this. The first moves were Russia and China leading the way, but now the other BRICS nations are following suit, and even Saudi Arabia has signaled to join in their reformation efforts of the global economy.

The tremors of this decision are reverberating across the globe.

A possible outcome:

The dollar’s demand plummets, depreciating its value and eroding the wealth stored in dollar-denominated assets, and countries heavily reliant on the dollar for trade and investment face significant economic headwinds as the once-stable currency loses its footing in the global arena.

Simultaneously, a new global reserve currency emerges, much like the Protestant Reformation gave rise to new denominations and decentralized religious authority. The nation or alliance controlling this new reserve currency wields immense influence, reshaping global trade dynamics and financial power structures. Like the Protestant Reformation, the transition might not be swift or smooth, but it signals a tectonic shift in the world order. And also, like the Protestant Reformation, we might be looking at an opportunity to decentralize power and increase the self-sovereignty of the average person around the globe: a net good for everyone except the oligarchs of the existing hegemony.

In this unfolding economic drama, the BRICS nations are the vanguard of change, seeking to liberate the global financial system from the dollar’s hegemony. One of the competitive options for global currency emerging from this scenario is Bitcoin. As a distributed digital currency, it offers the potential to transcend borders and facilitate global commerce without the need for intermediaries. Its underlying blockchain technology ensures transparency and security, fostering trust in its value as a medium of exchange and allowing everyone involved to feel less like they are subservient to some national sovereign money of a land they will never see—and, in many cases, don’t care for at all!

In a world where the BRICS nations and other economic powers embrace Bitcoin, the dollar’s dominance wanes, and a more level playing field in global finance emerges. This decentralization of currency away from the dollar could become a net good for freedom by flattening out the disparity in global power structures.

As Bitcoin gains traction, the global economy witnesses a paradigm shift similar to the one that occurred during the Protestant Reformation, gradually eroding the dollar’s supremacy. This transformation can bring about greater financial inclusivity, empower individuals and businesses, and ultimately promote a more equitable distribution of wealth and resources.

Moreover, the widespread adoption of decentralized currencies like Bitcoin spurs innovation in various sectors, as individuals and organizations embrace new technologies, data sovereignty, privacy, and new financial instruments. This shift fosters the development of more efficient, transparent, and secure financial systems, ultimately benefiting global trade and commerce.

In conclusion, the BRICS nations, as harbingers of change, are well-positioned to challenge the long-standing dominance of the U.S. dollar. The implications are far-reaching and transformative if they collectively adopt an alternative currency like Bitcoin for global commerce. The decentralization of currency away from the dollar fosters a more equitable global financial system, much like the Protestant Reformation led to the decentralization of religious authority.

As Bitcoin potentially gains traction, it holds the potential to reshape global power structures, spur innovation, and promote financial inclusivity. By flattening out disparities in global power structures, this shift could ultimately prove to be a net good for freedom and prosperity worldwide. Just as Martin Luther’s actions ignited a socio-religious revolution, the widespread adoption of Bitcoin heralds a new era of economic empowerment and liberation.

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