Jul 19•5 min read
Don't Go Down With The Ship.
You Don’t Owe Them Your Loyalty
How would you describe the economy right now? Garbage, trash, hell, broken, or the brink of collapse? If you vibe with the fifth option, you are not wrong to feel this way. It seems like the whole world is going to shit in a handbasket, and we are just along for the ride.
Gas prices around the world are through the roof. According to AAA, the national average for a gallon of gas in the US is an eye-watering $4.46. Compare this with a national average of 3.16 just a year ago. While 3-dollar gas isn't the greatest, it is undoubtedly better than what we see today.
Desiel is sitting at $5.49 gallon with no relief on the horizon. These prices get passed down to the consumer at the end of the day, especially the cost of diesel. The trucking industry powers the modern economy, so the more truckers have to pay for fuel, the more we have to pay for the end product. This is a fundamental fact and is just one piece of the puzzle.
How can the economy sustain the impact of high gas prices without going into recession or worse?
This is precisely what the Federal Reserve wants to happen to "tame" inflation. They are pilling on to the problem of high fuel prices by raising interest rates to make it more expensive to borrow. Making credit more expensive reduces the demand for items such as houses, cars, and other big-ticket items consumers use credit to buy. Reduced demand for these items has second and third-order effects that ripple through the economy. This means fewer hours for the parts makers and the home builders, which then impact the stores that supply the materials, affecting retail workers. This is how recessions are created.
In a credit-based monetary system such as ours, it's contracting if credit isn't expanding. A contracting credit system makes borrowing more expensive for governments in general. All governments borrow money to help finance their operational needs. Governments worldwide borrowed lots of money since the great financial crisis and during the covid crisis at extremely low rates, which was fine and dandy when rates were rock bottom. Now that interest rates are rising, governments worldwide will have a more challenging time rolling this cheap debt over.
If governments borrow money at higher rates, it is hard for them to pay other loans back as they come due. If you sum it up, it essentially looks like a Ponzi scheme.
If you look around the world, you see governments having difficulty paying back their loans. Here a just a few examples of countries defaulting on their debt or at risk of default:
Governments rely on central banks to print their currency as well. Cheap credit equals more cash in circulation. When central banks print too much money, and it gets into the economy, you get inflation. Governments that have borrowed too much money are essentially screwed.
Central banks hike interest rates to combat inflation, making it hard for governments to borrow money to roll over debt.
Central banks print money; they debase the currency making it worth even less. This is the situation that governments find themselves in today, but who gets screwed in the end?
Regular people like you and me. National pensions don't get paid. Citizens get hit with confiscatory taxes in a vain attempt to repay debts. Governments fail, and chaos takes over. All because governments got greedy and were unable to live within their means.
How survive this situation with your wealth intact?
Bitcoin Is Your Life Boat
If you want to survive the looming economic disaster on the horizon, you must take prudent action to preserve your wealth now while you can.
Some people will tell you that you should buy gold, silver, or property as they tend to do well in an inflationary environment. They are not wrong per se. These bearer assets are good because you can take custody of them, but they have counterparty risk.
Gold and silver can be confiscated, especially if you have a large amount of them. It is also hard to transport over long distances. Try buying something online with a gold bar. You can't do it.
Property can protect you from inflation, but you can't take it with you if you need to move, and it is not a liquid asset.
So what choice do you have left that checks all the boxes? Bitcoin. It is fungible, meaning it can be readily exchanged. It is portable, meaning you can take it anywhere you want or send it across the world in a blink of an eye. Lastly, the government can't seize it, unlike the money in your bank account. No one can take your Bitcoin away from you if you have your seed phrase.
Just sit and think how revolutionary this concept is. If you have your wealth in Bitcoin, it won't be debased by the money printers, and it can't be taken from you by governments looking to take your hard-earned wealth to bail out their bad decisions.
Bitcoin is the economic lifeboat that is available to everyone on the planet. All you have to do is hop on. The choice is yours. Don't go down with the ship.
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