The US economy is slipping into recession as GDP grew by just 1.1% in the first quarter. Bitcoin, on the other hand, is continuing to rise.
Probably the most important factor for economic well-being is oil. Oil drives economies, and strong demand for oil is indicative of a healthy economy that is using oil to fuel its industrial base.
However, in this day and age, oil prices have continued to fall as economic growth slows and demand weakens despite production cuts by OPEC countries.
In the U.S, GDP growth slowed to 1.1% in the first quarter. Given the forecast of 2%, this was an unexpectedly sharp drop. Moreover, the decline is also sharp considering that the GDP growth rate in the fourth quarter of 2022 will be 2.6%.
Another looming problem facing the dollar is that de-dollarization is taking place. The rest of the world is starting to move away from the dollar, possibly due to the US government’s recent weaponization of it, imposing sanctions on any other country it disagrees with.
Russia is using renminbi for trade, Argentina will use renminbi to pay for Chinese imports, India is settling some of its trade in rupees, Brazil and China are deciding whether to use dollars in trade between them, and Saudi Arabia is considering accepting renminbi for oil Export to China.
However, de-dollarization is likely to be a slow process, as US dollar foreign exchange reserves are almost twice as large as the euro, yen, pound and renminbi combined, which is the same as a decade ago.
The U.S. dollar accounts for 58% of all central bank foreign exchange reserves, and that may not change anytime soon. Nonetheless, the winds of change have begun to blow, and dollar hegemony is on the wane.
Dollar remains in control
Still, the dollar has been described as the least dirty shirt in the laundry. It has its problems and its critics, but it’s still the world’s reserve currency, while all other fiat currencies are much weaker.
The BRICS nations Brazil, Russia, India, China and South Africa are said to be developing a new reserve currency This will be backed by physical goods such as commodities.
The evil of CBDC
Nonetheless, over time, fiat currencies go to zero, as has been historically proven.For those wishing to maintain full control, the only final roll is to impose central bank digital currency (CBDC).
A CBDC would enable central banks to exercise the kind of control hitherto only read about in science fiction. A CBDC would empower the micromanagement of individual accounts, including setting spending time limits, deciding what can and cannot be bought, and even direct sanctions if an individual does something deemed contrary to the national interest.
Become Your Own Bank With Bitcoin
In the quagmire of all this fiat currency misery, there is one asset out of the control of governments and central banks: Bitcoin. Bitcoin is completely decentralized, cannot be taken away, and enables individuals to be their own banks.
Banks are outdated behemoths of a bygone era. They don’t serve depositors because they decide who we can or can’t trade with, they don’t provide returns to account for inflation, and if enough depositors demand their money at the same time, the bank will fail because due to partial provision Gold is zero and it holds hardly any deposits.
Bitcoin is cyclical, so history tells us that its price does go up and down, sometimes quite wildly, but it’s an emerging asset class, so it will take time for its volatility to subside.
The main thing is that it is the people’s money, which reduces people’s dependence on the government and banks. With the evil of CBDCs looming, it is incumbent upon all to research Bitcoin to the best of their abilities in hopes of moving away from the crumbling and dangerous fiat currency system.
Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.