Petrodollar To US Digital Dollar In 2021?

By Neenah Payne

Many Americans assume that the dollar will remain our currency for the foreseeable future. However, Are You Prepared For Imminent US Digital Dollar? points out that since the establishment of the Federal Reserve in 1913, the value of US dollar has declined so much that it is worth almost nothing now.

The Coming US Digital Dollar (Part 1): What it is, and Why it Matters by Dr. Garrick Hileman warns that the replacement of the US dollar by a digital dollar is now inevitable and imminent – possibly as early as January 1, 2021. Americans who are not prepared for this shift may be left in a precarious position. Yet, this possibility is still off the radar for most Americans who don’t understand that the dollar is in danger. Many Americans are still invested in the stock market – not realizing that no matter how much money they may make, it’s still all in petrodollars that could be replaced soon.

Government Digital Currency: Why You Should Be TERRIFIED! explains that once the US digital dollar is introduced, it may no longer be possible to protect your savings. So, the time to consider Bitcoin and other cryptocurrencies is NOW – before the end of this year.

When President Richard Nixon severed the dollar’s final link to gold in 1971 shows that Nixon’s decoupling of the dollar from gold in 1971 had major consequences that will shock most Americans. 1971: The Year That Changed Everything links to the informative site WTF Happened In 1971?.

Endless Wars to Protect Fiat Petrodollar

The dollar became the dominant currency in the global economy soon after World War I. The Bretton Woods Agreement in 1944 solidified its position at the top by an agreement that all countries would use only dollars to pay for oil. That was the birth of the “petrodollar”.

Petro-Dollar System Crumbles: US Dollar Could Collapse from the World’s Oil Wars warns:

With the Petro-Dollar System Devastated, the U.S. Dollar Is More Fragile Than Ever. Free market advocates, gold bugs, and cryptocurrency proponents have always said that today’s monetary system was immoral and manipulated. Of all the countries in the world, U.S. leaders have been some of the worst manipulators in history and the nation’s super-powers may be coming to an end. The U.S. government has blamed the coronavirus outbreak on the economic devastation, but America’s financial system was already in trouble before the virus.

The article adds:

Many Americans during the last two decades have wondered why the U.S. has been at constant war in the Middle East and it is likely due to the petro-dollar. Back when Franklin D. Roosevelt and the ‘House of Morgan’ destroyed the American economy, in 1944 the Bretton Woods pact was agreed upon, which was the first step in establishing the petro-dollar.

The deal made it so countries worldwide would trade international commodities that are always priced in USD. The U.S. would also hold and protect gold reserves for various countries as part of the deal. This gave the United States a financial upper hand and in return, the U.S. pledged not to use the Federal Reserve to print massive amounts of USD. The creator of Keynesian economics, John Maynard Keynes, was instrumental in forming the Bretton Woods pact in 1944. The U.S. using the honor system promised it would not print money on a whim and it would help protect the world’s gold reserves.

The Bretton Woods agreement fared well up until the Vietnam War, as American allies realized the Fed was printing money like no tomorrow for war expenditure. A few countries started questioning America’s monetary schemes and decided to ask the U.S. to repatriate their gold reserves. In 1971, France wanted to withdraw their gold reserves from the U.S. and former President Nixon decided to react.

On August 15, 1971, President Richard Nixon declared a new economic policy, which Americans called the “Nixon shock.” Nixon said he was removing the USD from the gold standard for a temporary period, but the move remained permanent. Two years later, Nixon begged the King of Saudi Arabia to only accept U.S. dollars for barrels of oil and in exchange, Nixon offered military protection. The U.S. President extended the same offer to key players in the fossil fuel-rich countries and by 1975 the plan captured every nation state tethered to the Organization of the Petroleum Exporting Countries (OPEC).

The article points out:

Many historians believe that the Gulf Wars started over the petro-dollar and the many invasions in other Middle Eastern, African, and South American countries as well. In fact, the U.S. has caused harm to various nations either by sanctions or invasions in Libya, Venezuela, Iraq, Afghanistan, Lebanon, Syria, Yemen, Somalia, Sudan, and Iran…. Most anti-war advocates have figured out why the U.S. has been deployed all over the Middle East and multiple African nations. The only reason for these invasions was to keep the petro-dollar alive, but throughout the Bush and Clinton administration, 500,000 children had died due to these wars. Muammar Mohammed Gaddafi tried to escape the petro-dollar system when he had Libya create the Dinar with a few allies.”

High Costs of Petrodollar Wars

The petrodollar is a “fiat” currency backed by nothing but the US military. For the last 20 years, the US has fought several wars to keep Middle Eastern nations from shifting out of the US dollar in selling oil. The US bombed Libya (one of the most prosperous African nations) almost back to the Stone Age.

Those wars have been costly not only in terms of the nations destroyed to protect the petrodollar, but in terms of the US economy and the lives of the US military. The billions of dollars spent protecting the dollar backed by nothing but oil was money not spent on building up our failing infrastructure. In addition, for the last 20 years or so, American veterans have been committing suicide at the rate of one an hour. New Veteran Suicide Numbers Raise Concerns reports. “We lost more than 60,000 veterans to suicide over 10 years. That’s ridiculous.” That’s more than the 47,424 Americans who died in combat in the Vietnam War or the 53,402 Americans who died in combat in WWI.

So, supporting the petrodollar has been expensive for America as well as the Middle East. The US claims that it spreads democracy around the world. However, America’s defense of the petrodollar has led our currency to become a Weapon of Mass Destruction. A dollar that costs so much is not good for America or the world. The BRIC nations (Brazil, Russia, India, and China) formed as a counter measure to this unilateral dominance and plan to bypass the dollar.

Fidelity Report/Documentaries Discuss Bitcoin Revolution

The Fidelity PDF BITCOIN INVESTMENT THESIS BITCOIN’S ROLE AS AN ALTERNATIVE INVESTMENT shows that one of the world’s biggest investment firms just greenlighted Bitcoin for institutional and retail investors. The October 2020 report says it is now inevitable that retail investors will jump into Bitcoin.

It says, “In a world where benchmark interest rates globally are near, at, or below zero, the opportunity cost of not allocating to bitcoin is higher.”

Bitcoin and the blockchain on which it runs are new concepts for many people. The documentaries below help explain these terms that are revolutionizing our world. Bitcoin is the end of money as we know it. However, the technology is revolutionizing much more than our currency.

Magic Money: The Bitcoin Revolution says that Bitcoin is one of the most important inventions in history and the most revolutionary technology we are likely to see in our lifetimes! Bitcoin is both a currency and a payment network. The documentary describes Bitcoin as “a financial game changer”. Yet, it is easier to use than email. Bitcoin is very freeing and empowering due to is potential to eliminate central banking. The video explains how this technology helps not just rich nations but the poorest as well. Blockchain technology on which Bitcoin runs is impacting the financial industry around the world in major ways. It is also going to disrupt accounting, law, governments, wars, and much more.

The documentary shows the connection between money, power (government, bankers, religion), and wars. The video describes the role of the banks in what it calls the “magic money machine” in which cash is created out of thin air and for which interest is charged. It describes the role of the banks in creating the housing crisis of 2008 which caused The Great Recession. No American banks have been held accountable for causing that crisis which cost 30 million Americans their jobs and one million their homes. Instead, the bailout rewarded the failed banks with trillions of dollars.

The documentary explains that Bitcoin uses the internet to restore the trust that used to characterize the best money systems. It shows that Bitcoin enables people to become their own bank. Bitcoin is a digital currency and computer software. No one person can control the software on which it runs.

Gold or Bitcoin?

On Aug. 15, 1971 was the day the Fed shut its “gold window” — meaning foreign governments could no longer trade gold for dollars at the fixed rate of $35 an ounce. Discussions have been held for several years about replacing the dollar with a variety of currencies. Former Texas Congressman Ron Paul and others have proposed a return to the gold standard to restore a sound US dollar.

However, the video interview at the bottom of the WTF Happened In 1971? site explains why gold is no longer the best choice for a sound currency. The interview is with Ben and Collin Prentice who created the site. These savvy Millennials are advocates of bitcoin which they believe solves many of society’s problems. Ben says that, contrary to what boomers believe, gold has failed as a currency because a politician like Nixon could decouple it from our money supply at the stroke of a pen — and one politician destroyed the world’s economic system. So, they believe that Bitcoin may be the ONLY chance for sound money because it cannot be controlled by anyone and turned into a fiat concurrency.

Many wise investors have diversified their portfolio with gold. However, since the introduction of Bitcoin in 2009, even more savvy people have hedged their bets by getting into the cryptocurrencies. The chart below shows that was a profitable choice. As gold rose about 30% from March to August this year, Bitcoin soared about 130%. However, as the videos further below show, gold has been suppressed by the big banks and is now expected to soar. Since it’s possible to convert gold to Bitcoin, people who have gold may choose to ride that wave higher and convert it later, if they want.

HOW PETRODOLLARS STARTED THE GOLD CRISIS THAT MAY SOON DESTROY THE U.S. DOLLAR points out:

Most people don’t realize just how little gold there is left in the west and the impact this plays on the world’s financial stability…. For decades, the Fed has tried to suppress gold prices to enhance the credibility of the U.S. dollar as the world’s reserve currency. But that is no longer the problem. Now, the Fed is faced with a major crisis….The western central banks have done everything they can to manipulate prices down, but they are running out of options. I believe that very soon, this crisis will explode and threaten the entire financial system. Ultimately, this will expose the utter worthlessness of the U.S. dollar, and then the price of gold will skyrocket.

Corporate America Embraces Bitcoin

The 10/1/20 video The New Digital Dollar Is Coming discusses the dangers of the US dollar, including negative interest rates, and why having Bitcoin (rather than gold) could be an important protection. Max Keiser of The Keiser Report explains that after evaluating gold, Michael Saylor, co-founder and CEO of Microstrategy moved his company’s money from cash to Bitcoin. Keiser says all cryptocurrencies other than Bitcoin are scams. However, that is an over simplification. Some people see various cryptocurrencies as a store of value, while others use them for their payment utility and/or tokenization ability. For example, Bitcoin Cash and many other cryptocurrencies are far better than Bitcoin as payment systems.

MICROSTRATEGY CEO: WHY We Bought $425 MILLION Worth Of BITCOIN & Why Other Companies Have NO CHOICE is a 9/17/20 video in which Michael Saylor explains why he invested nearly half a billion dollars in Bitcoin in August this year when just a few years ago, he was saying Bitcoin was going to die. Saylor says you can’t keep your money in cash now because of hyperinflation and low interest rates (perhaps going to negative interest rates soon). He points out that he has a fiduciary responsibility not to lose his company’s money. Saylor says he plans to hold Bitcoin forever. He believe that it is 1,000 times better than gold and he expects Bitcoin to soar in the 3-6 months since his purchase in August. The video points out that Bitcoin has been the best-performing asset over the last decade. Saylor describes bitcoin as “the most magical, hardest-working security in the world”. The video discusses the surge in Bitcoin since 2017.

Why This CEO Made a Bold $425 Million Bet on Bitcoin is another interview with Saylor. He explains why he chose Bitcoin over gold. He says that Bitcoin is “digital gold”.

Bitcoin and Blockchain Status and Future

Bitcoin to $1 Million in Five Years, Enormous Wall of Money is Coming says Raoul Pal is an October 7, 2020 video interview with former hedge fund portfolio manager Raoul Pal who recently moved more than 50% of his assets into Bitcoin. The chief executive officer of Global Macro Investor said “I have reduced cash and put that into bitcoin. I’m also thinking of selling my gold to buy more. Bitcoin will massively outperform gold.”

You Might Have Missed it, but Blockchain is Now Mainstream shows that while the blockchain on which Bitcoin runs may still be off the radar for many people, they have quietly gone mainstream. It discusses the Fourth Industrial Revolution based on the blockchain and cryptocurrencies. It also explains why it’s time to take central banks’ digital currencies seriously. It says that 15% of Americans now own cryptos – and half of those bought in the first six months of 2020.

JPMorgan CEO Jamie Dimon once called bitcoin a “fraud”, but now he’s leading Wall Street’s push into cryptocurrencies. JPMorgan Chase is America’s largest bank by assets with over $2.62 trillion in assets and is one of the largest banks in the world. In February 2019, JP Morgan became the first U.S. bank to create a digital coin representing a fiat currency. The JPM Coin is based on blockchain technology enabling the instantaneous transfer of payments between institutional clients.

Financial Services Revolution: How Blockchain is Transforming Money, Markets, and Banking discusses JP Morgan Chase’s approach to the blockchain:

Also in 2017, the bank launched its own Interbank Information Network (IIN), which the bank touted as the industry’s first scalable, P2P network powered by blockchain. Some 415 banks have signed letters of intent to join IIN, with 100 now using it across 78 countries. JPMorgan says that 28 out of the 50 largest banks in the world are now onboard. JPMC came out with its own digital coin in 2016.

The Inevitable, Imminent US Digital Dollar

It’s smart to prepare now for the possible transition to US digital dollar as signs continue to suggest a replacement may be as early as January 1, 2021. In US Congress, New Bill Demands ‘Digital Dollars’ by January for Monthly COVID-19 Aid.

The Coming US Digital Dollar (Part 1): What it is, and Why it Matters is a June 24 article by Dr. Garrick Hileman. His bio says he is:

Head of Research at Blockchain.com and Visiting Fellow at the London School of Economics Garrick is best known for his research on monetary and distributed systems innovation, particularly cryptocurrencies and blockchain technology. Garrick was ranked as one of the 100 most influential economists in the UK & Ireland. He is a regularly invited speaker to various private and public sector institutions, including the CIA, US Army and Naval War Colleges, Federal Reserve, Bank of England, Bank of International Settlements, and the Financial Stability Board. Garrick is also frequently asked to share his research and perspective with the media, including the BBC, CNBC, FT, WSJ, and NPR.

The article warns:

Just over twelve months ago, few thought the creation of a new US digital dollar…would soon be on the policy and legislative “front burner” in Congress, the Federal Reserve, and other regulatory bodies….. But over the past twelve months there were several major developments that together have radically shifted forward the probability of introducing a broadly held and transacted US digital dollar:

Facebook’s ambitious global Libra currency was announced in mid-June 2019, and it would be underpinned by blockchain technology…to service Facebook’s billions of users

China began testing in April 2020 its digital yuan, the DCEP (Digital Currency Electronic Payment)

US-China strategic competition and geopolitical tensions escalated

The coronavirus pandemic struck, painfully demonstrating the antiquated nature of US monetary and financial infrastructure

The ongoing growth in stablecoin and cryptoasset use, which present ever-growing competition to traditional fiat currencies.

Because Facebook is a global company, the world’s banks are afraid people around the world might switch to Facebook’s Libra digital currency. Amazon also has a digital currency. Coins by Facebook and Amazon are called “stablecoins”. This key and growing shift in currency is happening outside the awareness of many Americans.

The Coming US Digital Dollar: Why It Matters

The LA Blockchain Summit was livestreamed on October 6 and 7 and was watched by 40,000 people. The 40 hours of recorded sessions are now available. Blockchain technology is the platform for digital currencies much like the internet is the platform for email. These sessions are like attending university-level courses taught by top people in the field. It is amazing that all this information is available for people to watch for free at their convenience from home!

The Coming US Digital Dollar — What it is, and Why it Matters is a session with Dr. Hileman and can be seen on Stage 2 of the October 7 livestream from about 6:54 to 7:14.

Dr. Hileman’s website is: https://www.blockchain.com/. He is currently a researcher at the London School of Economics, where he also received his PhD.

Video Warnings

The New Digital Dollar Is Coming — Discusses the dangers of a US digital dollar, including negative interest rates, and why having Bitcoin (rather than gold) is an important protection.

Government Digital Currency: Why You Should Be TERRIFIED! — The video warns that it may be inevitable and imminent for the government to ban cash. If the government imposes negative interest rates (even as high as 5%) on the US digital currency, people will not be able to withdraw their money and may not be able to save the currency. The video explains how the digital dollar could be tied to each person’s “Social Score” – as in China – and used for control of each person’s everyday activities. It warns that Bitcoin may be banned and gold confiscated.

Your Next Steps Now?

The video Government Digital Currency: Why You Should Be TERRIFIED! fails to explain that while the government may ban the USE of cryptocurrencies, it cannot ban or confiscate cryptocurrencies because they are protected by the blockchain – the underlying technology for peer-to-peer, decentralized, anonymous and uncensorable exchange. A ban on cryptocurrencies would only force more people into a black or gray market. The COVID restrictions on businesses had the same effect on some major retailers this year. For example, one retail outlet whose store was marked “closed” was in full (but well-hidden) operation not far away.

So, there are only two real existential threats to cryptocurrencies: quantum computing and an EMP (electromagnetic pulse) that takes down the entire grid. In the latter scenario, we’d have a lot more to worry about than how to spend our money.

The number of Americans invested in cryptocurrencies almost doubled from 7.95% in 2018 to 14.4% in 2019, an increase of 81% in one year. However, it can be daunting figuring out how to get started just relying books or online videos. The best approach might be to find people who have invested and ask them for help getting started. It’s remarkable how easy it is then. Finder’s Guide to Cryptocurrencies may be able to help with key terms, providers and players in the crypto world.

It is also not necessary to buy a whole bitcoin – which costs over $11,000 now. See the current price at CoinMarketCap. The satoshi is the smallest unit of the bitcoin currency recorded on the blockchain. It is a one hundred millionth of a single bitcoin (0.00000001 BTC). So, one bitcoin is 100,000,000 satoshis. The unit was named for Satoshi Nakamoto who is credited with creating Bitcoin in 2009.

Once you get a “wallet”, you can buy a variety of cryptocurrencies and use them to make purchases. You can take a first position at Coinbase, Activist Post’s recommended source. The KEY if you use a private wallet like Jaxx.io is to make sure you secure your 12-word Back Up Phrase! Since you are the only one who has that password, if you lose it, you will lose all your cryptocurrencies in that wallet! There will be no way to recover your password or your money! So, keep a printed copy in your safe or another secure place you will remember. Another option is to get a hardware wallet like the Ledger Nano X.

There are many advantages to learning about the blockchain and investing in cryptocurrencies. For example, the purse.io site offers a minimum 5% discount for purchases on Amazon made with Bitcoin (BTC) or Bitcoin Cash (BCH). How To Invest in a Bitcoin IRA: The 5 Best Crypto IRAs explains that up to $7,000 can be invested in a Bitcoin IRA each year and is tax deductible.

Join the Counter Markets newsletter to keep up-to-date on the crypto world. If your financial advisor is not telling you about Bitcoin as a means of potential diversification, you may need a new advisor!

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex, and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators’ websites before making any decision. The author may have holdings in the cryptocurrencies discussed.

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