The last Communist Party Congress, the last OPEC meeting, rising rates, recession and inflation, all pressure to take refuge in the Bitcoin store of value.
CCP conference very ominous for inflation?
The Congress of the Communist Party of China has come to an end. As expected, Xi Jinping is running for a third term as party leader. The first could be the popular national assembly that abolished the two-term presidential term limit in 2018.
The Politburo Standing Committee confirmed Xi’s hand replacement. This sanctuary of seven people making the most important political decisions will now deal with the head of the Ministry of State Security, Chen Wenqing.
But also Li Qiang, Shanghai party secretary, who was Xi’s chief of staff when the latter was governor of Zhejiang province. Li took the stage right after Xi, suggesting that he will become prime minister next spring.
This appointment says a lot when you know that the city of Shanghai, the world’s largest port, has been blocked several times to disrupt the global supply chain to create inflation in the West.
Overall, the nominations for this 20th Party Congress are seen as a bad sign across the Taiwan Strait, reflecting heightened international tensions.
Taiwan’s Kuomintang leader William Tseng said changes to the CCP’s constitution require him to “oppose and discourage” Taiwan independence.
In fact, two secret service officers and military leaders responsible for the “reunification” with Taiwan are joining the Poliburo instead of the heads of the Central Bank and the Minister of Finance.
This Conference of Parties sends a clear message to the rest of the world: a conflict is brewing. No Chinese leader has filled his cabinet with so many experts in the fields of aerospace, military, espionage and military.
War with Taiwan has become more likely since this weekend. Knowing that in 2021 Taipei produced 92% of semiconductors in less than 10 nm. An embargo against Taiwan would soon trigger a major disruption in the global supply of semiconductors.
However, the United States and Europe consume 45% of all semiconductors. And much more if we talk about the highest chips (less than 10 nm).
[À ce titre, ne manquez pas notre article sur la société chinoise Bitmain (fabriquant de machines de mining de bitcoin) qui est frappée de plein fouet par l’embargo US sur les puces avancées.]
An embargo will create a new wave of inflation capable of pushing the annual inflation rate up towards 20%. Inflation is currently “only” 10% on both sides of the North Atlantic.
All this to say that the geopolitical tectonic plates continue to shift in favor of stores of value like bitcoin.
WWIII
The actions of China and Russia are a coordinated attack on the current world order.
The status of the dollar as an international reserve currency is under threat, and with the empire of Uncle Sam. We remember that all the wars of the United States are aimed at ensuring that energy is sold in dollars and any other currency.
This was the case when Saddam Hussein decided to sell his oil exclusively in euros. Or recently in Syria, when Damascus gave the green light to the construction of the “friendship gas pipeline”, to connect the old region with Iran instead of Qatar. Iran and Qatar share the same gas field (South Pars), except that one of them sells gas in dollars and the other does not…
Since 1975, all oil and most raw materials have been denominated in dollars. It is for this reason that the central banks keep their reserves in dollars ($7,000 billion).
In other words, the slate dollar gives Americans $7 trillion over the rest of the world. Of which Russia has 300 billion that has just been “frozen”… China has 1000 billion dollars for hers.
So much counterfeit money that it could be eliminated if the oil producing countries adopted the yuan. This is why the yuan is freely convertible into gold and why Beijing has been hoarding it endlessly since the Iraq war. What if you don’t prepare for after the dollar?…
The tension we see today stems directly from the threat posed by China, Russia, Iran and many other countries to the dollar.
When you hear “a rules-based international world order”understand “petrodollar”:
The FED, the guardian of the dollar, joins the war effort by aggressively raising interest rates as well as reducing its balance sheet. In doing so, the US central bank is exposing economic flaws from London to Tokyo.
In other words, the dollar is being used as a weapon. Therefore, the president of Colombia was the first to draw, declaring last Thursday that Washington is destroying it “all the economies of the world”. “All our currencies are falling, not just the Colombian peso.”
It is a safe bet that the FED is trying to force the world to side with Ukraine by closing lines of credit (currency exchanges) to those who will participate in the sanctions against Moscow.
The politics of the dollar, however, is a double-edged sword. BRICS no longer makes any secret that they intend to get rid of it. Knowing that Saudi Arabia, Turkey and Egypt will soon be part of this club…
In addition, the table has completely reduced the table because OPEC has reduced its oil production. This support for the Sino-Russian axis is probably unrelated to the fact that some Fed governors are now suggesting that rate hikes should be put on hold.
Either way, central banks are finally caught, including the Fed. The debt has become too much.
See what an interest payment is on the debt alone. Interest will soon cost as much as the defense budget:
There are 36 ways to pay off debt:
1- By default, which spells the end of the petrodollar. Out of the question.
3- Increase productivity (good growth). This requires technological progress or a dramatic increase in energy consumption. Very likely. The US shale oil miracle of 2008 will not happen twice.
2- Take on more debt spinning the printing press.
The most likely result is money printing for various “emergencies” (pandemic, war, energy bill). Except that printing money makes inflation worse.
It’s a vicious circle. This escape must end in tragedy. Drama for those who left their savings in a bank account or real estate.
Glassnode On-Chain Bitcoin Analysis Weekly Summary
Glassnode points out in its report that the number of BTC on exchanges always declining. We are at a four year low. In October alone, 123,500 BTC were withdrawn, or 0.86% of the circulating supply.
The big bitcoin declines happen when BTCs flow into the exchanges. Therefore, a priori, there is no cleaner in the perspective.
Another satisfaction, the number of BTC saved is at the most historical level. There are more and more accommodation it is wise to have a long-term strategy. Overall, 66% of BTC has not moved for more than a year.
In contrast, the growth rate of shipments with a non-zero balance has stagnated since August. So, despite about 400k new addresses per day, because many addresses are empty from their entire balance:
Another reason not to think that the bull run would be very close: trading volumes in bitcoin. They continue to fall, at 19 billion dollars a day the same. The calm before the storm?
We will stop welcoming the evolution of accounting standards in favor of bitcoin in the United States.
The appreciation of the BTC can now increase the balance sheets of companies like Microstrategy, Tesla or Block. Enough to encourage other multinational companies to take a chance on their money.
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Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.
