As the Fed and central banks wallow in their own self-induced mess, the public awakens day by day to the extraordinary measures that we are all subjected to. The meteoric rise of cryptocurrencies, with Bitcoin at the top of the list, sheds light on the majority searching for the last refuge of wealth creation. Several cryptocurrencies have crossed their all-time highs day after day as the collective soul of the globe gives the proverbial “middle finger” to the all-knowing central bankers. Bitcoin has topped the $1,800 mark and Ethereum crossed the $100 threshold. Steemit has a game-changing blockchain social media network that pays you in STEEM to make informative posts. STEEM can be converted to Bitcoin, USD, and even gold if you have a Goldmoney account. Blockchains are the wave of the future, and as a skeptic for many years, I finally purchased a bitcoin as belief that decentralization can be obtained.
As the global debt problem grows exponentially greater, specifically in the U.S., alternative forms of currencies will gain incredible strength.
According to FRED (Federal Reserve Economic Data) by the Federal Reserve Bank of St. Louis, the U.S. Federal Government’s interest payments on current expenditures will reach an all-time high of $508.9 billion.
To put this is into context, the Federal Reserve’s balance sheet before the Great Recession was only $800 billion. The interest on the debt is now 65% of the total balance sheet in 2008. In the chart below, you can see when the credit expansion began to take off. Quarter 1 of 1971 held the interest expense, at $34.7 billion. Anyone who knows about monetary history will tell you that the single greatest threat to us all was when Nixon took us off the gold standard in that same year. Does anyone find it coincidental that the inflexion point of the credit expansion cycle started during this time? If FRED is willing to publish this interest expense of $500+ billion, what is the real number? We know that the total global notional derivatives outstanding are around $750 trillion, so this number must be much higher. Whatever the real numbers are, cryptocurrencies are challenging fiat, debt, and the petrodollar system.
Global leaders are facing a moment of truth as financial technology is beating the government’s archaic system. Slow transaction times and fees that limit transactions to a small domicile are a hindrance to the archaic banking system. The blockchain, a fast and more wide-ranging system, is pressuring the likes of centralization. As stated in a previous article, Lockheed Martin will introduce blockchain technology. Additionally, back in 2016, ex-Treasury Secretary Larry Summers announced that he was joining Digital Currency Group as a special advisor to this blockchain firm. Back in 2016, Digital Currency Group bought the largest Bitcoin news site, CoinDesk. Chinese regulators and Japanese regulators are becoming more lenient to the technology, as well as Australia. Blockchain research and development is moving rapidly, and I believe the technology is here to stay.