Application and value of Bitcoin in the macro-history of global water emissions

As the global market plunges into turmoil and domestic currency overdrafts, Bitcoin emerges as an almost "perfect" storehouse of value and security.

Since the 2008 financial crisis, central banks have injected unprecedented amounts of money into the global financial system. andThis has recently led to great disparities in the allocation of funds, and this allocation of inefficiencies is slowly escalating towards increased risk.Several market events in recent months indicate that these risks are on the rise.

The risks that lie ahead are greater than the economic risks and can be more dangerous than people realize.The company can affect not just ordinary investors, but all the financial and health benefits and pensions that are important to everyone. In order to prevent the financial downturn and the risk of a long-term economic downturn, the government will circumvent special measures, but this last resort may lead to big financial problems.

In this case, the emergence of emerging assets represented by Bitcoin appears as the only way for income classes to be guaranteed at all times when there is this problem.

Research analyzes over the past few years show that Bitcoin has become very important.It is not just an investment that occurs, it can now be compared to precious commodities like gold.

This is true, but I want to be clear before I start the test. I am happy with Bitcoin.

Welcome to the season of negative interest

You may never see him again, thoughThe financial sector has now entered the wrong "territory" of history, and all negative global earnings have passed the $ 16 trillion mark for the first time.At the same time, earnings on the German 30-year Treasury contract were negative for the first time. Now the real "Weed Flower Age" has arrived.

German government revenue over 30 years -0.11%;This means that in 30 years, if you buy a contract for $ 10,000 today, you won't just increase your investment, you will decrease it by $ 11, amount of money that obviously shouldn't happen. At least you won't be losing money in 30 years if you don't move your money at all.

In addition, although the impact is small, the German government may not be able to reimburse the president in 30 years.In particular, if the euro is expected to appreciate significantly in the future, so that the actual purchase of $ 10,000 used for the contract will drop today, the lender should provide some encouragement to counter this risk, but since the results of these agreements are not good. difficult. I define it as "knowing logic".

You may think that this event has nothing to do with you, and it may be a rare event, but it only affects business ventures or finances related to it, because they need business.

However, the situation is not as simple as you think.

First, negative interest rates will have a greater impact on those who are already retired.In general, most holiday pensions focus on low risk schemes such as investments and contracts, and this is because it is initially due to salary or investment income when young. Individuals like to move their savings to lower risk investments and get a return on investment where they have more control over their risk.But since bond yields fluctuate little, this is unlikely to reduce the risk of this investment.In turn, this group may be forced to choose cheaper investments, such as stocks or bad contracts.

Emerging negative interest rates are beneficial for borrowers such as businesses and mortgage lenders, according to a new article published by Forbes. This is because bad interest rates can lower the cost of debt repayment.However, low interest rates or disadvantages are not good for old people and seniors, and they will choose profitable tools to get negative results. The worst thing is that no one knows how long it will last because no one has met him.

Bad interest alone is enough to cause stress and anxiety, but if you dig deep into why and what they mean, there is a bigger problem. This is explained in more detail below.

And that's what Bitcoin is for!Like gold, Bitcoin is a “nonprofit asset” that is at the heart of all commodities.This means that it does not generate profits on its own, but looking at its performance since its inception, the value of Bitcoin has made the best profit for ten years.

In short, Bitcoin is an investment that can be used to offset market risk by producing negative return capital diversification.Even if you only distribute a small portion of Bitcoin (i.e. 1%-5%) of your total investment, you can still fulfill the return requirement, which is still important to support your personal budget.

According to Bitcoin promoter Vijay Boyapati, buying Bitcoin is one of the few asymmetric investments that the average person can join today. The logic behind what is called "asymmetric investing" is to make the risks bigger and smaller and to get bigger profits.

This means that you can buy Bitcoin with a small percentage of your total assets instead of taking a big risk in a market or other high-risk market. The image below is a good example.

So back to the starting point, can you get to the current situation step by step?

This is the first time in history that a notorious $ 16 trillion treasury contract has taken place.

Over the past 30 years, governments and medium-sized banks have changed their fiscal policy to stimulate the economy.In other words, the government expects to adjust incomes and other tools to reduce the impact on the economy of the ups and downs of the traditional economy.

In the event of a recession, the central bank intervenes to preemptively provide liquidity to the market,In other words, the government buys public loans from banks at a high rate and puts cash in the bank so that the banks can get more money for off-balance sheet loans, which makes all the difference. case. Interest rates have come down. At the same time, the government will encourage people to increase their consumption and increase the amount of loans to support economic development.

During the period of overheating, the central bank, represented by the Federal Reserve, raised the "value" of money by reducing the currency and limiting the expansion of credit.However, given the current market, it appears that the market's reliance on low interest rates around “sealing” banks has also increased.

As you can see in the photo above, the US stock market in 2018 had its worst December since the Great Depression. Indeed, the Fed is trying to bring rates back to pre-crisis levels. That's all.And the “crash-like” market reaction recently led the Fed to cut rates for the first time in ten years.

Simply put, the industry is now entering the "trustworthy" state of interest surges.

What has happened since 2008?

The aftermath of the 2007-2008 financial crisis forced the Fed to implement special measures to deal with the crisis 11 years ago.The Fed marked the end of the impact on banking market banks by acquiring US Treasuries.

The image below shows St. Exchange rate data performance as reported by the Louis Fed.Since 2008, the Fed “lies everywhere”.

US incomes have quadrupled since 2008, and the Fed has brought in $3.3 trillion in 11 years.Shadow levels represent several declines in the story.

The real problem with banking interventions in the market is that they are decided by very few people and the level of impact is reasonable.

Although the increase in revenue over the past few years does not seem to have led to a further increase in revenue in the traditional sense, the CPI and PCE indicators used to measure inflation have not been on the rise.In practice, however, the creation of additional capital comes right back into the bubble in key sectors like real estate, so inflation measures like the CPI are a viable option, if not a bit wrong.

The blue line is the payline and the orange line is the unit price.

The blue lines are silver and the red lines are commodities.

So the real estate market is actually much higher now than it was before the crash of 2007, let alone the real estate market, and the real estate market is now almost 2.5 times overbought.

At the root of this problem is the central bank's attempt to minimize market losses due to monetary policy as much as possible.

Of course, the European market still faces a similar situation for the United States due to the European Union debt crisis, but the ECB has not tried to strengthen credit in recent years,But they must add more money to loose financial policy to avoid a recession.

As you can see in the photo above, the European Central Bank has allowed financial markets to buy large contracts.This led to a further decline in revenues in the European market, directly affecting investors seeking a stable, low-risk recovery.

And that's what Bitcoin is for! Not all Bitcoin products can be developed by anyone, let alone the National Council of Economists.With total revenues of $ 21 million, no one can decide to regulate the credit cycle with "semi-cyclical" monetary policy.

Since Bitcoin's financial base cannot grow, if you have a certain percentage of all Bitcoin resources, you will always have at least some of it. The fact that it is the only device with this property makes Bitcoin unique.For this reason, some refer to Bitcoin as a "system of measuring value".

It's time to wake up !

After all the income has increased by billions of dollars, it is true that you cannot "delete data" as easily as the game, because the promotion will guarantee the market now and therefore more credit. to avoid suffering.

Dallas Fed data shows that debt companies are more likely than ever to be hurt by GDP.

One way to use this low credit is to redeem the product, which is a loan that the company uses to take advantage of low interest rates.By using these loans, the company will buy back its products, this behavior achieves the goal of increasing revenues in part by reducing the number of products in the market, while still increasing the price of the shares. Option management can also be more efficient.

These purchases have happened more often than ever and seem to have served their "purpose" of driving up prices.

When people talk about businessfinance", The above situation is one of the most representative symptoms, and some companies have always had to change their logic and become a "mathematical game" at the accounting level.

For more information,As a result, the current breakup is a key driver of demand on the stock market.At the same time, today is the true prospect of cheap credit.

Goldman Sachs data

The pension sector is not credible in the United States

The current retirement situation in the United States is not ideal.While it can support a high annual rate of return of 7.5%, the magnitude of the difference in the share of these investments remains alarming.up to $2 trillion.

Risk-free growth alone is not enough to achieve the 7.5% annual return target.You need to spread your money over riskier activities, such as commodities or businesses.Under normal circumstances, the company was only able to achieve a strong 7.5% demand recovery after the slowdown and poor performance, but this time no one still succeeded.

And suppose that the annual growth of the pension can be maintained at a higher level (about 2.0% annual growth),Then the pension difference mentioned above can reach 8 trillion dollars.

Now remember. Assuming an annual return of 7.5%, the difference is over $ 2,000 billion.

But remember one thing.In other words, government contracts in many countries are now at negative interest rates.7.5% annual return? What do you think?

In the pursuit of high finances, pensions will allocate a large portion of high assets. However, if the banks receiving the repo were downsized due to certain circumstances, it would have to be suffered by the market to manage the risk, and the financial markets were affected.

And that's what Bitcoin is for!Now eliminating a large number of junk bonds from the annuity investment aid and instead investing that part of the investment in the Bitcoin market at a much lower percentage would be enough to adapt to the level of ability to recover junk bonds that may be obtained. This reduces the risk of annuity used in the investment process.

Consider when the problem begins.

If lending rates do not fall sharply with the impact on the central bank, the best performing companies will not be able to repay their savings in the second tranche, and commodity prices will lose support and encouragement. Of course, it will drop sharply.And when this situation arises, a new catastrophe occurs due to the decline of the credit rating companies, and when the credit rating falls below a certain level, an event occurs in which the financial institutions with the pension falling must be sold.Contract market risk has increased,And these companies will not be able to repay their debts with new borrowing, which will put more stress on their stock prices, and losses for investors and retirees will increase.

Suppose you are retiring now and need to invest 80% of your investment in a risky business because the return on your low risk plan is not enough to meet your vital needs and the above dangerous situation arises. produced one day. , your fortune will drop sharply at night when the market drops.And it would be a "distraction" for you, without a cashier's check.

And that's what it's all about!Thanks to a security tool,The relationship between Bitcoin and commodities has always existed, and the financial market is minimal.Since Bitcoin is now not "owned" or "controlled" by anyone by a single organization, when an event occurs, Bitcoin does not affect people in the short term, such as trading commodities, copies and contracts. In other words, if a dangerous situation is removed from the specialty store,Big companies will focus on selling risky assets in the near future, but I don't think these institutions currently have a lot of bitcoin to sell.

Despite the similar situation, some people have to sell Bitcoin in the market, but in the high volatility of Bitcoin itself, the impact of this drop will be less than other stores. It has always been an important part of long-term investors. Therefore, Bitcoin is expected to remain bullish even during a downturn.

In contrast, the outlook for the stock market is bleak.In the event that stock trading may occur at any time, the stock market may fall by 60-70% in the future, and it may take a long time, perhaps even ten years, for the industry back to the current level. In particular, it's an unfortunate situation for people who focus on the stock market as a retirement or disaster target.

Quantitative easing does not stop

Therefore, what governments should and are doing is to ensure that the above situation does not become a reality. And by this, the government manages the income of the company in several ways without interruption.The term quantitative easing was born out of the need of that time.

Central banks need to keep lending rates low so that companies can continue to buy their products and grow their business.However, the increase in turnover will have a greater impact on the real estate bubble market and bubble products. These bubbles will widen the gap between the rich and the poor.

But the financial saving that most people think with the impact of this law will not happen because the government has not "allowed" it. Or in the long term,After 2008 people may have to venture into a new currency.

The Fed is trying to stimulate the economy by cutting more money to bring short-term inflation to zero.

And that's what Bitcoin is for!Banks will maintain their financial policies in place until the notes they declare are finally declared “worthless”.There is no better solution to this housing bubble, making loans cheaper. At least for now, I don't see a solution that doesn't hurt the big business problems.

Historically, gold has been recognized as the safest commodity during the industry's "problem" period.I now admit that I have gold, but I don't like it. It is difficult to confirm the purity of gold, and it is not easy to store and distribute. Gold seems a bit outdated compared to the internet age. Not only is gold a good buy, but gold ETFs are also a good option, but if the financial market is not working due to a large market, ETFs issued by these organizations are also available at more. great risk.Bitcoin would be better able to overcome this problem because even the central government cannot prevent or interfere with the Bitcoin market.

Unlike gold, the accuracy of a Bitcoin balance is immediately identified by the network, and anyone can keep it safe, regardless of price.

At the same time, Bitcoin is not "seized" by force, can be exported around the world, and there is no "additional investment".The "Escape" restrictions and they are open to everyone, whether you are poor or rich.Because of these advantages, Bitcoin may appear to perform on its own in future trading sessions better than gold has for hundreds of thousands of years.

Next, let's look at the problem from a general point of view.

Above, we discussed the economic problems facing the United States, but at the moment the management of the dollar is not as stable as it was a few years ago, and the situation with the dollar is increasingly in demand.

Since the formation of the Bretton Woods government in 1944, the US dollar has always served as the global currency, which means that demand for the US dollar in the market has been at a healthy level.So while the US government has operated on a large-scale economy for the past few years, it has not led to instability.

However, this situation appears to have changed and the investment by foreign banks in the purchase of US Treasuries has declined in recent years.

In addition, all US Treasury bonds held by other countries' central banks also fell sharply.

Until now, while the benefits of US Treasuries are still good today, the benefits of US Treasuries are no longer there.However, once targeted by large foreign investors, US Treasury yields could enter untapped territory, which could be worse than stated in the European contract.

Central banks in other countries are now refusing to buy US Treasuries and bank gold interest rates are on the rise. Why?

In fact, the answer is obvious. Today, many countries in the world refuse to help others with security and health insurance, so these areas are also precarious, because it is the dollars, they have an impact on the outside. Now the US government deficit is at record highs, and data for January-February this year could push federal revenues to over $ 1,000 billion this year. The US dollar remains a very practical means of payment in many countries,But that doesn't solve the problem the US government is currently facing. The US government has established its own balance sheet of $222 trillion, which could possibly be as big as Trump's "back". Twitter.

In the next few years, he expects middle-class banks to demand more to raise their gold or foreign exchange rates with numerical advantages.

like BSupporters of his case have worked to make the actual transcript of this statement available online.Because politicians like to use taxes and voters like to use nothingTherefore, the modern notion of money which can cause both "rain and snow" is undoubtedly very appealing.Maybe from a real estate development perspective, modern spending can be seen as some kind of Green New Deal, or some kind of Republican-friendly policy, and can narrow the gap. .

With less and less inflows of capital from other countries of the world, the Federal Reserve and the Treasury must work together to implement monetary and fiscal recession measures, create new capital and improve the efficiency of industry. However, the side effects of combining punches can be very significant, so this movement can lead to a historical increase.

And that's what it is!Since bitcoin is a non-regulatory asset and has achieved some international recognition, some countries or governments may decide to use bitcoin to end the US dollar rule in global currencies.

Many central banks continue to buy gold today, and they will be able to maintain this trend for many years to come.But now there are voices that digital advantages can be used to develop the new gold standard 2.0.It's a system like China is rumored to be developing gold-based digital currencies.

In fact, going back to the gold standard is amazing. Whether digital or not, beyond ideological issues, the hot-spot market is associated with the risk of competitors. The gold standard fell in 1971 when Nixon announced the separation of silver from gold. If China announced the benefits of recovering digital gold, it would likely repeat the mistakes of the United States in the 1970s.

Unlike gold or digital gold, Bitcoin is a brand new asset based on blockchain technology and without collaboration.It's secure, has accurate authentication, is very convenient, and the storage value is almost unmatched. At the same time, Bitcoin has cryptographic features such as multiple signature strategies and write capabilities, making it an almost "hard" financial asset, ideal for storage costs and business protection.

Now the "Carnival" has started.

No one can predict how Bitcoin will affect the world based on the above assumptions in the future. But one thing is certain,The current global financial system is likely to change drastically over the next few years and Bitcoin will certainly be an important part of this “exchange”.

Over the past 11 years, the central bank has had an impact on fiscal policy.But today, more and more people are starting to realize that it's time for the world to take a new level.If we look at history, the average life expectancy of fiat currencies is only 27 years.Still to learn.

At a time of turmoil in global markets, the government began to conduct unprecedented currency experiments, and gradually lost the confidence of the government or the financial community, Bitcoin was almost "perfect".At the same time, politicians clearly recognize Bitcoin's threat to the current financial system and directly view it as an "enemy", trying to have as many current assets as possible through various controls.

Although there is no 100% guarantee that Bitcoin will explode its potential in an emergency, it is not a good option if you have not distributed digital profits to your distribution by now. Because the other financial assets are clearly not worth the “fantasy”.

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