I have heard the saying cash is trash for years. The truth is that we are seeing this proven more and more each passing day. Currencies all over the world are being devalued by massive money printing. This is due to the policies being enacted by the various central banks around the world.
What is a central bank? Central Banks are independent national authorities that regulate banks and conduct monetary policy. Most people do not understand what the role of a central bank is. A key component of central banking is to stabilize the currency and prevent inflation.
Central Banks are usually governed by a board consisting of its member banks. Politicians will appoint and approve the nominee for the head of the central bank. There are differing opinions on how connected the central bank is in each nation and how connected they are to the government, but whatever position you have there is definitely a marriage between the two. Central Banks control the economic system of each nation by the policies they enact. Money printing is controlled by central banks and in recent years the amount of money being printed is massive.
Why would central banks devalue currency? We need to look at history to understand that question.
In July 1944 delegates from various countries met at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire to negotiate what is called The Bretton Woods Agreement. This landmark agreement was enacted to make the U.S. Dollar the world’s reserve currency. This wasn’t a new thing. Reserve Currencies have existed before. Great Britain, France, and Spain have all had reserve currency status in the past. There has been talk for some time about displacing the U.S. Dollar as the reserve currency.
This process of replacing the dollar has been possible for years with the IMF and the creation of SDR’s. SDRs were distributed between 1970 and 1981 and again in 2009 after the Global Financial Crisis. We just saw a new issue distributed earlier this year again.
I think it is possible that Central Banks are working towards a single world currency. This would mean a new Bretton Woods-like agreement. That agreement took over two years to create and another several years to implement. These types of agreements are hard to create and implement. It isn’t impossible, though. With all the talk of the Great Reset, it is possible to see this action being taken over several years.
To move towards a world currency would cause all major currencies to be devalued. The act of devaluing a currency causes inflation, and wealth is transferred from savers. The rich get richer and with the chaos comes opportunities to push for a global currency. The future global currency is most likely a digital currency.
Whether this plays out is uncertain, but the timing is perfect. What I do see is a true push toward digital money, which would result at the end of cash. I am not a fan of a cashless society. The idea of a centralized digital currency is concerning. This is why I am an advocate of Bitcoin. With Bitcoin being decentralized it takes power out of central authorities.
The future is uncertain, but I am keeping a watchful eye on the changing landscape and I would encourage you to do the same. I am hedging my bets on growing inflation. That means putting my surplus out of cash and into assets that protect me from inflation.
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