Bitcoin has strongly broken through the $100,000 mark today, confirming my judgment from the day before yesterday:Three major benefits have emerged, and Bitcoin is set to soar in the second half of the year!
In fact, Bitcoin today is very much like gold fifty years ago.
When President Nixon announced the decoupling of the dollar from gold in 1971, he also issued two other orders, namely:
Implementing a 90-day wage and price control (currently the Federal Reserve controls inflation with high interest rates)
Imposing an additional 10% tax on imported goods (essentially a tariff)
Look, doesn't it have a hint of Trump?
Let me explain the logic behind this in detail~
Trump announced yesterday that the U.S. has officially reached an agreement with the UK, maintaining a 10% basic tariff while the UK lifted restrictions on imports of American agricultural products.
If previously people were unclear about Trump's negotiating bottom line in the trade war, it is now very clear:
For various countries, a 10% tariff is the bottom line; as for what kind of agreement other countries ultimately reach, we'll see. Anyway, it's unlikely to be more favorable than for staunch ally Britain.
Once the 90-day grace period is over, other countries' tariffs will likely not be lower than this level.
What impact does this tariff have on us?
Let's add a bit of historical knowledge.
High tariffs have appeared in the U.S.; tariffs before World War II were as high as 50%!
After World War II, it gradually fell to the low-tariff era of later being below 5%.
Before World War II, the world's currencies were gold and silver, and the overall world was a zero-sum game. Although technology developed greatly, the gold and silver in the world were limited; if you made a profit, I would incur a loss.
So in this world, everyone came up with various ways to make money. First, Europeans made their fortune through geographical discoveries, going to earn gold and silver from Asia, Africa, and Latin America. America made money by exporting products with high tariffs.
After exhausting money from these places, they began to fight each other, ultimately leading to each country using their gold to buy arms from Americans. At that time, the U.S. held as much as 80% of the world's gold reserves.
After the U.S. became wealthy, it transformed from a producer to a financial capitalist, buying goods from around the world, which lowered tariffs.
The Bretton Woods system tightly bound the dollar to gold, so spending dollars was equivalent to spending gold.
This system lasted for more than twenty years, but by 1971, it could no longer be maintained.
Because America's gold is also limited; most of it has been spent on other countries, and with money running low, the government is on the verge of bankruptcy. Therefore, then-President Nixon announced the suspension of the dollar's convertibility into gold.
After this policy came out, it led directly to high inflation and global chaos.
So after 1971, let me share a few data points with you.
At that time, the CPI in the United States casually soared above 10%, and the yield on government bonds was the same.
Now with 5% government bonds, everyone is shouting they can't take it anymore; remember that in the 1970s, there were government bonds yielding over 10% available for purchase.
In the decade of the 1970s, gold and oil rose twenty-fold, housing prices and consumer prices rose more than twice, while stock prices barely increased.
Because at that time, there was chaos in the world.
How was the issue of running out of money finally resolved?
In the end, it was Reagan who came out and continued to export dollars globally through borrowing national debt, which marked the conclusion.
Countries around the world could earn dollars again, and the U.S. began the era of borrowing money to support its allies. Thus, the U.S. stock market welcomed its second spring, with stock prices starting to soar, while gold prices began to stabilize.
Therefore, the economy of this world is a Ponzi scheme; there must be someone constantly spending money all over the world for everyone else to make money.
Once no one is willing to spend money to take over, the world economy encounters a crisis.
This principle is essentially what Marx said two hundred years ago: capitalism pursues infinite capital accumulation, leading to a crisis of overproduction.
And now, Reagan's model of continuing to inject money into the world through bond issuance also seems unsustainable, and the world is about to return to a crisis mode where no one is willing to take over.
The last golden decade saw a twenty-fold increase; it wouldn't be too much to expect Bitcoin to increase tenfold in the next decade, right?
