CHINA Rules G-20 Summit: USD’s Demise vs BTC’s RISE!
The dominant power players like Donald Trump, Xi Jinping, and other world leaders have just concluded the G-20 summit, where they discussed economics on the grand scale. All eyes were on Trump and Xi, as the world waits and hopes for a possible trade deal.
Whether the markets will roar or roil during the remainder of 2018 and into 2019 largely depends on the tone struck during the G20 meeting: each word and phrase is now dissected as investors look for reasons to push the markets higher or lower. As for Trump and Xi, each has a mandate to return to their country and constituents with a favorable deal. At minimum, each wants to show some sort of a win.
China’s agenda will most certainly include the “One Belt, One Road” initiative, a massive trade and infrastructure project that aims to link China to dozens of economies throughout Asia, Africa, Europe, and Oceania.
It is, essentially, a modern version of the ancient Silk Road, which connected traders and travelers from China, Persia, and the Roman Empire.
Much like the G20 Summit, the “One Belt, One Road” project’s aim is to promote greater openness and cooperation, reject protectionism, and construct an open-world economy. China has already invested over $900 billion into the project, and any proposed trade deal will undoubtedly need to comport with the objectives of “One Belt, One Road.”
While we are all watching to see how trade negotiations play out, I’m also be closely monitoring G-20’s impact on the world currency trade, especially as it relates to the already precarious U.S. dollar.
G20 has the potential to disrupt the dollar’s world currency status, which has been deteriorating as powerful nations dump their dollars, U.S. Treasuries, and debt holdings.
The most immediate threat comes from Asia, with China slashing its share of U.S. Treasuries by nearly $14 billion and Japan’s holdings falling to their lowest level since October of 2011. China already launched its yuan-denominated oil futures contracts earlier this year as a direct competitor to the petro-dollar.
For Bitcoin, this is a critical crossroads.
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Pure Blockchain Wealth is also closing watching the European Union’s plans to switch payments from the U.S. dollar to the euro for its oil purchases from Iran. Meanwhile, India recently made its own move towards independence from dollar dominance when it was announced that a contract between Moscow and New Delhi for supplies of Russian S-400 air defense systems would be settled in rubles.
Along with their deal with India, Russia has taken a number of measures to reduce its dependence on the U.S. dollar, including cutting its U.S. bond holdings down to $14.4 billion from $96.1 billion in September; also, in late November, the Russian Finance Ministry reported that it had issued 1 billion euros (equivalent to $1.13 billion) worth of seven-year bonds with a yield of 3%.
These events have far-reaching ramifications. I am cautious about calling it war, but this is exactly what it is.
What we have been witnessing is the shift away from American political and economic dominance towards an Asian Century in which global power moves away from the United States and towards Asia, and especially China.
China’s standing in global affairs will likely only continue to strengthen as nations elect to trade more with China and less with the Washington.
Deal or no deal, G-20 is unlikely to diminish the multinational shift away from the dollar and towards China’s rise to leadership status in the global economy. With China having the world’s largest population at nearly 1.4 billion, the imminent collapse of the dollar will undoubtedly create a currency vacuum that will need to be filled.
This is where cryptocurrency and the blockchain can have their historic moment: Bitcoin could help to ease the process as China and other emerging leading nations dump their dollars and seek to replace them with a currency that’s secure, globally available, and impervious to inflation and devaluation.
Pure Blockchain Wealth will be monitoring and reporting on the G-20 Summit and its aftermath, and we’ll be updating on the inevitable strengthening of China’s economic power and the dollar’s loss of status as a respected world currency.
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.Please read our full disclaimer at PureBlockchainWealth.com/