The international currency is the Dollar. We have explained many times on cryptojournal.fr why all the countries of the world use the Dollar for their trade and why this gives Americans « un privilège exorbitant » (an exorbitant privilege).
Today we put our finger on one of the many harmful consequences of the greenback hegemony.
Countries such as Venezuela, Brazil and Turkey have recently made the bitter discovery that their currencies can crumble in a flash. (As a side note, it is precisely in these countries that cryptocurrencies trading volumes are rising sharply. For example: the cryptocurrency Dash is gaining noteworthy popularity in Venezuela.)
Why is the Turkish Lira crumbling?
Let’s start by saying again that emerging countries (including Turkey) have currencies that are illiquid and have little value in the rest of the world. No country wants to accumulate a currency that others will be reluctant to accept as payment. As a result, these countries must have reserves in Dollars in order to be able to trade effectively.
For example, when Qatar sells natural gas to its neighbor Pakistan, the transaction is made in Dollars and not in rupees or Riyals. These countries (businesses) must therefore get those Dollars beforehand.
Companies do not have many ways to obtain the Dollars they need; they can get them by:
– borrowing them
– exporting goods
In the vast majority of cases, companies in emerging countries have no choice but to borrow. Therefore they must pay interest in order to have access to something which is, in the end, only a means of payment…
According to the bank of international settlements – the bank of central banks (which publicly and heavily criticized Bitcoin as one could have expected…) – no less than $11,500 billion have been borrowed by all the companies outside USA (financial institutions were not included in this number).
The danger of borrowing in Dollars
It is very dangerous to borrow in Dollars, because if the exchange rate falls victim to a speculative attack, the repayment of these Dollars can become very painful.
Not only must countries and companies repay these dollars plus interest, they are also at the mercy of a decline of the value of their local currency against the Dollar. The Turkish Lira has lost about 50% of its value since the beginning of the year, which means that Turkish companies which have borrowed Dollars from Turkish banks will have to spend 50% more Lira to repay these Dollars.
It is also for this reason that the Euro is low lately as many European banks have lent currencies (especially Dollars and Euros) to Turkish companies which may now be pushed to default …
Why is the United States speculating to stumble the Lira?
The U.S. wants to force the Turkish president to return to the negotiating table. The currently dropping value of the Lira means that all imported products become more expensive, and the sudden inflation could push the Turks to overthrow the current administration. The same tactic is used in Venezuela (which has the largest oil reserves in the world) and Iran where inflation is rising fast.
What does the United States want from Turkey?
They want continuing full cooperation on their deadly agenda in Syria. The United States has used Turkey to smuggle thousands of trucks carrying arms and food to Syrian « insurgents ». It appears that Turkey no longer wants to be involved in NATO’s tricks, since the CIA lurks in the shadows of the recent attempted coup there. Turkey even buys Russian weaponry now; the famous S-400 ground to air missiles are already on their way.
It should be noted as well that a Russian official recently said, « The Dollar is not a reliable means of payment for the defense industry. »
Translation: If you want Russian weaponry, you’d better give up the Dollar.
The Dollar: a Formidable Weapon
By now you understand that the Dollar is a weapon which serves only one nation. This weapon is formidable, and it bestows an undeserved privilege upon the United States. The rest of the world (countries and companies) must find an alternative – the sooner the better.
Moving to Bitcoin would bring us closer to a world free of the American monetary yoke. Not just any cryptocurrency, but one that is secure and widely used: Bitcoin. There will be no room for hundreds of Altcoins. As you can see in the following diagram, only a handful of currencies are used in international transfers.
Everyone uses the Dollar; no one uses Ugandan or Malian currencies. There will be no exception to this dynamic with cryptos. Take note.
BTC : 1Crsj83gGx7iGGNhSyYedxX7y5Jqo5gKbA
ETH : 0xe7110Aee7923d42F7AbF975bAF94b962e8c8e30F