China and Russia seem to be cooperating in their move to back their currencies with commodities. Will Japan be the first developed nation to adopt bitcoin?
This is a transcribed excerpt of the “Bitcoin Magazine Podcast,” hosted by P and Q. In this episode, they are joined by Jeff Ross to talk about why he thinks we are still in a bear market and which country he thinks is going to be next to adopt bitcoin as a reserve asset.
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Q: China has so much of our debt and we've seen now what the playbook is if you do something that the U.S. doesn't agree with. As Iran has seen for the last 50 years, as Russia has now quickly seen, what happens when China enters some sort of a sanctioned period of time, why would they not then try to go ahead and follow the Russian playbook and strengthen their own dollar further diminishing the value of the us dollar and the global stage? Is that a scenario that's feasible?
Jeff Ross: Yes. I say, that's absolutely what they're doing. And that's absolutely what Russia and China are doing. I think they're colluding on this. They're banding together. They're saying the U.S. has (from their perspective), the U.S. has screwed us for so long. Why are we allowing this? I think this happened long ago, a decade ago, they decided, “What are we on this system for? Why do we keep buying U.S. Treasurys and supporting the U.S. military industrial complex? Why wouldn't we take a different approach and try to get off of the U.S. dollar as the world's reserve currency. Therefore, what we're gonna do is we are gonna follow the older school playbook of we are going to strengthen our own currencies by backing them with commodities.”
So what's happened in the last decade? China was buying commodities like crazy. They were stockpiling commodities. Russia is very commodity rich, right? Tons of oil in Russia. They both have a very significant amount of gold and they've been increasing their gold store. And just their commodity stores in general.
Why? They're going to use that as basically the basis to say, “Look, everyone knows that the U.S. dollar is literally backed by nothing. It used to be backed by gold until 1971. And then they got off the gold standard and they literally are backed by nothing. If you disagree, the U.S. military comes after you and sanctions come after you. That's the price we pay.”
So they're saying, “We have an alternative and now we're powerful and America is aging and senile enough.” No pun intended to our leaders, but basically [America is] ruled by octogenarians who have dementia and we're a waning power.
Russia and China are saying, “Look, this is our time to stand up and say, we have a stronger currency that is based on actual, real commodities, like gold, like oil, those kind of things.” Now, I would say the one thing that they're not considering, Russia and China, is bitcoin to me is the most obvious, best, hardest asset.
Yes, it's digital so you can't touch it or look at it, but it is what it is: It's basically perfect money. So if I were them, and I'm not, of course, and I'm not sympathetic to a lot of their causes, but they should be backing this on Bitcoin. They should be using bitcoin as a reserve asset to show, “Look, not only do we have gold and oil and other commodities to back our currencies, which are stronger than the U.S. dollar, we have a butt load of bitcoin as well. :ook how strong we are.”
That would be a good way to give the finger to the U.S. on the other hand, which is declining and has a dollar backed by nothing, backed by Treasurys, which are backed by the dollar, which is backed by nothing. They should be like, “Dude, we should be printing money as much as possible and we should be buying as much bitcoin as a reserve asset as possible to strengthen our weakening U.S. dollar.”
They should absolutely be doing that today. That's the first thing they should do right now on their agenda, but of course they're not gonna do that because that gives credibility to the bitcoin and acknowledges that we're weakening and we would never do that.
I'm just not into this game playing like, “Hey, we're so strong and we would never admit that we're weak and we don't need help and we rule the world.” I think that's so stupid and that's how great empires crumble and fall and go into obscure oblivion. That's where we're headed right now and I hate watching it.
Hopefully, at some point, we get some Bitcoiners up higher up in legislation. Hopefully we get some Bitcoiners for president. Hopefully we get some Bitcoiners at the Treasury and the Fed[eral reserve] and all these kinds of things. Then that will change.
By the way, my prediction is Japan will be the first one. They're far away from that right now, but they're in such dire straits right now and they keep trying all these crazy, obnoxious things. Is it really that obnoxious to think of Japan, instead of buying all these other garbage things and buying all the equities in the country and buying all the bonds and all this kind of stuff, what if they bought some bitcoin and strengthened their currency that way? That would actually provide longevity and strength to their currency. It wouldn't be that crazy, and if they did it, then all of the other developed nations would be forced to do it. That would be the game theory in action.
I'm waiting for that announcement. I hope it happens. You heard it here first. I've been talking about that actually for about a year or so. We'll see what happens, but if I had to guess which developed nation was going to embrace bitcoin as a reserve asset first, I would actually pick Japan as the dark horse.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
