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Illustration by Sylvain Saurel

Bitcoin Represents the Great Reset of the Current Monetary and Financial System

This Great Reset started on January 3, 2009.

Sylvain Saurel
Oct 11 · 6 min read

At the beginning of May 2020, the macro investor Paul Tudor Jones took an official position in favor of Bitcoin in a letter sent to his investors. Paul Tudor Jones explained that he now favored Bitcoin over the gold to protect his investors against the great monetary inflation that was starting.

While the term great monetary inflation immediately spoke to investors of all kinds, whether in the stock market or the Bitcoin world, a majority of people in the general public did not really understand what Paul Tudor Jones was talking about.

The great monetary inflation that Paul Tudor Jones was talking about at the time is the one that continues today.

Great monetary inflation hits the world more than ever in 2020

It corresponds to the measures taken by the Fed and other central banks to fight the economic crisis triggered by the COVID-19 pandemic. Within a few weeks, these central banks printed more than 10 trillion dollars of money out of thin air.

To give you an idea of what this means, imagine that your bank account today shows the amount of $1,000. And then, as if by magic, the next day it suddenly shows $1,001,000.

The amount of your money would have increased by +100,000% with the wave of a magic wand.

When you hear about quantitative easing programs by the Fed and other central banks, that’s exactly what happens. By a simple decision of a few unrepresentative central bankers, the money supply in circulation suddenly increases.

At the level of the U.S. dollar, the money supply in circulation is represented by the M2 Money Stock indicator. Between March 2020 and September 2020, the M2 Money Stock increased by +21% from $15,512 billion to $18,720 billion:

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M2 Money Stock evolution

This great monetary inflation favors the explosion of public debts

This unprecedented increase in the M2 Money Stock in such a short period of time has allowed the U.S. government to go deep into debt to finance a stimulus plan that will not have been enough to help those who needed it most.

While the U.S. public debt is close to $27 trillion, the situation is as bad as ever for the U.S. economy and U.S. citizens.

A new stimulus plan will have to be voted on by the end of the year. It will bring the U.S. debt closer to $30 trillion. For years the U.S. debt has been growing faster than the economy, but now it is growing exponentially:

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Total U.S. public debt evolution

The situation is the same all over the world. Since the U.S. dollar is the world’s reserve currency, the United States is exporting its inflation.

In total, the world public debt has increased by 15,000 billion dollars since March 2020. The current monetary and financial system has never been more in danger than it is today because of the original sin of giving central banks the ability to print more and more fiat money out of thin air.

From this sin then follows seven other capital sins that will sooner or later cause the loss of this monetary and financial system.

The problem is that all the money created remains in the hands of the richest people

For the people, the great monetary inflation is dramatic. All printed money remains in the hands of the richest 1% as shown by the dizzying drop in the velocity of the M2 Money Stock which is at its lowest since the 1940s:

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Velocity of M2 Money Stock evolution compared to M2 Money Stock evolution

As a reminder, a high velocity of the M2 Money Stock means that money passes quickly from hand to hand, and therefore that the American economy is dynamic.

On the previous chart, you can see that velocity has been falling steadily over the last 10 years as the Fed has intensified its money creation actions more than ever.

This low velocity is confirmed by the fact that America’s largest fortunes have taken in more than $500 billion since March 2020. The Fed’s actions have benefited a tiny minority with a Jeff Bezos as a symbol, who became the first man with a fortune of more than $200 billion in the summer of 2020.

The problem is that monetary creation is in the hands of governments

The situation we are experiencing in 2020 shows once again that the U.S. dollar, as well as all other fiat currencies, are weak currencies.

The main problem was already pointed out by the economist and philosopher Friedrich Hayek in 1984 :

“I don’t believe we shall ever have good money again before we take it out the hands of governments.”

For Friedrich Hayek, the problem is that central banks and governments have the power to create money as they wish. A total power that has no reason to be.

For him, monetary creation should not be the domain of the State, because this leads to these situations of great monetary inflation :

“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.”

Governments abuse monetary inflation for their own benefit.

A Great Reset is necessary, Bitcoin embodies it perfectly

The solution is a Great Reset of the current system. This Great Reset is called for by more and more economists worldwide. What these economists do not understand is that this Great Reset began on January 3, 2009.

It is embodied by Bitcoin, which is the best alternative in the face of the flaws of the current monetary and financial system.

Bitcoin has several important advantages:

  • A maximum offer that is limited to 21 million units no matter what happens. A consensus exceeding 51% to change this rule will never be reached.
  • A programmatic monetary policy that does not depend on the arbitrariness and corruption inherent in human beings.
  • The absence of a leader, which implies that Bitcoin belongs to the people as a whole.

Bitcoin is in a way the answer to what Friedrich Hayek hoped for throughout the 70s and 80s.

This answer was created by Satoshi Nakamoto following the banking crisis of 2008, which showed once again that the current system was reaching its limits. Twelve years later, a new economic crisis highlights the inevitability of Bitcoin for a better world for all when it comes to money.

In the meantime, Bitcoin’s market cap has reached $200 billion, and its price has risen to more than $10K.

Conclusion

More and more people are realizing that the Bitcoin plan is our only chance to make that necessary Great Reset. During the next great economic crisis, which will occur in 10 to 15 years at the most, the Bitcoin price will probably be closer to a million dollars than to zero, no matter what its critics say.

The big question is whether you will be one of those who will have boarded the train of revolution as soon as possible to benefit from it as much as possible.

It is up to you to decide, knowing that it is by educating yourself that you will be able to make the best decisions for your future in terms of money.

In Bitcoin We Trust

In Bitcoin We Trust is a place where Bitcoin believers…

Sylvain Saurel

Written by

Entrepreneur / Developer / Blogger / Author. In Bitcoin We Trust: https://www.inbitcoinwetrust.net

In Bitcoin We Trust

In Bitcoin We Trust is a place where Bitcoin believers share their ideas about the upcoming revolution. Blockchain and cryptocurrencies are also covered in this publication.

Sylvain Saurel

Written by

Entrepreneur / Developer / Blogger / Author. In Bitcoin We Trust: https://www.inbitcoinwetrust.net

In Bitcoin We Trust

In Bitcoin We Trust is a place where Bitcoin believers share their ideas about the upcoming revolution. Blockchain and cryptocurrencies are also covered in this publication.

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