The gunman was Richard “Tricky Dick” Nixon.
On August 15, 1971, the president announced the slaying to the nation live on TV.
To grab the attention of as many Americans as possible, he interrupted the popular cowboy show Bonanza with the following warning…
Prosperity without war requires action on three fronts. We must create more and better jobs; we must stop the rise in the cost of living; we must protect the dollar from the attacks of international money speculators.
Then the president unleashed what we now know as the “Nixon shock.”
To defend the currency against attacks from, as he put it, “international money speculators,” he delinked the U.S. dollar from gold.
Nixon broke the promise America made in 1944 to its World War II allies to trade dollars for gold at a fixed exchange rate of $35 an ounce.
In doing so, he ended the gold-based international money system in place, off and on, since the 1870s.
The fiat standard Nixon ushered in is breathing its last. And a new money system is taking shape – one built around decentralized cryptocurrencies and the blockchain technology behind them.
It’s not just cryptos such as bitcoin (BTC) that are rising up. So are government-issued versions of crypto.
These include a new, digital-only dollar that will replace the cash in your wallet – or what Casey Research founder Doug Casey calls “FedCoin.”
Most mainstream investors don’t have a clue about how these dots connect.
But don’t worry… By the end of today’s dispatch, you’ll know how to shield your nest egg… and ride this megatrend to potentially life-changing profits.
In April 2016, Teeka Tiwari recommended bitcoin at our Palm Beach Letter and Palm Beach Confidential advisories.
This was before bitcoin and the blockchain technology behind it started making headlines in the mainstream financial press.
Back then, one bitcoin changed hands for $428. As I type, one bitcoin will set you back $36,500.
That’s a 8,428% gain for Teeka subscribers who acted on his initial recommendation. That’s enough to turn every $1,000 grubstake into $85,280.
And in November 2017, just four months after launching our Near Future Report advisory, our tech investing expert, Jeff Brown, added bitcoin to the model portfolio.
It’s up 367% since then. And, like Teeka, Jeff sees more gains ahead.
Here’s how he explained it to Near Future Report readers in November 2017…
What makes blockchain so disruptive is we can now conduct financial transactions without middlemen such as commercial banks, central banks, or exchanges. Better still, these transactions happen in a way nobody can interfere with. Blockchains are also tamperproof.
In short, blockchains get rid of a lot of friction in financial transactions. The same transaction a typical intermediary such as a bank takes three days to do, blockchains can do near instantaneously, and at a fraction of the cost.
As I (Chris Lowe) have covered in detail in these pages, that’s a growing threat right now. The latest government figures show yearly consumer price inflation running above 5%.
That’s the biggest annual rise in inflation in 31 years. And it’s the product of the fiat-money system Nixon brought in.
Gold served as an inflation “anchor” for the dollar…
Before 1971, for every $35 Congress created, it had to come up with one ounce of gold to back the new spending.
There was some wiggle room… By 1971, the feds were printing more dollars than they had gold to back. But the gold standard kept government spending under an external constraint.
By ending the direct convertibility of dollars to gold, Nixon allowed lawmakers to create as many new dollars as they wished.
That devalued the dollar.
You need $6.74 in today’s money to have the same buying power as $1 in 1971. That’s thanks to an average inflation rate of 3.9% over that time.
Bitcoin is different. Due to its ingenious design, it’s inflation-proof. Jeff again…
With blockchains and cryptocurrencies, there’s no central bank that can digitally “print” more currency at the press of a button. A blockchain’s monetary policy is written into its code. In the case of bitcoin, there will only ever be 21 million coins. And each new bitcoin, like gold, is costly to “mine.”
In January, just 11 years after its launch, it hit 100 million users. That’s faster than the internet and smartphones hit that level of adoption.
It’s helped bitcoin become the fastest asset in history to reach a $1 trillion market value. (It took Apple (AAPL) 38 years to cross the trillion-dollar threshold.)
Governments see what’s happening… and are getting involved.
Figures from the Atlantic Council think tank show that 81 countries are exploring issuing digital-only currencies. These countries account for over 90% of the world’s economic output.
And as of last month, the countries testing digital-only cash include Sweden, the Bahamas, France, the Philippines, Japan, Turkey, and Switzerland.
Regular readers will have heard me on CBDCs before. But if you’re new to the conversation, here’s what I’m talking about…
Central bank digital currencies – CBDCs – are digital versions of existing fiat cash. But instead of carrying them in your pocket as banknotes and coins, you store them in a digital wallet on your smartphone.
You spend them on your smartphone, too, much like you’d spend bitcoin or another decentralized cryptocurrency.
It’s already tested this digital-only yuan in about $5 billion worth of transactions.
The U.S. is researching a CBDC, too – “FedCoin.”
Fed boss Jay Powell says developing FedCoin is a top priority. The Federal Reserve Bank of Boston and MIT, meanwhile, have been working on a prototype for a digital-dollar platform.
And it’s gotten Jeff thinking…
You see, he’s a member of the Chamber of Digital Commerce. He’s been up on Capitol Hill to advise a group of senators about digital currencies.
He’s also traveled to Israel on a U.S. Certified Trade Mission on digital-only currencies. He attended a meeting there with the head of the Israeli central bank.
That’s all given him a bird’s-eye view of what’s going on. And he believes FedCoin is inevitable.
The incentives for the U.S. government – or any government, for that matter – are too great. Jeff…
A digital-only dollar would have made it much easier for the government to distribute stimulus funds.
The Trump administration had to mail physical checks to folks who weren’t registered for electronic transfers from the government. That was cumbersome. And it took time. With FedCoin, we’d simply wake up and see digital-only dollars had been “air-dropped” into the wallets on our smartphones.
But the main reason for FedCoin is control over the money system. Jeff again…
Once it issues FedCoin, the government will stop supplying bills and coins. It will shut down the U.S. Mint, which produces our coins. It will also shut down the Bureau of Engraving and Printing, which prints dollar bills.
It’s all about control. The government can’t track physical cash the way it can a CBDC. Digital-only cash will allow the government to track and tax every transaction we make. The taxman will have a field day.
CBDCs are making negative interest rates much easier to impose. The Fed will centrally control this system. So it could write some code that deducts interest from our digital wallets each month to encourage spending.
That may be good for governments. But freedom-loving folks are sure to despise it.
As we’ve covered here today, nobody can create more bitcoin than the code allows for.
And each new bitcoin is expensive to “mine,” or create. Miners must first solve a complex math puzzle that requires energy-intensive computer processing power.
Central banks and governments can’t erode bitcoin’s value, through either inflation of the supply or funny business like negative interest rates.
This will make bitcoin even more attractive as governments force folks to ditch physical cash and switch to CBDCs such as FedCoin.
I say this all the time. But bitcoin is one of the best asymmetric speculations you can find.
It’s got a market cap of less than $900 billion right now. That’s less than 10 times the value of the market for physical gold.
The more folks realize it’s an escape hatch from the new digital-fiat standard that’s coming… the more they’ll want to own bitcoin.
And because its supply is fixed, that leaves only one way for prices to go… up.
Next Wednesday, August 25, at 8 p.m. ET, he’s holding his first crypto livestream.
In it, he’ll reveal what he believes could be the most urgent opportunity of his career.
It’s a billionaire-backed crypto project from the co-creator of Ethereum. And Jeff believes it’s another shot at the gains early investors in Ethereum made.
Early backers are up a truly life-changing 1,007,319% on ether (ETH), the crypto associated with Ethereum.
I won’t steal any more of Jeff’s thunder.
He’ll explain everything… walk you through this opportunity step by step… and host a Q&A session during his livestream event.
And as timing is so critical here, he’s heading up a cryptocurrency quick-start course starting this Friday, August 20.
To register for Jeff’s livestream… and to access his crypto quick-start course… for free… go here now.
Regards,
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Chris Lowe
August 16, 2021
Dublin, Ireland