Recent changes in the global financial system have marked a sharp increase in the value of Bitcoin and gold as central banks begin to integrate these assets into their structures.
Key Changes in the Monetary System
The new financial structure indicates that the U.S. dollar is partially backed by both Bitcoin and gold, at a rate of 25% each. The Federal Reserve also launched a Central Bank Digital Currency and expanded its balance sheet to a record $44 trillion. As a result, Bitcoin surged to $600,000, while gold reached $10,400.
Countries' Reactions to Financial Transformations
On August 14, Germany announced that the euro would now be backed by gold reserves at a rate of 10%. Emerging economies such as Venezuela, Turkey, and Nigeria began shifting their foreign exchange reserves into Bitcoin. Tether responded by launching a new Bitcoin-backed stablecoin. At that point, Bitcoin reached $265,000, and gold traded at $6,700.
Consequences for Traditional Markets
Despite the Federal Reserve's efforts to freeze the 10-year yield at 9.2%, a cascading collapse ensued, resulting in Bitcoin settling at $600,000, while gold ended at $10,400. The U.S. dollar index plummeted from 96 to 68, and the S&P 500 lost half its value.
Fred Krueger's narrative illustrates profound shifts and uncertainties regarding fiat currencies and centralized economic control. It underscores the impending transition towards Bitcoin and blockchain as potential replacements for the financial structures that dominated the last century.
