Bitcoin Forum

Hi, I dont know if you hare informed about this, but many analysts are saying that we are effectively in a currency war betweeen many powers in the World.

As you know, the USA owns the worlds reserve currency (aka dollars). How did this happen? Because of a little bit convoluted process called "the petrodollar", by which the USA has been able to "convince" the world to trade oil only with dollars (this was achieved by making a deal with middle east dictatorial rulers, among other moves).

Why is the trade of oil so important? Because all the current worlds economies depend on oil (millitary, agriculture, transportation, and so on). So nobody can afford not to buy dollars if he wants to import or export oil. This makes pretty much everyone in the world dependent on dollars.

But now recently some countries are starting to trade oil in their own currencies, and it happens this are countries the USA cannot invade (for example China, Russia). So the worlds essential oil trade is starting to be done in other currencies as well, changing the balance of power in the world. The chess moves are being made in the whole world to prepare for this big change, when the dollar loses his status as the only worlds reserve currency.

As it was proven, any group with less than $100 million dollars in hardware (as of today) can disrupt the Bitcoin network, by interefering with the honest mining power. So, I want to speculate that powers like Russia, Iran, China, could one day be willing to back the bitcoin network with hashing power, in case it is attacked by someone, as a mean to use bitcoin as a weapon in this "currency war". My reasoning is that these factions in the currency war will think "the enemy of my enemy is my friend". I have seen some indications of this happening allready, as Russia-Today (governmental tv) has given a lot of positive attention to Bitcoin lately.

This are just speculations of course. But it could fill the gap between the seemingly lack of Bitcoin resilience against a powerful hashing power attack, and the long term survival of the system. I dont see Bitcoin survining if key governments dont want to. Of course there could be other reasons for governments wanting to support Bitcoin. Gavin speculated today that agencies like CIA need to pay money in secret all the time (thats part of their job), so Bitcoin is quite great for this in fact.

Tell me if this reasonings and speculations are of any interest to you.

Why is the world's reserve currency the US$?  That's what the Allied industrialised countries agreed upon in 1944 with the Bretton Woods agreement.  The system ended in 1971 but by then the dollar was too important to world trade, so the defacto reserve status continued.  The USA was also the primary oil producer in the world (Japan went to war with the USA after the US blocked supply).

The US dollar has many problems, but no one really has a better system.  The Euro?  That's beginning to look quite fragile after little more than a decade.  Yuan?  Tied mainly to the US$.  Gold?  The only people advocating gold are the ones sitting on bullion bars talking their book.  The only thing that's certain is that bitcoin won't make any difference to world events.

They did not agree on it. USA had the industry intact and the military might to impose the dollar as reserve currency while Europe was devasted. In fact, the USA government had been trying to impose the dollar on other countries for decades, from late XIX century, early XX century. It all started with the progressive movement when they created the american imperialist mentality. Their moto was: "Extend democracy over the world". The USA imposed the dollar on Mexico, Cuba, Philiphines and more. They even tried to impose the dollar in China but failed. Most of this efforst were supported by military actions, basically totally or partially invading those countries.

So at the end of the IWW the USA government and the interests around it saw the perfect oportunity and imposed the dollar in the world. There is a reason why the USA has military bases all over the world.

Thinking that the rest of the countries agreed to use the dollar is extremely naive. In fact, most of the countries have complained about the dollar as rserve currency, but at the end nobody dares to do nothing about it.

Yes, as the international trade is made in dollars, all currencies suffer when the dollar is abused. The cause of the currency war is the soon to be replaced current world financial order (that started with Bretton Woods), when the dollar is not the worlds reserve currency anymore. In turbulent times, everybody tries to protect themselves, even if that means having to hurt the neighbor. I think Russia, China, Brazil, and others would like to see the dollar not being the only reserve currency, and Bitcoin (being a very small factor) could become one more piece in this world financial chess board. Think of it as a high risk, low cost, high yield financial weapon.

Noona has a better system than USA. Think again! The USA doesn't even own their dollars. Everyone is living on credit, even those who think they own their dollars. If you think about it ... the dollar is useless, just a piece of paper that you can wipe your ....
They are printing those dollars faster than toilet paper, just to keep up with their perfect system.
Its just about time for their bubble to burst IMO, but only time will tell.