This is a transcribed excerpt from 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 he is going to. the following are to use bitcoin as a reserve asset.
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Q: China has so much of our debt and we’ve now seen what the playbook is if you do something the US doesn’t agree with. As Iran has seen for the past 50 years, as Russia has seen quickly now, what happens when China enters some sort of sanctioned period, why not try to go ahead and follow the Russian playbook and strengthen their own dollar? further reduce the value of the US dollar and the world stage? Is that a feasible scenario?
Jeff Ross: Yes. I say, that’s definitely what they do. And that’s definitely what Russia and China are doing. I think they are colluding about this. They join hands. They say the US (from their perspective) screwed us over for so long. Why are we allowing this? I think this happened a long time ago, ten years ago, when they decided, “What are we on this system for? Why do we keep buying US treasuries and supporting the US military-industrial complex? Why not take a different approach and try to move away from the US dollar as the world’s reserve currency. That’s why we’re going to follow the old textbook, which is that we’re going to strengthen our own currencies by supporting them with raw materials.”
So what has happened in the past decade? China was buying raw materials like crazy. They were stocking goods. Russia is very resource rich, right? Tons of oil in Russia. They both have a very significant amount of gold and they have increased their gold supply. And just their department stores in general.
Why? They’re going to use that as a basis to say, “Look, everyone knows that the US dollar is literally backed by nothing. It was backed by gold until 1971. And then they left the gold standard and they are literally backed by nothing. If you disagree, the US military will come after you and sanctions will come after you. That is the price we pay.”
So they say, “We have an alternative and now we are powerful and America is aging and senile enough.” No pun intended for our leaders, but actually: [America is] ruled by octogenarians with dementia and we are a waning power.
Russia and China are saying, “Look, this is our time to stand up and say, we have a stronger currency based on real, real commodities, like gold, like oil, that sort of thing.” Now I would say the one thing they don’t consider, Russia and China, is that bitcoin is the most obvious, best and hardest asset for me.
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 of course I’m not, and I’m not sympathetic to a lot of their goals, but they should back this on Bitcoin. They should use bitcoin as reserve assets to show, “Look, we don’t just have gold and oil and other commodities to back up our currencies, which are stronger than the US dollar, we also have a huge amount of bitcoin. :look how strong we are.”
That would be a good way to put the finger on the other side of the US, which is going down and has a dollar backed by nothing, backed by Treasuries, backed by the dollar, backed by nothing . They should be like, “Dude, we should print as much money as we can and we should buy as much bitcoin as we can as reserve assets to bolster our weakening US dollar.”
They absolutely should today. That’s the first thing on their agenda right now, but of course they’re not going to do that, because that gives bitcoin credibility and recognizes that we are weakening and that we would never do that.
I just don’t like this game to play like, “Hey, we’re so strong and we’d never admit we’re weak and we don’t need any help and we rule the world.” I think that’s so stupid and that’s how great empires crumble and fall and fall into obscure oblivion. That’s where we’re going now and I hate looking at it.
Hopefully at some point we will get some Bitcoiners higher in the legislation. Hopefully we get some Bitcoiners for president. Hopefully we’ll get some Bitcoiners at the Treasury and the Fed[eral reserve] and all these things. Then that will change.
By the way, my prediction is that Japan will be the first. They’re a long way from that now, but they’re in such a difficult situation right now and they keep trying all those crazy, unpleasant things. Is it really so off-putting to think about Japan, instead of buying all this other crap and buying all the stocks in the country and buying all the bonds and all this stuff, what if they bought some bitcoin and their currency would strengthen that way? That would actually give their currency longevity and strength. It wouldn’t be so crazy, and if they did, all the other developed countries would be forced to do it. That would be game theory in action.
I’m waiting for that announcement. I hope it happens. You heard it here first. I’ve actually been talking about that for a year or so. We’ll see what happens, but if I had to guess which developed nation would embrace bitcoin as a reserve, I’d actually pick Japan as the dark horse.