Current world events have accelerated the transition to a new world order. It is now evident that the changing of the world has begun. There was hope that it would happen peacefully, and as we now know, it didn’t. Current events are laying a strong discord in the unity of the world economy for the following reasons:
1) Previously, no country had the right to attack a US ally without the threat of a military response. Today this is no longer relevant, and therefore the US military hegemony has been violated.
2) The lack of political unity in condemning Russia. China openly supported Russia’s actions. India and the UAE abstained from voting in the UN Security Council (not all countries vote there). Saudi Arabia said it would stick to the OPEC+ deal and would not expand supplies to replace Russian oil. Latin American countries, including Brazil and Argentina, chose not to impose sanctions or issue a condemnation. Southeast Asian countries remained on the sidelines. Moreover, after the military intervention started, Pakistan and India decided to establish new pipelines, increase trade, and look for new payment methods with Russia.
3) For the first time, sanctions and asset blocking have been applied against a country’s Central Bank. This violates the system of trust in the global financial system.
4) Britain confiscated all deposits over 50,000 pounds from citizens of the Russian Federation. The EU also implemented new rules and now citizens of the Russian Federation with deposits over 100,000 euros must provide supporting documents.
What has always favourably distinguished British law and the ideas of liberalism – is the inviolability of the private capital of the elites. Over the past centuries there, even during wars, large private capital was untouchable, and even kings were obliged to pay their bills. The financial greatness of the West rested on trust and a safe haven for capital, regardless of its origin.
The idea of stealing in one’s own country and putting it in Western banks worked very well, as almost all the elites of developing countries and third world countries did this. Yes, there were cases of confiscation of capital (the example of Gaddafi), but not on such a large scale. They began sawing the branch on which they have been sitting for the last 300 years. It is one thing to take away capital from Putin and his friends, and quite another to take it away from the entire elite of the country. The elite will now definitely not be investing their money there and will try to pull out everything that is still left.
Not only will the Russians stop investing, but soon so will the Indians, the Arabs, the Latin Americans, and the Chinese. The dollar is only a world reserve currency because people believed it was safe to store money in it. Now, investors need to consider if Western currencies are politically safe, and also if high inflation and low bond yields will devalue their investments. For comparison, the official inflation in the US is 7.5%, the yield on 10-year bonds is 1.87%, the inflation in China is 1.5%, and the yield on 10-year bonds is 2.8%.
Now, many investors will wonder if it is time to start storing in yuan and making a profit instead of storing in dollars and euros and making a loss. If China decides to take Taiwan, then other countries will need to make a choice and decide whose side to take. As the practice of voting at the UN already shows, many are ready to take China’s side. This transition, and awareness of the situation, will take some time, but it may happen sooner than you think. And when it does, the world will plunge into a severe financial crisis.
So now you might wonder what you can do to prepare for this and to protect your capital? I could write another 10,000 words explaining how to diversify your portfolio. Or, I could simply tell you what I’m doing. You see, I have investment strategies that are yielding profits. And to share those strategies with you, I only need to write one more word: #Bitcoin.
Risk Warning: The information in this article is presented for general information and shall be treated as a marketing communication only. This analysis is not a recommendation to sell or buy any instrument. Investing in financial instruments involves a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both an increase and a decrease in capital.