During real monetary crises, do you think citizens should want gold or bitcoin? Of course, bitcoin advocates are always preaching how BTC is the money of freedom that serves citizens best during crises and that physical gold is fool’s gold when compared to bitcoin. For example, Mark Cuban, among others, is among the community of crypto HODLers that sincerely believe that ownership of BTC will serve citizens better than gold during real economic and monetary crises. Cuban has flat out stated multiple times that “bitcoin is better than gold”. On the other hand, the majority of members of the “only gold is sound money” community has always stated that gold performs best during true economic and monetary crisis.
When the Venezuelan Bolivar (VEB) hyperinflated into nothingness and the Venezuelan Bolivar Fuerte (VEF) replaced it at a rate of 1VEF to 1000 VEB, a client of mine informed me that my guidance to change all VEB into gold before this massive devaluation literally saved his financial life and all of his savings from imploding into nothingness. When crises manifest, this is when owning gold is a non-negotiable. But of course one must have the foresight to own gold before the crisis manifests. And back then, one could not have argued that BTC still would have been the better investment because the first BTC had not yet been minted so there was no opportunity for BTC to save any Venezuelans from having their savings ground into dust.
With that said, let’s fast forward to today and investigate how gold has functioned under another economic crisis, the Sri Lankan crisis. Has gold helped Sri Lankan citizens hedge against a collapsing LKR (Sri Lanka rupee) or would HODLing bitcoin have served them better, as we have heard argued so often by the bitcoin community? Sri Lanka’s collapsing economy, in which staples which we take for granted, like food and electricity, have become scarce resources, has led to the IMF to swoop in like vultures and offer $600M in loans to “save” Sri Lanka. Of course, anyone that understands the IMF modus operandus understands that such loans are always structured exploitatively to guarantee default of interest rate payments that trigger punitive clauses that will subjugate Sri Lankan citizens under the thumb of global banker control for decades.
Thus, Sri Lanka presents the perfect case study of economic catastrophe that all Bitcoin advocates claim are the conditions under which Bitcoin will thrive to save all citizens and ensure their economic freedom. So, let’s take a closer look at the “Bitcoin is the money of freedom” narrative to see how well it functioned in ensuring the freedom of food deprived, utility starved Sri Lankan citizens this year. By the way, to understand how resources we take for granted, like running electricity at all times, may be taken away from citizens of even first world, industrialized nations, make sure you read this article if you have not already done so, for it may just save you from misery in the next few years.
J. Kim is the founder and Chief Education Officer of skwealthacademy. J. Kim graduated from the University of Pennsylvania with a degree in neurobiology. After working in healthcare for four years, he changed careers and worked for a Wall Street firm and one of the largest US banks as a Private Banker and Private Wealth Manager after obtaining an MBA and Master in Public Affairs from the University of Texas at Austin. After quickly becoming disenchanted with the ethics of the investment and banking industry, J. Kim left and founded his own company, a commodity based consulting and research firm.
J. Kim is now embarking on his second entrepreneurial venture, a disruptive wealth building Academy called skwealthacademy that seeks to supply all the critical knowledge that should be included, but is completely absent, from all global business academic programs, including the following topics: the truth mechanisms that drive asset prices, why key economic data is essentially useless for determining economic trends, the rapidly changing technology of investing that includes dark pools, HFT trading algorithms, front running and quote stuffing, how to determine your own personal inflation index and more.