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The IMF, Bitcoin, and El Salvador. What Seems to Be the Problem?

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The IMF is not happy with El Salvador’s decision to adopt Bitcoin as legal tender, to say the least.

That’s weird.

Why should a small, insignificant country’s economic policy worry the mighty powers of the financial world? They usually don’t care much about that part of the world. But now, all of a sudden, they are paying attention.

When El Salvador dropped their national currency in 2001, nobody blinked an eye or rushed to help their broken economy but when they try to move towards Bitcoinazation and all of a sudden it’s all a big drama.

There are many plausible explanations for this and then, there is the real reason. Let’s dig into that.

The International Monetary Fund doesn’t care about the little guy, they care about money and power. In order to retain power, they need currencies they can control. That’s the reason why we have Fiat currencies.

Central banks exert a lot of power through their monetary policies. At the end of the day, we need money to survive and as long as they can print it, they got the bull by the horns.

Bitcoin is a big threat to the status quo, no wonder they attack it so violently. If you have the only bakery in town, you don’t want anyone coming up with new ways to make bread. You’d pull all the strings to make sure they fail, and that’s exactly what the IMF is doing right now.

They couldn’t care less about El Salvador, it’s not even on the map for them. But what if there is a domino effect and the whole of Latin America, Africa, and other developing nations embrace Bitcoinazation?

That could be a problem.

The thing is: what do they have to lose? Most of these countries have weak currencies that constantly suffer from debasement, devaluation, and confiscation. Most of them have to resort to the dollar in order to gain some stability and even this brings a new set of problems.

If Latin America embraces Bitcoin as the reserve currency, this could well mean the end of economic struggles for millions. Instead of depending on handouts from rich countries, they could become fully independent.

And not just that, investing in Bitcoin now could be like investing in Gold in the 18th century. It will make insignificant nations ascend to the top very quickly.

When you own the most pristine asset, suddenly everyone wants to do business with you. We could well be witnessing a historic shift with developing nations inverting the geopolitical map.

The IMF is not happy about this.

When you own Fiat currency, you are trusting the government to ensure that it retains its value over time and there is no foul play.

Unfortunately, this is not the case in most countries. Devaluation, hyperinflation, or even direct confiscation make the financial situation of many unsustainable.

Any government can decide at any time to devalue the local currency 100 to 1 for example and people would lose 99% of their savings overnight. This is called theft in my dictionary and unfortunately, happens far too often in most of the developing world.

Paraguay, Indonesia, and Vietnam are examples of some of the most devalued currencies. Let’s keep in mind that this happens by decree, not accidentally. This is usually done in a desperate attempt to revive the economy but still, explain that to the poor farmer who managed to save 10.000 pesos, and now the value went to zero.

But there is even a more blatant example of confiscation. In 2001 the Argentinian government closed all banks for a whole year in an infamous intervention known as “el corralito”. During that period the local peso was devalued and all US dollars were confiscated and returned in pesos at a 1:1 rate. Imagine that!

Poor Argentinians thought their money was safe in the bank. Not quite.

The IMF recommends countries in crisis to devalue their currency in order to become more competitive. But what if these countries use Bitcoin as legal tender?

No devaluation, no inflation and no confiscation would be possible. They can’t allow that to happen, right?

Apart from bans, sanctions, and regulations which are totally ineffective against a decentralized network, what the IMF, central banks, and the G7 are doing is resorting to the old trick: spreading rumors.

By using Fear, Uncertainty, and Doubt they are hoping to buy time while deciding how to react to this new disruption.

In cahoots with the media, the financial industry ( which is already buying Bitcoin), and some other lobbies, the IMF is selling fake news about crypto and making up reasons why you should stay away from it.

They remind me of taxi drivers when asked about Uber. Never listen to anyone with a vested interest.

Now, the IMF is attacking and even blackmailing El Salvador for making this move. This is a sign of desperation and a show of their true colors.

But why should El Salvador listen to them? Did they ever offer a hand when this country was broke, immersed in violence, and without hope?

No, they didn’t. Poor people are not their priority, all they care about is the rich.

IFM’s worst nightmare is not that El Salvador fails in this risky move, they dread that it might succeed. If Salvadorians improve their lives, escape poverty and GDP grows by 25%, as president Bukele predicts, this would be a big blow for all these corrupt institutions that are ruling the world.

They have to make it fail at any cost. The problem is they are in unchartered territory. One thing is to invade a defenseless country in the middle east and another to try to bring down a decentralized network that’s proven to be flawless. I’m not betting for central banks on this fight.

There is something even deeper at stake here, something that could change the geopolitical atlas: the end of the national estate.

Big powerful nations have enjoyed a good century or two thanks to the use of powerful armies to gain resources and power overseas. Now, not so much.

Wars are a bad investment from all points of view. Apart from some crazy megalomaniacs, I don’t think we’ll see many armed conflicts in the 21st century. Although, if there is a big one, it could be final.

Since war has become bad business, maintaining the military, economic and social apparatus that big nations require is no longer viable. Now we are seeing small nation-states gaining power, reacting quicker, and moving faster because they don’t carry the dead weight of a big estate.

Singapore, Taiwan, Switzerland, Estonia, and El Salvador (maybe) are becoming very relevant in this digital economy because they are nimble, lightweight, and fast to act.

The EU, the USA, China, and Russia are dinosaurs that are losing ground to the small states. They are getting angry but, apart from throwing a tantrum, there is not a lot they can do.

The IMF was created to cater to these big nation estates so the current trend of decentralization is a worry for them. Bitcoin doesn’t help.

Does anyone think that the mission of the IMF is to make the world a better place, that they care for the families living below the poverty line, or that they want to redistribute wealth so everybody has a fair chance in life?

That was a rhetorical question. We all know the answer.

This is what they say, but their real mission is to protect the privileges of industrialized nations so the developing world doesn’t present a challenge.

Bitcoin is this new asset they can’t control so destroying it would be very convenient.

Unfortunately, it’s already too late.

Bitcoin is already bigger than JP Morgan, the biggest bank in the world, it’s already one of the top ten most valuable assets on the planet. If they wanted to destroy it, they should have done it 10 years ago.

The latest FUD is ESG. Apparently, bitcoin doesn’t follow the requirements for an Environmental, Social and Governance investment.

By using this excuse, they are trying to slow down adoption from institutions that are eager to claim part of the Bitcoin pie.

The environmental concerns have been proven wrong over and over again — 75% of Bitcoin is mined with renewables, miners are leaving China and going to North America, Iceland, and Scandinavia where green energy is cheaper than dirty coal.

Miners need inexpensive energy and a stable political climate and they move wherever they can find it. Luckily, solar, wind, and hydro are already the cheapest forms of energy so, what we are seeing is Bitcoin promoting the use of green power and not the other way round.

Even El Salvador will use volcano energy to mine Bitcoin.

Bitcoin can do more to improve the lives of poor people than any other economic policy that was ever implemented. They can transfer money fast and cheaply, they can hedge against inflation and they can hold their savings in places where no government can confiscate them.

This is a big deal for the 2 billion unbanked. For the first time in history, they can access credit, savings, loans, investments, and transfers from any amount. They have already started, Nigeria and Venezuela are countries with big BTC adoption and this is only the beginning.

ESG concerns are just an excuse to retain power.

Another point on the agenda is the Central Bank Digital Currencies.

Since they know crypto is a lost battle, they are trying to come up with an alternative, the centralized digital Dollar, Euro, Yuan, etc.

This is like cash, only 1000 times worse. Even Orwell couldn’t imagine this powerful tool for controlling people.

Once CBDCs are in place, they’ll force you to use it and you won’t be able to buy anything that is not allowed, especially Bitcoin.

Before this happens make sure you stock up if you want to retain some freedom. There will be a social divide: those who have Bitcoin and those who don’t.

That’s why they are trying to convince you not to buy.

As Warren Buffett says, when you want to understand a decision, look at the incentives.

What are the incentives for the IMF, Central Banks, and big governments? To help the poor? To save the planet? Or to keep in place a system that has been filling their pockets to the brim for centuries?

When you understand the incentives you understand the world.

The world is f*cked. The system has been rotten for decades but in 2008 it became clear that there are only two social classes: those who handle the money and those who foot the bill.

The problem is not COVID-19 or BITCOIN, the problem is an obsolete, corrupt and inefficient system that is collapsing as we speak.

The only way to survive now is to escape the system and the only escape is Bitcoin.

Buy your little piece of paradise and HODL it. Get rid of all your cash that soon will be worth as much as a Venezuelan Bolivar and get educated in this new decentralized system that is ruled by math, cryptography, and the blockchain.

We got to a fork in the road. To the left, you have the old world of elites, corruption, money printing, and value-sucking monsters. To the right, you have freedom. Choose wisely because once you start walking there is no turning back.

Take the orange pill.

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Source: https://medium.com/coinmonks/the-imf-bitcoin-and-el-salvador-what-seems-to-be-the-problem-9fcac948bc07?source=rss——-8—————–cryptocurrency

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