Geopolitical Compass #9

EUSSR patrolling Taiwan. WEF promoting Bitcoin...sort of. US electric tanks. East European debt.

Notable events in geopolitics and capital markets this week. Expand your perspective, gain context, and discover actionable insights.

Bankrupt Bank Bingo

Who’s next? Where are you keeping your savings, and how much is it insured for?

Bitcoin

Excellent new report out from Tuur Demester at Adamant Research: How to Position for the Bitcoin Boom.

During this accumulation phase, we expect for bitcoin to trade in a range of $22,000 to $42,000, until a new multi-year bull market pushes it well north of $120,000.

These are some of the areas in which bitcoin, with a current market cap of $0.5 trillion, directly competes with existing infrastructure:

• Remittances, annual volume of $ 0.7 trillion

• US treasury inflation-protected bonds: $1.7 trillion

• Payments revenues, globally: $2 trillion

• All the paper money in the world: $8 trillion

• Aboveground physical gold: $9 trillion

• Central Bank Reserves: $27 trillion

• Currency deposits worldwide (cash claims on banks): $62 trillion

• Residential Real Estate worldwide: $258 trillion

Of course, as happened in the stagflation of the 1970s, given these shifting tides investors will likely reach for gold, that historic store of value. However, it is our belief that in a digital, intensely globalized world, bitcoin will be even more desirable and in demand because of its superior ability to be stored safely, its vastly higher divisibility, its lack of a need for third party storage, its resistance to confiscation, its supreme auditability, and its provable scarcity.

We’ve seen new technology revolutionize and drive down costs time and again; photos, streaming services, books, online shopping, employment, newspapers, telecommunications, travel, banking.

How much of each of the above markets mentioned in the report will Bitcoin capture? I don’t know, but I do know $0 is the wrong answer.

WEF

Now I’ll admit this one shocked me! The WEF promoting Crusoe Energy’s use of Bitcoin mining to offset emissions. OK they couldn’t bring themselves to utter the ‘B’ word, but Crusoe is specifically using this cheap waste energy to mine Bitcoin.

For those invested in the energy space, behold the future for all energy companies. Less emissions, longer production times, and additional income.

Eastern Europe

Countries including Poland, Hungary and Romania are taking on debt at a rapid rate.

Countries in Eastern Europe have borrowed some $32 billion so far this year, three times more than during the same period a year ago, Bloomberg reported on Tuesday.

According to analyst estimates on Bloomberg, Eastern Europe's budget deficit will surge to 4.3% of the region’s gross domestic product in 2023, up from the 1.3% recorded two years ago.

EUSSR

The head ‘diplomat’ (and I use that term begrudgingly) of the EUSSR, Josep Borrell wants European navies patrolling the Taiwan Strait.

“Taiwan is clearly part of our geostrategic perimeter to guarantee peace.

“It is not only for a moral reason that an action against Taiwan must necessarily be rejected. It is also because it would be, in economic terms, extremely serious for us, because Taiwan has a strategic role in the production of the most advanced semiconductors,” he said.

These people can’t help themselves. They are yet to see a land to which they don’t feel their power should extend. Colonialism at its finest.

I wonder how Borrell would react to China patrolling the English Channel? Or Russia patrolling the Black Sea from a naval base in Syria? After all it’s just about freedom of navigation right?

Unelected and unaccountable bureaucrats only seek to see their power grow and warmongering (eventually war) is the best distraction from the poverty their actions bring upon their own people.

The business model is mayhem abroad, and misery at home. Borrell typifies this.

India & China Demographics

India is about to overtake China as the world’s most populous nation. India also has a younger demographic mix due to China’s previous one-child policy, however I believe the scare stories about China’s imminent demographic collapse are just that - fear mongering by self-interested parties.

China has already reversed this policy and is again encouraging larger families. China will continue to prosper and with a lazy 1.4 billion people, even a decline of that number in the decades ahead (before new generations regain the slack) is still a LOT of people.

Poland

After a false-start last year when Polish authorities merely froze the funds held by the Russian embassy in Poland, this week authorities have seized the funds completely.

"We have received a message from the prosecutor's office that funds from the accounts of the embassy and trade mission in Santander Bank have been transferred to the accounts of the prosecutor's office," the ambassador said.

Santander Bank, meanwhile, announced that it had terminated its cooperation with the embassy and closed the accounts.

Of course Western banks have no choice but to comply with government theft or face repercussions of their own.

It seems the West and it’s lapdogs - in this case Poland - are intent on bringing back an interim gold standard followed by a Bitcoin standard.

United Kingdom

The Bank of England says people need to accept they are poorer.

[People] need to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices, whether [through] higher wages or passing the energy costs through onto customers.

He said there was a “reluctance to accept” that Britain had become collectively poorer but claimed it was an inevitable consequence of the surge in energy prices since the invasion of Ukraine.

Yes you are poorer, but WHY?

It was always inevitable that horrendously inept government policy including lockdowns, crippling energy policy, sanctions and picking a fight with Russia you were always destined to lose would result in the UK becoming poorer.

Now these same bureaucrats are telling you to stay in your home serfs; stop complaining or taking actions that attempts to improve your situation.

United States

The Biden Energy Secrtary wants all US military vehicles to be electric by 2030 including tanks. It’s a good thing she won’t be in a position of power even two years from now, but will her successors maintain this same delusion?

This is purposeful destruction of the United States from within by arsonists. With the exception of their nuclear submarine fleet, the military forces of the US are already sub-par and vulnerable.

A delusional transition to electric vehicles which are more costly, less powerful, and require battery logistics when your adversaries are still utilising much more powerful hydrocarbon fueled products is nothing more than a death wish for hundreds of thousands of US defence personnel.

That’s it for this week, if you enjoyed this edition, please give it a like below!