American-Chinese trade war: bitcoin death and life game

American-Chinese trade war: bitcoin death and life game
Abstract

Over the past few years, Bitcoin has been at its best, usually when the traditional world economy has not been good or has witnessed political and economic tensions around the world.

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Over the past few years, Bitcoin has been at its best, usually when the traditional world economy has not been good or has witnessed political and economic tensions around the world. The digital currency was introduced shortly after the 2008 financial crisis, and many experts believe that one of the main reasons for Satinoshi Nakamoto's invention of bitcoin may be the economic crises and weaknesses of the traditional financial system. An article on the Quincy website examines the impact of the US-China trade war on bitcoin prices. Read the full text of this fascinating article below.


The global economy is currently facing its biggest crisis in 11 years.

This crisis, at least on paper, provides the best opportunity for Bitcoin to shine. It is time for Bitcoin to consolidate its position as an independent asset and resistant to political instability. Of course, this is a result that may happen, but the future will be very uncertain for both Bitcoin fans and those who deny it.

Before addressing the positives and disadvantages of bitcoin, it is best to ask why the current situation in the world economy is so worrying.

Behind the scenes games


The story began on Monday, August 5, when China allowed the Renminbi (the Chinese currency) to fall below 7.0 against the dollar.

The US Treasury announced almost immediately that they would now consider China a "currency fraud" by accusing China of deliberate manipulation of money.

The move would theoretically allow the Trump administration to use the legal cover needed to impose sanctions on the country. So the move was marred by the notion of a full-fledged currency war. A war in which both sides consistently cut exchange rates, which could lead to a devastating downward spiral in trade and economic growth.

Of course, this may never happen.

On Tuesday, the People's Bank of China cut some investors' fears. By acquiring more renminbi in order to stabilize its value, the bank indicated that it did not intend to use its national currency as a weapon in the trade war.

Of course, America's official comment in this regard is far from rational. According to the Treasury Department's own definition, currency manipulation should include a one-way and continuous market intervention to weaken the domestic currency; .

It has to be acknowledged that China has consistently opposed the definition of market manipulation for the past five years. It can be said that even to change the country's economic growth model from dependence on foreign exports, it has always sought to raise the value of its national currency. Even in a market that has always tried to bring it down.

That is why institutions like the World Trade Organization (WTO) and the International Monetary Fund (IMF) will never support the US accusation of manipulating the currency. Failure to co-operate with these institutions will leave the United States left alone and vulnerable to its damaging effects if unilateral international sanctions are imposed on China. It started last week on August 5 when China allowed the Renminbi (Chinese currency) to fall below 7.0 against the dollar.

The US Treasury announced almost immediately that they would now consider China a "currency fraud" by accusing China of deliberate manipulation of money.

The move would theoretically allow the Trump administration to use the legal cover needed to impose sanctions on the country. So the move was marred by the notion of a full-fledged currency war. A war in which both sides consistently cut exchange rates, which could lead to a devastating downward spiral in trade and economic growth.

Of course, this may never happen.

On Tuesday, the People's Bank of China cut some investors' fears. By acquiring more renminbi in order to stabilize its value, the bank indicated that it did not intend to use its national currency as a weapon in the trade war.

Of course, America's official comment in this regard is far from rational. According to the Treasury Department's own definition, currency manipulation should include a one-way and continuous market intervention to weaken the domestic currency; .

It has to be acknowledged that China has consistently opposed the definition of market manipulation for the past five years. It can be said that even to change the country's economic growth model from dependence on foreign exports, it has always sought to raise the value of its national currency. Even in a market that has always tried to bring it down.

That is why institutions like the World Trade Organization (WTO) and the International Monetary Fund (IMF) will never support the US accusation of manipulating the currency. Failure to co-operate with these institutions will leave the United States left alone and vulnerable to its damaging effects if unilateral international sanctions are imposed on China.

Wave effect


The main problem is that the economic and political environment in the world says that politicians are not supposed to behave rationally. In a world where the great Western nations are backing away from the neoliberal values   of the nineties and the first decades of the new century, the realities of the world and the views of international institutions are losing their value. So you should not be surprised if you see more market turmoil in the near future due to the dangers of this currency war.

Any deterioration in this situation will have a (negative) impact on the world. It should be noted, however, that a weaker renminbi also means that other countries trading with China will suffer. Those countries will also feel the need to lower the value of their currencies, and countries that trade with them will do the same.

In this case, any country whose official exchange rate is, even nominally floating, will do so by lowering interest rates instead of official intervention or direct exchange rate cuts. By doing so, the demand for their currency will be reduced, thus reducing their target rate. The central banks do not even need to justify this lowering of the exchange rate and merely say that the currency war has weakened the country's economic outlook.

Already, countries such as New Zealand, India and Thailand have announced that they will lower their interest rates in response to the devaluation of the Renminbi. Investors in the securities markets are also worried. The 10-year yield on US Treasury bonds is now almost lower than its quarterly bills, which is dangerously close to forming a reverse yield curve. The curve of the past has been indicative of weaker monetary policy and heralded an imminent recession.

This interest rate cut will quickly raise bank costs. This is the reason why the Swiss Bank Union (UBS) has been charged a fee to keep its large depositors' money. A game of negative interest rates that will anger savers.

But the most frightening prospect in this situation is not the uproar of wealthy depositors or the repetition of the market turmoil from year to year and the Asian economic crisis or even the huge losses of years to year. The most frightening repercussions of a currency war that America is about to begin remind us of the events of the 1980.


It was in the 1930s that the events of the end of the gold standard monetary system (backed by the dollar with gold) and the Smoot Hawley Tariff Act (the name of two senators who introduced the tariff) initiated a currency depreciation cycle. These two events were among the most important reasons for the start of the Great Depression. (The events) and the ensuing international crisis were the wind that ignited World War II.

Of course, we don't live in the '30s. Our economy is much more global than before, and we have the Internet. According to economists and political scientists, this coercion (pointing to the Internet) forces people, economic activists, and politicians to avoid futile economic or political conflicts.

On the other hand, we know that Web 2.0 has been very effective for political institutions that have become accustomed to supporting globalization and a free economy.

Concentrated data mining algorithms from companies like Facebook and Google have created a group of dopamine addicts who simply repeat their thinking in their forums. The combination of these groups with fake robots and untrue news has weakened the credible media that the news community once relied on.

Bitcoin purchase argument

Regardless of your point of view on liberalism, it is important to acknowledge that the dream of a liberal national government has been threatened, and that is the main reason for the chaos in the world. On the one hand, the Internet allows emerging transnational groups to prefer the interests of the world to the interests of their own country, and on the other hand, the uncontrolled system of it has fueled strong political backlash by anti-liberal and fanatical governments.

One of the best examples is the image last week of the brutal crackdown on Hong Kong protesters who desperately tried to disrupt Beijing's digital surveillance system. Another example is the Trump-type military talk.

But now we're armed with a technology we didn't have eighty years ago: digital currencies.


People who were worried about the devaluation of money, racial strife, or war welfare in the 1980s usually used gold to save value. Gold provided them with an ancient and well-known value-saving tool whose features, including its own, were beyond the reach of the turbulent governments.

But now a citizen who wants to protect himself from these threats has a digital alternative in addition to gold. A more appropriate alternative to the Internet age. A vital dump against centralized control of banks, huge Internet companies and wealthy governments.

This is the digital bitcoin replacement. The digital features of this currency are very similar to those of "solid currencies" such as gold. Features like extraction hardness, stable scarcity, liquidity and portability.

As fans of the Bitcoin incremental market have always said, the future of bitcoin in Hawking will cause the stocks to accumulate and its stocks to flow higher than gold.

Now the question is why should we choose Bitcoin rather than a newer and technologically superior tool in the market?

Because just like gold's superiority over silver as a safe haven, bitcoin has the advantage of other peninsulas in terms of the number of people who believe in their ability to safeguard their assets against political wars. It is this common belief that has brought Bitcoin to its present position. This is a point that is hidden from view by those who argue that software forks have weakened bitcoin's digital scarcity. (First witness: Comparison of Bitcoin and Bitcoin market volumes.)

Our argument for buying bitcoin at this moment is that no matter what your personal beliefs, many people now believe that bitcoin is the best way to protect their assets from the political and economic turmoil in the current financial system. Is.

It may be easy to say that this mentality was the main reason for the rising bitcoin price after Monday's market news, but keep in mind that it is always difficult to associate daily bitcoin fluctuations with real world events.

Most important of all is the fact that bitcoin's sales pressure has not been as real-world as it once was. A result that may have overruled my argument a year ago. I said in that scenario that panic in the world financial market would first cause a price drop (high sales pressure). Bitcoin will then become a popular risk-averse currency if it proves to be a viable means of safeguarding against (the instability) of the political world. However, perhaps the departure of many newcomers and intruders during the crazy market of 2017 has led the market to fall into a group of HODLers who have more experience and deeper beliefs about digital currencies.

But one should still not assume that the way forward is now smooth. One of the most significant threats against this view is the likelihood of a severe political backlash in digital currency legislation. An event that will take us very quickly to what Nick Carter calls a "complete criminalization" of digital currency by the government.

Everybody's concern here is that governments are looking at banning the outflow of funds and seeing the power of bitcoin in the capital war to ban it. Of course, it is possible to restrict the exchange rate instead of the ban so that high and low price jumps cannot be used properly.

If Bitcoin can continue to thrive under such tough conditions, even a stiff global legislature will not be able to break Bitcoin's anti-censorship power. But for now, the best prediction is that bitcoin price fluctuation will continue.

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