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Issue #1311: When money breaks down so does the social fabric

Issue #1311: When money breaks down so does the social fabric

Jan 31, 2023
Marty's Ƀent

Issue #1311: When money breaks down so does the social fabric

via Reuters

The last couple of weeks have been a reminder of how fickle monetary systems beholden to the whims of men who are easily corruptible can be. Two countries that have been in the news too many times over the last few years because of mismanaged monetary systems are back in the headlines; Lebanon and Nigeria.

As you can see above, Lebanon's central bank has decided to devalue the Lebanese pound by 90% as of tomorrow. Moving the exchange rate from 1,507 pounds per dollar to 15,000 pounds per dollar. If you dig into the story you'll find that it is well understood that this move won't have a material effect on the wider economy as most Lebanese people decided to adopt the dollar as their currency of choice after the banking system shut down and confiscated client savings accounts multiple times over the last three years. There isn't much trust left in the pound, so it shouldn't be surprising that the central bank is having to make this drastic move. A move that may not effect the broader economy, but will certainly impair the balance sheets of banks, which will probably lead to some unforeseen consequences.

If we pan over to Nigeria we'll find a similar but distinctively different story as the government moves to phase out certain denominations of bank notes as they embark on a path toward a central bank digital currency.

via Reuters
via Reuters

It seems that the note swap is not going according to plan so the Nigerian government had to extend the deadline by 10 days. On top of this, it doesn't seem like the government is doing a very good job of replacing the swapped notes with the newly printed notes they promised.

A very convenient coincidence if you ask your Uncle Marty. If I were a betting man I'd wager that the lack of note replenishing was planned well in advance to hasten their move toward a central bank digital currency, which I am highly skeptical the Nigerian government can pull off. As a result, the exchange rate for bitcoin on P2P markets is trading at a significant premium. With asks sitting ~$48,000 yesterday while bitcoin was trading ~$23,000.

When push comes to shove and your government decides to rug pull you, you will seek out a better alternative. I'm not exactly sure whether or not Lebanese citizens have been piling into bitcoin, but the Nigerians seem to see the writing on the wall and are attempting to escape the shackles of their government controlled money as quickly as possible. The situations in Lebanon and Nigeria are deeply saddening, but one must find solace in the fact that these people do have an escape boat via the bitcoin network.

In a world run by kleptocratic despots dead set on gaining as much control over their populations as possible, bitcoin provides a saving grace. And make no mistake, these types of situations can and will hit the shores of the Western world in due time. Our governments and central banks have set our monetary systems down the very same path.

The world is drowning in bad money controlled by individuals who do not have the self-control to do what is right. They will consistently do what is easy and convenient; print more money to paper over systemic problems. The only way out of this hellscape is to take the control out of the hands of those with no sense of self-control and place it in a transparent distributed system that can be controlled by no one.

Fix the money, fix the world.

Final thought...

They cancelled school again!

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