In our opinion, the decision by the ECB and the US Fed to remove Russia from the SWIFT banking system, may very well go down in history as one of the worst moves a central bank has ever made. Time will tell. This sets up for Russia, and will punish the US. See this article in the WSJ regarding the fact that currency reserves are being deemed worthless by central banks. This will likely cause Russia and at some point China to make a major move and bring about another reserve currency. It could be CBDC (central bank digital currency), or it could be Gold backed or Bitcoin backed. Russia has not revealed what they are going to do yet. We should know that soon, and then the domino’s will start to drop. Click here to read this article.
Our question is, how will this affect the USD as the global reserve currency. No currency has ever been weaponized against a Nation State before. Innocent Russian citizens will be punished, until Putin roles out a new strategy.
Below is a chart of lumber prices. They exploded, crashed, and have exploded again!:
Crude Oil could breach $150 per barrell this summer and beyond that, hard to predict. With the overall economic inflation the world is seeing right now, disposable income is way down. See this chart below on that:
To make it much worse. Nitrogen based fertilizers largely imported from Russia will explode food prices in summer 2022 and beyond. Urea, another fertilizer has more than doubled so far. Many farms will have to shut down. Shortages will become a massive problem, while at the same exact time, disposable income is dropping off due to inflation and the raw material supply crisis since mid 2021. Here is the article about the fertilizer issues, click here to view on twitter.
We uploaded a picture of our garden in the last blog. This is going to be an important issue in 2022, unfortunately. As these black swan events unfold, inflation increases, and the rush to decentralization, seizure resistance, and scarcity is a fordrawn conclusion. This will push up Bitcoin price action, probably to levels seen in 2017. December of that year Bitcoin hit 13X the 200 week moving average. Today, Bitcoin is 2.2X the 200 week moving average. Based on that we could theorhetically see $300K Bitcoin in the not to distant future. Here is the chart below:
Another factor to consider is that Bitcoin could actually continue to see more whale addresses be created. Wallets with over 1,000 BTC in them. See the yellow line in this chart below. Whale addresses are going parabolic right now!: