Can the RBA Compete with Bitcoin?

Oh-uh.

On Wednesday, inflation in the US came in surprisingly high for the third month in a row. This time, it was outright rising.

That’s not supposed to be happening.

The news sent the market into a spin.

The US is not the only country struggling with rising prices.

Australia is, in my view, worse.

The Australian government is harkening back to the age of the Price Justification Tribunal with its attack on supermarkets.

Supposedly, supermarkets have suddenly become greedier. Just as energy companies did in 2023. And resource companies did before that.

It’s only a matter of time before one of your stocks gets targeted in this game of inflationary whack-a-mole.

The eurozone, despite a prolonged recession, still can’t get inflation down to target. What more will it take?

Even in Japan, inflation is back after decades of deflation. The local news is full of company presidents apologising for the first price increases in decades. And it’s not even their fault. The Bank of Japan has been trying to engineer price increases for decades. Now that it’s happened, everyone is surprised.

All of this is a good reminder that governments and central banks are not in control. They just pretend to be.

And even if they were in control, what would the result be? They muck up everything else. Why should their monopoly on money work out any different?

So it’s no surprise that after years of inflation supposedly being too low, it’s now stuck too high.

The real question is, ‘what to do about it?’

No, not what central bankers and politicians should do. What you should do to protect yourself from their constant stream of mistakes.

Can you really escape the government’s insane monetary system? Of course you can! The real question is how and with how much of your assets.

Gold is telling you all about one option – the traditional one. The price is flying as people clamour to protect themselves from the next monetary disaster.

But there may be a better option that didn’t exist the last time we faced this sort of mess…

Might it be time to consider adding some of the alternatives to your wallet…?

Don’t just accept the price of failure

The alternatives I refer to are, of course, cryptocurrencies. Just as Uber and Airbnb cracked the heavily regulated taxi and hotel industry, bitcoin upended money.

But whenever people first consider buying cryptocurrencies, they always focus on the price. It’s a bit depressing, to be honest. The point of bitcoin was to challenge the financial and monetary system, and not to become a speculative mania.

It did this by becoming a viable alternative that competes. Back in 2009, when it was launched, the reason for this was obvious. Banks were failing and governments were printing money. Some governments even imposed capital controls.

I know one Greek who missed out on a scholarship at an Ivy League university because he couldn’t pay the bills. The Greek government prevented his money from leaving the country’s banking system.

People wanted an alternative form of money. One the government didn’t control and which wasn’t at the mercy of the banking system.

And bitcoin gave it to them.

Today, with inflation dominating the news, we have the corollary reason for bitcoin. Instead of bank failures and capital controls, we have rising prices.

But bitcoin’s value rises, unlike the currency we use. That’s because the supply of bitcoin is capped. Central banks explicitly target inflation, which is devaluation, of their currency.

The differences couldn’t be starker. That’s why it’s time to take action. To make your move and take advantage of the options and opportunities which the return of currency competition has created.

You could sit around and wait for the Aussie dollar’s failure to get so bad that you positively need to buy bitcoin. Or you could act now.

Option three is to wait for the quadrennial event which has preceded a surging bitcoin price three times in the past. It’s due this week…

Until next time,

Nick Hubble,
Editor, Strategic Intelligence Australia