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Kim Dotcom Predicts ‘Great Economic Reset’, Is Crypto a Solution?

·3 min read

Key Insights:

  • Failing U.S. central bank monetary policy could cause economic collapse.

  • The USD is the world’s reserve but Fed printing has caused dollar devaluation and higher inflation.

  • Crypto assets could be the answer, but there are also a number of risks.

On June 6, the 48-year-old German-Finnish Internet entrepreneur and political activist took to Twitter with his predictions of economic collapse.

The premise is based on the fact that the U.S. has massive national debts (currently $30 trillion), and the Federal Reserve prints more money to pay for things. This causes higher inflation (8.3% at the moment) and devalues the underlying currency, also the world reserve currency.

Biggest Theft in History?

That world currency status is what has exacerbated the issue for so long.

“Nations everywhere hold USD as a secure asset. So when the US Govt prints trillions it’s robbing Americans and the entire world. The biggest theft in history.”

He stated that this has been happening for decades, and there is no way to fix it before adding “mass poverty and a new system of control” is coming. More examples of asset values and debt liabilities were provided, implying that the entire economy was a house of cards. Dotcom then asks the question of what comes next:

“You may have heard about the ‘great reset’ or the ‘new world order’. Is it a controlled demolition of the global markets, economies and the world as we know it?”

Dotcom, formerly known as Kim Schmitz, is the founder and former CEO of the now-defunct file hosting service Megaupload. He was charged with criminal copyright infringement and money laundering, among other things, by the U.S. Department of Justice in 2012.

The Crypto Pros and Cons

Many responses to the post, which was retweeted 3,600 times in just a few hours, suggested that Bitcoin and crypto could be the solution.

There are arguments for and against crypto being a savior of economic collapse. On the pro-crypto side is the biggest argument of all – decentralization. Governments and central banks cannot control Bitcoin (BTC), its supply, or its fluctuating values. This makes it a vital part of a portfolio otherwise comprised of fiat-backed assets or stocks heavily controlled by nation-states.

No country has a leash on crypto, making it perfect for cross-border transfers. It has also become the choice of a younger generation with little trust for boomer bankers and policymakers, who have essentially made them poorer over the past decade.

There are some counter crypto arguments, however. In an epic global economic collapse scenario, crypto still requires electricity, the internet, and wallet infrastructure to operate. A government or state still has to be in control of this.

Volatility is also a massive downside as most digital assets are too volatile to be used as a daily currency. This will only level out once mass adoption occurs, which could be several years away. The industry is also plagued with scams and exploits, which also add elements of risk to using crypto as a global currency.

There is no doubting that the U.S. and global economy are in dire straits following years of failed monetary policy, an unprecedented pandemic, and now a war. The house of cards could come tumbling down soon, but it remains to be seen if crypto will shine through as the financial liberator.

This article was originally posted on FX Empire