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Why US Dollar Index (DXY) is Hitting 20-Year Highs | Bitcoin Expert Explains

Read MoreAnd piggybacking off that just talking about current events today the dxy is hitting 20-year highs so yes long-term all fiat currencies die but how do you see the next you know decade going if we're hitting all-time highs against other fiat today so there's another weird thing about money too is we think that.

You hear this term hyperinflation you think oh they just print money and then it linearly depreciates and the money eventually goes to zero and that's hyperinflation like there's some kind of smooth curve from hard money to soft money right but it could.

There's nothing like that at all it's actually quite the opposite it's extremely volatile and the reason is and offer you another definition of money now is that money is an insurance policy on uncertainty right if you are facing conditions.

Where you don't know what is going to happen then the best strategy for going into that situation is to have as many options as possible because you don't know which way the world's going to move so you want as many options as you can have so as we said earlier if money is this.

Perfect technology this technology of pure optionality then holding money is increasingly the wise strategy as things get more uncertain so the more uncertainty there is in the world the higher the incentive there is to hold or save money.

So when it comes to fiat you get this weird situation you mentioned the dxy which is the dollar index things are very uncertain right now getting more uncertain by the day if you've paid any attention at all you know there's a war in ukraine global technocratic utopian world economic.

Forum psychopaths trying to pump all kinds of stuff into all kinds of people uh you've got energy crisis in europe you've got all these geopolitical breakdowns right uncertainty is ramping up quickly and if you don't know that i guess you've been living under a rock well what's the the optimal strategic response to that it's well i need to.

Hoard money i need to save money i need to accumulate as many options for myself as possible going into these conditions so how does that translate into purchasing power fiat currency specifically for the dollar that the value of the dollar is going up right there's more reservation demand to hold.

Dollars and not spend them not buy stuff not trade them away however that provides some kind of a false confidence in a way typically central bankers will see that like oh well we printed money it here's the perverse thing about it.

You're printing money so you're increasing uncertainty in the world right you don't know how many dollars in circulation you're distorting price signals you're misleading entrepreneurial activity so you're driving um entrepreneurs to overborrow to start projects they cannot finish and then.

When these projects ultimately wash out and fail if enough of them fail simultaneously that's what we call a recession that's what we're going into right now right so the printing of fiat currency increases uncertainty in the world yet the holding of money is the insurance policy on uncertainty in the.

World so you get this really confused situation where people are hoarding money as uncertainty rises but then eventually there are shocks right where people need to get food people need to get shelter they have to consume and a lot of that money gets dumped back out into the market and then you'll see.

The purchasing power swing the other way so the punch line here would be that printing of money is increasing uncertainty and that increased uncertainty gets expressed in higher volatility of the purchasing power of fiat currency over time so the case study for this is.

Go and study the hyperinflation of the weimar republic this is in the uh 20s and 30s i think 1920s and 30s it might be a little bit off on the years but just why am i republic w-e-i-m-a-r republic in germany look at the price of gold during the ymr hyperinflation.

It would go up 5 10 x and it would draw down 80 90 percent and it would do that repeatedly and the the amplitude of the waves would get bigger each time so it's not like they just printed a bunch of marks and the the mark price of gold went from you.

Know one to ten thousand it was super volatile up and down the entire time so i think we're going to be going through similar circumstances today and you'll see this expressed in the price of gold in the price of bitcoin as these fiat currencies collapse.

Worldwide yes great perspective to watch the full conversation there's a link down below in the video description and if you're interested in learning more about cryptocurrency click subscribe right now we drop a video every single day you do not want to miss one see you tomorrow.

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