- A Credit Suisse analyst has said that Bitcoin “will probably benefit” from a new monetary order
- Zoltan Pozsar says that the commodities and money crisis will lead to the U.S. dollar being devalued
- Bitcoin can benefit by being an apolitical asset
A Credit Suisse analyst has claimed that Bitcoin can benefit from a “new world (monetary) order” where inflation runs rampant in the West and a weakening of the Eurodollar system. Zoltan Pozsar claimed that the world is entering a new monetary system which he calls Bretton Woods III, in a nod to previous financial regimes, with commodities at its center. Bitcoin will benefit from this new monetary order, says Pozsar, because of its apolitical nature, while its limited supply will also likely play a role.
Commodities and Conflict Driving New Monetary Order
The first Bretton Woods agreement was signed in 1944 and introduced a collective international currency exchange regime based on the U.S. dollar and gold, although this agreement lasted less than 30 years until the U.S. came off the gold standard. Bretton Woods II, says Pozsar, was “built on inside money, and its foundations crumbled a week ago when the G7 seized Russia’s FX reserves”.
Pozsar says that the availability and soaring prices of commodities will be a key driver behind a new monetary order, with Pozsar expecting a “perfect storm” of commodities prices, comparing Russian commodities today to subprime CDOs in 2008, which caused the global financial crash. He also fears for the value of U.S. yields due to the potential for China’s strength to increase on the back of the Russia-Ukraine conflict.
Bitcoin “Will Probably Benefit”
In short, Pozsar sees the current global events resulting in continued inflation, saying that, “When this crisis (and war) is over, the U.S. dollar should be much weaker and, on the flipside, the renminbi (China’s currency) much stronger, backed by a basket of commodities.” Pozsar chooses an intriguing way to sign off his analysis:
After this war is over, “money” will never be the same again…and Bitcoin (if it still exists then) will probably benefit from all this.
Well who’d have thought?
