While regulators in the United States haven’t decided to make a big move one way or the other when it comes to Bitcoin regulation, the reality is that they are eventually going to have to squash the adoption of the world’s most famous cryptocurrency. There are a variety of different reasons as to why the US Government would want to shutdown Bitcoin, but I would bet that the most serious threat from Bitcoin isn’t even being considered at this point. If bitcoins are able to eventually reach a point where the price is stable and it is used as a medium of exchange in multiple countries around the world, then you have to think about how much longer it will be until one of those countries decides to hold bitcoins in reserve rather than dollars. It could start with small trade deals where commodities such as oil are paid for in bitcoins rather than dollars, but this could set off a chain reaction that eventually leads to all of the inflation of the US dollar coming home to roost. The US dollar’s status around the world is at the core of the country’s ability to wield power, and Bitcoin could create a situation were the United States is forced to export goods rather than inflation in the near future.
The Inflated American Lifestyle
When it comes to global monetary policy, the game is currently rigged in favor of the United States. The American economy is supported entirely by the fact that poorer countries around the world are willing to make products for Americans in exchange for dollars. This is mainly due to the fact that the general consensus among today’s economists is that a country needs to have a cheap currency to promote their exports. For example, the Chinese government has been inflating their currency instead of allowing their currency to rise against the US dollar. It would actually be better if the Chinese did not inflate their currency because then the people with savings would actually be able to consume the products that they are making in their home country. The United States is not the key to the Chinese economy. China has all the factories and the workforce, and they are perfectly capable of consuming the products that they create in those factories. They have basically been importing US dollar inflation and exporting real goods. In a world where Bitcoin is the most widely used currency, the United States would be sending sound money that they can’t print or actual products over to China in exchange for their goods.
The Standard of Living for Americans Must Decline
At some point in the near future, the standard of living in the United States is going to have to decline. The people working at Walmart stocking the shelves and talking to customers are paid at exponentially higher rates than the people in China and other countries who are actually producing real things. The people working at Foxconn would love to be walking around air-conditioned Wal-Mart stores and talking to customers all day, especially when they’d be getting paid a decent wage. The idea of an American complaining about the minimum wage in the United States must seem insane to someone in China. With the reintroduction of sound money into the world economy, the lack of “stuff” being produced in the United States is going to be a real problem. When reality is brought back to world trade, China will be producing the best quality goods at the lowest price while the United States has nothing to trade for them. The service-based economy in the Untied States ends once they no longer have control over the printing press.