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📈 "Russia, Ukraine, China, Oil & Bitcoin"

The Pomp Podcast

Photo by Nicolas J Leclercq / Unsplash

Table of Contents

Host: Anthony Pompliano
Category: 📈 Market

Podcast’s Essential Bites:

[5:08] “Russia is the third largest oil producer globally. They're responsible for approximately 12% of the global production. Brent oil prices in the United States and globally have been quite high in recent months. So the current US administration has been asking for more oil to be supplied to the market in an attempt to curtail price increases. Both Russia and Saudi Arabia have said they will not increase production, so that leaves the US in an awkward position. To further complicate the situation, Brent oil prices spiked significantly on the news of Russian invasion, and now is trading well over $100 per barrel. In some weird way, the increased price of oil combined with the continued purchasing of Russian oil by the international community means that Russia is actually profiting handsomely from the invasion. Unfortunately, the United States and our allies can't stop purchasing the oil for any material amount of time, because we have made prior decisions that make us dependent on non US oil producers. […] The importance of energy independence is fairly obvious right now.

[6:27] “Regardless of the exact sanctions, it would be naive of the international community to think that Russia hasn’t wargamed this situation in preparation. Many people don't know this, but Russia has one of the largest foreign currency and gold reserves in the world. They were the fourth largest beyond China, Japan and Switzerland at the end of 2020. This 600 plus billion dollars in foreign currencies and gold will be a tool in their toolbox once sanctions are implemented.”

[7:06] “The United States has been the producer and distributor of the global reserve currency for decades. One of the benefits of that position is that we can impose financial sanctions on those that we disagree with, or those that are violating our view of good and evil. The nuance to financial sanctions, though, is that they only work if the intended target is using the currency that you produce and distribute. Given that Russia has an incredible amount of foreign currencies and gold, the sanctions may not be as effective as they would have been previously.”

[7:39] “The United States has to start considering what to do in a world where a large portion of the world doesn't use the US Dollar as their reserve currency. The hypothetical situation would see Russia and China, who have long publicly stated their intention to get off the US dollar system decide that the cost to use in the current global reserve currency has become too high.”

[8:15] “The next best option to being the producer and distributor of the global reserve currency is to be the most advanced user and holder of a global reserve currency that no single country controls. That incentive leads these superpowers to realize that Bitcoin will be essential for decades to come. The countries that have a large ownership stake, along with conducting mining and other pro Bitcoin activities within their country will have a significant advantage.”

[8:40] “The United States shouldn't give up on the US dollar. In fact, we should continue to optimize for the production and distribution of the global reserve currency. There is safety and stability when you occupy that position. But we must also begin to hedge ourselves. It is time for insurance. Even if our leadership believes there's an incredibly small percentage chance the US dollar may not be the global reserve currency in 50 years, we should still position ourselves to be a leader in that small possibility.”

[9:08] “The United States should put Bitcoin in the central bank reserves. We should immediately incentivize as many Bitcoin miners globally to move to the US. We should remove the capital gains tax on Bitcoin spending and treat it like a traditional currency. And the United States should begin educating its population on the decentralized digital currency. These steps will take years to successfully complete, but it is important that we begin now.”

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🎙️ Full Episode: Apple | Spotify | Google
🕰️ 11 min | 🗓️ 02/25/2022
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