The problem is that the U.S. fiscal deficit ultimately relates to the U.S. debt, and the question is whether the U.S. can manage this fiscal deficit right now. It's difficult in the long term. The U.S. lacks power; there is a shortage of dollars. This is because while U.S. defense spending continues to increase, inflation in the U.S. is rising even faster, meaning that when you consider inflation, the value is effectively declining. So, to put it another way, Bitcoin will emerge in a way that challenges the status of the dollar. 

The author mentioned that Bitcoin and geopolitics are closely related. What is the relationship between the two? Yes, geopolitics is connected to Bitcoin due to the link with the U.S. Many people think that Bitcoin is in competition with the dollar, which is a representation of the U.S.

Because the United States is currently at the center of the global system and is the axis of order, if the United States changes its attitude toward Bitcoin, it means that the policies it holds regarding the dollar will also change. This indicates that there will be a transformation in the world order that revolves around the United States. So, there is a connection here. What do you think about the claim that Bitcoin threatens the dollar? Yes, on the surface, it seems that way. Bitcoin represents a phenomenon that is, in fact, impossible. Ten years ago, I thought the same way. I thought it was possible that a private individual could create a system that could replace the dollar. Not just the dollar, but the entire financial system centered around the dollar could be replaced. If you have a slightly dreamy disposition like me, you can easily get carried away. Usually, people focus on what is visible.

I believe reality will not allow that. Anyway, I thought that this is not an easy task. That's why I wrote the book Strong. I had just one question: everything else is okay—decentralization, blockchain—those are good ideas. But can the U.S. really stop this? I kept pondering that, and I reached a conclusion: they can't stop it. If the U.S. can't stop it, then what should we do? The U.S., as I understand it, will embrace it. That's the conclusion I came to. So, it's really simple. The logic is whether it can be stopped or not. If it can be stopped, they will stop it. They would have exerted all their efforts to do so. Since it can't be stopped, now, ten years later, we are moving toward this embrace, as I mentioned. So, in fact, this is also what those who are misled desire.

It's not at all what I wanted, but an unexpected and unimaginable phenomenon has occurred. It can't punish any forces, and it can't eliminate it either. So my question was my own answer, which is why the title of my first book is Bitcoin is Strong. That is the only important question. Since then, I've received a tremendous variety of questions over the past ten years, and I've answered many of them. But what I really want to say is: You fools, there's only one question: Can Bitcoin break the U.S.? You can just ask that. It can't, right? Then buy. Is there no way for the U.S. to utilize both Bitcoin and the dollar together? There are many ways, yes. For starters, it's not entirely clear whether President Trump or Harris are aware of this, but their actions are on point, especially concerning our government.

Right now, I want to send a message: move quickly. The reason is that, well, the United States will want to hold a lot of Bitcoin. And there is a way to acquire a lot before other countries catch on. This is very important. The government often teaches us a lot while we study macroeconomics, but usually, we have a hard time imagining a nation. People don't see the government as an individual in our household or economy; they see it as a household. They judge it to be almost the same unit as a household or a business. But that is a misconception. The government is not that kind of entity. If the government operates like a business, then it leads to a misguided mercantilist imagination in that economy. So, the government makes money; of course, the government earns money from its citizens, such as through tax revenue, but on the level of the nation, the state...

The concept of earning money is somewhat different from the idea that a company makes money or an individual makes money. This is a bit of a nuanced discussion, so let's take it step by step. The conclusion is that the idea of the United States owning Bitcoin is different from the concept of the U.S. government owning Bitcoin. When we say the U.S. owns Bitcoin, it means that American companies or individuals can own it, right? It’s even better if individuals don’t keep it in their drawers or car trunks, but rather hold it through financial institutions. This way, it’s more favorable. If they hold it through financial institutions, the U.S. government can exert some control indirectly, if necessary. Therefore, it’s not essential for the U.S. government to hold it directly. Of course, there are instances where the U.S. government does hold it directly, such as through certain regulations.

It's a good method. However, to hold it directly, it requires a lot of costs. But when American banks hold it, the costs are almost negligible. When American companies hold it, it doesn't cost them a dime. How can this be achieved? They just need to create the right system. If they establish a system that is favorable for Bitcoin businesses in the U.S., everything will fall into place. The first step is the ETF, and then they need to allow companies to account for Bitcoin as an asset. If they do that, how should we respond? The Korean government isn't saying to buy Bitcoin. If they allow Koreans and Korean companies to hold Bitcoin legally, then it will come back to Korea. At some point, the game will start. When the U.S. moves to a parallel system for Bitcoin, that’s when we will need to be prepared.

If we talk about Bitcoin, individuals need to buy it at a high price, companies also have to buy it at a high price, and the government is unlikely to purchase it at all. What would they use to buy it? What resources do they have? Gold was used in a similar way during World War I when Europe was in chaos. The United States was the only country with an industrial base functioning, so everyone gathered their gold to buy weapons and sought safety in the U.S. During World War II, even more gold accumulated there. Based on that, the dollar standard emerged. Now, if the U.S. enhances its system in this manner, the attractiveness of the country, which is already central to the world, will increase. If there is an atmosphere of acceptance towards crypto, global companies will begin to showcase Bitcoin. Subsequently, through banks, indirect investments will start, and individuals will then accumulate Bitcoin in U.S. banks. Then,

Returning to the question, at some point, the United States may well set up operations linking Bitcoin and the dollar comfortably. Then, in another chapter, Bitcoin—well, I probably won’t have much chance to meet you all. Just like Michael Saylor said, one Bitcoin might be worth around 20 billion. So, a day like that will come eventually, but if it comes quickly, it won't be good for us because we won't have time. Right now, the U.S. has approved Bitcoin ETFs, while Korea is still hesitating about whether to proceed or not, which shows that they completely fail to understand the overall context. The citizens are busy dealing with their day-to-day struggles, and while they have to manage that, the people running the country are caught up in other battles. So, no one is really focused on this issue right now.

People are not looking at the satellites or the artificial intelligence maps, especially regarding Bitcoin, which is quite despairing. I feel that they don’t understand it at all. What do you think about the current situation of the dollar? Well, in the short term, there’s nothing wrong with the dollar. Rather, people are trying to buy more dollars as a safe asset. When the world seems dangerous, like with the war in Ukraine, conflicts in the Middle East, and the risks in Taiwan, people will seek dollars first. So, in the short term, I see a considerable demand for the dollar. The problem is the U.S. fiscal deficit. How long can the U.S. sustain its fiscal deficit? We need to have a mid- to long-term vision, but people are only looking at the immediate situation, which is not visible right now. Currently, in our country, people are earning money and have disposable income, so they are going on shopping sprees, buying luxury goods, and so on.

If we travel, we won't have a secure future later on. Why? Because our children’s generation hasn’t been born yet. In the end, instead of withdrawing from our savings, we should be relying on the economic activities of our generation. However, dogs won't live that long, and right now, there are no people around; it's just dogs. So when we predict the economy in the medium to long term, we can never escape the framework of population. The population decline affects potential growth rates and potential consumption, and we cannot escape these factors. If the population drastically decreases, real estate in our country will come to an end. Wouldn't that be the case? Yes, it’s still quite good for now. This is because individualism is intensifying, and while people should be living together after marriage, they are living separately, which means two houses are needed. So, while it seems good right now, we cannot ignore the fact that the population is decreasing.

If we keep it on, the dollar is similar. The dollar is ultimately America's debt, and the question is whether the U.S. can manage its current budget deficit. This creates a logical contradiction and makes things difficult in the long term. What do you think is the biggest reason for the current instability in the U.S.? Yes, the instability in the U.S. was due to the dollar. It's simple. Geopolitics tends to view hegemony only through the lens of power, while economists, not being in that field, are quite ignorant about it. To study both of these, we need to look at the Bretton Woods system that started in 1945, which is still maintaining the current order. We need to understand the characteristics of this system, integrating military geopolitical aspects with a financial system centered around the dollar. There are books on this, such as Bitcoin and the Dollar.

The idea I created is not my own, but it is something that economists are aware of. Political scientists often do not understand this well. In politics, it is a very general discussion, but those who cultivate (or work in agriculture) are quite unaware of it. I integrated these two aspects. In fact, the question I am about to ask is a very good one: Why is American power declining in the Indian Ocean? Why did Obama withdraw from the Indian Ocean? This is not just about Trump; it was during Obama's second term that the Indian Ocean, including the Middle East, was affected. The United States is referred to as a maritime nation. We project power through the sea; the instances where the U.S. projects power through land forces are almost nonexistent because it is not feasible. Therefore, if the U.S. is withdrawing from the Middle East, it also means it is withdrawing from the Indian Ocean. For the U.S. to invest power in the Indian Ocean, it must rely solely on its naval capabilities.

We need to load and send everything we can. However, if we get hit there, we have no place to repair it. There is one place, but it's somewhat limited in what it can do. To operate that, we need to send things to the U.S. and do a lot of work. That's the challenge. The U.S. is lacking in resources because, while its defense budget keeps increasing, inflation is rising even faster. In reality, when you factor in inflation, the value is decreasing, which is quite alarming. In countries like the U.S. and ours, most of the defense budget goes towards personnel costs. This is because if we don't spend on personnel, we won't attract excellent talent to the military. Other places offer better salaries, so when people are already living well, the most talented individuals in the country tend to avoid military service. Even if the military offers good conditions, they still prefer to stay away.

It is not the case, but the military must be very competent, so it inevitably leads to an increase in salaries, even if only in a trend. In contrast, China, which the U.S. is dealing with, doesn't have to raise salaries significantly. They can enforce military service, and due to the nature of their system, labor costs are not high in many areas. Therefore, they do not need to spend much on labor costs to hire the best talent in the country. If we exclude the inflated labor costs in the U.S. and compare defense spending qualitatively, there are serious issues. This seriousness has been ongoing for a long time, and people are realizing it. Yes, the U.S. is strong. The U.S. is overwhelmingly strong, especially in the Western Pacific and the Atlantic. However, in the Eastern Pacific, it is also overwhelmingly strong.

This is something that no one can deny. No matter how much China and Japan join forces to confront the United States in the Pacific, they will ultimately fail. The same goes for any confrontations in the Atlantic; they will also end in failure. However, will the United States continue to be strong in the Western Pacific? Will it maintain its strength as it moves from the Western Pacific to the Indian Ocean? That's not easy. This is why people need to understand geographical concepts. In short, it's because of a lack of resources. When World War II ended, the United States accounted for 40% of industrial production. The naval power was significantly diminished, and it is not an exaggeration to say that the U.S. Navy holds more than 90% of the world's naval strength. But now, the U.S. status is around 25% of the GDP, less than 20%. Meanwhile, China is also investing in its defense budget, which is more than that.

The U.S. has to write more, so it's now gasping for breath. The options for the U.S. are quite limited. It can either increase its budget deficit and continue to act as the world's police or stop the deficit now and withdraw in an orderly manner from its role as the world police. If we look at it rationally, this is a medium to long-term issue. This path is already set, regardless of Bitcoin. People usually only think about what they want and believe that what they are used to in the past will continue for the next ten years. However, there can be a volcanic eruption, and when that happens, the village gets swept away, and everyone dies. After ten years, people will rebuild the village. Human memory tends to last about ten years. So, do you see the situation in Pyongyang as a weakness for the U.S.? Well, Pyongyang is not currently a blank slate; they are putting all their efforts into it. How the U.S. responds is crucial.

Now that we are focusing on the Indian Ocean, we must also consider the strategic importance of the West Pacific. The West Pacific is significant due to China's presence. The United States holds global hegemony, but it is not the only country with such power; the UK, France, and the Netherlands also act similarly. They do not allow for a second-in-command. Therefore, in the Indian Ocean, even if the U.S. withdraws, it will still be able to navigate the region. However, in East Africa, and then India, Vietnam, and so on, as well as the Middle East, I believe we will see a struggle for dominance. Within a few years, I don’t see any country emerging to seize hegemony. But if the U.S. pulls out of the West Pacific, we know the answer: China and Japan will clash, and the winner will establish dominance. It seems likely that China has a higher chance of winning, and if that happens, the U.S. will...

In a situation where no hands are used, the United States does not allow that. The reason the dollar became the reserve currency is due to World War II. What kind of event would be necessary for Bitcoin to become a reserve currency? Wouldn't something similar, like a war, be needed? That's why I don't talk much about Bitcoin as a reserve currency. It's not something we should take lightly. So, I phrase it differently. Bitcoin will first appear as collateral in ultra-short-term finance, challenging the status of the dollar. Ultra-short-term finance refers to transactions between banks or situations where, if I hold hundreds of billions of dollars for just a week, I don't earn interest on it. There's a demand for this because banks need to place their payment reserves with the central bank. Rather than putting that money away and retrieving it, borrowing this money is a better option.

After gaining much more profit, we operate on a cycle that continues for about a week. This is how the whole world functions. It seems that this is a type of quality finance. When we use six-month financing, one-year financing, or two-year financing, it is usually when we buy a car and opt for a loan. In this case, the financing is not influenced by what the Federal Reserve announces but rather by the ongoing short-term financing. We keep extending this concept by lowering short-term interest rates. This spread is what we benefit from when we buy a car. However, not everyone can gain credit in this club. We are the ones who receive interest rates from there. Thus, the engine of global finance operates on ultra-short-term financing, which involves enormous amounts of money circulating on Earth.

Let's go back. This is something I don't really understand because it's not taught in school. When the Federal Reserve acts, the world is in such order. People think that when the Fed announces something, the banks will take action, and that's how we receive interest. However, that interest rate from the first-tier banks is not what we actually use when we apply for scholarships or when we buy a house. Especially in our country, when we buy a car, the interest rates aren't that straightforward. We use Hyundai, right? If we deal with one person, we can't get the price that is more affordable than what we can get from Europe, known as Eurodollars. This is the actual engine of global finance. Amazingly, when the lid was lifted in 2008, it turned out that even among these engines, defaults were being transmitted. There was no collateral.

Because it rotates among the benefactors, it means that you don’t need to provide collateral. Also, there isn’t any physical collateral to utilize. For example, if I were to lend something for a day, how would I use the house as collateral? Who would occupy it? If that issue arises, where is my guarantee? That’s the problem with lease fraud. My focus has shifted, and I am not the first priority. When I looked, the first priority is the bank, and then the leaseholder, while I end up being the third or fourth priority. Therefore, providing collateral is the safest option. However, there are conditions for collateral; it has to be a possession. If it is a possession, the counterparty risk disappears. If I do not possess it, there will always be counterparty risk. If the bank or the state, which is holding it on my behalf, freezes it, it could lead to bankruptcy. I must be able to possess the collateral. But in that context, gold, Bitcoin, and games are involved.

To us, gold looks really good. Gold is great. I realized how amazing it is during the last Black Monday when Bitcoin dropped to 20,000 won and the Nasdaq fell by 8%. Gold only dropped by 1.3%. Wow, it really shows that the wealthy hold onto it. It's something that doesn't fluctuate much; the rich hold onto it while the middle class and retail investors panic and sell. The wealthy, like Chairman Kim Seung-ho, whom I discussed this with here, are the ones who hold onto gold. They don't sell it when it drops. So, gold can't compete with Bitcoin because, in the ultra-short-term financial market, there’s no way to transfer gold within a week. Even if you use gold as collateral, it’s not an asset you possess because someone else is holding it. That involves counterparty risk. But with Bitcoin, you can transfer it.

You can send Bitcoin while borrowing dollars. Even if I go bankrupt, the other party will still possess the Bitcoin, so they won't go bankrupt. This is how it challenges the status of reserve currencies. Moreover, it appears as collateral in ultra-short-term finance. In fact, when I buy a car from Modern Capital, the interest rate I face is essentially the Bitcoin interest rate. I talked about this ten years ago, but at that time, people thought it was completely fanciful. However, now this is becoming a reality.

미국 달러패권의 종말, 비트코인은 앞으로 '이렇게' 된다 (오태민 작가 / 3부)

* 출연신청 & 제휴 및 광고문의 : ssid@dpnstud.io


미국 달러패권의 종말, 비트코인은 앞으로 '이렇게' 된다 (오태민 작가 / 3부)

미국 달러패권의 종말, 비트코인은 앞으로 '이렇게' 된다 (오태민 작가 / 3부)

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