What Do The Lira, The Bolivare and the Lebanese Pound Have in Common ?

Good Afternoon Everyone,

The Turkish Lira has plunged to new lows, and has now lost 57.4% of its value YTD.

I’ve attached a chart showing the devestation.

TRYUSD:

If you zoom out a little further, the Lira is now down 89% since 2013, as shown below. Pretty wild!

Gold has increased by approx 164% since March 2020, as citizens likely look at any way possible to protect their wealth against the collapsing currency.

XAU/TRY:

Meanwhile Bitcoin, the apex predator, has increased a mammoth 2200% during the same period. Powerful. Chart attached.

BTCUSD/TRY

These dynamics are not exclusive to Turkey unfortunately. Lebanon has also joined the highly undesirable club of failing political currencies, while the currency is officially pegged at 1,500 pounds to the dollar, the pound traded on the black market at 27,000 to the dollar - nearly 20 times its value two years ago. Brutal.

Looking at Lebanon’s CPI numbers are simply staggering as the cost of survival, let alone what we call ‘living’ is completely out of control. Take a look for yourself

Food prices up 300%, housing utilities up 215%, transportation costs up almost 1400%

Prior to Turkey and Lebanon we saw Venezuela descend into hyperinflation. Venezuela had experienced very high levels of inflation since the 80’s, but the hyperinflation really set it in the late 2010s.

It’s important to mention the term hyperinflation can mean many things to different people from fast and rising levels of inflation to collapsing local currencies. Regardless of the exact definition, what is important to note is that even at sustained double digits, the numbers are absolutely devastating to your ability to protect your wealth. For example with inflation at 10% for 5yrs, a currency would lose 40% of it’s value. This means if you own real estate for example, the price would need to have increased by 40% to be at parity on a real basis once adjusted for inflation, even if the levels of inflation are not technically “hyper” inflation.

I have a few good friends from Venezuela and I’ve spoken with them about the boots on the ground perspective, but I saw this tweet this morning and it really hammered the point home for me.

That is 465 with 12 zeros

465,000,000,000,000 Trillion. Wow.

I’ve mentioned many times when discussing bitcoin with people, that it’s most likely that the way bitcoin is distributed is first to the people that need it first and last to the people that need it last.

Meaning most people in developed nations will be last to understand not just the value proposition of Bitcoin, but the need for Bitcoin and it won’t be until they are confronted with the brutal reality of a collapsing currency in real time that they will be able to accept the now certain fate and begin to digest the implications for their families and their children.

I think it likely if you asked the average person in Turkey, Lebanon or Venezuela 10yrs ago if they thought their local currency was going to become worthless, they probably would not have believed you. Yet, here we are.

As you can see from the charts above, when it starts to become obvious and the majority of people are wise to what is going on, everyone rushes for the exits at the same time.

For the fiat world, it is simply a matter of time. There has never been a time in my life so far where the writing has so clearly been on the wall. Political monies are being devalued at a record rate. Getting educated around these topics along with planning and sound decision making are some of the best ways to insulate yourself from the madness. Turkey, Lebanon and Venezuela are just a preview of what is to come in my opinion.

Words cannot express my gratitude to satoshi for having provided an exit - and it’s available to anyone with a smart phone and an internet connection. Insanely powerful.

That’s it for today.

Wishing you well, and will chat to you tomorrow.

AK

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