The depth of the rift in the real world is matched by the preciousness of consensus in the crypto world.

Written by: Liu Jiao Chain

Yesterday was Black Monday. Under the swing of the tariff club, "Global Stock Markets Circuit Break, BTC Drops Below $80,000" (4.7 Jiao Chain Insider), BTC once plummeted to 74.5k. This morning, "The Initial Shock Settles" (4.8 Jiao Chain Insider), BTC rebounded to around $80,000.

The current tariff war initiated by the Emperor of the River against the world can be said to have no chance of victory for the United States. Unless his tariff war is merely a smokescreen, with other ulterior motives behind it.

This extreme extortion can only lead to victory through one path: the collective kneeling and surrender of the entire world. As long as China firmly retaliates, even if all other countries kneel, the goal of the tariff war itself cannot be achieved, because goods and capital will automatically choose the path of least resistance to complete trade, rendering high tariff barriers ineffective, and thus victory becomes elusive. If China's firm counterattack inspires other bewildered countries to stand up, then this robber blocking the road may find himself in trouble.

Some weak petty bourgeois bloggers have proposed a fallacy, believing that China produces goods to sell, while the U.S. buys goods with money, thus the one buying goods is the master. This is the poison of deep-rooted capitalist worship of money. If the dollar cannot buy goods, then that green paper is hardly worth using for wiping. Capitalist production is production aimed at money (profit), and products are merely byproducts of the profit-making process. The deeper one falls into bourgeois thinking, the more one will have an almost genital-like worship of money.

The Eastern country has bread machines to produce bread. The Western country holds a money printing machine to print green paper. The Eastern country exchanges bread for the Western country's green paper. Now the Western country has taken the initiative to provoke and refuses to play with the Eastern country. The Eastern country also retaliates in kind and refuses to play with the Western country. So, who will go hungry next, the Easterners or the Westerners?

Even elementary school students know that it won't be the Easterners who go hungry. However, middle school students understand that the Easterners not going hungry has a prerequisite: the capitalists who control bread production in the Eastern country must still be willing to continue producing bread even when they cannot earn green paper from it.

Undergraduates would think of the first principle of trade: fair trade only occurs when there is no possibility of armed robbery. "If the neighbor hoards grain, I hoard guns; the neighbor is my granary." Therefore, the above prerequisite has an even more fundamental prerequisite: the Eastern country must have guns and not fear the Western country coming to rob them.

There are also some bloggers who firmly believe in the theory of free exchange, unrealistically calling for no reciprocal countermeasures regardless of how the U.S. imposes tariffs on China, but instead should go against the grain and implement unilateral zero tariffs to maximize the welfare of their own people. This is dogmatism.

First, countermeasures are a political tool, not merely an economic calculation. Countermeasures cause pain to interest groups in the U.S., thereby forcing them to lobby politically, pushing the U.S. government to remain calm and not engage in self-destructive actions.

Second, the planning of countermeasures must certainly consider the welfare of the domestic population. It is essential to choose products that have the possibility of being replaced by third countries, as the categories of goods imported from others were previously chosen only to accommodate the interests of both sides.

Third, the premise for not implementing comprehensive countermeasures is that the U.S. still has unique goods that we cannot do without. In such cases, only selective countermeasures can be implemented, and comprehensive countermeasures cannot be executed. If, as described in the abstract story above, the only goods that the Eastern country cannot produce itself or obtain from third countries are the Western country's green paper, then the conditions for implementing comprehensive countermeasures would be met.

To summarize, comprehensive countermeasures will become a necessary option when the following three conditions are simultaneously met:

A) Division of labor completed: The Eastern country produces all goods, while the Western country only needs to print dollars.

B) Military balance: The Eastern country's military forces, such as nuclear missiles, sixth-generation fighters, and destroyers, can effectively deter the Western country from attempting to rob.

C) Loss of value: Apart from the dollar, the Western country can no longer produce any products or resources that are indispensable to the Eastern country, which the Eastern country cannot produce itself or replace through imports from third countries. In other words, the Western country's utility value has almost completely diminished in terms of the Eastern country's needs.

Of course, the reality will not be 100% pure and perfect; it only needs to surpass a critical threshold to be considered that conditions are mature.

When conditions are not mature, one must endure silently and work to make the conditions more mature. Even when the opportunity arises, one can only adopt a second-best strategy. For example, during the last trade war initiated by the Emperor of the River, we only chose selective countermeasures and devalued our currency to hedge against tariffs, which is akin to gritting our teeth and enduring the pain of being shot. This is a situation where the opportunity has come, but the conditions are not yet fully mature, so one can only endure.

When conditions are mature, one must also wait silently for the right moment. If the timing is not right, even if conditions are mature, one should not act rashly. Wang Yangming said, "When the heart is unmoved, act according to the 'opportunity'." This time, the Emperor of the River, like the Qing Dynasty, declared war on all nations, which is simply providing us with an excellent opportunity to strike. So this time, we will act quickly, accurately, and fiercely, directly confronting him, implementing comprehensive countermeasures, leaving the Emperor of the River momentarily bewildered, starting to say things like, "If you don't kneel, I will impose another 50% tariff."

The storm of diversification and decoupling is simply a breeding ground for the rampant growth of BTC, a super-sovereign, borderless cryptocurrency.

The depth of the rift in the real world is matched by the preciousness of consensus in the crypto world.

The economic turmoil caused by the short-term tariff war forces risk capital to seek refuge, borrowing funds everywhere, dragging the crypto market into a liquidity crisis, resulting in a market crash. This, in turn, provides discounts for steadfast investors who buy the dips.

In the medium term, high tariff barriers are equivalent to the U.S. government forcibly extracting profits from the trade chain, which increases the cost of trade friction, inevitably raising the prices of goods imported into the U.S., thereby increasing inflation and devaluing the dollar. Originally, one box of bread sold for 100 dollars; now, if 50 dollars are forcibly extracted in the middle, it will become one box of bread selling for 150 dollars. Bread prices rise. The dollar depreciates. Among all macroeconomic factors, the one that truly drives BTC prices in the long term is inflation, which is the continuous devaluation of fiat currency.

In the long run, if the trade deficit loses its ability to export dollars globally, the dollar will gradually lose its status as the global reserve currency. BTC will naturally have the opportunity to take its place, at least "one-third of the world will have its share." Moreover, since the Emperor of the River is unwilling to allow small countries to achieve trade surpluses with the U.S. and earn dollars from him, how can these small countries earn dollars for other procurement needs?

Jiao Chain has a bold idea: these small countries should quickly stock up on BTC now, and when the U.S. government also starts buying BTC in the future, driving up the BTC price, they can rely on their own country's BTC strategic reserves to gradually sell off and exchange for dollars to "retire."

This could be called the path to financial freedom for small countries through strategic reserves of BTC.

The future circulation of the new dollar will look like this: small countries sell a little BTC each year (less than 4% of their strategic reserves, which will never be exhausted as BTC continues to appreciate), exchanging it from the crypto market—ultimately from the U.S. (the Federal Reserve)—for dollars, using those dollars to import goods from the U.S., achieving trade balance or even a surplus with the U.S. The U.S. (government) continuously earns dollars through trade surpluses with global small countries, taking a portion of the profits to buy BTC and store it in the national strategic BTC reserve.

In my view, rather than calling this a new dollar circulation, it is more accurate to call it a BTC circulation.

If that day comes, El Salvador, which stocked up on BTC early, will surely stand tall first, becoming a financially free small country.

Let me ask, at that time, what height will BTC reach? Who can imagine?

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