Financial stories of the week Episode # 1

Assalamu Alaikum

In our latest review of some of the major financial stories of last week, we look at the possible Russian invasion of Ukraine, US inflation hitting its highest levels in 40 years, and how the Biden administration stole billions from Afghanistan. 

1. Russia is ready to invade Ukraine

Starting with a bit of background…

The Russo-Ukrainian War began in 2014 following the Russian annexation of Crimea from Ukraine.

In 2004 the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia joined the EU, followed by Bulgaria and Romania in 2007. The Russian government feared that Ukraine’s membership of the EU and NATO would complete a western wall of allied countries by restricting Russia’s access to the Black Sea. With South Korea and Japan being allied to the US, the Russian government was concerned that Russia was being ring-fenced by potentially hostile powers. 

Truth is, the Russian government just want to stay in power.

To do so, it wants to restrict its population from getting the wild idea that people should be able to hold their leaders accountable. This is why the Russian government has mobilized its entire army to the border of Ukraine. That is, to keep these ideas as geographically distant from its population as possible.

The problem with this situation is not the Russian military. The Russian military is a subpar fighting force with subpar technology. The problem is that there doesn’t seem to be a strong appetite in the west to fight for anything that doesn’t directly affect them.

What effect will a Russian invasion have on the markets?

It will likely lead to more inflation. Russians don’t produce anything except commodities, primarily oil and gas. As these are energy sources that are widely required in the production of most things, a rise in oil and gas will result in widespread price increases.

This brings up the second topic in our news rundown for this week which is:

2. Inflation hits four-decade high

US inflation in January, as measured by the consumer price index hit a four-decade high of 7.5%.

The bleak reality of this is that all else being equal, every savings account in U.S. dollars is now 7.5% less valuable in just 1 year.

Why has inflation reached the highest level in 40 years?

The monetary policy of the United States has allowed us to continue printing money. The more we print, the more indebted we become, the more additional money we need to print to pay it all off.

It is hard to predict what will happen in the future, but it is not sustainable to continue printing money this way.

U.S. national debt is now 30 Trillion dollars. There is zero chance of this ever being paid off. This debt cannot keep going up to infinity. 

We must find a better system.

Part of this better system has been found and it goes by the name of Bitcoin. 

Now more than ever I think the argument for Bitcoin is crystal clear; It’s a store of value that cannot be corrupted or inflated. 

I recently bought more Bitcoin encouraged by the bleak outlook on inflation that is facing all other traditional currencies.

If you’d like to follow my crypto portfolio consider becoming a PIF member.

3. Biden frees frozen Afghan billions for relief, 9/11 victims

Afghanistan has more than $9 billion in reserves, including just over $7 billion in reserves held in the United States. This $7 billion, which is the property of the Afghan people, has been frozen since the Taliban took over, and schools and teachers in Afghanistan are barely being paid. The economy is on the verge of collapse and famine is a real risk.

Instead of returning the money to its rightful owners, Biden has allocated half of it to pay 9/11 victim families who have filed lawsuits. 

Why is the Afghan people’s money being stolen to pay for the attacks of 2001?

The average Afghan has nothing to do with what happened, but that’s exactly who the Biden administration thinks should pay for it. This amounts to outright theft by the Biden administration. 

Furthermore, I have a hunch a good portion of this money will go to lawyers involved in the lawsuits instead of the families of the victims of 9/11 themselves.

Acts of theft like this will likely result in more people and governments adopting Bitcoin since it is seizure resistant. I expect many governments in the world to start adding bitcoin to their reserves in the not too distant future.

Just another reason to be bullish on Bitcoin.