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U.S. dollar 'apocalypse' coming in 10 years, more countries will make Bitcoin legal tender
(Kitco News) - Over the last 300 years, most major global fiat currencies have depreciated substantially, if not lost all of their value, and investors should not bet against this trend said Max Keiser, host of The Keiser Report and co-host of The Orange Pill Podcast.
"I think over the next 10 years, as you see these major economies like the U.S. and China, who are carrying debt loads at 300% of GDP, and they're going to just print their way out of this, we're talking about a fiat money apocalypse," Keiser told Michelle Makori, editor-in-chief of Kitco News.
Keiser's solution for hedging against an inevitable dollar debasement is to buy Bitcoin.
"I'd rather be cautious and load up on as much Bitcoin as I possibly can now and not try to play games on the timing side. What I do know now for sure is that these fiat [currencies are] going to go to zero. The reason is why Bitcoin is already in the tens of thousands of dollars a coin is because all of the major fiat money in the world is in a hyper-inflationary collapse against Bitcoin," he said.
Keiser's comments come as Bitcoin fell 20% over the last week, having dropped 31% year-to-date so far.
Meanwhile, the U.S. dollar index (DXY) is relatively flat, year-to-date.
Despite Bitcoin seeing the worst start to any year since its inception, Keiser is still fundamentally bullish long-term and said that relative to the U.S. dollar, Bitcoin's price will rise to "infinity" over time.
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Part of the story behind Bitcoin's rise against fiat currencies is its wide-spread that the world will see in the coming decades, and in fact, is already seeing now, Keiser noted.
In El Salvador, where Keiser is currently based, a large portion of the population that previously did not have bank accounts now have Bitcoin wallets and are using it in everyday transactions.
"The number of people who have Bitcoin wallets now exceeds the number of people who have bank accounts in total," he said. "That's the process of banking the unbanked, and that's part of the magic of Bitcoin."
The Chivo Wallet, El Salvador's official Bitcoin wallet, has managed to onboard 4 million users within 45 days. The government offered a $30 sign-up bonus, similar to an "air-drop", to all users who have set up a wallet.
El Salvador made headlines last year when it became the first country in the world to make Bitcoin legal tender.
Keiser said that other countries will soon be joining in the ranks in adopting Bitcoin as legal tender.
"I've been saying for six or seven years now that we could see a country make Bitcoin legal tender and this would set off a global hash war, or hash race, countries competing with each other to adopt Bitcoin and hoard Bitcoin," he said.
Keiser said that the next country to follow El Salvador's example will most likely be in Latin America.
El Salvador is also building the world's first "Bitcoin City," a special trade zone with its own trading and tax laws. Built upon the foot of a volcano, Bitcoin City will also set up the infrastructure to mine Bitcoins, harnessing the geothermal energy of the volcano.
The Central American country is issuing $1 billion worth of Bitcoin-backed bonds, half of which will be used to build Bitcoin City, hence the moniker "Volcano Bond," while the other half will be used to buy more Bitcoin.
The bond is a 10-year maturity, 6.5%-yielding coupon that is already oversubscribed before it goes on market next month, Keiser said.
To learn more about volcano bonds and El Salvador's current economic conditions, watch the video above.
Follow Michelle Makori on Twitter: @MichelleMakori
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