Good Morning Everyone,
When nation states have disagreements and to some extent oppose one another, there are a number of typical actions that can be taken in response as a means to try and assert oneself and desires upon the other and achieve some kind of a resolution. The most severe escalation of these actions is of course being out-right kinetic warfare - ie guns and violence - but there are other forms of war that typically precede this, including (but certainly not limited to) informational, geo-political, and economic wars.
Economic wars vary in scope from trade wars, as we have seen escalate between the US and China in recent years, to tariffs on specific goods as a means to try and cripple pivotal infrastructure needs or capabilities, or restrictions around the types of goods that are acceptable for import/export. Things can escalate from trade wars to financial sanctioning, and attempts to restrict the flow of capital as a means of more significantly choking and ‘disarming’ a countries ability to operate, and trying to economically suffocate their opponent. Globally this could be by removing access to the SWIFT system or freezing or confiscating locally held assets or accounts.
The US as the world reserve currency have had a fundamental asymmetry in this respect as the cost to impose financial sanctions is minimal, but its effect on an opponent is crippling. Leading to this being a much used arrow in the quiver as you can see from the image below - showing some 37 sanctions in the last 18months alone.
The problem with financial sanctions is that they provide diminishing returns over time, similar to a sharp sword that becomes blunt the more it’s used and ultimately being rendered useless. The use of such actions incentivises a move away from any system that enables this and in the process removes a major source of power from their opponent.
The critical thing to understand here, is that financial sanctions are an act of war. This is not my opinion. This is well documented and continuously demonstrated by history.
What we have seen in Canada is the government declaring an economic war upon the countries own citizens, and invoking emergency powers to enable such actions from being implemented free of any legal due process or really any legal restrictions whatsoever. They have attempted to seize assets and freeze accounts of anyone that opposes them in an attempt to economically strangle and suffocate citizens that oppose their political rule.
If Financial Sanctions are an act of war, then a run on the banks - that is to custody your own assets - is the appropriate response and the single most effective way citizens can retaliate and project power in the face of such an attack.
The following is an indication that this is exactly what is happening.
There are 4 charts below, showing outages from four of the major Canadian banks. The outages are from about a week ago, but according to downdetector.ca the outages continue to be significant and wide spread.
Obviously these institutions are not open, public networks, so we cannot track outflows on-chain like we can with the bitcoin network, but it’s a safe assumption that the coordinated outages of the major Canadian banks are not just a coincidence and are most likely in response to the initial signs of a run on the banks in progress, and in direct response to the disproportionate actions taken by the Canadian government.
I would make the argument that this is the primary reason supreme leader Trudeau has announced they are now revoking the emergencies act, just two days after a vote on it being formally implemented.
I’ve attached a clip below where Jordan Peterson even stated that he had been in contact with a reliable source within the Canadian military and he said this:
“That if I had any sense I’d take my money out of the Canadian banks, because the situation is far worse than i’ve been informed".”
This is an absolutely incredible thing to hear, in amongst a series of fairly incredible events, and at some point the dam has to break.
The bitcoin clinic being run by the Canadian government right now to educate their population on the necessity of self custody is, if it weren’t so heinous, something we should almost be pleased about. Obviously it is horrific and I’d not wish this on anyone.
The facts are simple.
If you do not have custody of it, and you can not project the power to protect it, then it’s not yours.
This should serve as a wake up call to everyone that has been idly sitting by and silently complicit as government slowly erode the rights of citizens, to learn from what is happening in Canada and understand and truly, deeply acknowledge, that these kinds of actions are not a matter of if - they are a matter of when. And as discussed previously - Governments and central banks are planning for it.
It does not matter how much you think you can trust an entity, or how sophisticated you perceive the society or trust in the rule of law. If the system - and the incentives of the system - are such that they can, then they most probably will.
History has already told this story many times. Although it may be new in our lives, that does not mean it is new. It’s simply new to us.
The current dynamic makes me even more grateful for the mission people like Jack Dorsey have undertaken at Block to develop and improve the ability to self custody ones bitcoin. I saw this tweet this morning from Nick Staney, a product design engineer at block, about the product they are working on and it sounds like it could completely change the game. Which is absolutely necessary, given most people still leave funds on centralized exchanges and do not seem to take seriously the true power of self-custody.
Lets see how things continue to unfold. The temperature is clearly rising. It’s never been more critical to get educated and understand what actions you should take to best deal with a world that is constantly changing, is wildly uncertain and feels increasingly volatile with each passing day.
If you do one thing - learn about self custody and take control of your keys.
The future is decentralized and the world is running a global marketing campaign on the need for censorship resistant money that cannot be confiscated.
Central banks won’t like it and will actively fight it. Bitcoin doesn’t care.
This neutral, apolitical protocol is changing the world in front of our very eyes.
It is inevitable.
Hope you have a great day - I’ll talk to everyone tomorrow.
AK
