Co-founder of online investment platform BnkToTheFuture.com Simon Dixon tells Bitcoin podcaster Lark Davies, also known as The Crypto Lark, how he outlined his thesis on an incoming economic collapse in the 2020s when Bitcoin was just emerging.
Back in 2009, the former investment banker and early Bitcoin adopter presented his ideas about monetary policy and mounting debt cycles at a lecture that was eventually videotaped and uploaded to YouTube. In the video, Dixon predicts how quantitative easing and high levels of indebtedness will increase until a black swan event triggers a collapse of the system.
Although Dixon didn’t foresee the deadly and disruptive coronavirus that has swept across the globe, claiming lives, dismantling industries and triggering mass unemployment, he says the global financial system itself thrives on a Ponzi-style setup that is ripe for the unraveling because people never repay the debt.
According to Dixon, a downward spiral eventually forces governments and central bankers to embrace a losing strategy of trying to print their way out of a calamitous economic downturn. But quantitative easing, he says, becomes useless as taxes can no longer cover the interest on the debt.
That leads to the last resort.
“You’ve got one tool left, which is not using the central bank to create money as debt, but just using the government to create [non-debt-based] money…
The problem with that is that money is inflationary. What we need is to find a way of injecting a new money supply – that’s not backed by debt – into the economy, that is also non-inflationary.”
What comes next, he predicts, is a new digital currency.
“I believe they’re going to let the bank go bust, and they’re going to give you an app that will have the same amount of money. But this money will be a central bank digital currency. They’re also going to distribute universal credits as the economy gets worse, by you downloading an app. And in that app, it will have a credit which will incentivize you to get into the central bank digital currency…
The central bank digital currency, while it is the only option left for the government, and I think it’s the option that they’ll have to take, it scares the shit out of me in terms of its impact on personal liberties, freedom and privacy.”
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