Deglobalization drives the end of the dollar standard Web3 becomes the new global force

We can feel a huge tectonic change taking place in the world.

Much has been reshaped and reconfigured in the way humans organize themselves on a global scale.

There is an underlying current that is defining how this phase of change unfolds:

De-globalization ( Undoing globalization ).

The book Principles of Responding to a Changing World Order, edited by Bridgewater founder Ray Dalio, presents a period in human history when the structure and organization of the world changed from the old… …become something new.

Meanwhile, discussions in the crypto community are increasingly aware of the “Fourth Turn” theory, which claims we should change the guard…whatever that looks like.

Using this lens, we can interpret some of the macro events unfolding before us.

Too much pursuit of globalization

The COVID-19 pandemic has revealed how global we are.

The manufacture of the world’s goods is naturally concentrated in the cheapest and most efficient ways. Before Covid, we didn’t pay much attention to the risk of China producing all the masks in the world or Taiwan producing all the semiconductors in the world. But when a pandemic hits and disrupts very fragile “just-in-time” supply chain models, the efficiencies gained from a globalized economy suddenly become weaknesses, dependencies, and risks.

Perhaps our pursuit of globalization is too high.

Just two years later, we are seeing a similar chain reaction from the Russian-Ukrainian conflict. Ukraine and Russia together account for around 30 percent of global wheat exports. The Ukrainian government this week banned the export of wheat and other staples “to meet the population’s need for critical food products.”

But it’s not just wheat. Fertilizers, phosphates and potash are also major Russian exports, all of which Russia has stopped exporting since the Russian-Ukrainian conflict.

Fertilizers have risen from $200/ton to $1,500/ton.

Deglobalization drives the end of the dollar standard Web3 becomes the new global force

The world has a 90-day food production cycle. If we stop producing food, our food will last about 90 days. So we have about 90 days before the full impact of these market changes starts to appear on all things human beings have to buy: food.

Maybe we made our global interdependence too strong.

Splinterverse

Meanwhile, in the digital realm, the Metaverse risks becoming a split universe.

Deglobalization drives the end of the dollar standard Web3 becomes the new global force

“We used to have only one internet. Now there are many:

Chinese Internet

Russian Internet

Internet in the US and EU

Indian Internet

The fragmentation of the Internet is the most serious threat to freedom of our time. – @RyanSAdams”

To control the flow of information, Putin pulled down the digital iron curtain surrounding the Russian internet.

Meta (formerly Facebook) is now “an extremist group” and all its products are blocked (Facebook, Instagram, Whatsapp).Also, many Western companies are willing to withdraw their services from Russia (Apple, Microsoft, TikTok, Netflix, etc.)

Ukraine calls on ICANN to remove “.ru” domain sites from the Internet. Although the Internet is a decentralized technology, we still need to agree on the standards we use to transmit data, and ICANN is the organization that provides this coordination.

Quote from the article linked above:

“A fragmented network is still very likely – driven by politics not technology”

Influenced by politics…

Elsewhere in this article it says:

“Even the backbone of the internet — this DNS routing system — is vulnerable and could be subject to government manipulation. The DNS system that makes it work is actually controlled by 14 individuals who hold seven sets of keys.”

The internet is losing its credible neutrality.

The legitimacy of the internet itself is called into question when the actors involved are some of the largest nation-states in the world.

The end of the dollar standard

The U.S. dollar plays a central role in this story because it is America’s primary tool for maintaining power and controlling the world.

And now, the world sees the U.S. freezing the Russian central bank, undermining “the dollar is a great place to store savings,” further motivating countries to find ways to store wealth outside the dollar system.

Arthur Hayes published an excellent article last week in which he stated:

“The current PetroDollar/EuroDollar monetary system ended last week, with the US and EU confiscating the Russian Central Bank’s fiat currency reserves and removing certain Russian banks from the SWIFT network. Within a generation Afterwards, hopefully, when this sad episode in human history ends, historians will point to February 26, 2022, as the date when this system ended and a new one, currently unknown to us, has sprung up.”

An article by Zolton Pozsar out of Credit Suisse brings the idea of ​​”Bretton Woods III” to life, making a case for the new monetary order that seems to inevitably lie ahead of us.

There seems to be a consensus that the dollar standard is coming to an end.

Remember: money is the ultimate coordination tool.

When it breaks, we lose a key tool in our tool belt that allows us to coordinate with others.

Theme for 2020s: Less globalisation, more independence

in conclusion:

  • We live in a world where global supply chains are disrupting.
  • External dependencies are turning into systemic risks and creating the possibility of global financial contagion, so much so that there are fears of famine.
  • The world’s largest coordination tool (the US dollar) seems to be losing everyone’s confidence.

The 2020s seem to have shown us all the ways in which we overextend for globalization.

Globalization and nations at war don’t go together well, and if we are indeed in the recession of an 80-year conflict cycle, then you can expect the world to enter a conservative protectionist paradigm rather than a liberal cooperation paradigm.

Counterstrike: Cryptocurrencies

Cryptocurrencies are here to continue the globalization story as the trajectory of the world shifts from globalization to Balkanization.

Putin’s Internet Iron Curtain can change what Russians see on the Internet, but not Ethereum.

The whole point of these things is that they are universal coordination tools that exist on a larger scale than nations.

So Ukrainians and Russians may see two different versions of the world, but when they look at the status of Ethereum or the account balance of Bitcoin, they see the same as everyone else in the world.

This is why the blockchain is called the “truth machine”. Blockchain does not lie.

Deglobalization drives the end of the dollar standard Web3 becomes the new global force

In a censored world with a divided internet, the Ethereum block space will be the most valuable community on the planet. We are entering that world now. – @RyanSAdams”

While countries around the world are “parting their ways,” the people of the world are all using the same Web3 protocol.

Maybe we’re overly globalized in the real world, but in the digital world… we’re just getting started.

If we do begin to change the new world order, you can expect the physical world to become more isolationist. Food and energy will be produced and sourced locally, so we won’t have to deal with international trade and supply chains.

But the Metaverse is inherently global. So while our nation-state builds walls around its citizens, the Metaverse runs right through those walls, connecting individuals in the world on the same plane of existence.

This has always been the promise of cryptocurrencies:

  • The dollar network is losing trust.
  • Supply chain networks are collapsing.
  • Even the internet itself is losing global consensus.

However, humanity’s march to figure out how to coordinate with each other on an increasingly larger scale won’t wait for nation-states to settle.

Humans just want to coordinate.

Whether or not our nation-state helps us achieve this, we will.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/deglobalization-drives-the-end-of-the-dollar-standard-web3-becomes-the-new-global-force/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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