Leading investor Simon Dixon recently described El Salvador’s bitcoin policy as “very responsible” and said it could be the first domino to fall by bringing down the International Monetary Fund’s “fiat-based Ponzi scheme” debt mechanism ( IMF) if successful.
Dixon summarized global financial history to point out that each financial crisis has led countries into debt, which has turned all their economies into over-indebted systems.
On the other hand, Bitcoin behaves like an independent equity that can provide excellent returns. On a large scale, investing in Bitcoin can provide a way out of the IMF leveraged debt cycle for countries.
“Betting a percentage of a country’s future, I believe, is a totally responsible strategy, not irresponsible, and the IMF wants countries to follow irresponsible fiat-based Ponzi scheme debt strategies.”
He continued to say that if El Salvador can complete its Bitcoin investment plan, it can back out of the alleged Ponzi scheme.
bitcoin as equity
Dixon described investing in Bitcoin as a deleveraging move from debt to equity. He said:
“[By] equity, I mean, I was deep down trying to start a bank, and then bitcoin treated me well. I got rich from bitcoin.
According to Dixon, investing in Bitcoin is followed by an increase in wealth due to the inevitable increase in value of Bitcoin. Increasing wealth leads to more spending, which ultimately supports Bitcoin’s sovereign economy. Meanwhile, investing in the fiat system leads to a decrease in wealth over time. Financial loss forces fiduciary investors to leverage assets and debt.
Following this logic, Dixon also argued that Central Bank Digital Currencies (CBDCs) will only carry IMF debt-based Ponzi schemes onto the digital platform, as they will ultimately be tied to IMF rules. He described CBDCs as “debt-free currency issued by a central bank” and a “speculative attack on fractional reserve banking.”
Follow El Salvador out of the IMF’s “Ponzi scheme”
Looking at historical milestones and the current state of the financial system, Dixon said countries could borrow from the United States, the IMF or China to finance their nations. Moreover, even if a government chooses to borrow from the United States or China, it will still borrow fiat currency which is ultimately tied to IMF control.
Dixon argued that the IMF did not like El Salvador making bitcoin its legal tender because the possibility of successfully building an economy around bitcoin posed a serious threat to the current IMF system.
“Whether [El Salvador] succeeds, it is a big problem for the economic model of the IMF. It is not a rescue society, it is not a mechanism to develop the world.
“They are a mechanism to dollarize the world and implement a global central bank digital currency on top of their special drawing rights, so they can maintain control of their mechanisms.”
El Salvador is currently undergoing restructuring. They are trying to build a sovereign economy that offers an increase in value, unlike fiat-based investment options, and is free from the IMF debt cycle.
El Salvador’s Bitcoin Policy
El Salvador became the first country to accept Bitcoin as legal tender in December 2021 and has accumulated over 2,300 Bitcoins since then. Based on the price movements, the country has seen short-term losses and gains.
The IMF opposed El Salvador’s decision to adopt Bitcoin as legal tender. Additionally, the country’s current bitcoin reserves are worth just over $50 million based on current bitcoin prices, which the IMF is tapping into to urge El Salvador to drop its bitcoin policy.
Either way, El Salvador is keen on its Bitcoin-centric financial system and is confident that prices will rise to higher levels than before. The county also encouraged the Central African Republic (CAR) to adopt Bitcoin as legal tender.