Why Has Debt Become Uncontrollable and How Will Bitcoin Benefit from It? This Article Draws a Parallel Between Energy, Debt, Geopolitics, and Bitcoin.

This article draws a parallel between energy, debt, geopolitics, and Bitcoin.

The world is facing an economic crisis that could be even greater than the one in 2008, according to Robert Kiyosaki, author of the best-selling book Rich Dad Poor Dad. In a recent tweet, Kiyosaki compares the current situation to the one in the 1930s, warning that things could get worse before they get better.

According to Kiyosaki, the world is nearing a "major financial and energy crisis." He adds that the last time such a crisis occurred was in the 1930s, during the Great Depression. Back then, it took World War II to pull the world out of the economic downturn.

The billionaire investor explains that the world is currently facing several challenges, including a decline in energy production, which is the "engine of any economy." Despite advances in technology, Kiyosaki argues that they are not sufficient to overcome the impending crisis.

"Energy is the engine of any economy. Especially OIL. Without it, no food from farms to cities, cement, water bottles, clothes, etc., will be delivered by the 100s of millions of trucks to every corner of the world," Kiyosaki wrote on Monday.

"There will be no rise in living standards without an increase in energy production. Many countries thought they could compensate for this energy constraint by going into debt, but there are limits. Debt stimulates demand but its effectiveness depends on abundant and cheap energy."

When energy becomes scarce, Kiyosaki says, debt generates mostly inflation rather than real growth. "Without an increase in the production of goods, any increase in GDP is just an inflationary illusion," he adds.

Raising purchasing power requires wages to grow faster than inflation, which can only be achieved through productivity gains that directly depend on our ability to extract low-cost energy. "Wages = productivity (quantity of goods produced per person) = machines = energy."

Every economy needs to grow in order to repay both the debt and the interest. But in the absence of an energy miracle, tough choices will have to be made. Especially since countries are "rolling their debt," triggering a spiral of compound interest.

Hence the exponential trajectory of public debts. In other words, without an exponential increase in energy production, inflation is inevitable. This inflation, in turn, forces an increase in rates, which will sooner or later lead to a default.

In the face of this threat, Donald Trump is putting increasing pressure on Canada, which accounts for 60% of U.S. oil imports (4 million barrels per day). The goal? To relaunch the Keystone XL pipeline project in order to transport an additional million barrels. Not to mention Greenland, where the United States is hoping to discover new deposits.

It is China’s colossal coal consumption that is the main driver of global growth. But if we set this coal aside, energy availability per capita has been declining since 2013. In France, oil consumption has dropped by 26% since 2005.

But can technology save us? Hopes are pinned on AI and robotics to drastically increase productivity, leading to a rise in wages and a decrease in the cost of goods. However, this will take time, and in the meantime, the burden of pensions will need to be reduced.

This is an unpopular necessity, as defaulting on debt or printing money ultimately comes down to the same thing: a decrease in purchasing power. But reducing spending will also lead to a decrease in purchasing power. There is no miracle. In France, this essentially means reducing the burden of pensions.

Now, productivity gains from AI and robotics may perhaps lead to an increase in wages; we shall see. But one thing is certain, AI will not replace oil.

In the meantime, debts are accumulating dangerously. The United States will need to refinance about $28 trillion in debt over the next four years.

Donald Trump is looking to lower rates to ease this burden. That is why the Fed has recently slowed the selling of Treasury bonds acquired since 2008 through Quantitative Easing.

It even feels like Mr. Trump is doing everything he can to encourage investors to take refuge in U.S. debt (tariffs, bombings in Iran, threats of annexing Greenland, etc.).

Except that this old recipe no longer works. Russia has shown the whole world on one hand that it can stand up to NATO, and on the other hand, that placing reserves in Western debts is very, very risky. The BRICS have taken note of the “freezing” of the 300 billion euros that Russia had invested in the public debts of the Western camp.

This brings us to Bitcoin.

Larry Fink made shocking statements this Monday. The CEO of BlackRock stated in his annual letter to investors:

“The United States has benefited from the dollar being the international reserve currency for decades. But this edge may not last forever. Public debt has been increasing three times faster than GDP since