The laws of war that shape your money.
On the 28th of June 1914, a motorcar transported a member of one of Europe’s most illustrious royal families through the city of Sarajevo.
The royal had arrived in Bosnia and Herzegovina for diplomatic reasons, in order to inspect the imperial armed forces of his empire—an empire that had annexed the nation he was visiting only six short years earlier.
However, an odd series of events and a simple misunderstanding of language would result in the royal’s motorcade taking a wrong turn.
It was a wrong turn that would change the course of human history.
Archduke Franz Ferdinand Carl Ludwig Joseph Maria of Austria was the Thronfolger—or presumptive heir—of the Austro-Hungary Empire. By all accounts, it was he that would ascend to the throne, following the expected future death of his uncle, Emperor Franz Joseph I.
But after his motorcade accidentally went outside its pre-planned route, his life would be ended prematurely by a bullet to the neck. The killer who fired the shot was a Bosnian Serb named Gavrilo Princip, who sought to free his nation from the oppressive rule of the Austro-Hungarian Empire.
And in a strange turn of fate, Archduke Franz Ferdinand would die on Franz Joseph Street—a street named after the uncle he was eventually meant to succeed.
At the time, Europe was a powder keg of tensions just waiting to be ignited. Overlapping alliances between empires, regular ethnic clashes, and new consolidations of power meant nations were suspicious and distrustful of one another.
If Europe was the powder keg, the assassination of Franz Ferdinand was the spark that would create an explosive ignition.
On the 28th of July, exactly a month after the death of the Archduke, Austria declared war on Serbia and commenced its bombardment of Belgrade.
This is how World War I began. At the time, the most devastating conflict humanity had ever experienced.
During the war, nations became increasingly wary of foreign powers and spies infiltrating their ranks to sow dissent, or to acquire information that could assist their enemies with victory. To protect themselves, many countries enacted new laws that aimed to bolster public safety, or to more easily capture or imprison those who would do the nation harm.
In the United Kingdom, for example, whistling was banned under the reasoning that it might be mistaken for an air raid siren, and could result in unnecessary panic.
On the islands of Samoa, racial segregation and censorship were enforced, after New Zealand captured the island in the early days of the war.
And in the United States, the Espionage Act of 1917 was created, which gave the government sweeping new powers to arrest and detain anyone they thought to be assisting their enemies.
Today, World War I has faded into history, and memory. But what still remains today, are some of the oppressive laws that were created during that cruel time in our past.
As you may know, Julian Assange—a citizen of my home country of Australia and the founder of WikiLeaks—currently languishes in England’s Belmarsh prison. Assange is on trial for crimes of espionage against the United States; crimes that could see him imprisoned for up to 175 years.
Many people will argue, as will I, that Assange is guilty of nothing more than uncovering war crimes the United States military was committing in Iraq. War crimes including the murder of innocent civilians, that were sometimes captured on video by the very soldiers committing the atrocities.
What isn’t well known, however, is that Assange is being charged under the Espionage Act of 1917. The same set of laws that were created by the U.S. during the chaotic height of World War I.
Laws created during a time of war. Laws that no longer reflect the world we live in.
But laws that linger, nonetheless.
As I’m sure you’re aware, a war currently rages in Ukraine.
A little over a week ago, after months of bravado and talk of innocent military exercises, Russia took the action much of the world expected it would, and launched a full-scale invasion into its non-belligerent neighbour’s territory.
There are many ways to look at Russia’s potential motives for the invasion: additional power on the world stage, new valuable geography to add to its portfolio, or nostalgia that desires to rekindle the glory of the old Soviet Union.
Whatever the reason, I’m not going to explore that here. Mostly, because there are other sources much better suited to uncovering what Putin’s real motivations may be.
Instead, I want to discuss the narratives we’re being told that surround this war. And how these narratives may be used to create laws or implement restrictions that could limit all our financial freedoms.
One of the major talking points around the invasion of Ukraine has been the severe economic sanctions levied upon the Russian nation.
For the uninitiated, sanctions are simply economic penalties designed to stop Russia from trading as freely as they were previously able to, with the aim of stopping the flow of foreign money entering the country. Less money in Russia’s economy, means fewer resources to fund their war in Ukraine.
Most of the time, sanctions are nothing more than feeble attempts for a nation to show disdain for the actions of another. But in the case of what’s being directed at Russia, sanctions thus far have been swift, sweeping, and severe.
For example, the Kremlin’s diplomats have been booted from many Western nations, and banks have been cut off from the SWIFT payment system. European airspace and ports are denying entry to Russian-flagged carriers and ships, and some of the world’s largest companies like AirBnB have ceased trading in Russia completely.
And in a bold move to hit Putin’s friends the hardest, nations like Norway, Italy, France, and Germany have begun confiscating the assets of Russian oligarchs—including the seizure of Dilbar, the largest motor yacht on the planet.
Despite all these sanctions however, the war in Ukraine continues. And because of this, conversation has increased about additional ways the world could limit the flow of money into Russia.
Inevitably, that conversation has included Bitcoin.
CNN and the New York Times have already published pieces describing how wealthy Russians could hypothetically use cryptocurrency to evade financial sanctions. In fact, CNN even went so far as to characterise Bitcoin as the key tool responsible for how they would achieve this.
“Financial sanctions are easier than ever for Russians to evade. Thank Bitcoin”, says CNN.
CNN’s statement sounds confident. But in reality, it couldn’t be further from the truth.
Just before Russia’s invasion started, the daily crypto trading activity of Russians amounted to over $70 million per day, as reported by Bloomberg. On March 3rd, only a few days after sanctions against the nation hit, this activity had dropped by more than half to only $34.1 million per day.
So, while many news outlets are pushing the narrative that Bitcoin is going to be an easy way for Russia to avoid sanctions, the real-world data paints a very different picture indeed.
In short, the sanctions are working. The numbers don’t lie.
But many media outlets are ignoring these facts. Because to them, the facts don’t matter.
What does matter, is the narrative.
These days, the real power of a nation is expressed by its economic power. And part of that power comes from people trading in that nation’s money; whether it be Euros, dollars, yen, or otherwise.
While crypto gives individuals more influence and control over their own money, and the way they choose to use it, it also results in fewer “real” dollars existing within the centrally-controlled financial ecosystem of a nation.
Less money in a nation’s ecosystem, means less financial power for that nation. As well as less power for its government.
This is the main reason many governments have been so quick to denounce the use of decentralised money. And why many in the legacy media—the mouthpieces of government—are fond of espousing anti-crypto rhetoric as well.
In the case of the war in Ukraine, it’s not in any way correct that Bitcoin allows Russians to easily evade sanctions. The massive drop crypto’s use in Russia over the last week illustrates this clearly.
But that won’t stop the powers-that-be and their media allies from using the war as an excuse to implement restrictions or to create new laws that could result in harder regulation on cryptocurrency for all of us.
In other words, never let a good crisis go to waste.
If new laws limiting crypto’s use are implemented for reasons that surround the war in Ukraine, don’t immediately assume that they’ll go away when the war ends. Because history gives us many examples of how this is often not the case.
My aim with this letter isn’t to convince you to put some of your savings into crypto, or other decentralised financial services. If you do choose to do that however, I believe you’ll probably be doing yourself a favour.
Instead, my aim here is to shine a light on the kinds of narratives that are regularly used to shape the state of our world, and our money.
Of course, the greatest tragedy currently happening in Ukraine is the unnecessary loss of life on all sides. And the millions of people who have had their lives upended, or who have had to flee their homes.
But it’s important to keep in mind that a tragedy like this is just another world event that those in power can use as an excuse to consolidate their power further.
By one way of looking at it, it’s a kind of war profiteering. The difference here is that the spoils of war aren’t money—they’re the shaping of our ideas.
Just remember: there’s a motive behind every story.
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