Zhu Weisha December 11, 2024
After my article "The annual compound inflation rate of the US dollar against gold has exceeded 8.1% in the past 50 years, which is the main reason for the polarization of the rich and the poor" was published, some readers thought that the article was not convincing enough to explain the collapse of the US dollar in about 100 years by relying only on Chinese historical data. After all, the current means are much more sophisticated than those in ancient times.
In fact, human nature is unchanging, and the laws of nature are unchanging. This article analyzes it again from the perspective of natural laws, and the conclusion is consistent. It must be stated that the specific time is only a reference, and the trend is predictable.
Characteristics of the natural growth curve
Modern biologists Pearl (R. Pearl) and L. Reed (L. Reed) studied the Law of population growth, as shown in Figure 1. This special curve is called the Peel growth curve, or Peel curve for short. The prediction method of the Peel curve is a method of fitting a Peel curve according to the Peel formula based on the historical data of the predicted object with the trend of the Peel curve change. Since the population grows naturally, the Peel curve is also called the natural growth curve.
Figure 1: Peel Curve
Analyzing Figure 1, we can see that the curve has the following rules:
(1) It has a top,
(2) It has an inflection point,
(3) The growth at the top and bottom is relatively slow,
(4) It basically presents a symmetrical graph.
(5) The graph is divided into three stages: accumulation period, high-speed growth period and maturity period,
(6) The high-speed growth period is twice as long as the accumulation period.
Predicting the growth curve of Bitcoin based on the Peel Curve
Metcalfe's Law is a law that describes the value of the Internet. It states that the value of a network is equal to the square of the number of nodes in the network, and the value of the network is proportional to the square of the number of Internet users. Based on this, the growth of the value of Internet companies can be described. Different companies have different promotion efforts, and the growth rate of users is also different, so the curve looks different. It inspires us to think about what the growth of Bitcoin users should be like. Can Metcalfe's Law describe the growth of Bitcoin's value? In fact, there are three factors that affect the value of Bitcoin itself: computing power, number of people, and amount of money. Assume that the rich and the poor are distributed proportionately among users. Bitcoin is a masterless system without corporate promotion. We believe that the growth of Bitcoin's computing power and users is natural, just like population growth. Therefore, the Peel curve can be used to predict the growth of Bitcoin prices.
The article "Bitcoin's Natural Growth Curve" was published on the Bitpush website on December 6, 2022. The article predicts Bitcoin prices for 33 cycles of Bitcoin under the condition that the Bitcoin standard excludes inflation. It points out that the 1st to 3rd cycles are accumulation cycles, the 4th cycle is the turning point cycle, the 4th to 9th cycles are high-speed growth cycles, and the time length is twice that of the accumulation period. The 10th to 12th cycles are stable growth cycles, and the subsequent Bitcoin growth is synchronized with economic growth. The entry of mainstream funds such as BlackRock confirmed the turning point of the 4th cycle. In fact, trend prices can be predicted, but short-term prices cannot be predicted. The vertical axis data represents the US dollar.
Figure 2 The natural growth curve of the first 15 cycles of Bitcoin
The development of the mobile phone market also conforms to the Law of natural growth
Mobile phones also belong to natural growth. Figure 3 shows the growth curve of mobile phones from 1980 to the present. The accumulation period is 15 years, from 1980 to 1995. The high-speed growth period is 23 years, from 1996 to 2019. Then it enters stable growth. The high-speed growth period is less than 30 years. The predicted high-speed growth period of Bitcoin is 24 years.
Figure 3 Natural growth curve of mobile phones
Typical Ponzi scheme curve
An anonymous author published an article on Sina that uses simple mathematical calculations to see through the Ponzi scheme. The article uses mathematical formulas and hypothetical data to simulate a typical Ponzi scheme curve. See Figure 4. It can be seen that the Ponzi scheme curve is also very similar to the natural growth curve. Conditions at the top constrain it. Once the balance cannot be maintained, it will collapse. The slope of the high-speed growth period is very steep, but the rule that the high-speed growth period is twice the accumulation period still exists.
Figure 4 Ponzi scheme curve
Predicting when the US dollar will collapse from the natural growth curve
With the above data, let's analyze the US dollar. US debt is the endorsement of the US dollar. Figure 5 is selected from Wind's article, "In the past 53 years, there is a subtle relationship between the price of gold and the total amount of US debt". The yellow one is gold, and the black one is treasury bonds. The slope of the growth curve of US debt is steeper than that of mobile phones and smaller than that of the Ponzi scheme curve. The growth curve of US debt is between the slope of mobile phones and the Ponzi scheme curve.
Figure 5 Comparison of US debt and gold prices from 1970 to 2023.
Using the natural growth curve, it takes 27 years from the collapse of the Bretton Woods Agreement in 1973 to 2020, which is the accumulation period. The reason for choosing 2000 is that gold has not yet started to rise. After 2020, gold began to rise sharply, and the slope of the national debt was consistent. According to the logic calculated above, the high-speed growth period is twice the accumulation period, and the high-speed growth period starts in 2000 and ends in 2054. Adding the 27-year stable growth period, it is time for the US dollar to collapse. The credit dollar lasts for 108 years. This forecast data is consistent with the lifespan data of legal currency issuance in China's history.
The US dollar is the best currency in the legal currency system, and its collapse means the end. Since the 1980s, some people have begun to build financial lifeboats for humanity, and a generation of human elites has emerged. Satoshi Nakamoto is their outstanding representative. The emergence of Bitcoin was not accidental, but it is in line with the historical trend. The Bitcoin standard allows the monetary system to return to asset currency, a historical trend. In December 2022, I suggested that Bitcoin be used as a reserve currency to solve US debt, and today some people have implemented it. I believe that the Bitcoin standard I proposed will also shine. Please refer to the DW20 Decentralized Standard Currency White Paper for more information.
https://chainless.hk/2024/12/11/predicting-when-the-dollar-will-collapse-from-the-natural-growth-curve/
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