Crypto 2
Who knows? Maybe we’ll pay off our $35 trillion dollars, hand them a crypto check, right? We’ll hand them a little bitcoin and wipe out our $35 trillion.
By Gregg Wall (8-3-2024)
Former POTUS Trump went from trashing crypto to becoming its biggest fan, after the Silicon Valley oligarchs and libertarians piled into his re-election campaign. Then again, Trump has always been a salesman and a transactional sort of guy. Trump historically has also gained notoriety as the Debt King and Bankruptcy King. In all fairness to Trump, he’s in good company. Larry Fink, Jamie Dimon have flipped or joined the club, and Kamala Harris’ campaign is said to be reaching out to the crypto community for a reset.
It’s all reminiscent of celebrities and politicians who got sucked into the FTX and Sam Bankman-Fried scandal, is it not? Where sticky fingers helped himself to investor crypto and showered it around powerful people and spokespersons to say nice things about crypto (and to make sure crypto received favorable treatment legislatively and from a regulatory perspective). Sam was subsequently convicted of: wire fraud, conspiracy, securities fraud, commodities fraud, money laundering. Then again, this has always been an industry in the shadows, the preferred cash or asset class of criminals and libertarians… who am I kidding, libertarians are criminals.
So, in the span of a few months, we went from the FTX scandal and SBF behind bars (notice, the MSM couldn’t get that story off the front pages fast enough) to talk of making Bitcoin a Strategic Reserve Asset, with Trump declaring at a recent crypto conference the desire to hold crypto as a strategic reserve, held by the federal government, that cannot be sold. Who would stand to gain with the U.S. government holding Bitcoin, crypto as a strategic reserve … take a look at who contributed to Trump’s campaign. Silicon Valley venture capitalists, libertarians, and crypto enthusiast, Peter Thiel. Wall St banks and bankers who have waded into the market, the crypto industry, Larry Fink at Blackrock… and of course, Elon Musk, who is now a big Trump backer and a holder of crypto. Separately, there’s fossil fuels which provides the energy for the energy sucking blockchain technology that runs the industry. Hell, maybe even the defense industry… instead of running around the planet, stealing oil and natural resources from the global south, perhaps America will go swashbuckling around the globe to steal crypto doubloons?
Bottom line: With the U.S. government giving Bitcoin its seal of approval and holding it as a strategic reserve, the asset price should increase considerably (and certainly help establish a floor), and potentially, set off a crypto arms race to accumulate the coin among nation-states. Trump's ultra-wealthy backers and Silicon Valley crowd could see their crypto holdings, potentially, exponentially increase in value. The U.S. government, too, may have a vested interest in seeing crypto asset values skyrocket.
Not bad for a currency, um asset, um thin air? Not bad for bytes or digital code not backed by any asset, that only exists in the cyber realm… in fact, if we factor in the impact blockchain has on the environment, crypto or the phantom asset actually has negative worth or real value? Truly, Bitcoin is a faith-based asset, not unlike Tulip bulbs, fiat currency, and other manias and get rich quick schemes that have spanned the centuries. So how did we get here? How did we go from this upstart asset or currency, prone to fraud and market manipulation, that was supposed to usurp the dollar, a libertarian pipe dream that was developed as a response to FED money printing (the preferred asset class, currency of the dark web and career criminals)… to an asset class favored by billionaires, Wall St, and now, promoted by at least one presidential candidate?
To answer that question we need to examine America’s catastrophic national debt and who currently possesses the resulting wealth and windfall, as a direct result of the massive transfer of wealth - from the public to the billionaire class, banks, boomers, and corporations - that has spanned the last several decades. The national debt, if we take the government at its word, is around $36 trillion; if we count the $4 trillion printed up to bailout Wall St back in 2020, under Trump’s watch, which was called a loan at that time, it’s $40 trillion. This national debt was printed up to bailout Wall St, finance tax cuts for the rich, fund corporate welfare, backstop all manner of corruption & giveaways in congress, and finance endless for-profit wars and empire… and create hundreds of billionaires by bailing out and inflating asset classes of the wealthy (see the stock market). Mr. Trump himself ran up eight trillion dollars, during his time as president, not counting the aforementioned extra $4 trillion to help out his friends on Wall St.
In short, this $40 trillion has made a handful of people extremely wealthy and powerful in a very short amount of time… power they’ve further used to consolidate entire industries into predatory cartels and monopolies. As I’m fond of saying, monopoly or unaccountable totalitarian power over everything from the economy, to government, prices, regulators, and wages. This monopoly power has also made the U.S. government exceptionally corrupt, crushed opportunity and living standards for the American people, and debased and significantly diminished the purchasing power of the dollar.
It's that last point that is increasingly on the wealthiest one percent’s mind, the debasement of the dollar, and how exactly to pay off the looting of the U.S. credit line, ahem, I mean national debt??? Or make it go away. The national debt standing now as a constant reminder… a flashing neon beacon of avarice, greed, fiscal irresponsibility, of the theft that has occurred, and exactly who gained from the looting of the U.S. Treasury & credit line.
What to do, what to do? The prudent thing to do would be a combination of taxation and a methodical, responsible debt write-down. After all, why are the American people being taxed to service the debt load on this monstrous debt, while they suffer endless austerity, unresponsive & incompetent governance, and a violent economy with predatory monopolies constantly jacking up the price of basic goods and services (and simultaneously, strangling labor)? No, the responsible thing would be for the banks, billionaires, and corporations -- who gained the most from the FED’s money printing orgy -- to pony up and pay significantly higher taxes. Many nation-states find themselves in similar circumstances, as the U.S., with high debt to GDP ratios. They too, would likely welcome a multilateral, gradual, methodical public debt write-down and their public would also appreciate higher taxes on the wealthy. (The keys to success of raising taxes on the wealthy and a public debt jubilee would be making sure that politicians didn’t use the debt write-down to spend like drunken sailors, and for the libertarians and greedsters in boardrooms and C-suites not to take advantage of the situation and begin another round of price gouging). This would be the prudent thing. It would also take the austerity monkey off the public’s back, and might cause a reevaluation of each nation’s priorities, particularly the failed economic paradigms that placed us here: neoliberalism, laissez-faire, and globalization.
But America doesn’t do the prudent thing, and oligarchs being oligarchs, they really aren’t into paying taxes, or admitting supply-side and trickle-down are a fraud. Besides, writing down the national down, also means – possibly – a diminished money supply, debt, and leverage used to inflate asset classes of the rich and the stock market to nosebleed valuations. Diminished national debt also means less social control… the national debt presently used as a cudgel to beat on humanity and tamp down any expectations of equity, social & economic justice, and a responsible social welfare state to backstop greed and crony capitalism.
Hence, under the auspices of shielding the rich from any inconvenience, like taxation … we get the idea of the US government setting up a strategic reserve of Bitcoin, inflating said Bitcoin, and using those inflated assets to pay down the national debt. Splendid.
Hence, preserving the natural order of things: out-of-control elites pigging out at the public trough; a pandemic of global corruption; money printing; endless state welfare for colonialism, speculation, and greed; the preservation of feudalism… and indentured servitude & slavery for the public; untold human misery; wars; man-made famine; and a planet in flames. Basically, Bitcoin, at least in theory, as the savior of a status quo with zero redeeming economic and social value. None, nada, zip. No wonder Trump and libertarians love crypto.
Will it work? Time with tell, but with government backing the scheme, the odds are better than not of some success (certainly in further enriching Trump’s wealthy crypto backers). Right now, crypto is still going through a purification or rehabilitation phase… FTX and SBF are in the rearview mirror but many have not forgotten…and undoubtedly, will take some time to sell to the public. Wall St and the government certainly are doing their part to normalize, regulate, and profit from crypto assets. The key question is, will nation-states accept, play along, and bid up crypto and Bitcoin? (The Global South may not want to play ball and prop up U.S. dollar hegemony?) Trump, in true Trumpian fashion, has used China as a threat to sell his plan; but if we are completely honest, China’s government has been far more responsible in dealing with & strictly prohibiting and regulating crypto, as a rogue asset, than the American gov.
If all else fails, the United States just might want to nationalize the Fortune 500 and the billionaire class… and strip the companies & the elite of all assets and sell ‘em off? This too, could pay down considerable debt. Perhaps the empire could be put on the market… although I’m sure few nations will stand in line to purchase Boeing products or Lockheed’s F-35.
In the meantime, all hail Bitcoin. Depending upon one’s perspective, the new financial messiah or yet another Ponzi scheme has arrived.
(Notice, all discussion on the FED issuing a digital currency, so far, has been shut down, which would mean Bitcoin appreciation accrues to private individuals & government holdings - not exclusively to the taxpayer; notice, this entire exercise could be a Trojan horse for a far grander agenda, like, depending upon the degree of appreciation, replacing the dollar altogether with private sector digital currency.)
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