Crypto capital of the world
Trump posted on his pseudo-twitter site: “I will make sure the U.S. is the Crypto Capital of the World.” He announced something he calls a US crypto strategic reserve.
What, exactly, is a crypto reserve?
Look, I get it. Money is whatever people use as a medium of exchange and a store of value. And crypto is used as a medium of exchange, albeit mostly by wholesale drug dealers, money launderers and extortionists. But crypto as a store of value? Please. It would be more accurate to describe cryptocurrencies as a tool for pump-and-dump.
Gold is rare on the earth’s surface, so it might make sense to have a gold reserve. It certainly did when the dollar was on the gold standard. But the US dollar went off the gold standard in 1971, so one might wonder what the purpose of a gold reserve is anymore. And a crypto reserve is a reserve of what . . . electrons?
The disturbing possibility is that this is about destroying Treasuries as the reserve currency. From the discussion thread at the link:
“ . . . it would work by statutory revaluation of the gold reserves and using the resulting increased valuation to buy crypto. The specific provision would presumably be an obscure provision in one of the current omnibus-type bills. Unless I’m missing something, I don’t see much difference between that and the platinum coin in spirit, but the magic invocation of gold could give it a respectability that the other wouldn’t have.
“If that’s the play, it’s kind of emblematic of this regime– creating nothing from nothing, but with a big public show.”
A more benign but cynical take is that the goal is to boost the price of Bitcoin so Trump and his crypto pals can make a quick buck; the pump of yet another pump-and-dump scheme.
“The main argument for a Strategic Bitcoin Reserve seems to be that Bitcoin holders worry about an impending shortage of greater fools and need the US government to act as the greatest fool of last resort.”
~ David Frum
US crypto strategic reserve scam
What, exactly, is a crypto reserve?
Look, I get it. Money is whatever people use as a medium of exchange and a store of value. And crypto is used as a medium of exchange, albeit mostly by wholesale drug dealers, money launderers and extortionists. But crypto as a store of value? Please. It would be more accurate to describe cryptocurrencies as a tool for pump-and-dump.
Gold is rare on the earth’s surface, so it might make sense to have a gold reserve. It certainly did when the dollar was on the gold standard. But the US dollar went off the gold standard in 1971, so one might wonder what the purpose of a gold reserve is anymore. And a crypto reserve is a reserve of what . . . electrons?
The disturbing possibility is that this is about destroying Treasuries as the reserve currency. From the discussion thread at the link:
“ . . . it would work by statutory revaluation of the gold reserves and using the resulting increased valuation to buy crypto. The specific provision would presumably be an obscure provision in one of the current omnibus-type bills. Unless I’m missing something, I don’t see much difference between that and the platinum coin in spirit, but the magic invocation of gold could give it a respectability that the other wouldn’t have.
“If that’s the play, it’s kind of emblematic of this regime– creating nothing from nothing, but with a big public show.”
A more benign but cynical take is that the goal is to boost the price of Bitcoin so Trump and his crypto pals can make a quick buck; the pump of yet another pump-and-dump scheme.
“The main argument for a Strategic Bitcoin Reserve seems to be that Bitcoin holders worry about an impending shortage of greater fools and need the US government to act as the greatest fool of last resort.”
~ David Frum
US crypto strategic reserve scam
Crypto”currency” isn’t currency. It’s a speculative investment like tulip bulbs or NFTs. People buy it hoping the price will go up so they can sell and make a profit. It hardly ever seems to be used as money in any normal sense. A crypto strategic reserve would be like a tulip-bulb strategic reserve.
@Infidel,
Yep. Like NFTs, crypto is based on the greater fool theory of investing.
Infidel:
I agree. There does not appear to be much of value backing it other than a desire.
Agreed, I would classify this as waste, and fraud, and abuse.
There are good uses of strategic reserves; oil being one. The government also did this with dairy. To ensure an adequate supply the government agreed to buy all the excess produced. It made cheese out of it because it could be stored a long time. The government gave it away to the needy. The same could be done with other public necessities like eggs. Powdered eggs store very well. If a supply issue arises the government would stop buying eggs which would increase the supply available to the public. It would provide some price stability to both producers and consumers. Just a thought, I doubt we ever have an egg supply issue.