Trillion-Dollar Coin And Other Nonsense Re: Bitcoin

Image Source: UnsplashTRILLION-DOLLAR COIN The trillion-dollar coin idea is a joke (laughable). It is usually mentioned in conjunction with schemes for paying down the national debt; or, as a means of avoiding the legal limits on the national debt and the accompanying side show from Congress each time the official debt limit is reached.After the convoluted process of minting and assigning $1T face value to the coin, it would be deposited on account with the Federal Reserve and then one trillion dollars would be disbursed to the United States Treasury.The coin would be about the size of a Silver Eagle and would contain 1 oz. of platinum ($923), with an assigned face value of $1T. Wouldn’t that be nice if we could all make a similar deposit of $1000 and subsequently draw out $1T (a one-billion fold increase)?The ostensible reason for the potential issue of the coin is to provide money to fund the government without having to increase the debt limit. That may be true on a technical basis, however, it is pure inflation and devoid of any legitimacy.Inflation is the debasement of money by government. The money is debased by continual expansion of the supply of money and credit. The $1T is an expansion of the money supply and is an example of pure inflation. The net effect of any potential issue of a $1T coin is just one more way for the government to inflate the money supply in order to get and spend money that it does not have. BITCOIN IS A STORE OF VALUE? Interestingly, the latest comments about Bitcoin as a store of value come from executives at investment banks that are involved heavily in Wall Street’s packaging and promoting of Bitcoin and other cryptocurrencies in retail product form (ETFs) and as an asset class for model portfolios and money management purposes. You can read what David Solomon/Goldman Sachs, Samara Cohen/Black Rock, and others had to say here.Do people that make claims about Bitcoin being a store of value even know how to define “store of value”? Investopedia says “A store of value is an asset, commodity, or currency that maintains its value without depreciating.” (italics for emphasis are mine)Bitcoin’s short history is characterized by extreme volatility. Bitcoin hasn’t shown the ability “maintain its value without depreciating”. Also, even to the extent that Bitcoin and other cryptocurrencies did present themselves better in terms of maintaining value without depreciating, they have too short a history for consideration as a store of value. It will take several decades before a realistic assessment can be made.Other extreme cases of similar sentiments coupled with wild claims for Bitcoin’s questionable value come from Dallas Maverick’s owner Mark Cuban and MicroStrategy co-founder Michael Saylor. Their statements and price expectations show a complete disregard for fundamentals. (see Comparing Bitcoin To Gold)Bitcoin and other cryptocurrencies have one unifying characteristic. They are digitized, blockchain-oriented processes for the private transfer of money.  It is the transfer process which has value, not the underlying unit of denomination (i.e., Bitcoin, Ethereum, etc.).  The decentralized nature of cryptocurrencies avoids the central clearing system which provides oversight and control by central banks and governments. That single fact, with the potential for tax evasion, is one of the primary reasons for the promotion and potential integration of central bank digital currencies (CBDCs). Investors take note: Any potential for profits from the crypto market will be severely diminished with further involvement by governments and central banks. Their intrusion, especially in the form of regulations and taxation, will have a crippling effect. (Janet Yellen Re: Cryptocurrencies And Terrorists)More By This Author:Silver’s 50-Year Bear Market
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