Political/national security perspective on bitcoin
Interview with Luke Gromen, who has an investment company. Discussion of political/national security aspect of bitcoin is interesting.
Some high level points:
- Success of bitcoin would undermine the dollar hegemony
- Political implication of shift to bitcoin: undermines ability to fund the military and social services
- IMF research hows 3 ways out of sovereign debt bubble: (1) default, (2) financial repression/market manipulation (3) hyperinflation
- Luke Gromen speculates that the US government is at some level aware that bitcoin would undermine dollar hegemony, and is looking the other way intentionally
- Argues China has taken advantage of US dollar hegemony and exploited it against US. They borrow dollars, lend those dollars, and accumulate hard assets. China accumulates finite hard assets for non-finite US dollars
- End result is Fed subsidizes China's accumulate of resources
- China, Russia, others are buying gold rapid rate
- US cannot buy gold. Doing so would undermine US dollar
- Luke Gromen suggests Fed accumulate bitcoin, let it run and become global reserve currency. Undermines China/Russia's gold accumulate strategy
- Comparison to Weimar Germany: hyperinflation was very volatile, similar to bitcoin. Creates liquidation risk if one attempts to leverage/borrow in the hyperinflating asset
- Argues if he can figure it out, CIA must be aware of the situation
- Solution Triffin's dilema is simple: separate reserve currency from fiat
- Gold price is held back by paper gold. Hard to source and take delivery of $100 million of real gold (vs. paper gold)
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