A senior White House official has hinted at the possibility of the U.S. utilizing its gold reserves to acquire more Bitcoin (CRYPTO: BTC).
“If we actually realize the gains on the U.S. gold holdings, that would be a budget-neutral way to acquire more bitcoin,” Hines said adding that there’s been “countless ideas” and the “best ideas" will be enacted by President Donald Trump.
White House Says Gold Reserves May Be Used Stolen to Purchase Bitcoin
This is genuinely the Dumbest idea Trump’s white house has come up with yet. Trading actual money for made up internet points.
I mean gold has actual value in jewelry, decorative, in electronics and probably other things that I can’t remember off of the top of my head. But it is actually valuable by itself so it’s stupid to swap it for something that fluctuates as heavy as bitshit
Gold’s industrial value is a tiny percentage of it’s market value. Like fiat currency and Bitcoin, the value is that other people think it’s valuable.
Gold’s price is more stable because it has more money invested in it so larger percentage swings are way less likely. Just like how penny stocks can see trading says where the value swings 40-50%, while Apple only moves 1-2%.
I don’t think trading gold for Bitcoin is a good idea, but gold’s value is just as artificial as Bitcoin’s and the value of both stems from the same source: speculation.
The problem is that cryptocurrencies are created on the fly specifically for the purpose of stealing, you create a new coin, promise there will only ever be 1000 coins minted, wait for everyone to put their money in the coin and then revil you secretly had a million coins under your name and you instantly own the value of all the coins minus the rounding error of the thousand coins everyone else has, it’s true fiat currency is an illusion but at least it’s a shared illusion governed by consensus instead of one millionaires scam, this is just one basic problem with crypto currency but all of them have the same issue of an individual probably trying to get rich creates the rules that govern them.
This is just corrupt pillaging with extra steps.
Remember when minting the $1 trillion coin was considered the craziest idea?
These actual mouth breathing morons have no idea what they are even attempting to describe.
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https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm
https://wikipedia.org/wiki/Gold_certificate_(United_States)
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The Federal Reserve doesn’t actually own, nor physically possess, any physical gold, that they could just sell off or speculate with.
When FDR outlawed gold private ownership in 1934, all physical gold was handed over to the US Treasury, and the Federal Reserve (and other banks) were given gold certificates, valued at $42.22… per ounce… a set value that hasn’t changed, and is used for the Fed’s modest valuation of its previously held gold reserves… which are utterly insignificant and dwarfed by the other assets it holds.
(This isn’t super current, but it gives you an idea. Light blue is gold certificates. Its a one pixel thin line at the bottom. The overall balance is even more huge than this now after Covid, and Gold Certs, even if they were revalued from $42.2222 to the current market rate, would basically be small, it would go from about 10 billion to 750 billion, when the Fed’s current total assets are about 7 trillion)
About 5% of the US Treasury’s gold is held at the New York Fed, but the Fed doesn’t own it, it’s just there because there is a vault there. The rest of the US’s gold is physically held at Treasury operated locations.
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What the Fed does own are Gold Certificates, back from 1934, which are still valued at the old $42.2222 price, in terms of the Fed calculating its own balance sheet.
To… have the US gov… order the Fed to sell off its gold certificates… that’s not a thing the US gov can actually legally do, not without asserting total direct control over the Fed, and thus basically instantly making its existence pointless…
Again, to repeat, the US government cannot legally command the Fed to sell off its gold certificates, the Fed cannot legally sell its gold certificates, nor could said certificates be legally exchanged for actual physical gold from the US Treasury.
This would be approximately analagous to the US government ordering a corporation to sell off its own capital assets and then just sending the money from that sale to a government account.
It is expropriation.
For this to be any kind of legal, they’d have to repeal or greatly amend … at least the laws that established the Federal Reserve, and the Gold Reserve Act, likely many more… or basically do a whole bunch of rat fuckery to get their own people in positions on various Fed Reserve boards, and possibly prevent other people on Fed Reserve boards from actually voting on motions.
This would amount to basically performing a coup on the US’s central banking system, and putting total control of the monetary system within the Treasury.
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This would upend the century old bedrock of the US’s financial system.
Now, I am no full, uncritical advocate of the Federal Reserve system in its current form… but this is what it is, a complete usurpation of the US’s existing monetary system, which would then be put in charge of the astoundingly incompetent current administration.
This is how you get hyperinflation.
This is quite literally fucking with the money at its most fundamental level.
This is how you speed run destroying the USD as the world reserve currency.
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tldr;
This isn’t only stupid in the sense of ‘sell gold to buy bitcoin’ is a dubious investment strategy, it is particularly stupid in that if the actual pursued strategy is ‘force the Fed to sell its gold certificates’…
(to who? its not legal for any private entity to ‘purchase’ them at the market rate for gold, nor is it legal for said hypothetical purchaser, not even the Fed, to actually redeem them for physical gold, nor is it even legal for the Fed to sell them even of its own accord!)
… then that method blows up the entire concept of a legally defined, semi-independent Federal Reserve, and that then blows up the entire basis of the US monetary system.
This is how you get hyperinflation.
“In 1923, the collapse of the Weimar Republic’s economy impoverished millions and gave Adolf Hitler his first chance at seizing power” – How Hyperinflation Heralded the Fall of German Democracy
Well so far we’ve managed to do the equivalent of the Enabling Act in… was it 33 or 34? before the hyperinflation, but yeah, I get what you’re going for with the very apt Nazi historical comparison.
We are headed for ‘idiot American Real Estate Mob Boss Hitler rises to power during moderate economic decline for all but the top 5ish %, proceeds to immediately blow up entire economy with tariffs and hyperinflation.’
