In times of trouble for the U.S. dollar, we’ve often seen Bitcoin thrive as traders flee toward a safe harbor for their money.
We’ve reported at length on the positions and philosophies of gold bugs in precious metals and cryptocurrency, and how the two stack up. Bitcoin often comes out ahead in terms of the transparency and free flow of its digital value.
Now, there’s another one of these waves crashing on the financial shore, as U.S. Fed Chairman Jerome Powell suggests America’s debt service is becoming unwieldy.
Cointelegraph reports today show some of the comments by the Fed chair and his assertion that the way to solve a burgeoning national debt is the bailiwick of the White House and the legislature, and not of the central bank.
“Ultimately in the long run (handling current U.S. debt service levels isn’t) a sustainable place to be,” Powell reportedly said. “How to fix that — it’s easy to say that — how do you do that and when do you do that is an issue that is up to you and not to us.”
Powell’s comments highlight what was behind Fed strategy over the past six months – the interest rate cuts pursued by the Fed weren’t done because the economy is doing so great that we can afford to give everybody free money. They were done out of desperation – in the face of a capricious U.S./China trade war – in order to juice up the economy, in which we arrived at only a meager 1.9% growth.
Now Powell is trying to shed the blame for any laxity and lack of progress in the American economy, and in the process, siding with everyone from tea party hawks to antiwar protesters in suggesting that the U.S. spends entirely too much money. Well – duh!
The situation is dire – but some believe that leveraging cryptocurrency and the innovative community arouns it could help to dig us out of the hole at least somewhat.
“I’ve turned over in my mind countless times ways that we could solve this problem, and I’ve asked plenty others their opinion on the issue,” writes Jon Creasy at Hackernoon. “The Fed believes continuing to print money is the solution, but the futurist in me points to Venezuela as an example of printed currency gone wrong. … But what if there were a way that a non-human controlled entity could issue money at a set rate from now on?”
Will Bitcoin thrive as U.S. traders flee stock equity positions in the common market? It partially depends on how bad the common market gets – whether the Dow Jones and the S&P 500 continue to float on any shreds of positive news as global tariffs depress the connected economy. If, as Powell seems to be warning us, the Fed runs out of tools, we could see dramatic change in our economy, and the national debt isn’t helping.
