Trump Could Revalue Bitcoin Radically Higher Like Oil In 1973, Says Top Economist

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As a seasoned crypto investor with over two decades of experience in the financial markets, I find Luke Gromen’s analysis on former President Trump’s potential influence on Bitcoin intriguing. His comparison of Bitcoin to oil and the strategic implications it carries resonates deeply with my understanding of market dynamics and historical precedents.

In a conversation with Natalie Brunell, Luke Gromen, a well-known macroeconomic expert and head of FFTT LLC, offered his thoughts on how former President Donald Trump’s actions could impact the value of Bitcoin. The focus was on Trump’s proposal to accumulate Bitcoin as a strategic reserve, and his likening it to oil.

Bitcoin As ‘The New Oil’

Discussing Trump’s potential investment in a large amount of Bitcoin over the coming years and its worldwide ramifications, Gromen chose to examine historical precedents and tactical economic moves. Reminded of Trump’s remark at the Bitcoin 2024 conference where he stated, “Bitcoin is the new oil,” this comment sparked curiosity in Gromen, leading him to delve deeper into strategic implications beyond mere political posturing.

Gromen reminisced about Trump’s statement from August, where he mentioned that he could potentially settle U.S. debt using Bitcoin. This remark sparked curiosity among economists, leading some to speculate if Bitcoin might serve a role similar to oil in the future. In other words, they wondered if Bitcoin would experience inflation like oil does.

He brought attention to a significant historical incident that occurred around the mid-1970s, specifically mentioning that oil prices skyrocketed by 400% between October ’73 and April ’74 as Gromen pointed out. He referenced an interview with the former Saudi Oil Minister, Ahmed Zaki Yamani.

In a 2010 interview on CNN International, the former Saudi Oil Minister Ahmed Zaki Yamani shared that he had attended a meeting of the Bilderberg Group, specifically at a Swedish island in October 1973. During this gathering, Henry Kissinger allegedly suggested that the price of oil was about to rise by 400%. According to Yamani’s account on CNN, this prediction came true. It’s important to note that these are not Gromen’s words but rather those of the former Saudi oil minister as reported in the interview.

Based on an economist’s perspective, the U.S. was expanding the oil market to cover its budget deficits by investing petrodollars into U.S. debt. This practice essentially resolved the U.S.’s fiscal issues post-Vietnam War and transitioned the economy from a gold standard to an oil standard, as Gromen explained.

Gromen proposed an idea that Bitcoin might be comparable to oil in today’s context. He mused if Bitcoin could undergo inflation similar to how oil did, leading to increased stability of coins, which in turn could buy more U.S. Treasury bills. By boosting the price of Bitcoin substantially, the United States could potentially draw global funds into U.S. Treasury bills via stablecoins, potentially resolving its urgent debt problem.

As a crypto investor, I recently took note of a report by the Treasury Borrowing Advisory Committee (TBAC), which included two supplements. One of these focused on the unsustainable state of the U.S. fiscal situation, while the other delved into “Digital Assets and the Treasury Market.” In essence, I see this as a signal from the biggest banks, suggesting ways in which digital asset markets could potentially assist in addressing the urgent fiscal and debt predicament faced by the United States.

Previously serving as Speaker of the House, Paul Ryan joined the conversation. Gromen referred to an op-ed by Ryan in The Wall Street Journal, where he suggested that stablecoins might aid the U.S. in addressing its debt issues. This shared viewpoint among influential figures prompted Gromen to ponder a collaborative approach integrating Bitcoin and stablecoins to boost the American economy.

Gromen proposed a solution to make the U.S. dollar less powerful while enhancing the American monetary system: by inflating Bitcoin’s value, it might increase the popularity of stablecoins, leading to higher demand for T-bills. This process could attract dollars from global financial markets into the U.S., potentially resolving debt problems and boosting economic growth at the same time.

Gromen made clear that his perspectives are tentative, stemming from recent findings. “It’s a fresh perspective; it’s not something I’m deeply committed to,” he acknowledged. Yet, he finds the alignment of Treasury reports, political commentary, and historical precedents convincing. “I believe they’re considering it this way. Yes, I truly do,” he summarized.

At press time, BTC traded at $96,751.

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2024-12-04 15:27