Should the US Treasury be buying bitcoin?
With Wyoming Senator Cynthia Lummis advocating for the US Treasury to create a bitcoin (BTC-USD) reserve, many are debating the merits of the department investing in cryptocurrency. On this week’s episode of Capitol Gains, Whalen Global Advisors Chairman Chris Whalen offers his take on the matter to host Rachelle Akuffo, Washington Correspondent Ben Werschkul, and senior columnist Rick Newman. “We're in the opposite situation that Franklin Roosevelt faced in 1933,” he explains. “We had deflation [in 1933]. Today we have inflation. That's why bitcoin has hit $100,000. Bitcoin is the best indication of inflation you could possibly have.” To Whalen, the answer lies not in crypto, but in gold. He believes the solution is for the Treasury to buy gold (GC=F) and sell credit default swaps. “You buy gold and start pushing the gold price up to where it should be,” he explains, “which is much higher than the current levels.” “Credit default swaps for the United States are trading at 40 basis points,” he adds. “That's twice Berkshire Hathaway. (BRK-B, BRK-A) When you start seeing corporates trading inside the United States in the credit markets, that's a problem. I think ultimately, we are going to have to respond to that.” “Unfortunately, nobody on Capitol Hill understands finance,” Whalen says. “Bitcoin is the problem. It's not the solution.” To find out more, listen to the full episode of Capitol Gains here. For more expert insight and the latest market action, click here to watch more Capitol Gains. This post was written by Nick Riccardo.
