Government response to crypto is a clear sign that it feels shaken by the remarkable gains it’s seen this past year.
January 11, 2021
By: Bobby Casey, Managing Director GWP
Government at every level has been particularly reckless this past year. It took a relatively healthy economy and threw it onto life support in a matter of months. Then to resuscitate it, it decided to spend untold amounts of money. And it barely accomplished that much.
In the midst of people literally crying for help, the government gave several rounds of “help” to other government entities like the Smithsonian Institute or foreign governments. All that borrowed money with no chance of getting any return on that investment.
How could they? The market was all but shut down. Even the business loans offered through these stimulus bills were not investments in good ideas. They were bailouts and stop gaps for businesses regardless of their ability to function at a profitable level.
It’s like a massive reboot of the student loan model.
And with all this spending comes, more “printing” or injections of new money into the system. Not counting the most recent stimulus, $9 trillion in stimulus money was “created” as of October 2020:
Estimates say, in 2020 alone, the U.S. has created 22% of all the USD issued since the birth of the nation.
This has implications. And one of those implications is how cryptocurrency has rallied in the past year. Around this time last year, Bitcoin was valued at approximately $7,000 USD. As of January 10, 2021, Bitcoin is at $37,965.
In fact, it’s grown faster and greater than gold. Gold last year was at $1,774. A year later, gold is at $1,850. The markets are leaning more on crypto than gold, which is something to watch.
Some people predict it could grow to thirteen times that value in under ten years. A very conservative statement considering the leaps and bounds its made in the last ten years, but I’m here for it all!
Here’s the thing with anything that is perceived as a legitimate threat to the status quo, it’s ideas that help make people just a little freer. You can tell by the response from the state what different things mean to them. The angrier the response, the greater the threat. The more benevolent the response, the more things are going their way.
With the pandemic, the government response was clearly a power grab, and when people called out, it was their opportunity to foster dependency by creating a sense of resentment toward those who wouldn’t indulge a larger welfare state. Something similar to a confidence scheme where they pull one over on large groups of people at a time.
In the case of people forsaking one state for another just within the union, we see tax hikes against those leaving with great amounts of wealth. The same thing with people working remotely for a company that resides in one state, while the employees reside in a different state. This is an obvious panic of states losing revenue.
Look at the response to the run on the capitol building. The run on the capitol is being called “terrorism” and an “insurrection”. Not the same terminology used for the protests in the summer of 2020. Those protests were considered the noble voices of the unheard, a la Martin Luther King, Jr.
Nonetheless, the response to the storm on Washington DC will be a resurgence of repurposed bills concerning “domestic terrorism”. Another way of silencing some people, and and excuse to further trample people’s 4th amendment rights.
Here comes cryptocurrency, skyrocketing over the past 12+ months. Expect to hear more about money launderers, tax evaders, and terrorists because the US Treasury must know where every dollar is going and where every dollar came from:
The US Treasury Department proposed strict regulations for cryptocurrency exchanges earlier this month to identify owners of digital assets in the US.
The Treasury Department mentioned that crypto exchanges currently operating in the US are required to verify the identity of owners if the transaction exceeds $3,000. The Treasury also asked exchanges to submit the information of the owner of a crypto wallet directly to the Department if a transaction exceeds $10,000.
The crypto industry has its work cut out for it in staying several steps ahead of the US government when it comes to privacy protection and encryption.
While they frantically try to corral the crypto cats, the bigger question is how crypto is changing how countries behave.
The headline reads: Venezuela Pays for Imports from Iran and Turkey with Bitcoin to Evade Sanctions.
The article goes on to explain how the nation’s “anti blockade laws” allow the executive (in this case Nicolas Maduro and his gang of thugs) to “use all the cryptocurrencies in the world, public, state or private, for internal and external trade.“ It also authorizes “the creation and implementation of any financial mechanism, including the use of crypto assets and instruments based on blockchain technology.”
It ends with mention of Iran also looking for ways to mine and utilize Bitcoin to dodge sanctions.
The tighter the US government tries to hold on to control, the more it seems to slip away. I think cryptocurrencies pose a legitimate threat to the status quo. Not just in monetary policy, but in overall economic regulation. And not just with individuals, but also with the countries they are trying to sanction into submission.
As the US tries to tax and spend its way out of the incredible mess its created, crypto will inevitably see greater gains. With greater gains, and more people and governments investing in it, the more heavy-handed we can expect the US response to be to it.
Click here to schedule a consultation on how you can protect your assets from overreaching governments, or here to become a member of our Insider program where you are eligible for free consultations, deep discounts on corporate and trust services, plus a wealth of information on internationalizing your business, wealth and life.