Luke Gromen, a veteran macro-investor, believes that the price of gold or Bitcoin (BTC), if used by the US as reserve assets will soar.
In a recent YouTube video Gromen claims that the US is suffering from “resource plague,” meaning the country produces a native commodity, the dollar, in large quantities and at a lower price than other nations.
Gromen states that the US is the only country to produce dollars, while its rest of the economy shrinks away in order to finance the USD.
“The United States are the Saudi Arabia for dollars. This is good for the US economy in the short term. Long-term, this means that the US economy will evolve in a way where we are heavily financialized. De-industrialization leads to high levels in wealth inequality and political instability.
This means that it is a risk to national security.”
According to Gromen, the US could cure its “resource plague” by selecting gold or Bitcoin for its reserve assets.
You fix the problem by eliminating Treasuries from your primary reserve assets. You settle deficits with a neutral asset, which is a reserve that is afloat in all currencies. It’s either gold or bitcoin.
You end up having to pay a large amount of money because of the US current account and trade deficit. To settle these, we’ll need to buy a large amount of bitcoin or gold at the current price. This means that the price of Bitcoin or gold [as] a neutral reserve asset must go up in dollar terms .”
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Sources of Images: Pixabay Creative Commons DALLE3
Luke Gromen, an investor at The ICD says that Bitcoin will ‘go up’ significantly if BTC is used as a reserve asset by the US. Here’s why.
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