John Oliver’s definition of cryptocurrency as “the parts of money you don’t understand combined with the parts of computers you don’t understand” has long been a favorite of mine, but this might almost be better.
Speaking of not understanding, it’s gibberish like this that persuaded me that Trump is a deeply stupid man. The MAGA types who like to pretend he’s a polymath genius are deluding themselves and it’s embarrassing. When Trump presents his “brilliant” ideas on how to solve problems, they’re all at the intellectual level of That Loud Angry Guy at the End of the Bar. And when you ask him to explain something he claims to know, you get this: desperate waffling, like a student who hasn’t done the assigned book report, only even more incoherent. It’s transparently clear that he doesn’t understand whatever he’s been told and hasn’t even tried to.
I’ve always assumed that he was smarter when it came to his core competencies of real estate, money laundering and scamming people, but maybe not. Maybe his apparent permanent, desperate need for money is because he’s never been good at those either, and constantly gets rooked by people who are 10% smarter than he is.
I can, however, explain what he’s on about when he talks of “writing a little Bitcoin check” and wiping out the deficit. The crypto people at the conference he went to persuaded him that the US needed to establish a “strategic Bitcoin reserve”, by buying something like $70 billion worth of Bitcoin. Trump was all for it, perhaps because those nice people also promised to throw around $200 million to his campaign, some of which was bound to finish up in his own pockets by the usual self-dealing route.
For comparison, the US currently holds around $240 billion in foreign reserves and other financial goods, so this would be the equivalent of more than a quarter of that, in a single “currency”. It would also be a straight wealth transfer from the US government to the Very Rich People who own most of the Bitcoin, which is consistent with past Trump policy. The Very Rich People like it because not only do they get to exchange some of their fantasy football nerd play money for hard currency, but the value of their remaining holdings goes up, crypto acquires the look of legitimacy, and future US governments will be much more reluctant to risk depressing the value of crypto by imposing strong regulations. It’s win-win-win-win for them.
Anyway, the crypto folks told Trump that if he bought all that Bitcoin, then in just a few decades it would be worth more than half the national deficit. I forget how much one Bitcoin would need to be worth for that to be true – something close to a million bucks, I think. That raises the question of why, if Bitcoin is going to be so insanely valuable, the people pushing to unload their Bitcoin on the Treasury don’t just hang onto it themselves. Maybe they’re patriotic altruists.
Anyway, Trump turned that “half the deficit” into “all the deficit” in his own mind, probably thought Bitcoin would appreciate overnight (something not even the Bitcoiners dared claim), and fantasized about “writing a little check”. Naturally, he didn’t understand that even if it all played out as advertised, the US couldn’t and wouldn’t just unload tens of trillions of dollars worth of crypto onto the market.
So that’s what he had in mind, but as usual his attempt to express it is clouded by his own inarticulacy, and the fact that he has misunderstood everything important about it.
