Veteran macro investor Luke Gromen believes that Bitcoin or gold will see a significant increase in price if either is used as a reserve asset by the US. Gromen points out that the US is currently experiencing a “resource curse,” where the country primarily produces the dollar in large quantities and at a lower cost compared to other nations. As a result, the rest of the US economy is becoming increasingly financialized, leading to wealth inequality, political instability, and national security risks.
Gromen suggests that the US can address this issue by replacing Treasuries with gold or Bitcoin as its primary reserve asset. By settling deficits in a neutral reserve asset that floats in all currencies, such as gold or Bitcoin, the US can reduce its dependency on the dollar. However, Gromen notes that this shift would require a significant amount of gold or Bitcoin at current prices to settle the US trade deficit and current account deficit, leading to a substantial increase in the price of these assets in dollar terms.
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In conclusion, Luke Gromen’s insights highlight the potential impact of using Bitcoin or gold as reserve assets by the US. By moving away from Treasuries and adopting a neutral reserve asset, the US can address its resource curse and reduce its dependence on the dollar. This shift would not only have economic implications but also political and security consequences. Stay informed and follow us for more updates on this developing story.
Overall, Gromen’s analysis underscores the need for the US to reconsider its reliance on the dollar and explore alternative reserve assets like Bitcoin or gold. By diversifying its reserves and reducing financialization, the US can potentially mitigate wealth inequality, political instability, and national security risks. Subscribe to our newsletter and follow us on social media channels to stay informed about the latest trends in the financial landscape. Don’t miss out on important insights and updates that could impact the future of global economics.
