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Consider Crypto: Coinbase CEO Bashes USA Swelling National Debt

#OhNoCrypto Finance

Quietly, throughout the booms and busts of the past few decades, the amount of sovereign or national debt the U.S. has been taking on has increased. Dramatically.

Just look to the chart below, which cites data from the U.S. Department of Treasury. As the chart indicates, the amount of public debt the U.S. has seen has risen well above $20 trillion — a figure larger than the entire GDP of the country.

Public debt of the United States from 1990 to 2019
Public debt of the United States from 1990 to 2019, Source: Statista

This has largely gone unnoticed — the U.S. isn’t directly charging its citizens to help pay back this debt. Yet, some think it is still an issue for the long-term prosperity of the States for it indicates the government needs to print an extremely large amount of money to keep operations afloat.

So what’s the solution? What’s the way out of this fiat mess?

According to Brian Armstrong, chief executive of the world’s most popular crypto company, it’s cryptocurrency. No surprise, right?

Crypto is a Way Out of Fiat Mess, Coinbase CEO Indicates

The Wall Street Journal on January 28th published an article titled “U.S. National Debt Will Rise to 98% of GDP by 2030, CBO Projects.

In it, the media outlet revealed that per a report from the Congressional Budget Office, “the national debt and sustained federal budget deficits will hit the highest levels since World War II over the next decade.”

According to Coinbase’s Brian Armstrong, this simple fact alone should make people “consider crypto.”

He wrote in a tweet thread that as it stands, “many people today still think of cryptocurrency as funny money, or a speculative asset class.” Despite this, Armstrong continued that eventually, there will be a “perspective flip” due to government money becoming said “funny money”:

But I believe we’re going to see this perspective flip, probably starting with young people as with many things, where holding a government’s currency is seen as funny money.

He added that when this happens, crypto will start to be seen as “real money” because “people can’t tamper with it (at least control is decentralized and I can trust people to review the open-source code).”

This harrowing report from the Journal comes shortly after Ray Dalio, one of the world’s most powerful hedge fund investors, wrote in an extensive LinkedIn post that “the world has gone mad and the system is broken.”

Dalio cited holes in the economy, including but not limited to  extremely low, and even negative interest rates for the creditworthy, the impending collapse of “sound finance” in “reserve currency countries and their currencies,” massive liabilities in pensions, a growing wealth gap, and, as the Journal article indicates, the large government deficits that he believes are almost certain to “increase substantially,”

Dalio isn’t supportive of Bitcoin, but has said that he expects for there to be a paradigm shift in the world’s economy.

Deutsche Bank Agrees With Positive Crypto Sentiment

It isn’t only Armstrong who thinks that crypto will start to overtake fiat as the government’s finances and fiat money as a whole become increasingly unstable.

In a Deutsche Bank report published late last year, the bank said that there are many  potential risk factors in the “current fiat system,” which bank analyst Jim Reid called “fragile” before adding that it “could unravel in the 2020s.”

Reid claimed that if this takes place, there will be a “backlash against fiat money and demand for alternative currencies, such as gold or crypto could soar.”

The Deutsche Bank analyst specifically looked to the high levels inflations of the dollar in the 1970s, which led to a surge in the prices of gold.

The post Consider Crypto: Coinbase CEO Bashes USA Swelling National Debt appeared first on Blockonomi.

OhNoCryptocurrency via @Nick Chong, @Khareem Sudlow