As you know, Donald Trump is off and running with a new scam, namely cryptocurrency. Both $Trump and $Melania made about $6 billion on paper over the course of this month. Very impressive — until you learn how crypto works and why billionaires love it. It’s because crypto only works only for “the purchase of other crypto assets, money laundering, extortion and scams. As economist Paul Krugman has said, their market value rests on nothing but ‘“technobabble and libertarian derp,”’ to quote Robert Reich, who wrote the must-read article quoted below..
Plus, “they also use huge amounts of energy. And if they infiltrate Wall Street, they could destabilize the entire financial system,” also according to Reich. We could be on the brink of disaster, and all because Trump managed to convince enough of the electorate that he was going to get rid of their enemies.
The crypto industry has a dubious reputation. Sam Bankman-Fried, founder of FTX, one of the world’s biggest crypto exchanges, was last year sentenced to 25 years in prison for fraud. Changpeng Zhao, founder of a rival exchange, has spent four months locked up for money-laundering.
But the richest people in America with huge power — the oligarchy, including Trump — support cryptocurrencies. Not only can they make a fortune, but crypto advances their longterm aim of shifting financial controls out of a democratically elected system of government and into their own hands.
Now that he’s president, Trump is actively promoting crypto — reversing biden’s attempts to prevent the crypto industry from infiltrating wall street.
Biden’s tight rules made it prohibitively expensive for banks to hold digital assets on behalf of clients, and stopped them from developing their own crypto products, such as stablecoins (tokens pegged to the dollar or other assets).
The Federal Deposit Insurance Corporation (FDIC), a watchdog, stopped dozens of such projects on the basis that it did not know how digital assets ought to be treated in regulatory filings.
With Trump, though, banks and the crypto industry are now pushing in the same direction, and face little resistance. New and enormously profitable forms of risk-taking are emerging — for a small group of people able to take such risks and able (like the Trump family) to profit off their own crypto products.
Trump is putting crypto-friendly people into place at key federal agencies, boosting its prospects. In December, he picked Washington lawyer Paul Atkins, a known crypto booster, to chair the Securities and Exchange Commission, America’s main financial regulator.
Last week, the Securities and Exchange Commission altered its guidance so that financial institutions no longer have to account, on their own balance-sheets, for crypto assets held on behalf of customers. The S.E.C. rolled back accounting guidance that had deterred banks from getting involved with crypto.
You see the direction that this is going. All Trump has to do is convince MAGA that they could be — or are now — major shareholders in $Trump and $Melania and whatever he comes up with next. Elon Musk has shown how huge wealth can create enormous personal political power, Trump is doing the inverse, showing how enormous personal political power can create huge wealth. As Reich points out, in bold, “This dynamic — great power creating huge wealth, and huge wealth creating great power — is central to the oligarchic takeover of America. And both are premised on the corruption of democracy.”
Any wealthy person, corporation, or foreign leader wishing to curry favor with Trump now has a particularly easy means — just buy $TRUMP and $MELANIA cryptocurrency tokens.
The corruption will grow worse because neither Trump nor Musk has any sense of limits. Nor do any of the oligarchs surrounding them, such as David Sacks, who Trump picked to oversee his administration’s policies on crypto and artificial intelligence.
Like Musk, Sachs serves as a “special government employee,” which does not require Senate confirmation or full financial disclosure, and allows Sacks to maintain his business interests while influencing policy. Expect more conflicts of interest.
As crypto and banking begin to merge, bank deposits will become more vulnerable to movements in the crypto market, and banks more vulnerable to runs. That’s what happened at Silvergate and Signature, two crypto-focused banks which collapsed in 2023. Both were broken by a tumble in cryptocurrency prices that began in late 2021 and then reverberations from FTX’s collapse.
The biggest beneficiaries of all this are the highest rollers — the oligarchs who have been pushing crypto for years. And now Trump is in on it and stands to personally gain billions, as will those seeking to curry his favor by buying his coin.
Trump ran again to stay out of prison and now that he’s back in power he’s going to loot the public coffers. It is as simple as that.
**************
Friends, I am forced to self-promote and ask you for money. We had a bad year compared with 2023 and the end of the year has been catastrophic. Traffic died on November 5. We are a small blog and completely self-supporting by ad revenue, donations, and subscriptions. If you can afford a monthly subscription that would help us out. If you can make a small donation, likewise. Our only goal is to stay in business and give you the best content we can generate. You are the wind beneath our wings. Thank you. Ursula
I love the names they picked for their sh*it-coins.
“Strump” and “Smelenia”
When they collapse the empire maybe a revolution will rise from the rubble. They will take it down. Revolution happens when the masses suffer so severely they see no other way.
Those who make democracy impossible make revolution inevitable. John F Kennedy