Veteran macro investor Luke Gromen thinks Bitcoin (BTC) or gold will skyrocket in price if either is used as a reserve asset by the US.
In a new YouTube video, Gromen says that the US suffering from a “resource curse,” which means the country produces one native commodity – the dollar – in very large size and cheaper than than any other nation.
Gromen notes that while the US monopolizes dollar production, the rest of its economy is shriveling away to financialize the USD.
“The United States is the Saudi Arabia of dollars. In the short run, this is a good thing. In the long run, it means the rest of the US economy evolves so that we become very financialized. We become de-industrialized and that leads to high levels of wealth inequality, high levels of political instability…
It means it’s a national security risk.”
But Gromen says the US can mend its “resource curse” by choosing gold or Bitcoin as its reserve asset.
“You fix it by getting rid of Treasuries as the primary reserve asset. Instead of in Treasuries, you settle deficits in a neutral reserve asset that floats in all currencies. Either gold or Bitcoin, that’s it.
What you then end up doing is, obviously given the size of the US trade deficit and current account deficit, [there’s] a lot of demand to settle. We’re going to need a lot of gold or Bitcoin at current prices to settle those. That means the price of gold or Bitcoin [as a] neutral reserve asset has to go up a lot in dollar terms.”
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The post Bitcoin Has To ‘Go up a Lot’ if the US Uses BTC As Reserve Asset, Says Investor Luke Gromen – Here’s Why appeared first on The Daily Hodl.