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I don’t see any serious critique of his comments in the comments of this note.

I don’t think he’s wrong on many points.

- there will absolutely be people cashing out

- bitcoin price could absolutely tank if blackrock or any big party decided to sell off (very possible)

- 1 million bitcoins is a significant portion of the total that would have an impact on overall fiat value up or down depending on events that unfold

What I have issue with:

I doubt any tax dollars would actually be used to purchase this amount of bitcoin.

100b may sound like a lot but it’s still peanuts in the grand scheme of demonetization of other assets.

There would be no need for bailouts unless BlackRock and friends forked but the network decided to sell them off. In this case you might have a need for bailouts. nostr:note16f76suqdw4g6evv6ayvhn6dfddfrkvhagfvfneyz7wq8z86y9eusgwgwka

Judge Hardcase 1y ago

I don't really take issue with any of his comments - it's mostly just run-of-the-mill normie FUD. (I'm even happy to concede that any money the government spends is effectively 'taxpayer' money).

What I think he is demonstrably wrong about is that the bill as currently written doesn't require taking on any new debt - at least for a while.. It essentially calls for the ~$11B in gold certificates currently held by the Fed to be updated from their $42.22 per ounce value (a relic of a 1970's statute) to the current market value - and the difference to be returned to the U.S. Treasury. At the current market rate for gold this would provide the Treasury with ~$700B that it didn't have to borrow from anyone.

Is $700B enough to buy 1M Bitcoin slowly over 5 years? I don't know, either (but I doubt). So maybe they would have to start borrowing to eventually achieve this. Though, in the meantime, it would actually temporarily wipe out a significant drop of the debt (and the associated interest payments) - so there's that.

PS. The upgrading of the gold certificates sounds too good to be true to me. I mean, why hasn't anyone suggested doing it before now to pay for their own pet project? It feels like there must be something that makes it legally undoable; but, I haven't seen the argument against it, yet... and it's still in the latest text of the proposed bill.

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Judge Hardcase 1y ago

"(c) Federal reserve system gold certificates.—Not later than 180 days after the date of enactment of this Act, the Federal reserve banks shall tender all outstanding gold certificates in their custody to the Secretary. Not later than 90 days after the tender of the last such certificate, the Secretary shall issue new gold certificates to the Federal reserve banks that reflect the fair market value price of the gold held against such certificates by the Treasury, as of the date specified by the Secretary on each new gold certificate. Upon issue by the Secretary, each Federal reserve bank that receives a new gold certificate shall remit the difference in cash value between the old and new gold certificates to the Secretary for deposit in the general fund within 90 days."

https://www.congress.gov/bill/118th-congress/senate-bill/4912/text

Judge Hardcase 1y ago

"The gold certificate account reflects the receipts issued to the Reserve Banks by the Treasury against its gold holdings. In return, the Reserve Banks issue an equal value of credits to the general account of the Treasury, computed at the statutory price of $42.22 per troy ounce. Because nearly all of the gold held by the Treasury has been monetized in this fashion, the Federal Reserve Banks' gold certificate account of $11 billion represents the nation's entire official gold stock."

https://fred.stlouisfed.org/series/WGCAL