Former US President Donald Trump has always been a critic of cryptocurrencies. He has spoken out on cryptos this week and most of what he said is not complimentary. President Trump is not a fan of crypto assets, and he has said it several times. The billionaire former president has been quite vocal on digital assets during his interview on Fox Business “Varney & Co.” on August 31.
Trump told host Stuart Varney while unleashing endless scathing anti-crypto comments:
“I like the currency of the United States. Investing in crypto assets is potentially a disaster waiting to happen.”
Fox Business reported that President Trump thinks that cryptos hurt the US currency and economy and “we should be invested in our currency.”
Cryptocurrency Or US Dollar?
In June 2021, Trump said that bitcoin is just a ‘scam’ and blamed it for watering down the US dollar. At the time he said:
“The currency of this world should be the dollar. And I don’t think we should have all of the Bitcoins of the world out there. I think they should regulate them very, very high. It takes the edge off of the dollar and the importance of the dollar.”
This week, Trump just said that ‘it may be fake’ while referencing Bitcoin and the crypto market. That seems to be his go-to answer for anything that he does not agree with. Over the past year, the US dollar has been performing dismally.
Based on the Wall Street Journal Dollar Index (DXY), it remains at the same place that it was this time last year. This index measures the value of the United States dollar relative to 16 major foreign currencies.
The Counter Argument
The US dollar is undisputedly the world’s reserve fiat currency. However, it is far from stable itself and might also be considered to be a ‘potential disaster’ in case several factors are considered.
Since the pandemic hit hard in early 2021, the Federal Reserve has already printed trillions of dollars for stimulus packages and quantitative easing. The more cash that is introduced into the monetary system, the lower the value every dollar has. Combine that with the interest rates at zero and the inflation at 5.4%, it does not go well for Trump’s precious dollars.
in August 2021, it was reported that the Fed’s balance sheet (assets and liabilities) was $8 trillion and set to continue growing. Most of these liabilities are the dollar bills that the central bank put into circulation to acquire assets like the $120 billion per month in bonds and mortgage-backed securities.
Recovery from the pandemic is expected to take many years, maybe even decades, thus the disaster that is waiting to happen might well be spawned from fiat and central bank monetary manipulation.