Bitcoin
Next US President Could Fight Massive Inflation by Using Bitcoin to Back Treasuries: Macro Guru Luke Gromen
Macroeconomics expert Luke Gromen says the winner of November’s US presidential election could do something to effectively control rising inflation rates.
In a new interview on YouTube channel What Bitcoin Did, podcaster Peter McCormack asks Gromen what the next US president can do to strengthen the dollar and reverse the trajectory of “massive inflation.”
Gromen says one way to combat inflation now is to offer long-term Treasuries that come with low yields. According to the macro guru, investors will flock to the offering even if the interest rate is low if participants are rewarded with Bitcoin (BTC).
“We’re going to cut the yield on the 30-year Treasury bond, we’re going to issue $5 trillion in 30-year Treasury bonds at 2.5%, and every single one of them will get a boost from Bitcoin…
You can base it on the percentage of par reached on the day you issue them.
There is no credit risk to these bonds. There will never be any credit risk to these bonds. The only risk of holding a long-term Treasury is [or a] The value of a long-term sovereign bond in any country is really the value of the currency.
And I do that, I eliminate all inflation risk.”
A 30-year Treasury bond yielding 2.5% suggests that interest rates are stable for a long period of time.
Gromen explains that large companies rely on interest rates to determine the cost of capital. If interest rates change from time to time, these companies would have to adjust their prices to cover the additional cost of borrowed capital.
According to the macro expert, stable interest rates allow large companies to plan years ahead, knowing full well that the cost of capital will not change significantly. He notes that a fixed interest rate would allow corporations to compete and become highly productive.
Gromen believes that the scenario will eventually lead to price stability for goods and services.
“For so many years, Wall Street has controlled the political discussion in Washington… But the real economy, for most of us, when the lights come on, is this real market that needs to have some semblance of the real cost of capital for 10-, 20-, and 30-year projects…
This cost of capital needs to be solid [and] well understood for us to strategically do what we are trying to do and that is not being allowed.”
At the time of writing, Bitcoin was trading at $66,289.
Don’t miss a beat – Subscribe to receive email alerts directly to your inbox
To check Price action
Follow us on X, Facebook It is Telegram
Surf Hodl’s Daily Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be aware that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Image generated: DALLE3