As I have said before, to assume that President Donald Trump doesn’t really mean what he says, is wishful thinking. He might opportunistically change his mind at times, mostly dependent on who he was hanging out with last. But mostly he clings stubbornly to ideas he thinks to fully understand, better than anyone else in the room. Like the belief that tariffs are a universal cure to all of America’s perceived ills, or that immigrants are the spoilers of America’s greatness. This greatness is a central pillar of his thinking. Its manifestation is the right of the stronger.
“No one who can acquire something by force is dissuaded by the argument that it is unjust to do so; justice has no place, unless between equals in power,” asserted the superpower Athens two millenia ago, according to their contemporary, the historian and general Thucydides. This is, in a nutshell, Trump’s view of international relations. Whether he wants to retake the Panama Canal, to annex Greenland, or to incorporate Canada into the United States, if needed by military force, is determined merely by cost/benefit calculations, not by diplomatic etiquette, rules of behaviour, or ridiculously unenforceable international law. Once such words are spoken, the rules have changed, whether or not a military campaign materialises.
This leaves Vladimir Putin and his colonial conquest morally untainted. The reason why he retook the Crimean Peninsula, which Nikita Khrushchev gifted to Ukraine in the 1960s, and why he “liberates” the Russian-speaking east of Ukraine by integrating it into the Russian Federation is not justice, but to demonstrate his will and his power. The same holds true for Israel’s permanent conquests in Gaza, the West Bank, Lebanon and now Syria. The only motivation for Trump to object to Xi Jinping’s designs on taking Taiwan by force is the expected display of military might. Trump does not want Xi to be powerful, to challenge the notion that the US is the greater military power.
Both Putin and Xi may grab what they can, as long as their action will not ridicule America’s perceived supremacy. On this I do not expect Trump to change his mind.
An example of a quick change of mind is Trump’s stance on bitcoin. He had little regard for digital tokens in the past, asserting that bitcoin was “based on thin air”. “We have only one real currency in the USA, and it’s stronger than ever. It is called the United States dollar,” he crowed. This was then. Now he’s surrounded by bitcoin bros and financiers who want to nudge him into a pump-and-dump scheme. Now, calculating the possible financial upside for his own fortune, Trump talks about a ‘Strategic Bitcoin Reserve’ and the introduction of a Sovereign Wealth Fund (SWF).
“Who knows,” he mused on Fox Business, “maybe we’ll pay off our $35 trillion (referring to the national debt at the time, standing at $36 trillion now) – hand them a little crypto cheque, right? Hand them a little bitcoin and wipe out our $35 trillion.”
The idea to counteract a fast growing, increasingly expensive national indebtedness by financial speculation is certainly new. One would assume that less profligacy and a higher tax intake might do the trick. But then, the MAGA Republicans are not the grail keepers of fiscal orthodoxy anymore, happily endorsing Trump’s tax cuts.
The concept for the establishment of sovereign wealth funds was developed on different premises. Countries like Norway, or the Gulf nations, awash with money from their oil and gas exports, were certainly not worried by their insignificant debts, but by the exact opposite, an inflation-inducing tsunami of money, which they wanted to stuff away for a time in the far future when their raw-material-riches would be exhausted. A country that chronically spends vastly more than it earns, like the US, has nothing to save. To spend even more money for the sake of speculation, rather than, let’s say, on rewarding infrastructure investment, looks like mad desperation.
If fashion changes and cowrie shells gain popularity again, the tokens will be worthless, like tulip bulbs after the burst of the tulip mania bubble- Andreas Weitzer
As an investment class, and the wholehearted embrace by Wall Street has knighted it as such, bitcoin is comparable to art. Like a Van Gogh painting, it does not share the properties of a currency. It is neither an accounting unit, nor a means of payment, outside of barter arrangements. It is not a currency, because it is not backed up by any financial authority. As a store of value it is perhaps even more ephemeral than a painting. It cannot evade control, seizure, expropriation or the destruction of war. It is even more easily stolen, as we have witnessed. What makes it a keen object of speculation is its programmed rarity. The total amount of bitcoin units to ever come into existence is 21 million tokens. Not as rare as the Blue Mauritius stamp, but rare. And certainly not as beautiful as Vincent van Gogh’s Vase with Fifteen Sunflowers.
Bitcoin is highly volatile because only those people who hold and buy bitcoin will keep it valuable. If fashion changes and cowrie shells gain popularity again, the tokens will be worthless, like tulip bulbs after the burst of the tulip mania bubble. While bitcoin have reached six-figure prices and hoarders sit on untold riches, it is hard to argue that what we see is a foolish bubble. The worth assigned to it by its collectors may as well rise another 2,000 times soon. Who knows? The fact that the president of the United States, together with his best buddy Elon Musk, the richest man on earth, is endorsing its “strategic” value will boost exalted prices even further.
Last year, Cynthia Lummis, a 70-year-old senator from Wyoming and early bitcoin believer (since 2013 ‒ a few years after its inception), introduced last year the “Bitcoin Act 2024” to the Senate for reading and legislation. The act suggests the establishment of a Strategic Bitcoin Reserve, with the Treasury being obliged to buy 200,000 tokens annually for five years, financed by remittances from the Federal Reserve Bank, the bulk being based on a revaluation of its gold reserves.
Any tokens seized from criminal activities and accounted for by the Department of Justice will have to be transferred to the ‘Strategic Reserve’ too. Starting with the more than 200,000 coins arrested in the raid of the now defunct, bitcoin-based, Silk Road trading platform, a dark-net distributer of choice for drug traders and arms dealers. It is a sizable hoard to start with, one per cent of all existing bitcoins, worth $20 billion at today’s prices.
I don’t think Lummis’ legislation project will be a priority for President Trump in the first few months of his reign. Tariffs and immigrants first, then new demands to the devious beneficiaries of America’s security umbrella, all weaklings like us.
Trump, speaking at the Bitcoin 2024 Conference in Nashville, Tennessee, last summer, had already promised to “hodle” ‒ to hold on in speculator parlance ‒ to the arrested Silk Road tokens and not to ruin the market by allowing the DOJ to sell them. The community of speculators ‒ and financiers feeding on them ‒ will know how to thank him. What about repaying the $36 trillion debt? Trump was just kidding.
Andreas Weitzer is an independent journalist based in Malta.