The Insanity Of A Bitcoin "Reserve", And Gold Inflow Records Broken On Comex

Metals are on the move. Literally, they're moving across the ocean.

A Bitcoin Reserve is Super Dumb, Getting High on Your Own Stash

Bitcoin was born within a given price matrix that already existed. That means it is built on top of that given price matrix. That given price matrix was in dollars, which are based on gold. Bitcoin cannot possibly be money in the same way that I cannot go back in time and father my own father, or mother. It just does not make any logical sense.

The Fed is the issuer of the dollar. The dollar is by definition everything on the Fed's balance sheet. All base dollars, every single one of them, were issued out into the public for the purpose of acquiring whatever it is that's on that balance sheet. When you spend a dollar, you are spending a mix of all the stuff on that balance sheet, which includes, gold, some coin, and a whole bunch of paper promising to pay back those same dollars.

The dollar is already a loop in on itself.

For the Treasury to buy bitcoin as a reserve, the idea is to make the government richer because bitcoin "always goes up". And yet, in order for bitcoin to "always go up" the amount of dollars on offer for it must always increase. Dollars increase by debt increasing. These are all just simple facts. If the debt stops increasing, or loses value, bitcoin becomes worthless.

If most of the dollar's value is inherent in the value of dollar-denominated debt, and bitcoin is worth XYZ dollars, if the debt falls, and it will, the dollar falls, and therefore bitcoin falls. There is no way out of this logic circle.

Gold is the money, the dollar is its derivative, Treasurys are dollar derivatives, and Bitcoin is a Treasury derivative. If the Treasury were to hold bitcoin as a reserve, it would simply be holding a supermegaultracrazy derivative of the very debt that they themselves issue, to the Fed, which issues the dollar, which is used to buy more Bitcoin. This is all insane.

They'd be holding their own debt cubed, or to the 4^th power, or whatever layer Bitcoin occupies above Treasurys exactly I don’t know.

It would be the equivalent of the Treasury leveraging up on margin just before the market tops out. The whole idea is so completely nuts it makes me want to bash my head into a wall. Which I won't do.

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