Just bought you new book. Someone who talked about btc in 2014 must be taken seriously! Thanks for the insights, your humour and balls. Not a paid subscriber yet, but getting there
Many thanks Dom. I'm staying long Gold, BTC and a number of miners. Makes a lot of sense.
Also, I may have mentioned it before but I have an account with Tally money, essentially a sterling account but based in gold. With the current debasement of fiat it's done very well and, in my view, will continue to offer an alternative way to hold sterling but, crucially, without the debasement associated with the usual run-of-the-mill bank accounts. If gold continues to rise and sterling tips over it will be an excellent place to store spare cash. Just fyi
I’ve also opened an account with Tally money. I’m a complete novice in the world of gold and was slightly reticent about going down this route. Opening the account was easy and once everything was accepted it was a breeze.
Ignore premature message please! Great article as ever and it reminded me of Bill Bonner’s quote ‘ most empires are built on theft, the USA’s is the first built on fraud’.
Part way thru' the new book, a serious and entertaining read. However because I am old a flippant thought keeps breaking in - it's a line from The Goon Show where Neddy Seagoon ( Harry Secombe ) finds gold and exclaims ' Gold ! gold ! - no more rags for me ! '
Dominic. You are the first person in the media, ( MSN or alternative) that has ever articulated the UK’s ownership of US Debt. I have been tracking it for years, and have no idea why “we” own so much. If you have any insights into this rather extraordinary situation, I would value your take. Thanks.
A number of commentators highlight this, though not the MSM. Find it difficult to believe that the UK powers that be are that stupid but I'm coming round to it given Rachel from Accounts' actions. And as for Brown's Bottom!
I'm not convinced that the US is extracting the dollar from reserve currency status and I think the GENIUS act will increase the use of USD around the world. To that end I asked Grok to comment:
------------
Question: "The GENIUS act backs stablecoins and promotes the practice of stablecoin issuers buying US Treasuries. This will help create demand for US debt. At the same time stablecoin dollars such as USDT and USDC will be released into the world's monetary system. Does this reinforce the USD as the world's reserve currency? Is it inflationary? Doesn't it put more USD outside the purview of the US Government, eg. African farmers could adopt USDT as a medium of exchange, thereby reinforcing the dollar as the reserve currency."
Answer: "The GENIUS Act, by requiring stablecoin issuers to back their tokens with U.S. dollars or short-term Treasuries, is designed to boost demand for U.S. debt, potentially reinforcing the dollar's status as the world's reserve currency. This mechanism could increase the attractiveness of U.S. Treasuries as a safe, liquid asset, especially if stablecoin usage grows into a multitrillion-dollar industry, as some projections suggest. The influx of stablecoins like USDT and USDC into the global monetary system could enhance dollar dominance by providing a digital, internet-native payment rail, particularly in regions with unstable local currencies, such as parts of Africa. This could indeed lead to adoption by entities like African farmers, using USDT as a medium of exchange, further entrenching the dollar's global role.
However, this also raises questions about inflation and control. The creation of new stablecoins, backed by Treasuries, could increase the money supply indirectly if issuers expand circulation rapidly, potentially adding inflationary pressure, especially if the U.S. Federal Reserve maintains an accommodative monetary policy. The act's emphasis on full reserve backing aims to mitigate this, but the scale of adoption and the velocity of stablecoin transactions could still amplify inflationary effects over time.
Regarding control, the placement of stablecoins outside the traditional banking system—where they could be used globally without direct U.S. government oversight—does reduce the government's ability to regulate their flow or enforce sanctions effectively. For instance, if African farmers adopt USDT, these dollars effectively operate beyond U.S. jurisdiction, potentially weakening the government's leverage over monetary policy or illicit activity prevention. This decentralization could bolster the dollar's reserve status by making it more accessible, but it also risks undermining U.S. sovereignty over its currency, especially if foreign issuers or unregulated markets dominate stablecoin issuance.
In summary, the GENIUS Act could reinforce the USD's reserve currency status by driving Treasury demand and global adoption, but it may also introduce inflationary risks and reduce U.S. government control over dollar circulation, creating a complex trade-off."
-------------
I'm not entirely convinced that Grok isn't just agreeing with me to please.
Whilst the GENIUS act supports the buying of US debt doesn't it also exacerbate the problems of the Eurodollar market with a large part of the dollar system outside the US?
I think devaluing the dollar is more about making US debt more affordable.
One final point, since USDT, USDC, etc are centralised currencies, aren't they back door CDBCs with the ability of 'switch-off' wallets, etc?
Dominc, I think you better dig into the feasibility of Bitcoin to act as a large scale medium of exchange note - large scale. I have done the math and the small size of the ledger used in Bitcoin could never support large scale use as a medium of exchange. For sure it’s price rise has happened based on a speculation of it’s continued rise. Likely most of the Bitcoin hype that we read (continually) is from those that already own it and they want the price to go up. Speculative rise, yes. Use as a medium of exchange, never will happen - do the math.
Thank you for your comments. Maybe you are right and when the great confrontation between the two happens in three or four years time Gold will win out.
Thank you for your comments. I don’t believe in this article I mentioned it bitcoin as a Medium of Exchange. I was talking about global reserve assets. Gold has no use as medium of exchange either.
Dominic - I can only surmise by these quoted excerpts that you meant medium of exchange. If just a reserve asset then there is no difference - who cares if one is real (gold) or the other is a mathematical construct?
“Bitcoin, as the world's best neutral digital currency, is going to have a role to play in all of this as well.”
“Eternal gold has a track record that is unrivalled. But it is an analogue asset in a digital world. Bitcoin is much more practical. Which will win out? Practical digital or impractical analogue?”
Thank you for your comments. Maybe you are right and when the great confrontation between the two happens in three or four years time Gold will win out.
Just bought you new book. Someone who talked about btc in 2014 must be taken seriously! Thanks for the insights, your humour and balls. Not a paid subscriber yet, but getting there
Many thanks, Gordon
Many thanks Dom. I'm staying long Gold, BTC and a number of miners. Makes a lot of sense.
Also, I may have mentioned it before but I have an account with Tally money, essentially a sterling account but based in gold. With the current debasement of fiat it's done very well and, in my view, will continue to offer an alternative way to hold sterling but, crucially, without the debasement associated with the usual run-of-the-mill bank accounts. If gold continues to rise and sterling tips over it will be an excellent place to store spare cash. Just fyi
Yes, I know Tally. I have met the dude that runs it a few times. Nice guy. Its users really like it. Which is a good sign.
I’ve also opened an account with Tally money. I’m a complete novice in the world of gold and was slightly reticent about going down this route. Opening the account was easy and once everything was accepted it was a breeze.
Thanks Christine. I was also impressed with the service
Thanks, again for letter many you new book!
Okay, excellent article and accompanying impression, remains as from a good wine
Reserve currency status can indeed be a curse, as I write in this article from 2012 (and which also formed the bulk of Chapter 5 of my book, The Golden Revolution Revisited): https://www.financialsense.com/contributors/john-butler/curse-reserve-currency-triffin-dilemma
Indeed. Thanks John
Ignore premature message please! Great article as ever and it reminded me of Bill Bonner’s quote ‘ most empires are built on theft, the USA’s is the first built on fraud’.
Great line
Part way thru' the new book, a serious and entertaining read. However because I am old a flippant thought keeps breaking in - it's a line from The Goon Show where Neddy Seagoon ( Harry Secombe ) finds gold and exclaims ' Gold ! gold ! - no more rags for me ! '
Oh, I didn’t know that that’s a great one
Dominic. You are the first person in the media, ( MSN or alternative) that has ever articulated the UK’s ownership of US Debt. I have been tracking it for years, and have no idea why “we” own so much. If you have any insights into this rather extraordinary situation, I would value your take. Thanks.
A number of commentators highlight this, though not the MSM. Find it difficult to believe that the UK powers that be are that stupid but I'm coming round to it given Rachel from Accounts' actions. And as for Brown's Bottom!
Stupidity. It’s not only at the national level it’s a lot of pensions, et cetera own it.
Just pre-ordered the book and audiobook, hope to catch a show in the future. Keep up the good work much love 🙌
Thanks Damien
Thanks for the commentary.
I'm not convinced that the US is extracting the dollar from reserve currency status and I think the GENIUS act will increase the use of USD around the world. To that end I asked Grok to comment:
------------
Question: "The GENIUS act backs stablecoins and promotes the practice of stablecoin issuers buying US Treasuries. This will help create demand for US debt. At the same time stablecoin dollars such as USDT and USDC will be released into the world's monetary system. Does this reinforce the USD as the world's reserve currency? Is it inflationary? Doesn't it put more USD outside the purview of the US Government, eg. African farmers could adopt USDT as a medium of exchange, thereby reinforcing the dollar as the reserve currency."
Answer: "The GENIUS Act, by requiring stablecoin issuers to back their tokens with U.S. dollars or short-term Treasuries, is designed to boost demand for U.S. debt, potentially reinforcing the dollar's status as the world's reserve currency. This mechanism could increase the attractiveness of U.S. Treasuries as a safe, liquid asset, especially if stablecoin usage grows into a multitrillion-dollar industry, as some projections suggest. The influx of stablecoins like USDT and USDC into the global monetary system could enhance dollar dominance by providing a digital, internet-native payment rail, particularly in regions with unstable local currencies, such as parts of Africa. This could indeed lead to adoption by entities like African farmers, using USDT as a medium of exchange, further entrenching the dollar's global role.
However, this also raises questions about inflation and control. The creation of new stablecoins, backed by Treasuries, could increase the money supply indirectly if issuers expand circulation rapidly, potentially adding inflationary pressure, especially if the U.S. Federal Reserve maintains an accommodative monetary policy. The act's emphasis on full reserve backing aims to mitigate this, but the scale of adoption and the velocity of stablecoin transactions could still amplify inflationary effects over time.
Regarding control, the placement of stablecoins outside the traditional banking system—where they could be used globally without direct U.S. government oversight—does reduce the government's ability to regulate their flow or enforce sanctions effectively. For instance, if African farmers adopt USDT, these dollars effectively operate beyond U.S. jurisdiction, potentially weakening the government's leverage over monetary policy or illicit activity prevention. This decentralization could bolster the dollar's reserve status by making it more accessible, but it also risks undermining U.S. sovereignty over its currency, especially if foreign issuers or unregulated markets dominate stablecoin issuance.
In summary, the GENIUS Act could reinforce the USD's reserve currency status by driving Treasury demand and global adoption, but it may also introduce inflationary risks and reduce U.S. government control over dollar circulation, creating a complex trade-off."
-------------
I'm not entirely convinced that Grok isn't just agreeing with me to please.
Whilst the GENIUS act supports the buying of US debt doesn't it also exacerbate the problems of the Eurodollar market with a large part of the dollar system outside the US?
I think devaluing the dollar is more about making US debt more affordable.
One final point, since USDT, USDC, etc are centralised currencies, aren't they back door CDBCs with the ability of 'switch-off' wallets, etc?
Yes, it’s going to retain some of its status via stable coins
Bill Bonner
Dominc, I think you better dig into the feasibility of Bitcoin to act as a large scale medium of exchange note - large scale. I have done the math and the small size of the ledger used in Bitcoin could never support large scale use as a medium of exchange. For sure it’s price rise has happened based on a speculation of it’s continued rise. Likely most of the Bitcoin hype that we read (continually) is from those that already own it and they want the price to go up. Speculative rise, yes. Use as a medium of exchange, never will happen - do the math.
Thank you for your comments. Maybe you are right and when the great confrontation between the two happens in three or four years time Gold will win out.
Thank you for your comments. I don’t believe in this article I mentioned it bitcoin as a Medium of Exchange. I was talking about global reserve assets. Gold has no use as medium of exchange either.
Dominic - I can only surmise by these quoted excerpts that you meant medium of exchange. If just a reserve asset then there is no difference - who cares if one is real (gold) or the other is a mathematical construct?
“Bitcoin, as the world's best neutral digital currency, is going to have a role to play in all of this as well.”
“Eternal gold has a track record that is unrivalled. But it is an analogue asset in a digital world. Bitcoin is much more practical. Which will win out? Practical digital or impractical analogue?”
Thank you for your comments. Maybe you are right and when the great confrontation between the two happens in three or four years time Gold will win out.