5 Reasons I Just Sold Out of Dollar Assets and Bought This Cryptocurrency 

I woke up Monday morning with a purpose: I sat at my desk and the very first task of the day was selling all my U.S. dollar-based stablecoins (cryptos designed to track the dollar on a 1:1 basis) and transferring every last penny into bitcoin. 

Which prompted a good bit of direct-messaging activity from my friends in the crypto space when they read my tweet announcing what I’d done. As one of them wrote: 

Big move. What made you so confident to do it today? Many people are talking about possibly another leg down. 

Let me use that comment to explain my rationale. I think understanding why I did what I did will provide some useful insight into the challenges we face globally, and why I want some of my money out of U.S. dollar assets and into a currency no one controls. 

First, let me state here at the outset that none of this is aimed at bashing the dollar or the States. These are simply financial and political facts that color my views. That said… 

The British Pound 

Recent events with the U.K. currency are the proverbial canary in the proverbial coal mine. Very worrisome, indeed. 

Briefly, the pound plunged when former Prime Minister Liz Truss and her chancellor proposed—proposed!—a so-called mini-budget that blew the bond market’s collective mind. The budget would have piled additional debt onto the economy, and the bond jockeys (smartest guys in the room) said, “Not today,” and dumped bonds, which kicked the legs out from under the pound.  

The Bank of England had to race to save the bond market from collapsing, as well as shore up pension funds threatening to slide into the abyss. 

That should not happen because of a budget proposal. It says bond jockeys suddenly have sovereign debt on their mind after years of politicians and monetary mandarins telling us debts and deficits don’t matter at a governmental level. 

The pound crisis unequivocally calls BS on the boneheaded thesis that debt doesn’t matter, which raises big red flags for… 

Uncle Sam’s Debt 

I’ve detailed this several times, but if you spent $1 million per day from the day you were born until the day you died at 100 years old, you’d have to live 822 lifetimes to spend the $31 trillion debt that Uncle Sam now shoulders…and that does not include his off-balance-sheet debts for Social Security and Medicare obligations, and promises to government retirees. 

It’s not even remotely sustainable.  

It’s going to lead to a crisis of some sort—financial, monetary, fiscal, political. All of the above? 

At some point, Congress is going to spend 100 million or one billion too many dollars and the bond market is going to react just as it did with the pound, and the dollar is going to face a crisis. 

Uncle Sam’s Anger 

Again, stated this before, but divisiveness in the U.S. means the far right and the far left do all the screaming, and there’s very few lawmakers anymore who represent a voice in the middle. 

At the same time, there are Supreme Court cases afoot, as well as legal and policy efforts on both sides of the aisle, that infuriate the other team. Success with any of those measures will result in massive political and social backlash. All the polls over the last couple of years, meanwhile, point out that right and left are more than eager to go their separate ways in a deconstructed United States.  

Both sides might just get their way. And if they do, it will be disastrous for the dollar. 

Inflation and Uncle Sam’s Banker 

Here, I am talking about the Federal Reserve and its fight against inflation. 

The Fed has been aggressive in this fight, but hasn’t really accomplished a whole lot. Inflation remains persistent. But the Fed did manage to destroy the housing market…it has wiped out trillions of dollars of wealth in asset markets ranging from stocks and bonds to crypto…and it has exported inflation to the rest of the world, which is causing financial angst elsewhere. 

At some point, sooner rather than later, the Fed will have no choice but to stop the insanity or else risk a debilitating global depression. When it stops, inflation will remain a problem because the roots of inflation (weather, pandemic, war) are outside the Fed’s control, as I noted in a recent column. 

Crypto will rally strongly in that environment. Bitcoin will lead the charge, just as it did in 2020 when the Fed was saying inflation was transitory, yet bitcoin was rising toward all-time highs specifically because it presaged the arrival of inflation.  

In a world where inflation is persistent, bitcoin will persistently stair-step higher. 

Corporate America. Corporate Europe. Corporate World. 

I’m not sure if the mainstream media is just stupid, ill-informed, blind, willfully ignorant, or purposefully spreading the wrong message among the masses. Whatever the case, much of the musings about crypto that spill forth from mainstream journalists are simply wrong. 

I won’t tell you why I think that is. Instead I will remind you, as I’ve written in the past, that scores and hundreds of global companies and governments are moving into the crypto space. 

Nike has sold $185 million worth of NFTs. McDonald’s is in the metaverse now with a digital eatery where you can order real burgers for delivery. Goldman Sachs is using a private, JPMorgan blockchain to trade bonds worth more than $1 million per day. 

Norway is potentially looking to build its national digital currency atop the Ethereum blockchain. The European Union has been running a series of tests that will see the EU bond market move to the blockchain. 

Walmart recently launched games in the Roblox metaverse aimed at younger consumers. The retailer rightly sees it as a way to build rapport with the next generation of customers who will all be functioning almost entirely in the metaverse (a 3D version of today’s internet and which operates largely on the blockchain and by way of cryptocurrencies). 

Ralph Lauren is in the metaverse, too. And retailers ranging from Abercrombie & Fitch to Louis Vuitton, Gap, and Gucci are already involved in NFTs and metaverse technology. 

Boardrooms spending billions says a whole lot more about our future than do the ramblings of reporters who have no skin in the game. 

So…that was my Monday. 

That’s why I’m doubling down on bitcoin in my personal finances. I connect the dots. I see where all of this is going. We might have another leg down in bitcoin for all I know…and I don’t care. 

I am buying now while I feel good with the price. Wait too long, and the risk is that a leg down turns into a major rally that sees bitcoin leave the $20,000 level…and never look back.