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Paul Tudor Jones: "My bet is [The Winner] will Be Bitcoin" Over Bonds

Taking Off Tomorrow. So here is our Monday Post Now- TX
Recently we read a long thorough piece from a Bitcoin advocate. Frequently these can be dismissed as proselytizing for a new religion. We re-posted it in full on Zerohedge where it got a lot of “Too Long, Didn’t Read” (TL/DR) type comments. Determined to make it accessible, but not dumb it down, we decided to break it into 5 parts for our readers. What it is:
  • a chronological take on how the west got to where it is fiscally
  • a PR piece for Bitcoin that is not heavy handed
  • A n accurate accounting to our knowledge of key moments in history
  • An (unintentional) affirmation of the reasons why Gold continues to be bought by central banks and investors
  • plainly written, just long.
Other than a few comments, highlighting and insertions of related things in bold, we’ve made no changes. Enjoy!
Part 1
Cryptocurrencies like bitcoin have few fans in Washington. At a July congressional hearing, Senator Elizabeth Warren warned that cryptocurrency “puts the [financial] system at the whims of some shadowy, faceless group of super-coders.” Treasury secretary Janet Yellen likewise asserted that the “reality” of cryptocurrencies is that they “have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”
Paul Tudor Jones went on CNBC October 20th to discuss Bitcoin as an inflationary hedge.
The interview is substantively about Bitcoin versus Bonds as this screen cap shows.
However the video headline is about Bitcoin versus Gold…
Crypto is beating gold right now as a better hedge against inflation: Paul Tudor Jones
Crypto is beating gold right now as a better hedge against inflation: Paul Tudor Jones
Click to watch
Thus far, Bitcoin’s supporters remain undeterred. (The term “Bitcoin” with a capital “B” is used here and throughout to refer to the system of cryptography and technology that produces the currency “bitcoin” with a lowercase “b” and verifies bitcoin transactions.) A survey of 3,000 adults in the fall of 2020 found that while only 4% of adults over age 55 own cryptocurrencies, slightly more than one-third of those aged 35-44 do, as do two-fifths of those aged 25-34. As of mid-2021, Coinbase — the largest cryptocurrency exchange in the United States — had 68 million verified users.
To younger Americans, digital money is as intuitive as digital media and digital friendships. But Millennials with smartphones are not the only people interested in bitcoin; a growing number of investors are also flocking to the currency’s banner. Surveys indicate that as many as 21% of U.S. hedge funds now own bitcoin in some form. In 2020, after considering various asset classes like stocks, bonds, gold, and foreign currencies, celebrated hedge-fund manager Paul Tudor Jones asked, “[w]hat will be the winner in ten years’ time?” His answer: “My bet is it will be bitcoin.”
What’s driving this increased interest in a form of currency invented in 2008? The answer comes from former Federal Reserve chairman Ben Bernanke, who once noted, “the U.S. government has a technology, called a printing press…that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation…the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to…inflation.” In other words, governments with fiat currencies — including the United States — have the power to expand the quantity of those currencies. If they choose to do so, they risk inflating the prices of necessities like food, gas, and housing.
In recent months, consumers have experienced higher price inflation than they have seen in decades. A major reason for the increases is that central bankers around the world — including those at the Federal Reserve — sought to compensate for Covid-19 lockdowns with dramatic monetary inflation. As a result, nearly $4 trillion in newly printed dollars, euros, and yen found their way from central banks into the coffers of global financial institutions.
Jerome Powell, the current Federal Reserve chairman, insists that 2021’s inflation trends are “transitory.” He may be right in the near term. But for the foreseeable future, inflation will be a profound and inescapable challenge for America due to a single factor: the rapidly expanding federal debt, increasingly financed by the Fed’s printing press.
In time, policymakers will face a Solomonic choice: either protect Americans from inflation, or protect the government’s ability to engage in deficit spending. It will become impossible to do both. Over time, this compounding problem will escalate the importance of Bitcoin.
End Part 1
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