In his latest essay titled “Black or White?”Arthur Hayes, co-founder and former CEO of crypto exchange BitMEX, lays out an analysis predicting that Bitcoin could soar to $1 million. Hayes argues that forthcoming US economic policies under the second term of Donald Trump could set the stage for unprecedented Bitcoin growth.
Hayes draws parallels between the economic strategies of the United States and China, coining the term “American Capitalism with Chinese Characteristics.” He suggests that, similar to China’s approach under Deng Xiaoping and continued by Xi Jinping, the US is moving toward a system where the government’s primary goal is to retain power, regardless of whether policies are capitalist, socialist, or fascist.
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“Similar to Deng, the elite that rule Pax Americana care not whether the economic system is Capitalist, Socialist, or Fascist, but whether implemented policies help them retain their power,” Hayes writes. He emphasizes that America ceased being purely capitalist in the early 20th century, noting, “Capitalism means that the rich lose money when they make bad decisions. That was outlawed as early as 1913 when the US Federal Reserve was created.”
Hayes critiques the historical shift from “trickle-down economics” to direct stimulus measures, particularly those implemented during the COVID-19 pandemic. He distinguishes between “QE for the rich” and “QE for the poor,” highlighting how direct stimulus to the general population spurred economic growth, whereas quantitative easing primarily benefited wealthy asset holders.
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“From 2Q2020 until 1Q2023, Presidents Trump and Biden bucked the trend. Their Treasury departments issued debt that the Fed purchased using printed dollars (QE), but instead of handing it out to rich [individuals], the Treasury mailed checks out to everyone,” he explains. This led to a decrease in the US debt-to-nominal GDP ratio, as the increased spending power of the average citizen stimulated real economic activity.
Looking ahead, Hayes anticipates that Trump’s return to power will usher in policies focused on re-shoring critical industries to the US, financed by expansive government spending and bank credit growth. He references Scott Bassett, whom he believes will be Trump’s pick for Treasury Secretary, noting that Bassett’s speeches…
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