This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transferring to the Finance Corps.
“First they ignore you, then they laugh, then they fight you, then you win”
– It is attributed to Mahatma Gandhi
As of this writing, the US Senate has just introduced the Digital Asset Anti-Money Laundering Act of 2022. The bill contains many threatening aspects, such as KYC laws for custody wallets and money transmitter licensing requirements.
This bill also comes on the heels of the European Central Bank (ECB) new revelation that Bitcoin is “artificially induced last gasp before the road to irrelevance.” About a week later, officials from the bank announced that they are considering banning Bitcoin and crypto to reduce environmental damage.
But as Europe’s energy crisis deepens, don’t you think that European regulators have bigger fish to fry, like Germany’s coal-fired power users? Or maybe politicians and officials are starting to understand Bitcoin and how it tips the scales of power? Come to think of it… maybe not.
Below is a thread by Level39 describing testimony from a recent Senate Banking Committee hearing.
I think this is just the beginning of the “then they fight you stage” and it will only get worse in 2023. Stay alert this year. When these restrictions and regulations are not properly enforced, it will be a significant speed bump for widespread adoption. I will keep listening (and maybe Bitcoin Twitter) to stay aware of the situation that can be influenced by many calls to representatives elected by the government, as happened with the infrastructure bill in 2021.
Debt Spiral… Spiral
Fortunately, I think more people are starting to wake up from the matrix and realize how bad things really are. The truth is, it’s getting really hard to pretend these days.
Central bank balance sheet above
The chart above is my new favorite image. When people ask about Bitcoin lately, all I do is show them this chart and they quickly realize how big it is to make money during the 2020 COVID-19 era. What is not yet understood is that it will continue, and may increase rates and intervals.
The US federal government is projected to run a $1 trillion deficit by 2023 (that’s 12 zeros, people). Even if the US government shuts down the entire military and cuts the Defense Department budget by $800 billion, the budget is still projected to be in the red for 2023. The most important thing is that the deficit will be large. higher, which means that more debt must be issued, and that will be in the period of increasing interest rates due to Federal Reserve tightening.
Source
The Congressional Budget Office has projected that negative growth in GDP is about as positive as growth is lower than expected. Couple that with the expected increase in unemployment, and you get yourself a fiscal double whammy. First, unemployment and negative GDP growth mean less tax receipts for the federal government, which means a bigger deficit, which means more debt. You add in the fact that the debt is being issued at a significantly higher level, and you have got yourself the ingredients for an accelerating debt spiral.
Even if everything had gone to plan, a trillion dollar deficit would have been nothing to celebrate. I think the numbers speak for themselves. The people I work with and my friends are really starting to notice and get worried; those who have never given economic interest before.
And when all the proverbial things are relevant about spinning, you can bet that the Fed steps right with printing more money. Add a trillion or more dollars to debt at 5% interest? I don’t think it will happen. I bet interest rates won’t go much higher. Quantitative easing three off. Long live quantitative easing infinity.
Source: TBL Substack
Coincidentally, while writing this article, I received the above article in an email from Bitcoin Layer. They seem to agree with me. Rate hikes can’t go much higher than they already have. They are basically off the trail.
Bitcoin Reigns Pioneer Spirit
Once upon a time, in a place called America, people were responsible for their actions, traveling in search of adventure and opportunity in the West. The name Oklahoma Sooners comes from the Oklahoma Land Rush of 1889, where nearly 50,000 Americans lined up on the edge of the “Unassigned Lands” to race for stakes in the undeveloped wildlands that became Oklahoma.
Like homesteading in the 19th century, Bitcoin is a team sport and a race. It’s a race in the sense that if you don’t take responsibility to claim your stake in cyberspace before anyone else, you might have missed the opportunity of a lifetime. It’s a team sport in the sense that successfully adopting Bitcoin in your life will require a degree of help from others.
How many BTC Session videos did you watch before setting up your first hardware wallet? How long after that actually send any UTXOs to a self-sustaining address? How long did it take you before you knew what UTXO was?
Bitcoin is the new frontier, digitizing the Unassigned Lands of the old American West. The journey is full of dangers and pitfalls, but the payoff is an opportunity that we will never see again in our lifetime. Everyone gets bitcoins at the price they deserve, yes, but that doesn’t mean you can’t help speed up the learning process.
Let’s make 2023 the year we slice the exchange; audit for paper bitcoin through sheer blunt style trauma. I challenge you to try and embody the spirit of homesteading pioneers to help make this happen; to help friends and family understand this phenomenon and opportunity. To help them take custody and preserve their wealth in an independent way. Help guide the horse to water, so to speak. You can’t save everyone, but you can at least try to see what’s coming, and stake your claim in the new Wild West in cyberspace.
This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.