Internet legend Kim Dotcom, who became infamous for his website Megaupload that became a global hub for internet piracy, is warning the people of the world to invest in Bitcoin and gold before the United States debt situation hits the fan.
1 TRILLION DOLLARS in additional US Govt debt PER YEAR!
US spending is funded by lenders who will never get paid. US Empire will collapse followed by a world wide economic collapse. https://t.co/kdtB0GnewP
Shift your USD into Gold & Bitcoin asap before USD becomes toilet paper. https://t.co/a5UIuhJvUT
— Kim Dotcom (@KimDotcom) August 9, 2018
Currently, the United States debt, provided by Treasury Direct, sits at a mind-boggling USD 21.342 trillion. This is a new all-time record.
To put this in perspective, Bitcoin’s market cap is USD 109 billion and the total cryptocurrency market cap is USD 214 billion, 0.5% and 1% the size of the United States national debt respectively. The cryptocurrency markets are a massive economic zone, it certainly does not make sense that the United States has a hundred times more debt than the total crypto market cap.
Essentially, the United States has been spending far more money than it actually has and prints money to compensate for the constant budget deficit. This is primarily done by issuing debt via selling USD bonds on the global market, which are considered the gold standard of the bond world, so they are bought up quickly despite the United States issuing tremendous amounts of bonds all the time. It’s getting even worse according to Kim Dotcom, the budget deficit is now over USD 1 trillion per year.
At some point in the future, if this is not resolved, the US will reach a point where it cannot afford to pay the interest on all of this debt. At that point, USD bonds will go from being the gold standard to being in default. These bonds are being held by numerous nations, corporations, and individuals worldwide, and if they were to default, it would cause an economic catastrophe. This would lead to massive money printing as a last attempt to save the economy, resulting in hyperinflation that will destroy the USD.
To be fair, it is possible that before this happens a government will arise in the United States that will take the hard steps necessary to balance the budget. It might truly be too late, however, as the economy is being propped up by the issuance of debt, and it’s quite possible that if the budget were balanced the economy would spiral into a deep recession from the lack of government stimulus, leading to further debt issuance and money printing.
This is where Bitcoin comes in. Bitcoin is a decentralized cryptographically secure cryptocurrency that can’t be printed at will. There is a fixed total of 21 million Bitcoins after mining is complete and Bitcoin is easy to use as a currency worldwide. If the USD collapses, Bitcoin will be in a position to become a top global currency. At that point, each Bitcoin would be immensely valuable and the current Bitcoin price just over USD 6,000 could be an excellent opportunity to buy.
Based on this simple economic logic pertaining to the United States debt situation, it seems Kim Dotcom has a point with his warning. People who buy and save some Bitcoin now could be the wealthiest ones in the future.
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