Kim Dotcom (Kim Schmitz), a controversial internet pirate and cryptocurrency advocate, recently urged all 736k followers to immediately buy gold and Bitcoin because President Trump is sleepwalking into a tremendous fiscal collision.
“1 TRILLION DOLLARS in additional US Govt debt PER YEAR!” warned Dotcom.
“US spending is funded by lenders who will never get paid. US Empire will collapse followed by a worldwide economic collapse. http://usdebtclock.org,” he added.
“Shift your USD into Gold & Bitcoin asap before USD becomes toilet paper.”
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
Dotcom began the warnings last week, which he said: “Trump was handed an Empire on life support,” and that “Top economists around the world agree that US debt is unsustainable. There is no sugar coating this. US Empire is broke. Prepare for collapse.”
Trump was handed an Empire on life support. No trade deal, no economic growth, no tariff or war can save this patient. Top economists around the world agree that US debt is unsustainable. There is no sugar coating this. US Empire is broke. Prepare for collapse. Gold and Bitcoin.
— Kim Dotcom (@KimDotcom) August 9, 2018
On Sunday, Dotcom cited Russian Finance Minister Anton Siluanov in a recent interview who said the US Dollar is becoming an unreliable tool for payments in international trade. The minister did not rule out the possibility of using national currencies instead of the US Dollar in the oil trade.
“We have significantly reduced our investment in US assets. In fact, the dollar, which is considered to be the international currency, becomes a risky tool for payments”
— Finance Minister of Russia
The US debt burden has become unmanagable. Watch USD when China drops US debt.
— Kim Dotcom (@KimDotcom) August 12, 2018
About an hour later on Sunday morning, Dotcom tweeted again at his followers telling them about a simple hedging strategy (buy gold and bitcoin) against a potential economic crisis, which he believes could make the greenback worthless and result into a very “big crash” for markets.
Trust me. Buy crypto and gold. Your USD will become worthless. With US economic collapse all old money currencies will crash.
Times will get tough. But you’ll be fine if you hedge some of your assets in preparation for the crash.
The big crash is coming 100%.
— Kim Dotcom (@KimDotcom) August 12, 2018
While he did not reveal the reason(s) behind the economic collapse, his tweets are perhaps not out of line, given the fact that the federal government ran a monthly budget deficit of $77 billion in July, up 79 percent from prior year. For the first ten months of 2018, the shortfall totals $684 billion, according to the Treasury Department. That is about an increase of 21 percent compared to the same period in 2017.
The exploding deficit has been primarily driven by Trump’s tax cuts, record military spending, and numerous other spending bills. Trump told the American people that tax cuts would lead to stronger economic growth, boost wages, deliver more tax revenue and reduce the deficit.
The deficit is projected to hit $793 billion at the end of the year and approach $1 trillion in 2019. According to the latest Monthly Treasury Statement, interest payments to service the debt have hit a new high and are forecasted to become the fastest rising yearly expenditure.
And lastly, we leave you with an excerpt from a recent note via Charles Gave of why the next economic crisis could already be here:
“So, if I take the US monetary base, and add to it the reserves deposited by foreign central banks at the Fed, I get my figure for the World Monetary Base. From this aggregate, I can get a rough idea of the pace of base money creation around the world, either through direct intervention by the Fed in the US banking system, or indirectly through US dollar accumulation by foreign central banks. When the WMB is growing, I can be relatively confident about the future nominal growth of the global economy. And when it’s contracting, it makes very good sense to worry about a recession.”
As the chart above shows, the Monetary Base is now contracting. So based, on Gave’s four decades of experience in financial markets, it seems to him the world could be entering its “seventh international dollar liquidity crisis since 1973.” We took Gave’s research just one step further — and highlighted that the next crisis could have already started with Turkey’s Lira collapse.
Read on ZH