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This week, among the world’s preeminent investment banking businesses signalled some severe FUD from the U.S. buck.
“Combined with a record level of debt accumulation by the U.S. government, real concerns around the longevity of the U.S. dollar as a reserve currency have started to emerge,” that the bank composed in a correspondence with customers, based on numerous news reports. “The greater the deflationary concerns that policymakers must fight today, the greater the debt build-up and the higher the inflationary risks are in the future.”
Along with the red flag about debt accumulation, the analysts pointed to a developing debasement hazard emerging as a outcome. And they proceeded to urge another safe haven for investors.
“Gold is the currency of last resort, particularly in an environment like the current one where governments are debasing their fiat currencies and pushing real interest rates to all-time lows,” the analysts wrote. “With more downside expected in U.S. real interest rates, we are once again reiterating our long gold recommendation from March.”
Firstly, I praise Goldman for realizing that the basic problems emerging within our fiat system. This warning from among the heritage system’s many ingrained associations is no little thing and, together with other significant cracks in the machine — such as record-low rates of interest, a global pandemic, the development of what the prescient Marty Bent predicts “Woke Capital,” etc. — it’s apparent that the prevailing economic system is currently failing or will fail a lot people.
However, it also needs to be pointed out that Goldman Sachs is directing its shareholders into some safe haven that doesn’t hedge against this failing system in addition to bitcoin does.
Goldman Is Missing Out On Bitcoin
I’ve written about the association between bitcoin and gold earlier. Gold is a strong secure haven asset in several ways that may function as a highly effective tool for picking out of our semi automatic fiat system. However, Goldman is singing gold’s praises while actively ignoring bitcoin, in spite of the fact that BTC functions as a much stronger “currency of last resort” as authorities debase their particular fiat.
In May, Goldman’s customer and investment management division released a demonstration that destroys some negative outlooks on bitcoin. It warned investors that BTC is a “conduit for illicit activities,” that its “appreciation is primarily dependent on whether someone else is willing to pay a higher price for it” and, in perhaps its most misguided decision, that it isn’t a rare resource.
“Though individual cryptocurrencies have limited supplies, cryptocurrencies as a whole are not a scarce resource,” based on a slide in the presentation. “For example, three of the largest six cryptocurrencies are forks — i.e., nearly identical clones — of Bitcoin (Bitcoin, bitcoin cash, and Bitcoin SV).”
It’s difficult to assert that B Money and Bitcoin SV are “nearly identical clones” of Bitcoin Core. However, the bigger point I’m attempting to create is that Goldman is appropriate to direct investors toward a safe harbor, but incorrect to discount bitcoin as a precious hedge option.
It must be mentioned that Goldman is indicating its shareholders double down gold since the advantage hit an all-time large in price (although bitcoin is soaring, it’s now far below its all-time large ). And, unlike any of its rivals, it’s not made a substantial, public investment to cryptocurrency.
“It’s important to note that Goldman Sachs’ competitors Fidelity and JP Morgan have made significant investments in cryptocurrency,” Dave Hodgson, the managing director of crypto-focused venture company NEM Ventures, told CNBC. “By considering it unviable for its investors, Goldman Sachs has risked causing its investors to miss out on one of the best performing asset classes in the past 100 years, nevermind the last 10.”