Sunday, April 11, 2021

Does the Biden Administration Have a Secret Plan to Drive Down the Dollar On Foreign Exchange Markets?

 In this edition of "This Week in Economics with Robert Wenzel," I discuss Biden Administration policies that appear designed to drive the dollar down on foreign exchange markets

The podcast version is here. And it is also available on your favorite podcast platform.

If your platform does not carry the podcast just enter this feed address to start following "This Week in Economics":


Who is Experiencing the Most Price Inflation in the United States?

According to Bloomberg, low-income Americans are getting hit hardest by price increases as the economy starts to open up.

The basics are the prices that are exploding and that is what hurts lower- and middle-income Americans.

Meanwhile, the lockdowns have shrunk parts of the upper-income field leaving those left in the higher brackets to scoop up some luxury items at bargain prices.

The latest numbers show that the prices for goods and services bought by the lower-income class have climbed by 1.75% in February, 1.53% for middle-income earners and only  0.98% for the top ten percent.


Saturday, April 10, 2021

Biden Couldn't Care Less About the Global Competitiveness of American Companies

Johns Hopkins economist Steve Hanke observes:

The newest Joe Biden whammy will increase the Gliti tax. That’s the tax on income earned abroad by US-controlled foreign corporations. This is just more evidence that Biden could care less about the global competitiveness of American companies.

From The Wall Street Journal editorial board:
As the debate begins over President Biden’s corporate tax increases, the temptation will be to focus on the headline tax rates. Those rates are bad enough, but worse lurks in the details. For one important example, dive into Mr. Biden’s plan for taxing U.S. companies’ global profits.

We’re talking about the tax on global intangible low-tax income, known as Gilti, which was created by the 2017 tax reform. American multinationals were previously charged the full U.S. corporate tax rate on their global profits, but only when they repatriated their foreign earnings. That created a strong incentive to park foreign profits overseas. Gilti taxes many foreign profits as they arise, but at half the top domestic rate. That less punitive approach allowed more companies to return overseas cash to the U.S.

Gilti was flawed from the start and needs fine-tuning, but Mr. Biden would make it worse in every respect. Start with the rate. The 2017 tax law set the statutory Gilti rate at half the regular corporate rate, so Gilti now is 10.5%. Mr. Biden would increase that to 21%, three-quarters of the 28% rate he proposes for companies overall.

That’s the statutory rate, though, and the effective rate companies actually pay is higher. This is because Gilti embedded double taxation in the tax code. Before the 2017 reform, companies could claim a credit of 100% of foreign tax paid against their U.S. tax bill, and also could carry losses forward or back. Gilti allows a credit of only 80% of foreign taxes, with no carry-forwards or carry-backs.

This means today’s effective Gilti rate is at least 13.125%, so any U.S. company paying less than that percentage of profits in foreign taxes will owe Treasury a Gilti payment. Raising the statutory rate to 21% increases that effective rate to 26.25%. This new Biden effective minimum tax would be higher than the statutory tax rates in most countries even in Western Europe, and that’s before those countries apply deductions and exemptions.

The Biden plan would further increase the effective Gilti rate by expanding the tax base on which it’s paid. Gilti now exempts the first 10% of a company’s returns on tangible foreign investments such as factories. Congress created this exemption because Gilti was supposed to apply only to big tech and pharma companies and their ilk, which allegedly gamed global tax rules to book the profits from patents in low-tax jurisdictions.

The Biden Administration wants to eliminate this exemption on the theory that it “rewards U.S. multinational corporations that shift profits and jobs overseas.” But the companies operating on thinner profit margins that benefit most from this exemption often have invested abroad to better serve local customers or due to labor costs or other factors. Bumping up their Gilti bill won’t encourage them to re-shore jobs and would limit the investments they are profitably able to make.

On Refuting Robert Reich's "Seven Ways" of Taxation

Robert Reich

This email has arrived from Jeffrey G Moebus,  Master Sergeant, US Army [Retired] 

Dear Mr Wenzel: 

i was referred to You by Mr Scott Olmsted, who called You "a financial analyst, Austrian economist par excellence, radical anarcho-capitalist, and financial newsletter writer from whose advice I have made a lot of money."


Scott and i had been discussing strategic planning and Libertarianism as America transitions from Trumplandia to Bidenopia, and he linked me to Your "Tom Woods Rages Against the Libertarian Party" article on Target Liberty, and recommended that i check out the Economic Policy Journal, as well.


Upon doing the latter, i signed on to a 3-month subscription [to the EPJ Daily Alert]; and have already gotten my money's worth exploring all that it and Target Liberty have to offer.  Scott also referred me to three TL articles related to strategy: the ones on "choking the Woke," intellectual mine and mind fields, and mind and mine bombs.


You concluded "Woke" with:


I have obviously thought about this in detail but this is as far as I want to go right now, right here.

Email me ( if you have any thoughts. I have a lot.


i have several thoughts on all that as well that I look forward to sharing with You.


Now, as to the specific purpose of this e-mail… .


Can You, could You, would You please write and publish a rebuttal to, and refutation and rebuke of Robert Reich's April 2 rant, "Tax the Rich. Here's How:  These 7 ways of taxing the rich would generate more than $6 trillion over 10 years" ? 


Mr Reich's argument is that "the tax code is rigged for the rich, enabling a handful of wealthy individuals to exert undue influence over our economy and democracy," and that:


"Conservatives fret about budget deficits. Well, then, to pay for what the nation needs—ending poverty, universal health care, infrastructure, reversing climate change, investing in communities, and so much more—the super-wealthy have to pay their fair share."  [Emphasis added.] 


Reich's Seven Ways To Tax The Rich, and his guesstimate as to how much money that would bring to DC are as follows: 


1.  Repeal the Trump tax cuts:  "...will raise an estimated $500 billion over a decade."


2.  Raise the tax rate on those at the top:  "...estimated $123 billion over 10 years."


3.  A wealth tax on the super-wealthy:  "...would raise $2.75 trillion over a decade, enough to pay for universal childcare and free public college with plenty left over."


4.  A transactions tax on trades of stock:  "...would raise $777 billion over a decade. That’s enough to provide housing vouchers to all homeless people in America more than 12 times over." [sic]


5.  End the “stepped-up cost basis” loophole:  "...would raise $105 billion over a decade."


6.  Close other loopholes for the super-rich:  "...estimated to raise $14 billion over a decade."


7.  Increase the IRS’s funding so it can audit rich taxpayers: "Collecting all unpaid federal income taxes from the richest 1 percent would generate at least $1.75 trillion over the decade."


And concludes:


"Together, these 7 ways of taxing the rich would generate more than $6 trillion over 10 years—enough to tackle the great needs of the nation. As inequality has exploded, our unjust tax system has allowed the richest Americans to cheat their way out of paying their fair share.


"It’s not radical to rein in this irresponsibility. It’s radical to let it continue."


i am in the process of preparing my own response to Mr Reich, starting with demonstrating that it is not a "rigged-for-the-rich tax code" that enables "a handful of wealthy individuals to exert undue influence over our economy and democracy."  That tax code is simply the natural, inevitable product of America's $ 1 = 1 Vote system of politics, and thus government and governance.  The tax code is a symptom; it is not the disease.


Next i will present him with data from the Tax Foundation that shows just exactly who is paying how much in individual income taxes, what their average tax rates were in 2018, and what percentage of total tax payments are made by the Top 1, 5, 10, 25, and 50 percentile cohorts of taxpayers, as compared to the Bottom 50%.


Then, i will specifically ask Mr Reich what he plans to do about and with the rich in order to take care of America's current $28.1 national, sovereign Debt  ~ which does not include this year's multi-trillion dollar stimulus, relief, and rebuild projects ~ when it starts coming due; particularly given the fact that the CBO projects that Debt to be close to $40 trillion [and twice projected GDP] in 2030.


And i will also inquire as to what happens to the rich when the wheels start falling off Social Security, Medicare, Medicaid, and Federal, State and Local government and private pension and retirement programs.  Set a Maximum Annual Wage, with anything beyond that automatically going to the IRS?


Next, i will ask him how many dollars he is prepared to CUT over the next decade from the budgets of America's military-industrial complex and surveillance-secrecy-security proto-Police State.  Or any other federal government program, for that matter.  And finally, i will ask him on what basis he assumes that the government would do a better job of managing the wealth of America's rich than they do, particularly when it comes to what they consume and, far more importantly, what they invest in and contribute to. 


At which point, i get out of my league and above my pay grade as far as addressing the flaws and incoherencies in each of Reich's proposed Seven Ways To Paradise.  And that's the reason for  sending You this Help Wanted and Needed request: 


Because i know that You could knock out many objections to each of his Ways, and show very clearly, concisely, and completely how and why they will not work,  And will most probably only serve to make matters worse; especially for the "non-rich" ~ whoever they actually end up being ~  the very people Reich claims to be trying to help.


And do that in a way that can be used as an effective weapon in The War Against The War On Wealth In The Name of Equality, Equity, and "Social Justice" ~ whatever those terms actually mean ~ that looms just down the road. 


Thank You for Your consideration, and have a Great weekend.




Jeffrey G Moebus

Master Sergeant, US Army [Retired]

Sitka, Alaska

RW response:

It doesn't make sense to get into the weeds with people such as Reich. 

What needs to be pointed out is that all taxes suck money out of the private sector and put the money under the control of the government which is a central power.

When you have a central power, those close to the central power will benefit. It is not about providing what consumers desire. 

Because we have such a massive government, we have a massive crony system around government agencies (power centers). By increasing taxes, regardless of how it is done and who is taxed, it distorts the economy in favor of the crony elite---and increases the size of government even more. This, thus, results in a lowering of the standard of living for the general population.

The cronies benefit. This is why rather than more taxes, taxes need to be reduced across the board, along with the size of the goernment.

But it is doubtful Reich will ever support this. He has always been apparatchik serving the state.  He was in the administrations of Presidents Gerald Ford and Jimmy Carter, as well as being the United States Secretary of Labor from 1993 to 1997 under Bill Clinton. He was also a member of President Barack Obama's economic transition advisory board.

He is a servant of the crony state from head to toe.

Wenzel on Modern Monetary Theory

 I recently appeared on a special edition of  Swamponomics to discuss mad Modern Monetary Theory.

Here is the interview:


Friday, April 9, 2021

IT BEGINS: Producer Prices Explode


The producer price index jumped 1.0% last month (that's 12% annualized) after
increasing 0.5% in February. In the 12 months through March, the PPI surged
4.2%. That was the biggest year-on-year rise since September 2011 and
followed a 2.8% advance in February.

March’s increase in producer prices was across the board. Goods prices
soared 1.7%, accounting for almost 60% of the increase in the PPI. That was
the biggest increase since December 2009 and followed a 1.4% rise in
February. Prices for services shot up 0.7% after gaining 0.1% in February.

Members of the Federal Reserve Board have no idea what is about to hit them in terms of price advances.

They are delusional and think it is temporary,


What Bitcoiners Need to Understand About the Matt Gaetz "Sex Scandal"

Putting aside for a moment the question of whether the claims aimed at Congressman Matt Gaetz  are trumped-up charges, there is an important lesson for Bitcoin users in the latest revelations surrounding the "sex scandal."

Here is the latest report from The Daily Beast:

In two late-night Venmo transactions in May 2018, Rep. Matt Gaetz sent his friend, the accused sex trafficker Joel Greenberg, $900. The next morning, over the course of eight minutes, Greenberg used the same app to send three young women varying sums of money. In total, the transactions amounted to $900.

The memo field for the first of Gaetz’s transactions to Greenberg was titled “Test.” In the second, the Florida GOP congressman wrote “hit up ___.” But instead of a blank, Gaetz wrote a nickname for one of the recipients. (The Daily Beast is not sharing that nickname because the teenager had only turned 18 less than six months before.) When Greenberg then made his Venmo payments to these three young women, he described the money as being for “Tuition,” “School,” and “School.”

Got that?

Gaetz used a very traceable method (Venmo) of paying his friend, who then used the funds to pay three women.

Digital records don't go away. They stick around, especially when it comes to Bitcoin and other cryptocurrencies that are recorded on blockchains.

There is no way they are as private as cash.

They leave trails.

Cash doesn't.

There is a lot to the old Roman saying "Gold (or cash) has no smell." There is no way to know where it came from or where it has been. You can't look up an old cash transaction, the way you can digital records.

Bitcoin may be somewhat private when used once for a single transaction. Do one and be gone, but it can never match the privacy of cash in a brown paper bag.

If Gatez had paid his buddy Greenberg in cash, then The Daily Beast would have no story.

On top of this, Gatez apparently wrote in the memo field the nickname of one of the girls. Double dumb.

"Never in writing, always in cash."


Data Suggest That Elevated Unemployment Benefits Cause People To Stay Fat, Happy and at Home

 Ryan Bourne and Erin Partin in a recent article point to data that show the not surprising fact that if you pay people more to stay at home than work, they will stay at home and not work:

Last week’s job market numbers were strong. The unemployment rate fell to 6.0 percent – the lowest since the start of the COVID-19 pandemic – and total nonfarm payroll employment rose by 916,000 in March. But signs already suggest that the employment bounce-back is being restrained from its full potential by Congress’s decision to entrench a $300 weekly unemployment benefit supplement through September.

Combined with state unemployment benefits, around 37 percent of workers can currently make more unemployed than in work. A low-income worker in Massachusetts previously earning $535 per week faced a pre-pandemic replacement rate of unemployment insurance benefits to earnings of 48 percent ($257). Now, the same worker would obtain benefits worth 104 percent of their pre-recession earnings ($557).
In New Mexico, someone previously earning $342 per week would see a replacement rate of 141 percent from the expanded benefits ($483). The disincentive to work this creates reduces the labor supply, raising market wages but by squeezing employment levels as fewer workers make themselves available for job opportunities that are economic to offer for businesses...
  1. Daniel Zhao, a senior economist at Glassdoor, reports that job search activity on Google fell by 15 percent in early March, with the decline starting just before the American Rescue Plan passed that extended elevated unemployment benefits. The search activity rate remains 10 percent down even now—a trend not observed in 2019, which cannot be explained by COVID prevalence across states, and which we wouldn’t expect as the economy reopens and job opportunities expand (see figure).


  1. Contacts to regional Federal Reserve Banks report issues with unemployment benefits deterring job re-entry, according to the most recent Beige Book. The Chicago Fed says “Several contacts expressed concern that unemployment benefits were putting a damper on worker availability.”

    The St. Louis Fed: “Contacts noted stagnant or declining employment, especially among small businesses and leisure and hospitality firms, with continuing closures in a slower-than-expected recovery. Transportation and manufacturing firms reported their desire to expand their workforce has been stymied by a scarcity of workers. Many contacts ascribed this scarcity to unemployment benefits and other government aid.”

    The Minneapolis Fed: “Despite increased job openings, labor supply constraints contributed to a continued disconnect between workers and opportunities… Some contacts said the prospective continuation of enhanced unemployment benefits created a disincentive to return to work.”

  2. Daily, one runs into stories of businesses struggling to hire new workers. But this now extends far beyond anecdote. The National Federation of Independent Business in March reported a record-high share of 42 percent of small businesses surveyed who said they couldn’t fill a job opening—much higher than the average figure of 22 percent since 1974, despite elevated unemployment. A massive 91 percent of respondents said they had few or no qualified applicants for job openings in the past three months, one of the highest values since that question was surveyed.

In some cases, this will mean businesses will raise wages which will result in higher prices for consumer goods and services. In other cases, it will result in businesses cutting back on supply of goods and services, resulting in supply bottlenecks and higher prices.

The work disincentives in the American Rescue Plan is a bizarre framework that sets up a unique form of stagflation where prices climb, the stock market climbs and unemployment remains high.


Thursday, April 8, 2021

Wokester Capitalism, Jeff Bezos Style

Jeff Bezos

By David Stockman

 I am sorry. There is a kind of free market conservative—John Tamny comes to mind—  that somehow thinks the massive fiscal and monetary insanity emanating from  Washington happens in a vacuum; and that as lamentable as it may be, it doesn’t  gainsay the brilliant works of today’s corporate titans in Silicon Valley and elsewhere.  

So never fear. Capitalist dynamism will out. Boom times lies ahead regardless of the  trolls and grifters who occupy the nation’s seats of power and the endless cockamamie  schemes and assaults on the free market they generate.  

Alas, we beg to differ. Profoundly.  

By and large these new titans are not geniuses. They are bubble riders who were in the  right place at the right time. And after years of the Fed’s massive inflation of financial  asset prices they have become totally corrupted—-politically, intellectually and  otherwise.  

We were put in mind of this baleful reality by today’s headline announcing that Jeff  Bezos is four-square behind Sleepy Joe’s Infrastructure Abomination, including its  massive tax hikes.  

Amazon Inc. Chief Executive Jeff Bezos said he supports a rise in the corporate  tax rate and supports President Biden’s focus on major U.S. infrastructure  spending. 

“We recognize this investment will require concessions from all sides—both on  the specifics of what’s included as well as how it gets paid for,” Mr. Bezos wrote.  He said Amazon was “supportive of a rise in the corporate tax rate” and  said the company looked forward to seeing the U.S. government’s progress on  the plan. 

We could say this is just another incarnation of Vladimir Lenin’s famous quip that  capitalists will gladly manufacture the rope to hang them with. But actually, it goes  much deeper. 

These people have been made so insanely rich by the Fed’s egregious stock market  inflation that they no longer care if their businesses are inconvenienced or even deeply  harmed by schemes like the Biden Boondoggle; and, worse still, have no idea about how  real, sustainable wealth is generated or that free market prosperity is not at all a sure  thing when the state becomes an unhinged wrecker of honest money, fiscal rectitude  and financial discipline.  

In the case of Bezos, the chart below tells you all you need to know. At the end of 2015  just five years ago, the company’s market cap stood at $315 billion, making Bezos  fabulously wealthy with a net worth of about $45 billion. Five years and the most  costly divorce in the history of the planet later, Bezos’ holdings are worth $175 billion.  

Needless to say, five years ago Amazon was already absurdly valued at 47X the  company’s modest free cash flow. That is, on $107 billion of sales, it only brought $6.7  billion to the bottom line (operating free cash flow) owing to massive levels of CapEx,  marketing and operational spending.  

The chart below leaves no doubt about what has happened since then. The company’s  market cap has soared to $1.627 trillion or by 5.2X. By contrast, operating free cash  flow has only risen by 3.9X. 

Consequently, the company’s free cash flow multiple has erupted to an  otherworldly 63X. 

And we do mean otherworldly. Amazon is a 30 year-old company that is coming off the  Covid year of the perfect storm for a monster e-Commerce retailer.  

A Covid-Lockdown stricken population cowering in their homes ordered front-door  delivery of goods and supplies like no-time in the history of mankind. Net sales during  2020 actually rose by the incredible sum of $106 billion.  

Let’s put that in perspective. That one-year gain exceeds the total sales of the nation’s  second largest retailer, Target Corp.  

That’s right. With 1,897 stores occupying 250 million square feet of selling space, Target  posted total sales in 2020 of $93.5 billion, and it had taken the company more than a  half-century to achieve a sales level well less than Amazon’s one-year gain during the  pandemic.  

Still, no one in their right mind could expect 2020’s brobdingnagian sales growth to  continue. A vaccinated public has had enough of cardboard boxes on their front door  steps and is more than ready to break Covid jail for the malls and other retail  emporiums.  

So to value a $386 billion sales behemoth at 63X a once-in-hundred years’ flood-tide  level of free cash flow is just downright lunatic. 

On the other hand, with $24.2 billion of pre-tax income in 2020 and an infinitely  speculative and gullible stock market, Bezos apparently figures that throwing the rest of  corporate America under the tax bus is worth the protection it might buy Amazon from  the Washington lifers who run the White House and keep Sleepy Joe on script.  

Even then, that’s not all. Amazon is not merely absurdly over-valued. It’s also an  unhinged menace on the economic highways and bi-ways of main street America.  

Yes, we get the bit about Amazon being a boon to consumers. But low costs earned in  the marketplace based on a reasonable return on capital is one thing; predatory pricing  without regard to profit in order to simply conquer new market segments is something  altogether different. .  

In a word, the latter doesn’t happen for long on an honest free market because predatory  loss-makers soon run out of access to investment capital. And without capital to  subsidize losses, the predator’s business model leads to failure.  

As it happens, the Fed and the Wall Street casino it has fostered have made predatory  capitalism viable in violation of all the laws of economics. That is to say, Amazon’s e Commerce business is so ridiculously over-valued that it is actually paying Bezos and his  minions to dissipate free cash flow on loss-making ventures of every shape and size.  

This truth is obscured by the fact that Amazon’s meager profitability from its core e Commerce business is supplemented massively by its wholly unrelated cloud services  business called AWS. Thus, during the record e-Commerce year of 2020, AWS still 

accounted for nearly 60% of Amazon’s operating profit based on just 11.7% of its total  sales.  

Stated differently, Amazon’s operating margin at AWS was 29.4% versus just 2.7% on its  giant e-Commerce business, which posted $340.7 billion or 89% of its total sales.  

At the bottom line, therefore, AWS earned net income of approximately $12.6 billion. If  you were to value AWS at Microsoft’s PE multiple of 37X, it’s standalone market cap  would be about $470 billion. 

And that’s more than fair. During the last three year’s Microsoft’s operating income has  soared from $4.1 billion (2017) to $22.9 billion (2020) or by 5.6X on the strength of the  belated take-off of its cloud business.  

By contrast, after several years of triple digit operating income growth prior to 2017,  AWS’ operating income rose from a nearly identical $4.3 billion in 2017 to just $13.5  billion in 2020. That’s a gain of only 3.1X or sharply below the Microsoft figure.  

At the same time, Amazon is currently valued at $1.662 trillion in the stock market,  which implies the e-Commerce business (including advertising) is worth $1.154 trillion.  

Then again, the net income attributable to its giant e-Commerce business in 2020 was  just $8.73 billion, meaning that it is implicitly valued at a 132X PE multiple!  

That’s truly out of this world because Amazon’s 2020 Covid-fueled e-Commerce  earnings were wholly aberrant based on its massive $96 billion volume gain in the  segment. By contrast. the e-Commerce segment’s net income was only half of 2020’s  level in 2019 and 2018 ($4.2 billion and $4.0 billion, respectively).  

In short, the effect of massive over-valuation in the Wall Street casino is that Amazon’s  management is being given seriously erroneous signals. During the last five years it has  not paid a dime of dividends or bought back a single share of stock despite generating  nearly $172 billion of cash flow from operations and $300 billion of gross profits.  

What this means is that Amazon is using these enormous flows to flood the marketplace  with below cost pricing and loss-making ventures in endless new segments, while  pleasuring Bezos and its public stockholders with an endlessly rising share price and  increasingly hideous valuation multiples.  

As we have often observed, there is no more dangerous combination than free money  and free markets. Together they have turned a once and former Schumpeterian  entrepreneur into a hideously rich destroyer of main street wealth, even as he offers  Sleepy Joe the rope with which to strangle what remains of sustainable capitalist  prosperity in America.  

At the moment, of course, conservatives and Republicans are bewailing the embrace by  Bezos and his corporate ilk to what amounts to the state religion of wokedom.—with the 

latest examples being the MLB’s exit from Atlanta and the Delta Airlines and Coca-Cola  attacks on Georgia’s voting reform law.  

But do they suppose that after a near death experience in 2020 and $12.4 billion of  losses that Delta Airlines would today be trading at a near record market cap of $32  billion had not the Fed flooded the market with fiat credit?  

Or that after 10 straight years of negative net income growth, Coca-Cola Co would be  trading at nearly 30X net income?  

Indeed, the chart below tells you all you need to know. Thanks to the mad money printers in the Eccles Building, Coca-Cola’s market cap has soared from $150 billion to  $229 billion during the last 10 years, even as it’s net income has plunged from $12.5  billion to $7.7 billion or by nearly 40%.  

At the end of the day, Coca-Cola’s now very woke executives got very rich, but not  because of the company’s miserable performance. They got rich and woke because the  Fed made it so, fueling a rampant gambling casino on Wall Street that took the  company’s PE from 12X in 2011, which it barely deserved, to nearly 30X today, which is  a pure crime upon honest finance.  

Still, are the Republicans prescient enough to see that their real enemy is the central  bankers who have enabled these wokester capitalists to become so unspeakably rich that  they no longer even need to pay attention to business or challenge the Washington  politicians who threaten it?  

The answer, unfortunately, is no. 

Awhile back we addressed these same over-valuation issues during a interview on the  outlook for the post-Covid economy. With the passage of time, the threat from  Washington has only metastasized measurably, even as the bubble has continued to  swell.   

David Stockman was Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.

The above originally appeared at David Stockman's Contra Corner.

Peter Thiel Says Bitcoin is a Chinese Weapon and That the US Needs to Crack Down on it Harder

Peter Thiel

Peter Thiel is “pro-crypto” and “pro-Bitcoin maximalist,” but he also thinks the cryptocurrency may be undermining America, reports Bloomberg.

Thiel urged on Tuesday that the U.S. government consider tighter regulations on cryptocurrencies.

“I do wonder whether at this point, Bitcoin should also be thought [of] in part as a Chinese financial weapon against the U.S.,” Thiel said during an appearance at a virtual event held for members of the Richard Nixon Foundation. “It threatens fiat money, but it especially threatens the U.S. dollar.” He added: “[If] China’s long Bitcoin, perhaps from a geopolitical perspective, the U.S. should be asking some tougher questions about exactly how that works.”

So  Palantir-man leads the advance against Bitcoin with an entirely new direction of attack. Interesting.

According to Bloomberg, Thiel was joined in the event by former Secretary of State Mike Pompeo and former National Security Advisor Robert O’Brien. 

Thiel also suggested that the U.S. should follow India in banning TikTok, the social app owned by Chinese company ByteDance Ltd., and which he called “this sort of incredible exfiltration of data about people.” Thiel noted that if it were banned, TikTok would likely be replaced by similar apps, as has happened in India. “I don’t think it was like a tremendous, tremendous loss” in India, he said.

Thiel obviously has a very nationalistic (anti-China?) streak.

Also this from Bloomberg:
The appearance with Pompeo could have implications for the 2024 presidential race. The former secretary of state is widely seen as a possible candidate for the Republican nomination—and Thiel has signaled a willingness to back figures closely aligned with Trump. He was a major backer of Trump in 2016, and recently donated $10 million to a PAC supporting the potential Senate candidacy of J.D. Vance, an author and conservative political figure who previously worked at a Thiel-backed venture capital fund.

Back to China and Bitcoin: Has Thiel ever heard of a gold-backed dollar that would solve the fear of competing currencies?