By
Bhushan Akolkar
April 19th, 2024
J.P. Morgan chief compares bitcoin rally with the tulip bubble while the US has more debt than any point in its history. The amount owed shoots past $20 trillion.
Bitcoin is proving to be one of the very few alternatives for financial protection, as the total debt of the US federal government surpassed it’s an all time high record with $20 trillion.
While bitcoin is one of the world’s best known digital currencies and has enjoyed huge success over recent years, JP Morgan Chase chief executive Jamie Dimon doubled down on his past criticisms of bitcoin today, declaring it a “fraud” and saying he would fire any trader known to be trading the cryptocurrency.
“Bitcoin will eventually blow up. It’s a fraud. It’s worse than tulip bulbs and won’t end well,” Dimon said.That’s a reference to the arrival and boom of the tulip plant in 17th-century Europe. Its market boomed as people speculated on its price, and it all ended in panic selling.
In june this year Michael Novogratz, a $3.2 bln investor and former manager of the multi-billion dollar investment firm Fortress, predicted that the cryptocurrency market can reach $5 trillion by 2022.
Pundits like Mark Cuban claim that Bitcoin is in a bubble. Daniel M. Harrison disagree. He shows how fundamentally markets are altered by the Blockchain and Ethereum.
The United States has now slipped past the 20 trillion dollar debt mark for the first time in the history of the nation. According to the Washington Examiner, the debt ceiling was kept just below that mark since March, but Trump signed that ceiling away. Accordign to the Baltimore Sun, no light has been spotted at the end of the debt tunnel.
For months, it had been using off-book extraordinary measures to keep from defaulting. Since President Trump signed a bill including the debt-limit lift Friday, it was able to start unwinding those measures with regular borrowing and increase the debt.
The milestone was technically hit Friday, with the Treasury Department settling its accounts at the end of the day with $20,162,176,797,904 of debt outstanding. Of that debt, the Treasury said $14,622,661,213,046 is held by the public, while $5,539,515,584,857 is held by various parts of the government, also known as Intragovernmental Holdings.
The debt jumped from $19.8 trillion to $20.1 trillion after Congress suspended the debt ceiling for three months, allowing the Treasury to borrow again on the open markets.
Still, deficit hawks reacted with alarm.
“Surpassing $20 trillion in debt is the latest indicator of our nation’s dire fiscal condition,” said Michael A. Peterson, president and CEO of the fiscally conservative Peter G. Peterson Foundation.
The debt burden would lead the government to spend $6 trillion on interest over the next decade, he said.
“That’s more than we will invest in our kids. So, in effect, we have decided to spend more on our past than on our future,” he said.
Michael A. Peterson urged Congress to pass “fiscally responsible” tax reform, which should be bipartisan and deficit neutral.
“Before Congress agrees to increase the debt limit again, it is imperative we pass new laws that will change this disturbing trend instead of ignoring the root cause of our nation’s debt problems,” said Republican Study Committee Chairman Rep. Mark Walker (R-N.C.).
The next debt-ceiling increase is due at some point in 2018, possibly as soon as March.