Flash Drive Rich

How the U.S. Government Will Use Crypto to Solve Its Debt Crisis.

Leave it to our government to solve fiscal mismanagement with a technology originally designed to circumvent that same mismanagement. Bitcoin and other digital assets were supposed to be a rejection of fiat currency issued by central banks. The whole point was to replace the system of debt and fake money that eroded our purchasing power. Now this technology is entrenched in bureaucratic shenanigans as Wall Street and central banks use it to enslave us forever.

The paradoxical cycle of degrading currency with government debt for the purpose of inflating away debt will cease momentarily as equity in the crypto market bails out the national debt.

Recent legislation has legitimized the crypto industry and has paved the way for digital assets to revolutionize the monetary system. On its face the “Genius Act” is a bill to establish regulatory clarity for stablecoin issuers. What this has actually done is corporatized money itself. Currency issuance is no longer limited to governments or central banks.

“Stablecoins” are digital assets that are pegged to fiat currency. These assets are supposedly fully backed by U.S. dollars, foreign currency, or cash equivalents like government-issued debt. Examples include Tether (UST), Circle’s USD Coin (USDC), and Ripple’s RLUSD.

The capital reserve requirements laid out in this bill provide a clear incentive for stablecoin issuers to buy government debt. Thus, any corporation can mint their own legal tender as long as they back their digital asset 1:1 with U.S. Treasury Bonds.

Governments need debt to function—minus the inconvenient policy of raising taxes or cutting spending—and they now have a wonderful scheme to ensure there is always a buyer. As the governments fail to sell their unattractive debt on the open market, they employ questionable strategies. They typically offload bonds to developing foreign nations, enforce strict allocations of T-bills in pension funds, or just devalue the currency by selling to the central bank as a last resort.

Stablecoin issuers are new customers for government debt, as they are lawfully required to back all the currency they mint with sufficient cash equivalents, just like banks must back customer deposits. Haha just kidding, banks barely have to back a fraction of the money in your account. I guess that’s the perk of being a licensed counterfeiter. Anyway… governments prefer the influx of competitors to their own currency because they can now issue debt without directly inflating the money supply.

Corporations sell digital currency for your fiat dollars and collect the interest payments from your government while appropriately abiding by capital reserve requirements. Every corporation can now finance their cash holdings and function like a traditional bank.

A simple example is Starbucks, which already functions like a bank through their Rewards Loyalty Program. Customers add money to their rewards account like a bank deposit. This unused money sitting in these accounts is called breakage. Starbucks can utilize these funds as collateral, either by issuing corporate bonds or by directly purchasing financial instruments to generate additional cash flow from interest income. Under the new Genius Act, Starbucks can now make customers turn their dollars into $tarBucks (too easy) to function legitimately as a bank and issuer of currency.

Every corporation can do this by implementing blockchain ledgers in their accounting system. They will motivate customers to purchase their stablecoins by offering discounts and promotional gifts. Interestingly, this digital money will be pegged to U.S. dollars at a floating rate that fluctuates with market pressures. This corporate funny money could eventually become more desirable than national currency as governments inflate it into obscurity.

Investors will be trading futures on Chick-fil-A Digital Nuggets or strategically employing carry trades between Pillsbury ¢ookie Dough and Blue Bell Moolah-nium Crunch coins. Companies may find that raising cash through stablecoins is more lucrative than issuing stock. Finance will be forever changed as money becomes commoditized.

The money you earn through labor will depreciate relative to corporate digital money. You will be better off keeping cash in these loyalty accounts that corporations use to buy more government debt and earn interest income.

Everyone wins as long as you are a faithful consumer. Just as designed.

Once again, our government has concocted a brilliant scheme with corporations to monopolize our money and ensure that they can issue endless debt without reprisal.

I haven’t gotten to the best part of this scheme. While stablecoins must be backed by stable assets to ensure predictive value, the digital framework used to develop these stablecoins is still susceptible to price swings based on utility, volume of transactions, and pure speculation. That means digital assets with a fixed supply, like Bitcoin, Ethereum, XRP, Solana, Celo, and Cardano, can appreciate in price as their associated stablecoins are utilized.

Numerous governments around the world have already established crypto sovereign wealth funds for “economic resilience.” Governments have seized billions in cryptocurrency used in illicit ways or directly purchased/mined the assets for equity exposure and protection against inflation. Crypto could replace gold and other tangible commodities as reserve assets. In this scenario, a higher and much more stable price for these assets would be preferred by our governments.

Let’s recap here for clarity. These assets rise in price as fiat currency dies and is replaced by stablecoins backed by government debt. Governments also hold these assets and would use the appreciated value to pay off their debt balances.

They are using the debt that devalued your money to pay off their debt.

The cryptocurrency that was supposed to free us from debt-based monetary slavery has now been exploited to facilitate a new system that tracks every transaction, depreciates the value of our hard-earned labor, and sequesters us to a consumerist lifestyle of corporate allegiance. Wonderful.

Rejecting this new system will not be easy. Despite the public condemnation of central bank digital currencies (CBDC), our political class has already permitted a watered-down version via the Federal Reserve’s FedNow service that more efficiently destroys our currency than ever before. And now, most recently, they enshrined into law corporatized CBDCs through stablecoin legislation.

Your bank likely already uses the updated payment rails, and soon your paycheck will be delivered the same way. Systematic changes eventually become the norm despite public disgust. First it's optional, then it's more convenient, then the conventional route is penalized, and then it's illegal to do it any other way. Unless you’re able to transact exclusively in cash and keep all your wealth in gold coins buried in the backyard, you will adopt this system.

You’re probably thinking the obvious route is to invest in the technology used in the new system to front-run the greatest transfer of wealth in human history. I am way ahead of you, but being “flash drive rich” is only good if that equity is transferable into real wealth.

Purchasing a large amount of critical infrastructure for the new monetary system and holding it on a cold wallet (fancy-looking flash drive) is judicious. But what if your government nationalizes those assets? What if they choose to confiscate your property for monetary stability? What if they make it illegal for citizens to sell their crypto?

You think this is hypothetical? In 1933, the U.S. federal government seized all citizens gold to control the money supply in the face of the Great Depression. Executive Order 6102 required everyone to surrender their gold coins, bullion, and gold certificates to the Federal Reserve or face monetary fines and up to 10 years in prison. Do not underestimate central banks.

If we are lucky, they will enact a federal buyout program and compensate those who were prudent enough to sift through the noise of propaganda and own assets with intrinsic value. If there is one thing we can learn from this, it’s that equity is a fugazi. Assets are only worth what someone else is willing to pay for them.

Anything priced in fiat money is subject to swings in valuation that really come down to inherent demand. What are the things that people really need? Food, water, security, and shelter? Bitcoin may be worth over $100,000, but ask yourself what $100,000 is worth now and what it used to be worth. Is your wealth determined by intrinsic value or just pure speculation and inflation?

Yes, the global payment system has been in desperate need of modernization. The current dilapidated system of wire transfers was last standardized in 1973 by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), but the technology is over 100 years old. Payment transfers can take days depending on the transaction type while digital communication occurs in seconds. The antiquated payment rails used by financial institutions will eventually utilize blockchain technology because it needs it.

The government will use blockchain technology because it needs it.

Our debt is unsustainable, and our sovereignty is at risk because of it.

You better get one of those fancy flash drives or turn your silly equity into real assets that you’re capable of defending. If they wanted us to keep our wealth, they wouldn’t actively try to destroy it every chance they get.