in a interview Along with Natalie Brunell, Luke Gromen, a renowned macroeconomic analyst and founder of FFTT LLC, shared his thoughts on the possible influence of former President Donald Trump on the price of bitcoin. The discussion focused on Trump's campaign promise that he will establish a strategic reserve of bitcoin and its comparison to oil.
bitcoin as 'the new oil'
When asked about Trump's interest in accumulating up to a million bitcoin in the coming years and its global impact, Gromen delved into historical parallels and strategic economic maneuvers. Gromen recalled Trump's statement at the bitcoin 2024 conference, where Trump said: “bitcoin is the new oil.” This comment piqued Gromen's interest, prompting him to explore deeper strategic implications beyond mere “pandering for votes.”
Gromen recalled Trump's comment from August in which he said he will “pay off America's debt with a little bit of bitcoin.” According to the economist, this “was a really strange comment. I started to wonder if bitcoin is the new oil. “That bitcoin is going to inflate like oil.”
He highlighted a historical event from the early 1970s: “If we go back in time to late '73 and early '74, the price of oil rose 400% between October '73 and April '74,” Gromen noted. He referred to an interview with former Saudi Oil Minister Ahmed Zaki Yamani.
“There is an interview given to CNN International by former Saudi Oil Minister Ahmed Zaki Yamani in 2010 in which he said that there was a meeting of the Bilderberg Group. On this Swedish island at the end of '73, in October of '73, Henry Kissinger attended and said, “look at the price of oil.” (It's) going up 400%. Get on board. And it happened. And again these are not my words. These are the words of the former Saudi Oil Minister on CNN,” Gromen said.
According to the economist, the United States was making “the oil market large enough to support US deficits” by recycling petrodollars into US debt, effectively ending the gold standard and establishing the new oil standard. “It basically solved America's fiscal problem after the Vietnam War and after we got off the gold standard, it basically put us on an oil standard,” Gromen said.
Gromen suggested that a similar strategy could be applied to bitcoin today. “I started to wonder if bitcoin is the new oil, that bitcoin will inflate like oil inflated stablecoins, so that stablecoins will buy a lot more Treasury (notes),” he explained. By significantly increasing the price of bitcoin, the United States could potentially attract global capital into Treasury bills through stablecoins, thus addressing its serious debt problem.
He referenced a recent report from the Treasury Borrowing Advisory Committee (TBAC), which included two supplements: one highlighting America's unsustainable fiscal situation and another analyzing “Digital Assets and the Treasury Market.” Gromen interpreted this as “the largest banks telling the Treasury how digital asset markets could help finance this serious US fiscal and debt problem.”
Paul Ryan, former speaker of the House, also participated in the discussion. Gromen mentioned Ryan's op-ed in The Wall Street Journal, where Ryan posited that “stablecoins could help the United States with its debt problem.” This alignment of perspectives from influential figures led Gromen to consider a coordinated strategy involving bitcoin and stablecoins to boost the US economy.
“We need a way to weaken the dollar and at the same time strengthen the dollar system,” Gromen said. By inflating the value of bitcoin, the United States could potentially “increase stablecoins, increase demand for treasury bills” and attract dollars from around the world to the US financial system. This could simultaneously address the debt problem and stimulate the economy.
Gromen emphasized that his views are speculative and based on recent observations. “It is a relatively new vision; It’s not as firmly rooted,” he admitted. However, he finds the convergence of Treasury reports, political commentary and historical parallels compelling. “I think they are analyzing it in this sense. “I really believe it,” he concluded.
At the time of publication, btc was trading at $96,751.
Featured image from YouTube, chart from TradingView.com
