355 sats \ 4 replies \ @tomlaies 30 Jul \ on: Saifdean Is Probably Correct - US Gov’t Won’t Buy Bitcoin, Fed Won’t Allow It bitcoin
I think this guy is fundamentally misunderstanding something. The plans for Bitcoin reserves were not made such that the Fed would buy them. The US government would. Just like the strategic petroleum reserve.
I think the opposite is true. How does the government buy it without the Fed? Where did the currency come from for the petroleum reserve purchases?
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You realize the US government has income and borrowing power, right? They can pay for it with taxes and borrowing, just like any other expenditure.
Re: the petroleum reserve, it has very roughly $50 billion worth of oil in it; the US government collects something like $5 trillion a year in tax revenue.
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They aren't spending tax revenues like that. The tax revenues are the cash flows that back up the borrowing. How does the borrowing work? Through the Fed! Even when the Treasury sells bonds directly to you or me, who sets the rate? It starts at the Fed Discount "Window." Also, show me any piece of U.S. currency you desire. Every single one says Federal Reserve Note. When bonds are cashed in fro. where does the currency come?