Former Federal Reserve Governor Kevin Warsh is bullish on bitcoin. He sees all assets that are not controlled by the U.S. government â€œgoing through the roof,â€ unlike those the Fed purports to control. He has outlined three reasons why bitcoin makes sense to him.
Why Former Fed Governor Is Bullish on Bitcoin
Kevin Warsh was a Federal Reserve governor during and in the aftermath of the 2008 financial crisis. He also served as the Fedâ€™s representative to the G20. Warsh was asked about his view on bitcoin during an interview with CNBCâ€™s Squawk Box on Wednesday.
He began by observing that â€œEvery asset price that the U.S. government doesnâ€™t controlâ€ and â€œthe Federal Reserve doesnâ€™t controlâ€ is skyrocketing. He mentioned bitcoin, which he said â€œis in some sense the anti-government price,â€ and gold, which he described as â€œthe barbarous relic that has been around for 5,000 years.â€ The former Fed governor exclaimed:
â€œItâ€™s that distinction which I think the Chinese are pitching to the worldâ€™s investors that are saying look something is happening and the treasury market is not reacting,â€ Warsh continued.
The former Fed governor proceeded to explain why he thinks bitcoin â€œdoes make some senseâ€ to him. â€œThe dollar is weakening,â€ he began, adding that â€œIâ€™d look for the dollar to continue to weaken against a large basket of currencies.â€ Warsh elaborated, â€œThatâ€™s because of an incredibly aggressive Federal Reserve, which rightly or wrongly, I think we will be more aggressive than the worldâ€™s other central banks.â€
Warsh further pointed out that there are new fiscal policies that were not considered a decade ago. â€œWe now have this idea that as long as you can cover your interest expense the U.S. government has nothing to worry about,â€ he stressed. â€œItâ€™s a rather radical shift in monetary and fiscal policy and to be candid itâ€™s a bipartisan shift. I hear plenty of Democrats and Republicans singing the same tune which is the Fed can just monetize this debt and make it go away.â€
Noting that â€œBitcoin does make sense as part of a portfolio in this environment,â€ Warsh suggested that some investors are moving from gold to bitcoin. He opined:
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