The U.S. Treasury Department has just issued an urgent letter requesting a lift on the debt ceiling, warning Congress of imminent financial collision in September as federal cash is running out. Though this scenario has played out many times before, it takes on special significance now in light of president Trump’s recent comments about bitcoin, saying it was created from “thin air,” and a congressional warning to Facebook regarding their Libra project. After all, to raise the debt ceiling and keep paying bills with borrowed USD is creating value out of thin air as well. Intrinsic value is nowhere to be found here. Not surprising when it comes to fiat perhaps, but diamonds and gold don’t make the cut, either.
Fiat: The Biggest Ponzi Scheme There Is
In Treasury Secretary Steven Mnuchin’s July 12 letter to House Speaker Nancy Pelosi, he states:
“Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes”
Speaking of cash, contrary to popular belief, the Federal Reserve doesn’t actually print any paper money. That’s what the treasury does, and this practice isn’t all that remarkable anymore, comparatively speaking. As it stands today, only about 11% of the money supply in the U.S. exists as physical money. Though estimates on exact amounts vary, the vast majority is created digitally, and debited or credited to banks via Fed implemented policy.
What this means is that the current system is literally one of centrally controlled digital assets. The whole thing is really a debt spiral of sorts, where the creator of the credit and debt (the U.S. government) essentially borrows from itself while the budget and national debt continue to increase for taxpayers.