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Kim Dotcom Says USD in Death Spiral, Buy Crypto

Kim Dotcom, who has been under siege by the New Zealand and United States governments since the 2012 closure of Megaupload, says the USD is in an irreversible death spiral due to the United States federal debt. Therefore, according to the internet entrepreneur, now is the time to buy crypto and gold.

US Empire now pays half a trillion dollars in interest payments per year to service its debt.

US debt increases by a trillion per year. It’s a death spiral that cannot be undone.

Self destruction and USD collapse are unavoidable. Get out of USD and US stocks. Buy gold & crypto.

— Kim Dotcom (@KimDotcom) October 25, 2018

Dotcom specifically mentions the United States government debt, which has been rapidly increasing due to a worsening federal budget situation. From 1997-2001, the debt was relatively steady in the USD 5.5-5.8 trillion range. The events of 11 September 2001 initiated a global war on terror, causing US debt to rise to USD 7 trillion by early 2004. In Iraq, the conflict became a war of attrition and to fund this, debt increased to USD 9 trillion around the beginning of 2008.

Then the Great Recession of 2008 began, the worst economic crisis since the Great Depression. Ultimately, trillions of US dollars were used to bail out banks and corporations, and this practice continues to this day. During early 2009, US debt exceeded USD 11 trillion. Notably, this acceleration of debt coincided with the launch of Bitcoin, and was referenced in the Bitcoin genesis block with the phrase “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks“.

By 2012, US debt had skyrocketed to USD 15 trillion. The pace of debt increase never slowed down, breaching USD 20 trillion in late 2017, coinciding with Bitcoin’s record highs of USD 20,000. As of 25 October 2018, this debt sits at USD 21.7 trillion, up USD 1.25 trillion in a year, or an increase of roughly USD 3.45 billion per day.

The Bitcoin market cap is USD 112.5 billion as of this writing on 28 October, which pales in comparison to the United States debt. It takes only a month for it to increase by the amount of the entire Bitcoin market cap.

Buried deep down in the United States budget for 2019 are tables showing that the budget deficit will be nearly USD 1 trillion in 2019, with projections of an increase through 2028. Interest paid out for debts will be USD 364 billion according to the estimate, with a year over year growth of USD 50 billion, yielding USD 869 billion of payments for debt in 2028. These are just estimates and do not account for emergencies like major wars or serious economic collapses.

Tying this data together with Dotcom’s statements, the United States debt has increased tremendously over the past two decades. Budget projections indicate the United States can not afford to slow down the deficit, let alone start paying back the debt. This will require the country to increasingly issue bonds, where people give the United States money in exchange for some slight long-term interest.

Depending on the length of bond maturity, current United States Treasury bond rates range from 2.3% to 3.3%. Historical 10-year bond interest rate data shows that after a long period of decline, rates for 10-year bonds have climbed from 1.5% in the middle of 2016 to 3.2% as of October 2018. Therefore, the amount of money the United States has to pay for bond interest has increased by over 100% in the past two years. This is likely due to decreasing demand for United States bonds versus the number of bonds the United States is trying to sell.

As bond interest rates rise, eventually investors will get spooked, and the United States will have to print money on a mass scale to keep the country running. This will drastically devalue the USD, and perhaps this is already underway. There has been 53% USD inflation since the year 1998 according to consumer price index (CPI) data, which is roughly 2.7% USD inflation per year.

Increasing budget deficits, which leads to increasing bond rates, which ultimately leads to printing money as a last resort once bond buying demand dries up, could very well cause hyperinflation of the USD. This would be catastrophic for most of the global economy.

However, Bitcoin and gold should hold their value relative to the USD, since they cannot be printed by the United States.

 

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DeVere Boss Sees Crypto Growth of 5,000% in Global Breakout

Nigel Green, CEO of deVere Group, one of the world’s leading independent financial advisory organizations, has predicted a growth in the crypto market of over 5,000% in the next 10 years.

Green puts this down to an acceleration in the mass adoption of cryptocurrencies over this period which he claims is close to what he describes as a “true global breakout”.

One factor of this new crypto gold rush, Green suggests, is the diminishing status of Bitcoin in the next ten years, which he feels will lose some of its current impetus due to the growth in the rest of the market. He commented:

“However, while I don’t wish to rain on anyone’s parade, I believe that Bitcoin’s influence and dominance of the cryptocurrency sector will drastically reduce in its second decade. This is because as mass adoption of cryptocurrency grows, more and more digital assets will be launched – by organizations in both the private and the public sectors. This will increase competition for Bitcoin and dent its market share.”

That said, he feels that in the short-term, FOMO or the fear of missing out will still be a major driver to Bitcoin adoption. On the eve of Bitcoin’s 10th birthday, Green is giving credit where its due, arguing:

“Bitcoin is what kick-started the crypto revolution and it has changed the way the world makes transactions, does business, and manages assets, among other things, forever. It all began with Bitcoin.”

In more a more radical statement about the future of money, whether digital or otherwise, German-Finnish internet entrepreneur Kim Dotcom and Irwin M Stelzer of the non-profit think tank the Hudson Institute are predicting the fall of fiat, but not in a decade, much sooner than that, suggesting:

“The pyramid game is coming to an end… crypto and precious metals will go up when everything else falls. I think it’s going to happen in the next two years.”

Stelzer proposes a scenario where the US dollar could even be on the verge of collapse due to current levels of debt and a multiple trillion-dollar printing program, adding, “If unlimited borrowing, financed by printing money, were a path to prosperity, then Venezuela and Zimbabwe would be top of the growth tables.”

 

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Kim Dotcom Warns to Invest in Bitcoin Before US Debt Bomb Explodes

Internet legend Kim Dotcom, who became infamous for his website Megaupload that became a global hub for internet piracy, is warning the people of the world to invest in Bitcoin and gold before the United States debt situation hits the fan.

1 TRILLION DOLLARS in additional US Govt debt PER YEAR!

US spending is funded by lenders who will never get paid. US Empire will collapse followed by a world wide economic collapse. https://t.co/kdtB0GnewP

Shift your USD into Gold & Bitcoin asap before USD becomes toilet paper. https://t.co/a5UIuhJvUT

— Kim Dotcom (@KimDotcom) August 9, 2018

Currently, the United States debt, provided by Treasury Direct, sits at a mind-boggling USD 21.342 trillion. This is a new all-time record.

To put this in perspective, Bitcoin’s market cap is USD 109 billion and the total cryptocurrency market cap is USD 214 billion, 0.5% and 1% the size of the United States national debt respectively. The cryptocurrency markets are a massive economic zone, it certainly does not make sense that the United States has a hundred times more debt than the total crypto market cap.

Essentially, the United States has been spending far more money than it actually has and prints money to compensate for the constant budget deficit. This is primarily done by issuing debt via selling USD bonds on the global market, which are considered the gold standard of the bond world, so they are bought up quickly despite the United States issuing tremendous amounts of bonds all the time. It’s getting even worse according to Kim Dotcom, the budget deficit is now over USD 1 trillion per year.

At some point in the future, if this is not resolved, the US will reach a point where it cannot afford to pay the interest on all of this debt. At that point, USD bonds will go from being the gold standard to being in default. These bonds are being held by numerous nations, corporations, and individuals worldwide, and if they were to default, it would cause an economic catastrophe. This would lead to massive money printing as a last attempt to save the economy, resulting in hyperinflation that will destroy the USD.

To be fair, it is possible that before this happens a government will arise in the United States that will take the hard steps necessary to balance the budget. It might truly be too late, however, as the economy is being propped up by the issuance of debt, and it’s quite possible that if the budget were balanced the economy would spiral into a deep recession from the lack of government stimulus, leading to further debt issuance and money printing.

This is where Bitcoin comes in. Bitcoin is a decentralized cryptographically secure cryptocurrency that can’t be printed at will. There is a fixed total of 21 million Bitcoins after mining is complete and Bitcoin is easy to use as a currency worldwide. If the USD collapses, Bitcoin will be in a position to become a top global currency. At that point, each Bitcoin would be immensely valuable and the current Bitcoin price just over USD 6,000 could be an excellent opportunity to buy.

Based on this simple economic logic pertaining to the United States debt situation, it seems Kim Dotcom has a point with his warning. People who buy and save some Bitcoin now could be the wealthiest ones in the future.

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