in interview With Natalie Brunelle, Luke Gromen, renowned macroeconomic analyst and founder of FFTT LLC, shared his insights on the potential impact of former President Donald Trump on the price of Bitcoin. The discussion centered around Trump’s campaign promise that he would create a strategic stockpile of Bitcoin and its comparison to oil.
Bitcoin as the “new oil”
When asked about Trump’s interest in amassing up to 1 million Bitcoin over the next few years and its global influence, Gromen delved into historical parallels and strategic economic maneuvers. Gromen pointed to Trump’s statement at the 2024 Bitcoin conference, where Trump said: “Bitcoin is the new oil.” This comment intrigued Gromen, and prompted him to explore deeper strategic implications beyond simply “appeasing votes.”
Gromen pointed to Trump’s comment in August where he said he would “pay off the debt of the United States with a little bit of Bitcoin.” According to the economist, this “was a really strange comment. I’m starting to wonder if Bitcoin is the new oil. Bitcoin will be inflated like oil.”
He highlighted a historical event from the early 1970s: “If we go back in time to late 1973, early 1974, the price of oil went up 400% from October 73 to April 1974,” Gromen noted. He referred to an interview with former Saudi Oil Minister Ahmed Zaki Yamani.
“There is an interview given by former Saudi Oil Minister Ahmed Zaki Yamani on CNN International in 2010, in which he said that there was a Bilderberg Group meeting. On this Swedish island in late 1973, in October 1973, Henry Kissinger came and said look at the oil prices. (It’s) up 400%. Get on the plane. And it happened. And again these are not my words. These are the words of the former Saudi Oil Minister on CNN.
According to The Economist, the United States was making “the oil market large enough to support the US deficit” by recycling petrodollars into US debt, effectively ending the gold standard and creating the new oil standard. “[It]basically fixed the American fiscal problem after the Vietnam War, and after we left the gold standard, it basically put us on the oil standard,” Grummen commented.
Gromin suggested that a similar strategy could be applied to Bitcoin today. “I started to wonder if bitcoin was the new oil — that bitcoin would be inflated like oil so that it would inflate stablecoins, so that stablecoins would buy a lot of treasuries,” he explained. By significantly increasing the price of Bitcoin, the United States could attract global capital into Treasuries through stablecoins, thus addressing its severe debt problem.
He pointed to a recent report by the Treasury Borrowing Advisory Committee (TBAC), which included two appendices – one highlighting the unsustainable financial situation in the US and the other discussing “Digital Assets and the Treasury Market.” Gromen interpreted this as “the largest banks telling the Treasury Department how digital asset markets can help finance this severe US financial and debt problem.”
Paul Ryan, former Speaker of the House of Representatives, also participated in the discussion. Gromen mentioned Ryan’s opinion piece in the Wall Street Journal, where Ryan posited that “stablecoins could help the United States solve its debt problem.” This alignment of views from influential figures has led Gromin to consider a coordinated strategy involving Bitcoin and stablecoins to support the US economy.
“We need a way to weaken the dollar while strengthening the dollar system,” Gromin emphasized. By inflating the value of Bitcoin, the United States could potentially “increase stablecoins, increase demand for stablecoins for Treasury bills,” and attract dollars from around the world into the US financial system. This could simultaneously address the debt problem and stimulate the economy.
Gromen stressed that his opinions are speculative and based on recent observations. “It’s a relatively new point of view; He admitted that it is not that strong. However, he finds the juxtaposition of Treasury reports, political commentary, and historical parallels compelling. I think they look at it in that regard. “I really do,” he concluded.
At press time, Bitcoin was trading at $96,751.
Featured image from YouTube, chart from TradingView.com