In interview with Natalie Brunell Luke Gromen, renowned macroeconomic analyst and founder of FFTT LLC, shared his observations on former President Donald Trump’s potential impact on the Bitcoin price. The discussion centered around Trump’s campaign promise to create a strategic stockpile of Bitcoin and its comparisons to crude oil.
Bitcoin as the “new oil”
When asked about Trump’s interest in accumulating up to one million Bitcoins over the next few years and his global impact, Gromen delved into historical parallels and strategic economic maneuvers. Gromen recalled Trump’s statement at the Bitcoin 2024 conference in which Trump said, “Bitcoin is the new oil.” This remark piqued Gromen’s interest and led him to explore the deeper strategic implications beyond simply “wanting votes.”
Gromen recalled Trump’s August comment in which he said he would “pay off America’s debt with a little bit of Bitcoin.” According to the economist, “it was a really strange comment. I started wondering if Bitcoin was the new oil. This Bitcoin will be inflated like crude oil.”
He highlighted a historical event from the early 1970s: “If we go back in time to the end of ’73 and the beginning of ’74, the price of oil increased 400% from October 1973 to April ’74.” Gromen noticed. He recalled an interview with former Saudi Oil Minister Ahmed Zaki Yamani.
“There is an interview that former Saudi oil minister Ahmed Zaki Yamani gave on CNN International in 2010 in which he said that there was a meeting of the Bilderberg Group. On this Swedish island in delayed 1973, in October 1973, Henry Kissinger was present and he said, look at the price of oil. [It] increases by 400%. Get on board. And it happened. And again, these are not my words. These are the words of the former Saudi oil minister on CNN,” Gromen said.
According to the economist, the United States was growing “an oil market large enough to cover American deficits” by recycling petrodollars into American debt, effectively abandoning the gold standard and establishing a up-to-date oil standard. “[It] essentially solved the US fiscal problem after the Vietnam War, and when we got off the gold standard, we basically went to an oil standard,” Gromen noted.
Gromen suggested that a similar strategy could be used with Bitcoin today. “I started wondering if Bitcoin is the up-to-date oil – if Bitcoin will inflate like crude oil, which will inflate the stablecoins so that the stablecoins will buy a lot more treasures [bills]– he explained. By significantly increasing the price of Bitcoin, the United States could potentially attract global capital into T-bills via stablecoins, thereby solving a major debt problem.
He referred to a recent report from the Treasury Borrowing Advisory Committee (TBAC) that included two appendices – one highlighting the unsustainable fiscal situation of the United States and the other discussing “Digital Assets and the Treasury Market.” Gromen interpreted this as “major banks telling the Treasury how digital asset markets can help finance this major US fiscal and debt problem.”
Paul Ryan, former Speaker of the House of Representatives, also joined the discussion. Gromen mentioned Ryan’s article in The Wall Street Journal, in which Ryan stated that “stable coins could help the United States solve its debt problem.” This convergence of perspectives among influential figures led Gromen to consider a coordinated strategy involving Bitcoin and stablecoins to strengthen the U.S. economy.
“We need a way to weaken the dollar while strengthening the dollar system,” Gromen assured. By increasing the value of Bitcoin, the United States could potentially “increase stablecoin adoption, increase stablecoin demand for T-bills,” and attract dollars from around the world into the U.S. financial system. This could simultaneously solve the debt problem and stimulate the economy.
Gromen emphasized that his views are speculative and based on the latest observations. “This is a relatively up-to-date view; it’s not that deeply rooted,” he admitted. But he finds the convergence of Treasury reports, political commentary and historical parallels compelling. “I think they’re looking at it from that angle. Really,” he concluded.
At the time of publication, the price of BTC was $96,751.
Featured image from YouTube, chart from TradingView.com
