Renowned crypto investor, Kim Dotcom, foreseeing a US economic crash, again tweeted on 26 Oct. 2018 urging investors to invest in Crypto. Dotcom, also an internet entrepreneur, stated that the U.S economy would inevitably crash in the foreseeable future.
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 believes that in case the US market collapses, crypto and gold will be the most stable investment assets. According to him, the two categories offer a stable store of value. He firmly asserts that
“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.”
For clarity, this is not the first time that Dotcom is issuing such a warning and urging investors to invest in crypto. In August 2018, the controversial bitcoin enthusiast tweeted calling investors to shift their dollars to Gold and Bitcoin.
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
Warnings Not Unfounded
Admittedly, the US is a leading economy in the world whose changes has significant effects in Europe and Asia. Recently, the US stock market suffered its worst sell-off and deleted all gains made in 2018. Analysts have reported that the flu has caught Asia markets and they have become more vulnerable to a potential crash.
Kathy Lien, managing director of FX strategy at BKAM, said in a CNBC interview that:
“It’s not in an environment of positive growth trend, so the pressure will be exacerbated in the emerging markets compared to the U.S. market. Unfortunately, this is the beginning. I think that when we get sentiment shifts like these, they always last longer than we would like to see and we could see the selling continue for some time.”
In the event of a US crash, the effect will reverberate across the real estate, stock, and financial markets of Asia. Already, several economists and leading financial institutions such as JPMorgan have predicted that the economy will crash in 2020.
Moreover, the US debt problem mentioned by Kim Dotcom has already been shared by the International Monetary Fund (IMF). Actually, the IMF had to emphasise that the government must stop ignoring the seriousness of the federal debt. Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities vividly told CNBC that:
“Even if you think that public debt just doesn’t matter to economic outcomes, the thing you have to admit is that when we hit a downturn, governments are less likely to take significant steps if the debt is as high as ours is now,”
Echoing Bernstein’s sentiments, Sonja Gibbs, senior director of the Capital Markets and Emerging Markets Policy Department of the Institute of International Finance. She stated that the US faced an arduous task of stimulating growth and facilitating economic expansion with its vast debt.
Dotcom forecasts that in the next ten years, increased cryptocurrency adoption will make them acceptable as a payment method. Consequently, consumers will have unmatched financial freedom which will increase the value of their digital assets.