https://wallstreetonparade.com/2024/12/trump-has-a-slush-fund-to-prop-up-the... By Pam Martens and Russ Martens: December 10, 2024 ~ Trump, Pied PiperThe dark veil behind which the U.S. political system has operated since the U.S. Supreme Court’s Citizens United decision and its progeny turned presidential elections into a subtle form of payoffs and kickbacks has been lifted. Donald Trump is handing out cabinet posts and ambassadorships to his largest donors in the most scandalous manner in U.S. presidential history. Now Trump’s crypto megadonors are demanding their own form of a kickback – a Bitcoin Strategic Reserve, where the U.S. government would, effectively, prop up the price of Bitcoin by buying up large amounts each year and holding it as a Strategic Reserve. (Skeptics might be forgiven for seeing that as a means for Bitcoin billionaires to sell their Bitcoin without driving down the price too much because there is a perpetual buyer on the other side of their trade.) Most Americans have heard of the Strategic Petroleum Reserve (SPR). The U.S. Department of Energy describes the SPR like this: “The Strategic Petroleum Reserve (SPR), the world’s largest supply of emergency crude oil was established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program. The federally-owned oil stocks are stored in huge underground salt caverns at four sites along the coastline of the Gulf of Mexico. The sheer size of the SPR (authorized storage capacity of 714 million barrels) makes it a significant deterrent to oil import cutoffs and a key tool in foreign policy.” Until more green energy sources are established, Americans must use petroleum products to drive their cars to work, to stay warm in the winter, and for various other essential functions. Other than speculative trading and money laundering, we can’t think of anything that Bitcoin does. In July 2019, NYU Professor and economist Nouriel Roubini critiqued the lack of a useful purpose for Bitcoin as follows: “Crypto currencies are not even currencies. They’re a joke…The price of Bitcoin has fallen in a week by how much – 30 percent. It goes up 20 percent one day, collapses the next. It is not a means of payment, nobody, not even this blockchain conference, accepts Bitcoin for paying for conference fees cause you can do only five transactions per second with Bitcoin. With the Visa system you can do 25,000 transactions per second…Crypto’s nonsense. It’s a failure. Nobody’s using it for any transactions. It’s trading one sh*tcoin for another sh*tcoin. That’s the entire trading or currency in the space where’s there’s price manipulation, spoofing, wash trading, pump and dumping, frontrunning. It’s just a big criminal scam and nothing else.” The FBI reported that crypto schemes defrauded victims out of $5.6 billion in 2023, accounting for 50 percent of fraud victims’ total financial losses. One of the politicians pushing for a crypto or Bitcoin strategic reserve is Senator Cynthia Lummis, a Republican from Wyoming whose campaign coffers benefit from the generosity of wealthy crypto investors. On July 31, Lummis introduced Senate bill S.4192 which is aptly called The Bitcoin Act of 2024. The official summary of the bill reads as follows: “This bill provides for the acquisition and storage of the cryptocurrency Bitcoin by the U.S. government. “The Department of the Treasury must purchase one million Bitcoins over a five-year period and hold the Bitcoins in trust for the United States. All Bitcoins acquired under this bill must be held for at least 20 years unless used to retire outstanding federal debt. “The bill directs Treasury to establish a Strategic Bitcoin Reserve for the secure storage of U.S. Bitcoins. The reserve must be a decentralized network of secure facilities across the United States. Existing U.S. Bitcoin holdings must be transferred to the reserve. States may voluntarily store Bitcoin holdings in the reserve in segregated accounts. “The bill also reduces the total amount of U.S. dollars Federal Reserve banks may hold in surplus and requires Federal Reserve banks to remit a certain amount of net earnings annually to the purchase of Bitcoins.” Let all that sink in for a moment. Some of the greatest investment and tech minds in the U.S. have called crypto a scam and a pump and dump scheme. (Warren Buffett called it “rat poison squared.”) And yet a Senate bill wants to get the U.S. Treasury and the central bank of the United States, the Federal Reserve, engaged in propping up crypto. Fortunately, as of this morning, the Lummis bill had zero co-sponsors. Trump appears to be in favor of the Bitcoin Strategic Reserve. At the Nashville Bitcoin Conference in July, Trump was a featured speaker and told the crowd this: “It will be the policy of my administration to keep 100 percent of all Bitcoin the US government currently holds [seized from fraudulent actors] or acquires in the future…as a core of the strategic national Bitcoin stockpile.” As recently as 2019, before all that money began to flow into his campaign from the ultra-wealthy crypto bros, Trump was a crypto skeptic, calling it “based on thin air” and facilitating “drug trade and other illegal activity.” Even if Lummis can’t drag her proposed legislation over the finish line, Trump has another resource he might try to use to prop up the price of cryptocurrencies – especially since he and his family stand to financially benefit from a crypto operation, World Liberty Financial. While the footnote at the company’s website goes out of its way to emphasize that Trump and his family and the Trump Organization do not own the business and are not officers of the business, it does share this: “DT Marks DeFi, LLC and its affiliates, including Donald J. Trump has or may receive approximately 22.5 billion tokens from World Liberty Financial, and will be entitled to receive 75% of net protocol revenues as defined in a services agreement to include revenue from any source after deduction of agreed reserves, expenses and other amounts, which amount cannot yet be determined….” The resource we’re referring to is the Exchange Stabilization Fund (ESF) – an entity that most Americans do not know exists. It’s essentially a slush fund available to the sitting U.S. Treasury Secretary since 1934, with the approval of the President. The ESF grew from $94.3 billion in assets prior to Trump taking office in his first term as President to $682 billion as of September 30, 2020, four months before he left office. The size of the ESF slush fund matters because under current law (31 U.S.C. §5302) the decisions on how to spend the billions in this slush fund belong to the Treasury Secretary and “are final and may not be reviewed by another officer or employee of the Government.” The law also provides that the Treasury Secretary “with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities the Secretary considers necessary.” The “other instruments” might be interpreted to include cryptocurrencies by some legal brain serving in the second Trump administration. We know that Trump in his first term as President issued an Executive Memorandum on March 20, 2020 giving U.S. Treasury Secretary Steve Mnuchin complete discretion to use $50 billion in the Treasury’s Exchange Stabilization Fund (ESF) as Mnuchin solely saw fit. On the prior Tuesday and Wednesday of that same week, Mnuchin had already used $20 billion of the Exchange Stabilization Fund to bail out Wall Street. As Mnuchin’s letter of November 19 to Fed Chair Jerome Powell confirms, he gave (or committed) $10 billion from the ESF to the Fed’s Commercial Paper Funding Facility on March 17 and another $10 billion to another Fed emergency lending program, the Money Market Mutual Fund Liquidity Facility, on March 18. Trump has nominated a hedge fund manager, Scott Bessent, to become U.S. Treasury Secretary. (See Donald Trump’s Treasury Nominee Made Big Bets this Year on Chinese Stocks and a Big Short on the U.S. Market.) What could possibly go wrong? FacebookTwitterWhatsAppLinkedInEmail