Let's be blunt. Trump's foray into cryptocurrency, specifically the TRUMP coin and the USD1 stablecoin, isn't just another celebrity endorsement. This entire arrangement feels like a precarious house of cards, built solely on the foundations of speculation and hype. The most regrettable lack of regulatory oversight should indeed cause you concern. Are we at the precipice of a new financial crisis, this time driven by meme coins and access to presidents?

Meme Coins, Real-World Mayhem?

Think back to 2008. The global economic ruin caused by the sudden collapse of the housing market, itself built on highly complex and newly-minted, ill-understood financial instruments. Now, take out subprime mortgages and insert meme coins such as TRUMP, and mortgage-backed securities with…well nothing of like inherent worth. The underlying issue remains: unchecked speculation can have devastating real-world consequences.

The argument that these are just harmless digital trinkets falls apart when you consider the sheer scale and the potential for manipulation. 20% of all TRUMP coins were worth $14 billion at the time of launch! Well, this isn’t a game – it’s a casino. The other winner—the house, possibly the Trump family through CIC Digital LLC and Fight Fight Fight LLC, which jointly hold 80% of the coins—always wins, taking profits from transaction fee collection. In the meantime, regular investors are the ones stuck holding the bag when the hype all but disappears.

Here's the unexpected connection: remember the dot-com bubble? Companies with no real business plan, just a catchy name and a website, saw their stock prices skyrocket, only to crash and burn, leaving countless investors ruined. Meme coins operate on the same principle: hype over substance. The only difference? This time, an ex-president is making a serious push to expand the bubble.

Dinner for Dollars, Danger for All?

The planned dinner for the 220 highest TRUMP coin holders isn’t merely ethically dubious—it’s actually a shining red-hot alarm bell. And the administration’s new plan — the complete commodification of access to the President — is being sold to the highest bidders. This would make foreign influence more opaque.

Cryptocurrency transactions are notoriously difficult to trace. Foreign actors would have no trouble purchasing TRUMP coins. This would provide them the access to the President and the influence power to address while eliminating any paper trail. It isn’t only a matter of possible bribery though—it’s a matter of national security.

The apparent lack of transparency surrounding this public-private approach is even more alarming. Their dinner is a secret, so it’s difficult to determine the risk they pose. This is more than a political scandal, this is corruption at the heart of our democracy’s processes.

  • What are the true motives of those buying access?

The USD1 stablecoin, released into the world by Eric Trump’s red pill brother, Donald J. Trump—well that just muddies the waters further. Even if stablecoins are pegged to the US dollar, their value is based on the assets that back them up. In the case of USD1, those assets are US Treasury securities.

Stablecoins Unstable Foundations?

On the surface, this seems safe. But consider this: a large influx of capital into stablecoins could distort the market for Treasury bonds, potentially creating instability. That $2 billion investment in Treasury bonds provides a staggering $85 million in annual interest. This serves the Trump family financial interests, presenting an unambiguous conflict of interest.

Now Elizabeth Warren’s opposition to the Genius Act, which would have started to bring stablecoins under control, seems a lot more hypocritical. Regulation can be a good thing. Even the Genius Act would not be enough to protect us from the kind of corruption we’re seeing in the Trump family’s foray into cryptocurrency. It is the lack of regulation that creates an environment for this abuse to thrive. The proposals on the table do not go far enough to mitigate that harm.

The risk here goes beyond just the monetary—it’s systemic. Without proper guardrails, stablecoins have the potential to be a disruptive force in the US financial system. Without smart regulation and robust oversight, we set ourselves up to absorb another shock.

Ultimately, Trump’s crypto gamble is a reckless wager on the US’s financial stability. It’s a cautionary tale of how unbridled speculation, special political influence, and obfuscation from the public can lead to catastrophic results. We must remain diligent and continue to call for stronger oversight to shield our financial system from bad actors who may exploit it. The answer is more than an ethical inquiry into Trump’s business pursuits. Key to all of these determinations is whether they represent a systemic risk to the whole US economy. Don't ignore this threat.

What's next?

  • Increased scrutiny: Expect increased scrutiny from regulators and lawmakers, particularly if the Trump family's cryptocurrency ventures continue to grow.
  • Potential regulation: The Genius Act or similar legislation could be revisited, with stronger provisions to address potential conflicts of interest.
  • Market correction: The value of meme coins like TRUMP is likely to plummet eventually, potentially causing losses for investors.

Ultimately, Trump's crypto gamble is a risky bet for US financial stability. It's a reminder that unchecked speculation, combined with political influence and a lack of transparency, can have devastating consequences. We need to be vigilant and demand greater accountability to protect our financial system from potential abuse. The question isn't just whether Trump's ventures are ethical; it's whether they pose a systemic risk to the entire US economy. Don't ignore this threat.