Macro economy expert Luke Gromen has forecasted that the victor of the forthcoming US presidential elections in November could play a pivotal role in addressing inflation. Gromen proposes the issuance of long-term Treasury bonds as a strategy to tackle inflation, with a unique twist: he suggests that these bonds should come with Bitcoin (BTC) incentives for the buyers.
Why Include Bitcoin in Bonds?
Gromen elaborated on his proposal, stating, “We will offer 30-year Treasury bonds with a 2.5% yield, and each bond will include a Bitcoin incentive.” He believes that this feature would significantly enhance the attractiveness of these bonds. According to Gromen, these bonds carry no credit risk, with the primary risk being the currency’s value. He asserts that this approach could effectively mitigate inflation risks.
The macro economy expert emphasizes that stable interest rates are crucial for large corporations, which base their capital cost planning on these rates. If interest rates remain consistent, companies are less likely to adjust their pricing to manage borrowing costs, making them more competitive and efficient.
What Does Stable Interest Mean for Businesses?
Stable interest rates provide large enterprises with the ability to plan long-term without worrying about fluctuating capital costs. This scenario allows these businesses to maintain consistent competitiveness and operational efficiency, ultimately benefiting the broader economy.
Key Takeaways
- Issuing 30-year Treasury bonds with Bitcoin incentives could attract more buyers.
- Stable interest rates help large corporations maintain consistent capital costs.
- Reduced borrowing cost fluctuations enhance corporate competitiveness and efficiency.
- Long-term planning becomes feasible with predictable capital expenditures.
Conclusion
Gromen stressed that Washington’s policy debates have long been dominated by Wall Street, and that the real economy requires steady and transparent capital costs for long-term projects. He argues that controlling capital costs is essential for achieving strategic policy objectives, highlighting the need for a more stable economic environment to foster long-term growth.