Tech billionaire Peter Thiel says the US economy would already be in recession if it weren’t for the government’s ongoing interventions.
Speaking to fellow billionaire Chamath Palihapitiya at the All-In Summit 2024, Thiel claims that the US government’s massive spending is the only reason we haven’t seen a recession yet.
This is not sustainable
According to Peter Thiel, however, these gigantic expenditures of the American government are not sustainable in the long term. The billionaire claims that this is causing gigantic budget deficits in the government, which causes the debts to increase and they have to pay more and more interest on those debts.
“I think we are close to a recession. I have thought that for a while. But it is being held back by the enormous government spending. In May 2023, the budget deficit for fiscal year 2024 (October 2023 – September 2024) was expected to be $1.5-1.6 trillion. In reality, that deficit is $400 billion higher,” Thiel said.
The budget deficit that was expected was already huge, at 1.5 to 1.6 trillion dollars. Now another 400 billion dollars is added to that. What makes the situation even more dangerous, according to him, is that America is dealing with these deficits at a “good” time.
If we also get a recession later, then according to him it could get completely out of hand. “We have too much debt and the economic growth is not sustainable enough,” he concludes.
What does this mean for Bitcoin?
For the Bitcoin price this is theoretically a positive development. At least in the long term.
Bitcoin is an asset that was launched in 2009 by Satoshi Nakamoto to protect against the “printing” of money by governments. That is exactly what we are seeing happening to a large extent now.
The theory is that it will become increasingly attractive for investors to abandon US dollars and government bonds in favor of the scarcity of Bitcoin or other assets with natural scarcity.
More and more investors are realizing that their money is not safe in the US dollar. On the other hand, we must not forget that people and companies ultimately have to pay their bills (and their debts) in US dollars.
Of course, that still creates a big demand for dollars. If that were not the case, we probably wouldn’t be talking about the US dollar anymore.
Source: https://newsbit.nl/miljardair-waarschuwt-voor-grote-recessie-in-amerika/
