Bitcoiners,

Have you ever wondered why "big government" keeps growing?

One reason is what economists call "the ratchet effect." Whenever a crisis happens, governments assume more responsibilities and control. Afterward, officials only return some of their new powers. When things revert to normal, they don't go back all the way, and like a ratchet, the government's grip tightens.

This often manifests in ever-increasing government spending. In 2008, for example, the government spent a few hundred billion on bailouts during the financial crisis. Twelve years later, Congress unleashed $5 trillion in stimulus spending during the Covid-19 pandemic.

Fiat money powers the ratchet effect because the government has nearly unlimited means (money printing) to achieve its ends. Fixing this requires a return to sound money, removing the government's means.

Thankfully, with its fixed money supply, a bitcoin standard would keep politicians' hands outside the cookie jar (no more printing) and end monetary hedonism once and for all.

Now let's dive in.

INSIGHTS

🤔 Americans refuse to stop spending despite high inflation

In a puzzling development for economists, consumer spending remains high despite increased prices. Americans can't stop eating out, traveling, and shopping for new cars. Analysts caution, however, that once the effects of rate hikes fully kick in, shoppers will eventually run out of gas.

Analysis: The lagging effects of increased interest rates can take time to set in, especially for the consumer economy. Spending remains high due to a strong labor market, but this is usually a lagging indicator. As job losses begin and economic fallout continues, expect consumer spending decreases ahead.

📈 SEC Chair: "Everything other than bitcoin" is a security

Securities and Exchange Commission (SEC) Chair Gary Gensler rocked the "crypto" world this week- to Gensler, everything other than bitcoin is a token pump because "there's a group in the middle and the public is anticipating profits based on that group."

Does it matter? Gensler's comments influence the SEC's bitcoin and "crypto," regulation, but they only define the open source network and asset within a limited regulatory purview. Bitcoiners should proceed cautiously regarding statements made by a political actor, who could easily change his mind based on the political headwinds.

👀 Survey: 80% see an urgent need to update US financial system

A large majority of Americans believe the global financial system unfairly favors powerful interests and needs a major overhaul, according to a new poll conducted by Morning Consult and Coinbase.

Digging deeper: The results indicate an increasingly frustrated population that feels the current economic system serves a few at the expense of the many. This is an unfortunate consequence of fiat money, where currency controlled by a few gets distributed disproportionately. Bitcoin provides a fairer, equitable, and superior monetary solution, which is why we do what we do.

📣 Financial Times questions Fed policy, raising inflation target

In a widely shared Financial Times article, economist and financier Mohamed El-Erian criticized the Federal Reserve's role as "the only game in town, chasing an increasingly elusive and outdated inflation target." El-Erian proposed Congress take a more active part in Fed policy, along with the Fed raising its inflation target.

Reading between the lines: Congress inserting itself into monetary policy is a recipe for more politicization- empowering the well-connected at the expense of everyone else. And El-Erain's call for raising the inflation target is nothing more than goalpost shifting- shielding bureaucrats from accountability for their inflationary missteps.

BITCOIN ADOPTION CONTINUES

Ukraine's deputy digital minister says bitcoin and digital asset donations and the speed at which they can be received played a crucial role in the country's ability to respond to the invasion.

Block CFO is featured on CNBC saying, "the internet needs a currency," referencing bitcoin and discussing bitcoin on their balance sheet.

Robert Kiyosaki, the author of Rich Dad Poor Dad, which is one of the top 10 personal finance books of all time, said he's very excited about bitcoin, or "the people's money," saying "the more I'm in it, the more I realize it has sustainability."

Israel's stock exchange has announced they will allow brokers to offer bitcoin to their clientele.

Rapper Drake is back betting with bitcoin, and this time it wasn't a good outcome. He lost 17 BTC, or $400,000 worth of bitcoin, betting on Jake Paul in his first loss to up-and-comer Tommy Fury.*

*If the rap mogul read this newsletter, maybe he'd understand it's better to speculate with fiat and preserve in bitcoin. C'mon, Drake!

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week: Bitcoin is fiscal responsibility.

United States Treasury Secretary Janet Yellen has been in the news recently.

A few weeks ago, Yellen made headlines regarding her calls to increase the debt limit. In her own words, she described the 'extraordinary measures the Treasury has started using' to keep paying its bills.

The debt ceiling is a hot topic as the US has spent beyond its means and requires raising the ever-increasing "ceiling..." Again.

But this week, the Secretary also announced an additional $10 billion of economic assistance to Ukraine for their ongoing war with Russia.

Before continuing, a disclaimer: this essay is not about the war or any personal political opinions- beyond the political jockeying that takes place with our money.

You may recall the Pentagon failing its audit for the 5th time in a row, unable to track $2 trillion in spending... Yes, trillion.

At this point, questioning defense spending is more than warranted. It should be imperative.

The two conflicting stories raise the obvious question: if we struggle to pay our existing bills, how can we provide other countries, or anyone in general, with billions of new dollars?

The answer lies in fiat money.

Maybe you support giving money to this specific cause. Maybe you don't. But doling out money we don't have is what got us into this debt limit mess in the first place. And many others.

In the White House press secretary's words regarding the debt ceiling debate: 'this will force cuts on programs critical to seniors, the middle class and working families.'

So how did we get here? Put simply, politicians enjoy unfettered access to a money that has no limit. Fiat money allows reckless spending by those who don't incur any of the consequences of their actions.

That's why, since 1960, politicians have raised the debt ceiling 78 times. And counting.

Contrast this fiscally irresponsible money system with bitcoin.  

The Bitcoin Network is a monetary system of checks and balances.

Unlike fiat, bitcoin has no central authority controlling its supply or distribution.

Instead, it operates on a network of unrelated computers, ensuring that no single entity can manipulate the system. This decentralization creates a system of checks and balances that provides transactions with integrity and prevents the corruption of money.

The fixed supply of 21 million bitcoin ensures fiscal responsibility, as there can never be more than a certain amount of bitcoin in circulation, preventing inflationary pressures.

And fiscal responsibility is something the world desperately needs at the moment.

Ready to get started with bitcoin? Coinbits is the best option. It's fast, safe, and free to create your account.

COIN CHECK

How are bitcoin transactions verified?

1. By Bitcoin, Inc.

2. By a government agency

3. By a network of financial institutions

4. By a network of bitcoin users

Check your answer at the end of the page.

FROM THE MEME POOL

BITCOIN ROUNDUP PODCAST

If you love our newsletter, you’ll love our podcast, too.

ANSWER

4. By a network of bitcoin users

Was this email forwarded to you? Sign up here.