By Michael Every of Rabobank

Oh Sugar!

A spoonful of sugar helps the medicine go down. However, sugar is now up over 40% year-to-date, and the monetary policy medicine is coming up with it. Sugar is usually a cheap ingredient in almost everything we eat or drink – and now it’s another example of supply-side shocks not going away. Olive oil is already echoing sugar, and what if the Black Sea Grain Deal fails too? Rates are going to go higher and stay higher.  

• The ECB’s Wunsch said rate hikes won’t stop until wage growth slows, and 4% is a possible ECB peak: that’s as the union responsible for distribution of sugar, olive oil, etc., at the biggest Dutch supermarket chain is on strike demanding a 14% raise and a lump sum. The ECB’s Schnabel said 50bps is not off the table for their next meeting.

• In the US, the Fed is on blackout ahead of another hike in May, but a headline runs ‘Critics warn US Inflation Reduction Act could keep prices high’ due to a scramble for workers, and the Wall Street Journal says ‘Weapons Makers Can’t Hire Enough Workers as Ukraine War Drives Demand: Rising geopolitical tensions have boosted military spending, prompting an industrywide hiring spree’. Reported CEO quotes from quarterly earnings calls include: “You’re starting to see a true sort of reshoring sort of industrial manufacturing growth,” and, “I want to just mention the excitement we have around the onshoring of manufacturing. It’s strong, and it keeps pushing forward projects such as the semiconductor chip plants, data centres, EV facilities, both the assembly facilities as well as the battery plants that are in our backlog.”

• In Australia, as Ben Picton notes in ‘Labour Pains’, the jobs market is extraordinarily tight too, and labour bargaining power may finally be increasing.

That does not imply an imminent sugary pivot, or even a saccharine pause as precursor. Or so the hedge funds diving into new US Treasury short positions think. Worse, this looks structural.

As the press notes a surge in global defence spending to new record –nominal– highs, Germany’s pledged EUR100bn hasn’t bought any bang so far, leaving the EU unable to defend itself out of a wet paper bag; Australia’s strategic defence review called its armed forces “not fit for purpose”, requiring massive investment and the development of domestic supply chains; Poland is spending 4% of GDP on defense without knowing where the money will come from; and the US hints it might need to double defence spending. Against this backdrop, Bloomberg underlines ‘What a New Cold War Means for Central Banks’:

“The battle against soaring prices is little more than a year old and central banks need to gird for the next big trial: Serving their nations in a world defined by protracted competition between the US and China. Policymakers will be reluctant cold war warriors – they are more comfortable aiming at inflation targets and tinkering with guidance on interest rates than fending off strategic adversaries. Unfortunately, they don’t have the luxury of sitting this out.”

As Lagarde said last week, and I said years ago, at least partial monetization of fiscal spending on defence and supply chains looms. This changes all your economic and market forecasts unless you are: (1) in denial; or (2) think geopolitical problems just ‘go away’.

On which, here’s where you might need a sugar hit to get through the Daily:

• Tucker Carlson was canned from Fox News, Don Lemon at CNN, and Susan Rice at the White House. A member of the Fugees is on trial for being a Chinese agent; a prominent Chinese journalist faces inverse charges there. Note the zeitgeist – changes are sweeping in.

• Russia’s Foreign Minister Lavrov told the UN Security Council that: “As was case in Cold War, we have reached the dangerous, possibly even more dangerous, threshold.”

• China deleted the interview transcript of its Ambassador to France saying former-Soviet states have no legal status. However, as the South China Morning Post notes: “China’s questioning sovereignty of post-Soviet states is tit-for-tat over Taiwan: Beijing would not care about their international status if only the West would stop weaponizing the island against the mainland.” Yet the EU is now talking about sending its navies to sail in the Taiwan Strait.

• The Financial Times has an op-ed, ‘How to stop a war between America and China’, noting in DC the talk is of a probable, not possible, conflict. Not long ago, many were denying there would be a Cold War: now that seems the best outcome, if the US can persuade China to enter into a period of 70’s-style détente. Unfortunately, the author concludes it is unlikely to happen, and the article doesn’t offer a realistic way to do what its title says.

• In Foreign Policy, Adam Tooze argues ‘America Has Dictated Its Economic Peace Terms to China’, and concludes, “By refusing negotiation over China’s rise, the United States might be making conflict inevitable.” In short, the US is saying China can rise if it isn’t *this* kind of China; Yellen’s speech last week offered a new modus vivendi – the old trade order with geopolitical guardrails for national security in key sectors. However, the political dynamic on both sides may already be beyond that point due to a lack of trust.

• If so, this isn’t going to be a short-term or a limited problem if so. It will impact all of us, everywhere, for years and years in different ways.

• Tellingly, the US-China wargame recently held by the US Congressional Committee on the CCP saw Team ‘Blue’ kick China off of SWIFT; Team ‘Red’ said “No electronics for you’ in response. In short, global capital and trade flows collapsed.  

This subject matter — war risk and global architecture collapse— is beyond the skillset or mindset of the average market participant, or so overwhelming that they simply don’t know what to do with it. I get that. Taleb-style, everyone is a fat, happy, well-fed Turkey until just before Christmas.

But should they really forecast in a geopolitical vacuum, with the above headlines flashing, the lessons of Ukraine just over a year old, rearmament underway, and central banks now shifting towards a quasi-war economy to fund it before any shooting starts outside Ukraine and Sudan?

Apparently it does. Almost all the market analysis you will read today is counting the same old beans, twiddling thumbs, or rearranging intellectual meme deckchairs on the Titanic. An industry which likes to pretend it can predict the future is looking the other way at key geopolitical risks which AT THE VERY LEAST point to much higher inflation FOR MUCH LONGER than is currently being priced for. Logically, there is no way rates are going to come down again quickly, and stay down, unless that new liquidity is of use against the big picture national security backdrop above.

Then again, the same markets can’t even grasp what’s going on in sugar. Which is why we are all deep in it.

Companies which service student loans are preparing for chaos, as an unprecedented 44 million borrowers will resume payments later this summer following the expiration of a November 2022 extension of a pandemic-era pause, which stipulates that payments must resume by August 30, 2023.

“I think the real challenge is the resource constraint, right? That’s really on the customer service side,” said Student Loan Servicing Alliance (SLSA) executive director, Scott Buchanan, in a statement to The Hill. “Systemically, we can handle this, but that customer service component is going to be constrained, and that’s because the [Education] Department has continued to make cuts to the customer service funding for student loan servicers.”

According to SLSA, a nonprofit trade association that deals with servicing issues, its members are “responsible for servicing over 95% of all federal student loans and the vast majority of private loans.”

That said, the lack of funding for customer service centers falls on the shoulders of Congress, which denied increased funding for the Federal Student Aid (FSA) office last year.

“It’s important to think about this holistically,” said said Sarah Sattelmeyer, project director for education, opportunity, and mobility in the higher education initiative at New America. “FSA’s budget constraints are certainly affecting servicers. And I think that’s an incredibly huge problem because it affects the ability to effectively have a student loan support system. … All of the things that FSA has on its plate — it’s never had more things on its plate. There’s a lot of new reforms coming down the pipe, and a lack of funding is really impacting its ability to do all of that work.“

According to the Department of Education, the funding Congress allocated for the FSA was more than enough.

“As the Department has repeatedly made clear, restarting repayment requires significant resources to avoid unnecessary harm to borrowers, such as cuts to servicing,” said a spokesperson.

In preparation for student loan payments turning back on, the Education Department has announced multiple initiatives they say will make the transition easier for borrowers, including reforming the income-driven repayment (IDR) system so some borrowers wind up owing as low as $0 a month.

The department is still hoping the Supreme Court won’t kill President Biden’s student debt forgiveness program, though that will require it and the student loan servicers to take on the Herculean task of sweeping debt relief and loan repayment resumption at the same time. -The Hill

According to Spencer Orenstein, an officer on student borrower success for the Pew Charitable Trusts, of the 400,000 borrowers tracked over a five year period, 80% had interactions with their student loan servicer.

“Even prior to this, we were in a system where servicers played a very important role,” he said.

Buchanan, meanwhile, thinks there could be a ripple effect of negative consequences which reverberates throughout the entire system.

“The department has meaningfully reduced the amount of resources we have and people we can put on the phones. That’s going to be a challenge where we will probably have longer hold time, and processing time for requests and applications could take a lot longer than usual,” he said, adding: “We clearly communicated to the department the consequences, them knowing we need customer service and them making these kinds of cuts. Those discussions absolutely happened.”

As of now, around 44 million borrowers haven’t had to make payments on their student loans.

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Around 3,000 migrants set out on Sunday in a large caravan from southern Mexico and began walking north in what organizers said was a protest demanding an end to detention centers like the one that burned down last month, killing dozens.

The migrants, mostly Venezuelans, started walking north early Sunday from Tapachula, a city in Mexico close to the border with Guatemala.

The stated goal of the migrants is to reach Mexico City in around 10 days and appeal for the closure of detention centers.

Past caravans that started in southern Mexico have typically headed north toward the United States, with migrants often seeing such mass walks as a way to reach the U.S.–Mexico border.

“We joined the caravan to be safer and not be detained,” said Yoani, a Venezuelan migrant who only gave his first name, in a phone interview with Reuters.

Yoani said that, once in Mexico City, he and his family were hoping to speed up the legal process for onward travel.

It’s unclear how many of the protesters plan to continue on toward the United States.

Deadly Fire

Organizer Irineo Mújica told The Associated Press that the migrants are demanding the closure of Mexico’s immigration agency, which some have blamed for a March 27 fire at a detention center in Ciudad Juarez that killed 40 people and injured dozens more.

“It could well have been any of us,” Salvadoran migrant Miriam Argueta said of those killed in the fire, according to AP. “In fact, a lot of our countrymen died. The only thing we are asking for is justice, and to be treated like anyone else.”

The fire on March 27 started when migrants set fire to foam mattresses when they found out they would be deported, according to Mexico President Andres Manuel Lopez Obrador.

Video footage of the fire showed three uniformed officials leaving the room and appearing to leave the migrants behind in locked cells as the fire spread.

Five people face homicide charges over the deadly blaze, including three immigration agents and a private security guard, as well as a Venezuelan man believed to have started the fire.

Mújica, a leader of the Pueblos Sin Fronteras activist group, called the detention centers “jails.”

“We are asking the government that justice be done to the killers, for them to stop hiding high-ranking officials,” Mújica told AP in Tapachula before the caravan set out on its trek north. “We are also asking that these jails be ended, and that the National Immigration Institute be dissolved.”

Some caravan participants carried crosses or banners reading “The Government Killed Them,” referring to those that died in the fire.

After leaving at around dawn, the migrants made it to a town about nine miles north of Tapachula before settling in for the night.

Read more here…

S&P CoreLogic (Case-Shiller) home price index unexpectedly rose (0.06% MoM) in February (the latest data released today), which slowed the annual 20-City Composite price index growth to just 0.36% YoY…

Source: Bloomberg

Despite the small MoM pop (likely last minute panic bids as mortgage rate fell briefly), that is the slowest YoY growth since May 2012.

“February’s results were most interesting because of their stark regional differences,”  Craig J. Lazzara, managing director at S&P Dow Jones Indices, said in statement.

“It’s unsurprising that the Southeast (+7.8%) remains the country’s strongest region, while the West (-4.2%) continues as the weakest.“

Diving down to the metropolitan regions, Miami, Tampa, Atlanta again reported highest year-over-year gains (though Miami saw a big MoM drop) among 20 cities surveyed while the West Coast continues to get clubbed like a baby seal with Seattle, San Diego, and San Francisco now all underwater YoY…

Given the heavy lag and smoothing in the Case-Shiller data, it is certainly not useful for real-time calls for turning points, but the trend is very clear now and given the historical relationship with mortgage rates, we suspect prices have a lot further to fall…

Source: Bloomberg

Will a 30% YoY decline in home prices be enough for The Fed? We suspect it will take more than Biden’s new ‘punish high credit scores’ plan to rescue this housing market.

Tucker Carlson, now ousted from Fox News, gave a speech last week at the 50th Anniversary of the Heritage Foundation on the bigger picture of good and evil within our society. 

The conflict is no longer about politics, it’s about the very moral foundations of civilization.

The new ideological movements are based on old and dark premises, and their motivations are solely to destroy what they can in order to take what they can. 

Tucker Carlson’s speech over the weekend was powerful. Too powerful apparently. pic.twitter.com/sxncP26Tda

— TexasLindsay™ (@TexasLindsay_) April 24, 2023

Perhaps Carlson was getting a little too close to the truth…

UBS’s Swiss-listed shares slid in early Tuesday trading after the bank posted a 52% year-on-year decrease in net profit in the first quarter. Despite the slump, the bank recorded strong customer inflows while preparing to acquire rival Credit Suisse. This marks the first financial results since UBS announced the takeover of Credit Suisse last month. 

UBS disclosed its weakest quarterly earnings in more than three years and a dim outlook for interest income in its wealth management division. It said net profit came in at $1.03 billion for the first quarter, missing analyst expectations of around $1.75 billion for the period. 

Switzerland’s largest bank experienced a $665 million hit in net income due to US residential mortgage-backed securities litigation. It also said it’s in talks with the US Department of Justice to settle a 2018 civil complaint. 

That news overshadowed the inflow of $28 billion from high-net-worth clients during the quarter, $7 billion arriving in the ten days following the announcement of the Credit Suisse takeover in March. 

Here are other highlights of the first quarter:

• Revenues reached $8.75bln vs. 9.38bln a year ago
• Operating expenses were $7.2bln from $6.6bln a year ago
• CET 1 capital ratio, a measure of bank solvency, came in at 13.9% vs. 14.1% a year ago

Retaining clients and assets is a major challenge for Sergio Ermotti, who returned as UBS CEO to oversee the historic merger. The results didn’t include Credit Suisse’s operations since the merger has yet to be finalized.

Credit Suisse revealed on Monday that it borrowed far more from the Federal Reserve’s liquidity backstop program than previously known, with clients continuing to withdraw after the deal was announced. 

In an interview with Bloomberg TV, Ermotti said the inflows at UBS are “a sign of confidence of our clients.” He noted that the inflows weren’t just from Credit Suisse clients but also from the US. 

During the banking crisis last month, UBS froze its buyback program. Ermotti said during the interview: 

“We are reiterating our intention to have a progressive cash dividend increase every year and we definitely have an intention to resume share buybacks when its appropriate.” 

UBS shares fell as much as 5% Tuesday morning. 

Here is what analysts are saying (courtesy of Bloomberg): 

JPMorgan (Kian Abouhossein, overweight) says while earnings can be seen as weak, long-term view unchanged 

• Says consensus EPS could be cut 3%-5% after bank gave worse than expected NII guidance for wealth management 
• Notes more details on Credit Suisse merger were expected

KBW (Thomas Hallett, underperform) says results were a “lackluster set,” with wealth management underwhelming and also sees material downgrades to 2023 expectations following NII guidance 

• Sees consensus going down 5% as bank guided that wealth management, personal and corporate net interest income to be broadly in-line with 2022 4Q annualized 
• Capital below consensus 
• Says results disappoint, remains underperform

Citi (Andrew Coombs, buy) sees earnings as uneventful, notes there could be disappointment on litigation charge, cautious outlook commentary 

RBC (Anke Reingen, sector perform) notes 1Q missed estimates on higher litigation provisions and also sees consensus estimates earnings cuts on the NII guidance

Moving forward, UBS must integrate Credit Suisse, and any overlapping business units will likely result in thousands of job cuts. 

Via SchiffGold.com,

In January, the US government ran up against the debt ceiling, kicking off another fake debt ceiling fight. Three months later, Congress still hasn’t agreed on a plan to raise the borrowing limit. Peter Schiff talked about it in his podcast, saying the lack of a higher debt ceiling isn’t the problem; the ever-increasing spending and the debt are the problems. Refusing to raise the ceiling would provide the solution.

In just the first six months of fiscal 2023, the Biden administration ran a $1.1 trillion budget deficit. Excessive spending is pushing the government toward a crisis point when it will no longer be able to finance spending through extraordinary measures. But Republicans in Congress want to attach strings to the new debt ceiling. Democrats want a “clean” bill to raise the spending limit.

Peter zeroed in on a key point in this “fight” – everybody wants to raise the debt ceiling.

It’s not like the Republicans are saying, ‘We’re not going to raise the debt ceiling.’”

Peter ran for Senate in 2010 and a key part of his platform was to stop raising the debt ceiling.

I didn’t want to come up with some gimmick to allow the ceiling to be raised. I wanted it to stop. I wanted to create a permanent ceiling that could never be raised.”

But Democrats (and most Republicans) claim, “We must raise the debt ceiling because we pay our bills!” Peter said it’s the exact opposite.

We never pay our bills. If you pay your bills, you don’t have any debt. Where does the debt come from? It’s unpaid bills. We have $31.7 trillion in debt. That’s $31.7 trillion of bills that we have not paid. We didn’t pay them. We borrowed the money. And we want to keep on borrowing the money. Nobody wants to pay any of these bills.”

This exacerbates the government spending problem. Uncle Sam never has to rein it in as long as he can keep borrowing.

We can keep putting all the spending on a credit card. As long as they raise the debt ceiling, we can continue to not pay our bills.”

Of course, eventually, the borrowing and the accompanying money printing will precipitate a currency crisis.

It’s not about America not wanting to borrow. It’s about the rest of the world not wanting to lend because they know we’re not going to pay them back. And one of the reasons they know that is because we’ve already told them. We are telling them that repeatedly in the debt ceiling battle.”

Meanwhile, the mainstream media spins the debt ceiling as a problem. Peter said the debt ceiling is actually the solution to the problem.

The problem is the debt. The problem is that Congress and the president keep running up more and more debt and every time we get to the ceiling, we either raise it or suspend it. … The problem is that we keep raising the ceiling, not that we won’t raise it. In fact, the threat is that we raise it again.”

The mainstream, along with Democrats, also claim that if Congress doesn’t raise the debt ceiling, the US will default. Peter said that’s the dumbest thing you can say when you’re running a Ponzi scheme, which is what this is.

We are admitting that every time we tell our creditors that if we can’t borrow more money, ‘You’re out of luck, you’re not getting paid.’”

Peter pointed out that the interest on the debt is around $600 billion. The US government collects about $4.6 trillion in tax receipts.

We’ve got plenty of revenue to pay the interest on the national debt if we want to prioritize paying interest on the national debt. But clearly, we don’t want to do that. Not only are we not prioritizing it; we’re telling our bondholders that they’re the low man on the totem pole. We don’t talk about anything else that’s going to not get paid. Nobody is saying, ‘Well if we don’t raise the debt ceiling, we’re going to have to cut back on congressional salaries,’ or, ‘We’re going to have to fire some of our staffers.’ They don’t say, ‘Well if we don’t raise the debt ceiling, we might have to cut Social Security, and we’re going to have to cut defense.’ No! The only thing they talk about cutting is paying interest on the national debt. That tells you where you are as a creditor.”

Ponzi scheme 101 is don’t tell anybody that you’re running a Ponzi scheme.

We’re so dumb; we’re running the world’s biggest Ponzi scheme and we’re telling everybody that it’s a Ponzi scheme.”

And Peter said he thinks the world is starting to wake up. That’s why you’re seeing a move to get out of the dollar.

It’s only a question of time. It’s not a question of if. It’s just a question of when. We will default on our debt. All the bad stuff that they’re saying is going to happen if we don’t raise the debt ceiling is guaranteed to happen because we do raise the debt ceiling.”

Peter said a default could take two forms. We could have an honest default where the government just doesn’t pay back bondholders. Or we could have a dishonest default where we pay with inflation. In that case, they just print money and pay people back with worthless or near-worthless paper.

Those are the only two choices and everybody knows that.”

Peter went on to put the debt into a broader perspective and gave an overview of the history of the debt ceiling.

In this podcast, Peter also talked about money-losing companies going public and how a strong stock market now signals a weak economy.

The insufferable Don Lemon’s long-overdue ousting from CNN ultimately sprang from his discourse-stifling, race-baiting interview of GOP presidential candidate Vivek Ramaswamy, sources tell The New York Times. 

Last Wednesday, Ramaswamy appeared on “CNN This Morning,” the show Lemon co-hosted with Kaitlin Collins and Poppy Harlow after his September demotion from prime time.

When Ramaswamy said Lemon was doing a “disserrvice to our country by failing to recognize” the enormous progress blacks have made in securing rights since 1865 and 1964, things went downhill quickly, with Lemon sanctimoniously telling Vivek that he wasn’t authorized to talk about black history. 

You see, while Ramaswamy is a man of color, it isn’t the right one. “When you are in black skin and then you live in this country…then you can disagree with me,” said Lemon.

Harlow sat silently, alternately watching the spectacle, looking at her phone and elsewhere. Meanwhile, it appeared CNN producers were trying to pull Lemon back from the cliff — only to receive an on-air scolding. “Please. I cannot keep a thought if you guys are talking in my ear. So hang on one second,” he said, ordering the producers to stop talking as he similarly worked to bring Ramaswamy to heel.  

If he hadn’t already done so, it’s safe to say Lemon sealed his fate with one particular line down the stretch — as he told Ramaswamy it was “insulting” for him to be “sitting there, whatever ethnicity you are, ‘splaining to me what it’s like to be black in America.”

according to the NYT this interview that Don Lemon conducted last week with Vivek Ramaswamy played a role in his firing. Note co-host Poppy Harlow sitting silently while Lemon goes after Vivek. pic.twitter.com/Fjx5eX30wU

— Aaron Rupar (@atrupar) April 24, 2023

Citing anonymous sources, the Times reported that the segment “left several CNN leaders exasperated.” 

Lemon had already been on thin ice, having been demoted from prime time to a morning slot six months ago. Even though he was in network rehabilitation mode, he continued piling on reasons for his CNN masters to eject him altogether.  

In December, the crew of “CNN This Morning” reportedly witnessed an unsettling backstage argument between Lemon and Kaitlin Collins, one of his co-hosts. Lemon had apparently scolded her for repeatedly interrupting him. 

In February, Lemon said GOP candidate Nikki Haley — at age 51 — “isn’t in her prime, sorry…A woman is considered to be in her prime in her 20s and 30s and maybe 40s.” When his female co-hosts pushed back, he shut them down by declaring “I’m just saying what the facts are — Google it.” He apologized and submitted to a CNN training program. 

That reportedly prompted his female co-hosts to storm off for a “well-timed bathroom break.” Sensitive, PC types would have raised a ruckus if a host on any network said what Lemon had said about women — the fact that it happened on CNN made it all the more noteworthy. The same can be said for his “whatever ethnicity you are” line with Ramaswamy.  

It’s interesting that, between Haley and Ramaswamy, two GOP candidates played central roles in sweeping Lemon off the screen.  

CNN bookers had recently observed that fewer guests wanted to be interviewed by Lemon, just as internal research documented a drop in his popularity. 

Barring a personality change, moving Lemon to a morning show was a terrible attempt at salvaging a lost cause. As the Times put it:   

“Mr. Lemon imported [his spiky-exchange and pull-no-punches] persona to “CNN This Morning,” but it was an awkward fit for an hour when many viewers — making breakfast and getting children off to school — want easygoing patter, not thundering monologues.”

The divorce was already off to a messy start, as Lemon and CNN tweeted contradictory characterizations of how his termination was handled.

Expect more fur to fly: Lemon has retained Hollywood lawyer Bryan Freedman to advise him on his exit from CNN, where his current contract was to continue until 2026. Big-media litigation makes for strange bedfellows: Tucker Carlson has hired Freedman too. 

pic.twitter.com/8PyLqvS0d7

— Don Lemon (@donlemon) April 24, 2023

Don Lemon’s statement about this morning’s events is inaccurate. He was offered an opportunity to meet with management but instead released a statement on Twitter.

— CNN Communications (@CNNPR) April 24, 2023

Authored by Ahmed Botan via BitcoinMagazine.com,

Bulgaria, a small country located in Southeast Europe, nestled between Romania and Greece, could become one of the wealthiest countries in the world.

The reason for this is its possession of 213,000 bitcoin, which its authorities seized from a group they labeled as criminals in 2017. According to the South East European Law Enforcement Center (SELC), the group hacked the Bulgarian customs agency’s computers and made changes to the system so that their partner companies could import goods while avoiding paying taxes on them.

Immediately following the crackdown, the bitcoin seized was worth about $500,000, however, it would now be worth closer to $6 billion dollars, as of April 2023. While the details around the BTC seizure are unclear, and it is not totally clear whether the country still holds that bitcoin or what it plans to do with the stack if it does, the potential of a nation like Bulgaria holding this much BTC is worth exploring.

As the value of bitcoin is, in the view of many, set to go up a lot higher still in the coming years, Bulgaria could stand to become very wealthy.

THE RISING PRICE OF BULGARIA’S BITCOIN

While the future price of bitcoin is impossible to predict, there are some prominent examples of experts explaining why they are confident Bulgaria’s bitcoin holdings will grow exponentially in value.

Jesse Meyers, the COO of Onramp Bitcoin who holds an MBA from Stanford University, has predicted that the bitcoin price will hit $10 million in the coming decades. Ark Invest CEO Cathie Wood has predicted bitcoin will reach $1 million by 2030 in a bullish scenario. Similarly, Arthur Hayes, co-founder of BitMex believes that bitcoin could hit $1 million by 2026.

Most recently, the former CTO of Coinbase, Balji Srinivasan, has predicted that bitcoin would hit $1 million by June 15, 2023, wagering $2 million to that effect.

While most people don’t believe that the bitcoin price can reach $1 million by then, anything is possible. For example, if there was an extended banking crisis and hyperinflation of the U.S. dollar, as predicted by Srinivasan, who knows how valuable Bulgaria’s bitcoin stack will become?

For instance, shortly after Srinivasan’s bet (although this was certainly unrelated), several nations, including China, Russia, Saudi Arabia and Kenya and more began moving away from using the U.S. dollar in their trades, With the Kenyan president warning citizens to get rid of their dollar holdings.

The United States government has measures in place to prevent further bank runs, like the Federal Reserve’s $25 billion bank-term funding program (BTFP) and the Federal Deposit Insurance Corporation’s (FDIC’s) openness to cover all deposits.

I think, if the FDIC decides to insure all deposits, that will be enough to deter true bank runs, but it’s clear that the U.S. dollar is not as strong as it used to be. And that opens the door for a decentralized, global monetary unit like bitcoin to rise.

As a result, if Bulgaria holds onto its BTC stash, it could amass more value relative to the holdings of other countries around the world and become one of the world’s richest.

SO, WHAT WILL BULGARIA DO WITH ITS BITCOIN?

Bulgaria could use future bitcoin gains to invest in its economy, but it will have to pay off national debts first. As of 2022, Bulgaria’s national government debt reached $20 billion in 2022.

By 2030, if the bitcoin price hits $1 million and it still holds its seized, 213,000 BTC stash, its holdings could be worth $213 billion.

After paying off its debt, Bulgaria could use the funds generated from selling the 231,000 BTC to invest in various industries, such as technology or real estate.

Moreover, the Bulgarian government could use the funds generated from the sale of its bitcoin to improve the country’s infrastructure, education and healthcare.

By investing in these essential sectors, Bulgaria could attract foreign investment, and this would further boost the country’s economy.

Bulgaria has a significant opportunity to become one of the wealthiest countries in the world if it HODLs its bitcoin and sells some at the right time.

But it seems wise for the country to keep a significant portion of bitcoin in reserve in perpetuity, as fiat currencies like the dollar continue to deteriorate.

Authored by Susan Crabtree via RealClear Wire,

During meetings with Soviet leader Mikhail Gorbachev or other top Soviet Union officials, President Reagan often pulled out a card from his pocket and recited the names of the country’s jailed dissidents and pressed for their freedom.

The practice became such an annoyance to Soviet officials, human rights activists recall, that they often complained to Secretary of State George Schultz that Reagan’s constant focus on their government’s human rights abuses were impeding other areas where the two countries could make diplomatic progress.

Bob Fu, a prominent religious freedom activist and China critic who immigrated to the United States from China in 1996, said several Reagan aides told him about those tense exchanges as a testament to the power of directly challenging authoritarian regimes’ human rights abuses to spur international condemnation.

“I hope our president and vice president, whatever party is in the White House, would do the same as Reagan when they are meeting with China virtually or in person,” Fu told a House Foreign Affairs Committee subcommittee hearing on Thursday. “That way [Chinese officials] can be reminded that this is serious, this is important.”

Sadly, Fu said, neither the current administration or any other since Reagan have prioritized and elevated human rights abuses in such a powerful way. Instead, when it comes to China, most of Washington has spent three decades pointedly looking the other way.

In late May of 1994, President Clinton abandoned a central foreign policy principle of his administration, announcing that he had decided to “de-link” China’s privileged trading status from its human rights record.

While Clinton acknowledged that China continued to commit serious human rights abuses, he said that broader American interests justify the policy reversal.

The pivot set the U.S. and other Western countries on a more conciliatory path with China. It also paved the way for China’s entry into the World Trade Organization, and in 2000, the U.S. granting Beijing permanent normal trade relations status, a legal designation allowing free trade between the two countries.

At the time, expanding U.S. business ties to China was a bipartisan cause. Led by the U.S. Chamber of Commerce, it allowed American companies to move their manufacturing operations to China to take advantage of its cheaper labor and production facilities.

“The premise of this policy was that if the West opened our markets to China, that the Chinese economy and society would liberalize and that [Chinese Communist Party] leaders would come to see the world as the way of the West, valuing democracy, rule of law and critically human rights,” said Andrew Bremberg, who previously served as President Trump’s representative of the United States to the Office of the United Nations and is now the president of the Victims of Communism Memorial Foundation. “We were wrong.”

Instead, Fu told the panel, the Communist Party has increasingly asserted far more control, and Chinese citizens are now experiencing the worst period of persecution since Mao Zedong’s Cultural Revolution.

Over the last few years, the U.S. has acknowledged China’s genocide against the Uyghur Muslims, and has condemned President Xi Jinping’s tightening of CCP control in Hong Kong and his war on religion and dissent of any type.

Human rights advocates are now urging the U.S. government to more aggressively confront China about the startling scale of its human rights abuses and the arbitrary imprisonment of dissidents.

On Thursday, Rep. Chris Smith, a New Jersey Republican and longtime human rights champion, urged President Biden to meet with Geng He and Sophie Luo, the wives of two prominent human rights defenders detained by China. The pair provided emotional testimony before a House Foreign Affairs subcommittee that morning about their husbands’ confrontations with the CCP and their detainments and disappearances

Smith also called on China to disclose the location and legal status of some Chinese human rights attorneys who either represented religious minorities and other dissidents or led pro-democracy movements in China and have since disappeared.

The two women testified that the Obama and Biden White Houses have not reached out to them about the plight of their husbands despite many attempts over several years.

“That has to change,” Smith said, pledging to introduce legislation requiring the Biden administration to report to Congress on efforts to pressure China to free all prisoners of conscience.

Geng’s husband is Gao Zhisheng, a three-time Nobel Peace Prize nominee nicknamed “China’s conscience.” Gao has been jailed and tortured for more than a decade with his ultimate fate – whether he is alive or dead – unknown to even his family.

“The United States must stand up to the Chinese Communist Party and make it clear that we will not ignore or trivialize these crimes,” Smith said.

Sophie’s husband, Ding Jiaxi, and another human rights attorney, Xu Zhiyong, earlier this month received sentences of more than a decade for “subversion of state power.”

Ding and Xu are leaders of the New Citizens Movement, an initiative advocating for Chinese citizens to demand the civil rights and rule of law guarantees spelled out in the Chinese constitution, including Article 35, which states that “citizens of the People’s Republic of China shall enjoy freedom of speech, the press, assembly, association, procession and demonstration.”

In his memoir, “A China More Just,” published in the United States in 2007, Gao credits his Christian faith and its teachings on morality and compassion for his commitment to defending other religious minorities and dissidents across China.

The lawyer, who was once recognized by China’s Ministry of Justice as “one of the country’s 10 best lawyers,” drew the CCP’s ire in 2005 by sending open letters to the Chinese government on behalf of practitioners of the Falun Gong. The spiritual discipline became so widespread and popular in the 1990s that the CCP viewed it as a threat and outlawed its practice in 1999.

In 2005, the CCP disbarred and shuttered his law firm. Gao escaped to northeastern China, where he was working with Falun Gong practitioners who said government security forces had tortured them.

In early 2006, Amnesty International said Gao narrowly escaped an assassination attempt by Chinese secret police, then launched a hunger strike, which was joined by people in 29 Chinese provinces and supporters overseas, with several Chinese participants jailed for their participation.

In August 2006, Gao disappeared while visiting his sister’s family. He was officially arrested later that year, convicted of subversion, and sentenced to three years in prison, which a judge suspended and replaced with probation for five years after he confessed to several errors. But Gao recanted that confession and began to openly renounce the Communist Party while writing open letters to Congress and the European Parliament calling for a boycott of the 2008 Olympics in China.

In February 2009, Gao was nabbed by Chinese security agents and was freed in 2017, but was then kidnapped again by secret agents with nothing heard from him for nearly six years. In 2009, Gao’s wife and children escaped to the United States, which granted them emergency asylum.

Over the years, Congress and the State Department have issued statements calling on Beijing to free Gao or disclose whether he is alive or dead, and if alive, at least allow U.S. embassy officials to visit him.

“I am very worried,” Geng, his wife, said Thursday, struggling to hold back tears. “Nearly six years have passed, and not only is there no arrest warrant, but no unit or organization has been responsible for Gao’s abduction. No one has seen him, no one has heard his voice, and no one has confirmed that he is still alive in this world.”

Since 2012, Geng says she has asked to meet with Biden to discuss her husband’s case, both during his presidency and while he served as vice president, to no avail. She also has urged Biden to press Gao’s case in meetings with Xi, which she believes never occurred.

Ding’s wife, Sophie Luo, who also escaped to the U.S. several years ago, on Thursday testified that “there is no justice” in China because the CCP has repeatedly violated its own Constitution and laws to silence and torture human rights lawyers and civil society activists.

“There is no justice or fairness involved – just authoritarian rule to maintain their corrupt power,” she told the panel. 

Luo warned U.S. companies to be wary of doing business in a lawless country without respect for international legal standards where they could be arbitrarily detained or worse.

Even though tensions between Beijing and Washington are running high, the U.S. has plenty of economic levers to pressure China on human rights, advocates argue. In addition to the United States’ global influence, Bremberg noted that U.S. and Western investments in Chinese companies are bolstering China’s power and enabling human rights abuses, something Washington needs to reevaluate.

“The impunity with which the CCP has been able to commit these crimes thus far cannot persist,” he said.