Musk to lead new White House advisory office named DOGE
It’s a play on the Texas tech king’s love of Dogecoin and an acronym that stands for Department of Government Efficiency.
DOGE aims to curb inflation now
Either we fix this problem or we go de facto bankrupt
– Elon Musk (@elonmusk) December 26, 2024
The magnetic technology engineer has extensively advised former and future President Trump on a number of technology, business and public policy issues.
His ideas for greater government efficiency could help reduce excessive spending in Washington, D.C., slow the growth of the federal budget deficit and curb rising prices in the economy caused by inflation.
High deficits cause inflation because government spending increases the velocity of money in the economy and drives up prices. Meanwhile, new dollars created by the Federal Reserve and loaned to banks to buy government debt inflate the dollar and also drive up prices.
A recent study from Princeton University’s economics department estimates that U.S. budget deficits in 2021 caused about 30% of U.S. dollar inflation in 2021-2022.
The price hikes resulting from big spending in Washington start in financial markets and then ripple through the economy to drive up prices at the gas pump and grocery checkout counters.
New headwind for Bitcoin price, warns Musk
If dollar inflation is resolved, the dollar price to buy cryptocurrencies will fall, all else being equal.
What matters is the dollar/crypto ratio.
– Elon Musk (@elonmusk) January 7, 2025
The effect is particularly dramatic in crypto markets and is clearly reflected in the price of Bitcoin and that of other major token pools, such as ETH, XRP, SOL and DOGE.
In fact, many cryptocurrency investors say they favor crypto assets such as Bitcoin, Ripple, and Dogecoin as a refuge for their savings from dollar inflation.
Although not all experts agree that Bitcoin is a hedge against dollar inflation, over a four-year period, money held in the form of BTC has markedly increased in purchasing power while that the greenback, on the rise, is losing its purchasing power parity.
But Musk warned in an
Indeed, decreasing deficits and inflation will slow price increases across the board, including traditional financial markets like stocks and internet financial instruments like Bitcoin.
Bitcoin price corrected to $94,600 on Wednesday after losing the $100,000 mark on Tuesday.
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