The first preference of United States President-Elect Donald Trump to be the Office of Management and Budget head is 49-year old Mick Mulvaney. This Republican Representative of South Carolina blamed the US Federal reserve for lowering the value of the US Dollar and endorsed Bitcoin as alternative currency. According to monetary disclosures as of last year, he invested in gold and stocks for gold mining amounting to roughly $100, 000.
As the leading contender to manage the OMB, Mulvaney is expected to help shape new fiscal policies, set government spending and modify the federal tax code of the Trump country. Another member of the House of Representatives (Tom Price) chosen by the new President to cabinet-level post has engaged in stock trading while he was congressman.
In one of his speeches delivered before members of the John Birch Society, Mulvaney said the central bank devalued the USD and strangled economic progress. He also praised the digital currency saying it could not be maneuvered and controlled by the bureaucracy. This society subscribe to the belief that only gold and silver are legal currencies. The US currency became stronger by more than five percent since the presidential election while gold declined 10 percent. Bitcoin surged during the past week and hit the highest peak since November of 2013.
President Trump and Bitcoin
Bitcoin shares surged 75 percent in 2016. It can even go up 165 percent within 2017 due to Trump’s spending spree. This was one of the “Outrageous Predictions for 2017”, a report made by Denmark-based SAXO Bank saying the virtual currency can reach more than $1, 200. The currency is presently trading at $763. 80, according to Bitcoin exchange Coin Base. The bank forecasted that the plan of Trump to heighten infrastructure expenditures together with interest rate increases by the US Fed will lead to a stronger USD and compel emerging economies to search for alternative currencies like Bitcoin.
Digital currencies are definitely staying because of ups and downs in fiat money as well as excess debts. According to this bank’s international macro strategist, many emerging markets are drifting away from US monetary policies and banking system. They are eager to espouse the Blockchain as payment form while adjusting to zero interest and decline in systematic risks.
Meanwhile, the increasing price of Bitcoin is credited primarily to investors from China yearning for higher returns. In case the governments of the Russian Federation and People’s Republic of China accept the virtual currency as one of the alternatives to the US currency, Bitcoin can go up to as high as $1, 200. Even then, the USD is still the currency of choice in nearly all countries worldwide.
The financial revelations of Mulvaney show his investments in ETFs or Exchange-Traded Funds where he focused on the energy, pharmaceutical and utility industries. News reports also said the former Congressman reported shares which are believed to be from $500, 000 to $1 million in property holdings and tree farming somewhere in South Carolina. According to an unidentified source, Mulvaney hired a financial adviser but makes investment decisions personally.
The lawmaker has an undergraduate degree from the prominent Georgetown University and finished law at the University of North Carolina (Chapel Hill). He went into private practice, put up a family-owned construction business and owns as well as operates a local restaurant chain. As representative, he actively campaigned for reducing government expenditures. He co-authored a measure in 2011 passed by Congress that could have cut down outlays and increased debt ceiling provided the House passed an amendment to balance the government’s budget as well as make it difficult to raise taxes.
Conflict of Interest
Mr. Mulvaney may be subjected to rules regarding conflict of interest as cabinet official and compel him to dispose of certain assets in case these are found in conflict with his responsibilities at the government’s executive branch. This will be handled by the Office of Government Ethics.
President-Elect Trump and some of his appointees for principal cabinet positions may come under scrutiny because of their wealth and possible conflicts of interest. He is the first billionaire to become president of the United States and appointed two billionaires and 10 millionaires to his cabinet. They have a net worth of approximately $5.6 billion. A report stated that Wall Street believes the business magnate’s presidency is much similar to the actor’s administration referring to former President Ronald Reagan.
Mr. Reagan passed a huge fiscal stimulus program. Trump is planning to implement the same thing. The former actor-turned President reduced taxes and backed the idea as an economic advantage. According to the nominee of Trump, their taxation scheme will be the biggest since Reagan’s term. However, the economic differences are absolutely different at this present time. The issues that confronted Reagan in 1980 were entirely different compared to 2016.
Comparison between Administrations
First and foremost, the US is not close to a downturn. When Reagan assumed the presidency, the country’s economy was affected by recession as well as high unemployment rate. This called for a massive fiscal incentive. Reagan had to come up with that stimulus as per economists.
On the contrary, Trump inherits a potent economy and small unemployment rate of only 4.6 percent. Thus, an enormous infrastructure program is not really necessary because it can only cause damage to the present economy. This intended move of Trump is perceived as inadequate understanding of policymakers regarding the nature of the issues that must be addressed.
What now is the Sine Qua Non for Blockchain and Bitcoin along with other crypto-currencies? It remains to be seen as the Trump Government inches towards its six-year reign.