Elon Musk has endorsed Tether promoter Howard Lutnick as Treasury Secretary. Although Musk has done a good job of supporting freedom of speech on X and helping Trump get elected he sometimes makes uninformed endorsements of people. Previously, Musk showed public support for the X Spaces held by Mario Nawfal who claims to "host the largest show on X" even though nearly all of the listeners are bots and Nawfal has a history of conducting Crypto ICO scams. Musk has also publicly supported the X account WallStreetSilv whose owner James Morrison was charged in 2020 with aggravated child abuse with a weapon. If Lutnick becomes Treasury Secretary thanks to the endorsement of Musk, the U.S. will quickly become a Banana Republic.
Three months ago, Lutnick spoke at the Bitcoin Conference and used the first half of the speech to give a new ever changing story about how he somehow managed not to go to work on 9/11 and survived the attacks while all of his employees were killed. He used the second half of the speech to promote Tether claiming that Cantor Fitzgerald holds the assets backing Tether, which is a lie.
There are now 127.5 billion+ USDT outstanding.
Lutnick's total assets under management had been declining year after year from $19,757,076,192 on August 31, 2021, to $15,874,393,787 on August 31, 2022, and to $13,374,535,409 on August 31, 2023. After he began promoting Tether a year ago his assets under management increased to $17,956,654,049 as of August 31, 2024, although they declined again in September 2024 to only $14,800,963,131.
Is it possible he holds $1-$2 billion worth of U.S. Treasuries for Tether? It is certainly possible, but he is promoting it like he holds $127.5 billion worth of reserves for Tether and it is fully backed and not a systemic risk to Crypto and perhaps the entire U.S. economy.
If Tether was legitimate and fully backed and not a systemic risk why does it need Lutnick to speak at the Bitcoin Conference about how it's definitely not a scam?
It was reported last month that a Federal Investigation has finally been launched into Tether for possible violations of sanctions and anti-money-laundering rules. Even in the extremely unlikely event that Tether was somehow fully backed and not used to manipulate the Crypto market, it has clearly violated every AML rule in the book.
Cantor Fitzgerald even had Michael Saylor speak last month at their annual conference in Miami. Everybody has forgotten about how MicroStrategy (MSTR) engaged in accounting fraud during the dot-com bubble. We are not suggesting MSTR is engaged in similar behavior today, but it has done nothing other than use debt to buy Bitcoin and it somehow trades at a market cap of many times the NAV of its Bitcoin holdings.
We will buy Bitcoin after Tether gets shutdown and MSTR goes bust. Until then, we prefer undervalued out-of-favor hated assets that nobody else wants to own. Almost every global stock market around the world is trading at or near an all-time low relative to the U.S. market.
MSTR has done amazing for people who are smart enough to sell it right now, but most people won't be smart enough to sell it now. With a company like Celtic plc (LSE: CCP) a highly profitable professional sports franchise trading for 0.79x revenue at a time when every other professional sports franchise is being acquired for 10-15x revenue, there is no risk of it collapsing in value like MSTR ultimately will. At some point in the very near-future, Celtic plc (LSE: CCP) will be trading for many times its current share price and so will Trio-Tech International (TRT).
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is meant for informational and educational purposes only and does not provide investment advice.
Preparing Americans for Hyperinflation
