How long till the next big crash?

Trump wants to unleash the crypto greedhead bro-verse. What could go wrong?

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The year 2008 seems an eternity ago, but given what is going on today in Washington what happened that year is coming into sharp relief. There was a massive stock market crash. A major investment bank, which had been around for more than a century and a half, imploded. The U.S. government, then run by the Democratic president Barack Obama, came to the rescue of an economy in free fall.

New guardrails were put in place to prevent such a thing from ever happening again. Banks that had been massively overleveraged were required to maintain larger cash reserves. Restrictions were placed on what bankers could do with depositors’ money.

But even with all the corrections put into place, there has been a lingering question ever since that disastrous year: Could it happen again?

In the midst of Donald Trump’s blizzard of executive orders, directed at everything from rounding up undocumented immigrants to ending government DEI programs to firing or reassigning government employees to stripping U.S. agencies of the protections provided by independent inspectors general, our new president gave his answer when he ordered a complete overhaul of government policy on cryptocurrencies. The answer is yes. In brief, Trump gave every indication that he’s going to let crypto be crypto, freeing the already free-for-all market in imaginary money to do whatever it wants to do.

The first and most important thing Trump’s order did was to protect banking services for crypto enterprises and markets. This will allow crypto exchanges and marketers to use regular banking services to store their real money while they scheme to create new kinds of fake money to sell to those who have fallen for the libertarian dream of a system of payments for goods and services that’s free from the highly regulated American dollar.

Trump also ordered the creation of a handpicked crypto “working group” to study the feasibility of creating what, on the campaign trail, he called a “strategic reserve” of cryptocurrency. The notion of a strategic reserve is not a new one. The U.S. maintains such a reserve of petroleum created after the 1973-74 Arab oil embargo to calm the oil market and ensure that the country has enough oil to face shortages or to use during a national emergency such as a war.

The strategic petroleum reserve is a real thing: Hundreds of millions of barrels of crude oil are stored in a series of underground caves along the Gulf of Mexico (er, ah … the Gulf of America). But what would a crypto reserve look like?

This is an excerpt from my weekly column in Salon. For the rest of the column, go here:

Let crypto be crypto