The U.S. Federal Reserve and regulators should examine the consequences of their fiscal and monetary policies, including the resulting shortage of suitable investments that has led some to put their money into “speculative” ventures such as bitcoin, the Washington Post said in an editorial Saturday.

  • While dismissing the possibility of bitcoin displacing the U.S. dollar’s reserve status, at least for now, for policy makers, “the best reason to focus on bitcoin’s rise is what it tells us about the risks that may be bubbling up amid the Federal Reserve’s commitment to zero interest rates,” the Post’s editorial board said.
  • While calling the Fed justified for trying to boost the pandemic-afflicted economy by encouraging investors to put their funds in job-creating activities instead of parking it in banks or government bonds, the lack of suitable investment opportunities has driven many to chase yield via “speculative vehicles – bitcoin very much included,” the newspaper said.
  • The Post quoted Tesla CEO Elon Musk’s Tweet from Friday: “When fiat currency has negative real interest, only a fool wouldn’t look elsewhere.” Musk was talking about why his company had invested $1.5 billion of its treasury funds into bitcoin. (Notably, the Post didn’t address the second half of Musk’s Tweet. “Bitcoin is almost as BS as fiat money. The key word is “almost.”)
  • The Post concluded by appealing to new U.S. Treasury Secretary Janet Yellen to look at the markets for how those policies are playing out: “We urge her and other regulators to heed what these markets reveal about the real-world consequences of current monetary and fiscal policy — positive and negative, intended and unintended.”