From there, he shifts to what he sees as the crucial difference between today and the 1970s. Back then, Visser notes, federal debt stood near 35.5% of GDP in 1970 and around 31.6% by 1979. Today, he says, the comparable figure is about 122.5%. That changes the amount of pain the system can absorb. In his telling, the United States is confronting the possibility of a second inflation wave with a debt burden roughly four times heavier than at the end of the last major oil-driven inflation era.
He makes the same point through asset valuations. The stock-market-capitalization-to-GDP ratio, he argues, is now above 200%, versus roughly 42% in 1975 and 38% in 1979. In practical terms, that means a determined inflation fight would not only hit a more indebted fiscal structure and a more fragile Treasury market, but also a far more financialized economy. “This is not just a replay of the 1970s,” Visser writes. “It is the 1970s problem inside a far more levered system.”
Visser argues the Fed has already begun preparing markets for that distinction. He cites Chair Jerome Powell’s March 18 press conference, where Powell acknowledged higher energy prices could lift inflation in the near term while reiterating that central banks often try to “look through” energy shocks if inflation expectations remain anchored. Visser also notes Vice Chair Philip Jefferson’s warning that persistently higher energy prices could weigh on both inflation and spending, intensifying the Fed’s dual-mandate dilemma.
That is where Bitcoin enters the story. Visser ties the current setup back to Bitcoin’s creation during the 2008-09 financial crisis, arguing that Satoshi Nakamoto’s design was a direct response to a monetary system dependent on bailouts, intervention and expanding guarantees when stress becomes intolerable.
“Bitcoin was born as a response to a system in which governments and central banks could always create more money, extend more guarantees, and socialize more losses when the structure became too fragile to endure discipline,” he writes. “Whether you view that as protest, timestamp, or both, the message was unmistakable.”
At press time, Bitcoin traded at $66,466.
