The 14 computers that issue money in the US will boost Bitcoin

Elon Musk, in his role as director of the Department of Government Efficiency (Doge) in the United States, turned on the alarms again due to the failures of the traditional financial system. Musk used the expression «14 magical money computers» to illustrate how funds were generated without clear support during the previous administration.

Musk pointed out that US financial practices feed inflation, a recurring challenge that the Fed struggles to contain.

In a podcast in which he participated with Senator Ted Cruz, Musk said:

«We discover 14 magical money computers, which can simply make money out of nowhere.»

The tycoon, who is the owner of the social network X and the Spacex and Tesla companies, hinted that this Capacity to create money extended through policies Applied by various arms of the federal government under the mandate of Joe Biden, during the previous administration.

Musk said these computers, that create money «in the air», only «issue payments.» And with this, it seems to avoid the digital monetary issuance that has been discussed before and that is present in the Federal Reserve Policy (FED) for several years.

In the United States, the issuance of money involves the FED, the Department of Treasury and agencies such as La Casa de la Moneda (US MINT) and the Engraving and Printing Office (BEP). Physical money-billetes and coins-represents only a fraction of the money supply (10-15%), while digital money, in bank accounts and reserves, It is dominant in the system (85-90%).

Physical money begins with the coins, produced by the Casa de la Moneda according to the demand projected by the Fed. In facilities such as Philadelphia and Denver, they are manufactured with metals such as copper and nickel, and then are distributed to commercial banks through the 12 regional banks of the Fed.

Tickets, on the other hand, print the BeP in places like Washington DC and Fort Worth, Texas, using special cotton and linen paper with safety measures. The Fed orders its production to replace worn tickets or attend the circulation, and these are delivered to the banks as “Federal Reserve notes”, backed today only for the confidence in the economy, not by gold.

Digital, much more significant money is created in two ways. First, the Fed generates electronic reservations by buying treasure bonds or assets (such as crisis mortgages) to banks and investors, paying with newly created money that appears as credits in the accounts of the banks with the Fed.

Second, commercial banks multiply this money through the fractional reserve system: of a USD 100 deposit, they reserve only 10% (USD 10) and lend USD 90, which are redeemed and lend again, multiplying the money supply (M1 or m2) up to ten times in theory. This money exists as numbers in accounts, accessible via cards or transfers, without the need for physical tickets.

The way in which the Fed of the USA issues money in a digital way and the impact that this has on the money supply, also known as M2, which is nothing more than an economic measure that encompasses all the money circulating in the economy.

In the global context, The M2 is playing historical maximumswhich means that the monetary offer of world economies is on the rise. And this is not new, since since the financial crisis of 2008 and the Covid-19 pandemic in 2020, the central governments and banks They have injected massive amounts of liquidity to the financial system.

Why Bitcoin will rise in price?

Musk’s revelation about the «14 computers» that emit money from nowhere refers to this ability to create digital money with few tangible limits, which leads to the devaluation of the dollar and the loss of confidence. This, because the green ticket, without physical support since 1971, loses value over time due to excessive emission.

Unlike Fíat currencies such as the US dollar, the circulating offer of Bitcoin is not controlled by any centralized or governmental entity, as is the case of central banks or, more precisely, the Federal Reserve.

In fact, BTC’s offer is limited to 21 million coins. It is a limit that is established in its code and, in addition, is immutable.

It is precisely that capacity of the central banks for being able to control their Fíat coins and play their mercy with monetary liquidity, as well as the independence that BTC has in that regard, which motivates an increase in the price of digital currency most important in the world.

Designed in response to the FÍAT system, Bitcoin reduces its broadcast every four years in the halvingoffering a predictable shortage that contrasts with the flexibility of the dollar. This makes BTC itself, Be perceived as a refuge against inflationespecially in contexts of excess liquidity, which usually causes this monetary phenomenon.

BTC’s growing interest as a «digital gold» pushes investors to assign capital for this assetpotentially increasing its price by mere law of supply and demand. That is, by increasing the demand, the price of the asset increases, especially if the supply, as in the case of Bitcoin, is limited or scarce.

In other words: Investors will prefer to take refuge in toughest and transcendent assets That the US dollar, such as Bitcoin, knowing that the manipulation of monetary emission by the rulers is what usually derives in inflations and crises, as seen in Venezuela, Argentina and Zimbabue.

This was already seen. In the early years of the Covid-19 pandemic, governments decided to turn on their money printers to grant mass stimuli to citizens. This caused M2 to shoot in several economies in the world, and therefore, Bitcoin had an upward rally that led him to the historical maximum of $ 69,000 In a few months.

We must also take into account that Bitcoin’s offer in the market is increasingly decreasing, both by the action of large whales, whose BTC accumulation is increasing, and by institutional investments through the funds quoted in the stock exchange (ETF) and other financial vehicles.

To put it in context, the Bitcoin whales accumulated more than 60,000 bitcoin in a week, as cryptootics reported, denoting a renewed interest in these large investors, which already accumulate several hundred thousand BTC. On the other hand, the BTC in cash ETC They accumulate approximately 1.2 million coins globally.

After the Halving of 2024, the reward per block is 3,125 BTC, generating about 450 BTC daily until the next adjustment in 2028. This shows an imminent supply and demand shock, which could potentially exploit the price of the digital currency in the short-median term.

Thus, everything indicates that US magic computers will lose more and more space against truly hard and strong assetsas well as independent and decentralized, such as the creation of Satoshi Nakamoto.

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