Politicians Promoting State Pension Crypto Investing Could Learn From Argentine President
Even if losing all the pension money gambled means nothing to politicians, the risk of scandal, embarrassment, and threat of impeachment is very real.
A headline in USA Today yesterday, Argentine President Could Face Impeachment Trial After Touting Cryptocurrency That Later Crashed, should send shivers down the spines of American politicians recklessly proposing that state pensions—funds established to provide retirement security for government employees—load up on highly volatile, worthless crypto investments.
Reportedly, Argentine President Javier Milei could face impeachment after touting a cryptocurrency which crashed soon after.
Milei late on Friday posted on X recommending the little-known crypto coin $LIBRA, which soon after shot up to nearly $5 apiece.
Just hours later, the cryptocurrency plummeted to under $1.
Argentina’s fintech chamber acknowledged that the case could potentially be a “rug pull,” in which the developers of a crypto token draw legitimate investments, pumping up the value, only to later dump their stake.
“This scandal, which embarrasses us on an international scale, requires us to launch an impeachment request against the president,” said lawmaker Leandro Santoro, a member of the opposition coalition.
“Rug pull” is what we Americans commonly refer to as a “pump and dump.” We recently warned readers the Crypto Pump And Dump Scheme Targeting State Pensions Means End Is Near.
As we noted, the pump is:
Across America, more than a dozen states are already entertaining investing public funds in digital assets, including Ohio, North Carolina, Arizona, Utah, Texas, Wyoming, Florida, Pennsylvania, New Hampshire, Massachusetts, Oklahoma, North Dakota, Montana, Maryland, and Kentucky.
And the dump:
When public pensions, known to Wall Street as “the dumbest investors in the room,” finally jump into crypto with both feet—i.e., secure legislative approval to gamble 10 percent of workers’ retirement savings on a worthless asset, the end is near. The bubble is about to burst, leaving public pension stakeholders, including workers, retirees and taxpayers, footing the bill.
Given the massive, largely still-unknown risks related to highly volatile digital assets, you’d think state politicians would be hesitant—cautious—before proposing to imprudently gamble hundreds of billions of taxpayer and retirement funds.
Even if losing all the money gambled—which, with leverage, may very likely happen—means nothing to state politicians, the risk of scandal, embarrassment, and threat of impeachment is very real. This is a blatant example of what I refer in my book Who Stole My Pension? to as “politicization of investing,” i.e., the selection of investments based upon political considerations, as opposed to investment merit.
Worse still, it’s the most short-sighted scheme I’ve ever seen. Evidently, the pols don’t understand how quickly pump and dump schemes collapse, or simply don’t care.
Crypto is fool’s gold. Also, it’s killing the grid.
How can we stop them?