Search
All
Economics
Politics

El Salvador’s bonds Sell for 40 Cents on the Dollar, What About Bitcoin City?

•

•

35 comments on El Salvador’s bonds Sell for 40 Cents on the Dollar, What About Bitcoin City?

•

How Beautifully?

El Salvador has models. President Nayib Bukele tried to sell bonds backed by Bitcoin but there were no takers.

Buy the Dip

Soon the US will follow. Yeah right.

President’s Nayib Bukele Bitcoin City Vision 

Fears of Default

Meanwhile, back in the real world, El Salvador reveals plans for Bitcoin City amid fears of default

Last year, Bukele announced that El Salvador would become the first country in the world to accept bitcoin as legal tender, alongside the US dollar. El Salvador was going to fund the project with $1 billion in bonds. These public debt securities would be secured with bitcoin instead of a fiat currency. These so-called volcano bonds were meant to be issued in March, but the date has been pushed back to September.

“We will have no income tax, forever. No income tax, zero property tax, no procurement tax, zero city tax, and zero CO2 emissions,” he said in a statement in November. “The only taxes that they will have in Bitcoin City is VAT, half will be used to pay the municipality’s bonds and the rest for the public infrastructure and maintenance of the city.”

Bloomberg agency estimates that El Salvador has bought 2,301 bitcoins since it became legal tender in September 2021. These tokens currently have a total value of $74 million, well below the $103 million Bukele paid for them.

Government bonds are trading at 40% of their original value, as investors start to doubt whether the country can meet its next debt payment in January 2023.

Betting Your Country on Bitcoin

Nothing like betting your country on Bitcoin.

And the bonds to build the city, cancelled.

Michael Saylor, CEO of MicroStrategy (MSTR) bet his company on Bitcoin. El Salvador president Nayib Bukele bet the country.

That’s how crazy things have gotten.

For discussion of MSTR please see Bitcoin Margin Calls, Waterfall Events, and People Pretending to Know the Unknowable.

This post originated at MishTalk.Com.

Thanks for Tuning In!

Please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

If you have subscribed and do not get email alerts, please check your spam folder.

Mish

Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

This post originated on MishTalk.Com

Thanks for Tuning In!

Mish

Mike Shedlock

Recommended Articles

Comments to this post are now closed.

35 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Hansa Junchun
Hansa Junchun
3 years ago
What a time for Max Keiser to be off the air! Would have loved to hear his spiel on the volcano bond meltdown….
0
0
Nasty Edwin
Nasty Edwin
3 years ago
the end result of a ponzi scheme is knowable by historical precedence
0
0
brainy
brainy
3 years ago
Reply to  Nasty Edwin
but you knew this already: this time it will be for sure different… and bitcoin is not a Ponzi-scheme (at least if we ignore all evidence) 🙂

0
0
KidHorn
KidHorn
3 years ago
Reply to  brainy
Not a ponzi scheme. Just an ordinary scam.
0
0
TheWindowCleaner
TheWindowCleaner
3 years ago
Bitcoin and cryptos are rabbit holes. The way to the libertarian wet dream of price deflation and the rejuvenation of profit making economic systems is through the new monetary paradigm of Direct and Reciprocal Monetary Gifting which integrates the best aspects of the orthodoxies on the left and right. https://www.amazon.com/dp/B07PLNJLRN/ref=sr_1_1?keywords=wisdomics-Gracenomics&qid=1552358772&s=books&sr=1-1-catcorr
0
0
MPO45
MPO45
3 years ago
I applaud El Salvador for trying something different. At least they were trying to break the central bank cycle. Many here are constantly criticizing the Fed and when a country tries to do something different and break free, they get kicked while they are down. So sad and tragic for a “libertarian” site.
Of course, many here want gold to become a standard but as we can see from the price action this week on gold, it’s not that better than bitcoin.
0
0
PapaDave
PapaDave
3 years ago
Off topic, but closer to home: Heat wave overwhelms Texas power plants producing close to 3 GW and electricity prices spike to $5000/mwh.
0
0
MPO45
MPO45
3 years ago
Reply to  PapaDave
it’s kind of like the slowly boiled lobster isn’t it? I read somewhere that global temps might go up beyond a really bad threshold by 2026. Every year it gets a little warmer, more electricity needed to cool off and more climate change deniers, kinda like covid.
Let’s see how bad hurricane season is this year.
0
0
RonJ
RonJ
3 years ago
Reply to  MPO45
0
0
PapaDave
PapaDave
3 years ago
Reply to  MPO45
Checked a half dozen sites and most are projecting an “above average” hurricane season.
Meanwhile, the drought in the US west is dropping water levels in lake Mead and Powell. It looks like they are going to sacrifice Mead to save Powell for this year. Mead is dropping about a foot every 5 days now. Every foot equates to a loss of 6 MW of generating capacity. The lake is 177 feet below full pool level of 1229 ft above sea level, or 1052 ft. Most of its turbines will stop working below the 1050 ft level, though they did install 6 new turbines that could still generate some electricity all the way down to the 950 ft level.
They are going to have to fire up more NG generator plants soon.
0
0
Lisa_Hooker
Lisa_Hooker
3 years ago
Reply to  PapaDave
PapaDave –
Any idea of how many acre-feet of water for agriculture are being lost every day?
Food might become more important than air conditioning.
0
0
William Janes
William Janes
3 years ago
Reply to  Lisa_Hooker
Should not be growing hay in the desert. Only cheap water provided by federal government allows Arizona to produce crops that were better suited to the Midwest.
0
0
Hansa Junchun
Hansa Junchun
3 years ago
Reply to  Lisa_Hooker
People only live in deserts because of air conditioning.
0
0
RonJ
RonJ
3 years ago
Reply to  MPO45
“The National Oceanic and Atmospheric Administration just found from a new study that cleaner air is actually brewing more hurricanes in the Atlantic, according to a new AP article.”
0
0
PapaDave
PapaDave
3 years ago
Reply to  RonJ
Yes. Dirty air, full of particulates from heavy pollution, actually help to block the sun and cool the planet. Our air was so dirty from 1950 to 1980 that it was offsetting the warming of GHG emissions. But then we decided to clean up the air in order to stop the health problems that result from dirty air.
0
0
FromBrussels
FromBrussels
3 years ago
Reply to  MPO45
only difference being that Covid was NO problem, merely a great test to see how far they can go dominating the sheeple ….very far btw, that s obvious, that s why you will always be sheeple…..stupid, non thinking followers ….
0
0
Zardoz
Zardoz
3 years ago
Reply to  PapaDave
Third world infrastructure in a conservative state? Mon deu!
0
0
KidHorn
KidHorn
3 years ago
Reply to  Zardoz
They made the mistake of relying on wind mills.
0
0
FromBrussels
FromBrussels
3 years ago
Reply to  PapaDave
‘something is rotten’ as far as ‘the state’ of the planet is concerned, Shakespeare would ve said …..Exponentially weakening magnetic fields maybe ? Nothing good is coming our way…..Why do you think some billionaires are eager to conquer space these days ?
0
0
Esclaro
Esclaro
3 years ago
The only thing that rules is the mighty USD destroying everything in its path. Many countries will follow El Salvador’s slide into default.
0
0
FromBrussels
FromBrussels
3 years ago
Under the present circumstances we ve definitely and undoubtedly reached the proverbial, ‘once in a lifetime opportunity’, to buy …… NOTHING at all ! The system is crumbling in all aspects, let s simply remain in denial though for there s no fn alternative anyway, all bullets have already been shot by CBs worldwide …… well, apart from Ukraine that is, plenty of ammo there ….and cannon fodder… for the glory of the fn US of A, the world’s warmonger n° 1….and our clueless, steerless ship in the ocean, called the EU, armtwisted into following suit ….
0
0
Zardoz
Zardoz
3 years ago
Reply to  FromBrussels
Calm down comrade…. your face red like communist flag! Have a nice Belgian potato to settle you.
0
0
FromBrussels
FromBrussels
3 years ago
Reply to  Zardoz
french fries are delicious…. although they should be called belgian fries for that s what they are, just like Tintin (Kuifje) is belgian too , and the french thinking he s french …..fn chauvinists ! Your Trudeau is a fn dictator too, in case you hadn t noticed yet , your flag should be red like your potatoe face ….
0
0
William Janes
William Janes
3 years ago
Reply to  FromBrussels
An endless loop of stupidity.
0
0
Maximus_Minimus
Maximus_Minimus
3 years ago
If it was just Nayib Bukele, but the whole country was taken for a ride. The parliament voted for the laws. I guess, they watched Max Keiser and took it seriously.
0
0
Six000mileyear
Six000mileyear
3 years ago
Governments are always the last participants in a trend. Bitcoin will now fall to levels below the base where its bubble started, which is below $4000. Hey, don’t act so shocked! The NDX lost ~90% in the DotCom crash.
0
0
Mish
Mish
3 years ago
Reply to  Six000mileyear
“Governments are always the last participants in a trend.”
An astute observation.
Will work it into a post if I get the chance.
Thanks
Mish
0
0
Six000mileyear
Six000mileyear
3 years ago
Reply to  Mish
I’m not the original observer of that behavior. I read it on Elliott Wave’s website years ago.
0
0
Bam_Man
Bam_Man
3 years ago
The movie “Idiocracy” was a documentary.
0
0
Maximus_Minimus
Maximus_Minimus
3 years ago
Reply to  Bam_Man
Or a guide.
0
0
thimk
thimk
3 years ago
New meaning to the idiom “betting the farm” .
0
0
thimk
thimk
3 years ago
New meaning to the idiom “betting the farm” .
0
0
Tony Bennett
Tony Bennett
3 years ago
The Onion will soon be a memory.
0
0
prumbly
prumbly
3 years ago
Reply to  Tony Bennett
The Onion is just prophecy
0
0

Decorate Your Walls with Mish Fine Art Images

Click each image to view details or purchase in the store.

Stay Informed

Subscribe to MishTalk

You will receive all messages from this feed and they will be delivered by email.