Corruption and politics often go hand in hand around the world and throughout history. So it’s not exactly news that a politician might be corrupt. That said, despite some extreme corruption in very high office in the United States over the years, we have enjoyed a reputation as one of the less corrupt nations.
As I write this in mid May, our president is making headlines around the world for accepting a $400 million airliner as a gift from the government of Qatar, especially because he has said that he might keep it after he leaves office. And while it’s difficult to imagine any circumstance under which this is not corrupt, Mr. Trump has been making angry social media posts attacking his accusers. Of course, he admits accepting the gift, but he denies that it’s corrupt.
If you are a supporter of the president, you may be inclined to point out corruption in previous presidencies, and I’d be inclined to agree with you. Donald Trump is not the first corrupt president and, sadly, he’s unlikely to be the last. But regardless of whether you support this president or not, there are potential costs to his corruption for all of us for years to come.
In 2021, in an interview on Fox Business, Donald Trump said, “Bitcoin is a scam against the dollar.” At other times he stated it was based on nothing but “thin air.” Trump’s opposition to crypto currencies was consistent, until last year.
During the 2024 presidential campaign, Trump said he wanted to make “the United States the crypto capital of the world.” At the time, journalists mused that he had changed his position to court the vote of crypto enthusiasts, especially from Silicon Valley. But so much more has recently come to light.
The Financial Times of London has reported that minutes before the new Melania Trump meme coin $MELANIA opened for trading, 24 crypto wallets acquired a total of $2.6 million worth of the new coin—ahead of the public. Within days, these wallets sold out their coins for roughly $100 million.
Who were the owners of these 24 wallets? We don’t know, but they clearly had a deal nobody else got.
If Melania’s coin was a registered security—like a stock, bond, or mutual fund—such insider trading would have been illegal and subject to prosecution, just like what happened to Martha Stewart some years back. But crypto currencies remain unregulated, which means that as far as we know, nothing illegal happened here.
But who bought Melania’s coins? We don’t know, and that makes it a perfect vehicle for anyone wanting to gain the president’s favor. In case you don’t think that would happen, take a look at what the president did for buyers of his own coin.
On May 22 he hosted a dinner at Trump National Golf Course on the Potomac River for the 25 largest holders of his meme coin. Among the attendees was the mother of Paul Walczak, who was convicted of stealing $10 million from the paychecks of nurses and doctors who worked for him. This was Mrs. Walczak’s second dinner with Mr. Trump. The first one was a $1 million-a-plate dinner in April, shortly after which Mr. Trump gave her son a total and unconditional pardon.
Also at the May 22 dinner was Justin Sun. Sun is the largest investor in Trump crypto ventures, with a $75 million investment in Trump’s World Liberty Financial and a $20 million purchase of the $TRUMP meme coin. Back in 2023, Sun was sued by the SEC for fraudulent market manipulation. Currently, the Trump administration’s SEC has its Sun investigation on hold. No need for a pardon if you’re not convicted in the first place.
I can easily go on, but let’s move on to what’s really important—the consequences for you.
It’s been estimated that the Trump family has been cashing in on his presidency to the tune of $1 billion per month. Certainly, we have had corrupt officials in high office in the past. But all of those past events are tiny compared to what we’re seeing now. And the volume of the Trump family’s corruption threatens the integrity of the government. When coupled with the vast size of the U.S. debt and the fact that the new budget, if passed, will actually increase the debt, it means that the world’s trust in U.S. investments and U.S. government debt is now at risk. If foreigners don’t want to buy our debt, that is unlikely to produce a crisis. But it does mean higher interest rates. When the likelihood of being paid back at the end of a bond’s term has declined, then you, as an investor, would normally want a higher rate of interest on that bond.
And so, as the world looks at ballooning U.S. debt and large amounts of official corruption, they are demanding higher rates of interest on our debt. U.S. Treasuries set the rates upon which all borrowing is done, especially mortgages. The Trump family’s corruption is a threat to your ability to buy the house you want.