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"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -Henry Ford
And that’s the liquidity vortex. Without a constant supply of fresh debt, all liquidity gets sucked into a black hole of debt repayments that can’t mathematically be filled.
And that’s the liquidity vortex. Without a constant supply of fresh debt, all liquidity gets sucked into a black hole of debt repayments that can’t mathematically be filled.
Spending money, if you stop and think about it, only transfers that money to someone else. The money is still there, its quantity hasn’t changed, but it’s just in a different person’s bank account or wallet now. That’s fundamentally why money can’t “flow into” an asset. If you buy an asset, that money you spent is still available to spend, just by someone else rather than by you. It’s not somehow sitting there inside the stock or bond or real estate, waiting for you to sell your asset so it can emerge back into the financial landscape and be spent again.
That subject deserves its own in-depth explanation. Suffice to say that if you’ve ever felt that the financial system is a parasitic entity infested at the highest levels by people with “persistent antisocial behavior, impaired empathy and remorse, and bold, disinhibited, and egotistical traits,” you’re probably on the right track. It’s the ideal habitat for a motivated psychopath, and I believe they’ve maneuvered themselves into the system and are busy exploiting our trust and the properties of our most crucial social technology. Unfortunately not one person in a thousand understands what’s happening. Most can see the decay spreading and feel something is wrong in society at a fundamental level, but without understanding they cause, they don’t have the knowledge or tools to fight back.
What's the difference between a subsistence hunter/gatherer lifestyle and the modern civilization we all enjoy today? Specialization of labor, and complex supply chains. And what enables those civilizational necessities? Money.
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When we expand this situation to the global economy, we discover that the world has $320 trillion of debt and only $120 trillion of M2 money supply. The annual loan repayments on that massive debt pile are around $60 trillion.
When we expand this situation to the global economy, we discover that the world has $320 trillion of debt and only $120 trillion of M2 money supply. The annual loan repayments on that massive debt pile are around $60 trillion.
That’s why the dollar refuses to die. Regardless how much everyone hates it, the global debt pile is enormous. And the only way to survive is to keep working and earning dollars to keep making those payments every month. And the ride never ends, because if every single dollar in existence was used today to pay down the debt, the world would be penniless and still $200 trillion in debt. That’s $25,000 of debt for every human on the planet.
So that’s how banks create their own demand, and keep an iron grip on the global economy. Every loan they make creates future demand for dollars to repay that loan. And the ever-increasing gap between the debt and the money available to repay it means that the only way for the economy to stay above water is a constant supply of new loans to create the money needed to pay off the old loans and accumulated interest. Which, of course, is supplied by the banks.
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If every Bitcoin holder simultaneously decided tonight that the lowest price they’re willing to accept is $200,000 per Bitcoin, and a single potential buyer decided to buy a single dollar worth of Bitcoin at that price, that would be the new Bitcoin price tomorrow morning. No ETF “inflows” or institutional buying pressure or short squeezes or liquidations required, or any of the other excuses market analysts use to confuse normal people and make it seem like they have some deep esoteric insight into the workings of markets and future price action.
If every Bitcoin holder simultaneously decided tonight that the lowest price they’re willing to accept is $200,000 per Bitcoin, and a single potential buyer decided to buy a single dollar worth of Bitcoin at that price, that would be the new Bitcoin price tomorrow morning. No ETF “inflows” or institutional buying pressure or short squeezes or liquidations required, or any of the other excuses market analysts use to confuse normal people and make it seem like they have some deep esoteric insight into the workings of markets and future price action.
If every Bitcoin holder simultaneously decided tonight that the lowest price they’re willing to accept is $200,000 per Bitcoin, and a single potential buyer decided to buy a single dollar worth of Bitcoin at that price, that would be the new Bitcoin price tomorrow morning. No ETF “inflows” or institutional buying pressure or short squeezes or liquidations required, or any of the other excuses market analysts use to confuse normal people and make it seem like they have some deep esoteric insight into the workings of markets and future price action.