We are living in unprecedented times. Well, not exactly. I think we're all well aware that power corrupts absolutely and the cyclical nature of the world is that empires rise and fall.
We are in the eye of the storm of this happening to the global financial system. In a post-COVID world where trillions in value was created from quantitative easing and then subsequently removed, even the banks are struggling to keep up. Let alone your local grocery store or restaurant.
From a subjective experience, I've seen many local businesses crumble during COVID. I would say - without any real data outside of experience - that about 20% or more of the local businesses in my area are now out of business or changed hands to new ownership since the beginning of COVID.
Local governments, the federal government and the federal reserve did unimaginable damage to local and global economies. We're still experiencing the fallout of everything they did from shutting down small businesses to masks to straight up lies to printing billions of free dollars and raining it upon us.
America's Banks Are Missing Billions of Dollars
Balaji is making a lot of noise about this, post-SVB collapse. We've seen 5 banks collapse so far and many people think that there are a whole lot more collapses on the horizon.
"The odd thing is that deposits in American banks are nevertheless falling. Over the past year those in commercial banks have sunk by half a trillion dollars, a fall of nearly 3%. This makes the financial system more fragile, since banks must shrink to repay their deposits. Where is the money going?"
-The Economist "America’s banks are missing hundreds of billions of dollars"
As people who are into crypto, we've heard a lot of different banking terms. I've heard in the past that one of the many lessons and values of being in crypto is the "economic degree" that you get from being in this industry. From my perspective, I have learned so much about economics since I first got into this industry... it's wild.
In this industry we've also heard "unbank yourself" and "bank the unbanked". A lot of "bank" getting thrown around. The ironic thing is that the general sentiment around crypto is to do away with banks. Either entirely or at least a %.
I have touted this as well - why hold all your money at a bank? I just don't think that makes sense. I think it makes a whole lot more sense to hold some money at multiple banks and then also some money in the crypto ecosystem.
Look, either crypto is all going to 0 or it is going to change the world and everyone is going to use it like the internet some day. That's one helluva asymmetric bet.
The tide has gone out since covid and now we see a ton of small to mid-sized banks with their pants down. Interest rates are still on the rise (unless the FED decides to pause hikes in the meeting they're having in 3 hours) and the banks are holding some bad debt on their balance sheets.
Crypto is Still a Scam - Uncle Sam
Somehow - between the crumbling global economy and banks on the verge of shuttering their doors - the U.S. Government is still finding time to call Crypto a scam.
It's pretty ironic. The government calling something a scam that promises to remove so much reliance on banks meanwhile those same banks are shuttering their doors because they scammed clients out of deposits and literally don't have enough $$ on their balance sheet to cover withdrawals.
Look, I'm no government anarchist but I do believe in having more individualism when it comes to finance.
I have long been a believer in unbanking some % of your net worth. As I said above, my advice to friends and family is always to use multiple banks + have some crypto. I don't say to all-in to crypto... I say multiple banks + some crypto.
I'm not one of the maximalists that will tell you the whole system is going to shit on some Mad Max type of level. I'm a pragmatic person and I have pragmatic beliefs about how you should manage money and be in both systems. I think there is a value in both.
Bitcoin promises us a future where we can have at least some % of our net worth "outside the system". I firmly believe in that future.
No, maxis, I don't buy-in to the future that the USD is going to $0 and we're all going to use BTC as the world's reserve currency and buy all of our groceries with it.
Instead, I think we'll use BTC to store wealth outside the system. Tap into that wealth when we need it - like a long-term savings account - and it will be the centerpiece of a digital ecosystem. That's what BTC is to day. It's doing all of these things already. I just think it has a lot more room to scale up.
Long Bitcoin, Short Banks
Longing BTC is shorting the banks. Like I said, I don't think you need to completely remove yourself from either system. A healthy mix of the two will take you to the place you need to go which is individualism and self-reliance.
I wrote two quick Threadstorms today. One talked about the FED from an ELI5 perspective. The other talked about HBD and how it can be utilized as a really powerful storehold of wealth, especially with the 20% savings rate on-chain.
If you know me, then you know that my whole mission in life is to democratize financial knowledge and access. I believe in a future where everyone is more financially literate. That's what LeoFinance is all about.
Read these two threadstorms if you want to up your literacy in the next 5 minutes:
- On The FED: https://alpha.leofinance.io/threads/view/khaleelkazi/re-leothreads-2eqmrfabe
- On HBD: https://alpha.leofinance.io/threads/view/khaleelkazi/re-leothreads-2oc8pdmd9
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So much I agree with here. I come from the old school, gold and silver are money, everything else is credit - and that much holds true within the fiat system. All stocks are merely derivative paper contracts implying inferred ownership of a % of a company's overall equity. However, it's been decades since private ownership of paper stock share certificates was the norm, so it's already all digital, within a brokerage account, which, in most cases, you can only access online as it is.
I am a firm believer in having a core cash position (USD - fuck the CAD, the AUD, GBP, CNY, YEN, EUR, NZD) with liquid USD spread across at minimum 2-3 checking accounts, 2 of which at least, need to have physical branches were you can go in-person to withdraw cash if needed. Having multiple Stores-of-Value is important as well, hence my % gold + % silver allocations. Never go all-in on any singular asset, it's never going to end well, no matter the intention.
As for crypto, I am a pluralist, I believe that we will live in a multi-chain future, with different token-swap-centric bridges, such as XMR-ETH, XMR-BTC, Hive Lightning @brianoflondon, and others. Claiming that only $BTC in its current form is valid is not only foolish, but stupid. Never put all your eggs in one basket, and never bet on only one horse. It's all a casino anyway, why not spread your risk around and see how many possible hits you can get, rather than bank only one winner?
Seems common sense to me, at least. And of course, allocating a % of your crypto portfolio to $BTC, $XMR can't hurt.
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Government have been the biggest scammers since the beginning of their conception. To this day, half the people are not represented by the bi-partisan leader appointed, yet they pay taxes. Taxation has been their most profitable long-term scam! Biggest gang to exist, all there is to it. Do what they say or reap consequences... pretty damn extortionist sounding to me! SMH. Add the fact they're in league with the banks in one way or another and the money printing process even if not directly branched from them (For obvious reasons.) and you've got yourself a Grade-A, A1, scamming machine!
Money just doesn't disappear either. It went somewhere. If the government had been using crypto, we'd have a clear and undeniable endpoint because they'd be using a ledger we would all have access to and could check receipts on. It's all by design that they "lose" this money magically. 🙄
Yeah government's are the original scam artists of the world
Give people the power to do whatever they want, and they will
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With so much evidence that cryptocurrencies are the future, it is crazy to continue to take such a stance.
They have to continue their stance because they are so neck deep in the current financial system. IF they were smart, they'd see the tide shifting and adjust accordingly
Spoiler: they are not smart
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They are also crazy !LOL
Not at all, haha!
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What are the other two? RFB and Credit Suisse?
Just making sure I didn't miss one or two of them :D
Governments are a necessary evil!
Sadly they are necessary but never forget they are Evil and should always be treated as such.
And banks say Cryptocurrency is an avenue for money laundering when HSBC was doing that for the cartels and got away with a slap on the wrist.
By now ,it is becoming more clearer that their is more hope and future when it comes to putting out trust in cryptocurrency
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That is the surreal about all of what is now happening, that we are constantly told by the media that cryptos are a scam, and it is the banking system that begins to collapse; showing us that it is a matter of time before the current global monetary and financial system collapses pieces. It is ironic if we analyze it deeply.
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What we hold in the bank isn't money, it's currency. The real money the system seized in 1934 with the Gold Reserve Act.
Its purchasing power will definitely dissolve. Can't tell whe , but it will. That's the nature of all fiat currencies; and the reasons are the same throughout history.
Anyways. Good read. Great info to debate over.
They are shouting at the people who kick the legs out of their chairs. This loud shouting is the evidence that we are right and they are in fear.
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I admire the confidence and the "consistency". Calling crypto a scam and yet promoting their own cbdc. Very consistent indeed!
Thanks for the two links you shared above.
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it's clear that the traditional banking system has some serious flaws when it comes to tracking and managing money. It's shocking to see that billions of dollars have gone missing, and yet the government is still quick to dismiss cryptocurrencies as a scam.
While it's true that cryptocurrencies have their own set of challenges, they also offer some unique benefits, such as transparency and security.
It's a LOL moment when u realize how corrupted and inconsiderate the system is.
For a long time, I thought people deserve freedom but as the time goes by I'm less and less certain about it.
If they can't see the consistent patterns in the last 40 years, then i don't know what to say.
The Fed and other central banks created the inflation problem. Their solution to the inflation they created could turn the impending recession into something alot worse.
The US government has a $31 trillion deficit. Every time rates go up the interest on that unpayable debt rockets higher. Then think about the $13 trillion of consumer debt in the US and the $11 of corporate debt. As rates keep going up a chunk of this debt will be defaulted on. Then of course, the cost of mortgages and other loans such as sub prime cars loans will go up and squeeze living standards even more.
The Fed does not have a solution for this crisis of a totally insolvent financial system.
If China, Russia and other BRICS nations develop a gold back currency for conducting trade then the dollar will lose its status as the worlds reserve currency which will have major repercussions for all of us.
This is everywhere govt complaining about missen money whereas they are actually using it for something which no one knows about
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https://leofinance.io/threads/@mercadomaestro/re-leothreads-yqc6fcad
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-- I like how people talk about BTC being a store of wealth, when put in contrast with peoples complaints about the ecological effects of "Mining" BTC.. I wonder if they prefer the ecological effects of actual mining of the earth for things like gold.