1. Exquisite Tweets from @BMBernstein, @James11804433, @MemesForTron, @LukeGromen

    Crypto1ChanCollected by Crypto1Chan

    The USD is going to turn into monopoly money faster than people realize

    People are starting to say 'deficits don't matter' just as they matter more than ever

    Owning a non fiat store of value is more important than ever

    In 2022 the govt officially turns into a ponzi

    Here's why

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    BMBernstein

    Brendan Bernstein

    Debt and deficits are rising faster than ever

    Deficits just surpassed $1tn. They're not slowing down

    The $20tn trillion Treasury market was the $10tn trillion Treasury market a decade ago

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    BMBernstein

    Brendan Bernstein

    Real deficits are even worse. Boomers are retiring and entitlement spending is going through the roof

    When you count all government liabilities, the real debt balance isn't $20tn

    It's 10 TIMES higher: $200tn

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    BMBernstein

    Brendan Bernstein

    By 2022 'real interest expense', will surpass all tax receipts

    This is historically when fiat currencies collapse

    We'll need more debt just to fund EXISTING DEBT. This is like rolling credit cards. The US will be running a ponzi

    Who would loan us money?

    From: @LukeGromen

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    BMBernstein

    Brendan Bernstein

    You can't finance new debt with existing debt forever, bc at some point new buyers run out

    Foreigners, historically the largest buyers, realize this

    And theyve stopped buying our treasuries as a result

    The trade war. Foreign sanctions.THIS is the cause

    zerohedge.com/news/2019-02-2…

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    BMBernstein

    Brendan Bernstein

    This means that private institutions are left to buy the debt

    But this crowds out other investment. Specifically the equity markets, causing massive reflexivity

    Stock prices will decline, driving up deficits even further because of the wealth effect

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    BMBernstein

    Brendan Bernstein

    This is also coinciding with bipartisan support for the MMT nonsense and increased fiscal spending

    2008 was a socialist policy for bankers

    The rest of the country wants a similar socialist policy

    And with the likes of / rhetoric of Bernie & AOC, they'll probably get it...

    Reply Retweet Like

    BMBernstein

    Brendan Bernstein

    But by 2050, ALL of our tax receipts will already be going to Boomer's entitlements

    The US government will be just one big machine made to finance the boomer's retirement

    We don't have any room to add massive fiscal policy

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    BMBernstein

    Brendan Bernstein

    Meanwhile, the impending social plans aren't going to be cheap

    AOC's new deal would cost (just) $90tn....That's over 4x our GDP

    ...Because 'deficits don't matter' right?

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    BMBernstein

    Brendan Bernstein

    We're not going to end up spending that...but you get the point

    The only way to finance NEW spending will be the fed balance sheet

    Despite purportedly selling off the balance sheet, it's going to go the other direction

    The money printing machine is going to get revved up again

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    BMBernstein

    Brendan Bernstein

    No institutions are going to finance the debt given the credit risk

    The Fed will be forced to, and holders of the currency will take the hit

    According to @RayDalio

    “You easily could have a 30 percent depreciation in the dollar through that period of time.”

    Reply Retweet Like

    BMBernstein

    Brendan Bernstein

    Remember, this is all LATE CYCLE too

    The fed has already turned most of these dials

    We've been on QE novocaine for 10 years already

    Next crisis, when we really need the monetary ammunition the most, we'll be out of bullets

    Can the Fed soften the blow of the next collapse?

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    BMBernstein

    Brendan Bernstein

    Modern Monopoly Money Theory could work early cycle in a "closed system"

    But if there’s a exit / neutral arbiter of value, the market wont finance a govt that can only bail itself out w. more debt

    The scarce asset will offer better real returns

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    BMBernstein

    Brendan Bernstein

    Think of a currency like equity in a nation

    The debt holders are more senior. Equity holders will be diluted to pay them off

    When people realize this, they will rush into scarce assets and "sell off the equity"

    Assets like BTC and gold will skyrocket in value

    Reply Retweet Like

    BMBernstein

    Brendan Bernstein

    But this won't be gradual. I think it happens in a massive step function value increase as confidence in fiat currencies vanishes

    Meaning, if you're not in these assets *before* the move, you're riding the sinking ship lower

    Reply Retweet Like

    BMBernstein

    Brendan Bernstein

    This is all happening right before our eyes:

    Populism. MMT nonsense. Demographic shifts

    The people running the presses aren't buying fiat currencies. They're buying a 'worthless rock'

    cnbc.com/2019/01/31/wor…

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    BMBernstein

    Brendan Bernstein

    Just wait until they realize there's an even more scarce, unconfiscatable, digital alternative that's better

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    BMBernstein

    Brendan Bernstein

  2. Japan has been in a similar situation for decades, and yet they have experienced low inflation. Why is the US different?

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    James11804433

    FJEiwofjIOGHIOEGHIOESJFOI:SEJ

  3. The US spends money they dont have on a army they dont need, just to be the big guns on the world stage ..... muscle over brains..... the US will crumble and all those guns and rockets and Apache helicopters, wont fuel a dead economy....

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    MemesForTron

    Meme for tron

  4. The situation is much worse than it has been for Japan. But both are bad

    Would love to get @LukeGromen’s take. Any thoughts?

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    BMBernstein

    Brendan Bernstein

  5. Japan is domestically funded creditor nation whose military is largely provided for by the US.

    US is historically a foreign-funded twin deficit nation who must pay its own military.

    At very least suggests USD should be much more sensitive to this than JPY has proven to be.

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    LukeGromen

    Luke Gromen

  6. Haven’t looked $ for $, but Japan doesn’t have balancing off need to attract foreign capital/defend USD reserve status w need for lower rates to finance US govt, Corps and consumers

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    LukeGromen

    Luke Gromen