‘So never forget that inflation compounds. You need to own assets that can fight a disinflation environment starting from an inflationary monetary induced economy. That’s what capitalism is. Capitalism needs inflation so that the collateral backing bank loans appreciates over time. The reality is all the banks are under capitalized. It is a function of the fiat Ponzi. When you only hold 6 to 8 dollars of equity risk capital on your books as a bank to protect against loan losses, the other 94 or 92 cents or 94 cents on the dollar comes from a depositor’s money.’ – Greg Foss.
For some time now, the focus on the US dollar has been intense; for example, “Rich Dad, Poor Dad” author, Robert Kiyosaki has spent the better part of the year discussing how the fiat currency and the economy is doomed and bound to fail. Kiyasaki has warned that Americans will soon have no other option than to revolt against the government because of the severity of the economic collapse. However, with Jet-Bot platform for Binance exchange, you may allow you to earn an annual percentage yield of 200% APY to 2,000% APY. To become one of the best traders, copy the top traders and automatically follow all of their deals.
Many other investors, independent analysts and fund hedge managers like Ray Dalio, Michael Burry, and Bill Miller have all warned about the coming financial catastrophe. Greg Foss, a former fund hedge manager, and Max Kaiser, a well-known bitcoin OG and former host of the Kaiser Report, both discussed the direction of the US economy and the US dollar. Foss maintains that inflation may yet persist for longer because capitalism needs inflation. He also knows that the Federal Reserve may not do much to reduce the skyrocketing prices except if it would risk sending the economy into a severe period of depression. We will now take you to Foss and Kaiser’s interview:
‘They need inflation. They can’t control it. If they do, it’s going into a depression. This is not a soft landing. You might have been a little gratuitous in your definition. We are currently probably in a recession right now, and the Fed has only raised rates twice. They’re saying they’re going to raise another seven times and stop quantitative, or you know, do quantitative tightening that QT is equivalent to another four additional rate hikes. They’re talking about another 11 rate hikes. Don’t even pretend that you’re going to do another couple, let alone another 11 in total. The economy can’t stand it. We will be in a depression.
A final shout out to Max: yes, Putin understood this, and guess what he’s going to start doing? He’s going to start pricing his energy in bitcoin because bitcoin is digital energy. It makes sense to sell valuable natural resource commodities or energy for beautiful monetary energy. Why sell it for a worthless fiat dollar or petrol dollar that they don’t even have access to when they get blocked on the Swift system? There are so many easy scenarios to play out here, and no one’s listening.’
‘Well, on February 26th, effectively, the US seized foreign assets and defaulted on their US dollar obligations. So very similar to 1971, we left the gold standard when the United States defaulted to Great Britain when Nixon went on it. began this 50-year experiment of all fiat money, which was really the first time ever you’d had all economies running on a fiat standard that nobody had any hard money.
So, on February 26, there was a real echo of that moment, the Nixon shock. When the United States essentially stated that the dollar is completely untrustworthy and that we will default, we’re going to seize the reserves of foreign countries whenever we want to. I just don’t think that we’ve talked about convexity before and the central banks. As a result of the 2008 bailout, they loaded up on them themselves with a lot of these debts. If Enron, I’m sorry, if long-term capital management was leveraged at a hundred to one, um, you know, the Federal Reserve Bank is conservatively leveraged at 50 to 1, if not closer to 80 to 1 right now. If they try to take rates anywhere higher, you’re going to have a massive default at the central bank. The central bank is going to need a bailout.
So in 2008 the Federal Reserve bailed out Wall Street. They swapped all their bad debts for fresh treasury bills. They put all that bad debt on the books of the Fed. Now all that bad debt is worth zero cents on the dollar, and nobody wants to buy U.S. debt anymore. The U.S. Treasury bond is being vomited from the reserves of countries all over the world. Nobody wants to buy U.S. debt. It’s no good. It’d be stupid to buy U.S. debt. China is getting rid of its debt. Russia has gotten rid of all its debt. Japan is a huge basket case.
You know, Japan is actually the linchpin that holds together this whole global Ponzi scheme because they always had the lowest rates. You could always do that carry trade of borrowing in Japan and putting your money into some other currency and making a positive spread and then leveraging it up 20 times, and you’ve got this great carry trade, but that looks like it’s also blowing up, so I mean, I understand yield curve management. I understand that they can try to bring rates to a higher level. I can understand, but that presumes that the game has another chapter to it. I don’t think there is another chapter to it. I think the Fed will go bankrupt. I think the U.S. will go bankrupt. That, I believe, is what we’re looking at, and it’s why so many countries are beating the war drums right now. There’s a lot of saber rattling going on. The US is going to open up another front against China as well as the proxy war in Ukraine against Russia, so this is the end of empire stuff. Greg, this is like America’s having had the world reserve currency for 100 years. It’s had a great run, but it looks like this could be another five years. The U.S. could be pretty much finished.’ – Max Kaiser.
Since Russia was slapped with sanctions after sanctions for invading Ukraine. There have been multiple reports that the country is looking into the use of cryptocurrencies to reduce its financial dependence on the west, especially on the United States. The most recent report from the transcontinental country is that it is sooner or later going to legalize cryptocurrencies as a means of payment.
Last month, Russian trade minister Denis Manturov hinted that the government and central bank may be moving closer to settling their differences on the issue of cryptocurrencies. More recently, the first deputy governor of Russia’s central bank has revealed that the Apex bank and the Russian government do not oppose the use of cryptocurrencies in international transactions.
‘The question is, when this happens, how will it be regulated, now that the central bank and government are actively working on it’ – Manturov replied when asked about cryptocurrencies gaining legal status in Russia.
‘But everyone tends to understand that… sooner or later this will be implemented, in some format or other.’ – he added. With Russia possibly on the verge of legalizing cryptocurrencies, how soon do you think many other countries will join the likes of El Salvador and the Central African Republic, which have already taken the bold step?
[This article is a transcription of a video made by Savvy Finance]
Original video: https://youtu.be/bSHDkc2IsZY ]