🔮 A crypto legend's prediction

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GM everyone. This is 2036, the newsletter that makes you smarter on crypto in 3min/day.

On January 30, 2020, billionaire investor Balaji Srinivasan made the following prediction on Twitter:

At the time, Balaji was ridiculed. Most people hadn’t even heard of COVID in January 2020.

But in time, the most terrifying words on the Internet became “Balaji was right.”

Two days ago, Balaji issued his latest warning on what he sees coming next - and the steps you can take to prepare yourself.

Are you ready?

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On March 14, 2008, the New York Fed agreed to provide a $29 billion loan to Bear Sterns.

A few weeks later, the bank collapsed and was sold to JP Morgan.

Shortly after, Ben Bernanke, then-chairman of the Federal Reserve, announced the US could experience a “mild recession” - though nothing to really worry about.

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On March 16, 2023, a consortium of banks agreed to provide a $30 billion rescue package to First Republic Bank.

A few weeks later, the bank collapsed and was sold to JP Morgan.

Yesterday, Jerome Powell, chairman of the Federal Reserve, announced the US could experience a “mild recession” - but that the system was sound and resilient.

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158 days after Ben Bernake’s announcement in 2008, the global financial system collapsed.

Millions of people lost their job in the worst crisis in 100 years.

But this is not 2008.

Yes, there’s a commercial real estate crisis that’s worse than 2008.

But there’s also:

• a global banking crisis ($500 BILLION+ of failures in 2 months)

• a debt ceiling crisis (that investors have warned about for a long time)

• a de-dollarization crisis

• an auto, credit and student loan crisis

• a trade war and energy crisis

… and did you see the US Treasury spent half its tax receipts in 2 days?

Balaji predicts that, eventually, shit will hit the fan.

And when it does, the Federal Reserve will have no choice but to print TRILLIONS to bail out all the affected industries and stimulate the economy again.

But these trillions aren’t going come out of tax receipts, or any receipts for that matter.

They’ll come from borrowing:

And at some point, all this money has to be paid back.

Now - every smart economist and investor on the planet pretty much agrees there’s no way to actually pay back the money.

This isn’t a controversial opinion.

Instead, the debt will need to be either:

a) defaulted on (hard default)

b) inflated away through money printing (soft default)

What most people don’t fully appreciate, according to Balaji, is the scale of money printing and the speed at which it’s coming.

He assigns a:

• 10% probability that the US will hard default on its debt in the next few months

• 70% probability that the US will combine hard default with massive money printing to inflate the debt away over the next few years

His solution?

You guessed it. Bitcoin.

Banks are collapsing left and right. Literally.

Earlier this week, it was First Republic Bank. As I’m writing this, PacWest Bancorp is considering a sale. Western Alliance Bank could be next.

And that’s just the tip of the iceberg. Insurance companies are completely broke too.

All deposits are moving to JP Morgan. They won in 2008, and they’re winning now.

In July, the Fed is rolling out FedNow - a system of digital control governed by the Federal Reserve.

Sounds creepy, because it is.

Bitcoin is the exit ramp to sovereign money.

You can read Balaji’s full thesis here.

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