Base Layer
Posts
🏦 The only 2 options left 👀

🏦 The only 2 options left 👀

PLUS: the new talk of the town

Alex M.
June 19, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: with Blackrock’s Bitcoin ETF in the works, we’re getting closer to the point of no return. And there are really only two options left.

It’s Macro Monday, where we explain the bigger picture of things. Let’s dig in.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

The US government is currently $32 TRILLION in debt. Another $2T will be added this year.

At the same time, interest rates are at their highest in 15 years.

This means:

Interest expenses go up 📈
Tax revenues go down 📉

… which means deficits skyrocket even further 🚀

So, who’s going to pay for all these deficits? Two options.

Option A: nobody, in which case everything collapses, 1929-style.

Option A

Option B: the US Federal Reserve, by printing trillions of dollars to buy all the debt no one else wants to buy.

Option B

As you can maybe imagine, we fall squarely into Camp Option B.

Sooner or later, the Federal Reserve will lower interest rates and print trillions of dollars to “stimulate the economy.”

It’s death by a thousand cuts.

We’ll inflate away a) the debt but also b) the purchasing power of cash.

The losers will be those who hold cash. The winners will be those who own debt and assets - like crypto.

It’s the end of the long-term debt cycle. Ray Dalio, the founder of the world’s largest hedge fund, explains this brilliantly in this short video that’s worth watching a few times.

Throughout history, the playbook’s been the same: confiscate hard assets (e.g. gold, now maybe bitcoin), tax real estate, and inflate the debt + currency away.

It’s how Empires rise and fall.