Hey everyone!
I’ve been getting slightly freaked out lately by the parallels from this moment in time to 1920’s Weimar Germany.
Now, before you immediately hit the “history class snooze button” picture this…
You are sitting at a restaurant in Weimar during this….
You order a coffee for 10 German Marks (That was the name of their currency).
By the time the waitress pours the coffee, there has been an announcement (literally by one of the waitresses standing on a table)
COFFEE IS NOW 20 MARKS!
Can you imagine?
A currency that was losing value SO QUICKLY that you couldn’t even pay for your coffee in time to drink it?
By the time this was all over, you literally had to use a WHEELBARROW to wheel your cash to the store, to buy a loaf of bread.
Absolute disaster.
Now, the reason I’ve been getting freaked out is TWO-FOLD.
1) Michael Burry Keeps Tweeting About It
2) Bitcoin is the “PIN” to the currency bubble
(Read on if you want to know how I see this playing out)
First off, who the hell is Michael Burry and why should you care?
Remember the movie “The Big Short?”
For those that don’t, you will ALL remember the housing crash of 2008, right?
Well, Michael Burry was one of the ONLY people who saw it coming, and put his money where his mouth was….
He made BILLIONS shorting the housing market (betting that it would go DOWN) when everyone else was buying 12 houses on a $50,000/year salary.
So, the guy definitely has respect at being able to predict large, World changing financial events….
And now, he went on an epic tweet-storm and basically then deleted all his tweets and went dark….
Super strange, but we should probably pay attention.
BOLD EMPHASIS MINE, NOTICE HOW THIS SOUNDS EERILY FAMILIAR….
Burry tweeted. “One was the great wealth, at least of those favored by the boom … business and the stock market were booming … Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared … demoralization … crept over the common people … from watching their own precarious positions slip while others grew so conspicuously rich … Almost any kind of business could make money … The boom suspended the normal processes of natural selection … Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities … Everyone from the elevator operator up was playing the market.”
“Prepare for #inflation,”
“Re-opening & stimulus on the way. Pre-COVID it took $3 debt to create $1 GDP, and it is worse now”
Yikes….
Now, I 100% agree with Burry that this system is un-sustainable….
The U.S. government prints money like it’s “going out of style” and they aren’t going to stop anytime soon.
Here’s where I think the difference between us and Weimar is, though, as simple as I can make it.
WEIMAR IS NOT THE U.S.A.
Yes, there are huge parallels, but the most important is that the U.S.A. currently has the World Reserve Currency.
This, coupled with the fact that we have the World’s largest MILITARY, means that unless there is a viable ALTERNATIVE to the U.S. Dollar, this madness would probably just continue forever….
However, there happens to be an alternative….
I believe Bitcoin is the “PIN” to this currency balloon….
Obviously, the U.S. Dollar is ultimately doomed.
I know it might seem crazy that I’m saying “Obviously” but at this point it’s not a matter of “if” it’s “when”.
Like I’ve written about EXTENSIVELY in this letter, the debt is simply too great, the stress on the system too high, and the ONLY exit valve is the currency.
It literally NEEDS to be de-valued to continue our current system.
However, we are not the first World-Reserve Currency to collapse…
As you can see, there have been multiple World-Reserve Currencies before us, and all seem to collapse after about 100 years.
Now, in the past, every time this has happened, the World has shifted back to some sort of “Gold Standard”.
Which makes sense….
The government goes insane, and prints money like a Monopoly Banker on Crack.
Then, to restore sanity, the World has to put a PEG back into the market.
Saying, THIS is what REAL money is, money that can’t just be printed out of thin air.
And then we start over again.
STAY WITH ME THIS IS IMPORTANT.
It’s actually kind of funny that it always “starts over again”.
Why not just fix the problem and stop repeating the mistakes of history?
Honestly, it’s simple.
GOLD ISN’T A GOOD CURRENCY.
Gold is
Heavy
Hard to Verify
Hard to Secure
Hard to Divide into small enough pieces to transact.
SO…
We’ve ALWAYS had to issue PAPER certificates to REPRESENT Gold….
(did you know that the U.S. dollar once was redeemable for a certain amount of Gold?)
But like the song says so wisely…
“Mo Money, Mo Problems” - P Diddy.
With more paper money, it just makes the temptation to print it irresistible.
Every government eventually succumbs to the temptation.
That’s why Bitcoin truly is the PIN that is going to pop this currency bubble forever….
Bitcoin is the first money that is BUILT for the digital World we are headed into.
It is the scarcest asset in the Universe (there will never be more than 21 million)
at the same time it’s infinitely divisible for whatever transaction size
The lightning network on layer 2 will allow it to do coffee sized transactions at (you guessed it) lightning speed.
Most importantly, it CANNOT BE MANIPULATED BY A GOVERNMENT.
I still think (hope) we are in the early innings here….
This is really the first year where Bitcoin has been recognized for what it is, by some of the largest companies and smartest people in the World…
Bitcoin also goes through 4 year “cycles” centered around its “halvings” which reduce its supply like clockwork.
Imagine closing half the Gold mines in the World every 4 years and you’ll get the idea…
So, my prediction is that we don’t get hyperinflation THIS cycle, but on the next one around 2025….
For this year, I think Bitcoin will continue to skyrocket and touch prices of $250k-$300k….
Then, it will consolidate back down around $100k or so for the next few years…
THEN, I think it’s game on….
By that point, the U.S. will have printed so much funny money that every other Government in the World will probably be secretly ready to start stacking Bitcoin to move away from this insane dollar system…
(remember, their currencies are just as bad as ours)
All of us need a life raft, and Bitcoin is that raft.
Once Governments start jumping ship, it’s going to be one of the most insane things we’ve ever seen in our lives.
Just be prepared, is all I’m saying.
People in Weimar didn’t think that their currency was on the verge of collapse either…
They were just playing around in the stock market and having one hell of a time and then BOOM….
Their currency was used as literal toilet paper….
Until tomorrow!
Kale
p.s. Share this and Subscribe! You gotta admit this one was pretty fire today….
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