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MY CLUBHOUSE THESIS: HYPERINFLATION IS CLOSE

Discussion in 'The Kruse Longevity Center' started by Jack Kruse, Mar 11, 2021.

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  1. Jack Kruse

    Jack Kruse Administrator

  2. Jack Kruse

    Jack Kruse Administrator

    The most important economic component of the El Salvador (ES) announcement is the comment on remittances. When wealth is sent back “home” by hard working migrant workers, the fees using legacy channels are egregious. Reducing fees materially increases ES GDP.
    *WHEN* El Salvador does pass legislation to recognize bitcoin as legal tender, BTC would very likely become *MONEY* under US commercial law https://law.cornell.edu/ucc/1/1-201:



    Money means a medium of exchange currently authorized or adopted by a domestic or foreign govt

    What's the significance? Well, it means bitcoin would gain a special status in banking systems globally. Banks would likely treat it like any other foreign currency. Bitcoin *MAY* get back-door favorable treatment under bank capital requirements (Basel 3, etc).

    The knock-on effect of El Salvador's announcement is that other countries may now follow. One likely candidate has always been Russia, which has been gradually de-dollarizing since before the 2008 financial crisis. It will be v interesting to watch the foreign policy moves from here on out.

    It advances adoption no matter how it plays out. Wonderful for all involved. Congrats to everyone--most especially to the people of El Salvador.

    I expect Bulgaria to follow next because they already have billions worth of Bitcoin in their treasury.

    With my discussion with Jack Dorsey last night it is obvious that BTC is hacking big tech.

    BTC is also hacking dictatorships.
    [​IMG]
     
  3. Jack Kruse

    Jack Kruse Administrator

  4. Jack Kruse

    Jack Kruse Administrator

    OK let's dig in. Here's a tl;dr: *When* El Salvador adopts legislation to make bitcoin legal tender, bitcoin: * likely gets status as "money" so treated on par w/ foreign currency by banks * possibly gets "cash" accounting treatment under USGAAP/IFRS (solves BTC adverse accounting
    That's why this is likely gonna be a knockdown fight: it MAY be a back-door way to enable banks to handle bitcoin + MAY solve bitcoin's lower-of-cost-or-market acctg problem. The politicized immigration debate in the US probably comes into play too. Incumbents WILL try to block this move.
     
  5. Jack Kruse

    Jack Kruse Administrator

    What's the big deal--what's "legal tender" anyway? It's a commercial law term (means citizens must accept "X" if offered in payment of an obligation in exchange for delivering property). Legal tender is key to commercial law, which is THE foundational layer of any legal system. In 2018, some in Wyoming wanted to make bitcoin legal tender, as Wyoming had already done w/ gold & silver. Article 1 Section 10 of the US Constitution mentions gold & silver explicitly, but making anything else legal tender in the US requires amending the US constitution.

    So, it wasn't possible to make bitcoin legal tender in the US without amending the US constitution. I thought at the time another country might do it though, & thereby open the door to treatment of bitcoin as "money" under commercial law + "cash" under acctg rules.

    TO BE CLEAR, I'm not an accountant so making an educated guess. Accountants, please chime in!! bitcoin is treated as an "indefinite intangible" which means lower-of-cost-or-market, but if it's a foreign currency it gets mark-to-market up & down.
    michael saylor will be happy.


    And, if I'm right, other corporate treasurers could also buy bitcoin w/o facing its punitive accounting treatment--they'd now account for it like any other foreign currency. No more adverse accounting=>more companies start holding BTC.


    Back to the law. Commercial law lays out the rights & obligations of parties when exchanging property + establishes a road map for judges to adjudicate disputes.

    US Commercial Law Angle. If El Salvador actually goes ahead and recognizes Bitcoin as legal tender...Bitcoin then becomes "money" under https://www.law.cornell.edu/ucc/1/1-201
     
  6. Jack Kruse

    Jack Kruse Administrator

  7. Jack Kruse

    Jack Kruse Administrator

    Ann Neuberger of @_nsagov is now creating the next FUD argument against #BTC. Ransomeware attacks. This will lead the Fed an excuse to print more money to "protect" vital interests of the gov't. Ridiculous narrative I expected post COVID due to WEF playbook.
     
  8. Jack Kruse

    Jack Kruse Administrator

  9. Jack Kruse

    Jack Kruse Administrator

    England now has a lot of negative-yielding debt. Now we have this: https://www.bankofengland.co.uk/paper/2021/new-forms-of-digital-money

    Go back and read what I said in BTC #3 and 4 in the Patreon series about negative-yielding bonds. It signals the coming end of the debt cycle and many bank closures.
    • The new paper focuses on the implications that the adoption of private stablecoins could have for the cost and availability of lending, and the difficulties this could present for monetary policy.
    • New forms of digital money could offer benefits of cost and functionality, while a CBDC could enhance the effectiveness of monetary policy by shortening the timescales for clearing and settlement.
    • "But these opportunities can only be realized if new forms of digital money are safe," the paper said. "They could be privately provided – in the form of stablecoins. Or they could be publicly provided – in the form of a CBDC."
     
  10. Jack Kruse

    Jack Kruse Administrator

    Microstrategy and Michael Saylor have also formed a new subsidiary, MacroStrategy LLC, which will hold its existing 92,079 BTC.
     
  11. Jack Kruse

    Jack Kruse Administrator

    New blog out on the BTC Miami conference. How do you handle stress? Do you use stress or does stress use you? It is a natural condition of existence for us. The dose and our reaction to it, however, is where people either adapt well to it or fall apart. You are not your circumstances or your perceptions. Your attitude determines how you manage this randomness in life. Stress occurs when demands exceed resources. Today there is financial distress in the fiat world that is ruining our ability to live freely and be in control of our destiny because we are being stolen from. When this balance is off long term in your life you pay a biological toll. Today begin to realize, if there's too much of it and it's not properly managed, it becomes distressed. Stress is an adaptive outcome. Stress is a compilation of choices. Begin to learn to make decisions that choose peace in your life today.
    Adding BTC to your balance sheet is how you should de-stress now. This blog explains why thinking outside the box on health and wealth are critical skills for the Black Swan Mitochondriac. When you "Think outside the box" it gives Schrödinger's cat a bunch of possibilities man never considered possible. https://www.patreon.com/posts/btc-28-bitcoin-50456239
     
    Sean Waters, JanSz and caroline like this.
  12. Jack Kruse

    Jack Kruse Administrator

    John Schumacher and JanSz like this.
  13. Jack Kruse

    Jack Kruse Administrator

    I told all my members 14 months ago that the 4 papers I reviewed from 2005-2019 made me realize that the USA (Fauci specifically) was helping the CCP virology lab work on GOF studies for a coronavirus. I believed the reason what to use it as a way to slow the global economy to get the public ready for the money grab of an economic reset because we are at the end of the debt cycle. In this way, attn would be diverted away from the Central bankers of the world and focused on the fraudulent scientists who locked us down for no good reason. It appears they are getting away with it. Do not let them ruin your life savings. Buy BTC at once as the vaccine you need against tyranny.

    Bitcoin is the taxpayers' peaceful weapon of choice. Money represents human action, it's the most fundamental level of freedom of speech.

    https://justthenews.com/politics-po...science-suggests-covid-19-came-wuhan-lab-leak
     
    John Schumacher and JanSz like this.
  14. Jack Kruse

    Jack Kruse Administrator

  15. Jack Kruse

    Jack Kruse Administrator

  16. Jack Kruse

    Jack Kruse Administrator

    Microstrategy 2020-21 financial moves are bringing back LBOs but instead of buying companies, they're buying bitcoin. Pretty smart move with hyperinflation around the corner.
     
  17. Jack Kruse

    Jack Kruse Administrator

    In 2005, the 'net capital rule' was changed. It was changed at the behest of Wall St.bankers.

    The changes allowed much more financial leverage & led to the explosion in the repo market. The changes played a huge role in the failure of Bear Stearns and Lehman Brothers. Both went bankrupt when the CDS insurance for 10 million dollars was at 6 basis points. Today, the US treasury CDS is at 12 basis points for comparison. The changes are still in force on the net capital rule.
    [​IMG]
    Today the FED REVERSE REPO FACILITY USAGE CLIMBED TO RECORD $486.097 Billion. The system is loaded with liquidity and counterparty leverage.
    [​IMG]
     
    John Schumacher and JanSz like this.
  18. Jack Kruse

    Jack Kruse Administrator

  19. Jack Kruse

    Jack Kruse Administrator

    Tim Wu, the top anti-trust U.S. advisor to President Biden on technology and competition policy, hodls between $1 million and $5 million in Bitcoin In 2017, he called it a “bubble” in the New York Times. Today, Bitcoin makes up between 25% - 43% of his total assets. Good adaptation for him.
     
  20. Jack Kruse

    Jack Kruse Administrator

    The bipartisan U.S. Senate Financial Innovation Caucus endorses Bitcoin as a tool for financial freedom. Founded by
    @SenatorSinema & @SenLummis
    the Senate caucus calls for Congress to pass Bitcoin favorable legislation.
    @SenLummis and @WarrenDavidson spoke at last week’s Bitcoin 2021 conference. Bitcoin is about ensuring sound money, an egalitarian approach to banking and financial freedom. It’s time for Congress to take this seriously and make sure there is always freedom to innovate.


    Today the *IRS CHIEF ASKS CONGRESS FOR AUTHORITY TO REGULATE CRYPTO.
     
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