Bitcoin – BTC Buy Bitcoin Because A Huge Storm Is Coming – Lyn Alden & Mark Know everyone’s focused on the debt ceiling right now and of course that’s a you know that’s a hurdle they have to go through whereas I think the biggest question is what happens after the debt ceiling because when the treasury is no longer offsetting some of the Federal Reserve policies um I think we’re You’re out of risk of a liquidity Challenge and then beyond that you either see the Federal Reserve probably have to change some of their policies maybe end quantitative tightening or take other actions or you need to see the treasury make unusual actions like for example they can issue a ton of key Bills to keep funding their large deficits and I think that that a lot of that probably materializes in the second half of this year or maybe if they push it out maybe early next year it’s been four months and four days since the United States hits debt ceiling on January 19.yet the Republican-led house and President Joe Biden have yet to reach an agreement to assure investors that the United States is not about to default on its obligations over the past few months treasury’s secretary Janet Yellen has been warning that the country is heading toward a self-imposed disaster which could Severely damage its reputation on the international stage a default we’ll see the retirement and veterans benefits of millions of Americans put on hold they would also badly affect the financial market and see the economy slip into a severe recession bringing more chaos and uncertainties to the already alien economy while Negotiations continue between the president and the house many people are certain that both parties will settle their differences and reach a consensus before the economy implodes yet for popular Financial analysts Lynn Alden the damage has already been done regardless of whether there is in default or not Alden was recently at the Bitcoin 2023 conference where she had a fireside chat with Dylan Leclair the head of market research at Bitcoin magazine Mark Moss a founder of market disruptors and Preston pish of the investors podcast Network all four discuss the current state of the U.S economy and the unsavory options Facing the Federal Reserve and the treasury Department within the coming months according to Alden the United States has had 40 Years of steadily declining interest rates higher and higher equity valuations and more and more debt as a percentage of GDP now Alden believes the 40-year machine is out of juice and Things are about to go terribly wrong according to Alden the next era for the U.S economy will be marked by sideways interest rates lower asset prices and massive deficits to try to put a lid on the situation the renowned macro analyst believes the government will be using some unfamiliar and unstable tools that Would undoubtedly cause more damage to the economy Alden believes one of these tools will be Financial repression to trap investors and depositors in the failing traditional banking system and away from assets like Bitcoin before we bring you clips from the insightful discussion please take a little time to like this Video subscribe to the channel and turn on post notifications for more videos like this lastly don’t forget to drop your comments and observation in the comments section below as it helps our videos reach more viewers thanks and enjoy the video different things obviously bring people to bitcoin from Different angles some people get brought in from the tech group some people get brought elsewhere and I think a lot of in our case if you’re brought in by stuff we’re watching in the debt markets and the currency Market that was like a big lens for a lot of us and so The past you know 40 plus years we’ve been in this environment of steadily declining industry it’s higher and higher Equity valuations more and more debt as a percentage of GDP and that’s been kind of this like nice coasting scenario but as we enter this next period where we have maybe sideways interest rates Um asset prices that therefore are maybe struggling to go up deficits that are completely blowing out for demographics reasons as well as the fact that that 40-year machine is kind of like out of juice now we enter I think a more challenging time and the analogy that I’ve I’ve often been drawing from There’s no perfect historical analog but when I look back at the 1940s it’s the last time public debt as a percentage of GDP was this High I look at it from both the UK angle and the United States angle and other countries and it’s very instructive for this period because one It shows how they tackle High debts environments and some of those are kind of unpleasant things like Capital controls and things like you know Financial repression that I think it’s it’s you useful from say a Bitcoin perspective to understand these periods to know how to navigate it and some of The tools that they’re probably going to bring in their tool chest I think that’s a good point I mean looking at history historical examples to see how we navigate through this so you mentioned Financial repression and so when you get the debt to GDP level this High you have to bring that back Down 130 has been kind of the Kill Zone most countries haven’t come back from that and we’re flirting at the 124 125 range right now and so historically how do they bring that back down Financial repression is a way and so they want to trap money into the financial system Close off the exits don’t allow you to exit and then inflation rages high so you keep bond yields low inflation rate is high and they basically steal well steal your purchasing power and so that seems to be the Playbook the IMF Roto paper on that in 2015 basically spelling That out we’ve seen it played in Israel other places as well and so how do you protect yourself from that well one way is to get out of that system they’re trying to trap you in and of course Bitcoin is that Escape Route I think the Path path we’ve seen for a while now ever since say autumn of last year is you’ve had these two opposing forces so on one hand you have the Federal Reserve still trying to tighten policy whereas the treasury was actually offsetting some of that they were actually pushing liquidity back into the market using Their treasury cash accounts it’s kind of like how if you uh were not allowed to borrow debt and you lost your income how would you keep paying your expenses well you’d probably draw down your savings and keep paying your expenses until you basically ran out of savings And so the treasury has cash that they hold at the FED that they have kind of like you know in their kind of like liquidity buffer and so for the past six plus months they’ve been pretty aggressively drawing down that cash balance and putting it back into the Market because they couldn’t issue more debt and of course their tax revenues don’t cover it and so you had Federal Reserve QT and then you kind of had like treasury QA and the challenge you know everyone’s focused on the debt ceiling right now and of course that’s a you Know that’s a hurdle they have to go through whereas I think the biggest question is what happened after the debt ceiling in its bid to lower the 40-year high inflation last year the Federal Reserve announced some quantitative tightening measures including increasing the interest rates and shrinking its nine trillion dollar balance sheet According to Alden and Moss the full force of the DraStic and Rapid tightening measures has yet to fully hit the economy because the treasury Department has been offsetting the impact by pumping hundreds of millions of dollars into the economy Alden explains that if any event should necessitate a reversal of the treasury’s QE measures the country will be faced with a liquidity challenge that the fed and treasury have no appropriate tools for dealing with as a result the financial analyst believes investors should prepare for more economic challenges later this year or at most early next year for Moss the Federal Reserve still has one more tool in its chest that tool is more money printing he agrees that more economic challenges await the United States in the second half of the year or early 2024 however he believes the FED will be motivated to return to the printers as They did during the great financial crisis and more recently the pandemic Alden and Moss also agree that the Federal Reserve is going to announce a barrage of repressive measures to keep money in the failing system and away from Safe Haven assets like Bitcoin here’s another clip from the discussion We’re not China in China it’s very easy to do these things they don’t have open capital accounts so they can just kind of close those exits it’s it’s communist we’re the land of the free so how do they do that well how do they always get You in a cage well it’s for your safety of course fear fear fear hey we need to do this for your safety we can suspend Constitution for your safety and so unfortunately the financial system is under duress it’s crumbling because of the actions they’ve taken of course living well beyond their means printing Unlimited amounts of money and so then there’s a need for an exit ramp well how do we do that in America in the land of the free well we do it for your safety so unfortunately we need to protect the financial stability by you having an ability to get out of That that crumbles that weakens the financial stability and so it’ll be sold as Bitcoin being a threat to National Security you getting your money out would be a threat to National Security and you don’t want to put other people at risk do you and so be a good citizen Accept what we do go into the cage keep your money inside the system so we can steal it away from you through inflation for your safety I think a really good instructive example we see is with some developing countries today that have currency issues so an example is Nigeria for a While now has kind of severed um crypto exchanges from their banking system so it’s actually really hard to make it illegal there’s a lot of enforcement points it’s easy to disregard that but the lowest hanging fruit the countries can have is just make it either hard or entirely cut off From Banks being able to go to these like you know exchange points and then more recently we saw Argentina kind of make similar moves where they’re dealing with 100 inflation and so they turn to try to limiting the outflows that are going into things like stable coins Bitcoin all these other assets they want to like stem the tide and even before these types of actions a lot of these countries have all sorts of restrictions on their citizens abilities to get dollars and again sometimes it’s on the individual level but the easier place to Do it is on the banking level because even though some trickles in and out it just it just kind of turns the fire hoses into Garden is it kind of like slows down the leaks and so it’d be kind of unprecedented in some ways to see it happen in developed Countries because you know part of what makes the United States Global Reserve currency is our open you know open Capital markets and all that but when we go back in history when you look at for example the the you know World War One World War II environments You know last time we had very inflationary environments last time we had major war last time you had very high sovereign debt levels the United Kingdom at the time was the global Reserve currency and they they had all sorts of draconian Capital control Securities controls uh lending restrictions that’s another thing we see In Turkey recently is that when they try to keep industry it’s low but they have inflation high so what do they do then they try to restrict types of lending that people can do so you can’t for example borrow Turkish lira and plowed into gold or Bitcoin or something or Dollars or something like that they try to make that harder to do and I think it’s important not to be asleep at the wheel for some of those risks that could materialize in three five ten years as we go through some of these kind of macro transitions that are that are Currently happening and then probably still ahead of us the financial repression Alden and Moss spica has started in various countries across the world especially in areas facing terrible economic conditions many Americans believe in the ineffectibility of the U.S economy as such they expect that even at the last minute the United States will be able to avoid such a fate but as both analysts have brilliantly explained we are entering uncharted waters that would see the consequences of the past 40 years catch up very fast with the United States rather than place a more into trust in a failing system It’s best to prepare for what’s coming by taking your Investments and assets as far as possible from their reach for us that means investing in Bitcoin and other top 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