Why all roads lead to Bitcoin and why fiat yield farm investors will be exit liquidity for central bankers and the Fed

The US currently has a debt to GDP ratio of around 130%. Historically, the risk of default if debt to GDP of a country is above 100% is 98%.

That means the US has a 98% probability of default.

If you don't believe this check this out:

You can't fight gravity



There are two roads to default.

A) Official default. If that happens the global financial system would collapse. In such a case you absolutely want to hold portable, hard to confiscate assets with no counterparty risk. Road A leads to Bitcoin.

B) Unofficial default, a smarter road to default. In this case the Fed and other central bankers suppress interest rates below the rate of inflation while debasing their currency. This is also called financial repression. In this case bond holders/creditors never get their original investment back(after adjusting for inflation) even though the US did officially not default on their debt. The US will likely choose this option.

In that case you don't want to hold fiat yield farm coins(government bonds) while the Fed dumps USD on you Terra-Luna style (their size really is size).

Don't forget that Terra had to print always more of their coin to support their yield product UST. In this case the US dollar is Luna and government bonds are UST, the unsustainable yield product.

1 USD will always be 1 USD so it can't lose it's peg unlike UST but it will lose it's peg against all other goods when the government has to print like crazy to continue to pay out yields to USD debt investors. The dollar will be sacrificed like Luna to support the government's yield product but investors will still lose a lot of their money after adjusting for monetary inflation.

Boomer governance tokens (stonks) might be a much better option but they are already overvalued and if there is sustained high monetary debasement the economy will hurt and so will stock earnings.

What you want in that case is an asset that can't be debased and that is not a fiat derivative. Road B also leads to orange coin.

Alternatively, the unproductive yellow rock that needs a bigger fool buyer (gold) also looks attractive but if it does really well our digital tulip banker poison² coin would likely do much better.

Central bankers will of course hope that people hold on to their fiat bags as the bag holders help undo the mess they have created losing their personal savings. That's why they will want to convince people that gold is a terrible investment and bitcoin is going to zero while they gradually devalue the dollar towards zero.

They will also want to convince people that all problems are socio-economic, geopolitical or whatever but never due to monetary policy itself.

Many will fall for it because government bonds are presumably risk-free and some entities will have no choice as they will be required to hold bonds in their funds or on their balance sheet.

submitted by /u/bitcorner22
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