What Bitcoin Did - The Dollar Endgame Is Not What You Think | Peruvian Bull

Episode Date: June 17, 2026

“The dollar endgame is still in play, but it’s going to play out much differently than most people think.” Peruvian Bull, is a macro analyst and the author of Dollar Endgame. In this interview, we discuss why the collapse of the dollar is unlikely to play out the way most people expect, why the dollar remains so dominant despite America’s worsening debt problem, and why Japan may be the clearest warning signal for what comes next. We get into the eurodollar system, stablecoins, treasury demand, the yen carry trade, QE, yield curve control, zombie companies, and the ways central banks continue to create new tools to kick the can down the road. THANKS TO OUR SPONSORS: ANCHORWATCH BLOCKWARE LEDN BITKEY SWAN CAPE FOLLOW: Danny Knowles: https://x.com/\_DannyKnowles or https://primal.net/danny Peruvian Bull: https://x.com/peruvian_bull

The U.S. is the sole issuer of currency, and the rest of the world needs that currency. And so because of that demand imbalance, the U.S. has to decide whether they want to print more money or if they want to not do that, and then the global system starts for liquidity and everything starts to seize up. That's an issue of a centralized issuer and a global demand. Bitcoin is a decentralized issued currency. Bitcoin doesn't suffer from this. If any country wants to earn Bitcoin, they can do it. And so that means that in the long run, not only is Bitcoin a better,

reserve currency. It's the perfect reserve currency. Again, you look at the numbers, you look how fed does QE, you look at the debt load and you say, okay, they're going to print the money, there's no way out, everything's going to get inflated away. We're going to see 5% inflation, then 10, then 20, then 50, then 100, and then, you know, within five years, the dollar will be dead. A harsh lesson that a lot of people might have to learn. Like, I think if we're moving into this sort of multipolar world, Bitcoin is the best money. Like, it just is. All right, let's get into it. Roberto, good to see you, man. We've been talking about making this show for a very long time. So it's good to have you here. Yeah, thanks for having me.

So we're going to get into the dollar end game. The thing that's always funny about this is people have been talking about this for a long time, way before Bitcoiners. Gold bugs have been talking about this forever. And then over time, like with the 2007-8 financial crisis, like money printing, all this stuff happens. And the dollar just seems like stronger than ever. So what is the dollar end game and is it actually coming? Well, I would say, you know, my idea of what the dollar end game is also has evolved in the last like eight years setting macro. Because I definitely started off on that same path that you, you know, initially mentioned, right? You listen to Peter Schiff.

You listen to Mike Maloney. You listen to basically all of the dollar doomers in the hyperinflation camp. And they give you this story of, you know, unsustainable U.S. fiscal deficits. insanely high debt-to-GDP ratios compounding to the future, right, huge unfunded liabilities that are unsustainable, an overextended American empire and military state that is creating conflicts all around the world. And it makes you believe that the dollar, you know, is going to collapse tomorrow. And so you think, wow, gold, silver, you know, bullets, this is what I should be investing in because the U.S. is going to become a zombie wasteland. And the rest of the world is

is going to be fine, right? But as I've dived down into the macro rabbit hole over the last eight years, I've found that the story is much more complex than initially seems, right? And that dollar dumerism, while it's correct on certain bases, like we could say an absolute basis against, you know, scarce assets, it's not true on a relative basis. And this is what, you know, Brent Johnson's pointed out with the dollar milkshake theory. And that relative basis actually matters a lot because when you think about like where capital flows in a, you know, modern digitized, globalized world, relative strength really does matter. If you're a Chinese investor, if you're a Japanese investor, if you're a German investor, if you're your UK investor and your

stock market goes up 5% a year and the U.S. is doing 12% of your compounded. Well, over 20 years, that's more than double total capital growth, right? And so why would you even invest in your local stock market if the U.S. has much better growth? And so that those capital flows, those investment flows, commodity flows will influence, obviously, you know, the global economy, but also the U.S. economy and give us that, you could say, like a buoy, a artificial boost, which allows us to, you know, maintain this exorbitant privilege of the world reserve currency. But yeah, we can get into it. But I think the dollar in game is still obviously in play, but I think it's going to play out much different than most people think. Yeah, I mean, it's funny that you say that like if you're in another country, like the US stock market performs so much better, so you may as well just invest there. And I live in Australia and that 100% happens here. Like I don't think very many people are investing in like the Australian stock exchange. Instead, it's either like real estate or the US stock exchange. So that money does end up in the US. So how do you think this does play out then? Because like you mentioned Brent Johnson then. And I've had him on the show a couple of times. I think he's really smart guy. But he basically thinks that everything is. does fail, but the dollar is the last one to fail. Yeah, I think, I mean, I think that's broadly correct. What I would say is that, you know, there are certain things, even during that failing period, right, there are certain things that are going to outperform other things. And there are certain,

you can say, like, signposts on the road towards that global monetary collapse that we need to be looking out for and will give us hints and clues on what's going to happen next. And, you know, part of the reason why I studied Japan is because Japan has been not only, obviously, the forerunner in global monetary policy. They've been the ones who created QE in March 2001. They're the first ones who did QQE in September 2013, and they have the first ones who did yield curve control in 2016. But not only are they the first ones to do it, they're also the most, you could say, you know, bleeding edge in terms of their creativity when it comes to monetary policy. And when I first started in the macro space, I thought, you know, again, you look at the numbers,

you look at Al Fed does QE, you look at the debt load, and you say, okay, they're going to print the money, there's no way out, everything's going to get inflated away. We're going to see 5% inflation, then 10, then 20, then 50, then 100, and then, you know, within five years, the dollar will be dead. But what that ignores is the ability of central bankers to create new forms of liquidity and funnel that into the economy and, you know, design new ways that that, liquidity won't necessarily impact consumer price inflation, at least not immediately. And so it's basically like cancicks that they've invented. And you look at the last,

you know, 10 years, or especially the last six years in the U.S., and you can see that happening, like very, very clearly, right? Again, you ask Peter Schiff, you asked Mike Maloney in 2018, hey, we're going to have a global pandemic. We're going to have massive fiscal stimulus, right? The Fed's going to run up their balance sheet from $4.5 trillion to $9 trillion within 18 months. We're going to have 0% interest rates, and the Fed is going to cut reserve requirements on banks down to zero. What's going to happen? Well, they're going to tell you, okay, well, within two or three years after that, the dollar's going to be dead. Dixie's going to be at 60 and inflation is going to be at 40%.

Well, you look at what actually happened and that's not how it played out at all, right? Which tells you, obviously, they're wrong. But why is that? Well, it's because the Fed not only did traditional QE, which is obviously the invention of the Bank of Japan, but they also used new monetary tools to create liquidity without creating the same side effects that, you know, traditional QE does. And so like one great example would be like the BTFP. If you remember in March 2020, a bunch of, you know, regional banks started to fail. Obviously, Silicon Valley Bank was the largest one of those. But First Republic was also on the chopping block. And as these regional banks began to fail, the Fed began to get worried about this duration issue that was, you know, probably isolated at these, you know, smaller regional commercial banks where they had overloaded themselves on treasury bonds.

And the Treasury bonds had now fallen 40%, 50%, especially with the long end ones, ever since the Fed started hiking in March of 2022 a year earlier. And that had left a hole in their balance sheet. And so the Fed said, we're going to open up this program. It's going to value all your bonds at par. and we're going to lend that money to you at OIS plus an interest rate spread of like 20 bibs or whatever. And this will help you get liquidity, you know, as if you were, you know, the bonds were valued at face value, even though they're 40% lower than that. So you can, you know, deal with lending liquidity concerns you have. And then once the liquidity issues blow over, like you can worry about the solvency issues, you know, in the long term on your own.

And guess what? It worked. But it didn't obviously have the same effect as QE because. it wasn't stimulative in the same way that QE was, even though it was a liquidity creation. And the same thing is true, by the way, of the push to eliminate the Treasury exemption from the SLR. In 2020, during COVID, the Fed issued this. The Fed has a bunch of regulatory rules that they can influence and also create, obviously, right? And one of them is the SLR. And that's called the Supplementary Leverage ratio. And it basically means

a bank has to hold a certain amount of capital against its own assets. So it's a leverage ratio. So let's say a bank has $100 billion of treasury bonds. It has to hold, let's say, $5 billion of cash in case those treasury bonds fall in value. Now, treasuries are obviously a large part of a bank's assets. And if treasuries get exempted from the SLR, then that means that the bank doesn't have to hold capital against those treasuries falling in value. So it basically means that they get to hold the treasuries with infinite leverage, right? And during COVID, because again, all the banks are loaded up on treasury bonds,

treasury market is, you know, collapsing. It's freaking out the move index spikes to over 100, right? We see huge volatility, not only in stocks, but obviously in bonds as well. So they create this exemption. They say, okay, you don't have to hold capital against these treasury bonds anymore. And that lasted for like a year and a half. And then it ended in 2022, but by March 2020, the banks were starting to get nervous. And then they started a petition with the CFTC and ISDA, which is the International Securities and Derivatives Association.

And in early 2024, they submitted a formal letter to the Fed asking for that exemption. And so far, the Fed looks like in November of last year, they made some moves to lower the SLR requirements. they haven't completely eliminated it. But the point is, like, that was another move that they made, right, that basically increases liquidity in the system without actually printing money. It frees up capital that's on bank balance sheets without traditional QE. And this will never show up in a press release. This will never show up on, you know, a Fed Minutes meeting or meeting minutes. It'll never show up on their balance sheet on Fred, but it will have a real impact on the financial economy, especially. And so all these different tools that they're creating are allowing them to have way more optionality than most people think.

I mean, the question I would have on that is, like, if you explained everything that happened during COVID or even with the BTFP program, like a rational person might look at that before the event happened and be like, yes, that's going to be a massive hit to the dollar. Like maybe this is the end of this Fiat system. But you can understand the rationale behind thinking that. And then in reality, it's like you say, it's very different. Why is that? Is it people underestimating the resiliency of the market or is it something else? I mean, I think it's obviously like you said, it's a couple things. So for one, it's the amount of US dollar debt that exists in the world, not only, you know, obviously in the US, but internationally is massive, right? The Eurodollar market, which essentially includes all dollar linked deposits globally. Plus, you know, you can, if expend it to derivatives, to FX, futures, forward swaps is somewhere north of $200 trillion, right? It dwarfs even the U.S.

dollar market. And all that debt needs to be paid, right? What that debt represents is a demand for future dollars. And so just because there's a global shutdown doesn't mean all those debts are erased. And so all those foreign entities that need those dollars, well, what do they do? They have to sell their domestic currency. They have to sell whatever capital or cash they have, whatever equity they have in order to get dollars and then use those dollars to finance their debt obligations. And so that means that, you know, that dollar demand is kind of embedded into the system globally on a scale that most people don't realize. And the other, you could say like, worrying factor in all this, right, or like confounding factor in all this, is that the system

continues to perpetuate itself, right? It's that old saying, like, that we have in Bitcoin, right, there can only be one currency. Well, that's true with, with the world reserve currency as well. So when we boil it down to like FX pairs, right, nine out of ten of the top most liquid and most traded FX pairs are dollar linked. So it's, you know, USD JPI, USD, EUR, USD, GBP, right? USDCAD, the Canadian dollar.

Like the US dollar is basically the linchpin of the global economy. And it's the oil that greases the wheels and the cogs of the global engine, the global market engine. And so whenever, you know, whenever that debt rolls over and people pay it off,

then the banks, those Eurodollar banks, there's derivative banks. What they do, obviously, is once they get paid with dollars, they want to create more, they want to get paid on that, you know, those dollar reserves. So they lend them out again.

So they create new debt. And the system perpetuates itself. And this also has to do with, obviously, like, you know, interest rate risk, risk. If you're a Pakistani, you know, textile manufacturer or you're a Saudi oil manufacturer, you can get a loan in your own currency and you'll pay 10%. If you get a dollar-based loan, you'll pay 7%. And for a company dealing in billions of dollars of KappaX, a 3% difference in interest rates is

everything. And so no, basically, you know, not no, but very few international, large global conglomerates want to borrow in anything other than dollars. Just because the rates are lower, the liquidity is higher, and the ability to transact that dollar and to earn that dollar in global trade is so much higher. And so with like the everything that's happening in the stable coin market now, do you think that that's going to sort of just accelerate the timeline in terms of dollarization across the world? Yes, I think it will. I mean, so did you see Brent Johnson's most recent report on the stable coins. Yes, I did a podcast with him about this.

Oh, you did? Okay. Awesome. This was like a few months ago, right? Or has he done a new one again? He did do one. I think he did do one a few months ago, but I'm pretty sure he released one on a substack like two weeks ago. Okay, no, I've not covered that within that. Okay. Okay. Well, basically, he lays out, right, like, stable coins are essentially the crypto euro dollars, right? They are the same mechanism, but more... you know, more transactable and more native to the 21st century rails. And what that means is that the

velocity of money for those stable coins and for those digital euro dollars is much higher than it is for traditional ones, right? You don't have to wait three days or five days for an international swift transaction to come through. You can settle stable coins within seconds. And what that means is that the dollar dominance can continue to expand globally at a much faster rate than was, previously thought, right? And so in the short term, you know, that adds two to three trillion worth of treasury demand on the front end from global stable coin demand. But if the stable coin, you know, industry continues to penetrate, especially the global south and emerging markets, you know, we could see significantly more demand than even that start to appear. And that demand

is very important, right? Because this is the categorical difference between, you know, the old, you could say, dollar-based, debt-based system and this new kind of state. Cablecoin asset-based system, which was pointed out to me by Matt Dynes. I don't know if you've heard of him, but he's a CIO of build asset management. The key difference there is the old system, right, was secured with bank reserves. And the only way you perpetuated was by originating more debt, right? So you create more debt in order to, you know, create more dollars, and then those dollars flow out into the global economy, get paid back to you with interest, and then you do it again.

This new system, this new stable coin, you could say, paradigm that's being created, is more of an asset-backed system. And the asset is the U.S. Treasury bond. And so if we are able to, you know, basically manufacture demand for U.S. treasury bonds, what does that do for the U.S.? That lowers domestic interest rates, that increases the government's spending power, that increases, you know, our ability to project power both militarily and economically globally. All in all, it's basically a way to, you know, turn this nothing stops this train meme

from a dumerous meme, like a pessimist, oh, no, we're all going to go down the hill to a more optimistic view of like, we can have the global economy help to drive treasury rates down even more than they already have and then use that to hopefully get ourselves out of this fiscal situation. Because obviously the debt, you know, no one would argue the debt's not unsustainable. It is. But there could be more ways to get out of it than we previously thought. It's funny, I struggle with the stablecoin thing because on one hand, I obviously think Bitcoin is the best money and I want the people in the Global South to be adopting Bitcoin as quickly as possible. But in the same time, like, I understand that there is still volatility in Bitcoin and people just understand the dollar fundamentally differently. And so, like, I would never say that someone who's living under like a high inflation currency shouldn't move to the dollar because fair, like I would do that in their situation as well potentially. But the thing that I'm really interesting is like if you look at it. to the future, stable coins will usurp some foreign currency at some point. That's like inevitable. I'm really curious what the timeline is to that. Like when do we start seeing the US dollar

destroy other global currencies because of the stable coin? Yeah, I think I think it all depends on institutional adoption. The main problem with stable coins is that like yes, do retail investors, to retail users, right? A mom and pop living in, you know, Colombia or living in Argentina or some high inflation country, Venezuela. Do they have a huge reason to use stable coins and pick up a metamask wallet and, like, transact? Yes, absolutely, right? But does a large global G-Sib like JPMorgan or, you know, Bank of America or Wells Fargo, do they have a reason to adopt it? Not really, because they're plugged into Fedwire. So they're literally sitting on the heartbeat of the global financial system. So their need to use these like, you know, tacked on appendages that are created by

these crypto, you know, crazy crypto people is pretty low. And so I do understand that. Like in America, there's no reason to use a stable coin. But if J.P. Morgan can go out and address a huge audience that they otherwise can't and they can start selling dollars offshore, like that, that would make them do it. Yeah. No, I think that would create a new business line. And I mean, I don't know if you've seen this, but I saw that just earlier this month in June, JP Morgan and several other banks were putting forward proposals to create basically stable coins versions of their own deposits. So, you know, digitizing their own deposits

so that they're tradable on a, you know, decentralized ledger. But I don't think that's obviously like them becoming the issue word. They're becoming their own circle of their own tether and trying to control it and not allowing you to, you know, necessarily move tokens outside of their own network. But it is still interesting. I mean, obviously, it's a new opportunity, new frontier for them. But I'm also worried, like, as a bitcoiner, I'm worried on the censorship and the, you know, you could say ideological side.

Because double coins, although they're obviously not CBDCs, they have the same centralized control mechanisms that a CBC would have. And since there's a centralized issuer and, you know, holder of reserves, you know, and those people are audited by regulators. Like, there's room for failure. there's room for risk. And that, to me, that's what's concerning there. Yeah, I mean, that was one of the coolest things that came out of the whole situation, the straight-of-home moves, is Iran started taking payment in stable coins and then had them frozen. And so their only option left was Bitcoin. And it's like a harsh lesson that a lot of people might have to learn. Like, I think if we're moving into this sort of multipolar world, Bitcoin is the best money. Like,

it just is. Absolutely. Yeah. I mean, I don't know if you saw this, but there was like, you know, probably $20 to $30 million a day potential Bitcoin transactions happening for the Strait of Hermuz. And it was obviously pointed out by, I think it's the Bitcoin Policy Institute and several others as one of the key inflection points in this whole Bitcoin narrative. And I think obviously now as the Iran War starts to wind down as announced last night and seems to be progressing today, you know, that immediate story may fade. But the broader picture of the U.S. using our hegemony over the global dollar and the global financial system to punish other nations and to whack them on the head whenever they act out from what we would like them to do, that would push more and

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Get started today at blockware solutions.com forward slash WBD and use code WBD for $100 off your first miner. That's blockware solutions.com forward slash WBD. Should we talk a bit about Japan? Because you do a ton of work on Japan. And I think I know the reason why. I imagine that you look at Japan as like the end game, the future point, the end. every fiat system is going to come, come to. I don't know, start off by just outlying why you concentrate so much on Japan. Sure. So, you know, I started researching Japan for macro back in

like 2019, 2020, and then I really started realizing the importance of it in 2021 as COVID started to grind on. And, you know, we saw the bank of Japan continue to reaffirm the zero percent interest rates, even though the rest of the world started to hint at hiking. But Japan is like one of the most interesting stories because this entire, you know, eight years, nine years I've spent in macro researching Keynesian economics, Austrian economics, Japan was the one outlier, right? And this was brought to my attention by a Heisenberg research report that was made in 2018 that found there's, you know, 55 nations that have gone above 120% debt to GDP. And 54 of these 55 nations in the past 150 years have either hyperinflated, you know, inflated or default.

on their currency, right, in some way. 54 to 55. The one exception is Japan. And so I was asking, you know, why is that? What happened there? And the story is really, really fascinating. So in the 1980s, obviously Japan had a huge, huge stock market and real estate bubble, fueled by low credit and a strengthening yen that they had agreed to under the Plaza

Accord in 1985. and the low interest rates and the huge amounts of credit that was being funneled into the general economy was enabled by the Bank of Japan and their window guidance system that they were able to impose on the local commercial banks. So basically they would call commercial banks and tell them, we need to make $100 billion, $100 billion loan this week in the auto sector, go make them. And it didn't matter about the credit of the borrower, it didn't matter about the actual demand, it didn't matter about any economic fundamental. They would just go make those loans. And so the amount of debt issuance and the amount of, obviously, credit creation in the late 80s exploded. And then by December 1989, the bubble was starting to become apparent.

You know, there's tons of stats we can point to. But, you know, there's things like the Imperial Palace of Tokyo was worth more than all of California. There's obviously like the Japanese stock market was worth, I think, more than two times the American stock market at the time, even though Japan was, you know, a third of the population or half the population and had way less economic activity. Like, there's all these little things you can point to. But the Bank of Japan hikes December 1989, 1990 begins, and the Nick Gay starts to roll over. And it keeps rolling over.

It keeps rolling over and begins this slow motion deflationary crash that lasts for basically an entire decade. And everything the Bank of Japan did basically was like giving me. morphine to a cancer patient, right? It didn't really solve the situation. The first thing they did was obviously way too late in 1998. They finally got independence from the Ministry of Finance because the two had been linked previously under the post-war reconstruction government. And they decided to lower interest rates to zero, right? They'd already been cutting rates, but they hadn't had the ability to lower them all the way to zero and then to the negative bound. And so by February

in 1999, they were able to do that. And they thought, they'd already. And they thought, they'd already be thought that that would simulate growth. It didn't. And then September, and then March 2001 turns around. They say, we're going to try something else. Let's start QE. Let's create this new method of creating reserves and we'll buy government bonds off the balance sheets of these commercial banks. They start doing that. Nothing happens. 2008 rolls around. And then they say, you know, growth is still very low. And by the way, the NICA is still less than half of the price it was at the peak in 1989. So we're still technically in a bare market. And the real economy in Japan has basically been, you know, zomified for the last, you know, 15 years, 18 years by 2008. And then, you know,

they have the global financial crisis. They have another excuse. So they create even more QE. They print even more reserves. Nothing happens. And so the question becomes like, what, what's going on here? Like all our MMT models, all our Neo-Kanesian models tell us that this bank reserve creation should by default buoy up stock prices, right, buoy up bond prices, and then that, you know, capital gain should flow as a wealth effect into the general economy, right? People start to feel richer. And the problem was the people kept, you know, falling back to this liquidity trap of believing that, you know, the growth was as sucked out of the economy and that the only way to make money was to invest in bonds, right? And so that's

why the Japanese retail investor became, and the Japanese institutional investor became the world's biggest creditor. They started lending to the French, you know, the French government, the British government, the U.S. They're obviously the largest holder of U.S. Treasuries, the largest holder of British Guilts, one of the largest holders of French GEDs like German Boons. You look at the global sovereign debt market. Japan is basically the funder of first resort to all of it because they've been searching for a yield for all these these decades and as the years rolled on again more and more crises come up and the japanese respond by creating more and more ways to print money and you know they start doing by 2013 under abbe and his three arrows abenomics plan they want to be more

even more you could say assertive aggressive right with their monetary policy let's not just buy government bond let's buy uh stock ETFs Let's buy real estate ETFs. Let's buy corporate bond ETFs, right? So they switch the, you know, they switched the regulations for the Bank of Japan that previously had to excluded them from doing so. And by late 2013, they're buying wholesale equity ETFs.

And again, that helps a little bit, doesn't fix the situation. And so all these years, and then the yield to have control comes on in 2016. And all these years pass, and they've basically been unable to do anything to ignite. growth. And it all comes down to the same fundamental problem. The issue that was created in 1989,

which is over, you know, over collateralization, over debt, you know, over indebtedness, and inability to repay that debt with any productive economic growth had never been resolved. All the companies that had become zomified that had basically taken on way too much debt and then were allowed to survive by rolling forward on zero percent interest rates, those companies were still running. The employees were still working there. And again, you can think about it like a hospital patient. It's like a comatose person, right? The lights are on, but nobody's home.

There's entire companies and industries in Japan that don't really produce a profit, that just produce enough money to pay off the interest on the loans that all these companies have taken on. And the banks that issued those loans were too embarrassed to admit that the companies wouldn't be able to repay them. And so they changed their repayment schedules and changed their repayment terms so that the companies, to just kick the can indefinitely.

And so that's created this unique situation where basically the debt is at 263% debt to GDP, right? The growth is basically at zero. The inflation has been at zero for two and a half decades up until recently. And the entire, you know, you could say entrepreneurial market is basically gone. There's no entrepreneurs in Japan.

They have lower, like to put this in reference, of the 50 top GDP per capita countries, they have a lower GDP per capita than all of them except for one. And the one is Croatia. And Japan is a first world country that's obviously extremely wealthy. And so for them to have a lower entrepreneurship rate

than Croatia is insane. Or like being the lowest of all of them except for Croatia is insane. So why would Japan, like what were the demographic issues or whatever it was? Why were they able to do so much QE and have like zero or negative interest rates and not have any inflation?

because that seems like a huge outlier. Sure. So again, the fundamental issue was that there was so much credit created in the 1980s and, you know, the early 90s before the crash that the, even the QE that they did wasn't fundamentally resolving the real issue, which the real issue was the debt overhang. So, you know, they print yen. They buy JGBs off the, you know, Japanese bank balance sheets, right? those banks were so conservative and so worried about, you know, running into issues that all they did is just invest those proceeds abroad. And so the two decades of Japanese QE essentially became a conduit for capital to move from Japan out into the rest of the world, especially the U.S. So the QE that they did didn't even stay in their own financial system.

And the problem that needed to be solved was like those banks and those zombie companies needed to default. right we saw a couple defaults in the late 90s in 1997 there was a famous string of defaults in october of that year um that resulted in a bank an actual bank run and the bank japan announced a bank holiday that month and closed like 15 banks and then reopen them in like you know a week later and recapitalized them um but it was pretty limited and to kind of explain the situation even further like there's a very strong cultural element here as well right the japanese are very ethnically and culturally homogenous So, for example, when the Nippon, which is their local CNBC financial news outlet reporter was reporting on this in 1997, reporting on the bank runs, a bank of Japan official ran out into the street in Tokyo and asked him, hey, can you not cover this? We don't want to spread panic. And he said, okay, they cut the broadcast, the station destroyed all their tapes and decided not to error any of it. And that's like the perfect encapsulation of, what Japan is, right?

It is all about saving face. It's all about cultural honor and dignity. And the idea that, like, you would oppose an authority that's telling you to do something different is completely ludicrous. So, yeah, no one ever questioned the bank, Japan doing QE. And the bank Japan never questioned why the commercial banks weren't reloaning or trying to simulate growth. They said, okay, they're just doing what they're doing.

And all the money just flowed into the banks and then into the retail investors. And those retail investors just lent it out into the, the world. At the very start of the show, you said Japan was doing QQE. What is that? QQEEE is qualitative, quantitative, easing. So it's another crazy word, but it basically means instead of doing general QE, which is basically like shooting a shotgun, you know, at a problem, like saying, oh, I'm just going to buy a bunch of treasury bonds. I'm going to buy a bunch of mortgage bonds. They decided we're going to like specialize it, right? So we're going to buy, you know, corporate ETFs, corporate stock ETFs. We're going to buy real estate investment trusts.

We're going to buy, you know, individual equities. I mean, at one point, the Bank of Japan owned, like, you know, of the top country, because they have their NICA index, of the top, like, 500 companies in the NICA, the Bank of Japan was the top shareholder in 70% of them. And the Bank of Japan owns like 10% of the total stock market capitalization of the, of Japan. So yeah, it's insane. I mean, they just went out and bought everything they could. So I just looked up the country with the highest debt to GDP ratios.

And the only country above Japan is Sudan, which is probably not great company to keep in terms of this. Will they survive this? Like, what's happening now? Will Japan get through this? Sure. So I guess I'll give you a little more, like, update on what's happening right now. So, you know, obviously in, you know, they've been running this zero percent interest rate, you know, zero growth, zero inflation playbook for decades. And again, they didn't really understand why they were stuck in this trap, but they have been.

And so they've just been running with it. Well, a huge problem emerged in 2022 because a little institution called the Fed started to hike. And that hike resulted in a huge interest rate differential opening up between the U.S. and Japan. So it's the Yen carry trade. Yeah. And the yen carry trade blew out the yen from one 10 to the dollar to 160 over the course of 2022. Do you want to just explain the dynamics of the end carry trade for anyone that's not aware? Sure, sure.

So the yen carry trade is essentially, you know, borrowing in a cheaper interest rate currency in order to invest in a higher interest rate currency. So it's a rate arbitrage. But it can get obviously more complex than that because you have FX problems to deal with, right? And there's obviously different ways to play the Yen-carry trade, right? But the simplest one would go like this. You know, a Japanese investor or even an American investor goes through Japanese bank, you know, opens up an account. They deposit some collateral or they can even, in some banks, they can get unsecured loans.

They get it for, you know, 50 basis points, half a percent of interest or zero percent interest, if we're talking prior to to 2024. And then they loan, they take that, those. they take it to the foreign exchange market they convert it into dollars or into you know Australian dollars or into you know British pounds and they go invest in British you know British guilt or US treasuries and they profit from the interest and so for many years it was literally zero percent was where Japan was at and wherever the US was at four percent five percent was the yield you would make and so that five percent may not sound like a lot but when you multiply

it by hundreds of millions or billions or trillions of dollars that's a lot of money and hedge funds, institutional traders, retail traders, right, family offices, banks, all's a good advantage of this. And it's estimated that the yen carry trade is, you know, somewhere north of $4 to $5 trillion. And if you include all the derivatives, it's probably north of $10 trillion. So it's a huge, huge trade. And it's one of the driving factors that's pushed the yen weaker for the last three or four years. And so what's the state of that?

So what happened when the U.S. started raising rates like have japan followed too so okay so initially they decided to you know try to fight the fire with more fire right so let's go back to where we were talking you know earlier the defense hires hiking in march of 2022 the infantry differential starts to explode right and not only does japan have rates at zero percent in 2022 but they also haven't moved rates since 1999 February so they've literally had 23 years of never changing their interest rate policy. It's been basically zero to slightly negative to like negative 10 to 20 bips for two and a half decades.

And so for interest rate traders, which have to also worry about interest rate risk, right? Like what if Japan hikes? This is the clearest signal. They borrow as much yen as they can and they all convert it to USD and they start, you know, buying U.S. treasuries. The problem is what that functionally does is they're selling yen. which lowers the value of the yen, and they're buying dollars, which inflates the value of the dollar. And so by doing that directionally all year, the yen goes from 110 to 160 by September of 2022.

Now, on September 18th of that year, the BOJ starts to panic because the yen starts to reach the 160 mark, which is one of the red lines of like, you know, very severe currency depreciation. So they decide to initiate a currency intervention to the tune of like 38. billion dollars and it waxed the yen down to 151 you know the end slowly recovers in october they followed up with more interventions more 30 billion 40 billion dollar clips firing ammo clips to the market trying to blow out traders and what it does it is just it just buys them time because they're using they're burning the reserves to do that right and meanwhile while they're doing all this stuff and this just shows you the insanity of japanese monetary policy they're still doing

QE. They're still running yield curve control. So they're burning literally $30 billion a month on the foreign exchange interventions. And on the other hand, they're printing like $20 billion USD a month for their yield curve control program. Because the more, again, they print, the more JGB yields go up, because obviously people get worried, oh no, JGB yields are growing up. And so because they have this yield curve control, which is basically this cap on interest rates, and at the time I've said at zero. Any time the yield starts to threaten to trade out of the negative zone, they just print infinite yen and buy enough JGBs so that the yield goes back down to the negative bound. And so it just happens over and over again where in the same months, they're literally like,

oh, let's go buy yen over here. And then let's go, oh, print yen over here. And they're just like doing the same thing burning the kennelhead belt ends for months. And then, you know, obviously they start to panic because the interventions aren't doing enough. So December 2020, they do their first move, which is they change the band of yield curve control from the negative bound up to a range of zero to zero and a half percent. So they finally move it like kind of out of the zero bound, not really, but like it's no longer pinned at exactly zero, right? It can go up to half a percent for the 10 year. We're talking about the 10 year JGB, right? This isn't their T bills.

This isn't their short-term debt. This is their 10-year bond. They're like, okay, maybe we'll let people earn half a percent over 10 years. you know, a year on 10 years. And then, you know, that buys them a little bit of time. That causes a margin call for the Japanese securities clearing corporation in December of that year. By the next June, the yen is back at 150 again, and they start panicking.

So they move the yield, the band again. And then that, like, you know, causes a bunch of carry trade unwind and panic. And then the stock market, you know, falls 12% in a day. and then they you know the situation progresses over 2023 2024 2024 comes around they do more interventions in May and June and then they move the band again and you know by you know there's a lot of obviously like I could list every single date and what they did at every single point but the long and short of it is by you know 2024 they had burned through

120 billion dollars of interventions and they lifted the caps on yield to control higher and higher and then eventually They had completely eliminated yield curve control altogether by 2025. And then they also obviously hiked out of the zero bound, starting in 2024. They'd gotten in March of that year, they'd completely gotten out of the zero bound, and then they did a half-point hike up to half a percent. And right now they're actually having a meeting because they're considering hiking again to 0.75%. And so, well, actually, I might have that wrong.

think if they're at 0.75%, they might hike to 1%. So they might hike another 25 bits. And so the point is, like, they threw everything by the kitchen sink at the yen carry trade. They threw all they could at the weakness, the yen weakness, and none of it worked. And so now they're finally trying their last bazooka, which is actually hiking rates and trying to normalize with the US. The problem is that long term, that is completely unsustainable. Because that's GDP so high.

Yeah. So, I mean, it seems completely unsustainable. None of this makes sense when you look at it. Like, will Japan be able to survive this? Well, not in its current state, right? Like, the Japanese economy is still, like we said, still dealing with the repercussions of what happened in 1989. And it hasn't fleshed that out.

And unfortunately, as you know, like, the only two ways to deal with a massive debt overhang is default slash deflation or hyperinflation or just or financial repression right if you don't okay if you don't want to cause hyperinflation let's burn burn the debt off at 15% inflation a year and cap yields at 5% a year and just burn everyone out over 20 or 30 years that's basically the sovereign playbook that's what japan will have to do and that's not something they want to do um but it's unfortunately the the grim reality that they're facing because with 260% debt to GDP 120% private debt to GDP, with the oldest and most age demographic in the world and the lowest

birth rate in the world, they don't really have an option to grow their way out of this, that they could have maybe had, they had an argument for that in the 60s and 70s. Their only option is to financially finagle the way out via inflation or deflation somehow. And so with the debt to GDP where it is, I mean, we're talking two to three decades, five to 10% inflation to really get this thing done, probably 10%, 10, 15. And that just means that the average Japanese person who's invested in bonds is going to get absolutely destroyed. This is a bit of a tangent, but do you think the fact that they've got one of the lowest birth

rates in the world is down to the lack of growth and sort of nihilism within the country? That's definitely part of it. You know, there's this really good sub-sac post I read a while back called No Country for Young men, which is obviously a play on the movie title, No Country for Old Men. And it was about the Bank of Japan and how the Bank of Japan and central banking in general has kind of emasculated young men by eliminating risk-taking, but also obviously eliminating the penalty for excessive risk-taking. And so what they argued in that piece was that the average Japanese young man, And basically, instead of having, you know, a severe depression where everyone lost their job

and, you know, young men are forced to go out on the street and find work or create work or create businesses or do something, right? Like, we had our Great Depression and we, you know, enrolled hundreds of thousands of young men to rebuild our national parks and to build trails and the Hoover Dam. And we did all these public works projects. Instead of doing that, the Japanese took the comfortable way out, right? They just said, we'll lower rates to zero. We'll do enough QE so that the stock market stops.

falling and everyone can go home and play video games and we'll just relax and what that did is just completely emasculated and eviscerated the you know the vital life force of that entire generation and so there's actually a word i i can't say the word in japanese because i don't speak japanese well but um there's a word for these people but it translates to the lost generation so anyone born you know in the 1970s who was basically graduating college by the early 90s uh they basically stayed at home. They didn't get a job. They didn't get a career. They didn't get a girlfriend. They didn't get a wife. And obviously that that kind of dominoes down to human the society. Because when people don't get married don't have kids, then their kids don't have kids. And that just

means the demography rapidly, rapidly changes. And, you know, this was basically equivalent to almost a war, right? If you look at the birth rates and their collapse in the 90s and 2000s, it was basically just as bad as a as the world war was initially um and the problem is you know until this financial situation economic situation is resolved we're not going to get that baby boom uh like we did after war war two it's crazy it's like instead of facing sort of the harsh reality of life they've just been sedated through this period yeah the key words they kept coming back to me was zombieified or like that that just very well encapsulates the entire japanese economy so people might be listening to this being like, why is Japan so important here? Like, why are you talking about Japan?

This is a Bitcoin show. Like, most people listening are in America or the UK or in Australia. Like, do you see this sort of Japanese playbook coming to these other countries? I think, well, that's what I'm worried about. I think it could, right? You look at like the zero interest rates, the QE, right? And then obviously the subsequent inflation and all this financial engineering that's gone on in the West. And it's basically a derivative of what's happened in Japan. So like we mentioned at the outset of the show or maybe right before the show, Japan is the monetary experiment lab of the world, right? QE was created there.

Yield curve control was created there. Zero percent interest rates and negative interest rates. That was created there. The Eurozone, the U.S., right, Canada, like the entire global monetary system was basically just copying what Japan had done 10 to 15 years earlier. And so whatever, you know, whatever playbook that Japan chose the world is a potential playbook that other central banks could try to implement. And it might sound, you know, harsh. It might sound cruel, right? Because especially you look at the human cost, you know, suicide became the leading

cause of death in Japan by 1993. And there were, you know, tens of thousands of suicides every single year in the country. It was obviously became one of the highest suicide countries globally because of the economic malaise, because young men suddenly weren't able to find a job, weren't able to find a girlfriend weren't able to provide for themselves or anyone else. And especially as a young man, like when you lose that life purpose, when you lose that, you know, reason for being, it can be extremely debilitating and depressing. And for many people, it's just too much. But that cost, right, that costs on society, it may sound like it's too much. But when you look at it from a central banker's perspective, their worry is security and stability. And what they would say is,

hey, if we allow a deflationary collapse, if we allow 40% of the banks to fail, and, And, you know, M2 to shrink by 30, 40%, and a huge, you know, Great Depression event to happen. The, there might be crowds coming with pitchfork for the central bankers. Yeah. Right? For the people empowered, they don't want that.

So what do they do? They say, just same thing as like kind of more liberal socialists say. Let's socialize the cost. Let's make everybody feel the pain. Let's sedate everybody. Instead of isolating the pain to the few people and the specific people who took on way too much debt and absolutely wiping them out, we're going to just make everyone hurt a bit and make them hurt for the rest of their lives. And so that's just the playbook.

And unfortunately, I think that's what the West was doing for the 2010s and 2020s. We're not careful. It's what they'll try to do in the 2030 as well. The thing that keeps me up at night with Bitcoin cold storage isn't Bitcoin failing, it's my setup failing. And this is where Anchor Watch comes in. With Anchor Watch, your Bitcoin's insured with your own A plus rated Lloyds of London insurance policy. And all Bitcoin's held in their time-locked multi-sig volts. So you have the piece of of mind knowing your Bitcoin's insured while not giving up custody. So whether you're worried about inheritance planning, wrench attacks, natural disasters, or just your own silly mistakes, you're protected by Anchor Watch. Rates for fully insured custody start as low as 0.55% and are available

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But like what do you expect to happen in the economy there now? Do you think rates will continue to go up? Like I know there's been a lot of talk about that with Walsh. Do you think inflation is going to be sustained for a long? period of time. What do you see happening? Well, I think obviously long-term, my view is, you know, similar to all the other macro analysts, like it's undeniable. Inflation's going to have to creep up just because of the fiscal situation, right? And the Fed is going to eventually have to start QE. What Worse wants to do, which is to lower rates and decrease the size of the balance sheet,

is kind of a paradox, right? It's an oxymoron. There's been basically no central bank governor for the last 30, 40 years that's been able to do opposing monetary policies in the long term, right? For short term, sure. But, you know, Powell did the same thing. Yelan did the same thing. Yellen wanted a higher stock market and a lower Fed balance sheet in 2018. So they started laying off, you know, U.S. Treasury started shrinking the balance sheet. By October 2018, the U.S. stock market was having, you know, four or five red days every single week. And by December, it was officially in a bare market and we had the worst December Christmas since 1934 in December 19, 2018. So it was a horrendous crash.

And then, of course, what happens in January of 2019, they reverse course, right? And by September 2019, COVID starts. We have the repo madness. And then QE comes in wholesale in early 2020. So we reverse that very quickly. And that's the same issue I see with Warsh and with every other central bank. governor that's gone before him. You know, they may want to lower inflation and lower rates and, you know, thread this needle

any way they can. The problem is the numbers won't let them, right? The U.S. Treasury debt is growing way too rapidly. The interest expense is growing at 12% a year. The U.S. economy, you know, the last Fed now forecast was 1.6%. Federal tax receipts or interest expense as a percent of federal tax. Tax receipts is now 24%, so basically a quarter of all your tax dollars is just going to pay the interest on the debt. Interest is now the largest line item, and I think it's very close to defense.

So some months is less than defense, but a lot of months, it's more than defense. It's at one point two trillion a year. And if you don't get rid of that, right, the U.S. fiscal situation continues to worsen and more money needs to be created to pay that off. And so that just causes secular inflation. Now for the Iran war ending, I think that's obviously a good thing short term. That lets some of the pressure and the steam out of the bag. But the long-term issue still hasn't been resolved. And the money we've spent on this war, right, $300 billion reconciliation deal,

which Trump is saying that not all of that is going to be paid by us. It's going to be paid by the Gulf states, which good luck convincing them to pay for war that they didn't even fight in and they didn't want. want you know i i i don't see how that that plays out i mean there must be something in that deal for them as well that probably comes from the u.s but um it's like it's funny because obviously people talk about the big print in bitcoin all the time and and it does seem in evisble that at some point that'll happen but is your take really that even if the big print happens it won't be just straight up q e like we've had in the past yeah yeah um i think it'll be a mix of

liquidity measures, right, capturing of retail deposits, the BTFP reimagined, right? Yield co-control. Yield co-control. Like, they'll try, and they'll even probably invent new things, right? Like, these people, although we are Bikorners and we don't like central planning and Keynesian economics and people inflating our money away, I agree, it is immoral. But it is important to understand, like, who your opponent is. Like, these aren't stupid people.

These are people with PhDs and economics. and if they're at the helm of the monetary system, they can probably figure out new ways to, you know, create liquidity or to kick the can down the road further than you think they can. You know, the prime example I think of is something I found very early in my macro research, which is in, you know, 2013 and 2014, after the, you know, huge fallout

of the great recession in the global financial crisis, you know, banks were looking for new types of high-quality liquid assets to hold on to, and mortgage-backed securities were obviously not one of them. and the Fed and the CFTC and the OCC and other institutions decided, hey, why don't we create new laws that basically make money market funds invest, you know, have a section of them called government MMS, invest 99 and a half percent of their, of their, you know, total fund, AUM into government bonds. Because before they were just optional, but now let's make it a regulatory requirement.

And then let's also make it a regulatory requirement for banks to hold treasuries as well. So that forced, obviously, a lot of bank capital into treasuries that wouldn't have otherwise gone there. And who's to say that they're not going to do that in the future with like deposits, that they're not going to say, oh, hey, every bank deposit, the $19 trillion of bank deposits in the U.S., they all have to be backed one to one by U.S. Treasury bills, four-week bills. So banks, you've got to go out and buy all this treasury debt. They could do that. And that would be another way to increase demand for treasuries without necessarily, you know, printing more money immediately.

I mean, the inevitable thing is the fuckery is going to continue. And like the good thing about Bitcoin is you can just buy Bitcoin and kind of ignore all this stuff. Yeah, absolutely. What is your take for Bitcoin, like get over a long enough time frame? What do you think Bitcoin becomes? I think, you know, Bitcoin is such a fascinating topic because as, as you know, like when you look at it from different perspectives, it can go into so many different, you know, it can go and fit into so many different disciplines and applications from philosophy to, you know, cryptography and cyberpunk culture to, you know,

future space-faring energy money, right? But the main problem that I see, which is something that kind of Brent Johnson pointed out to me and some others as well, is that the current system favors, right, inflationary currency with a continually expanding supply. And Bitcoin, being a scarce asset with a finite supply, is going to suffer from what's called Gresham's Law, which is that bad money drives out good, right? And Gresham's Law applies up until basically complete monetary collapse,

at which point it flips into Tears Law, and Tears Law is the opposite. Good money drives out bad. So like in a hyperinflation, in Weimar, Germany, what do people do? They all, by the very end, they were all burning wheelbarrows of cash, and they're all trying to get their hands on dollars and pounds and gold bars, right?

But that doesn't happen until the very end. because in the beginning, the slowly depreciating currency, right, the currency dealing with 2% inflation a year, that is actually much more spendable in the real economy than the currency gaining 5% a year, like let's say gold would be or Bitcoin would be. And so that means that people, like the market generally, doesn't have much demand to spend it.

And again, if you go around and ask Bitcoiners, you know, how much Bitcoin do you spend? Most of them are going to be like, why would I spend it? This is an investment. This is going to go up 10x. Sailor says it's going to go to a million, right? And whether or not you believe that,

I think all Bitcoiners obviously believe it's going to go much higher. You know, my target's 300K in the next two years. But even if, you know, or especially if you believe that, you'll want to hold onto every sat you can. And so spending a little Bitcoin here and there might be optional,

but you would never want to spend your whole stack. And so that's going to prevent Bitcoin from being truly adopted as a currency especially in the short to medium term up until we see very severe fiat collapse because bitcoin i think to be adopted as a money as a money and as a true true medium of exchange it's not only going to require the you know attractive force of it being superior it's also going to require a repellent force of the old system dying which by the way this is exactly how every reserve currency has taken place it wasn't just you know the u.s dollar didn't become the u.s dollar just because the u.s is a great country

Oh, it's amazing. It's such a good, you know, a good idea to buy U.S. dollars. It's also because the British were decimated by World War II, decimated by World War I, and they started losing all of their colonies within 15, 20 years. And so you look at the, you know, the rates of the British pound and the U.S. dollar and the amount of trade volumes they had, it started collapsing, not actually right after World War II, it started collapsing in the early 50s. Because that was the point where all of the British colonies started announcing into dependence from, you know, Great Britain, and the endemic, you know, demand that they had created, this structural demand that they had created started falling apart. And then obviously with that power vacuum, it all flowed to the U.S. dollar. So until we have those two things happening, not only the attractive, you know, pulling force of Bitcoin being the superior money, but also the pushing force, the repelling force of the old fiat currency really falling apart, I think Bitcoin being a true currency is not going to happen. I mean, that's a very long road to getting to the point of being sort of the global

reserve currency. But do you think it can become like one of a maybe a basket of global reserve assets before that? Absolutely. Yes. And so this is where like I have the caveat, right? And where I piss off both the bitcoinsers and the fiat MMT years and like everybody, oh, dude, you should see my Twitter, dude.

Anything I say, everybody gets pissed on me. I have bitcoinsers saying, oh, you're a total shill. no, guys, I just think I'm more realistic and more level-headed because I am a Bitcoin and I do think obviously in the long run, Bitcoin will win, right? The scarce assets will win. The question is, how do we get there? And the idea that the dollar hyperinflates tomorrow and we all are using, you know, basically like relays and moon wallet to zap SaaS to each other is tomorrow is not realistic. Now, a Bitcoin as a store of value is obviously it's proven its use case and it's going to continue to prove its use case over the next decade. And so for it to be a

reserve asset is definitely valid. And that's something I pointed out in one of my recent sub-sec articles. I made the case that like, okay, you look at current reserve currencies, right? And you look at former reserve currencies and how they lost reserve currency status and how it changed. Well, where most people would look at like the trade data, right? Like how many dollar transactions are happening per month. You know, what's the total notion of British pound transactions happening in April, 1951? Right. That was like the last indicator of collapse. The first thing was that people started to divest from the bonds of the reserve currency. So the

total rate of investment in British guilt's, right, started to collapse in the 1930s and then more in the 40s, obviously, then increasingly in the late 40s and early 50s, even before the trade data started to show it. So I was looking for that in this, you know, for the U.S. dollar for the U.S. Treasury market. And we started to see that same thing play out. And this is something Gromond has pointed out many, many times. You know, from 2008 to 2015, we had a net issuance of $8 trillion of total net new government debt, right? Foreigners bought 71% of that. They bought around $6 trillion of it. From 2015 to 2022, we issued around $10 trillion, and foreigners bought 15% of that.

So we went from foreigners buying the majority of net new debt, so China, Japan, you know, Russia, all these other countries, buying a ton of U.S. debt to basically finance our deficits, to basically them not financing us on net at all, right? That's not to say they're all, you know, going to sell it all tomorrow, but you look at the trend. And in August of 2025, you know, there's that famous chart that, uh, total value of global central bank gold holdings surpass the value of their treasury holdings. And China, Russia, obviously, have been off-lying U.S. treasuries for years. And they've been trying to divest from the U.S. Treasury market for years.

And it makes sense because what are U.S. treasuries? They're basically long-dated U.S. dollars. And so if you're going to get rid of, if you're looking at the entire U.S. dollar complex, what would you get rid of first? your most liquid easily tradable dollar that's like a cash deposit at a bank? No, you'll get rid of the thing that's locked up for 30 years, right?

You'll sell your US treasury bonds, the long bonds, and then you'll move down the curve. Especially when you add what happened with the Russia's treasuries and these assets getting frozen, that's another risk to add on to the top of that. Yeah, exactly. So it's much easier, ironically, obviously, it's much easier to freeze US treasury bonds

than it is even to freeze dollar-linked deposit. because there's only so many U.S. Treasury bonds, but there can be as many U.S. dollars as they want to lend into existence. And so the system kind of encourages this way of transitioning. So watch the 30-year bonds, watch the 20-year bonds on foreign central bank balance sheets. That will tell you if they're truly deciding

to avoid from the dollar. And they are. They've been making those moves. But it is a slow process. Because as Brent points out, like, 55% of global trade still invoice in dollars, 80% of interregional trade invoice in dollars, 59% of global forks and reserves are still in dollars. It's basically been flat for the last five years, even despite all the de-dollarization talk. So the real movement has been happening

in the treasury market, not in the actual, like, FX trade data. I mean, it's no wonder that the US, well, the current US admin are so keen on stable coins, because that's like one last chance to save the bob market i guess yeah yeah yeah but you know my concern with that obviously is you know even though obviously like i said it's better because you can manufacture demand for treasuries rather than just allowing infinite debt growth you know um better is still a relative term right that even with the size of the stable corn market where it is now and where it's projected to be it still has to grow significantly more for it to actually make a big enough difference um in the total rate path and the total debt path of the US government. And the bigger problem is,

like, the real issues that need to be solved are the fiscal problems, which obviously no politician wants to touch. Oh, man, it's going to be interesting. Just buy Bitcoin and sit on your hands and wait this thing out. This has been really cool. We should definitely do this again. Is there anything else we've not touched on, though, that you want to cover today? I mean, I would just say, like, you know, I think Bitcoin, what's so fascinating to me about it, that again, most people view it as like this negative, it's a negative thing that institutions and that global central banks that are, you know, Iran was accepting Bitcoin as payment for the, you know, global finance, for global trade. I view that as a massive positive.

And the reason why is because the way that you will, you know, win with Bitcoin, the way that you'll take over the global financial system is not by, you know, creating an entirely separate one and forcing everyone at gunpoint to come to yours, is by infiltrating and, you know, basically co-opting the existing mechanisms into yours, right? This is how the U.S. dollar gained permanence over the British pound is we basically copied the U.S. British, or the British rails,

and we just did them with the dollar, and we encourage your dollar loans and encourage your dollar deposits, and just kind of proliferated their own system of, you know, guilt and British pound lending, and improved upon it and did it again. And I believe that that is the way that this is going to play out. The main issue of macro, the main issue of especially U.S. macro is that Triffin's dilemma, right?

The U.S. is forced to send out money to the global financial system to ensure that there's enough liquidity. Bitcoin solves that, right? Bitcoin actually obviates the need for that because Triffin's dilemma requires a centrally issued currency. Triven's Dilemma says, you know, oh, the U.S. is the sole issuer of currency, and the rest of the world needs that currency. And so because of that demand imbalance, the U.S. has to decide whether they want to print more money than would otherwise be justified by their, you know, gold peg, right? Their peg of dollars to gold. Or if they want to not do that, and the global system starves for liquidity and everything starts to seize up, right? That's an issue of a centralized issuer and a global demand.

Bitcoin is a decentralized issued currency. Bitcoin doesn't suffer from this. If any country wants to earn Bitcoin, they can do it. If any country wants to trade Bitcoin, they can do it. There's no censorship rails that exist, like, that do with fiat. And so that means that in the long run, not only is Bitcoin a better reserve currency, it's the perfect reserve currency. And so I don't see how that doesn't dawn on people over a long enough time frame.

I don't see how that doesn't make people realize, wow, like instead of buying gold, which is a good store value that can hold in my bankfall, I could buy Bitcoin and I can transact it digitally anywhere. And then if, you know, the Reserve Bank of Russia wants a payment from, you know, the Reserve Bank of China, I can just send a Bitcoin payment on chain and it can be verified by the entire global system in two or three blocks and it's immutable and unchangeable. Wow.

This is like, this is better than gold. This is digital gold. And so I think that that, once that starts to dawn on people, especially people at the high level, I think things will really start to change. But again, we're thinking about central bankers. We're thinking about people who are boomers. They're old. They don't understand technology. They don't understand Bitcoin, unfortunately.

So I think it's going to take a while. But I do think that that's the future. And I'm obviously long run, very bullish on Bitcoin. I do believe we're going to get to a million dollars a coin. I just think it's a matter of how we get there. I mean, Bitcoin's going to win. It's crazy that you can turn billions of dollars for less than one sat. of V-Vite. You spend fractions of a dollar to send a billion dollars.

We are going to win. I think Bitcoin's already winning. It's just going to take some time. We're still so early, man. Absolutely. We are. We are. Roberto, this has been very cool. We'll have to do it again at some point for sure. We've been talking about making this show for a very long time, so I'm glad we finally did it. But tell everyone where they can find your substack and everything like that before we close out. Sure. So I have a substack. It's called Dollar Endgame. And again, that's where I kind of flesh out this evolving theory. of macro that I have. You can just go to dollar

endgame.substack.com or you can go to my Twitter profile, which is at Peruvian underscore Bull. I used to go by Peruvian Bull, and you'll find everything there. I'm the only verified Roberto Rios Peruvian Bowl account. So if you see a bunch of clones,

please don't pay attention to those. And I also have a brand new YouTube channel and that's called Peruvian Bull as well. We have new, like, you know, mid-length, 15, 20-minute deep dive macro videos coming out. So go subscribe if you're interested. Awesome. I'll put all of that in the show notes. But thank you so much, man. I will definitely speak to you again soon. Awesome. Sounds good. Thanks for

having me. Thanks, ma'am.