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The Banking System Just BROKE (And Warren Buffett Knows It) | Bitcoin Simply · Simply Bitcoin

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  When the greatest investor of all time is this, cautious
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  markets should pay attention. Over the last three years,
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  Warren Buffett and Berkshire Hathaway have sold over $184
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  billion worth of stocks. This comes at a time when stock
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  market valuations are even richer than they were at the.com
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  bubble. And if you needed more signal,
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  well, on Friday you weren't paying attention to the meltdown
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  that was happening in the banking system, probably because
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  you were too busy getting your Halloween costume ready. the Fed
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  had to inject $50 billion into the system in a single day.
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  The high since March of 2020. Bit corners were probably still
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  mourning the fact that they had a Red October for the first time
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  since 2018, but completely ignoring the fact that the
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  system is screaming that it needs to be saved.
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  Consumer spending tanking, bank reserves dropping off a Cliff,
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  and banks sitting on more unrealized losses and else than
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  the Pelicans without a first round draft pick next year.
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  This isn't time to panic. This is the time that bit
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  corners told you was going to come.
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  Banks will collapse, and when they do, the Fed will have no
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  choice but to inject liquidity into this system.
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  This is the end game, and this is Dante Koch with Bitcoin.
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  Simply, let's break it down. Ria is dipping in.
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  For the first time, Yeah. Well, the biggest conversation
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  gets back to to what you know you you alluded to at the start,
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  which is trying to understand the risk and return drivers of
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  this. Because when you look at it
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  fundamentally as a global scarce emerging monetary instrument
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  that that looks a lot like digital gold to many people.
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  And that is detached from the risk factors that affect any one
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  country or their economy, monetary, political, fiscal
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  situation, et cetera. That looks like a diversifier
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  and a hedge and on a fundamental level.
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  But then you see this noise in terms of short term trading
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  episodes where people talk about risk on.
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  That's a bit of a dubious concept to to begin with.
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  The reason why $11 trillion BlackRock is calling Bitcoin a
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  diversifier in a hedge is because they understand what's
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  going on behind the scenes. The current system is collapsing
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  right in front of our eyes. Banks woke up on Friday morning
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  like Kevin Hart. Help me, help me.
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  At 8:30 in the morning, the Fed jumped in to inject $20 billion
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  of liquidity to banks that were screaming for help.
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  And in case that wasn't enough, they needed another $30 billion
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  injection by 1:30 that same day. What happened to cost such a
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  major investment from the Fed? Well, it's the private credit
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  market in the banks that have been screaming for the last
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  several weeks that there has been trouble in the system.
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  Well, we're starting to understand and see exactly
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  what's going on. The bank's liquidity is drying
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  up. We haven't seen this much
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  liquidity flow into the system since September of 2019 when the
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  system completely dry and there was complete stagnancy in
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  markets all across the globe. Banks have been sitting on
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  unrealized losses for years, holding long duration Treasury
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  bills that are now coming to roost.
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  And banks have this crisis on their hands and so does the Fed,
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  which is why Jerome Powell says that they need to start to begin
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  to grow their balance sheet. He says at a certain point.
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  Freeze the size of the balance sheet, the non reserve
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  liabilities currency, for example, they're going to
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  continue to grow organically. And because the size of the
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  balance sheet is frozen, you have further shrinkage in in
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  reserves and reserves. This is the thing that we're
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  that we're managing that has to be ample.
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  So that'll happen for a time, but not a not a tremendously
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  long time. We don't know exactly how long,
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  but at a certain point you'll want to start grow.
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  You want to start reserves to start gradually growing to keep
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  up with, you know, the size of the banking system and the size
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  of the economy. So we'll be adding reserves at a
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  certain point. I'm such a kid.
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  When he said shrinkage, I, I did laugh.
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  I'm going to be real. But back to the point, that
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  certain point is now, like Count Dracula sucking blood out of
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  somebody's neck. The regional banks have been
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  sucking liquidity out of the bank repo system as bank
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  reserves are now lower than $3 billion, meaning the only way to
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  sustain the system is injection. the US banking system is sort of
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  like a junkie that can only survive if it gets another hit
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  of liquidity. You know what I'm saying?
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  And the only thing holding up this entire market right now is
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  this AI bubble investment thesis.
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  The consumer markets actually look pretty rough. 1 great
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  indicator that you can always look at on your own if you want
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  to do your research is the freight markets.
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  Because when the freights ain't shipping, we ain't buying.
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  Freights tend to move when we're buying groceries, when we're
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  buying consumer goods and we're more buying product.
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  Well, when the demand for drivers go down and the volume
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  of freight goes down, that means less people are buying.
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  Pretty simple. Back to the AI thing.
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  This is honestly the biggest red herring that leads me to believe
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  that this thing is going to pop and when they do, they are going
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  to have to inject liquidity into the system because there is no
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  entire market overall. It's just the stock market.
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  There's not Main Street and Wall Street.
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  Main Street is struggling, there's only Wall Street.
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  And this clip right here tells me exactly why I believe this AI
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  hype bubble will burst. justlikethe.com bubble in 2000.
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  How? You know, how can the company
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  with 13 billion in revenues make 1.4 trillion of spend
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  commitments? You know, and, and, and you've
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  heard the criticism. Saying we're doing well, more
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  revenue than that. Second of all, Brad, if you want
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  to sell your shares, I'll find you a buyer.
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  I, I just enough like, you know, people are I, I think there's a
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  lot of people who would love to buy opening eye shares.
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  I don't. I don't.
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  Think you, Including myself, including myself.
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  Who talk with a lot of like breathless concern about our
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  compute stuff or whatever that would be thrilled to buy shares.
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  So I think we we could sell you know your shares or anybody
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  else's to some of the people who are making the most noise on
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  Twitter. Whatever about this very
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  quickly. We do plan for revenue to grow
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  steeply. Revenue is growing steeply.
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  We are taking a forward bet that it's going to continue to grow
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  and that not only will chat to BT keep growing, but we will be
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  able to become one of the important AI clouds that our
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  consumer device business will be a significant and important
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  thing that AI that can automate science will create huge value.
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  So, you know, there are not many times that I want to be a public
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  company, but one of the rare what times it's appealing is
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  when those people are writing these ridiculous open AI is
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  about to go out of business and you know, whatever.
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  I would love to tell them they could just short the stock and I
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  would love to see them get burned on that.
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  But. Whenever you see somebody to get
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  this defensive and this aggressive when just ask a
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  simple question, how are you going to sustain $1.4 trillion
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  in investments when you only have 13 billion in revenue right
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  now? Let me translate.
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  It's a Ponzi scheme where we need the media hype cycles to
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  continue to push out press releases of how much investment
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  and forward investments we're getting to sustain the revenues
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  that we have and the costs and expenses that we have that are
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  rising faster than the revenues. This is a Ponzi scheme happening
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  in plain sight and we've seen this before.
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  And when the AI bubble pops, the Fed won't have any choice but to
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  step in and prop up markets. And Warren Buffett knows this
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  correction is coming. We told you at the beginning of
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  the episode, they've been selling for three straight years
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  $184 billion worth of stocks. They actually have $382 billion
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  worth of cash, enough to buy 477 of 500 S&P 500 companies in
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  cash. And when that happens, people
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  are going to panic and they're going to think the system is
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  stopped or the system is broken. Well, the normal financial
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  system will stop and the banking system will be shut down, sort
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  of like what Scott Besson said. That won't happen to Bitcoin.
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  It's the only system that isn't going to be shut down, unlike
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  what he calls the Democrats shooting a little shot right
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  there and this system shut down. This calamity going on the US
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  financial banking system is exactly what Uncle Ray Ray is
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  saying is the leading cause as to why central bankers and
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  countries are buying gold. It's likely that those deficits
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  will then produce lots of bond sales, which will compound it
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  when you get into the porn in the cycle where debt is needed
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  to pay debt. OK.
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  Pause. I think he meant point, but
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  let's continue. And compounds, it becomes a a
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  problem. It becomes a problem also for
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  the central banks because the central banks, by the way, this
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  is not just an American problem, this is a world problem.
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  The central banks themselves owned, owned the debt and so,
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  and they lose money on the debt. And so when they're losing money
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  on the debt and, and they have asset liability problems, then
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  they also not only have to monetize essentially the other
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  the government's debt, but they also have to monetize theirs.
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  And those are the characteristics that produce a
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  deterioration in the monetary order.
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  And that's, you know, that's why what you're seeing.
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  You're seeing a dynamic of why countries, for example, are are
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  letting the reserves or their assets in bonds and so on go
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  down and they're acquiring and have been acquiring gold, for
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  example. The major winner of the 21st
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  century won't be gold. Gold cannot be moved and
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  translated at the speed of light as a digital asset like Bitcoin.
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  We're moving to a stable coin, fully digitally backed system
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  that needs a hard asset, and that asset will be Bitcoin.
• 9:01
  It's no wonder that treasury secretaries got Besant is
• 9:04
  talking about Bitcoin and tweets.
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  Bitcoin has been chopping sideways and it's because
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  there's been a lot of liquidity sloshing around in the system,
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  but that liquidity actually hasn't been flowing into Bitcoin
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  as much as people think. Some analysts like Willie Wu,
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  which I always reserve my, you know, questions for, say that he
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  doesn't see liquidity flowing into Bitcoin and that's why the
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  system has been a bit choppy. But he also also says this is
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  exactly the time when we see the blow off top, when Bitcoin rises
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  from 2000 to 20,000 in a blink of an eye.
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  Listen to what he has to say right here.
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  I just do really dumb shit which is measure the flow of capital
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  coming in. I don't look at why, I don't
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  speculate why I can, but I'd probably be wrong.
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  It's not coming in at the same rate.
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  So it tells me that we're in this phase where liquidity is
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  starting to reduce relative to the growth of the price and that
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  Divergent is growing bigger and bigger and a certain point the
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  top, the clock stops ticking unless there's a massive
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  injection of liquidity some point, right.
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  In the broader economy. No, it's not a big.
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  Coin. Right, but I've never seen that
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  you know, we measure it at peaks and then it starts tailing.
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  You might get a little bit of this.
• 11:24
  I see choppiness and those choppiness adds for another
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  bullish run, but the clock's ticking and so yeah, we're late
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  phase in the bull market. I.
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  Was just about to ask. We'll finish this topic.
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  You'll definitely say this is late stage of the bull market.
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  Yeah, in the final, it's the final leg of the bull market.
• 11:41
  Yeah. And to to.
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  That's when things get interesting.
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  Like but to. Be clear.
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  That final leg. Could be huge.
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  Could be 3 to 9 months. It could be 3 to 9 months.
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  Yeah, I think that's a good sort of window.
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  And also, if you look at some of the past cycles when the
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  liquidity started sort of dropping away, that's when the
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  fireworks happened. That's when Bitcoin ran up from
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  rough, say, 2 1/2 to 5000 to $20,000, right?
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  That's a blow off top. Are you ready for what happens
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  when the Fed has to step in and print?
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  The banks will collapse. They're sitting on long duration
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  bonds, they've tapped out all of the liquidity that the Fed has
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  in repo reserves and otherwise, and now they're sitting on a
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  book of bad loans that are coming due to roost.
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  This is the ultimate opportunity for people to think longer term
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  about what's going to happen next.
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  Not just first order effects, but second order effects.
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  And I think Bitcoin being a diversifier in a hedge, just
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  like BlackRock said, is going to be the winner moving forward.
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  What do you think? If you don't understand what's
• 12:40
  going on, then you need to get some alpha by subscribing to
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  channels like these where we drop alpha like this seven days
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  your tickets. This is Dante Cook with Bitcoin.
• 13:00
  Simply happy stacking.