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The $1.8 Trillion Debt Spiral Has Begun — And No One Sees It | Bitcoin Simply · Simply Bitcoin

• 0:00
  It's Friday, March 6th, and the next financial crisis may
• 0:03
  already be starting. Oil is ripping higher with the
• 0:06
  war in Iran escalating. Traffic through the Strait of
• 0:09
  Hormuz has basically stopped. Meanwhile, the Dow just dropped
• 0:12
  1000 points in a single day. And at the same time, private
• 0:15
  credit, the $1.8 trillion shadow banking market is starting to
• 0:19
  crack. BlackRock is marking down loans
• 0:21
  to zero that were 100 cents on the dollar just a few months
• 0:23
  ago, and investors are trying to pull their funds as fast as they
• 0:27
  can with no luck. Former Goldman Sachs CEO David
• 0:30
  Blankfein is warning that the private credit market could
• 0:33
  trigger something like 2008 all over again.
• 0:35
  But that's not the story you're hearing.
• 0:37
  The real problem isn't oil. It isn't war.
• 0:40
  It's debt. And the West is entering what
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  Luke Roman calls a sovereign debt spiral.
• 0:45
  And when that happens, the entire system begins to change.
• 0:48
  Yeah, I think within 10 years, yeah, I think Bitcoins price 10
• 0:52
  years way higher. Private credits break, banks
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  pull back, governments intervene, and something new
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  replaces it. Digital credit.
• 0:59
  This is down to cook with Bitcoin.
• 1:01
  Simply, we've got a lot to break down today.
• 1:03
  Let's go the Strait of Hormuz. What is it?
• 1:10
  Well, about 20% of the world's oil ships through these lanes.
• 1:13
  And right now, traffic is nearly stopped, which has caused oil to
• 1:17
  go above $80 a barrel. But I told you this on Sunday,
• 1:20
  European jet fuel prices have risen 71% in a single week.
• 1:24
  And most people look at that headline and think it's an
• 1:26
  energy story, but it's not. It's an an inflation story, a
• 1:29
  transportation story, a food story.
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  Think about all the things connected to the oil itself.
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  And when energy spikes in a late economic cycle, it causes stress
• 1:38
  throughout the entire system. And that's where things are
• 1:40
  starting to break. The Dow Jones dropped 1100
• 1:43
  points the same day that oil crossed $80 a barrel.
• 1:46
  Gold just hit all time highs at $5100.00 an ounce.
• 1:50
  And Treasury yields are climbing.
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  China, Japan and US bonds, the 10 years are moving higher at
• 1:55
  the same time, like in a coordinated fashion. 4 point one
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  for the US is the highest since 2007. 1.8 for China, the highest
• 2:02
  since 2007, 2.2 for Japan the highest since 2007.
• 2:06
  This is an extremely rare combination which signals one
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  thing, stress in the entire financial system.
• 2:12
  And when stress rises, the weakest parts break 1st and the
• 2:16
  weakest part clearly right now is private credit.
• 2:18
  This market exploded after 2008 when the banks pulled back from
• 2:22
  lending, large asset managers stepped in.
• 2:25
  The private credit market today is roughly 1.8 trillion and it's
• 2:28
  crap crashing on a dime. Here's the problem.
• 2:30
  The assets are opaque, the leverage is hidden, and
• 2:33
  investors money can't be pulled out easily when they want it
• 2:36
  back. And now we're seeing the first
• 2:38
  cracks. BlackRock is one of the leaders
• 2:40
  in private credit, and they're writing down loans left and
• 2:42
  right. Blackstone, not BlackRock, their
• 2:45
  flagship private credit fund has had $1.7 billion in redemptions
• 2:49
  in the last several weeks, and they're shutting the doors.
• 2:52
  And Lloyd Blankfein, who was at Goldman Sachs during the great
• 2:54
  financial crisis, says this looks a lot like the subprime
• 2:57
  mortgage crisis when banks and other asset lenders wanted their
• 3:01
  money out while they couldn't get it out.
• 3:03
  And we've seen this movie before.
• 3:05
  It reminds me of the scene in Margin Call where John told
• 3:09
  says, I can't hear a thing right now.
• 3:13
  The dangerous part is we've seen this before, and there's been so
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  many people that have been promised 4 and 5% returns to
• 3:18
  these private credit funds. And this is exactly what Michael
• 3:20
  Saylor predicted. These funds were going to
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  experience stress. People are going to want their
• 3:25
  money out and they're not going to have an opportunity to get
• 3:28
  it. And this is exactly the market
• 3:29
  he's positioning for with Stretch.
• 3:32
  And this is the beginning of digital capital.
• 3:34
  Eating with under collateralized junk bond issuers that are going
• 3:39
  out of business in six months that are offering you 5% yield
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  and somebody's buying that garbage, right.
• 3:46
  And so, yeah, at some point really distressed credit issuers
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  are a liquid private credit. They will find it harder.
• 3:55
  Look, now nobody's going to stop buying T-bills because of this
• 3:57
  stuff. You don't got to worry about
• 3:59
  that. We're not competing with the US
• 4:00
  government. We're competing with the
• 4:02
  marginal borrowers issuing illiquid, low yielding, tax
• 4:07
  inefficient junk bonds, high yield bonds, private credit and
• 4:12
  other types of garbagey credit instruments.
• 4:14
  And and then the ones that sell things over the counter that you
• 4:17
  can't legally buy and we're actually making it available to
• 4:21
  you. So who wins?
• 4:23
  The world wins, the digital asset economy wins, everybody
• 4:26
  wins. And how big is the market?
• 4:30
  Well, there's $300 trillion of garbagey credit right now, and
• 4:34
  it's probably going to double over the next 10 years.
• 4:37
  So if you can get 5% or 10% of it, there's a 50-60 trillion
• 4:41
  dollar opportunity. But this isn't just about the
• 4:45
  private credit market. That's the first thing that
• 4:47
  begins to show weakness in the entire system, sort of like
• 4:50
  homes in 2008. And Luke Roman calls this the
• 4:53
  sovereign debt spiral. Governments around the world
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  have accumulated enormous amounts of debt.
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  There's almost $300 trillion worth of debt in the system. the
• 5:01
  United States has a $38 trillion deficit.
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  Interest payments are rising faster than tax revenues, while
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  the consumer has less and less money to pay for taxes.
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  Boomers are leaving the economy, which is the number one tax base
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  for the United States government.
• 5:14
  And so this forces governments to do one thing, borrow more
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  money from the future to service old debt, which leads to money
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  creation, which leads to inflation, which leads to
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  currency debasement, which leads to intervention.
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  This is why the energy prices are soaring.
• 5:27
  This is why gold is soaring. The system is unstable.
• 5:30
  The math simply doesn't work anymore.
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  Kind of coming back almost full circle to the where we start
• 5:34
  with the year round stuff. We're like what?
• 5:38
  Yeah, because you just maybe think of this with with the debt
• 5:39
  and what's going on here. But you know, we have debt
• 5:41
  jubilees like how does how does this stuff get?
• 5:44
  How does this stuff get sorted out in in the long run?
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  Like whether it's, you know, like you said, the Fed balance
• 5:48
  sheets going to just rock it, you know, with AI and all the
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  things that are happening is there like does this just melt
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  and go away at some point? Do we go to global war?
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  Is it a debt jubilee or people taking the hit and saying, Yep,
• 5:59
  you know, I'm short sale on my house or short sale on it,
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  Sorry, country, you're going to take the hit.
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  What? What ends up happening in your
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  mind? Oh, that you can't have it do a
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  debt jubilee with a debt based system like this because the
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  debt is everybody else's asset. So it's ultimately the system
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  has to get fully reserved. In other words, they have to
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  create currency units that mostly or entirely back all the
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  debt outstanding. And you know, that's, that's how
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  this ends. Like there is now, that's unless
• 6:27
  you get some sort of productivity miracle that not
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  only is massive, but is massive and doesn't arrive too fast so
• 6:35
  as to disrupt, to enforce deflation and blow up the very
• 6:39
  same debt system. And I think that is the case of
• 6:43
  AI. It's too fast, but we'll see.
• 6:45
  Failing that, that this Goldilocks productivity miracle
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  that I think is almost, you know, threading a needle,
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  they're gonna have to fully reserve all the debt.
• 6:52
  But the same thing is happening at the same time.
• 6:54
  The financial system is adapting away from the old system and
• 6:56
  towards a new system. US regulators just issued
• 6:59
  guidance that tokenized securities can receive the same
• 7:02
  treatment as traditional securities on a balance sheet.
• 7:05
  Translation. Wall Street and other firms such
• 7:07
  as Tether and Kraken just got permission to move trillions of
• 7:11
  dollars of assets onto the blockchain.
• 7:13
  And this comes at the same time as Kraken, one of the largest
• 7:17
  crypto firms in the world, getting access to the Federal
• 7:20
  Reserve payment system. Think about that in the
• 7:22
  implications of what that means. But they're going to create all
• 7:24
  of these synthetic products that don't have any scarcity and
• 7:27
  eventually the world is going to realize just like it has in the
• 7:30
  past, we need scarce desirable assets that cannot be
• 7:34
  manipulated or debased and that's Bitcoin.
• 7:36
  One of the ways that institutional finances already
• 7:38
  come to Bitcoin is through a company called Lenin.
• 7:40
  They allow you to borrow against your Bitcoin with the most
• 7:43
  institutionally grade and secure product that is actually a
• 7:46
  credit rated instrument that allows you to borrow up to 50%
• 7:50
  loan to value in your Bitcoin, which means if you've
• 7:52
  accumulated a lot of Bitcoin, don't sell the Bitcoin, borrow
• 7:55
  against it in Fiat. The money comes into your
• 7:58
  account in less than six hours, and the application just takes 2
• 8:01
  minutes. The rate start at 12.4%, which
• 8:03
  is half of what you could get for a traditional credit card,
• 8:06
  and you can repay it anytime without penalty.
• 8:09
  If you stacked a lot of Bitcoin, it's a no brainer, and
• 8:11
  especially if you do it responsibly.
• 8:13
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• 8:16
  One of the ways you can continue to become sovereign in your
• 8:18
  Bitcoin journey is by becoming your own bank.
• 8:21
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• 8:24
  keys, setting up your own channels, and ensuring your
• 8:27
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• 8:29
  technology. But that can be hard to to do
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• 8:33
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• 8:35
  Well, get a coach, a coach from the Bitcoin way, someone who's
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• 8:46
  when the system collapsed. Schedule a free 30 minute
• 8:48
  consultation with the team at the bitcoinway.com/dante.
• 8:52
  Dante, let's take a step back and look at what's happening
• 8:55
  across the economy. Let's look at Oracle, a massive
• 8:58
  tech company. They're going to have 3000 cuts
• 9:00
  or layouts what about Morgan Stanley in the banking sector
• 9:03
  2500 job cuts what about discover who was just acquired
• 9:07
  by Capital One, which now is just being told in less than a
• 9:10
  year 1100 employees are being laid off the same time you see
• 9:14
  home sales plunging and at the same time you see record numbers
• 9:17
  of people tapping into their four O 1 KS to pay for emergency
• 9:19
  expenses. These are classic late stage
• 9:22
  signals. The system is slowing and we are
• 9:24
  at the end of a cycle. The pressure is building and
• 9:26
  nobody wants to say this thing out loud.
• 9:28
  The global financial system is collapsing.
• 9:30
  It's masked by war, inflation, high energy prices.
• 9:35
  But ultimately it's the end of the system that is breaking in,
• 9:38
  can no longer work and continue to function in the same fashion
• 9:40
  that it has in the last 50 years.
• 9:42
  And that's why people are hedging their bets with Bitcoin.
• 9:45
  It is an alternative system that the new system needs to be built
• 9:49
  upon if we want to have any semblance of control of scarcity
• 9:53
  and a lack of currency debasement.
• 9:55
  The debt will have to be reserved and backed by
• 9:58
  something, and that something is Bitcoin.
• 10:01
  We're moving to a world of open networks, digital collateral,
• 10:04
  transparency. Bitcoin sits at the center of
• 10:06
  that shift. The new financial system won't
• 10:08
  arrive because people want it. It will arrive at a necessity.
• 10:12
  That's how all of these systems play out.
• 10:13
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• 10:16
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