Thread by @WesleyBKress

(1\13) The next time someone says #crypto is the one with #leverage tell them they have ZERO understanding of the existing legacy banking & financial system. Historically banks were required to hold 10-13% in reserves. Federal Reserve moved it to 0% on March 15, 2020 $EGLD $CEL

(2\13) federalreserve.gov/monetarypolicy… When I used to teach banking I would have my students perform #UBPR which are essentially an analytical tool for assessing banks health & performance. NEVER has the banking system allowed 0% reserve. Let me

(3\13) give you a mathematical example of how #FractionalReserves are essentially implicit leverage. If banks historically had to hold say 10% than the way you would understand how much leverage is by 1*1/R. You deposit $100 *(1/R) R=10% = $1,000, so they can lend out $900 for

(4\13) every $100 deposited. This is 9X implicit leverage essentially. This also doesn’t account for the fact they can do unsecured loans in fact most institutions book of business (loan book) is often times 30% unsecured so that means its backed by nothing, yes nothing,

(5\13) increasing the implicit leverage. But NOW they can hold 0% yes 0%. This means that the implicit leverage within our banking system can infinitely go higher. Lets just do one more example $100*(1/R) R=.0001% = $1 Million so now for every $100 they deposit they can lend

(6\13) out $999,900 that is 9,999X implicit leverage. So to make matters even worst. After 2008/2009 Financial Crisis, caused much by the moral hazard behavior of these banks, they managed to pass International Law called the “Bail-In” that essentially states that YOUR bank is

(7\13) legally able to use your deposits to make themselves whole. I.e. if you have 100,000 and they took so much risk that they need a “bail out” instead of the tax payer on the hook it is the depositor, yes you. Don’t believe me? These were the parameters to International

(8\13) Law signed by all G20 countries to allow this to happen: imf.org/external/pubs/… (Bail-Ins)
Also, anyone who keeps telling you they don’t want to have all their money in crypto because of FDIC insurance clearly has not done their due diligence.

(9\13) Their “false safety” is rooted in a fantasy world that likely they think anyone in crypto are living in. Look their fantasy world is that there is only $119 Billion worth of Insurance to cover $7.0 Trillion in deposits & another $4.8 Trillion in in deposits likely over

(10\13) the $250,000 FDIC arbitrary threshold.
fdic.gov/analysis/quart…
If anyone tells you they feel safer keeping their money in the existing banking & financial system than they just aren’t educated enough & not skeptical

(11\13) enough. They are being extorted through inflation, implicit tax, they are being robbed by receiving NO yield while they pay shareholders & top management all the gains, they being robbed via fee’s and exorbitant interest rates. The whole system is unstable & littered

(12\13) with moral hazard, no one acts in your best interest. Also, banks notoriously get hacked all the time. The technological security systems of your banks is far inferior to blockchain, it isn’t even a comparison, yet again a false belief of safety rooted in false illusion.

(13\13) Tell me this is the system & people you want to trust? Hmm… okay who is the crazy one?

This is why I trust $EGLD $CEL #Banking #Finance #Yield #Security #Lies #Illusions #SystemicRisk #FederalReserve

https://twitter.com/wesleybkress/status/1414843166654562304