So Alameda minted 36b USDT, and only ever redeemed ~4b USDT, a net figure of 30b+ USDT.

So did Alameda wire Tether $30b+ USD? If so, with what money? One possible "good" explanation is that they were a bank mule for other actors.

Alternative explanations are... not great.

1/4 The 36b USDT figure wouldn't be all that noteworthy if they were a frequent large redeemer, but again, they only ever redeemed ~4b of USDT, a majority during LUNA/UST crash.

So *presumably* there was a massive amount of USD that had to be wired to Tether to mint all it all.

2/4

The effects of QT so far on liquidity has been relatively muted, as the Fed's balance sheet runoff has occurred in tandem to off & on drains of both the TGA & RRP.

Heading into '24 with ~$1T left in the RRP and unbridled fiscal spending, things start getting interesting.

1/ Here's a similar look, with the RRP and TGA balances included. It's been somewhat methodical - TGA drains offsets Fed QT, and now over the last four months or so, the TGA is filling back up which is being offset by the drain out of the reverse repo facility.

2/

Thread on the web of deception with Justin Sun around Huobi, stUSDT, and TUSD, as well as the TUSD relationship with Binance and the drain of real USD liquidity from the crypto ecosystem.

1/ In late 2022, Justin Sun reportedly acquired a controlling stake in Huobi, now named HTX, which had over $1.5b USDT deposits at the time.

Over the summer deposited USDT funds started getting replaced by stUSDT. This substitution has been largely unnoticed by Huobi users.

2/

This chart will ruffle some feathers.

You'll often see charts or visuals illustrating the depreciation of the $USD over time, normalized to $1.00, of which I occasionally share myself.

However, there's an important caveat: these visuals rarely account for short-term yields. Displayed below is the purchasing power of $1, adjusting for annual CPI inflation (in red) versus the purchasing power of $1 accounting for 1-year Treasury yields less annual CPI inflation (in blue), starting from 1962

Notice anything?

The purchasing power of $1 from 1962 to the present equates to $1.85 when accounting for 1-year Treasury yields and inflation. Meanwhile, adjusting for inflation alone leaves you with just $0.10 of purchasing power.

Quite the massive difference.

However, there's more nuance to consider:

1) Let's separate the data into distinct eras,

From 1962 to start of 2009:
- Average annual inflation: 4.40%
- Average 1y yields: 6.22%
- Average difference: +1.82%
Real gains in purchasing power.

From 2009 to Present:
- Average annual inflation: 2.34%
- Average 1y yields: 1.00%
- Average difference: -1.34%
Real losses in purchasing power.

2) The data doesn't include the 1940s where financial repression massively devalued the USD to erode real debt burdens (the data I quickly threw together only went back to 1962) in the post war period.

3) Why 2009 for the change in eras? What has changed? If the U.S. can just pay a nominally higher yield than the inflation rate in perpetuity, are the fiat doomers really just delusional?

In my view:

- Positive real yields can be sustained with a clean balance sheet. It's feasible for the government to pay creditors a positive real interest rate when real debt burdens are low, demographics are booming, and the global GDP is exploding as the world industrializes.

- With Debt to GDP meaningfully > 100% and other tailwinds reversing, this is no longer the case. Post GFC and the introduction of ZIRP + QE to facilitate "growth", has the positive real yield era behind us, at least until real debt burdens have been eroded - which will take either explosive real growth, or a steady dose of inflation above yields, debasing creditors in the process.

The Bottom Line: The reality is that the average/median American individual or family often doesn't have much disposable income to capture such yields. The ones that do, benefit; and the ones that don't are the ones that pay for it.

When you look at charts showing record wealth disparity, or are wondering why the political landscape is more polarized than ever, keep this chart in mind.

Fiat inflation didn't bother the investor class from for forty years as yields outpaced inflation. Currency devaluation wasn't felt in the slightest by this cohort, they didn't just escape the devaluation, but outpaced it significantly.

Now, with Debt to GDP levels domestically and globally near record levels, expect the post 2009 dynamic to continue into the future on a longer time frame. Don't let the current tightening cycle fool you as to what must occur.

Inflation > Yields, over a sustained period of time, is the only way global governments can mask their insolvency.

Thanks for coming to my Ted Talk.
Have received a bunch of great feedback, mainly on the lack of capital gains included in the yield calculation, and the validity of CPI.

So here's a few more visuals for you:

First, here's a 20% capital gains tax included on the 1-year Treasury yields.

(more below)

Many of the actions taken by the hyper-elite class are based on the realization that the trajectory of tech and AI will eventually dematerialize hundreds of millions of jobs, particularly in the West.

COVID-19 responses, climate change narratives, the cashless push/introduction… twitter.com/i/web/status/1… WEF globalists are literally saying it out loud, and have been for years:

"Useless class"

https://t.co/s29o3eS9ptweforum.org/agenda/2020/01…

I don’t give one single consideration to what the government has to say about bitcoin.

It’s literally computer code. You can’t stop people from memorizing 12 words in their head.

Bitcoiners will stay intolerant longer than geriatrics can remain in power. Keep on running up the debt to keep this laughing-stock joke of a system glued together for a little while longer.

Just know that there’s a growing number of people out there that see the sham for what it is, who’ve simply decided to just not play.

I prefer math over politics.

Playing devils advocate here...

Maybe the $BTC rally to start '23 is an illiquid name that got beat to a pulp in '22 catching some flows YTD, instead of it suddenly being treated as a banking system hedge.

$META - 2022: -63.7%, 2023: +73.8%,
$BTC - 2022: -64.5%, 2023: +69.4% This thought changes nothing about the long-term potential for bitcoin, but this rally and the accompanying narrative does feel eerily similar to the Russia FX reserves sanction narrative when $BTC rallied in March of 2022.

Are $NVDA, $TSLA & $META banking crisis hedges?

Drop lightning invoices/QR codes for 1,000 satoshis in my replies and I’ll send you some bitcoin.

The only rule is if you receive some BTC, you have to let Mike know that no bitcoin was moved and that it’s not a medium of exchange. sent about 70 separate transactions of 1,000 sats so far, will continue until i drain this lightning wallet

apologies if i miss yours ❤️

and remember everyone, no bitcoin is moving here so it absolutely cannot be a medium of exchange

The fascinating thing about the recent SEC enforcement is that people are somehow surprised that pumping & dumping low float VC garbage on unsuspecting retail without any disclosures is actually *illegal*.

I'm no simp for the state, but like, what did you honestly expect? I've said many times, I'm all for the free market and could absolutely care less about what people do with their money.

Fair play to everyone involved, best of luck lol

But you're surprised?

The $BTC options market recently flipped the futures market in terms of open interest for the first time ever in March.

👀🤔 Options bulls getting feisty recently

Put vol is the cheapest relative to call vol since 2021...

Smart money or degens... We will see in due time

Where did all the crypto firms that fled Silvergate turn? Signature Bank.

Something to monitor closely.

$SBNY $SBNY is much larger than $SI ever was, and has a much more diversified deposit base (20% are crypto related).

They have a similar product to SEN, Signet, a source of non-interest bearing deposits. A continued regulatory crackdown will lead to dwindling crypto deposits...

Medical science experts from Harvard, Johns Hopkins, and Stanford testifying before Congress:

“The greatest perpetrator of misinformation during the pandemic has been the U.S. government.”

The awakening. Good morning.

Believe it or not, many saw right through the entire charade - a poorly executed psychological operation only possible with endless amounts of state propaganda.

Welcome to the real world.

Friendly reminder that the pandemic was used as cover for a financial system bailout.

From Jul-Sept 2019:
- Fed starts cutting
- BlackRock calls for unprecedented stimulus during next downturn
- US yield curve inverts
- Repo market blows up, Fed starts expanding balance sheet Probably a coincidence that a virus comes out of nowhere to lock everyone in their homes, which of course had to be financed w/ tens of trillions of fiscal + monetary stimulus.

If there was ever a convenient excuse to print after a decade of ZIPR & QE…

blackrock.com/corporate/insi…

Silvergate -46% over the last month.

$SI Comforting.

If I were to engineer a massive deflationary bust, here's what I'd do.

THREAD:

1) Use lockdowns to justify the largest fiscal/monetary largesse in history

2) Set rates at 0% while buying endless amounts of debt to suppress yields

3) Directly send stimulus to the populace 3) When inflation finally started to show up, dismiss it - call it transitory & continue monetizing debt to suppress yields further

4) Engineer the biggest asset bubble in recorded history. Force everyone to pile into speculative assets in an attempt to maintain purchasing power

Credit markets continue to roll over - for anyone that isn't aware by now, a deleveraging is in the making.

In a deleveraging event, liquidity is nonexistent, volatility is reflexive, and correlations trend to 1.

People sell what they can, not what they want. This isn't a bitcoin specific tweet (although I suspect bitcoin exchange rate won't be insulated).

This is about the system in general.

- Elevated volatility in FX/commodities/equities/credit
- Raging inflation & rising yields
- Falling real incomes & credit worthiness