Another clarification about Balaji's $1mn bet

I had posted an article earlier today titled "Clarification about Balaji's $1mn bet (misinformation)" where I was making a point that his $1mn bet was against hyperinflation of dollar and not $1mn btc price in 90 days; all of this based on all his visible tweets which I had linked to. Even though many others on the sub said otherwise, I thought so since no one around spoke of what and where he said until u/angry_koala_26 quoted his $1mn bet terms.

It so happens that he linked one of his tweets to a longer post which is as follows:

Here are the remaining references, as Twitter has a limit on the number of links in one post.

I am moving $2M into USDC for the bet. I will do it with Medlock and one other person, sufficient to prove the point. See my next tweet. Everyone else should just go buy Bitcoin, as it'll be much cheaper for you than locking one up for 90 days.

Terms of the bet: ideally someone can set up a smart contract where BTC is worth >$1M in 90 days, then I win. If it's worth less than $1M in 90 days, then the counterparty gets the $1M in USD.

HYPERBITCOINIZATION We have to define hyperinflation in BTC vs USD terms because all other fiat currencies can and will be inflated away. That is hyperbitcoinization.

This is the moment that the world redenominates on Bitcoin as digital gold, returning to a model much like before the 20th century. What's going to happen is that individuals, then firms, then large funds will buy Bitcoin. Then sovereigns like El Salvador (@nayibbukele) and tiny crypto friendly countries.

The big move will be when a US state like Florida or Texas, or a "normal" country like Estonia, Singapore, Saudi, Hungary, or UAE buys BItcoin. And when @narendramodi tells India's central bank to buy Bitcoin, even as a hedge, it's over.

Why will it be so fast? Well, hyperinflation happens fast. We've seen digital pandemics (COVID), digital riots (BLM), and digital bank runs (SVB). Everything will happen very fast once people check what I'm saying and see that the Federal Reserve has lied about how much money there is in the banks. All dollar holders get destroyed.

The thing is, people are still tuned to an analog world where things get gradually worse rather than all at once. But there isn't much forewarning for a digital event — it's 1 and then it's 0. Just like the bank runs, except this is the central bank.

There are however two sources of forewarning. First is the chart of the long-term depreciation of USD vs BTC, from less than $1 USD per BTC to $25k USD per BTC. Much of the smart money has been voting against the dollar since the financial crisis. The end is a digital drop off a cliff, almost invisible on the chart — but highly visible in the world.

This tweet is the second forewarning. It'll be ignored and mocked by people who still trust the US establishment, even after the last few years. Who can't imagine that the US banks and media could be lying to them to this extent.

But they are. Just as they did in 2008, and over the last ten years. The digital devaluation of the dollar is coming and it's going to be intense.

[9]: Patient on hikes Nov 3 2021: https://archive.is/thPOu [10]: Renominated Nov 22 2021: https://archive.is/NWb25 [11]: Yellen admits not a tech issue: https://archive.is/8xzPO#selection-2467.421-2467.502… [12]: FDIC admits rate rises rekt banks: https://archive.is/yxd1u#selection-2043.19-2047.150… [13]: Presidents don't like hikes: https://archive.is/Aiayr#selection-7099.213-7099.330… [14]: https://archive.is/ZM2YK

ends here

As much as I have no clue about what btc's monetary valuation would be against usd due to events we've never seen before, I tend to think that his reasoning and references citing them hold valid. I'm surely rooting for the outlook of the current financial and political systems he has as I think of it similarly.

One aspect I tend to differ a bit about is the source of dollar's devaluation. I'm not sure if I differ exactly, since I'm not sure of what he thinks of this issue. It's about the nature of bubbles in general across decades/generations. If we look at the history of bubbles, the only common thing that sparks them is when drastic growth picks up in both the economy and one or more other aspects that tend to dominate most personal and social behavior.

The two most commonly know bubbles from the recent times are the dot com bubble and the housing bubble, both in the US. I don't think many people around the world know or atleast talk about Japan's real estate and stock market bubble of the 1980s. The general opinion both in media and general public is that Japan has a fairly sound monetary system. No one talks about or reacts as much to rate cuts or hike happening there even though it's the world's third largest economy, accounting for almost 8.6% of global GDP. All the messes we know of are from the US which is effectively spreading waves across the world via whatever happens with the dollar like we felt in the global recession. Just the housing bubble there due to a banking and valuation fraud sent the dollar spinning in the air and all nations feeling the effects since they use it as a reserve currency and partially where the own currency derives value from. And as a result, if all of them inflate against each other even in small proportions over long periods of time (decades), we can clearly sense something might go wrong with the notion of money if the US screws up somewhere. Especially in how it's been managing its $.

With the two recent banking collapses in the US, we saw how the government panicked and announced that they effectively fully insure all deposits. But only for these two banks though. It's beyond the mandate of FDIC and the secretary Jannet Yellen stepped in because she sensed "systemic risk" to the financial infrastructure of the economy. Econ words for "oh shit, stop that else the banking sector is gonna trip and fall." There's a reason they're scared. It's because everything been lent in multiples both to the world (both corporations and foreign governments) and itself. And all that the banks are supposed to keep as reserve are with the FED where they get exchanged for treasuries where the government effectively take that for a fixed period and use it for whatever they wish. One of the things it does with that is lend and fund the functioning of multilateral institutions like the IMF. It pretty much gets that to perform its duty as a government where it's also been using that to exercise power over the world and one of its biggest forms is the military spending. Pretty much what the general international consensus is for what backs the strength of dollar - that it can control and surf through the world events. No wonder they've been involved with every major war of the last century. Anyways, I'm rambling all of this to make the point of credit bubble. That a lot more is being spent that what can be afforded for whatever real value there is to back it - the real economy (!monetary economy). What those US economists won't be allowed to call a disequilibrium.

Everyone would know from econ 101 that wherever there's disequilibrium, the side that's inflated has to revert. It's scary to say it but it literally translates to 'the dollar has to crash to represent what the real American economy can actually afford.' There are many Americans on our sub, it'd be interesting to hear if you can bare the cost of every other diplomatic engagement around the world - military, financial (debt) and health are those big chunks. If the citizens can't, the government's gotta be crazy. It pulls out funds for this both from taxes and as well as fed backdoor. The whole world also takes their word for granted for if they're accounting everything right and not in alignment with their incentives. What could go wrong I guess lol?

If the banks start losing value of the stock market like they already have, people will slowly but surely start pulling out. Would you keep your money in if the bank is losing over 10% its market value in a week? Or even a month? Forget it, even a quarter? It guess that's where time is to tell what's to unfold.

Also wanted to stand corrected over the terms of bet where he's literally betting a lot to go down in the next 90 days including btc @$1mn. Interesting bet for sure despite being degen at best🤷‍♂️