There’s an old joke in the finance circles that goes something like this: If you’re on the hunt for a top-notch accountant, simply pop them the question, “How much does one plus one equal?” The real pro will usher you into a room, seal the doors, draw the curtains, and after a thorough pat-down to ensure no wires are lurking, they’ll lean in close and whisper, “What do you need it to equal?” 

Now, you might crack a smile, but this little jest slices through to the harsh truth lurking in the underbelly of our financial systems. It’s a world where the clear-cut and the calculable are as murky as a swamp after a storm. And it’s here, in this article, that we’re diving deep — right into the heart of it all. 

You see, at the core of every exchange that keeps our economy buzzing is something called collateral. This isn’t just fancy finance speak; it’s the bedrock of trust in any transaction. Whether it’s a handshake deal over a used car, a leveraged trade in the financial markets or a billion-dollar corporate merger, if there’s no collateral, there’s no deal. 

Let’s take a little history trip back to the Great Financial Crisis. Ever wondered why the whole economic castle came crashing down? It was all about collateral. We’re talking treasury bonds, real estate — stuff that people believed was as solid as granite. But here’s the kicker: as soon as folks started to sniff out the default stink, that rock-solid value crumbled like stale bread. 

What we learned (the hard way) is that when the collateral backing our mightiest financial structures gets shaky, the entire edifice will tumble. In this article we will dig into that chaos, guide through the rubble, and map out the true power and peril of collateral and how it relates to what is happening in the world today. 

Let’s talk about collateral. Think of it as the safety net in the high-wire act of finance. It’s what a borrower offers up to a lender in case things go south. Say you borrow some cash and pledge your vintage car or your grandmother’s diamond ring as a guarantee. If you flake on the loan, the lender snags your valuables. Fair, right? This little arrangement cuts down the jitters for lenders, letting them hand out bigger bucks at better rates because, come hell or high water, they’ve got something to fall back on. 

Now, this isn’t some newfangled idea. Collateral has deep roots, stretching back to ancient times. Picture a medieval European baron using his acres of land to butter up the bankers. As centuries rolled by and financial markets got savvier, the whole concept of collateral got a major upgrade. 

Here’s why collateral isn’t just old-school cool, but absolutely critical: 

First, it slashes financial risk. It’s like wearing a parachute when you jump out of a plane. It gives lenders a bit of peace of mind, knowing they won’t lose their shirt if a borrower bails. 

Second, it cracks open the door to credit. Without that diamond ring in the vault, many folks might not get a loan at all or they’d be choked by sky-high interest rates. 

And third, it’s the glue that holds markets together. By making sure loans get repaid, collateral keeps the financial ecosystem stable and less likely to crash and burn. 

But: collateral is only as good as its value. When the market tanks — like during the 2008 meltdown where real estate prices plunged — so does the worth of that collateral. Suddenly, what was once a fortress of security turns into a house of cards. 

Ever since Trump won the election in November, I’ve been glued to his administration moves like a kid with his nose pressed up against the glass at a grandmaster chess match. Most times, I can’t make heads or tails of the strategies being played out, but I’ll be darned if it isn’t the most riveting game in town. Now, as I watch these political pawns and knights shuffle back and forth, a few hard-hitting truths keep buzzing in my brain, louder than a mosquito in a quiet bedroom at night.  

First off, let’s talk about our world economy — it’s broke, bankrupt, insolvent. If anyone out there believes otherwise, I’m all ears. How in the world do we expect to pay back this mountain of debt we’re sitting on? It’s like trying to empty the ocean with a teacup. 

Next up, this same broke economy keeps pretending it’s got cash in the bank by cranking up inflation. It’s a vicious cycle, a merry-go-round that just keeps spinning faster. We’re feeding more wood into the fire, hoping it doesn’t burn the whole house down. 

Our global economic system is basically a high-stakes poker game, and the house always wins. It’s got to pilfer from Peter to pay Paul, swindling the lot of us into believing there’s such a thing as a free lunch. But let me tell you, the only free cheese is in the mousetrap. 

Lastly, looking for a solution to this mess from inside the mess itself? Good luck. It’s like asking the fox how to secure the hen house. There’s no fix coming from within because the system is rigged to keep the music playing, no matter how many chairs are left when it stops. 

I may not grasp every maneuver this new administration makes, but the way I am reading the financial tea leaves now is that I am convinced that we are seeing the re-collateralization of the US Dollar and the Treasury market. To do this there is a bit of financial engineering that will occur, but my conviction is that cryptocurrency, and ideally Bitcoin, will be at the heart of the system. 

Let me explain because I know this perspective seems outlandish. 

Since the election Bitcoin is up roughly 55% and the US dollar is up roughly 7%.  Traditionally these two markets are inversely correlated. 

he U.S. dollar, while holding the prestigious title of the world’s reserve currency, falls short in its role as a dependable store of value, especially when one considers the purchasing power necessary to acquire real goods and services. This erosion of value paints a stark contrast to the financial muscle it flexes across global markets, where the dollar reigns supreme in facilitating lower borrowing costs and exerting significant economic influence. 

Simultaneously, the U.S. Treasury market, critical in underwriting the federal government’s expansive budget, faces skepticism from investors. These treasuries, traditionally seen as ironclad investments, are now haunted by the specter of inflation, which gnaws away at the returns, leaving investors with less real value than anticipated. This inflationary backdrop casts a shadow of doubt over the sustainability of such investments, especially during periods where inflation rates soar and real yields dip into negative territory. 

In response to these growing concerns, there’s a burgeoning dialogue around the necessity of anchoring the dollar and U.S. Treasuries to something more concrete, like tangible assets. Historically, the discourse harks back to days when currencies like the dollar were pegged to gold, ensuring each dollar was as good as the gold it could be exchanged for.  

Imagine our current financial system as an inverted pyramid, balancing precariously on its pointed tip. This visual isn’t just a striking metaphor; it serves as a poignant critique of how financial stability is currently managed. In theory, it’s possible for this pyramid to maintain its balance, but it’s far from a position of strength. 

At the core of this setup is the role of collateral, primarily in the form of U.S. dollars and U.S. Treasuries. These assets, ideally meant to provide stability, are distributed towards the outermost edges of the pyramid, leading to a significant, yet often overlooked, phenomenon known as ‘re-hypothecation’. 

Re-hypothecation occurs when collateral that has been posted by a borrower is reused by a creditor as collateral for further borrowing. This practice can cascade, with the same collateral being hypothecated multiple times, amplifying the credit and operational risks across the financial system. The critical issue here is that each re-use of the collateral increases the leverage in the system, inflating asset values and intertwining the financial health of multiple entities. 

The risks of re-hypothecation were starkly highlighted during the Great Financial Crisis. As the market strained under pressure, it became evident that much of the collateral underpinning various financial instruments had been so extensively re-hypothecated that its actual value and stability were grossly compromised—the collateral, in blunt terms, was subpar. When the market’s confidence waned, the interconnected and over-leveraged nature of these assets led to a domino effect of defaults. 

Re-hypothecation, while legal and widely practiced under current regulatory frameworks, presents clear systemic risks. It creates a complex web of dependencies where the failure of one institution or the devaluation of a key asset can ripple through the financial system, triggering widespread instability. 

To navigate away from such a fragile system, a shift towards more transparent and less leveraged practices is essential. Utilizing inherently stable assets like Bitcoin, which cannot be re-hypothecated due to its cryptographic nature and fixed supply, could provide a more solid foundation for financial operations. Bitcoin’s role as ‘hard money’ could serve as a countervailing power against the current system’s tendency towards excessive leverage and opacity. 

While the financial markets can operate under the current model, the reliance on extensively leveraged and re-hypothecated assets is akin to balancing an inverted pyramid on its tip.  

Fiat currency is a sleight of hand so slick, so seamless, it’s like watching Houdini at work, except this trick’s being played on your wallet. Every day, as the prices climb higher and higher, your dollar buys less and less. Why? Because that piece of paper is backed by absolutely nothing tangible. It’s like trying to grasp air! 

Let me paint you a picture: podcaster Simon Mikhailovich, a man with an eye for the sneaky ways of money, recently strolled out of the Metropolitan Museum of Art. The smell of hot dogs wafts through the air, and curiosity gets the better of him. He walks over to a hot dog stand, pulls out a few bucks, and bam! Four dollars for one hot dog!  

Now, let’s time travel back to 1906. Back then, your granddad could snag two hot dogs for a nickel.  How do you make sense of this giant price increase?  Hot dogs today cost 160 times more than they did in 1906. Is it because hot dogs have suddenly become more valuable?  Let’s price out these hot dogs in gold to make a very important point. An ounce of Gold in 1906 was worth $20.67 and would buy roughly 690 hot dogs.   

Fast forward to today, and that same ounce of gold, even at a whopping $2,700, nets you 675 hot dogs.  It’s not exact parity, but it is far better than the price of increasing 160x.  

In truth the price of hot dogs has barely risen at all in 119 years when priced in gold. 

Unfortunately, this same tale can be told across any product or service in the economy.   

Prices increase for all goods and services. 

Purchasing power crashes. 

Savers must become speculators to do battle with persistent inflation. 

This tale is destroying the trust of the US dollar and the US Treasury markets. 

But worst of all is the illusion that it creates when people have more money, but in real terms they are poorer, because their pay does not rise as quickly as the general inflation level. 

The notion that the U.S. balance sheet could be undergoing a silent transformation, or a “collateralization,” is not as far-fetched as it might initially appear. One can find tangible evidence of this shift in the strategy adopted by several public companies, which are increasingly distancing themselves from the U.S. dollar in favor of assets like Bitcoin. 

Take, for example, MicroStrategy ($MSTR). Four years ago, the company was valued at less than $1 billion. Today, as it aims to secure approximately 5% of the total supply of Bitcoin, its market capitalization has surged to an impressive $90 billion. This monumental growth is a clear indicator of the lucrative potential of digital assets as a cornerstone of corporate treasury strategies. 

Is it then too speculative to imagine similar growth dynamics within the public sector? If a corporation like MicroStrategy can leverage Bitcoin to multiply its value so dramatically, the implications for public financial management could be profound. This kind of asset diversification, if adopted on a governmental level, could potentially stabilize and strengthen the financial foundations of a state. 

Moreover, MicroStrategy’s bold move has not gone unnoticed. A slew of companies worldwide are adopting similar strategies, aiming to enhance their financial attractiveness by reducing their dependency on the traditional fiat currency. A prime example is MetaPlanet in Japan ($MTPLF), which has seen its stock rise 83% year-over-year by essentially mirroring MicroStrategy’s approach. This pattern suggests a growing recognition and validation of digital assets as a viable alternative to conventional currency, particularly in environments of currency devaluation and inflation. 

As more companies follow in the footsteps of MicroStrategy, turning to Bitcoin and other digital assets to fortify their balance sheets, the narrative around traditional and digital finance is evolving. The corporate world’s embrace of this model might just be a precursor to more extensive shifts in public sector financial strategies, reflecting a broader move towards asset-backed value preservation on a scale we are just beginning to comprehend. 

At the heart of the MicroStrategy playbook is that they recently started creating a form of a Bitcoin-backed convertible bond which has massively outperformed all credit instruments.  

The reason I don’t trust politicians is because they pay lip service to this persistent inflation and their response to every problem is to simply turn on the money printer.  While it sounds like a very tall order, a bitcoin backed dollar, and Treasury would revitalize the financial markets.  

The idea that our good old fiat currency — backed by nothing but the promises of Uncle Sam — is as solid as Fort Knox is frankly, a bit of a stretch. Think about U.S. Treasuries, for instance. These are supposed to be the bedrock of financial security, right? Safe, stable, the investment equivalent of storing your cash in a vault. But let’s peel back the layers a bit. 

U.S. Treasuries are essentially IOUs. The government says, “Lend us your money, we’ll give you a bit of interest, and you’ll get your money back later, no sweat.” But here’s the kicker: what you get back might not buy you as much as it did when you forked it over. Why? Because the purchasing power of that money is dwindling. It’s like trying to hold water in a sieve. 

The root of the issue? These Treasuries and, more broadly, all fiat currency, are backed by nothing more than trust — trust in a government’s promise. But when the printing presses run overtime, churning out more dollars to cover everything from government debts to new public programs, that trust starts to wear thin. With each new dollar printed, the ones already tucked in your wallet lose a bit of their weight. It’s a silent tax, really, eroding your savings and your ability to plan for the future financially. 

The crux of the problem is this: fiat currencies are inherently vulnerable because their value isn’t anchored by anything tangible. It’s all based on the stability and fiscal policies of governments, which, let’s face it, can change with the political winds. So, as these policies fluctuate, especially in times of economic strain, the buying power of the currency can plummet. This leaves investors holding Treasuries in a bit of a bind. You get your payment, sure, but if the dollar has fallen, what was a good chunk of change can suddenly feel like chump change. 

It’s a bit like a magic trick, one that you don’t want to be on the wrong side of. And while the ledger might say you’ve got X amount of dollars, those dollars just aren’t what they used to be. That’s the danger we’re flirting with when we rely so heavily on fiat money — money that’s backed more by words than by something concrete like gold or silver. Each time we hit a financial snag and the solution is to print more money, we’re not just pushing the problem down the road; we’re making the road crumblier for everyone walking on it. 

So, when you park your hard-earned cash in U.S. Treasuries or any fiat-based instrument, remember, you’re really betting on the government’s ability to manage its finances wisely. And if history has taught us anything, it’s that this is a game where the rules are, well, less than reliable. 

The global financial markets are akin to a runaway train, propelled by fiat currencies whose controls seem utterly abandoned. Amidst this chaos, Bitcoin emerges as a beacon of stability. 

Bitcoin is fundamentally the most robust form of money ever encountered by civilization. It is defined by an unalterable fact: a total supply limited to 21 million coins. This cap isn’t just a number — it’s the cornerstone of what could be the next era in financial stability. 

Now, envision Bitcoin as collateral within the financial markets. Its immutable cap offers a degree of stability that fiat currencies, with their limitless supply, could never hope to achieve. This positions Bitcoin as an ideal asset for securing loans and underpinning transactions, serving as a steadfast anchor amid financial turbulence. 

Further, Bitcoin operates on a decentralized and transparent ledger — the blockchain. Each transaction is recorded and can be verified by anyone, immutable and permanent. This transparency significantly enhances the integrity of financial markets, making them more secure and ultimately more trustworthy. 

In an era characterized by financial uncertainty, Bitcoin stands out as a model of reliability. It is not merely another asset but a revolutionary framework for securing financial transactions and reinstating trust in our financial systems. 

For those skeptical of new financial paradigms, ask yourself this: what is riskier? Trusting a faltering fiat currency system or investing in a finite resource that is designed to retain its value over time? The answer seems straightforward. 

Bitcoin represents not just an investment but a safeguard against the reckless fiscal policies prevailing today. In the financial world today, the adoption of Bitcoin as a strategic reserve is not just an innovative idea; it’s becoming a strategic necessity for some states, cities, and potentially, nations. This trend reflects a growing recognition of Bitcoin’s unique properties as a hedge against the traditional financial system’s instabilities and mismanagement. 

State-Level Adoption: Currently, a handful of U.S. states are exploring or have proposed legislation to incorporate Bitcoin into their financial strategies. These moves are pioneering but still in early stages, as legislators and stakeholders weigh the implications and logistics of such a strategy. The exact number fluctuates as policies and proposals evolve, reflecting the dynamic nature of this adoption. 

City-Level Adoption: On the city front, the acceptance of Bitcoin for transactions remains a niche but growing phenomenon. A few cities around the world, notably in the United States and Switzerland, have started to accept Bitcoin for certain types of payments, such as taxes, fees, and services. This not only underscores Bitcoin’s growing utility but also signals a shift in how cities manage and anticipate fiscal challenges. 

Rumors of National Adoption: There are mounting rumors that several nation-states are considering the establishment of strategic Bitcoin reserves. This speculation is fueled by Bitcoin’s perceived ability to act as ‘digital gold’ — a finite, non-sovereign asset that can serve as a long-term store of value and a buffer against currency debasement. Countries facing economic sanctions or high inflation are particularly interested in such prospects, viewing Bitcoin as a potential tool for economic resilience. 

In an environment where currency debasement is a regular occurrence, the absence of a robust, decentralized reserve asset like Bitcoin is increasingly felt. Traditional financial systems, managed by governments and central banks, have shown a propensity for policies that lead to currency dilution, eroding public trust and financial stability. 

My stance, like many of you, reflects profound skepticism towards political leaders’ management of economic policies. The repeated mismanagement and short-sighted fiscal policies have led many to look for alternative stores of value.  It’s not just an investment but a strategic necessity to hedge against the systemic risk posed by conventional economic policies. 

The shift towards Bitcoin and its adoption at various governmental levels may not be rapid, but it is inevitable given the current trajectory.  

Imagine a world where Donald Trump does more than just talk a big game. Picture him actually coming through with a plan so bold it just might work: setting up a Strategic Bitcoin Reserve. That’s right, Bitcoin! If he pulls this off, for the first time since the Fed started its endless money-printing party, we could actually hold on to our purchasing power. 

I know it’s a tall order.  I know it appears far-fetched.  But if I was king of the US Dollar, I would immediately try to co-opt Bitcoin to back US financial assets. 

The severing of the dollar’s link to gold in 1971 under President Nixon, a pivotal moment in economic history, led to the creation of the petrodollar system. This strategic alliance, crafted by Henry Kissinger and Nixon, was designed to embed the U.S. dollar in global commerce as the dominant reserve currency by tying it to oil trading. However, as we move deeper into the 21st century, the limitations and vulnerabilities of this system have become starkly apparent. A compelling alternative that is emerging is backing the dollar with Bitcoin, a transformation that could redefine the productivity and stability of the global financial system. 

Bitcoin offers a profound contrast to the petrodollar system in several key aspects. Unlike oil, Bitcoin is a deflationary asset with a capped supply, embodying absolute scarcity with only 21 million coins ever to be mined. This inherent limit is crucial as it provides a stable, predictable foundation that the fluctuating oil reserves and prices of the petrodollar system cannot offer. 

Envision the dollar backed by Bitcoin, potentially stabilizing the currency and restoring faith in its long-term value — a stark turnaround from the current fiat system, which is characterized by inflation and devaluation. The productivity of an economy grounded in a Bitcoin-backed currency stems from Bitcoin’s attributes: transparency, immutability, and resistance to censorship. 

Furthermore, the petrodollar system is heavily centralized, relying on diplomatic and military might to maintain its structure, which breeds economic policies that can be manipulated to benefit a few at the expense of many. Bitcoin, by nature, is decentralized; it operates on a global, public ledger accessible to anyone with an internet connection. This decentralization could democratize economic power, reducing the ability of any single entity to wield excessive influence over the monetary system. 

Considerations around Bitcoin’s energy consumption, primarily driven by the mining process, are often cited as a critique. However, this energy use is typically framed within the broader context of securing a global financial system — an endeavor that, arguably, consumes far less energy than the military and logistical operations required to protect oil routes and ensure the stability necessary for the petrodollar. 

Imagine a world where the dollar is backed not by a commodity subject to geopolitical strife and environmental concerns but by a digital asset that is entirely fungible, transportable, and inherently secure. This could not only enhance the dollar’s position globally but also introduce a level of fiscal responsibility previously unattainable under the petrodollar regime. 

In conclusion, while the petrodollar helped to maintain the dollar’s dominance through the latter half of the 20th century, its future efficacy is questionable. A Bitcoin-backed dollar represents a novel, forward-thinking alternative that could redefine global finance by aligning it with the principles of transparency, scarcity, and decentralization — principles that might lead to a more equitable and stable economic future. 

Regardless of how this all plays out, the US dollar needs bitcoin, and Bitcoin will continue to prosper with or without the world’s reserve currency. 

The Fed at every press conference tells us that the economy is strong and resilient.  

This inflation isn’t just high — it’s rocketing into the stratosphere and tearing a gaping hole between real-world economics and the funhouse mirror world of financial markets. Prices for everything are ballooning not because we’re all suddenly flush with cash or because the market’s ablaze with genuine demand. Nope, it’s because our currency’s getting life squeezed out of it. 

The bigwigs in government? They’re not just spectators; they thrive on a weak currency. And as the money printers go brrrrr, the value of our dough takes a nosedive. So guess what happens? Everything priced in those dollars — your house, your stocks, even that vintage wine collection — starts looking like it’s on steroids in terms of price. 

But let’s not kid ourselves. When you see those asset prices climbing, ask yourself: is this really a sign of a booming economy? Or is it just that our currency’s going to the dogs? 

The government’s down to their last Hail Mary: gunning the currency devaluation engine even harder. Buckle up, because it’s gonna be a wild ride. 

Now, for you traders out there, wake up and smell the coffee. Your goals and Uncle Sam’s? They’re on completely different planets. 

Start questioning everything. That government economic report? Give it the side-eye. What we once called normal? It’s ancient history now. When gold — that old-school form of cash — is outperforming the big boys on Wall Street, it’s time to rethink your whole strategy for safeguarding your wealth. 

Here we are in 2025, $36 trillion in public debt, surfing the giant wave of volatility. It’s not just some trendy word; it’s our daily grind. Success now demands you to be proactive, not just lounging around waiting for things to happen. 

This complex mess we’re in doesn’t play by the old rules. Wishful thinking won’t cut it anymore. Embrace the new breed of tech like A.I. trading software. These brainy systems chew through data and spit out gold—real, actionable insights that can guide you through these shark-infested financial waters. 

Think about it — A.I. is outplaying humans at poker, chess, Jeopardy, and Go. Trading’s no different. Don’t just twiddle your thumbs waiting for the Fed to flip-flop. Get ahead with the kind of sharp intelligence only A.I. can deliver. 

It’s about positioning yourself smartly with the right assets. Knowledge is power, sure, but A.I.? That’s your golden ticket to unleashing that power effectively. 

So, what are you waiting for? Dive into our A.I. FREE Live Training. We’ll spotlight three A.I.-picked stocks ready to make big moves. Remember, in the market, any movement spells opportunity for profit. 

Find out why the pros are betting on artificial intelligence for lower risk, bigger rewards, and solid peace of mind. Curious? Join us at our next live class.  

It’s not magic. 

It’s machine learning. 

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