The dollar endgame
Dollar manipulation, destruction of wealth in fixed income, secular inflation, monetary reset, and bitcoin supremacy.
Dear Readers,
You all are a highly educated, avid reading bunch. Whenever I pose questions on theoretical macro topics, you always have a name ready to submit as a relied-upon expert. For that, thank you—it has made my job as a researcher more enjoyable and challenging, and the analysis is better for it. It also reminds me that I’m still a rookie. Now with a little over decade of fixed income experience, I’m constantly reminded at the gaps in history I must fill into my own arsenal to conjure up today’s full macro picture. There is no substitute for experience.
With that, I spent the past several days on the framework of Luke Gromen, one of your favorite analysts. In today’s letter, I’ll drill down into some of his core arguments, represent my own, and discuss why his historical context inspired me. This one is heavy on the bullish implications for bitcoin, and it begins with a timely update on bitcoin capital flows.
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Today’s topics
Bitcoin is destroying traditional assets, and people are noticing
Bitcoin’s realized price is going vertical again
Have you been preparing for six-figure bitcoin?
Treasury repo market update
Inflation regime check: Dr. Copper
Dollar and Treasury yield correlation study: who is driving?
Why currencies strengthen and weaken
Why the US government manipulates the dollar
United States policymakers want a weaker dollar
US crude powerhouse helps the dollar
Fiscal dominance as Treasury uses T-bills and TGA to manipulate the dollar
Federal interest payments as a % of tax receipts analysis
T-bills as a % of Treasuries outstanding is becoming the lead story, amazingly
The grand monetary reset is underway
Bitcoin’s relationship with gold, an important quantitative study
Our understanding of the dollar endgame
Bitcoin market update
Outperformance like this can only be ignored for so long. In our recent interview with Eric Balchunas of Bloomberg, we discussed the incredible wave of early institutional allocation to bitcoin ETFs—he pointed out how much this behavior stuck out from the norm. Appetite for bitcoin materialized so quickly, as bitcoin ETFs broke every launch record Wall Street had to offer, but capital allocations to new vehicles usually takes much longer. Right out of the gate, we had pension funds allocating. The follow-on is something we can only dream up, because the only way to describe bitcoin is unprecedented.