Tetras Capital partner: USD will "turn into monopoly money"

28 Feb, 2019 | Updated: 28 Feb, 2019
by Will Heasman
Opinion
Tetras Capital partner: USD will turn into monopoly money

In a recent Tweetstorm, Brendan Bernstein, a founding partner of Tetras capital – a crypto hedge fund – offered multiple reasons as to why he believes the US dollar is little more than monopoly money and how the US government will soon turn into a “Ponzi” scheme…

Kicking off the storm, Bernstein highlights the the fact that debt and deficits are exponentially rising, relaying that the US deficit just surpassed $1 trillion, adding that the current US national debt has more than doubled in 10 years:

Bernstein then goes on to offer an even more disastrous perspective, stating that the pensions and entitlements owed to the fast retiring Baby Boomers is putting spending “through the roof” adding that combined government liabilities brings the actual debt balance closer to $200 trillion, more than 10 times the official figure.

Bernstein continues by auguring the future of fiat, stating that by 2020 ‘real interest expense’ will surpass all tax receipts, adding that this is historically when fiat currencies collapse, and that this will form a necessity to fund debt with more debt, equating the US government to a Ponzi scheme:

As a result of the unsustainable effects of financing debt with new debt, Bernstein maintains that foreign buyers – historically the largest buyers of US treasury securities – will stop buying:

Bernstein predicts that this, combined with the aforementioned drain on fiscal spending due to Boomers entitlements, will cause stock prices to decline and deficits to rise further:

In Bernstein’s view, this will lead to institutions backing out from buying up Treasury securities, leaving the federal reserve no choice but to finance the debt, leading to an eventual deprecation of USD.

As a result of this Bernstein posits that scarce assets such a BTC and gold will offer much better returns; investors will realize this, and these assets will “skyrocket in value”

Bernstein caveats that this won't be a gradual development stating that he thinks it will happen in a “massive step function value increase as confidence in fiat currencies vanishes” adding “If you're not in these assets *before* the move, you're riding the sinking ship lower.”

He concludes:

Read more: Will Bitcoin replace fiat money?; 

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