High level, my sense is that there really isn’t a global economy anymore. The entire system is just corporations dependent on liquidity injections from their government. Small businesses are dying. Middle class is disappearing. Job growth is with large corporations and government. This is the heart of the dysfunction.

Luke Gromen uses a metaphor of liquidity being like a switch. They can either flip the switch on or off. They don’t have a dial to make smooth adjustments. They flick it off (as Japan just did) and the system crashes. They flick it on, and asset prices rise, causing inflation and resulting income inequality and social ills.

Every time they flick it on and off, the volatility gets worse and fragility increases. It’s like a car without brakes bouncing back and forth on a mountain road accelerating faster and faster. Eventually it will break through the guardrail and fly off the cliff. When they fly off the cliff, each country can choose either to kill their currency through inflation (fire) or kill their bonds through deflation (ice). They must choose to kill one. They always choose inflation because it’s politically easier. Japan has now reached this point. They just realized that they can no longer turn the switch off.

The US hasn’t reached this point yet, but it’s getting close. We’ll know they’ve reached it when they too can no longer raise rates or turn the switch off. In my view, the USA isn’t totally a lost cause yet, but the opportunity to recover is fast disappearing. In the US, the switch is off right now. A crisis is coming. Then they’ll flick the switch back on. It’s not clear how many remaining times they can flick the switch.

The US could solve its problems by:

- massive deregulation (cut all the unconstitutional departments), return to a republic (state powers)

- eliminate the income tax

- no more wars or empire building

- massive buildout of energy (carbon and nuclear)

- evict illegals and only allow meritorious immigration

- bitcoin reserve and banking

Theoretically possible, yes. Likely?

Bitcoin is fueled by global liquidity. As each country breaks (like Japan just did) leaving their switch permanently on and going “inflationary”, bitcoin will accelerate. Obviously won’t be straight up, but the path seems inevitable.