Subnostr

security backed lines of credit (SBLOC) have been the tool of the ultra wealthy for a long time. The "Buy, Borrow, Die" strategy has proven to be extremely effective against the backdrop of a collapsing fiat currency.

Bitcoin is the most pristine collateral that humans have ever had and as it explodes in purchasing power over the coming decades I encourage all of you not to sell but to borrow dollars against your bitcoin in order to acquire more desirable assets. This is effectively a means of shorting the dollar as you pay back weaker dollars in the future and your assets continue to appreciate.

We all might as well use the Cantillon Effect to our advantage

"Buy Bitcoin, Borrow, Die"

Brisket 2y ago

I know it's the winning strategy in the fiat world. Borrowing constantly debased dollars to buy scarce assets.

I'm primarily concerned about my corn getting liquidated on a dip that I'd be happy hodling through. Of it being liquidated before I can provide more collateral.

I'm also concerned about the ethics of the arrangement. How can I knowingly take part in the scam? Yes it's legal, but it's still stealing value from those who work & save in fiat.

I can rationalise the action but it still doesn't sit well with me.

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Discussion

Satoshi_shrugged 2y ago

That is definitely a reasonable position to take. Nothing would be worse than your Bitcoin being liquidated for some silly dollar loan. Stay humble stack sats is always a winning strategy. I would never borrow more than 20-30% LTV to avoid this problem and I don't plan to do so for quite a while.

As far as the ethical question goes it is true that you are benefiting from the corruption of the fiat system. However, I see this as no different from any other trade. Is it unethical to buy something when it goes on sale or to sell something that is highly demanded? This is how markets and price discovery functions.

I also believe that the more people who borrow dollars and save in Bitcoin the more we accelerate the downfall of the dollar and bring about hyperbitcoinization.

Brisket 2y ago

Yeah it's something in going to keep playing with internally. Free markets are quite different to Riba. It is a broken system & the sooner it collapses, the sooner we return to hard money. I have no problem in logically justifying it (don't hate the player, hate the game).

I think ultimately my guide will be how it feels to me. I'll avoid it if it feels like fear or greed is motivating my action. It sounds like woo woo, but it's served me well in decision making so far.

I'm yet to see a product that feels right, but I'm still open to it. I think we'll see some compelling products come out this coming cycle. My ideal product would be an interest only mortgage that uses bitcoin (in shared custody) as deposit collateral. There should be no reason to liquidate in this scenario while the mortgage is being serviced.

I want a few of hundred acres of farmland/pasture.