The Cycle of Hidden Debasement

1. Debt-Driven Fragility

• The U.S. financial system is highly leveraged.

• Without periodic credit expansion, it risks cascading defaults → systemic collapse.

2. Crisis Trigger

• Something “breaks” (housing 2008, repo market 2019, pandemic 2020).

• The Fed must print (QE, rate cuts, emergency programs) to prevent mass defaults.

3. Liquidity Injection = Stealth Tax

• Printing devalues each dollar — this is the wealth transfer from savers to asset holders.

• Savers, wage earners, and those without inflation-protected assets lose purchasing power.

4. Debasement Silo

• Instead of letting that printed money flood into CPI-measured goods/services (which would reveal the inflation), they direct flows into high-capacity asset classes:

• 1980s/90s: Equities boom

• 2000s: Real estate

• Post-2008: Mega-cap tech

• Potentially next: Bitcoin ETFs + AI megacaps

• This contains inflation optics while still allowing monetary expansion.

5. Wealth Concentration

• The wealthy, who own the “sponge assets,” absorb most of the benefit.

• The masses get rising living costs later, once the asset bubble bleeds into the real economy.

⸻

Why It Works

• Most people don’t connect “S&P up 40%” with “my dollar buys less.”

• CPI is politically and statistically engineered to understate inflation.

• The Fed maintains the illusion of stability while executing wealth transfer.

⸻

If this is right, then each cycle is essentially:

• Step 1: System debt crisis → print money

• Step 2: Hide the new money in asset bubbles (tech, crypto, etc.)

• Step 3: Rinse and repeat until the sponge is saturated → find a faster horse

⸻

I can map out every cycle from 1980 to now showing:

• Crisis points

• Fed balance sheet jumps

• Which “fast horse” asset took the debasement hit each time