As we sprint toward the 2024 US Presidential election the case for using bitcoin as an asset to store value for the long term has never been stronger. The insanity of the incumbent power structure is being laid bare and it is becoming impossible to ignore the headwinds that the Borg faces moving forward.

Yesterday morning and earlier today it became clear that inflation is rearing its head again. Not ideal for the soft landing Jerome Powell and Yellen are signaling to the markets after the first Fed Funds rate cut in years.

It seems like the yield curve predicted this earlier this week when it inverted after a temporary normalizing period after the Fed's rate cut. Futhermore, it is becoming glaringly obvious that running historically high fiscal deficits while interest rates were at multi-decade highs was a pretty bad idea. As James Lavish points out, the data from the CBO earlier this week shows that the US federal government is running a deficit that is 13% higher than it was last year. This is at a time when real wages are still depressed, inflation is still suffocating American consumers and the private sector job market for American citizens is cratering.

Speaking of the job market, the numbers that came in yesterday were worse than expected:

The effect of Hurricane Helene should certainly be taken into consideration when looking at this jobs miss. However, even with the miss we know that these numbers have been under reported for years to make the economy seem healthier than it actually is. Even with Helene's effect taken into consideration this print will likely be revised higher 3-6 months from now.

All of this points to a breaking point. A breaking point for the economy and, more importantly, a breaking point for overall confidence in the US government and its ability to operate with any semblance of fiscal responsibility. The chart that Pierre Rochard shares in the tweet at the top of this letter is the only chart that matters for anyone attempting to gauge where we find ourselves on the path to bitcoin realizing its full potential.

There is $133 TRILLION worth of value sitting in global bond markets. Bitcoin is a far superior asset to store one's wealth in. Bond markets are beholden to the whims of the actors who issue those bonds. In the case of the US Treasury market, the largest bond market in the world, the US government. And as we have pointed out above, the US government is recklessly irresponsible when it comes to issuing debt with a complete inability to pay it back on the long-term. Inflation is up, the jobs market is cratering for the native born Americans who actually pay taxes, and the push toward a multi-polar geopolitical landscape is becoming more pronounced by the day. All of this points to a long-term weakening in demand for US treasuries.

The only way out of this mess is to overtly default on this debt or inflate it away. The latter will most certainly be the route that is taken, which positions bitcoin extremely well as people seek the confines of an asset that cannot be debased because it cannot be controlled by a central authority.

The levels of sovereign debt in the world are staggering. Do not let the bitcoin price consolidation of the last six months lull you into a state of complacency. Even the results of the Presidential election won't have a material effect on these dynamics. Though, a Donald Trump presidency would certainly be preferable if you prefer to see relatively sane policy enacted that would provide you with time to find safety in bitcoin. But, in regards to this sovereign debt crisis, that is the only benefit you can hope for; more time to prepare.

I'll leave you with some thoughts from Porter Stansberry:

Final thought...

I hope my tux still fits for this wedding.

Enjoy your weekend, freaks.