Shhh… the Fiat Emperor is naked.

Last week, Ben Hunt published a brilliant piece called The Common Knowledge Game, I encourage you to read it:
New on ET: Joe Biden and the Common Knowledge Game
— Ben Hunt (@EpsilonTheory) July 1, 2024
Common knowledge is what everyone knows that everyone knows.
Common knowledge is why the 2024 Biden/Harris campaign has collapsed.
All that remains is the cope.
No paywall on this one. Too important.https://t.co/nbutCHnlGj
Ostensibly, it's about the presidential debate, (which I discussed here last week) but Ben provided a key insight I was missing.
It has to do with the dynamics of the Common Knowledge Game:
Even if everyone in the world believes a certain piece of private information, no one will alter their behavior. Behavior changes ONLY when we believe that everyone else believes the information.
In other words: it's not enough for everyone to believe the emperor is naked. No one will acknowledge his nakedness until everyone believes that everyone else believes the emperor is naked.
It occurs to me that this, my friend, is a great framework for understanding your opportunity with Bitcoin:
- The superior monetary properties of Bitcoin are understood by many, but are not common knowledge.
- The ongoing (and at this point, inevitable) decay of fiat is understood by many, but not common knowledge.
- The fact Bitcoin is a hedge against the decay of fiat is understood by many, but not common knowledge.
It could easily take decades for the above to become common knowledge, but as we just witnessed, the actual moment something moves from private belief to common knowledge happens quickly.
If I had to summarize the reason I believe in the 3 points above goes something like this:
The amount of money in existence is nowhere near enough to cover the amount of debt in existence —globally. Governments will "print" new money (as they have always done) to service the debt, decimating the purchasing power of fiat.
As more currency units chase a given number of goods, the nominal value of desirable assets will blow up. Within the universe of desirable assets, Bitcoin is uniquely positioned to outperform.
Now, let's have a look at what happened last week see if we find facts to support the thesis.
Major European countries need 3x to 5x their GDP to cover the unfunded pensions of their aging population (ie, they'll need that money sooner rather than later).
That‘s the most scary chart I have seen in a while. Unfunded pension entitlements in major European countries between 300% and 500% of GDP. Mixed with collapsing demographics it’s a recipe for debt disaster. pic.twitter.com/pTRK9Ge6vn
— Michael A. Arouet (@MichaelAArouet) July 6, 2024
The US deficit (as a % of GDP) is negative at levels comparable to the World Wars.
Winner of the internet today
— Michael A. Arouet (@MichaelAArouet) July 2, 2024
Ht @PhilipJagd pic.twitter.com/xwU27JiSVm
Fed chair Powell publicly acknowledges the US debt is unsustainable.
POWELL SAYS U.S. DEFICIT BETTER FIXED SOONER RATHER THAN LATER
— *Walter Bloomberg (@DeItaone) July 2, 2024
The U.S. government deficit is unsustainable, Chair Powell said in Europe, while avoiding comment on fiscal policy, as usual. The subject arose as markets brace for the possibility of the same party controlling the…
Yet, the Treasury is accelerating debt growth.
With Biden 2.0 no longer an option, the Treasury has also stopped pretending and US government jumped by $109 billion in one day - the biggest one day increase since Oct '23 - to a record $34.831 trillion.
— zerohedge (@zerohedge) July 2, 2024
And now the debt starts to really move again https://t.co/ruprDPaYDq pic.twitter.com/0E7cx10cUS
The debt acceleration in context:
It took 165 years for the US to accumulate its first $1 trillion of debt. Now, the US amasses $1 trillion in debt every 150 days.
— James Lavish (@jameslavish) July 5, 2024
Is the US in a recession?
Most of the it, not all of it.
Negative growth in Full Time Work.
— James E. Thorne (@DrJStrategy) July 6, 2024
No false positives in predicting a recession. pic.twitter.com/F7nYdUVqv0
We've commented on consumer loan defaults being high and housing defaults spiking
CAUTION: Housing defaults have just skyrocketed
— Game of Trades (@GameofTrades_) July 5, 2024
This is unlike anything we’ve seen in a decade pic.twitter.com/ja7l6ophev
Which isn't hard to understand when you look at just how unaffordable housing is becoming (regardless of whether you're buying or renting).
BREAKING: The median new mortgage payment now requires 41.4% of the median US household income, according to Reventure.
— The Kobeissi Letter (@KobeissiLetter) July 8, 2024
To put this in perspective, even at the peak of the 2008 Financial Crisis, this metric topped at 39.3%.
On a post-tax basis, new homebuyers are spending over… pic.twitter.com/m036XstP5q
The housing affordability problem is driving many to eat into their savings.
All this does is delay the inevitable and destroy your retirement in the process.
— QE Infinity (@StealthQE4) July 1, 2024
Give the keys back to the bank and let them foreclose. No sense in ruining your retirement to keep a house a little longer.
The fact is most people can’t afford their mortgage payments. pic.twitter.com/UXnVpSoz3c
However, asset-rich boomers , are having a good ole' time.
Let the good times roll
— Richard “Dick” Whitman (🌎/21M) (@GhostofWhitman) July 7, 2024
…with an inflation adjusted social security, a pension, Medicare, & a million dollar house you bought for 20 grand.
Why aren’t the kids having any fun? pic.twitter.com/oz2LVdmrcs
Their stocks are going up so much even analysts are throwing up their hands.
Piper Sandler Capitulates 🚨
— Barchart (@Barchart) July 8, 2024
The firm says it no will longer provide S&P 500 $SPX price targets because the index no longer makes sense 😂 pic.twitter.com/958eN9b1c3
Money Games
Like in all games, some will bend the rules, others will break them.
China, for example knows their currency can't compete with the USD, indeed the Dollar has gained against the Yuan, but they also know money isn't everything.
If "CNY is down 20-30%" but the CNY can buy critical tungsten while the "ripping" USD cannot, who is actually winning and who is actually losing in the real world v. in the meme world? 🤔
— Luke Gromen (@LukeGromen) July 3, 2024
...esp. since the US will send another $300B to China this yr, & $300B more next yr, etc. https://t.co/lhbtUpMyRH
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Desirable assets —like tungsten— can be preferable to currency units your rival can print at no cost.
About 10-15 years ago, China apparently recognized that the US could not possibly keep the USD “as good as gold for oil & other commodities” forever, & began cutting out the middleman, buying commodity supplies instead of USTs w/their USD surpluses.
— Luke Gromen (@LukeGromen) July 3, 2024
The Fed cannot print tungsten https://t.co/4SzK3AM2YC
Similarly, Michael Saylor has learned to bend the money game rules masterfully to convert as much fiat as he can for Bitcoin.
Michael Saylor is really fucking good at buying #Bitcoin pic.twitter.com/OJ5sdrnLRQ
— The ₿itcoin Therapist (@TheBTCTherapist) June 30, 2024
What would happen if the sitting president of the USA got wise to the idea of playing the money game to accumulate Bitcoin?
FORBES: “That game theory would only accelerate if the United States… were the first developed country to begin accumulating bitcoin as a strategic reserve asset. This decision would fast-track global acceptance of bitcoin as a long-term savings instrument and a form of digital… pic.twitter.com/EBLBjG8xqd
— Bitcoin News (@BitcoinNewsCom) July 3, 2024
I don't know how soon the implications of that would become common knowledge.
I do know I'm stacking as hard as I can before everyone knows that everyone knows the Fiat Emperor is naked.

Price News
Bitcoin has been crashing to levels not seen since… 4 months ago.
Among rumors of imminent Mt. Gox distributions and the German government selling a ton of coin —consistent with their flawless record of horrible decisions in the past few years—are creating a massive dip. Will it be enough to shake out some of the ETF holders?
It’s highly likely that Germany selling 50,000 #bitcoin will mark a bottom.
— Joe Burnett, MSBA (🔑)³ (@IIICapital) July 5, 2024
Announcing a sale of this size is idiotic and creates a reflexive feedback loop.
Let me explain my thoughts.
Imagine you’re a whale on the bid or market maker on the bid with a 1,000 BTC bid at the top…
Bitcoin Surfing
Last week BTC took a plunge into the Water ($59.5k) and has not come up for air yet.

Dip Fishing
I was wrong. Last week I said I didn't foresee BTC diving under $56k and it has now dipped below that twice. I won't make any predictions this week, but there's more Mt. Fox coming and the next strong support I see is all the way down at $50k. I've been stacking as best as I've been able to.

Calm Chart
July is solidly in the red and I expect it'll remain that way, at the moment any catalysts I can see (like Mt Gox) would represent further pressure to the downside.

