May 27, 2025. By King Edward.
The Affect of The Genius Act: If banks are permitted to trade in cryptocurrencies and accept cryptocurrencies as payment than there will be a weakening of the US dollar due to the provision in the GENIUS Act that the bank must hold a ratio of 1:1 US dollar to cryptocurrency. This required ratio will cause the financial system to "plug up" where by there will be fewer dollars to lend due to the fact that cryptocurrencies require an equal number of US dollars to back them. Because there exists no facility for lending cryptocurrency there will be fewer dollars to lend to small businesses and consumers. This will raise interest rates to reduce the amount of borrowed credit. Once enough businesses have failed the US government will either outlaw Cryptocurrencies or shut down the internet - Although the latter seems outrageous it is a possibility if the American government wishes to use cryptocurrencies in the future. **The government will confiscate savings and gold from the people of America to offset the shrinking money supply**. When the catastrophe is over the remaining banks will be over capitalized and will require the federal reserve to remove capitalization. This will effectively reset the economic system of America. Be safe, invest in land and housing - that's why they are building so much - Keep little cash.
May 28 2025. By King Edward
**As I have mentioned, the act will permit banks to trade in cryptocurrencies provided they hold an equal number of American dollars to cover their investments. So, how will Americans lose their savings... When a bank becomes insolvent the depositors lose their savings and are awarded $75 000 in depositors insurance if their accounts do not possess secondary insurance to cover a larger amount. Because large banks will become more selective as to who they lend to, smaller regional banks will fail causing small businesses to fail too. A spike in lost savings and unemployment will be how the American government confiscates savings. The confiscation of gold is questionable but possible too.
May 30, 2025 by King Edward
In the past cryptocurrencies could be issued privately without the need for financial backing by any currency. When buying the currency you either purchased from a holder or the issuer if they were selling. When selling the currency you had to sell to a buyer with cash. The new requirement of the GENIUS Act states that all cryptocurrencies issued by institutions (called stable coins) must be backed 1 to 1 with approved US reserves. So what does this mean for Bitcoin? Well, there are approximately 20 million bitcoins in existence and each one sells for 104 thousand US dollars - that's a market cap of 2.08 Trillion dollars. In order for Bitcoin to be considered a stablecoin they would need this much money in reserve with an institution. I don't believe they ever will, it's the cost of being first and I believe it will result in a Bitcoin sell off. The sell off will occur because American institutions will not be permitted to bank with Bitcoin, and Bitcoin will not be advised as a secure investment. My suggestion? Sell your Bitcoin and wait.
June 1, 2025. By King Edward.
As I have been saying... The GENIUS Act requires one to one capitalization using approved reserves like cash and short term treasuries (<90 day). This will lead to the over capitalization of banks that issue stable coins. As the stable coins increase in value the banks will have less resources to lend; this will lead to a capitalization crisis. To avoid the crisis, banks will have to refrain from issuing their own stablecoin. If that can not be done issue a low volume stablecoin with a price cap (the cap would be chosen with respect to the desired max capitalization of the institution). And finally, invest in foreign financial services like those of England and China because if capitalization becomes a concern in America and banks can not lend resources to businesses, those businesses have a right to seek foreign investment - and they will. In conclusion, the GENIUS Act requires too much capital to be held in reserve. As a result there will be an over capitalization of banks in America which will lead to a capitalization crisis and a lack of lending. So it is advised to refrain from issuing a stablecoin and to invest in foreign financial services.
June 1, 2025. By King Edward.
Private credit may be the match that ignites the capitalization crisis in America. If lenders bypass banks to produce loans then banks will have a reduced access to capital and be more exposed to the stablecoins they underwrite. Furthermore, as private credit deals increase in popularity there will be fewer and fewer senior debts and a rise in junior debts will occur. Because junior debts are unsecured there will be an increase in risk in the banking sector as private equity firms leverage the new lending practices - if the juniors fail the seniors will fail too and the entire market will collapse. JPMorgan recently launched Kinexys on May 14, 2025 in partnership with Chainlink and Ondo. Is this the beginning of the crisis?
June 3, 2025. By King Edward
It looks like the federal government will be reducing the capital requirements for large banks. This is bad news for wall street and main street because it reduces the amount of reserves the banks have, to deal with bad debt. With investment firms pushing private capital and banks becoming involved in Stablecoins it looks like a perfect storm of legislation that will bring down corporate America within the next few years. I have read that the federal government might remove secure reserves like treasuries from bank balances for capital requirement calculations which my boost investment in treasuries. Overall, however, I think it is a good time to start shorting the banks. But I will say, buy JPMorgan, Kinexys is a pegged stablecoin tied to US Treasuries and unless they issue an unpegged stablecoin they should make record profits.
Jun 4, 2025. By King Edward.
It looks like Europe's largest bank HSBC will be entering the private credit markets with a 4 billion dollar investment; which they hope will reach 50 billion in the comming years with the help of private investment. The private credit market is a risky market where money is lent to borrowers who do not qualify for traditional bank loans. There are two types of private equity loan, the senior debt loan and the junior debt loan. Senior debts are written such that they must be paid back first and are secured against a borrowers assests. The junior debt loan is often unsecured but pays a higher intrest rate which makes them attractive. However, in times of economic crisis such as what the globe is experienceing now private equity loans have an addittional risk because more and more businesses are unable to qualify for traditional bank loans. The overload of borrowers are being serviced by private credit in hopes that their businesses will survive. However, if enough junior debts are defaulted the seniors will default too. So, what is the worst that could happen to HSBC? Considering they have a 3 tillion dollar balance sheet, one would think that 50 billion would do no harm. But HSBC also insures debt, and if enough banks enter the private credit market and their debts fail, the payouts could be huge. We could be looking at the financial collapse of 2008 all over again.
June 5, 2025. By King Edward
Chainlink... Creators of the LINK token. Monetizing data for the sake of mankind. Could Chainlink offer a search engine for the internet that rivals that of Google? They have the server capacity and the AI required to sort data. Furthermore they are a payment company so it would be easy for them to make and receive payments for advertising. However, it would mean the end of their partnership with Google Cloud X and all future business with Google, plus Google might begin to compete in interblockchain technology putting pressure on Chainlink. But then again, there is always XRP or Avalanche since the latter has already digitized the California Department of Motor Vehicles regestry. There is obviously more to Blockchain than fungible tokens.