(Hey everyone, this is the SECOND half of the Finale, you can find the first half here)

The Dollar Endgame

True monetary collapses are hard to grasp for many in the West who have not experienced extreme inflation. The ever increasing money printing seems strange, alien even. Why must money supply grow exponentially? Why did the Reichsbank continue printing even as hyperinflation took hold in Germany?
What is not understood well are the hidden feedback loops that dwell under the surface of the economy.
The Dragon of Inflation, once awoken, is near impossible to tame.
It all begins with a country walking itself into a situation of severe fiscal mismanagement- this could be the Roman Empire of the early 300s, or the German Empire in 1916, or America in the 1980s- 2020s.
The State, fighting a war, promoting a welfare state, or combating an economic downturn, loads itself with debt burdens too heavy for it to bear.
This might even create temporary illusions of wealth and prosperity. The immediate results are not felt. But the trap is laid.
Over the next few years and even decades, the debt continues to grow. The government programs and spending set up during an emergency are almost impossible to shut down. Politicians are distracted with the issues of the day, and concerns about a borrowing binge take the backseat.
The debt loads begin to reach a critical mass, almost always just as a political upheaval unfolds. Murphy’s Law comes into effect.
Next comes a crisis.
This could be Visigoth tribesmen attacking the border posts in the North, making incursions into Roman lands. Or it could be the Assassination of Archduke Franz Ferdinand in Sarajevo, kicking off a chain of events causing the onset of World War 1.
Or it could be a global pandemic, shutting down 30% of GDP overnight.
Politicians respond as they always had- mass government mobilization, both in the real and financial sense, to address the issue. Promising that their solutions will remedy the problem, a push begins for massive government spending to “solve” economic woes.
They go to fundraise debt to finance the Treasury. But this time is different.
Very few, if any, investors bid. Now they are faced with a difficult question- how to make up for the deficit between the Treasury’s income and its massive projected expenditure. Who’s going to buy the bonds?
With few or no legitimate buyers for their debt, they turn to their only other option- the printing press. Whatever the manner, new money is created and enters the supply.
This time is different. Due to the flood of new liquidity entering the system, widespread inflation occurs. Confounded, the politicians blame everyone and everything BUT the printing as the cause.
Bonds begin to sell off, which causes interest rates to rise. With rates suppressed so low for so long, trillions of dollars of leverage has built up in the system.
No one wants to hold fixed income instruments yielding 1% when inflation is soaring above 8%. It's a guaranteed losing trade. As more and more investors run for the exits in the bond markets, liquidity dries up and volatility spikes.
The MOVE index, a measure of bond market volatility, begins climbing to levels not seen since the 2008 Financial Crisis.
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MOVE Index
Sovereign bond market liquidity begins to evaporate. Weak links in the system, overleveraged several times on government debt, such as the UK’s pension funds, begin to implode.
The banks and Treasury itself will not survive true deflation- in the US, Yellen is already getting so antsy that she just asked major banks if Treasury should buy back their bonds to “ensure liquidity”!
As yields rise, government borrowing costs spike and their ability to roll their debt becomes extremely impaired. Overleveraged speculators in housing, equity and bond markets begin to liquidate positions and a full blown deleveraging event emerges.
True deflation in a macro environment as indebted as ours would mean rates soaring well above 15-20%, and a collapse in money market funds, equities, bonds, and worst of all, a certain Treasury default as federal tax receipts decline and deficits rise.
A run on the banks would ensue. Without the Fed printing, the major banks, (which have a 0% capital reserve requirement since 3/15/20), would quickly be drained. Insolvency is not the issue here- liquidity is; and without cash reserves a freezing of the interbank credit and repo markets would quickly ensue.
For those who don’t think this is possible, Tim Geitner, NY Fed President during the 2008 Crisis, stated that in the aftermath of Lehman Brothers’ bankruptcy, we were “We were a few days away from the ATMs not working” (start video at 46:07).
As inflation rips higher, the $24T Treasury market, and the $15.5T Corporate bond markets selloff hard. Soon they enter freefall as forced liquidations wipe leverage out of the system. Similar to 2008, credit markets begin to freeze up. Thousands of “zombie corporations”, firms held together only with razor thin margins and huge amounts of near zero yielding debt, begin to default. One study by a Deutsche analyst puts the figure at 25% of companies in the S&P 500.
The Central Banks respond to the crisis as they always have- coming to the rescue with the money printer, like the Bank of England did when they restarted QE, or how the Bank of Japan began “emergency bond buying operations”.
But this time is massive. They have to print more than ever before as the ENTIRE DEBT BASED FINANCIAL SYSTEM UNWINDS.
QE Infinity begins. Trillions of Treasuries, MBS, Corporate bonds, and Bond ETFs are bought up. The only manner in which to prevent the bubble from imploding is by overwhelming the system with freshly printed cash. Everything is no-limit bid.
The tsunami of new money floods into the system and a face ripping rally begins in every major asset class. This is the beginning of the melt-up phase.
The Federal Reserve, within a few months, goes from owning 30% of the Treasury market, to 70% or more. The Bank of Japan is already at 70% ownership of certain JGB issuances, and some bonds haven’t traded for a record number of days in an active market!
The Central Banks EAT the bond market. The “Lender of Last Resort” becomes “The Lender of Only Resort”.
Another step towards hyperinflation. The Dragon crawls out of his lair.
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QE Process
Now the majority or even entirety of the new bond issuances from the Treasury are bought with printed money. Money supply must increase in tandem with federal deficits, fueling further inflation as more new money floods into the system.
The Fed’s liquidity hose is now directly plugged into the veins of the real economy. The heroin of free money now flows in ever increasing amounts towards Main Street.
The same face-ripping rise seen in equities in 2020 and 2021 is now mirrored in the markets for goods and services.
Prices for Food, gas, housing, computers, cars, healthcare, travel, and more explode higher. This sets off several feedback loops- the first of which is the wage-price spiral. As the prices of everything rise, real disposable income falls.
Massive strikes and turnover ensues. Workers refuse to labor for wages that are not keeping up with their expenses. After much consternation, firms are forced to raise wages or see large scale work stoppages.
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Wage-Price Spiral
These higher wages now mean the firm has higher costs, and thus must charge higher prices for goods. This repeats ad infinitum.
The next feedback loop is monetary velocity- the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.
The faster the dollar turns over, the more items it can bid for- and thus the more prices rise. Money velocity increasing is a key feature of a currency beginning to inflate away. In nations experiencing hyperinflation like Venezuela, where money velocity was purported to be over 7,000 annually- or more than 20 times a DAY.
As prices rise steadily, people begin to increase their inflation expectations, which leads to them going out and preemptively buying before the goods become even more expensive. This leads to hoarding and shortages as select items get bought out quickly, and whatever is left is marked up even more. ANOTHER feedback loop.
Inflation now soars to 25%. Treasury deficits increase further as the government is forced to spend more to hire and retain workers, and government subsidies are demanded by every corner of the populace as a way to alleviate the price pressures.
The government budget increases. Any hope of worker’s pensions or banks buying the new debt is dashed as the interest rates remain well below the rate of inflation, and real wages continue to fall. They thus must borrow more as the entire system unwinds.
The Hyperinflationary Feedback loop kicks in, with exponentially increasing borrowing from the Treasury matched by new money supply as the Printer whirrs away.
The Dragon begins his fiery assault.
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Hyperinflationary Feedback Loop
As the dollar devalues, other central banks continue printing furiously. This phenomenon of being trapped in a debt spiral is not unique to the United States- virtually every major economy is drowning under excessive credit loads, as the average G7 debt load is 135% of GDP.
As the central banks print at different speeds, massive dislocations begin to occur in currency markets. Nations who print faster and with greater debt monetization fall faster than others, but all fiats fall together in unison in real terms.
Global trade becomes extremely difficult. Trade invoices, which usually can take several weeks or even months to settle as the item is shipped across the world, go haywire as currencies move 20% or more against each other in short timeframes. Hedging becomes extremely difficult, as vol premiums rise and illiquidity is widespread.
Amidst the chaos, a group of nations comes together to decide to use a new monetary media- this could be the Special Drawing Right (SDR), a neutral global reserve currency created by the IMF.
It could be a new commodity based money, similar to the old US Dollar pegged to Gold.
Or it could be a peer-to-peer decentralized cryptocurrency with a hard supply limit and secure payment channels.
Whatever the case- it doesn't really matter. The dollar will begin to lose dominance as the World Reserve Currency as the new one arises.
As the old system begins to die, ironically the dollar soars higher on foreign exchange- as there is a $20T global short position on the USD, in the form of leveraged loans, sovereign debt, corporate bonds, and interbank repo agreements.
All this dollar debt creates dollar DEMAND, and if the US is not printing fast enough or importing enough to push dollars out to satisfy demand, banks and institutions will rush to the Forex market to dump their local currency in exchange for dollars.
This drives DXY up even higher, and then forces more firms to dump local currency to cover dollar debt as the debt becomes more expensive, in a vicious feedback loop. This is called the Dollar Milkshake Theory, posited by Brent Johnson of Santiago Capital.
The global Eurodollar Market IS leverage- and as all leverage works, it must be fed with new dollars or risk bankrupting those who owe the debt. The fundamental issue is that this time, it is not banks, hedge funds, or even insurance giants- this is entire countries like Argentina, Vietnam, and Indonesia.
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The Dollar Milkshake
If the Fed does not print to satisfy the demand needed for this Eurodollar market, the Dollar Milkshake will suck almost all global liquidity and capital into the United States, which is a net importer and has largely lost it’s manufacturing base- meanwhile dozens of developing countries and manufacturing firms will go bankrupt and be liquidated, causing a collapse in global supply chains not seen since the Second World War.
This would force inflation to rip above 50% as supply of goods collapses.
Worse yet, what will the Fed do? ALL their choices now make the situation worse.
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The Fed's Triple Dilemma
Many pundits will retort- “Even if we have to print the entire unfunded liability of the US, $160T, that’s 8 times current M2 Money Supply. So we’d see 700% inflation over two years and then it would be over!”
This is a grave misunderstanding of the problem; as the Fed expands money supply and finances Treasury spending, inflation rips higher, forcing the AMOUNT THE TREASURY BORROWS, AND THUS THE AMOUNT THE FED PRINTS in the next fiscal quarter to INCREASE. Thus a 100% increase in money supply can cause a 150% increase in inflation, and on again, and again, ad infinitum.
M2 Money Supply increased 41% since March 5th, 2020 and we saw an 18% realized increase in inflation (not CPI, which is manipulated) and a 58% increase in SPY (at the top). This was with the majority of printed money really going into the financial markets, and only stimulus checks and transfer payments flowing into the real economy.
Now Federal Deficits are increasing, and in the next easing cycle, the Fed will be buying the majority of Treasury bonds.
The next $10T they print, therefore, could cause additional inflation requiring another $15T of printing. This could cause another $25T in money printing; this cycle continues forever, like Weimar Germany discovered.
The $200T or so they need to print can easily multiply into the quadrillions by the time we get there.
The Inflation Dragon consumes all in his path.
Federal Net Outlays are currently around 30% of GDP. Of course, the government has tax receipts that it could use to pay for services, but as prices roar higher, the real value of government tax revenue falls. At the end of the Weimar hyperinflation, tax receipts represented less than 1% of all government spending.
This means that without Treasury spending, literally a third of all economic output would cease.
The holders of dollar debt begin dumping them en masse for assets with real world utility and value- even simple things such as food and gas.
People will be forced to ask themselves- what matters more; the amount of Apple shares they hold or their ability to buy food next month? The option will be clear- and as they sell, massive flows of money will move out of the financial economy and into the real.
This begins the final cascade of money into the marketplace which causes the prices of everything to soar higher. The demand for money grows even larger as prices spike, which causes more Treasury spending, which must be financed by new borrowing, which is printed by the Fed. The final doom loop begins, and money supply explodes exponentially.
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German Hyperinflation
Monetary velocity rips higher and eventually pushes inflation into the thousands of percent. Goods begin being re-priced by the day, and then by the hour, as the value of the currency becomes meaningless.
A new money, most likely a cryptocurrency such as Bitcoin, gains widespread adoption- becoming the preferred method and eventually the default payment mechanism. The State continues attempting to force the citizens to use their currency- but by now all trust in the money has broken down. The only thing that works is force, but even the police, military and legal system by now have completely lost confidence.
The Simulacrum breaks down as the masses begin to realize that the entire financial system, and the very currency that underpins it is a lie- an illusion, propped up via complex derivatives, unsustainable debt loads, and easy money financed by the Central Banks.
Similar to Weimar Germany, confidence in the currency finally collapses as the public awakens to a long forgotten truth-
There is no supply cap on fiat currency.
Conclusion:
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QE Infinity
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When asked in 1982 what was the one word that could be used to define the Dollar, Fed Chairman Paul Volcker responded with one word-
“Confidence.”
All fiat money systems, unmoored from the tethers of hard money, are now adrift in a sea of illusion, of make-believe. The only fundamental props to support it are the trust and network effects of the participants.
These are powerful forces, no doubt- and have made it so no fiat currency dies without severe pain inflicted on the masses, most of which are uneducated about the true nature of economics and money.
But the Ships of State have wandered into a maelstrom from which there is no return. Currently, total worldwide debt stands at a gargantuan $300 Trillion, equivalent to 356% of global GDP.
This means that even at low interest rates, interest expense will be higher than GDP- we can never grow our way out of this trap, as many economists hope.
Fiat systems demand ever increasing debt, and ever increasing money printing, until the illusion breaks and the flood of liquidity is finally released into the real economy. Financial and Real economies merge in one final crescendo that dooms the currency to die, as all fiats must.
Day by day, hour by hour, the interest accrues.
The Debt grows larger.
And the Dollar Endgame Approaches.
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As the Fed begins their journey into a deflationary blizzard, they are beginning to break markets across the globe. As the World Reserve Currency, over 60% of all international trade is done in Dollars, and USDs are the largest Foreign Exchange (Forex) holdings by far for global central banks. Now all foreign currencies are crashing against the Dollar as the vicious feedback loops of Triffin’s Dilemma come home to roost. The Dollar Milkshake has begun.
The Fed, knowingly or unknowingly, has walked into this trap- and now they find themselves caught underneath the Sword of Damocles, with no way out…
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Sword Of Damocles
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“The famed “sword of Damocles” dates back to an ancient moral parable popularized by the Roman philosopher Cicero in his 45 B.C. book “Tusculan Disputations.” Cicero’s version of the tale centers on Dionysius II, a tyrannical king who once ruled over the Sicilian city of Syracuse during the fourth and fifth centuries B.C.
Though rich and powerful, Dionysius was supremely unhappy. His iron-fisted rule had made him many enemies, and he was tormented by fears of assassination—so much so that he slept in a bedchamber surrounded by a moat and only trusted his daughters to shave his beard with a razor.
As Cicero tells it, the king’s dissatisfaction came to a head one day after a court flatterer named Damocles showered him with compliments and remarked how blissful his life must be. “Since this life delights you,” an annoyed Dionysius replied, “do you wish to taste it yourself and make a trial of my good fortune?” When Damocles agreed, Dionysius seated him on a golden couch and ordered a host of servants wait on him. He was treated to succulent cuts of meat and lavished with scented perfumes and ointments.
Damocles couldn’t believe his luck, but just as he was starting to enjoy the life of a king, he noticed that Dionysius had also hung a razor-sharp sword from the ceiling. It was positioned over Damocles’ head, suspended only by a single strand of horsehair.
From then on, the courtier’s fear for his life made it impossible for him to savor the opulence of the feast or enjoy the servants. After casting several nervous glances at the blade dangling above him, he asked to be excused, saying he no longer wished to be so fortunate.”
—---------------
Damocles’ story is a cautionary tale of being careful of what you wish for- Those who strive for power often unknowingly create the very systems that lead to their own eventual downfall. The Sword is often used as a metaphor for a looming danger; a hidden trap that can obliterate those unaware of the great risk that hegemony brings.
Heavy lies the head which wears the crown.
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There are several Swords of Damocles hanging over the world today, but the one least understood and least believed until now is Triffin’s Dilemma, which lays the bedrock for the Dollar Milkshake Theory. I’ve already written extensively about Triffin’s Dilemma around a year ago in Part 1.5 and Part 4.3 of my Dollar Endgame Series, but let’s recap again.
Here’s a great summary- read both sides of the dilemma:
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Triffin's Dilemma Summarized

(Seriously, stop here and go back and read Part 1.5 and Part 4.3 Do it!)

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Essentially, Triffin noted that there was a fundamental flaw in the system: by virtue of the fact that the United States is a World Reserve Currency holder, the global financial system has built in GLOBAL demand for Dollars. No other fiat currency has this.
How is this demand remedied? With supply of course! The United States thus is forced to run current account deficits - meaning it must send more dollars out into the world than it receives on a net basis. This has several implications, which again, I already outlined- but I will list in summary format below:

1. The United States has to be a net importer, ie it must run trade deficits, in order to supply the world with dollars. Remember, dollars and goods are opposite sides of the same equation, so a greater trade deficits means that more dollars are flowing out to the world.
2. (This will devastate US domestic manufacturing, causing political/social/economic issues at home.)
3. These dollars flow outwards into the global economy, and are picked up by institutions in a variety of ways.
4. First, foreign central banks will have to hold dollars as Foreign Exchange Reserves to defend their currency in case of attack on the Forex markets. This was demonstrated during the Asian Financial Crisis of 1997-98, when the Thai Baht, Malaysian Ringgit, and Philippine Peso (among other East Asian currencies) plunged against the Dollar. Their central banks attempted to defend the pegs but they failed.
5. Second, companies will need Dollars for trade- as the USD makes up over 60% of global trade volume, and has the deepest and most liquid forex market by far, even small firms that need to transact cross border trade will have to acquire USDs in order to operate. When South Africa and Chile trade, they don’t want to use Mexican Pesos or Korean Won- they want Dollars.
6. Foreign governments need dollars. There are several countries already who have adopted the Dollar as a replacement for their own currency- Ecuador and Zimbabwe being prime examples. There’s a full list here.
7. Third world governments that don’t fully adopt dollars as their own currencies will still use them to borrow. Argentina has 70% of it’s debt denominated in dollars and Indonesia has 30%, for example. Dollar-denominated debt will build up overseas.

The example I gave in Part 1.5 was that of Liberia, a small West African Nation looking to enter global trade. Needing to hold dollars as part of their exchange reserves, the Liberian Central Bank begins buying USDs on the open market. The process works in a similar fashion for large Liberian export companies.
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Dollar Recycling
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Essentially, they print their own currency to buy Dollars. Wanting to earn interest on this massive cash hoard when it isn’t being used, they buy Treasuries and other US debt securities to get a yield.
As their domestic economy grows, their need and dependence on the Dollar grows as well. Their Central Bank builds up larger and larger hoards of Treasuries and Dollars. The entire thesis is that during times of crisis, they can sell the Treasuries for USD, and use the USDs to buy back their own currency on the market- supporting its value and therefore defending the peg.
This buying pressure on USDs and Treasuries confers a massive benefit to the United States-
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The Exorbitant Privilege
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This buildup of excess dollars ends up circulating overseas in banks, trade brokers, central banks, governments and companies. These overseas dollars are called the Eurodollar system- a 2016 research paper estimated the size to be around $13.8 Trillion USD. This system is not under official Federal Reserve jurisdiction so it is difficult to get accurate numbers on its size.
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https://preview.redd.it/92wcmhdb0uq91.png?width=691&format=png&auto=webp&s=20dbaf63f75ff6f2e255fff06e6f48c03170b11b
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This means the Dollar is always artificially stronger than it should be- and during financial calamity, the dollar is a safe haven as there are guaranteed bidders.
All this dollar denominated debt paired with the global need for dollars in trade creates strong and persistent dollar demand. Demand that MUST be satisfied.
This creates systemic risk on a worldwide scale- an unforeseen Sword of Damocles that hangs above the global financial system. I’ve been trying to foreshadow this in my Dollar Endgame Series.
Triffin’s Dilemma is the basis for the Dollar Milkshake Theory posited by Brent Johnson.
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The Dollar Milkshake

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Milkshake of Liquidity
In 2021, Brent worked with RealVision to create a short summary of his thesis- the video can be found here. I should note that Brent has had this theory for years, dating back to 2018, when he first came on podcasts and interviews and laid out his theory (like this video, for example).
Here’s the summary below:
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“A giant milkshake of liquidity has been created by global central banks with the dollar as its key ingredient - but if the dollar moves higher this milkshake will be sucked into the US creating a vicious spiral that could quickly destabilize financial markets.
The US dollar is the bedrock of the world's financial system. It greases the wheels of global commerce and exchange- the availability of dollars, cost of dollars, and the level of the dollar itself each can have an outsized impact on economies and investment opportunities.
But more important than the absolute level or availability of dollars is the rate of change in the level of the dollar. If the level of the dollar moves too quickly and particularly if the level rises too fast then problems start popping up all over the place (foreign countries begin defaulting).
Today however many people are convinced that both the role of the Dollar is diminishing and the level of the dollar will only decline. People think that the US is printing so many dollars that the world will be awash with the greenback causing the value of the dollar to fall.
Now it's true that the US is printing a lot of dollars – but other countries are also printing their own currencies in similar amounts so in theory it should even out in terms of value.
But the hidden issue is the difference in demand. Remember the global financial system is built on the US dollar which means even if they don't want them everybody still needs them and if you need something you don't really have much choice. (See DXY Index):
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DXY Index
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Although many countries like China are trying to reduce their reliance on dollar transactions this will be a very slow transition. In the meantime the risks of a currency or sovereign debt crisis continue to rise.
But now countries like China and Japan need dollars to buy copper from Australia so the Chinese and the Japanese owe dollars and Australia is getting paid in dollars.
Europe and Asia currently doing very limited amount of non-dollar transactions for oil so they still need dollars to buy oil from saudi and again dollars get hoovered up on both sides
Asia and Europe need dollars to buy soybeans from Brazil. This pulls in yet more dollars - everybody needs dollars for trade invoices, central bank currency reserves and servicing massive cross-border dollar denominated debts of governments and corporations outside the USA.
And the dollar-denominated debt is key- if they don't service their debts or walk away from their dollar debts their funding costs rise putting great financial pressure on their domestic economies. Not only that, it can lead to a credit contraction and a rapid tightening of dollar supply.
The US is happy with the reliance on the greenback they own the settlement system which benefits the US banks who process all the dollars and act as gatekeepers to the Dollar system they police and control the access to the system which benefits the US military machine where defense spending is in excess of any other country so naturally the US benefits from the massive volumes of dollar usage.
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https://preview.redd.it/yq1f1anq0uq91.png?width=1140&format=png&auto=webp&s=27447e2acec884848a5c70ab3651820e487fc0f3
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Other countries have naturally been grumbling about being held hostage to the situation but the choices are limited. What it does mean is that dollars need to be constantly sucked out of the USA because other countries all over the world need them to do business and of course the more people there are who need and want those dollars the more is the pressure on the price of dollars to go up.
In fact, global demand is so high that the supply of dollars is just not enough to keep up, even with the US continually printing money. This is why we haven't seen consistently rising US inflation despite so many QE and stimulus programs since the global financial crisis in 2008.
But, the real risk comes when other economies start to slow down or when the US starts to grow relative to the other economies. If there is relatively less economic activity elsewhere in the world then there are fewer dollars in global circulation for others to use in their daily business and of course if there are fewer in circulation then the price goes up as people chase that dwindling source of dollars.
Which is terrible for countries that are slowing down because just when they are suffering economically they still need to pay for many goods in dollars and they still need to service their debts which of course are often in dollars too.
​
So the vortex begins or as we like to say the dollar milkshake- As the level of the dollar rises the rest of the world needs to print more and more of its own currency to then convert to dollars to pay for goods and to service its dollar debt this means the dollar just keeps on rising in response many countries will be forced to devalue their own currencies so of course the dollar rises again and this puts a huge strain on the global system.
(see the charts below:)
JPY/USD
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GBP/USD
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EUUSD
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To make matters worse in this environment the US looks like an attractive safe haven so the US ends up sucking in the capital from the rest of the world-the dollar rises again. Pretty soon you have a full-scale sovereign bond and currency crisis.
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https://preview.redd.it/72nlain01uq91.png?width=1141&format=png&auto=webp&s=cbaa411acc88acb3849949d84a36624d75d6cfc4
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We're now into that final napalm run that sees the dollar and dollar assets accelerate even higher and this completely undermines global markets. Central banks try to prevent disorderly moves, but the global markets are bigger and the momentum unstoppable once it takes hold.
And that is the risk that very few people see coming but that everyone should have a hedge against - when the US sucks up the dollar milkshake, bad things are going to happen.
Worst of all there's no alternatives- what are you going to use-- Chinese Yuan? Japanese Yen? the Euro??
Now, like it or not we're stuck with a dollar underpinning the global financial system.”
—-------------
Why is it playing out now, in real time?? It all leads back to a tweet I made in a thread on September 16th.
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Tweet Thread about the Yuan
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The Fed, rushing to avoid a financial crisis in March 2020, printed trillions. This spurred inflation, which they then swore to fight. Thus they began hiking interest rates on March 16th, and began Quantitative Tightening this summer.
QE had stopped- No new dollars were flowing out into a system which has a constant demand for them. Worse yet, they were hiking completely blind-
Although the Fed is very far behind the curve, (meaning they are hiking far too late to really combat inflation)- other countries are even farther behind!
Japan has rates currently at 0.00- 0.25%, and the Eurozone is at 1.25%. These central banks have barely begun hiking, and some even swear to keep them at the zero-bound. By hiking domestic interest rates above foreign ones, the Fed is incentivizing what are called carry trades.
Since there is a spread between the Yen and the Dollar in terms of interest rates, it thus is profitable for traders to borrow in Yen (shorting it essentially) and buy Dollars, which can earn 2.25% interest. The spread would be around 2%.
DXY rises, and the Yen falls, in a vicious feedback loop.
Thus capital flows out of Japan, and into the US. The US sucks up the Dollar Milkshake, draining global liquidity. As I’ve stated before, this has seriously dangerous implications for the global financial system.
For those of you who don’t believe this could be foreseen, check out the ending paragraphs of Dollar Endgame Part 4.3 - “Economic Warfare and the End of Bretton Woods” published February 16, 2022:
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Triffin's Dilemma is the Final Nail
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What I’ve been attempting to do in my work is restate Triffins’ Dilemma, and by extension the Dollar Milkshake, in other terms- to come at the issue from different angles.
Currently the Fed is not printing money. Which is thus causing havoc in global trade (seen in the currency markets) because not enough dollars are flowing out to satisfy demand.
The Fed must therefore restart QE unless it wants to spur a collapse on a global scale. Remember, all these foreign countries NEED to buy, borrow and trade in a currency that THEY CANNOT PRINT!
We do not have enough time here to go in depth on the Yen, Yuan, Pound or the Euro- all these currencies have different macro factors and trade factors which affect their currencies to a large degree. But the largest factor by FAR is Triffin’s Dilemma + the Dollar Milkshake, and their desperate need for dollars. That is why basically every fiat currency is collapsing versus the Dollar.
The Fed, knowingly or not, is basically in charge of the global financial system. They may shout, “We raise rates in the US to fight inflation, global consequences be damned!!” - But that’s a hell of a lot more difficult to follow when large G7 countries are in the early stages of a full blown currency crisis.
The most serious implication is that the Fed is responsible for supplying dollars to everyone. When they raise rates, they trigger a margin call on the entire world. They need to bail them out by supplying them with fresh dollars to stabilize their currencies.
In other words, the Fed has to run the loosest and most accommodative monetary policy worldwide- they must keep rates as low as possible, and print as much as possible, in order to keep the global financial system running. If they don’t do that, sovereigns begin to blow up, like Japan did last week and like England did on Wednesday.
And if the world’s financial system implodes, they must bail out not only the United States, but virtually every global central bank. This is the Sword of Damocles. The money needed for this would be well in the dozens of trillions.
The Dollar Endgame Approaches…
—-------------------------------------------------------------
​

Q&A

(Many of you have been messaging me with questions, rebuttals or comments. I’ll do my best to answer some of the more poignant ones here.)

—-----
Q: I’ve been reading your work, you keep saying the dollar is going to fall in value, and be inflated away. Now you’re switching sides and joining the dollar bull faction. Seems like you don’t know what you’re talking about!
A: You’re mixing up my statements. When I discuss the dollar losing value, I am referring to it falling in ABSOLUTE value, against goods and services produced in the real economy. This is what is called inflation. I made this call in 2021, and so far, it has proven right as inflation has accelerated.
The dollar gaining strength ONLY applies to foreign currency exchange markets (Forex)- remember, DXY, JPYUSD, and other currency pairs are RELATIVE indicators of value. Therefore, both JPY and USD can be falling in real terms (inflation) but if one is falling faster, then that one will lose value relative to the other. Also, Forex markets are correlated with, but not an exact match, for inflation.
I attempted to foreshadow the entire dollar bull thesis in the conclusion of Part 1 of the Dollar Endgame, posted well over a year ago-
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Unraveling of the Currency Markets
​
I did not give an estimate on when this would happen, or how long DXY would be whipsawed upwards, because I truly do not know.
I do know that eventually the Fed will likely open up swap lines, flooding the Eurodollar market with fresh greenbacks and easing the dollar short squeeze. Then selling pressure will resume on the dollar. They would only likely do this when things get truly calamitous- and we are on our way towards getting there.
The US bond market is currently in dire straits, which matches the prediction of spiking interest rates. The 2yr Treasury is at 4.1%, it was at 3.9% just a few days ago. Only a matter of time until the selloff gets worse.
—------
Q: Foreign Central banks can find a way out. They can just use their reserves to buy back their own currency.
Sure, they can try that. It’ll work for a while- but what happens once they run out of reserves, which basically always happens? I can’t think of a time in financial history that a country has been able to defend a currency peg against a sustained attack.
​
Global Forex Reserves
​
They’ll run out of bullets, like they always do, and basically the only option left will be to hike interest rates, to attract capital to flow back into their country. But how will they do that with global debt to GDP at 356%? If all these countries do that, they will cause a global depression on a scale never seen before.
Britain, for example, has a bit over $100B of reserves. That provides maybe a few months of cover in the Forex markets until they’re done.
Furthermore, you are ignoring another vicious feedback loop. When the foreign banks sell US Treasuries, this drives up yields in the US, which makes even more capital flow to the US! This weakens their currency even further.
​
FX Feedback Loop
​
To add insult to injury, this increases US Treasury borrowing costs, which means even if the Fed completely ignores the global economy imploding, the US will pay much more in interest. We will reach insolvency even faster than anyone believes.
The 2yr Treasury bond is above 4%- with $31T of debt, that means when we refinance we will pay $1.24 Trillion in interest alone. Who's going to buy that debt? The only entity with a balance sheet large enough to absorb that is the Fed. Restarting QE in 3...2…1…
—----
Q: I live in England. With the Pound collapsing, what can I do? What will happen from here? How will the governments respond?
England, and Europe in general, is in serious trouble. You guys are currently facing a severe energy crisis stemming from Russia cutting off Nord Stream 1 in early September and now with Nord Stream 2 offline due to a mysterious leak, energy supplies will be even more tight.
Not to mention, you have a pretty high debt to GDP at 95%. Britain is a net importer, and is still running government deficits of £15.8 billion (recorded in Q1 2022). Basically, you guys are the United States without your own large scale energy and defense sector, and without Empire status and a World Reserve Currency that you once had.
The Pound will almost certainly continue falling against the Dollar. The Bank of England panicked on Wednesday in reaction to a $100M margin call on British pension funds, and now has begun buying long dated (10yr) gilts, or government bonds.
They’re doing this as inflation is spiking there even worse than the US, and the nation faces a currency crisis as the Pound is nearing parity with the Dollar.
​
BOE announces bond-buying scheme (9/28/22)
​
I will not sugarcoat it, things will get rough. You need to hold cash, make sure your job, business, or investments are secure (ie you have cashflow) and hunker down. Eliminate any unnecessary purchases. If you can, buy USDs as they will likely continue to rise and will hold value better than your own currency.
If Parliament goes through with more tax cuts, that will only make the fiscal situation worse and result in more borrowing, and thus more money printing in the end.
—----
Q: What does this mean for Gamestop? For the domestic US economy?
Gamestop will continue to operate as I am sure they have been- investing in growth and expanding their Web3 platform.
Fiat is fundamentally broken. This much is clear- we need a new financial system not based on flawed 16th fractional banking principles or “trust me bro” financial intermediaries.
My hope is that they are at the forefront of a new financial system which does not require centralized authorities or custodians- one where you truly own your assets, and debasement is impossible.
I haven’t really written about GME extensively because it’s been covered so well by others, and I don’t feel I have that much to add.
As for the US economy, we are still in a deep recession, no matter what the politicians say- and it will get worse. But our economic troubles, at least in the short term (6 months) will not be as severe as the rest of the world due to the aforementioned Dollar Milkshake.
The debt crisis is still looming, midterms are approaching, and the government continues to deficit spend as if there’s no tomorrow.
As the global monetary system unravels, yields will spike, the deleveraging will get worse, and our dollar will get stronger. The fundamental factors continue to deteriorate.
I’ve covered the US enough so I'll leave it there.
—------
Q: Did you know about the Dollar Milkshake Theory before recently? What did you think of it?
Of course I knew about it, I’ve been following Brent Johnson since he appeared on RealVision and Macrovoices. He laid out the entire theory in 2018 in a long form interview here. I listened to it maybe a couple times, and at the time I thought he was right- I just didn’t know how right he was.
Brent and I have followed each other and been chatting a little on Twitter- his handle is SantiagoAuFund, I highly recommend you give him a follow.
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Twitter Chat
​
I’ve never met him in person, but from what I can see, his predictions are more accurate than almost anyone else in finance. Again, all credit to him- he truly understands the global monetary system on a fundamental level.
I believed him when he said the dollar would rally- but the speed and strength of the rally has surprised me. I’ve heard him predict DXY could go to 150, mirroring the massive DXY squeeze post the 1970s stagflation. He could very easily be right- and the absolute chaos this would mean for global trade and finance are unfathomable.
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History of DXY
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Q: The Pound and Euro are falling just because of the energy crisis there. That's it!
Why is the Yen falling then? How about the Yuan? Those countries are not currently undergoing an energy crisis. Let’s review the year to date performance of most fiat currencies vs the dollar:
Japanese Yen: -20.31%
Chinese Yuan: -10.79%
South African Rand: -10.95%
English Pound: -18.18%
Euro: -14.01%
Swiss Franc: -6.89%
South Korean Won: -16.73%
Indian Rupee: -8.60%
Turkish Lira: -27.95%
There are only a handful of currencies positive against the dollar, the most notable being the Russian Ruble and the Brazilian Real- two countries which have massive commodity resources and are strong exporters. In an inflationary environment, hard assets do best, so this is no surprise.
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Q: What can the average person do to prepare? What are you doing?
Obligatory this is NOT financial advice
This is an extremely difficult question, as there are so many factors. You need to ask yourself, what is your financial situation like? How much disposable income do you have? What things could you cut back on? I can’t give you specific ideas without knowing your situation.
Personally, I am building up savings and cutting down on expenses. I’m getting ready for a severe recession/depression in the US and trying to find ways to increase my income, maybe a side hustle or switching jobs.
I am holding my GME and not selling- I still have some shares in Fidelity that I need to DRS (I know, sorry, I was procrastinating).
For the next few months, I believe there will be accelerating deflation as interest rates spike and the debt cycle begins to unwind. But like I’ve stated before, this will lead us towards a second Great Depression very rapidly, and to avoid the deflationary blizzard the Fed will restart QE on a scale never seen before.
QE Infinity. This will be the impetus for even worse inflation- 25%+ by this time next year.
It’s hard to prepare for this, and easy to feel hopeless. It’s important to know that we have been through monetary crises before, and society did not devolve into a zombie apocalypse. You are not alone, and we will get through this together.
It’s also important to note that we are holding the most lopsided investment opportunity of a generation. Any money you put in there can be grown by orders of magnitude.
We are at the end of the Central Bankers game- and although it will be painful, we will rid the world of them, I believe, and build a new financial system based on blockchains which will disintermediate the institutions. They have everything to lose.
—------
Q: I want to learn more, where can I do? What can I do to keep up to date with everything?
You can start by reading books, listening to podcasts, and checking the news to stay abreast of developments. I have a book list linked at the end of the Dollar Endgame posts.
I’ll be covering the central bank clown show on Twitter, you can follow me there if you like. I’ll also include links to some of my favorite macro people below:

• Peruvian Bull (my only account)
• Lyn Alden
• Luke Gromen
• Brent Johnson
• Raoul Pal
• Andreas Steno Larsen
• Jeffrey Snider

I’m still finishing up the finale for Dollar Endgame- I should have it out soon. I’m also writing an addendum to the series which is purely Q&A to answer questions and concerns. Sorry for the wait.
—-------------------
Nothing on this Post constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person.

I am getting increasingly worried about the amount of warning signals that are flashing red for hyperinflation- I believe the process has already begun, as I will lay out in this paper. The first stages of hyperinflation begin slowly, and as this is an exponential process, most people will not grasp the true extent of it until it is too late. I know I’m going to gloss over a lot of stuff going over this, sorry about this but I need to fit it all into four posts without giving everyone a 400 page treatise on macro-economics to read. Counter-DDs and opinions welcome. This is going to be a lot longer than a normal DD, but I promise the pay-off is worth it, knowing the history is key to understanding where we are today.
SERIES (Parts 1-4) TL/DR: We are at the end of a MASSIVE debt supercycle. This 80-100 year pattern always ends in one of two scenarios- default/restructuring (deflation a la Great Depression) or inflation (hyperinflation in severe cases (a la Weimar Republic). The United States has been abusing it’s privilege as the World Reserve Currency holder to enforce its political and economic hegemony onto the Third World, specifically by creating massive artificial demand for treasuries/US Dollars, allowing the US to borrow extraordinary amounts of money at extremely low rates for decades, creating a Sword of Damocles that hangs over the global financial system.
The massive debt loads have been transferred worldwide, and sovereigns are starting to call our bluff. Governments papered over the 2008 financial crisis with debt, but never fixed the underlying issues, ensuring that the crisis would return, but with greater ferocity next time. Systemic risk (from derivatives) within the US financial system has built up to the point that collapse is all but inevitable, and the Federal Reserve has demonstrated it will do whatever it takes to defend legacy finance (banks, brokedealers, etc) and government solvency, even at the expense of everything else (The US Dollar).
I’ll break this down into four parts. ALL of this is interconnected, so please read these in order:

Updated Complete Table of Contents:

• Part 1.0: The Global Monetary System
• Part 1.5: Triffin’s Dilemma and the New Rome
• Part 2.0: Reflexivity and the Shadows of Black Monday
• Part 2.5: Derivatives and the Alchemy of Risk
• Part 3.0: Debt Cycles and Great Depression
• Part 3.5: The Money Illusion
• Part 4.0: The Weimar Republic
• Part 4.1: Nightmare of Hyperinflation
• Part 4.2: Financial Gravity & The Fed’s Dilemma
• Part 4.3: Economic Warfare & The End of Bretton Woods
• Part 5.0: A Story of Fire & Ice: The Finale

“Enter the Dragon”

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The Inflation Dragon
​

PART 5.0 “The Monster & the Simulacrum”

“In the 1985 work “Simulacra and Simulation” French philosopher Jean Baudrillard recalls the Borges fable about the cartographers of a great Empire who drew a map of its territories so detailed it was as vast as the Empire itself.
According to Baudrillard as the actual Empire collapses the inhabitants begin to live their lives within the abstraction believing the map to be real (his work inspired the classic film "The Matrix" and the book is prominently displayed in one scene).
The map is accepted as truth and people ignorantly live within a mechanism of their own design and the reality of the Empire is forgotten. This fable is a fitting allegory for our modern financial markets.
Our fiscal well being is now prisoner to financial and monetary engineering of our own design. Central banking strategy does not hide this fact with the goal of creating the optional illusion of economic prosperity through artificially higher asset prices to stimulate the real economy.
While it may be natural to conclude that the real economy is slave to the shadow banking system this is not a correct interpretation of the Baudrillard philosophy-
The higher concept is that our economy IS the shadow banking system… the Empire is gone and we are living ignorantly within the abstraction. The Fed must support the shadow banking oligarchy because without it, the abstraction would fail.” (Artemis Capital)
​

The Inflation Serpent

To most citizens living in the West, the concept of a collapsing fiat currency seems alien, unfathomable even. They regard it as an unfortunate event reserved only for those wretched souls unlucky enough to reside in third world countries or under brutal dictatorships.
Monetary mismanagement was seen to be a symptom only of the most corrupt countries like Venezuela- those where the elites gained control of the Treasury and printing press and used this lever to steal unimaginable wealth while impoverishing their constituents.
However, the annals of history spin a different tale- in fact, an eventual collapse of fiat currency is the norm, not the exception.
In a study of 775 fiat currencies created over the last 500 years, researchers found that approximately 599 have failed, leaving only 176 remaining in circulation. Approximately 20% of the 775 fiat currencies examined failed due to hyperinflation, 21% were destroyed in war, and 24% percent were reformed through centralized monetary policy. The remainder were either phased out, converted into another currency, or are still around today.
The average lifespan for a pure fiat currency is only 27 years- significantly shorter than a human life.
Double-digit inflation, once deemed an “impossible” event for the United States, is now within a stone’s throw. Powell, desperate to maintain credibility, has embarked on the most aggressive hiking schedule the Fed has ever undertaken. The cracks are starting to widen in the system.
One has to look no further than a simple graph of the M2 Money Supply, a measure that most economists agree best estimates the total money supply of the United States, to see a worrying trend:
​
M2 Money Supply
The trend is exponential. Through recessions, wars, presidential elections, cultural shifts, and even the Internet age- M2 keeps increasing non-linearly, with a positive second derivative- money supply growth is accelerating.
This hyperbolic growth is indicative of a key underlying feature of the fiat money system: virtually all money is credit. Under a fractional reserve banking system, most money that circulates is loaned into existence, and doesn't exist as real cash- in fact, around 97% of all “money” counted within the banking system is debt, in one form or another. (See Dollar Endgame Part 3)
Debt virtually always has a yield- that yield is called interest, and that interest demands payment. Thus, any fiat money banking system MUST grow money supply at a compounding interest rate, forever, in order to remain stable.
Debt defaulting is thus quite literally the destruction of money- which is why the deflation is widespread, and also why M2 Money Supply shrank by 30% during the Great Depression.
​
Interest in Fractional Reserve Fiat Systems
This process repeats ad infinitum, perpetually compounding loan creation and thus money supply, in order to prevent systemic defaults. The system is BUILT for constant inflation.
In the last 50 years, only about 12 quarters have seen reductions in commercial bank credit. That’s less than 5% of the time. The other 95% has seen increases, per data from the St. Louis Fed.
​
Commercial Bank Credit
Even without accounting for debt crises, wars, and government defaults, money supply must therefore grow exponentially forever- solely in order to keep the wheels on the bus.
The question is where that money supply goes- and herein lies the key to hyperinflation.
​
In the aftermath of 2008, the Fed and Treasury worked together to purchase billions of dollars of troubled assets, mortgage backed securities, and Treasury bonds- all in a bid to halt the vicious deleveraging cycle that had frozen credit markets and already sunk two large investment banks.
These programs were the most widespread and ambitious ever- and resulted in trillions of dollars of new money flowing into the financial system. Libertarian candidates and gold bugs such as Peter Schiff, who had rightly forecasted the Great Financial Crisis, now began to call for hyperinflation.
The trillions of printed money, he claimed, would create massive inflation that the government would not be able to tame. U.S. debt would be downgraded and sold, and with the Fed coming to the rescue with trillions more of QE, extreme money supply increases would ensue. An exponential growth curve in inflation was right around the corner.
Gold prices rallied hard, moving from $855 at the start of 2008 to a record high of $1,970 by the end of 2011. The end of the world was upon us, many decried. Occupy Wall Street came out in force.
However, to his great surprise, nothing happened. Inflation remained incredibly tame, and gold retreated from its euphoric highs. Armageddon was averted, or so it seemed.
The issue that was not understood well at the time was that there existed two economies- the financial and the real. The Fed had pumped trillions into the financial economy, and with a global macroeconomic downturn plus foreign central banks buying Treasuries via dollar recycling, all this new money wasn’t entering the real economy.
​
Financial vs Real Economy
Instead, it was trapped, circulating in the hands of money market funds, equities traders, bond investors and hedge funds. The S&P 500, which had hit a record low in March of 2009, began a steady rally that would prove to be the strongest and most pronounced bull market in history.
The Fed in the end did achieve extreme inflation- but only in assets.
Without the Treasury incurring significant fiscal deficits this money did not flow out into the markets for goods and services but instead almost exclusively into equity and bond markets.
​
QE Stimulus of financial assets
The great inflationary catastrophe touted by the libertarians and the gold bugs alike never came to pass- their doomsday predictions appeared frenetic, neurotic.
Instead of re-evaluating their arguments under this new framework, the neo-Keynesians, who held the key positions of power with Treasury, the Federal Reserve, and most American Universities (including my own) dismissed their ideas as economic drivel.
The Fed had succeeded in averting disaster- or so they claimed. Bernanke, in all his infinite wisdom, had unleashed the “Wealth Effect”- a crucial behavioral economic theory suggesting that people spend more as the value of their assets rise.
An even more extreme school of thought emerged- the Modern Monetary Theorists%20is,Federal%20Reserve%20Bank%20of%20Richmond.)- who claimed that Central Banks had essentially discovered a ‘perpetual motion machine’- a tool for unlimited economic growth as a result of zero bound interest rates and infinite QE.
The government could borrow money indefinitely, and traditional metrics like Debt/GDP no longer mattered. Since each respective government could print money in their own currency- they could never default.
The bill would never be paid.
Or so they thought.
​

The American Reckoning

This theory helped justify massive US government borrowing and spending- from Afghanistan, to the War on Drugs, to Entitlement Programs, the Treasury indulged in fiscal largesse never before seen in our nation’s history.
​
America's Finances
The debt continued to accumulate and compound. With rates pegged at the zero bound, the Treasury could justify rolling the debt continually as the interest costs were minimal.
Politicians now pushed for more and more deficit spending- if it's free to bailout the banks, or start a war- why not build more bridges? What about social programs? New Army bases? Tax cuts for corporations? Subsidies for businesses?
There was no longer any “accepted” economic argument against this- and thus government spending grew and grew, and the deficits continued to expand year after year.
The Treasury would roll the debt by issuing new bonds to pay off maturing ones- a strategy reminiscent of Ponzi schemes.
This debt binge is accelerating- as spending increases, (and tax revenues are constant) the deficit grows, and this deficit is paid by more borrowing. This incurs more interest, and thus more spending to pay that interest, in a deadly feedback loop- what is called a debt spiral.
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Gross Govt Interest Payments
The shadow threat here that is rarely discussed is Unfunded Liabilities- these are payments the Federal government has promised to make, but has not yet set aside the money for. This includes Social Security, Medicaid, Medicare, Veteran’s benefits, and other funding that is non-discretionary, or in other words, basically non-optional.
Cato Institute estimates that these obligations sum up to $163 Trillion. Other estimates from the Mercatus Center put the figure at between $87T as the lower bound and $222T on the high end.
YES. That is TRILLION with a T.
A Dragon lurks in these shadows.
​
Unfunded Liabilities
What makes it worse is that these figures are from 2012- the problem is significantly worse now. The fact of the matter is, no one knows the exact figure- just that it is so large it defies comprehension.
These payments are what is called non-discretionary, or mandatory spending- each Federal agency is obligated to spend the money. They don’t have a choice.
Approximately 70% of all Federal Spending is mandatory.
And the amount of mandatory spending is increasing each year as the Boomers, the second largest generation in US history, retire. Approximately 10,000 of them retire each day- increasing the deficits by hundreds of billions a year.
Furthermore, the only way to cut these programs (via a bill introduced in the House and passed in the Senate) is basically political suicide. AARP and other senior groups are some of the most powerful and wealthy lobbying groups in the US.
If politicians don’t have the stomach to legalize marijuana- an issue that Pew research finds an overwhelming majority of Americans supporting- then why would they nuke their own careers via cutting funding to seniors right as inflation spikes?
Thus, although these obligations are not technically debt, they act as debt instruments in all other respects. The bill must be paid.
In the Fiscal Report for 2022 released by the White House, they estimated that in 2021 and 2022 the Federal deficits would be $3.669T and $1.837T respectively. This amounts to 16.7% and 7.8% of GDP (pg 42).
​
US Federal Budget
Astonishingly, they project substantially decreasing deficits for the next decade. Meanwhile the U.S. is slowly grinding towards a severe recession (and then likely depression) as the Fed begins their tightening experiment into 132% Federal Debt to GDP.
Deficits have basically never gone down in a recession, only up- unemployment insurance, food stamp programs, government initiatives; all drive the Treasury to pump out more money into the economy in order to stimulate demand and dampen any deflation.
To add insult to injury, tax receipts collapse during recession- so the income side of the equation is negatively impacted as well. The budget will blow out.
The U.S. 1 yr Treasury Bond is already trading at 4.7%- if we have to refinance our current debt loads at that rate (which we WILL since they have to roll the debt over), the Treasury will be paying $1.46 Trillion in INTEREST ALONE YEARLY on the debt.
That is equivalent to 40% of all Federal Tax receipts in 2021!
​
In my post Dollar Endgame 4.2, I have tried to make the case that the United States is headed towards an “event horizon”- a point of no return, where the financial gravity of the supermassive debt is so crushing that nothing they do, short of Infinite QE, will allow us to escape.
The terrifying truth is that we are not headed towards this event horizon.
We’re already past it.
​
True Interest Expense ABOVE Tax Receipts
As brilliant macro analyst Luke Gromen pointed out in several interviews late last year, if you combine Gross Interest Expense and Entitlements, on a base case, we are already at 110% of tax receipts.
True Interest Expense is now more than total Federal Income. The Federal Government is already bankrupt- the market just doesn't know it yet.
​
Luke Gromen Interview Transcript (Oct 2021, Macrovoices)
​
The black hole of debt, financed by the Federal Reserve, has now trapped the largest spending institution in the world- the United States Treasury.
The unholy capture of the Money Printer and the Spender is catastrophic - the final key ingredient for monetary collapse.
This is How Money Dies.
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The Underwater State
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(I had to split this post into two part due to reddit's limits, see the second half of the post HERE)

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Nothing on this Post constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person. From reading my Post I cannot assess anything about your personal circumstances, your finances, or your goals and objectives, all of which are unique to you, so any opinions or information contained on this Post are just that – an opinion or information. Please consult a financial professional if you seek advice.
*If you would like to learn more, check out my recommended reading list here. This is a dummy google account, so feel free to share with friends- none of my personal information is attached. You can also check out a Google docs version of my Endgame Series here.
~~~~~
I cleared this message with the mods;
IF YOU WOULD LIKE to support me, you can do so my checking out the e-book version of the Dollar Endgame on my twitter profile: https://twitter.com/peruvian_bull/status/1597279560839868417
The paperback version is a work in progress. It's coming.
​
THERE IS NO PRESSURE TO DO SO. THIS IS NOT A MONEY GRAB- the entire series is FREE! The reddit posts start HERE: https://www.reddit.com/Superstonk/comments/o4vzau/hyperinflation_is_coming_the_dollar_endgame_part/
and there is a Google Doc version of the ENTIRE SERIES here: https://docs.google.com/document/d/1552Gu7F2cJV5Bgw93ZGgCONXeenPdjKBbhbUs6shg6s/edit?usp=sharing
Thank you ALL, and POWER TO THE PLAYERS. GME FOREVER
~~~~~

You can follow my Twitter at Peruvian Bull. This is my only account, and I will not ask for financial or personal information. All others are scammers/impersonators.

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BBBY Investor Relations
https://preview.redd.it/x05bjqxpz5m91.png?width=838&format=png&auto=webp&s=cd7ca28c4330f6535f5bdaa1555fefb7eeaa9eec

Q2 EARNINGS CALL

Company held a premarket Q2 Earnings Call on 9/29/22 and highlighted:

• Liquidity of approximately $850M as of fiscal September, reflecting recently expanded $1.13 billion ABL facility and new $375M FILO loan.
• At-the-Market ("ATM") Offering of 12M shares (completed as of 10/24/22 raising $75M).
• Company indicated working on liability management transactions. Later they announced an exchange offering for their outstanding 2024, 2034, and 2044 bonds to reduce BBBY's debt and interest expenditure. The Exchange Tender deadline is 11/15/22.

As previously announced with the Company's Strategic Update Call/Presentation on 8/31/22, the Company is maintaining the following outlook parameters for fiscal 2022:

• Comparable sales decline in the 20% range driven by improvements in the second half of fiscal 2022 versus the first half of fiscal 2022
• Adjusted SG&A expenses ~ $250M below last year, reflecting cost optimization actions occurring in the second half of fiscal 2022
• Capital Expenditures of ~ $250M vs. the ~ $400M previously planned for fiscal 2022
The Company anticipates breakeven operating cash flow by the end of fiscal 2022 <--

​

RECENT EVENTS

• Another share offering of up to $150M was recently authorized. BBBY intends to use the proceeds from this offering to "drive immediate strategic priorities such as rebalancing our assortment and inventory, and addressing our debt."
• CEO Sue Gove hosted a vendor summit during which she remarked: "our accounts payable has been cleaner than its ever been," and said "we don’t think there is bankruptcy on our horizon.”
• CFO Gustavo Arnal passed away 9/2/22 from apparent suicide. He sold a ~50k portion of his >250k shares on 8/16 & 8/17 (this was pre-planned in April).
• BBBY was put on the Reg SHO Threshold List from 8/16 to 8/31/22 during which BBBY caught a lot of social/mainstream media attention.
• Ryan Cohen bought shares Jan 2022 through March amounting for 9-11% of outstanding shares. He sold the entire stake on 8/16 and 8/17/22 for unclear reasons. Many suggestions in his letter to the board were met/evaluated.
• CEO Mark Tritton resigned; Sue Gove served as interim CEO and later was voted in formally. Before that, new board members were voted in during 7/15/22 Annual Shareholder meeting (3 of 10 seated by RC Ventures).

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BBBY Investor Relations
https://preview.redd.it/x05bjqxpz5m91.png?width=838&format=png&auto=webp&s=cd7ca28c4330f6535f5bdaa1555fefb7eeaa9eec

Q2 EARNINGS CALL

Company held a premarket Q2 Earnings Call on 9/29/22 and highlighted:

• Liquidity of approximately $850M as of fiscal September, reflecting recently expanded $1.13 billion ABL facility and new $375M FILO loan.
• At-the-Market ("ATM") Offering of 12M shares (completed as of 10/24/22 raising $75M).
• Company indicated working on liability management transactions. Later they announced an exchange offering for their outstanding 2024, 2034, and 2044 bonds to reduce BBBY's debt and interest expenditure. The Exchange Tender deadline is 11/15/22.

As previously announced with the Company's Strategic Update Call/Presentation on 8/31/22, the Company is maintaining the following outlook parameters for fiscal 2022:

• Comparable sales decline in the 20% range driven by improvements in the second half of fiscal 2022 versus the first half of fiscal 2022
• Adjusted SG&A expenses ~ $250M below last year, reflecting cost optimization actions occurring in the second half of fiscal 2022
• Capital Expenditures of ~ $250M vs. the ~ $400M previously planned for fiscal 2022
The Company anticipates breakeven operating cash flow by the end of fiscal 2022 <--

​

RECENT EVENTS

• Another share offering of up to $150M was recently authorized. BBBY intends to use the proceeds from this offering to "drive immediate strategic priorities such as rebalancing our assortment and inventory, and addressing our debt."
• CEO Sue Gove hosted a vendor summit during which she remarked: "our accounts payable has been cleaner than its ever been," and said "we don’t think there is bankruptcy on our horizon.”
• CFO Gustavo Arnal passed away 9/2/22 from apparent suicide. He sold a ~50k portion of his >250k shares on 8/16 & 8/17 (this was pre-planned in April).
• BBBY was put on the Reg SHO Threshold List from 8/16 to 8/31/22 during which BBBY caught a lot of social/mainstream media attention.
• Ryan Cohen bought shares Jan 2022 through March amounting for 9-11% of outstanding shares. He sold the entire stake on 8/16 and 8/17/22 for unclear reasons. Many suggestions in his letter to the board were met/evaluated.
• CEO Mark Tritton resigned; Sue Gove served as interim CEO and later was voted in formally. Before that, new board members were voted in during 7/15/22 Annual Shareholder meeting (3 of 10 seated by RC Ventures).

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BBBY Investor Relations
https://preview.redd.it/x05bjqxpz5m91.png?width=838&format=png&auto=webp&s=cd7ca28c4330f6535f5bdaa1555fefb7eeaa9eec

Q2 EARNINGS CALL

Company held a premarket Q2 Earnings Call on 9/29/22 and highlighted:

• Liquidity of approximately $850M as of fiscal September, reflecting recently expanded $1.13 billion ABL facility and new $375M FILO loan.
• At-the-Market ("ATM") Offering of 12M shares (completed as of 10/24/22 raising $75M).
• Company indicated working on liability management transactions. Later they announced an exchange offering for their outstanding 2024, 2034, and 2044 bonds to reduce BBBY's debt and interest expenditure. The Exchange Tender deadline is 11/15/22.

As previously announced with the Company's Strategic Update Call/Presentation on 8/31/22, the Company is maintaining the following outlook parameters for fiscal 2022:

• Comparable sales decline in the 20% range driven by improvements in the second half of fiscal 2022 versus the first half of fiscal 2022
• Adjusted SG&A expenses ~ $250M below last year, reflecting cost optimization actions occurring in the second half of fiscal 2022
• Capital Expenditures of ~ $250M vs. the ~ $400M previously planned for fiscal 2022
The Company anticipates breakeven operating cash flow by the end of fiscal 2022 <--

​

RECENT EVENTS

• Another share offering of up to $150M was recently authorized. BBBY intends to use the proceeds from this offering to "drive immediate strategic priorities such as rebalancing our assortment and inventory, and addressing our debt."
• CEO Sue Gove hosted a vendor summit during which she remarked: "our accounts payable has been cleaner than its ever been," and said "we don’t think there is bankruptcy on our horizon.”
• CFO Gustavo Arnal passed away 9/2/22 from apparent suicide. He sold a ~50k portion of his >250k shares on 8/16 & 8/17 (this was pre-planned in April).
• BBBY was put on the Reg SHO Threshold List from 8/16 to 8/31/22 during which BBBY caught a lot of social/mainstream media attention.
• Ryan Cohen bought shares Jan 2022 through March amounting for 9-11% of outstanding shares. He sold the entire stake on 8/16 and 8/17/22 for unclear reasons. Many suggestions in his letter to the board were met/evaluated.
• CEO Mark Tritton resigned; Sue Gove served as interim CEO and later was voted in formally. Before that, new board members were voted in during 7/15/22 Annual Shareholder meeting (3 of 10 seated by RC Ventures).

Good day, Apes!
This DD will provide you with a plethora of knowledge on why 2022 is year of the MOASS, and after absorbing this info, you'll reach such a high level of zen that you'll be completely impervious to any FUD.
https://i.redd.it/2uwehkoxbnw81.gif
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Recommended Prerequisite DD:

1. Checkmate
2. We Are Unstoppable
3. Mountains of GME Synthetic Shares

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2022: Year of the MOASS [8 Reasons Why ∞ Soon]
§1: RC's BBBY Call Options
§2: Indicators [Primarily Utilization]
§3: The Algorithm
§4: Market Crash
§5: Stock Split Dividend
§6: NFT Marketplace
§7: DRS
§8: DOJ Investigations
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§1: RC's BBBY Call Options
1 month ago, RC purchased not only a significant amount of BBBY shares, but also a significant amount of call options, as per SEC Schedule 13D Filing from RC Ventures:
Under ITEM 3,
“The aggregate purchase price of the 7,780,000 Shares directly owned by RC Ventures is approximately $119,376,296, excluding brokerage commissions. The aggregate purchase price of the call options exercisable into 1,670,100 Shares owned directly by RC Ventures is approximately $1,785,263, excluding brokerage commissions.”
Here’s more details on the options he purchased:
https://preview.redd.it/2n101ksyanw81.png?width=1339&format=png&auto=webp&s=6d58a23720b26ca121cd028b593a71feabc0a5c0
https://preview.redd.it/i16wwmwzanw81.png?width=1341&format=png&auto=webp&s=ae8d3e0be4a22770d7a95017b7a9a252c6b6d4bf
Call options varying from $60-$80, expiring January 2023.
This means that RC is betting that the price of BBBY will surpass $80 anywhere from now till January, 2023. These are the furthest OTM options that he could buy (meaning that the highest price he could bet the stock was going to surpass was $80, and he purchased those contracts).
The price of BBBY stock at the time of recording is around $15, meaning that for RC’s $60 calls to go ITM, the price of BBBY would need to increase 301%+ its current price (and increase 434%+ for the $80 call options). For this to happen, there’d need to be a January 2021-type run up, which is not possible anymore without igniting MOASS. In other words, RC is betting MOASS before January, 2023. However, due to theta decay on options contracts, RC is most likely anticipating MOASS to happen way before January, 2023 (likely sometime around mid-2022), which would be around the time of the NFT Marketplace/Stock-Split Dividend, which makes sense.
Also, if we further ponder why RC would go with BBBY contracts instead of GME contracts, it makes perfect sense. RC is the type of guy to only want to either HOLD or HODL his GME shares. I doubt he’ll be interested in selling any GME shares during MOASS, as to not inhibit the legendary event. But, if he wanted to collect profits on the MOASS, he could sell his BBBY options instead. BBBY, being one of the basket stocks attached to GME’s price, will squeeze once the MOASS launches, and so RC could turn his million dollar options position with BBBY into billions in profits, selling those contracts and collecting billions without messing with the MOASS directly. A brilliant play.
§2: Indicators [Primarily Utilization]
I’ve always considered utilization (percentage of shares available to borrow that have been lent) to be an important factor for determining our proximity to a squeeze. When I was primarily focused on αmc during the first half of 2021, one of the big factors I looked for was utilization, so when utilization hit 100% in May, I knew some significant price movement to the upside was going to come. It only took a few weeks after 100% utilization for the stock to go up 600% afterwards. Did MOASS ignite? No. That, to me, was merely FOMO, which took the basket stocks, along with GME, to critical levels in June that SHFs did everything they could to suppress the price (from getting their pals to dump shares, to stock halts, etc.). We should note, however, that utilization was at 100% for only a few weeks.
In the Social Science Research Network's “Short Squeezes and Their Consequences”, Schultz states "I find that the likelihood of squeezes is very low for most stocks. The risk of a squeeze becomes important when stocks are hard-to-borrow. Utilization, that is the proportion of shares available to lend that are currently on loan, has a strong positive correlation with the probability of a short squeeze. If utilization is high and a share loan is recalled, it is difficult to find a new source of shares. I find that for the majority of stocks that have low utilization rates, an all lender short squeeze appears about once every 40 years. For stocks with very high utilization of 90% or more, an all lender squeeze occurs about once every 11 days."
This goes in line with what I witnessed with αmc on May-June, 2021.
However, in the case today, GME has been at 100% utilization for 50+ consecutive trading days, which is big.
For reference, utilization was at 100% for about 90 consecutive trading days, leading to the January, 2021 run up.
https://preview.redd.it/b5nm75ksanw81.png?width=692&format=png&auto=webp&s=1ec5e6c6a33e32702212dd7b1fa0e8f6d71c9950
Now it looks like we’re repeating that same pattern:
https://preview.redd.it/yr9qlg2wanw81.png?width=911&format=png&auto=webp&s=44ba40e7425436085f781262e470e4540e1ce950
For utilization to be at 100% for so long at this point tells us that the spring is loading up for something BIG, and whatever is coming is going to explode like nobody’s ever seen before. The January run up in 2021 was pure FOMO. That can’t happen anymore. If GME explodes past critical margin levels, MOASS begins (legitimate short positions closing) and that 100x run up from August 2020-January 2021 will be peanuts compared to what’s coming.
Note: I’m not saying that the current utilization will emulate the January, 2021 utilization data. It could easily take longer than 90 consecutive trading days, but every trading day at 100% utilization adds to the pressure which will inevitably make the price erupt into a nuclear MOASS. Another few months of consecutive 100% utilization alone will make the price of GME substantially harder to control.
There's also other strong indicators that lit up, such as the supertrend indicator. The weekly supertrend indicator went bullish 4 weeks ago. Last time it was bullish was in February, 2021.
https://preview.redd.it/skom8hy1bnw81.png?width=1147&format=png&auto=webp&s=8ae047aeeead5d6afdbbbccef436741bb7feca5e
Due note that when the weekly supertrend flipped bullish pre-January, 2021, several months went by until the January run up happened. This indicator, by no means, infers that a big price jump will happen within a short period of time, but that a strong run up in the price may occur sometime between now and several months from now.
There's also other long-term indicators that flipped bullish several weeks back, but they aren't nearly as important as utilization. TA is mostly useless when it comes to a manipulated stock. There's only a few indicators that actually hold some significance to me, and even then, are not indicative of anything happening immediately.
The most important indicator here is utilization, which may take several months for the price to react to, and ultimately pass margin levels, launching MOASS.
§3: The Algorithm
As I've said before, I consider TA to be mostly useless. This is primarily because Technical Analysis is used to predict "natural price movements". Well...there's nothing natural about GME's price movement. This is a heavily manipulated stock, so trying to predict natural trends of a heavily manipulated stock is counterintuitive.
I've previously seen TA posts from Apes saying things, such as "bull flag forming, moon soon" or "inverted head and shoulders pattern, we're gonna run". This is silly. I mean, just think about it logically. You really think a SHF manager manipulating GME is gonna be like "OH SHIT, everybody, look, there's a bull flag forming on GME! We're screwed! We're gonna lose control of the price, and have to close all our short positions now! NoooOOOO!!!"?
Miss me with that BS lmao. If anything, SHFs create fake bullish patterns just to get day traders to buy short term options thinking there will be a price jump on a certain date, only to get rekt when SHFs drop the price and collect their sweet premium money to help live another day.
I care very little about TA. What I DO care about is the $100 million algorithm these institutions use to manipulate the price.
The algorithm is used to optimize the best strategies for SHFs, for example, to determine how long they can feasibly keep the price down until they have to let it run a bit (due to rollover periods, etc.). Ergo, the algorithm can maximize the effectiveness of 'can-kicking', but eventually it comes to a point where the most strategic choice would be to let the price run a few weeks before shorting again.
What happened on January, 2021 was a scenario that overpowered the algorithm. The algorithm didn’t say “hey, GME needs to go from $4 to $400+ by January, 2021”. That’s not how it works. It was slated to allow a gradual increase at the time, but got overpowered and taken over by retail FOMO. In January, retail regained control of the stock and took away control from the algo, up until the shutdown of the buy button where SHFs not only recalibrated the algo, but all piled in to double down on their short positions by shorting the shit out of GME as soon as the buy button got shut off.
Regardless of any recalibrations from SHFs, their algorithm is designed to maximize profits, and at some point, the algo has to let there be a significant price increase and face a (say) 60% risk of tripping up and initiating MOASS rather than a 95% risk of initiating MOASS by burning through cash at an exponential rate, ultimately facing margin calls. Cost to borrow is an example. Cost to borrow was increasing at an exponential rate. Had they not allowed a price increase, the rate could've continued, eventually burning through their cash at an astounding speed. Every time that they allow a small run up to happen, however, they risk losing control of the price and ultimately initiating MOASS, which is why I'm curious to know how high of an algorithmic jump SHFs will have to deal with in the future.
The closest algorithm I could find that best emulated GME's algorithm (in past time; hence, basket stocks not included) is BRN.AX (Brainchip Holdings).
For comparison, this is GME's chart:
https://preview.redd.it/7sacl6b4bnw81.png?width=1149&format=png&auto=webp&s=df8a73984de8b02924e90916b839a05d4008f5d3
This is BRN's chart:
https://preview.redd.it/wb3y6585bnw81.png?width=1187&format=png&auto=webp&s=cbf2d535a37f8ff405e58a65bf8cd7bf074dbd1d
The similarities are striking. BRN's "January run" happened on September, 2020; hence, it's technically ahead of GME by around 5 months, which would allow us to see a possible glimpse into the future, based on the algorithm.
I wanted to dig deeper by deriving a correlation coefficient, so I crunched up the price movement data and this is what I got:
https://preview.redd.it/t6oz5st6bnw81.png?width=579&format=png&auto=webp&s=cfeb824d8776fd4aff54faf6b24041ee1279ac3d
https://preview.redd.it/5evg6ea8bnw81.png?width=739&format=png&auto=webp&s=4398dfba3c7d23db04063d731d561dfbae7fb1af
A general correlation of around .4, which is actually considered a moderate positive correlation.
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Methodology:
I used Yahoo Finance to extract BRN's historical data (from September 2, 2020 to September 2, 2021) as well as GME's historical data (from January 21, 2021 to January 21, 2022). Combined the data sets in an excel spreadsheet, analyzed, and extrapolated the correlation coefficient based on each respective stock's price movements within each historical timeframe. More information of the code used to extrapolate Pearson's product-moment correlation.
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Considering how complex these $100 million algorithms are, I recognize that extrapolating a correlation coefficient between these two stocks by analyzing a general/ambiguous factor, such as price movement, might not yield the most definitive results.
We can opt to take a rudimentary approach on extrapolating the correlation coefficient by instead analyzing the specific outliers (i.e. the strong periodic runs in price).
Circled below are the focal points we'll be comparing to extrapolate a correlation.
https://preview.redd.it/jurbeyz9bnw81.png?width=1440&format=png&auto=webp&s=9d5084c225031ddc140bdc8b53d2f22e2505b43c
Taking these easily identifiable peaks, the dates between each stock's peak, and inputting the data into the Pearson correlation coefficient formula shown below,
https://preview.redd.it/8lail7bbbnw81.png?width=365&format=png&auto=webp&s=21aba05fc5c0f216d67301df316734568b0031f5
We can obtain a correlation of around .8 or more, which is considered a strong positive correlation.
Note: The results aren't going to be ideally precise, as it depends what what crests/dates you end up using as your variables. For example, you could take slightly different dates in proximity to the crests, or use other smaller focal points you'd prefer in the data instead. Hence, the results could vary slightly, but the overall positive correlation is there. I've permutated the data using two different sets of focal points, and still came out with a (conservatively) moderate-to-strong positive correlation overall, which means that we can indeed use BRN's chart to get a better understanding of what the future holds for GME.
As I've stated before, GME is 5 months behind BRN, which means that the big spike you saw in BRN's January, 2022 chart would be algorithmically slated to happen to GME around the summer. HOWEVER, this is not a perfect correlation. Conservatively speaking here, we have a moderate correlation, meaning that there could be a variety of other factors that could delay that part in the algorithm, possibly prolonging a run up of that magnitude many more months out. It's important to proceed with caution, as to balance your expectations. Nevertheless, I see GME's algorithm slated to eventually have the giant run up in price sometime this year comparable to what BRN had in the beginning of this year, and as we already know, a run up of that magnitude will open the doors to extreme FOMO and uncontrollable price action, ultimately leading to: MOASS.
§4: Market Crash
Speaking of algorithms, let’s talk about the algorithmic movement of the S&P 500.
There’s only so much that the government/institutions can do to artificially inflate the market until the inevitable crash comes, and it appears that time is approaching soon.
I came across a post by Ape "choochoomthfka", who analyzed and compared the current S&P 500 price movements with that of 2008 and discovered algorithmic correlations that are pointing to a possible crash around the end of May, and just like the VW squeeze that came soon after the 2008 crash, the GME MOASS would come soon after the 2022 crash.
His statement: “I’ve independently confirmed the S&P chart overlay of 2008 & today for myself. The similarity is indeed striking, but I just wanted to alert apes to the fact that the progression is ~4.4x faster today than in 2008. If indeed similar, the big crash is ~May 20th and the squeeze ~May 25th.”
https://preview.redd.it/guhhw5vdbnw81.png?width=699&format=png&auto=webp&s=ed1b39c3007eca21cd1adcc8cacaac4de103cc2a
This also goes in line with what we're seeing with the Buffet Indicator:
https://preview.redd.it/1bhhp0afbnw81.png?width=891&format=png&auto=webp&s=62827e2648f87f9704cb77d55713dca5d8021d19
Now, although I agree that the current S&P price is likely being algorithmically controlled (via PPT, institutions, etc.), I don’t want to promote dates. The truth is that we aren’t entirely sure when the crash will happen. With a very strong confidence interval, I could say it will happen this year, but to say it will happen exactly near the end of May, I cannot. There can easily be wide standard deviations associated with these market algorithms that prevent us from pinpointing an exact date. For all we know, there’s unaccounted variables that could allow the algorithm to delay the market crash another 3 or 4 months after May. The algorithm simply optimizes the most strategic move. That’s all. If the S&P can no longer afford to be can kicked longer than June, the algorithm will signal and allow for the market to finally crash in June. However, if an externality shows up and changes the variables, it could delay things.
All I’m saying is don’t get attached to specific dates. Nevertheless, the S&P 500 is following a similar pattern to 2008 that indicates a high likelihood of a market crash for 2022. As you may know, a market crash begets extreme loss in collateral for SHFs, triggering margin calls, and as such, MOASS. It’s important to note, though, that similarly to VW, GME might initially drop in tandem with a market crash, only taking off in the opposite direction as soon as shorts start closing their positions, due to failure to meet a margin call.
Federal rate hikes, China’s real estate market conundrum, 8.5% inflation rate (as of March, 2022), unprecedented records of margin debt, exponential increase in mortgage-backed security failures, spikes in credit default swaps, the Feds cracking down on unsustainable overleveraged positions from hedge funds, regulatory agencies/clearing corporations filing rules preparing for defaulting members, etc., are all additional signs adding to a likely market crash this year.
§5: Stock Split Dividend
I explained this in my Checkmate DD, so I won’t be going over it too much here.
Basically, a 7:1 stock split (in the form of a dividend) would likely lead to MOASS, due to the fact that SHFs can’t come up with 6 times the amount of synthetics that they produced over the entirety of GME’s life within a relatively short time frame. This is why TSLA ran like crazy after they proposed their stock split dividend. Even if there was some sort of hidden loophole that they exploited, post-split dividend, we can expect FOMO (buying/DRS’ing pressure) to increase substantially, due to a significantly more affordable price.
§6: NFT Marketplace
The NFT Market was valued at $40 billion in 2021, per Chainalysis Inc. report.
Considering GameStop’s market cap is valued at $10 billion, there’s a lot of potential revenue GameStop can tap into by entering this market. Not only that, but as time goes on and crypto/NFTs become more globalized, the NFT Market can easily exponentially increase in valuation, similarly to how Bitcoin did when it started getting adopted by institutions internationally as a store of value.
OpenSea, currently the world’s largest NFT Marketplace, is valued over $13 billion, according to Sephton at “CoinMarketCap Alexandria”.
Yet, the OpenSea NFT Marketplace is incommensurable to the soon to be GME NFT Marketplace, due to a variety of reasons:

1. OpenSea has extremely high gas fees, which deter business/revenue through their services and creates dead weight loss.
2. Weak security protocols. They have tons of vulnerabilities in their code that make them susceptible to attacks/thefts. Many examples in the past of OpenSea users suing the Marketplace for letting their NFTS get stolen by cyber thieves due to their “security vulnerabilities”.
3. GameStop gets nearly 1,000x more organic traffic via search engines than OpenSea does.

GME succeeds where OpenSea fails, by utilizing its partnerships with Loopring & Immutable X to eliminate high gas fees as well as reinforce security, using Ethereum’s security rather than Polygon’s (etc.). GameStop’s NFT Marketplace will not only supersede, but augment the NFT Market as the dominant NFT Marketplace.
That being said, GME’s market cap is already $10 billion. Say they get in the NFT Market in the summer and hit a valuation just half that of OpenSea this year. GME would end up with a high enough valuation putting itself past a $200 price. Maintaining a GME price past $200 would obliterate critical margin levels at this point, initiating MOASS.
In case you haven’t noticed, something very big is gearing up this year, and I don’t think RC bought extremely OTM BBBY calls this year just for the fun of it.
Very large partnerships with blue chip companies may be revealed upon implementation of the GME NFT Marketplace, and I believe we saw hints of it back in February:
https://preview.redd.it/d28t4wdhbnw81.png?width=777&format=png&auto=webp&s=c9cc8c25a664c6db7833837ccefcd03420bf6a23
I’m going to end with this: there were tons of complaints (likely from shills) that RC has been so secretive about the NFT Marketplace. If you have something REALLY good on your hands, are you going to go out and tell everyone? No. You wait until the time is right to present it. Companies that don’t have anything good on their hands will be all talk, nothing much to present. The talking would come to just fluff their position and provide a façade to investors. RC is the exact opposite personality. This project has been in the works for the past year, and I genuinely believe when it delivers that it will exceed expectations.
This NFT Marketplace, once implemented (and any additional hidden partnerships announced), could be a very big driver for FOMO soon after, ultimately breaking shorts’ banks and kickstarting MOASS.
§7: DRS
I've explained this before in §3 of my We Are Unstoppable DD. The Price Suppression Quandary.
"If the price of GME exceeds a certain point, margin calls will ensue, starting a snowball effect which will lead to MOASS. The more they short, the more money they lose, the more margin requirements pose a problem to them, and the more they will need a lower price.
Now, if the price of GME declines too low, as I’ve demonstrated in “§ 1: Relentless Dip Buying”, Apes will double, triple, quadruple, etc., their ability to buy up the float and register it.
Example: Let’s say, at the price of $120, it will take 10 months to lock 100% of the float. If SHFs decrease the price to $60, it will now take 5 months to lock 100% of the float. $30? 2.5 months. $15? A little over a month. By taking the price down so much, they effectively accelerate their demise, which is why they need a higher price.
This is also not including any outside entities purchasing the dip (e.g. institutions, pension funds, or even angel investors, such as RC, Musk, etc.)."
This is at the basic level. In reality, a price at $40 or below could technically allow GameStop to lock up the rest of the float themselves with their cash on hand, so it would immediately be game over if SHFs tried to pull off something like that. The more time that goes on, however, the less and less room SHFs have to breathe. Their margin call threshold is getting tighter each month that goes by. For example, back in June, their critical margin levels were around $350, meaning a sustained underlying close above $350 would've likely have led to margin calls/MOASS. As several months have gone by and they've burnt through so much cash with the stock that's only been getting harder to short every month, the critical margin levels that would beget margin calls now lies around $200-$210, which is why GME was halted around $200 this March, and SHFs threw everything they had once trading resumed in an attempt to regain control of the price. Their situation will continue to get more difficult as the number of registered shares increases.
Every share DRS'ed crunches down the float of available shares, and strengthens the bullish indicators. SHFs cannot sustain this indefinitely, as the pressure of DRS'ed shares continues to build until an eventual snap of the algorithm, taking Apes straight to the moon.
§8: DOJ Investigations
When GameStop's 10Q came out on December 8, 2021, for the first time, this came up (pg. 14):
https://preview.redd.it/btsr9vtibnw81.png?width=781&format=png&auto=webp&s=3e103a2d053782050d40d36b58424341919a7f4d
A few days after that was published, this happened:
https://preview.redd.it/f2wj9frjbnw81.png?width=1329&format=png&auto=webp&s=29028b506fe0430f060a38d55361f5b08683b241
Now, is it a coincidence that the DOJ immediately launched a criminal investigation into SHFs soon after GameStop's 10Q published, showing registered shares from Apes? Maybe, maybe not. But, I've talked about this happening way before the DOJ even launched an investigation.
From my past DD Mountains of GME Synthetic Shares:
“I expect the closer we get to locking 100% of the float, the stronger the pressure the government will feel to taking initiative themselves, as once the float is 100% locked, there's no going back, and the entire world will witness the synthetics shitshow that will reveal itself and completely undermine the market's regulatory bodies. Moreover, as we also get closer to locking up the float, shorting GME back down will be a lot more costly and difficult for SHFs to do, which is why it's highly likely to me that the MOASS will start before the entire float gets locked up.”
I strongly believe that the DOJ has had enough of SHFs putting the economy in jeopardy, and that is self-evident with their race to begin indictments before the float gets locked.
From the Washington post recently:
https://preview.redd.it/pbxboo9lbnw81.png?width=683&format=png&auto=webp&s=d6fe64adceb96f8c49ecad91fc62dcbfd8cbe4c1
Hwang isn't the only one. I urge Apes to read into the DOJ's press release a few days ago. It's got really juicy info. Other indictments include Patrick Halligan, Archegos' CFO (charged with racketeering/fraud). Also, co-conspirators Scott Becker and William Tomita were indicted. If the judge were to throw the book at them, they'd practically end up with life in prison.
I want to share excerpts of the DOJ's press release here, just because it's so good:
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“We allege that these defendants and their co-conspirators lied to banks to obtain billions of dollars that they then used to inflate the stock price of a number of publicly-traded companies,” said U.S. Attorney Williams. “The lies fed the inflation, and the inflation led to more lies. Round and round it went. In one year, Hwang allegedly turned a $1.5 billion portfolio and pumped it up into a $35 billion portfolio. But last year, the music stopped. The bubble burst. The prices dropped. And when they did, billions of dollars of capital evaporated nearly overnight.”
[...]
Today’s charges highlight our commitment to making sure the investment arena remains free from fraudulent activity of all kinds.”
[...]
Last year, when the prices fell, Hwang’s positions were sold off and he could no longer manipulate the prices, and billions of dollars of capital evaporated nearly overnight.
[...]
The indictment further alleges that in order to get the billions of dollars Archegos needed to sustain this market manipulation scheme, Hwang and his co-conspirators lied to and misled some of Wall Street’s leading banks about how big Archegos’s investments had become, how much cash Archegos had on hand and the nature of the stocks that Archegos held. As alleged, they told those lies so that the banks would have no idea what Archegos was really up to, how risky the portfolio was, and what would happen if the market turned.
As alleged, just over a year ago, the market turned and the stock prices Hwang and his co-conspirators had artificially inflated crashed, causing immense damage to U.S. financial markets and ordinary investors. In a matter of days, the companies at the center of Archegos’s trading scheme lost more than $100 billion in market capitalization, Archegos owed billions of dollars more than it had on hand, and Archegos collapsed. Market participants who purchased the relevant stocks at artificial prices lost the value they believed their investments held, the banks lost billions of dollars, and Archegos employees, many of whom were required to invest 25% or more of their bonuses with Archegos as deferred compensation, lost millions of dollars.
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This is a very big deal. It's also definitive proof that SHFs lie about how much money they've been making by overly inflating their positions.
I remember in the past, sometimes shills would post articles that said "Kenny made 'x' amount of money recently," or "this month was such a profitable month for 'x' SHF. Apes aren't making a dent on SHFs' portfolios!" I knew it was all BS. But then those same shills try to gaslight you, saying things like "oh, you're against reality" or "get back to the real world". Well, this is the real world, bitches. The DOJ indicted this financial terrorist for racketeering, fraud, and artificially inflating his positions. Moreover, our decision to call these guys financial terrorists is completely warranted. The DOJ literally just stated in the press release, I quote, "the market turned and the stock prices Hwang and his co-conspirators had artificially inflated crashed, causing immense damage to U.S. financial markets and ordinary investors". Financial terrorism defined.
Also in February, it was revealed that among the many SHFs the DOJ is investigating include Melvin Capital as well as Citron Research. Melvin Capital recently issued an apology to its investors and has been doing shady things to hide from their past.
Usually, the DOJ goes for the less significant ones first, once they catch a few rats that snitch, they can then work their way up the chain and expand the investigation.
A lot of shady, unexplained behavior has happened since the DOJ investigation has gone on, from buildings burning down rumored to have in possession documents related to criminal misdeeds of brokers/SHFs, to executives inexplicably stepping down from Citadel and other institutions.
After Michael Bodson recently announced he's stepping down from his position as President of the DTCC, along with billionaire Archegos owner, Bill Hwang, being indicted, I made this comment trying to connect the dots as to why these big players are now hiding from their past and/or stepping down from their positions:
https://preview.redd.it/5wly0a7nbnw81.png?width=679&format=png&auto=webp&s=f4ae87f503ca7153ac82c77775847599aa826e2c
According to computershared.net, nearly 35% of the float has been locked by Apes within 8 months [September, 2021-April, 2022], and over 70% of ALL outstanding shares have been locked.
The fact that over 70% of all outstanding GME shares have been locked should be raising alarm bells for the gov., which would explain why serious action is being taken now. If the DOJ's data scientists determine there's a too high risk of the float potentially getting locked by the end of the year, they will initiate MOASS before then. If they have to shut down Citadel and force close positions before all the shares get registered, they will. They're not standing idly by while 100% of the float gets locked. Financial terrorists like Kenneth Cordele Griffin are threatening the stability and longevity of the entire U.S financial market, and consequently, the global economy. Kenny & Co. are a threat to national security, a threat that will be neutralized by the DOJ before they let the float get 100% locked.
https://i.redd.it/bvuuk8utbnw81.gif
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Additional Citations:
Buda, Andrzej. “Life Time of Correlation between Stocks Prices on Established and Emerging Markets.” Arxiv.org, Cornell, May 2011, https://arxiv.org/ftp/arxiv/papers/1105/1105.6272.pdf.
Department of Justice (April 27, 2022). Four Charged in Connection with Multibillion-Dollar Collapse of Archegos Capital Management. Available at: https://www.justice.gov/opa/pfour-charged-connection-multibillion-dollar-collapse-archegos-capital-management.
“Schedule 13D.” SEC Filing | RC Ventures., SEC, 7 Mar. 2022, https://www.sec.gov/Archives/edgadata/0000886158/000119380522000426/sc13d13351002_03072022.htm.
Schultz, Paul, Short Squeezes and Their Consequences (February 3, 2022). Available at SSRN: https://ssrn.com/abstract=4025226 or http://dx.doi.org/10.2139/ssrn.4025226.
“SEC Filing: Gamestop Corp..” SEC Filing | Gamestop Corp., SEC, 8 Dec. 2021, https://news.gamestop.com/node/19686/html.
“SEC Filing: Gamestop Corp..” SEC Filing | Gamestop Corp., SEC, 17 Mar. 2022, https://gamestop.gcs-web.com/node/19651/html.

PARTs summary: (will add links as these posts go live).
part 1- january
part 2 - february
Part 3 - march +list of great apes and the DD they brought (from jan 2021 to current)
part 4 - april
part 5 -may
part 6 -june 2021
part 7 july 2021
part 8 august 2021
part 9 september 2021 (DRS REALLY STARTS OFF HERE)
part 10 October -2021
part 11- november
part 12 - December (2021)
Part 13- January 2022 (the wise ape is here)
part 14- February 2022
Part 15- March 2022
Part 16- APril to June 2022
part 17 -summary
​
Hello everyone,
Ape historian here with the biggest fricking post to date. the way i wrote this post out was to use my dashboard that i hope everyone now knows about.
For those nee a backstory - i am ape historian - i have been archiving the gme subs on my site and via my setup (reached 90tb total usable space a few days ago! massive milestone) and I am backing everything up. i am now going back in tiem to recreate the events from the sneeze to now, and this post is FEB/ MARCH time.

END OF FEBRUARY

the deletions continue
​
for those who havent seen my previous two posts - if you dont have a permalink to a delted post you cannot get it from wayback machine or any backup - AND ITS NOT SEARCHABLE. thats the important point - its not searchable.
Now posts get deleted for various reasons and I am not saying that all delted posts are suspicious . but int he aggregate i find it strange that a lot of POPcorn posts and silver posts stayed up on the original uusb sub - and you can freely check out my dashboard and doouble check me on this.
but the dd for gme was "deleted"- or so they thought.
here is what this dude had to say:
POST START
Disclaimer: This is not financial advice, and much of this information is not my own, sourced from other DD’s, many that have been removed.
As many of you know, on the 17th of this month, Interactive Brokers Chairman Thomas Peterffy had a CNBC interview (Automod won't let me link it?) where he goes on to explain the fundamentals of the short squeeze.
However, this whole ordeal might be a whole lot bigger than we had ever imagined.
Tom (or should we go with Tommy?) goes on to illustrate the idea that they had to regulate the stock, as if they had not it would have caused a collapse of the entire market. While Tom might very well be simply lying to us to give an excuse, let’s play his game, and ponder this idea for a second.
Tom states without the regulation, brokers would have been obligated to deliver 270 million shares, while only 50 million shares existed. 540% of shares.
Vlad, CEO of RobinHood, also told us that on the day of the halt they had an order volume of 3 Billion, that they could not fulfill.
Tom continues the interview, admitting that without the regulation, GameStop stock would have surged into the thousands, yes plural.
Maybe the reason all of this has truly become such a battle, is because of how seriously scared the other side of the trade really is.
Finra’s latest short interest update gives us a value of 78.46%. However, there are many reasons why this could be falsely construed. For one, Finra had announced new ways of calculating short interest, letting the synthetic longs drive this down. Another reason this may be low is this data is not fully up-to-date and does not take into account the fall from 100 to where we are now.
So, what is the true short interest then?
Well, let’s take breakdown GME share ownership alongside the findings of corrode1024 DD-
Insider Ownership: 23,704,787
Institutions: 151,000,000
Funds: 40,000,000
Retail: 38,595,000
Total Owned: 253,299,787
Total Outstanding: 69,746,960
Percentage of ownership to outstanding: 363.17%
Estimated Synthetic Shares: 183,552,827
FINRA Short % of Float: 78.46%
Finviz Float: 50,650,000
Reported Shares Shorted: 35,538,624
Total Estimated Short (Synthetic + Reported)
219,091,451
Percentage of Shorts to the Float: 432.56%
If you would like a deeper breakdown of corrode1024’s data, check out his DD.
But yes, the short interest may be a whopping ~432.56%.
Last week, u/thabat (yes -the thabat you know who looked into will look into cellarboxing in 8 months time) ran an AI-generated model of GME’s stock price, which predicts a squeeze target of an extreme $130k a share.
Now, I know, lol. Let’s not get ahead of ourselves. That is a completely crazy fucking number. I mean, right? It has to be?
But I mean, if this whole thing really is bigger than we thought, and it really could cause an entire collapse of the markets. This could be one of the biggest exchanges of wealth in the history of the world.
If SI really is ~400%, shorts covering at infinitely higher and higher prices certainly could drive it up to astronomical heights.
​
the image from that post - courtesy of wayback machine.
If this is what our models show, imagine the models and algorithms these big firms have. This may very well be why they are so frightened. They have dug themselves into a hole below bedrock.
All of this seems to line up with what Vlad and Tom have now told us. Without regulation, this squeeze will be the Mother of all Short Squeezes.
So now, alongside our Dogfather Cohen, we shall wait patiently for a catalyst. Just like on the last squeeze to $483, we required a catalyst to get us there. Don’t forget the information we knew in November and December. Board spots are opening up in July which Cohen will take advantage of, Cohen could up his stake. Earnings in March. Who knows what could happen.
It is important to remember the gaming industry is the largest industry in the world, and we are still in its infancy. Older generations continue to laugh down the importance of gaming, but as our generation grows up gaming is only going to evolve and get bigger. GameStop is the only retailer dedicated to gaming and has a surplus of centers that big competitors like Amazon do not.
We are basically right back where we were in NovembeDecember. The stock price does not matter. If short interest is at 400%, or if short interest is at 80%. Both are insanely high SI values, and a squeeze is inevitable, one that sends us to 500 or one that sends us to 50,000. With high short interest, a squeeze is inevitable. NEVER forget that.
So, continue to hold fellow apes. May your hands turn to diamonds and your balls to steel.
💎🙌
Edit: Also don't forget the other CNBC interview with our boy Tommy where he also admitted that they halted to save themselves. Or the CNBC interview with Vlad where he said it multiple times assuredly that it WAS NOT a liquidity issue, but that is his reasoning now. (You can find these 2 interviews on youtube, AutoMod wont let me link youtube)
Ape historian superfind 10: this video shows up again - https://youtu.be/RfEuNHVPc_k?t=5419
remember the hearing - well here is the point where they tried to setup DFV to say something. and DFV wasnt taking it.
​
from \"Why GameStop was going to cause a collapse of the entire market, and why it is still going to:\"
the above post mentioned corrode1024 didnt it - lets have a look - i need more wrinkles than i have to understand this all.
corrode mentions aah_soy whom we did see in our previous part 2 of the post where he accurately figured out synthetic shortselling - a FUCKING YEAR before most of the apes figured out what that meant. but somehow his account got deleted. nevermind.
u/jeepers_sheepers finds at the early start of feb 2021 that XRT, you know - THAT XRT has an SI of 800%. post title - "XRT is being used to hide GME shorts. XRT currently sits at 190% SHORT FLOAT. Peaking on 2/1 at over 800% SHORT FLOAT!!"
somehow also deleted and we saw this post in part 2. strange. huh what could it possibly be?
but if you search on my dashboard you will have the post.
the post also mentions that there already was an archive before my time - on stonking.info - but that got taken down.

or did it? heh not from me. you see how this shit gets hard to pindown once "deleted" is on the menu? you can se how if i didnt have access to all the subs, full search, and wayback machine there is NO FUCKING WAY i would find this. ever.

https://web.archive.org/web/2021*/stonking.info
the site is dead but here is what was posted: https://web.archive.org/web/20210220162502/https://www.stonking.info/post/evidence-that-gme-shorts-are-not-covering
​
part1
​
\"the first mention of synthetic shares that i can find\".
and before sec decides to wipe that 2013 paper off here is the link to it-
https://www.sec.gov/about/offices/ocie/options-trading-risk-alert.pdf
https://web.archive.org/web/20210215001445/https://www.sec.gov/about/offices/ocie/options-trading-risk-alert.pdf
and here is another article from tradesmith daily -https://web.archive.org/web/20210225044538/https://tradesmithdaily.com/investing-strategies/the-drop-in-gamestop-short-interest-could-be-real-or-deceptive-market-manipulation/
​
\"the hedge funds can use tricks to make it look like they have covered their shorts- even if they havent\" - this is from the sec document.
Fun huh? so we have in feb of 2021 already some understanding about how hedgies are manipulating THE PERCIEVED SHORT INTERESST IN GME WITH XRT SHORTING AND SYNTHETIC LONGS. remember this prhase it will come in usefull later.
in march stonking will come back with more points around synthetic shares, counterfeight shares and phantom shares.

fuck i have read some of this but never sat down to read it all.

​
just reminding everyone that all this is available on this dashboard - free to access, no license, no tracking. full post search on the left, title and author search on the right. subreddit and date dropdowns.

MARCH - the day of runups and the birth of the stonk and AMAs!

for this one you need to remember phantom shares,and a few other keywords.
u/atobitt publishes the everything short and citadel has no clothes: but actually they dont make it to superstonk until a little later as a repost. go read both of those posts, its required reading.
in short - "The EVERYTHING Short"
"TL;DR- Citadel and friends have shorted the treasury bond market to oblivion using the repo market. Citadel owns a company called Palafox Trading and uses them to EXCLUSIVELY short & trade treasury securities. Palafox manages one fund for Citadel - the Citadel Global Fixed Income Master Fund LTD. Total assets over $123 BILLION and 80% are owned by offshore investors in the Cayman Islands. Their reverse repo agreements are ENTIRELY rehypothecated and they CANNOT pay off their own repo agreements until someone pays them, first. The ENTIRE global financial economy is modeled after a fractional reserve system that is beginning to experience THE MOTHER OF ALL MARGIN CALLS.
THIS is why the DTC and FICC are requiring an increase in SLR deposits. The madness has officially come full circle."
"Citadel Has No Clothes"
TL;DR - Citadel Securities has been fined 58 times for violating FINRA, REGSHO & SEC regulations. Several instances are documented as 'willful' naked shorting. In Dec 2020 they reported an increase in their short position of 127.57% YOY, and I'm calling bullsh*t on their shenanigans.
​
Ape historian superfind 11: CITADEL basically does whatever it wants and isnt afraid to show it - more than a year later.
and -einfachman- did a stellar piece of DD https://www.reddit.com/Superstonk/comments/v0zrni/burning_cash/ -and all the DD's here.
and of course this one: https://www.reddit.com/Superstonk/comments/v4wxkb/i_spoke_with_a_former_citadel_client_heres_what/
​
but i digress
lets get back to march shall we - Wed Mar 17 2021 16:32:47 GMT+0000 (Greenwich Mean Time)
Post title "THIS IS HUGE: RobinHood NEVER OWNED YOUR GME SHARES, they got margin called $3B to cover the shares they needed to buy!" - you can always search for post titles in my dashboard to find the OG post and all the backup links.
​
funny how this keep getting deleted. why? are people really deleting their dd with 40k upvotes?
here is the wayback link: hehe you thought it was lost.
​
​
\"THIS IS HUGE: RobinHood NEVER OWNED YOUR GME SHARES, they got margin called $3B to cover the shares they needed to buy!\"
There is a post that this post links- "the post is titled "robinhood the missing link" on the 17th march 2021- and its in my dashboard as well.
​
\"In this scenario, RobinHood continuously sends order flow buy and sell orders to Citadel (I'm just using Citadel as a name, it could be any market maker). When a trader enters a buy order, that order is sent to the MM, and the price is set for the trade and the trader is given access to their shares at the current price. RobinHood has fulfilled their agreement to best-price, and the MM paid for the order, and the customer has access to their shares.\"
this was posted by u/theguyonthereddits
the main point here is this: But that doesn't mean that the MM actually went through with purchasing or selling those share orders yet. They paid for the order, but they only need to execute it "in a reasonable time".
https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-arnuks-20210317.pdf
"2) They recently changed their PFOF method from one giving them a set payment per share to one giving them a percentage of the spread instead. Think about this: A Robinhood trader wants the spread in the stocks he/she is trading to be as narrow as possible. The HFT market maker buying those orders benefit most when that spread is as wide as possible. And now Robinhood benefits most when the spread is as wide as possible as well! This is an amazing misalignment of interests. "
"While PFOF is legal, we have long wondered how it possibly could be. How can a broker, charged with the duty of getting its clients the best available prices, possibly do so by selling that client’s orders to amazingly sophisticated HFT firms, who in turn will make billions of dollars trading against these orders?"
Forex brokers and MMs are well-known to take inverse positions to retail trades. I think RobinHood was as well. CFD brokers have to delta hedge their actual holdings as their clients positions become profitable. As long as the clients are losing money, there is no reason to ever buy the securities, as the position is just going to lose money anyways. CFD brokers will only buy the security you own if that security starts becoming profitable and it will cost RobinHood more money to buy the share later. They are basically shorting your shares on their books.
"While retail brokers and market making firms, claim that price improvement (PI) accrues to retail investor orders, such price improvement is a flawed calculation:

1. It is based off of a slower price feed (the SIP),
2. It does not take into account odd-lots,
3. And the NBBO reference price it uses is largely set by the very same HFT market makers providing the “PI” in the off-exchange environment. "

"When a few HFT market-makers buy up orders that account for as much as a third of the volume – orders that tend to be less-informed, uncorrelated, and benign, so that they are not represented on exchanges, what is left on those exchanges is that much more toxic and costly to trade with. Market impact costs are higher, and spreads are wider as well. Two studies that confirm this are the Babelfish study of transaction costs in “Meme Stocks”7 and an additional academic study, that amazingly points out that when Robinhood experiences technology outages, spreads in the general market become narrower. Wider spreads mean that retail investors receive worse prices, even after accounting for PI, and all other investors see their costs increase as well."
"It should surprise no one that investor orders do not dominate these races; HFT Market makers do. Investors’ orders typically find themselves further back in the queue. As a result, investors miss opportunities at buying cheaper stock, and when they do get filled they are subject to outsized adverse selection. Despite this, brokers representing investors still route largely to these exchanges for that rebate."
Once RobinHood sells your orders to Citadel, Citadel can buy or sell the needed shares on any exchange they want to, to get themselves the best spread on the price difference. WHEN YOU BUY SHARES ON ROBINHOOD, YOU ARE NOT AFFECTING THE ACTUAL MARKET ORDERS. Your shares that you are buying/selling get collected by Citadel, and they can then buy/sell as they see fit with those orders.
Citadel can collect a large batch of buy orders, and then BUY those shares on a dark pool exchange that DOES NOT DRIVE UP THE ACTIVE MARKET PRICE. And they can also collect large sell orders into one large batch, and then SELL those shares on the ACTUAL MARKET WHICH ACTUALLY DOES DRIVE THE ACTIVE PRICE DOWN.
That is why you can see huge dumps on days with the SSR active and no large selling volume. Citadel/MM are capable of keeping ALL of the buying pressure OFF of the open exchanges, while simultaneously loading up sell orders to dump at once ON the open exchanges.
"• In January 2021, a record 47.19% of US stock-market volume traded “off-exchange and on February 9th we hit an all-time record of 50.47%, with retail representing 1/3rd of total US ADV"
Over 50% of all trading activity is done off-exchange. And retail is 1/3 of the total daily volume. They can literally keep 100% of retail buy orders routed through these MM off of the open exchanges, to avoid YOUR buy orders from driving the price up in real-time.
I will stop doing the copy pasta here but that post is definitely worth a read.
Ape historian superfind 12: hmm it might be that robinhood never owned the shares- this would explain the PCO. but lets continue in the next part of the series

end of march - coourtesy of u/broccaaa - welcome to synthetic shares writeup. post title -"The naked shorting scam update: selling nude like its 2021"

from u/broccaaa: "This post updates the possibility of a naked shorting scam with massive hidden FTDs and short interest in 2021. By looking at SEC rules and academic papers I show that rule changes do not stop the potential abuses of naked short selling in a material way. Rather they slightly modify how it could be done and optimized. The changes also make the scheme less sustainable on the short side and over time pressure might "coil the spring" and lead to an unprecedented FTD squeeze.
With current rules:

1. Synthetic shares can still be sold to hedge funds as part of a married put trade (or reverse conversion)
2. The borrowed privileges now only relate to the "bona-fide" market makers exemption from locate requirements
3. Rather than being able to flood the market with synthetics and let them build up indefinitely, once a security is on the threshold list market makers are forced to cover (after a certain time period)

If mass naked shorting and married put trades were being carried out in GME this could explain:

• the "BUG" bids as being part of "bone-fide" requirements to be "regularly and continuously placing quotations [..] on both the bid and ask side of the market"
• short interest manipulation
• how naked short selling has become so widespread
• why borrow fees can still be so ridiculously low (low demand for located shares to borrow)
• that the vast majority of options (both puts and calls) might be due to naked short selling
• how short shares are 'washed' and able to be dumped on the market even during SSR
• why such a large number of way out of the money calls have been seen recently (actually part of a naked short trick, not long whales or gamma ramps)
• the vast number of trades in OTC / Dark Pools as part of married put trades

🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀
Note: this is not financial advice. I am not a cat. I read some papers and made some interpretations. Any number of these could be flawed and wrong. Make your own mind up.
Introduction
The post I wrote yesterday was based on an economics paper looking at naked short practices that abused options market maker privileges. The paper was written in 2007 and took Overstock shares as an example of of a stock with massive short share fuckery. Here is a great Rolling Stone article showing court documents confirming the illegal short seller activity in Overstock. Despite the clear similarities with GME in 2021certain SEC rules have changed since the paper was written.
Which short selling rules have changed and could a modified version of the scam be happening in 2021?
With some help from other apes in the comments and a little extra research I'd like to clarify this and provide some thoughts on what might be going on today.
SEC rules on short selling and the changes made up until 2006 ( amendments to Regulation SHO under the Securities Exchange Act of 1934 )
Regulation SHO, which became fully effective on January 3, 2005, set forth a regulatory framework governing short sales. One of the goals of this was to target potentially abusive “naked” short selling practices in certain equity securities. Additional regulation was put in place to limit the selling of securities without first finding a valid share to borrow. The 2005 implementation failed miserably.
A fantastic letter was written in December 2003 by former Undersecretary of Commerce Robert Shapiro and forwarded to the SEC. In the letter Shapiro detailed findings from his own research and his doubts that the proposed changes in the SEC rules would have any material impact on the abusive practices:

Ape historian superfind 13: and we get our first introduction to "phantom shares" - https://web.archive.org/web/20190623164454/http://rgmcom.com/articles/PhantomShares.pdf

​
perhaps the most interesting part of that pdf i just posted is the TREND FOR FTDs is going up while clearly the advancement in technology is also going up from 2005 to 2007- so the question is - WHY? why is it going up? is it profiable?

and yes every post mentioned here is backed up. In part 5 i will introduce the ipfs archives. its taking a while

Ape historian superfind 14: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2867383 "(Naked) Short Selling Around Earnings Announcement
AND THIS
Ape historian superfind 15: https://www.proquest.com/openview/b7759a0d7c621f67d82668197d99c379/1?pq-origsite=gscholar&cbl=18750&diss=y
Ape historian superfind 16: AND ANOTHER POST - "Naked Short Selling: The Truth Is Much Worse Than You Have Been Told"
​
\"Naked Short Selling: The Truth Is Much Worse Than You Have Been Told\"-exceprt.

so to sum up- this shows in a simple way that actually - apes were right. a few months after this date AMAs from Lucy and Wes and Dr Trimbath will start to unravel this shitstorm. and of course the smithonstocks links

Superstonk by end of march 2021 had 63 posts. April is where the real shit hides.
Ape historian.

in comes the first mention of DRS -by Austins-Reddit on 01/Mar /2021. post title "GME Paper Stock Certificates through "ComputerShare" after transferring from TDA"

The post below is what i wanted to reach out to you about: "Buy & Hold 2.0 - A theory on how locating REAL shares may trigger a domino effect."
oh- \"Buy & Hold 2.0 - A theory on how locating REAL shares may trigger a domino effect.\" -deleted again. funny that.
that post from the archives - well the excerpt is below:
​
computershare was postulated by at least one ape in march 2021.
TLDR- this entire research peice is fully available - just use my dashbaord and start searching for yourself - this is NOT the only things that happened. this is the main things that I feel accoring to me were most important.
standby for part 4.
ape historian-destroyer of free disk space