XRP Domino Theory Hidden Systemic Risk Exposed

Jake Claver

In this video, we explore the "Domino Theory" which delves into macroeconomics, systemic risk, and a sequence of potential events that could significantly alter the financial system. We examine the roles of Japan's economic strategies, U.S. Treasuries, Tether, Bitcoin, and the U.S. stock market in a chain reaction that could lead to a major economic shift. Through a discussion on blockchain, smart contracts, regulation, and global economic power dynamics, this video aims to shed light on how interconnected and vulnerable our current financial system is, and the pivotal changes that could lie ahead.  #xrp #bitcoin #xlm #xdc #crypto   Find more from Jake Claver by visiting the links below:  🖥Websites🖥 Digital Ascension Group - https://www.digitalfamilyoffice.io Beyond Broke Mastermind - https://mastermind.beyondbroke.com Digital Wealth Partners - https://www.digitalwealthpartners.net  Need a cold storage wallet solution? We are proud to support D'Cent D'Cent Wallet - https://store.dcentwallet.com/o1cddj

Transcript

00:00this is very likely one of the most important videos that i will ever put out so with that said

00:08buckle in get your coffee and i hope you watch till the end

00:12so what i'm going to talk about today is what i call the domino theory and it's going to be a

00:19little bit of macroeconomics it's going to be systemic risk and it's going to be a sequence

00:26of events that could cause pretty significant change in the financial system and how blockchain

00:34smart contracts regulation and a shift in global economic power takes place so the main components

00:43of this i'm going to talk about each domino and their implications in the change in the pattern

00:49that would have to play out and again this is a theory but i think it's likely otherwise i wouldn't

00:55be putting the video out so we'll see and stick around to the end because i think a lot of people

01:01are going to be happy with how this ends scary in the middle though so this is going to start with

01:06japan and then we're going to talk about u.s treasuries and then we're going to talk about

01:11tether and then we're going to talk about bitcoin and then we're going to talk about the u.s stock

01:16market and how the sequence of events could cause a significant downturn in u.s stocks and the broader

01:24economy all right so let's start with japan this year japan is poised for pretty significant upside

01:31in their stock market the nikki is is almost back to its all-time high uh hasn't been here since the

01:3880s and you know they're positioned to actually do really well over the next decade and with that

01:46you know we've seen them start to raise their interest rates which have been even negative at some

01:51points over the last couple decades and because of that they've accumulated a very large position

01:56in u.s treasuries it's been more profitable for their government and other people there to hold

02:02foreign treasuries and u.s treasuries in particular than it has been for them to own their own treasuries

02:08so sbi is a very large um financial power in japan yoshitaka katao is the ceo of sbi and he's a big

02:22believer in ripple sbi owns 10 percent of ripple equity they're a big believer in xrp and we'll get

02:27to that at the end of this um they are also very progressive there in japan and they're working to

02:35issue a cbdc this year they are likely going to be the first g7 nation to issue a cbdc they're in the

02:44pilot phase of their launch of that and the other g7 nations are still a bit behind so it's likely

02:52that they will launch a cbdc and with that it it may incentivize their people and their government

03:02and the banks to hold bonds associated with that that may yield even higher than u.s treasuries and

03:10because they are the number one holder globally aside from the u.s itself of u.s debt and treasuries

03:17this would be a catalyst for them to dump u.s treasuries and so there's the first domino what i'm

03:24watching for is a situation where japan's economy starts to do really well they're able to fool

03:30themselves even further out of the hole either by issuing a cbdc or other economic factors where

03:38they begin to dump u.s treasuries and maybe they do it all at one time and that's really the potential

03:44problem is if they were to dump all that debt on the market at one time the fed has slowed their

03:49purchase of foreign treasuries the main entity that's been accumulating purchases of treasuries

03:56over the last couple years has been tether so tether is a stable coin that it provides the

04:05majority of liquidity in the crypto market and you know if japan were to dump u.s treasuries

04:11it would cause a lot of instability in the treasury market the fed would have they've already raised

04:17interest rates they would have to raise them even higher you'd see a spike uh and and the yield

04:22curve is inverted already we've got um 10-year treasuries lower than two-year treasuries which

04:29is not good if you follow global and macroeconomics at any juncture uh or at any pace you're probably

04:37aware of a lot of these things but they're not good we're we're in a very scary unsound time for

04:45for the u.s economy and u.s treasuries and the underlying debt that backs our system most of

04:51people have been screaming this for years but i think this will actually be the point the tipping

04:55point where it becomes a problem so they dump the treasuries and cause instability in the treasuries

05:00market uh interest rates will have to spike in order to combat that and incentivize people to

05:06hold and buy u.s treasuries but if it's the number one holder internationally were to dump i think that

05:11other international holders would also dump and this would be a domino effect there that would cause

05:18instability for tether tether tether would have to mint more tether in order to purchase those treasuries

05:24but i think it would it would cause some systemic risk and the backing for tether would then be

05:31destabilized and this table coin would come unpegged and we've seen what's happened in the past when

05:36that's occurred for other stable coins like terra luna if you were around for that so that's my

05:44anticipation we see japan dump uh u.s treasuries again because their economy is doing well they

05:50issue a cbdc they want to incentivize the government the banks the individuals there that are in japan to

05:56hold their own debt instead of international debt and that'll destabilize the treasury market

06:02and then destabilize tether so so what are the implications there for tether well again it provides

06:09the majority liquidity to the crypto market i don't know if you've ever tried to trade usdc or another

06:16stable coin for um you know something through an exchange but the volume in that market is

06:23significantly less than tether tethers you can move millions of dollars through tether uh ripple and

06:29their odl they even use tether in certain corridors because it's more liquid than xrp uh in certain

06:34corridors so that becomes destabilized that destabilizes the crypto market we've seen a huge

06:41run-up in bitcoin now before the halving which is unusual and you know we've got exposure to the

06:50broader markets and systemic risk that wasn't there before because of the etfs so the etfs for bitcoin

06:57were approved and launched on january 10th this year and now these large investment banks blackrock

07:04grayscale fidelity and many others hold significant allocations to bitcoin through the spot etf

07:12so if we had instability in tether and it caused a downturn because of the market becoming illiquid

07:23you could see a significant sell-off in bitcoin and that causes even greater problems as systemic risk

07:30for these investment banks because for them to rebalance they're still t plus two

07:36with the clearinghouse and the brokers so they're not going to be able to rebalance their books and if

07:46this happens over a weekend it's even worse they're going to have significant losses uh and this happens

07:53anyway for bitcoin in most rallies you see drawdowns in bitcoin of 30 to 40 percent if we saw that

07:59and the investment banks were holding those allocations like they are and that didn't rebound

08:04very quickly you would have huge losses that they would have exposure to so if we saw instability in

08:11tether and then you had a drawdown of you know 50 percent 60 percent in bitcoin because of you know

08:19liquidity being pulled sucked out of um the crypto market in a massive way with instability and tether

08:26this does not bode well for the investment banks and their exposure now to bitcoin uh and the sec

08:32obviously you know they didn't want to approve the etfs uh they were almost forced to because of the

08:38court ruling with grayscale um and you know senator warren and many other people have come out and

08:44spoken against it as well that you know it's the underlying asset itself is volatile and unstable

08:50and could cause problems and systemic risk and so now that's what we have and because we don't have

08:55stable coin regulation to to verify you know make sure that tether is stable uh it leaves a gap in the

09:03market as now we would have tether collapsing bitcoin collapsing and in order to cover those positions

09:12and make people whole the investment banks are now going to have to pull from other positions

09:17in the stock market which is also very fragile at this point you've got a few select stocks propping

09:23up the majority of the market pushing for all-time highs we're at peak levels of risk in the stock

09:30market in my opinion um i'll just say this here nothing here is financial advice only for entertainment

09:36educational purposes only always speak with your financial advisor before making any investment

09:40decisions so we've got all-time highs in the stock market that's propped up by just a few stocks

09:45you know the investment banks would then have to sell off positions in traditional stocks and other

09:49financial products to cover the losses that they would be experiencing in bitcoin because they can't

09:54settle uh real time like bitcoin actually settles i say it settles real time it's you know a couple hours

10:02which is still much faster than t plus two so it trades 24 7 365 where stocks do not

10:08so now you've got this systemic risk you've got the actual losses that would have been incurred by

10:15the investment banks that we'll have to cover and this would cause sell-offs in other positions

10:1990 of the stock market is traded by bots at this point anyway so now once these sell levels are reached

10:27you're then going to see these bots liquidate positions also and it would cause a snowball effect or a

10:34catalyst that would pull the traditional stock market down you would see a collapse and a sell-off

10:40very rapidly in the stock market and we're already in a position where things are very illiquid

10:46because of where interest rates are the fed has hiked interest rates uh i do anticipate some pivot

10:53at some point this year uh with the election coming up however you know most people are looking into

10:59march and seeing that that's not going to be the case they're going to continue to hold rates where

11:04they are and all things remain equal if stocks continue to hit new highs that's probably what will

11:10happen i don't know when this happens i'm just going to go ahead and say this here this could be

11:15months out but i think it is likely at some point in 2024 that we see this scenario actually play out

11:23because they need to bring in regulation around digital assets stable coins bridge currencies in order to

11:31create efficiencies in financial markets release cbdcs and move into the next phase of you know financial

11:40system and global economics so these are the things that i think could play out in order for them to bring

11:48stable coin regulation obviously if we saw you know tether collapse on itself because of u.s treasuries

11:54selling off they would need to verify that you know one u.s treasuries would no longer be tier one

12:00collateral the bis would have to change that the only other tier one asset at this point is gold so

12:06maybe they make you know all of the stable coins have to hold gold or other commodities like oil as

12:13their backing and they can't use uh sovereign currencies as the backing or treasuries which

12:18would be interesting i don't know that that'll be the case maybe they make it where the backing for

12:25the treasuries and the currency that's issued by sovereign nations has to be backed by gold or oil

12:32and then you could still you know leverage that and have the treasuries as tier one collateral as long

12:36as they were backed maybe they make the cbdcs uh treasuries and they're held in that position we'll see

12:43but these the systemic risks that i see you know um potentially playing out i know a lot of people

12:49are really happy right now they're confident they see the upside in their portfolio especially if

12:54you're in crypto uh and the stock market and everybody's kind of euphoric and that's when i

13:00take pause and step back and start becoming concerned and so that's why i'm putting this video

13:06out now because i see these things looming and this is not to fear monger this is just to make you aware

13:14of potential situation that could play out so what's the solution say all this does play out how how do we

13:22fix this what happens i'd have to rush in stable coin regulation and that actually gives some clarity

13:30to a few assets that i like um and other people that watch this channel probably like xrp and xlm meet

13:38the qualifications for a bridge currency and then those could step in and provide liquidity in the

13:43market like i mentioned before triple uses tether in certain corridors to provide liquidity through

13:50their odl product xrp could step in in those positions if there was enough liquidity in xrp to be able to

13:57do so you know you've got blackrock who has robbie minchinik who's the head of their digital asset

14:04division he came from ripple um there's a lot of correlations in people that are invested in ripple

14:11and their success and xrp also that this would benefit so let's say all these systemic risks do take

14:21place the stock market collapses we see a collapse in u.s treasuries we see a collapse in tether we see a

14:27collapse in bitcoin where are all those people going to run they're going to run to gold which

14:32a lot of people are already there and they have figured that out you know you've seen the investment

14:36banks and uh central banks over the last five six years uh accumulating a ton of gold and i think

14:42they're going to run to xrp and so if if you had a inflow or influx of a significant amount of liquidity

14:49into xrp it could then facilitate the back-end settlement of the stock market it could then facilitate

14:55international trade and settle you know transactions at scale for swift there's a lot of use cases that

15:02have been proposed and discussed over the last decade that could be fulfilled if there was enough

15:08liquidity in that asset so that's my anticipation is that's how they bring this in we rush in regulation

15:15we start using those bridge currency assets as backing and look to provide liquidity in an illiquid

15:22illiquid system you'd see fed drop interest rates pretty significantly from where they're at now

15:27and pivot they would have to but that also you know causes inflation so their mandate is to keep

15:34it at two percent they're still not quite back to two percent inflation there's just a lot of

15:39instability in the market that would basically shore things up if this were to take place sbi

15:47back to the beginning in japan has said that all the banks there will use xrp to settle

15:52in between them and internationally in 2025 which is just one year away and there's you know ripple said

15:59that in 2024 a g7 nation would adopt a cbdc which again you know i speculate is japan just based on

16:06where they are in the track to launching theirs they're in pilot while everybody else is still

16:12either research or development or testing so that's where we're at i see the dominoes set up in a

16:20row here and i'm waiting for japan to knock theirs over and things will escalate very quickly those

16:28dominoes will fall very quickly if that takes place so just some thoughts for people you know

16:35i'm sure there'll be a lot of people that comment on the video and say this is crazy that's

16:39never going to happen u.s treasuries have have always been the most stable thing they're never

16:43going away there's no systemic risk for bitcoin at this point there is like you wanted the etfs

16:51you got the etfs you've got a huge influx of liquidity the investment banks are now

16:56exposed and so is the broader stock market because it doesn't settle real time it's t plus two

17:04let me know what you think type in the comments below you know is this plausible can it happen

17:10what are your thoughts on this have you heard anybody else discussing this and if you haven't

17:14yet please like subscribe and we'll see you on the next one

Category

Transcript

Recommended