Emergency Episode: Why This Financial Crisis Is Worse Than 2008 | Balaji Srinivasan Pt 1 (Fan Fav)

Tom Bilyeu (0:00)

What's up, guys? Get ready for part one of an incredible three-part episode where we delve into the controversial, thought-provoking, and sometimes almost scandalous viewpoints with the man who burned one million dollars to raise awareness about the trillions of dollars being printed, the one and only Balaji Srinivasan. Balaji, who predicted the response to COVID and the civil unrest that followed on Twitter before basically anybody else, is joining us now to talk about the precarious state of the economy, possible banking collapse worse in 2008, and the catastrophic consequences you'll need to be prepared for.

Get your mental armor ready and brace yourself for part one of this very powerful conversation. First, did you know Impact Theory is now available on Amazon Music? Head over to the Amazon Music app to hear more Impact Theory episodes like this, the hard conversations that really matter. Don't wait guys, subscribe to Impact Theory now on Amazon Music and be legendary. I'm Tom Bilyeu and welcome to Impact Theory.

Balaji Srinivasan (1:05)

The problems go all the way to the bedrock of the financial system in terms of treasuries being the new toxic waste. It's going to be at least as bad as 2008, but probably worse than that.

Tom Bilyeu (1:16)

You spent a million dollars of your own money to raise the alarm to the fact that the government is printing trillions of dollars.

And what I want to know is, how are you so sure that the US economy is in really bad shape? What does Bitcoin have to do with this? And how on earth could you justify spending a million dollars of your own money to make people aware of this?

Balaji Srinivasan (1:40)

I do believe that we're in the middle of something, we're at the beginning of something that is at least as serious as the 2008 crisis.

The government is extremely good at kicking the can, and that's its primary skill in some ways. So it's hard to know exactly when things will be formally acknowledged as such. I've got a bunch of slides that show that the economic situation is parlous, A.

B, that the degree of collapse across a number of different industries and a number of different weaknesses will probably necessitate some form of bailouts or printing, even if it doesn't look exactly like 2008 A lot of what the financial system does is it evolves to evade last time's pattern recognition.

And so it may not look exactly like it used to. Despite what form it comes in, whether it's like Treasury buybacks or the People's QE, which are different ways of like injecting money into the system that don't look exactly like the 2008 bailouts, I do believe an enormous amount of money is going to be printed just like Ray Dalio, just like a number of other people do. And in such a case, you want to have quote outside money, whether that is gold, whether that is a foreign fiat currency that you have faith in, that's sort of outside the Fed's control, or whether that is Bitcoin or a cryptocurrency, Bitcoin in particular is built to be difficult to seize. I think that's part of the answer. And it's not the only thing, you want an allocation, you want to think about other things in life, like where you live, your location. Again, Dalio also thinks of that as an important thing. You know, the early 2010s, Janet Yellen was credibly reported as having known about the housing crisis, having seen it and not raise the alarm. And now I'm actually sort of finding like, you know, people quote, don't want to hear you raise the alarm or whatever. They'll be like, oh my God, you're a doomer. Why are you saying this? Right? The financial crisis was maybe officially acknowledged in September 2008 But of course, it had been going on for years before then. It was just something where it became undeniable at that point. But I felt it was my responsibility having put together what I had seen to be like, you know what? This is a lot worse than people are saying. It's not just like a single bank crisis. It's not even just a banking crisis. It's a central banking crisis. The problems go all the way to the bedrock of the financial system in terms of treasuries being the new toxic waste. And it's going to be at least as bad as 2008, but probably worse than that.

Tom Bilyeu (4:09)

One thing I really want to, I want the audience to understand why I become so obsessed with this. And I've heard you say that the farther we get from the last deleveraging, the more incautious people become. And what I think people have, the subroutine that runs in the average American's mind for sure, is that this hasn't ever happened, not realizing what they mean is hasn't happened in my lifetime. And they don't realize the hard truth, which is that every single empire and every reserve currency, all throughout all of recorded history have all collapsed. They have all failed. They have all gone through this massive deleveraging. And deleveraging is a really polite way of saying, everybody loses everything. And it is a bloodbath. It is often, as Ray Dalio talks about, it is often marked by blood, literal blood in the streets. This is when we go to war, everybody's freaking out. And so because it's been so long since we've had a big war on a global scale, because nobody alive in the Western world anyway is aware of a massive deleveraging.