The former head of major crypto exchange BitMEX and now prominent essayist Arthur Hayes has come out with his new work titled "The Denominator." In it, Hayes, comparing the current situation in the U.S. banking sector to friends splitting the bill at a nightclub, tries to answer the question: Who will pay for the banking crisis ignited by the Fed's deflationary policies? Along the way, Hayes offers rescue options which, according to the author, guarantee not only safety but also the possibility of making a profit in the midst of the financial storm.
If we try to answer the author's question simply, we can say that the crisis will be solved "at the cost of the lives" of medium and small banks, which Hayes refers to as "not big enough to fail." He believes that their assets will surely be absorbed by the big systemic banks, which have guarantees from the U.S. government to cover customers' deposit losses.
On the other side of the coin is the real value of money in the pockets of citizens, which, according to Hayes, will certainly decrease as the Fed turns its policy around.
Thus, Hayes identifies two ways forward: reducing the price of money by lowering the Fed rate or increasing the money supply, which would also lead to the "cheapening" of money. If American politicians do not decide to let the banking system run its course and let it collapse, then they will come to this, Hayes is convinced. In both of these cases, the author sees salvation in Bitcoin and gold as means of preserving value outside the banking system.
"Get your Bitcoin, and get out!" Hayes concludes his essay.