GameStop: The World’s Truman Show Moment
The Truman Show is a movie about an insurance salesman who discovers his life is actually a reality TV show. At one point in the movie, Truman Burbank (played by Jim Carrey) starts to notice unusual events, and then tries to break the carefully set boundaries and rules that had governed his life.
In many ways, The Truman Show is an apt metaphor to describe where we are now. We sense that there is something broken in our society, and we have grown more suspicious of our media, our governments, and our institutions.
Wallstreetbets has stumbled across a glitch in the system, specifically, the massive leverage that exists in our financial system. They have found a loose thread and have decided to pull on it. What occurred last week with Robinhood restricting buy orders for $GME, $AMC, and a handful of other stocks are signs of cracks in the financial system which only drew more attention to its potential unraveling. What happens when we keep pulling? Will someone step in to stop us? What happens if it actually unravels?
The Fed and the SEC will undoubtedly step in to prevent the system from unraveling. To extricate themselves from this short squeeze and stop a contagion from infecting the entire financial industry, they will have to either :
1. restrict trading on the stock,
2. force GameStop to issue more shares to be made available to only the hedge funds that have shorted them, or
3. Bail out the hedge funds directly.
Doing so will only confirm people’s suspicion that the system is rigged against them and they will start to look for other strings to pull. What else can we short squeeze? How about silver? How about gold? What else can we break?
As Truman Burbank’s suspicion grew, so did his efforts to break the boundaries and rules that had governed his life. The producers of the show in turn, had to employ more and more drastic means to confine and restrict him, even at one point staging a nuclear power plant meltdown.
Like Truman Burbank, we will start to question everything in pursuit of truth. We will keep breaking things until we stumble across the ultimate truth- that our entire financial system and everything we think we own is built on a gigantic pyramid of debt. Cash is debt. Stocks are debts. Bonds are debts. Paper derivatives of gold, silver, oil, and other commodities are all just debts. And that the primary issuer of all this debt that collateralizes the entire global economy is the US treasury, the Federal Reserve, and all of the central banks of the world that acts as subsidiaries. And that those who are in control of these institutions can issue debt at will, and that it is based on nothing, and that everything is just an entry in an electronic database. It is all made up. None of it ever existed to begin with.
Bitcoin is also just a database. But it is an immutable database secured by mathematics controlled by no one. The bitcoin blockchain is a pillar of truth in a world built on lies, half-truths, and empty promises. Truth always prevails in the end.
