Kind: captions
Language: en
Bitcoin is worthless if you do nothing
with it if no one trades a bit another
Bitcoin ever again it falls to zero hold
on that's a very big statement there's
chaos in the universe it's always
increasing everyone's going to go to war
at some point so everyone's beefing up
on defense the incentives you create by
allowing the government to steal is so
wrong that we're going to create an
entirely new system we've accomplished
nothing we have not done what Bitcoin is
there to do and therefore we will be
rewarded with
zero do you think that we are in a truly
once in a-lifetime moment that um people
should stop pay attention figure out
what their crypto strategy is absolutely
we are at the culmination of the post
World War II period we've we've we've
had four generations since then so all
the people who fought in the War pretty
much dead so we've lost that that
knowledge that reticence to ever do
something stupid and terrible like a
total World War ever again now we have
people around the world who are
celebrating these leaders who are
bombing indiscriminate civilians because
it you know solves their particular
issue whatever that is because we don't
have this institutional knowledge so
everyone else is dead who would
participated in World War II so and we
also have a a situation where you know
the United States did very well out of
War War II and created a whole global
system that to preserve their hegemony
and now that's coming undone uh and you
know when top dog is getting challenged
by the dogs at the bottom there's always
conflict and so we're at that point in
time we have no institutional memory of
how bad war is and we have a preeminent
power that's being challenged by others
who was going to resort to violence to
preserve their position I think we are
at this situation that has happened in
the past many times empires have come
and gone but now we have for the first
time in human history a an ability to
save in a currency Bitcoin and the
cryptocurrency situation in general that
is globally owned by
everyone and so the people own a new
type of money it's people around the
world can still sell their Fiat whatever
and buy Bitcoin it's not blocked or
banned in most places yet and so you're
able to move wealth between this analog
system that we've had for thousands of
years into a new way of socially
creating Financial wealth the financial
system
a new type of money this sort of this
sort of situation is never going to
happen again because we have all these
Fiat assets that are being depreciated
and everyone knows it's happening and
now we have this little small door
called Bitcoin and people are starting
to go through the small door and that's
why the Bitcoin price is up I don't know
50% or 60% this year already as now we
have the institutional investors saying
yeah I understand this game is rigged I
helped rig the game now I have a product
where I can can get out of this mess
that I created get me the [ __ ] out of
government bonds I want some of this
Bitcoin too so now everyone's competing
to get in this little door and that's
why the price is going up so this is a
once in a-lifetime Opportunity we have a
system reset and we have a way to
preserve wealth in the old system and
bring it into the new system and that's
what crypto is all right that's powerful
so if we think of crypto as the arc that
we can all get on before the rain comes
uh the catch is that you've got all
kinds of different cryptocurrencies all
kinds of different thesis about which
one we should be getting into um what's
your take how do you break down the
world of crypto so Bitcoin is the
reserve currency if you will of crypto
it's the ultrasound money it's it's
crypto money it's and it's proven that's
that's what it cares about the community
of Bitcoin cares about security and um
the immutability of the Bitcoin
blockchain and it wants to make it the
soundest crypto money so if you're
thinking about okay I don't know
anything else about crypto but I kind of
believe in this whole inflation and
changing Global relations story than
just buy Bitcoin right it's got the
largest market cap um it's very
conservative with the types of things
that are added to the the network
because everyone wants to make sure that
Bitcoin is always the hardest money so
the experimentation is much lower on
bitcoin than other uh other networks um
next you go to well okay can we build a
new Financial system within crypto
that's decentralized Finance defi um and
ethereum in my in my worldview is the
the best decentralized computer that has
been built uh thus far and so if you
think okay I think we need a new
Financial system that's based on these
crypto know crypto assets that's
decentralized that's transparent blah
blah blah then ethereum uh is where it's
at now once you get past those two
things I'd say most other things in than
crypto are either some sort of
application that rides on top of
ethereum or a decentralized like
computer another blockchain trying to
disrupt either being the best money or
the best decentralized computer and then
you sort of have to get into the Weeds
on understanding what it is these
Protocols are are trying to do so for
those who just want to like close their
eyes and buy something that's crypto
safe not saying that's you know there's
no risk here I would say Bitcoin and
ethereum are where you should start your
journey and once you say okay maybe
there's some things I think these
protocols could do better or I've been
hearing some things about these exciting
new very smart people building something
then you start going down the rabbit
hole of of other coins that do other
things and obviously have more risk
because they're experimenting more what
do you advise people around volatility I
think one of the things that draws
people to crypto specifically is is the
volatility I'm actually very curious to
see what happens to um cultural energy
around crypto once it's the the tried
and true thing volatility is your friend
the reason why you're even thinking
about crypto is because the price went
up a lot and you heard about it so you
want volatility the entire
trafi traditional government apparatus
is trying to do something unnatural
which is remove volatility from the
system entropy is always is increasing
it is unnatural to try to suppress
volatility think about it like your lawn
if you have one at your house right
entropy says the grass keeps growing
because that's what the grass does what
do you try to do you spend energy to cut
the grass because you want it to look a
certain way a certain nonvolatile
Pleasant way but it's unnatural if you
don't have the energy to cut the grass
the Grass Grows and the grass will grow
long after you're gone because you can
only do this so long and that's the same
thing governments and central banks and
banking systems are doing they're trying
to squash volatility we don't want
volatility and they're trying to
convince you that it's safe but there is
no such thing as safe there's chaos in
the universe it's always increasing
they're doing the unnatural Thing by
trying to remove it and then at certain
points they can't do it anymore and then
there's an explosion somewhere whether
it's a war whether it's a financial
crisis so embrace the volatility this is
the nature of the universe and that's
why Bitcoin in crypto is a good thing
because there is none of this
manipulation it goes up it goes down but
it's a true reflection of what the
universe is so I think volatility is a
good thing obviously that means if you
use leverage be very judicious about it
if you're a leverage if leverage trading
is your thing that better be your
full-time job like you better eat
breathe and sleep the thing that you're
trading because that's the only way that
you're going to survive thinking that
you're going to get home from work put
on some highly leveraged crypto trade
and just trade for a few hours and then
go to sleep you will lose all your
money okay volatility as a good thing do
you think that crypto will lose some of
its um its potency its cultural energy
when the volatility begins dying down or
will like in a given cycle the way that
this traditionally goes is uh you've got
Bitcoin which has massive volatility but
is less Vol volatile than some of the
what people lovingly call
shitcoins um so people tend to go down
the curve so they'll start with Bitcoin
they'll ride that up as that begins to
stabilize and chop sideways then they're
going to go to the next volatile if that
crashes or whatever they go to the next
the next the next constantly chasing
volatility um will that forever be
people will just keep introducing new
and highly volatile things or will it
become more like gold where it's it's a
far more stable entity well Bitcoin as
you law of large numbers the larger it
gets the less volatile it becomes
um and as you mentioned right for people
who are saying I want to make big gains
in a short period of time Bitcoin might
not do it for them they say well I need
the next new new new thing and so they
start trading whatever the new shiny
Bobble is that's being sold out there in
in crypto there's nothing wrong with
that just recognize what you're trying
to do if you're saying I want to save in
a ultrasound money then yes so
volatility is not a good or bad thing
for Bitcoin it's it will go down over
time as the asset class gets bigger if
you're saying I need the volatility I'm
a professional Trader this is what I'm
here for then there will always be a new
thing to trade because the great thing
about crypto is it's this the only free
market left where humans are expressing
themselves and whatever is we think is
valuable there's no manipulating force
with you know an unlimited bag of fiat
currency that's telling us what is a
good and or bad investment and so there
will always be volatile things within
the crypto ecosystem so long as there's
human beings Trading and I guess we'll
have the machines too soon these AI
operators uh in the
ecosystem it's really interesting so I
want to get to the essence of um what
crypto is I want to get to the essence
of What markets are why people play them
so I I really want to be the
contribution that I make to um I mean
anything that I do quite frankly is
helping people get to the essence of it
to think from first principles to build
a thesis uh even though ultimately I
think that only the simple spreads I do
want people to be able to understand the
the nature of this do do you see markets
as gambling like are they gambling at
their very nature I'd move it even more
fundamental we are gamblers everyone all
the time constantly because we don't
know what the future holds um so let's
take an example and I wrote this in a
previous essay so imagine you're going
there's a building you walk out the
building
you can either take the stairs or take
an
elevator um so the stair taking the
stairs using your own feet walking up is
safer than the mechanical thing which is
an
elevator but walking up the stairs takes
more energy than riding up the elevator
so what do you do well your brain you
know whether you're conscious of it or
not is constantly evaluating the
probability that if I do one of these
things will there will there be harm
that comes to me and is the probability
of that harm outweighed by the gain
whether it's time or energy by using one
or the other modes of transportation and
so you're gambling you don't know what
do you know if this elevator is going to
break down and fall 30 flights in an
instant no but you believe that there's
been a um credible engineer that's
designed this piece of technology that
there's a government building codes that
govern how it's been installed and how
it's been made
so the risk of me taking this elevator
even though I don't know if it's going
to fail when I get on it is very very
low therefore I will take the elevator
because it's faster and less energy
spent than walking up the stairs to the
top of the building right so we gamble
all day every day because the future is
unknown so for people that say that oh
markets are bad because it's gambling no
your whole life is a gamble you do not
know what's going to happen one moment
to the next you are constantly assigning
a probability to the Future and that's
what the market is the market is for a
particular thing what does the crowd say
the probability of the future of this
company building this product making
this money or this asset being worth
whatever it's worth in the future what
do the crowd think that's what the
market is telling us and the market
gives us great signals as to what the
crowd actually thinks because we're
putting our money on the line and what
is money money is Just Energy and our
time in an abstracted form that's why
money is the most important thing in any
society because if you degrade the value
of money you degrade someone's time and
their effort and their energy and it
it's you know it's a front to human
dignity if you degrade the value of the
money that they earn by doing work to
you know earn a living pay for food blah
blah blah right so markets are gambling
but your entire existence is a gamble as
well so I don't think there's a problem
with that okay this is uh really
interesting and it goes back to what I
was talking about with um the ability to
save from where I'm sitting feels like
it should be a human right uh so okay
let me just go back and recap what you
said money is energy and time in an
abstracted form so uh you go to work and
some you do a thing that the world says
that they value which is why somebody's
willing to pay you for that because
they're able to create a thing that they
sell to somebody so you spend energy and
time creating a thing that people want
to buy now what that allows you to do is
Pro of work so you have this unit of
money that you've exchanged for your
labor now when you are putting that into
a system where they can socialize losses
so H this is it drives me crazy how
complicated this all is but let me just
walk everybody
through what ends up happening in the
current Keynesian economic model that we
have which uh I'll give a brief
summation of Keynesian economic if you
see that I've gone wrong in any way
please jump in uh Keynesian economics is
basically hey uh the market left to its
natural devices is going to swing wildly
there are going to be massive upsides
there are going to be massive downsides
and if you if you get to one of the
moments where the economy is not able
to progress forward part of the reason
it may not be progressing forward and
this is the break from the classical
model is that people are just poor and
and so if you stimulate money into the
system now you can get the economy
moving again and so you flatten the
curves both on the upside and the
downside so you're squeezing the
volatility by um going back to your
mowing the lawn analogy you're injecting
energy into the system the the
government is putting this new money
which they're making up out of thin air
into the system in order to get people
feeling like they have money again it is
very much a a man-made manipulation of
the system but this is essentially what
we've been doing since the Great
Depression so uh canes comes up with
this idea in the Great Depression and he
realizes hey wait a second there are
people willing to work there are
factories here that are not at capacity
there are even people willing to buy and
if they just had money then the economy
would start moving again so hey make up
money okay sounds amazing until you put
it together with what you just said and
the fact that this is socializing losses
so all right something bad happens 1929
we have an economic collapse um people
got into a bubble we just got into a bad
situation for a whole host of reasons I
won't go into it right now but anyway
bad thing happens the government then
says oh I'm going to print more money
which is now taking that loss and
spreading it across everybody that's
what happens when you're printing money
because there's no new Goods put into
the system that anybody wants there's no
new labor that has gone into the system
there's only the artifact what should be
the artifact of somebody's time and
energy but it's not it's just made up
and so that ends up diluting across
everybody so you have individual losses
with that are spread across everybody to
the benefit of only people that hold
assets so now you get this massive
bifurcation so I'm very worried about
the hollowing of the middle class and
going back to what exactly creates this
as far as I can tell is this it is this
moment right here where you are
socializing losses across everybody so
the poor the middle class and the
wealthy are all going to have their
buying power reduced but only people
that have assets are going to get
wealthier and so what's crazy is if you
look at the moment that we're living in
right now you have a growth in the upper
class so if you break lower middle upper
you've growth in the upper and you have
growth in the
lower and only the middle class is going
down now at first I was like well that's
kind of exciting you actually have more
people going into the upper class than
you have going into low lower class
amazing right but as you Hollow that out
you get just literal Division and
warfare within a
country all of that makes sense based on
what you just said which is that money
is your time and energy in an abstract
form and it is an affront to human
dignity when you begin messing with that
system yes now laying all that out this
this is why I am really
unnerved by the moment that we're living
in now and we'll I'll try to tie this
all back to um crypto as the potential
Arc that we're all going to get on as
the the rain continues to fall but just
today uh one of my employees came up to
me and was like I'm finally seeing the
data that backs up what I feel which is
I just cannot get she didn't say
American Dream but that was the
punchline I can't afford to buy a house
I see other people making huge amounts
of money and I'm not I'm not able to get
ahead and on paper it seems like I'm
making enough money but I just don't
feel like I'm getting anywhere and so
she isn't positive about the moment that
she's in nor is she optimistic about the
future because they're there are these
cues that people look to buying nice
things having a nice car having a nice
house feeling like you can afford
children feeling like when you retire
it's going to be travel and fancy
restaurants and it isn't going to be me
working until I'm 85 and you know super
unhappy and so when you take that you
take the anger you take the frustration
you take the GameStop of it
all again people yoloing in
people I don't want to say following
sort of culty ideas but like an idea
will gain momentum and they just get on
board with that momentum versus doing
what you said get your spending under
control figure out your risk appetite
deploy that into um an asset class that
you believe is matches your risk
appetite and is going to go somewhere
okay so there's been a
demoralization of
people they don't understand what it
is but
it's not to be too harsh but it's it's
Keynesian
economics it's the
manipulation of the currency it's the
massive inflation to deal with
debt
okay if all of that is true then it
certainly explains
means this Great Migration from trafi
over into crypto does all of that feel
right or do you feel like I'm being
unfair to the current economic situation
to Keynesian economics maybe I don't
understand it I mean the only wrinkle
that I would say is that if the
government is able to borrow money and
build things of real economic value
like okay in the 19
1950s Eisenhower did the in the United
States President US President Eisenhower
did the highway act right and the US
built however many millions of
kilometers of roads which lowered the
cost of
Transportation you know had all this you
basically had the explosion of mass
Market stuff because you could ship
things from coast to coast blah blah
blah in China you had building of uh
hydroelectric dams okay there was some
environmental cost but it brought Elric
electricity to the countryside and so
these are only projects that governments
can can do because they have the ability
to tax uh and spend on a on a aggregate
level so I say the only caveat is if
you're able as a government to build
these types of things that have a rate
of return greater than the debt the
implicit debt cost that you're wasting
on the economy then those are good
things to do the problem is that there
there's there's a finite of projects
like that uh the society that you're
building these things in can only accept
so much of this infrastructure spending
the problem is that governments don't
know when to stop they don't know they
think everything's going to be like the
highway act in the 1950s in the United
States or building free gorgees Dam in
China versus where it is today which is
the building they're building a lot of
stuff that has no value because it'll
never earn back its its
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what are we building today well I mean
I'm saying we as a global Society I
don't know what politicians in the US
are building or China or anywhere I'm
just making sort of a obled statement of
people I don't know there's Biden doing
what's it the inflation reduction act or
some sort of act that they're building
stuff in all these government subsidies
to build things whether it's
electrification of the Grid or whatever
right there's industrial policies for
governments around the world saying we
need to build whatever it is we think is
valuable as a
government sometimes that's rooted in
Market signals other time it's just hey
I want to give a a backhander to my boy
in my uh in my district that's the
problem there is a good there is good
that can be done doing that but
politicians abuse it and we're at the
abusive stage of you know the initial
gains of building some of these pieces
of public infrastructure now we're just
doing stupid [ __ ] Ray alio talks a lot
about debt cycles and the inevitability
of how this just Loops over and over um
is all of this inevitable and do you
think that the migration to
cryptocurrency will be complete and
will'll never be back in a system like
this again or do you think these systems
will coexist so it's definitely not
inevitable uh the great example is
what's happened down in Argentina so the
policy of Argentina is if you've never
been it's a beautiful country [ __ ]
love it down there I've been skiing
there and you know to the the falls and
all kind of stuff it's got a massive
Coastline it's got aable land great food
great wine space for people to live and
yet it's mired in poverty and inflation
because of political choices of
Keynesian taken to you know another
level the her onist um sort of political
culture down there and the people after
I don't know 50 or 60 years of this [ __ ]
are finally fed up let's try something
different and you have President melee
down there who basically campaigned on a
promise of I'm going to cut down
government services close a bunch of
Ministries we're going to balance a
budget and he's already balanced a
budget I think within the first quarter
or two of him being there so we'll see
how the economy reacts so the people do
have an option they can reject what the
elites are telling them oh there's only
one way to do this which is print money
and do c in economics no there's another
way which is you earn them you propose a
taxes we the people agree to pay these
taxes and you the government do what we
told you to do build roads build schools
healthc care police force blah blah blah
and don't do anything else and this
other [ __ ] that that you got that
the government has tacked on to their
responsibilities um and created all
these deficits so there is another
option but it requires people to
understand you know where's a situation
there is there isn't one way to do
things there's another way to do things
there's a way to run the government like
you run your household you make $100 a
month you're only able to spend $100
that's it no nobody runs our household
like that though there's something about
the the culture that we're in right now
because if you look at um debt the
government operates on a debt businesses
are all in debt uh individuals are all
in debt we were at 0% interest rates for
so long money seem free people just like
just took on debt debt debt Deb debt and
so it really requires a cultural shift
more than anything and I worry that what
we're seeing in Argentina is that oh
yeah there is a point at which it is so
brutally painful that people would
rather austerity than continuing to
suffer the way they've been suffering
but are we
anywhere near that point or maybe a
better question can we make the change
without needing that amount of
suffering no because the loss is there
the debt has been taken there's been
unproductive activity and this is the
global thing right Global debt to GDP is
I
think 360% per the World Bank or
something like that and it's been
accelerating over the past two decades
right so there is an implicit dead
weight loss in the system the question
is who Bears the loss now that's
whatever government is tackling what
does everyone government do they push
that loss down onto the people
themselves VI inflation tax but the loss
has to be paid it's not like the
Argentinian situation is without losses
people are going to lose money in
austerity right the question is who
loses the money so if it's I don't like
austerity because deflation destroys the
banking system well in a capitalist
Society what happens when a bank goes
bankrupt the unsecured creditors take
over the bank so put the [ __ ] CEOs of
City Bank and JP Morgan and Goldman
Sachs and Morgan Stanley on the [ __ ]
Street after 2008 and give the bank to
the
depositors that's how Bakery law should
work it didn't work in that situation
they would rather save the managers of
the banks than allow the people who are
unsecured creditors of the bank take it
over and run it how they think it should
be run so I think there is we have we
being a lot of capitalistic systems and
you know even in China they have these
sorts of bankruptcy sort of laws it's
just that nobody wants to use them
because it's going to disenfranchise the
elites we have all the tools available
to us we've thought about these things
we're just unwilling to use them because
of who Bears the pain so that's the
situation but I think when more people
realize the reason why crypto exists
it's crypto is valuable because we're
unwilling to take these losses if all of
a sudden the United States and China and
Europe and Japan said we're going to run
balanced budgets we're going to cut out
75% of all these government
services I would be thinking hard about
whether I want to beong crypto at that
point and maybe I should be something
else because the societal mindset has
changed to something more responsible
and maybe we're not going to see these
massive price gains in crypto because
the Fiat debasement part of the equation
has ceased okay so if that's a scenario
that would cause you to rethink crypto
um if all of those governments were hey
we're going to be like Argentina we're
going to get our stuff together we're
going to run a balanced budget how would
you respond to that in ter terms of your
investment
strategy there's obviously going to be
some short-term a lot of short-term pain
and then you have to see what is bitcoin
or crypto worth really fast will you
explain why why will there be short-term
pain what happens in
austerity when we're not printing like
right now the US government is so in
debt that surely if they were to just
balance the budget immediately without
printing any more money that holders of
government treasuries bonds poof they
would be gone yeah who owns the bonds
rich people at Banks so that's who
suffers if who's making all these you
know the the US Treasury spends about a
trillion dollars on an annualized basis
and interest payments who is getting
these interest payments all the
[ __ ] I saw at the ski resort
who now get five and a half percent on
on their um their cash and I great I own
these treasury bonds getting five and a
half% I've got a good Capital base I'm
going to go enjoy the world right it's
all the rich people who own these
Financial Assets that're Now worth a lot
less in a deflationary environment the
primary one being government
bonds who now the government balance a
budget and guess what all that debt
we're just gonna gone I they can do it
Deb Jubilee it's happened in the past
study the Roman Empire and you know
Greek Solon and certain people like it's
a feature of the society where a leader
comes and says this is not a good idea
for the rich to be renas on the entire
productive capacity of society
let's destroy that asset that they have
and re- equalize system we forget that
this happens but it has happened in the
past and so if we did something akin to
a debt Jubilee who loses rich people and
then at some point if the government
does float another bond with a more
balanced budget then oh that might be a
good investment at a very high rate of
return is that better than owning
something that has made its gains in
Fiat terms I'm not saying that the
Bitcoin network is not valuable I
separate Bitcoin into Tech technology
plus liquidity but if you remove the
liquidity piece what's the technology
worth I don't know it's worth a lot for
sure but removing that liquidity piece
from the equation for crypto probably
means that it corrects quite
substantially and you want to own other
types of Assets Now that you know we
have the society is decided that we're
going to run our public affairs in a
different manner all right really fast
when you say liquidity are you talking
trading volume just the amount of back
and forth credit money credit Fe get
money in so sorry you said uh Bitcoin is
the technology plus liquidity so you
mean if nobody's manipulating Fiat and
printing printing printing then you take
a fundamentally different uh calculation
on the value of Bitcoin correct
interesting liquidity is one of those
words that I've long been like okay I
think I know what people mean by this uh
but clearly not so when you say
liquidity you mean printing yes I mean
how much credit money has been created
by the government in the banking system
and obviously the more Fiat that's
around scarce assets finet assets like
Bitcoin go up in Fiat terms but that's
just a denominator issue it's not
anything the value of Bitcoin itself as
a network of peer-to-peer decentralized
electronic money again that has a value
what is that value I think it's very
valuable is it I don't know what's the
Bitcoin bark down like two trillion or
whatever it is is it that so if we
removed all the money printing we said
you know US dollar the Yen the Yuan you
the euro is now sort of very stable
currencies not going to go up or down
much in terms of their supply do I want
to own crypto anymore maybe not at this
price maybe there's something else I'd
rather own maybe I want to own a power
plant in a new productive country where
the people feel happy and engaged and
want to do productive things maybe I
want to own something different so
that's that's just the
mental you know construct that I'm W
under because the system will change we
as you said there is this anger we have
global conflict spreading up around the
world we are not going to be in this
Keynesian system in the next 40 or 50
years there will be a different system I
don't know what it is it could be that
the people all wake up and they say this
is not for me we're going to create a
more Equitable system or they create
something even more [ __ ] up than the
one we're in today I don't know but
we're just going to change okay uh a
couple questions one did Argentina
default on their debts they have
defaulted multiple times on on their
peso dollar like you could probably
write a whole university thesis on the
history of Argentinian mon monetary
policy I mean specifically since melee
took office is that part of his strategy
like hey debt Jubilee I'm not sure okay
I'd be very curious to know that um so
okay one possible way for this to end is
you have an Argentinian solution uh the
country wakes up they realize hey I'm
not willing to suffer like this anymore
it's a bunch of Rich [ __ ] that are
controlling the place we have all these
um programs to take care of people but
we don't actually have the money and so
we've inflated our currency into
meaninglessness um this is dumb so let's
elect somebody let's take our lumps
austerity measures the system's not
really working anyway so I imagine to
some extent that probably even the
wealthy feel like they're on such
unstable ground they've probably long
ago fled to dollars or something like
that anyway if they have the wherewithal
to do it uh we this guy he comes in
literally with a chainsaw for people
that haven't seen the footage it is
hilarious uh and he just cuts Cuts Cuts
removing entire um portions of the
government entire
departments uh okay so that's one way to
do it um the other way to do it is war
why does this why does the
debt inflation through money
printing why does that lead to this
changing dynamic between countries what
I I can't mentally track I get it I've
seen it I know the data but I don't
understand why that happens so when
you're printing money you're inducing
economic activity that's unnatural so
you're producing stuff that you don't
you can't sell so what is you know what
I'm most wars about it's I have all this
excess production I have people that
need to work because that's how I stay
in power because they have a job and
money and whatever they have they're
producing all this stuff I need someone
to sell it to so if you want to think
back to sort of World War I World War II
you had the major Colonial Powers each
had their own home Market us has you
know Central and South America Britain
had the Commonwealth um French had the
West Indies and sort of parts of Africa
and Germany was like Hey I'm a I'm a
white Imperial power I deserve I deserve
some colonies too rather than going into
Africa my Colony should Russia we read
what Hitler wrote he's writing about
taking the Russian land and creating
space for the Russian people for the for
the German people that's why he did the
dumb thing of attacking Russia during
the winter didn't learn his lesson from
Napoleon um the Japanese wanted their
colon they thought they were a powerful
colonizer as well and China specifically
Manchuria would be their sphere of
colonial projection and their Market
would be southeast Asia and as you know
the Western Allied Powers challenged
that assertion that Germany and Japan
could have these Colonial spheres of
trading influence because they also had
overproduction as well remember coming
out of the Great Depression what was the
problem too much production nowhere to
put it deflation of assets everybody
produced too much [ __ ] they needed to
sell it somewhere so that was a Genesis
of all these of the world wars now what
do we have today CH has exhausted its
ability to build roads pump a property
bubble now they're saying we need to we
need to manufacture more stuff well so
does America they need to manufacture
more stuff so does Europe they need to
manufactur more stuff why is Europe all
pissed off at China right now because
China's the largest Auto exporter in the
world surpassing Germany and Japan and
they like oh [ __ ] there goes one the one
industry where we were kicking ass which
was high-end luxury cars and your German
and French Vehicles China's beating us
at this like hand over hand over foot so
everybody producing stuff because
they're they're just printing money say
go to work make stuff and then it's like
okay where do we sell it oh we need to
sell our Goods in China Chinese to sell
their goods in America well nobody wants
to open up their Turf to others because
they need to sell stuff not to buy
others and so that's why when you print
this money and you have all this
uneconomic activity happening the drive
to sell your goods in other markets is
what go is what prepares the road to war
oh you're not going to let me sell this
particular type of product in you know
this country well [ __ ] you we're going
to war and I'm going to make sure that
you can't sell your stuff into into my
turf and that is what we're gearing up
towards as all the major economic blocks
like okay we need to keep people in
their jobs so we're going to print the
money they're going to make stuff and
now where do we sell
it that is very fascinating it certainly
is not the only reason that we go to war
but that is a very good explan for how
when the
war's basic cause is economic or when
when the debt begins to get out of hand
why this ends up marching us towards war
that makes a lot of sense do you see a
way to unwind this so
once it's is it austerity or War are
those really the two options or do you
see us being able to really in In This
Moment use Bitcoin as the um Arc that
allows us to avoid either of those
catastrophic floods crypto is a way for
you to
sidestep some of the negative impacts of
austerity and austerity is not uniformly
distributed in terms of its pain right
the people who have the most pain are
those who have the most assets because
the cash flows are depreciated under
austerity there's no more government
printing press that's making these
things go up in value so if you you know
did the thing that what you told to do
get on the hamster whe work your ass off
and you were able to through hard work
build up a Fiat Nest dig and you
recognize that this situation is
untenable in terms of you know a very
small size of the population getting
very very wealthy while everyone else is
suffering then it behooves you to get
out of those Fiat Assets Now previously
there wasn't really an easy way to do
that but now we have crypto so now if
you have Fiat assets that are you know
you're saving vehicles or even just the
little bit of Fiat money that you're
able to
save you can now sidestep you can all
you can vote for austerity to rebuild
your your Society into a more equ
Equitable situation but at the same time
preserve the little bit of wealth that
you've able been able to accumulate in
the Fiat system by porting it over to
crypto and then you know once things
have reset then re-evaluating okay well
maybe I am okay with owning a Government
Bond that yields 10% if the economy is
growing at 5% that's a great return for
me I don't need to have this crypto
thing maybe it's too volatile for me you
maybe I lost a little bit of money
trading some particular coin I just want
to own some sort of bond in a government
that I believe in and respect cool now
you know you're getting paid to take
that risk versus now you're not getting
paid appropriately to take that
risk this is a really interesting moment
that we live in uh there so history
doesn't repeat at
Rhymes when you look back I think Ray
alio has done such a good job of
breaking this down how the the debt
cycle loops and how going back 500 years
you see the rise and fall of Empires
that they roughly last 150ish years um
that the sequence of events is such that
you have a debt Jubilee I mean I guess
it doesn't start with a debt Jubilee but
every cycle will will um repeat with
that and because you said you um use
that as a way to reset to get a more
equit
situation but the reality is it's only
going to be Equitable for a while
because once you're dealing in a world
where people clip coins which is the OG
way of inflating money or the current
way which is you literally just you have
the FED uh buy assets from the
government um you're inflating the money
supply you're reducing what you reduce
its purchasing
power that it is inevitable if you allow
that that people will get themselves out
of trouble
because if people are in pain they're
going to freak out they're going to lash
out at the government they're going to
say I want you to protect me which
um it's predictable so you know that
people are going to do that so you print
money so that you can get reelected so
as long as people have to get reelected
and one of the ways to get reelected is
to print money people are going to do
that and so you end up back in this um
cycle the fascinating thing is that
it it only comes down to any one
person's individual lifetime that's all
they know and that's all they really
care about and so if you can push this
off 150 years it you really don't care
and it begins to Loop however we are
living through a technological
Revolution right now that I think is
causing a rapid Divergence between the
generations which caused them to have
very different World Views and so you
have
this I'll call it a bifurcation but I
really think it's it's more of a
shattering but just for Simplicity sake
I'll say a bifurcation between people
who believe in the traditional system
because they know it they're used to it
it's the devil you know and then people
that believe in and the way I think
about it is will tomorrow be more
digital than today if yes why would I
ever think that money wouldn't become
digitized and so it just
for me as somebody who breaks on the
digital side when I looked at crypto I
was like oh yeah that it makes sense to
me that isn't a a fake asset or whatever
people call it magic internet money it's
all of money is simply a narrative we
all simply decide to agree that oh gold
has value because it's scarce the paper
money has value because the government
says that it does um crypto has money
because there's you Bitcoin there's only
21 million of it and that's it and so we
all agree that that that's the thing and
so so I will be very interested to see
as as we March
towards adopting cryptocurrency if we
really can take that as this off-ramp
that will avoid Us ending up in a hot
War I just I don't know that governments
will allow it to
happen what do you think about that
how Stern SL violent do you think the
government's response is going to be
will they control it through ETFs and so
same as it ever was or will they say uh
we're not going to allow this and and
find a way to put Capital controls on
it the smart governments will do the ETF
route which is allow the traditional
trafi people to give you a crypto
derivative like a Bitcoin ETF that's the
smart way to do it because it's the
nonviolent way to do and people think
that they've escaped this financial
apocalypse but not really they've only
just given their money to Black Rock and
the time in which they actually want to
use Bitcoin for what it's there for
which is to centralize money moving it
around 247 between whoever they feel
like they'll be told no if you want to
get out of the ETF you must sell it back
for Fiat and then do with your money
what you please right you don't own
Bitcoin people think they do that's the
best way to do it the worst way to do it
is to go out and ban it because when you
ban something as a government especially
in a digital age where people have
information at their at their
fingertips then they go oh well maybe
there's something here why is the
government telling me I can't do it
maybe I should read a little bit more
about this and then they just then they
decide oh the government is telling me I
shouldn't do it because it's not in
their interest then I'm going to do it
anyways because you've banned it you've
given it air time you've proven the
point that all everyone is that everyone
on the crypto ecosystem has been saying
for years which is the government
doesn't have your best interest at heart
that's why you're there Banning your
economic freedom and then you create the
demand for the thing and people will get
it
anyways right um so if you think about
you know the common Narrative of like
very you know authoritarian governments
in the west like oh China just does
whatever they feel like no bitcoin's not
even banned in China China bans a lot of
things have not banned Bitcoin there are
not it's hard to trade it um on sure in
China but is not ban did ban it because
no Bitcoin is not banned you can own
Bitcoin as a Chinese person um they've
shut down the it uh you can't mine it
and as a exchange the large exchanges no
longer offer a Bitcoin REM andb trading
pair but you can still trade at OTC and
you can can still own it because you
know Chinese government's smart they
know if I ban something then Chinese
people will find it valuable because the
government told me I can't do it now
that is why if you know the government
and the elites want to stay in sort of
this financial position the ETF is the
best thing that they can do because
people believe that they've achieved
Financial Freedom when they actually
have just handed over fees to the same
people who have been [ __ ] them for
the past 80 years anyways so that is the
smart thing to do but ultimately I think
that that attitude is very defeatist if
you do believe that a government is a
representative body of the will of the
people and you just default to saying
that it can never change because the
Elites in charge want it to stay that
way well then nothing will ever change
and that's you know that's a lot that's
a big detriment you know deriding
argument that a lot of people give
whether they're a boomer or somebody
who's much younger oh Bitcoin is really
good I understand like decentralize
money sound money you know inflation
resistant blah blah blah great but oh
but the elites want to let let it happen
so I'm not going to own Bitcoin because
the people in power are threatened
they're not going to let it survive well
[ __ ] that buy some Bitcoin tell your
friend to buy some Bitcoin shut up from
the rooftops create a movement be part
of it try to change things so I I think
that's a very defeatist attitude and if
that's the attitude that everyone wants
to have then you deserve to be a [ __ ]
death surf what do you really think come
on Arthur say something strong come on
man stop with this wishy-washy [ __ ]
uh yeah that's uh that's very on point I
think um I maybe have a little more
empathy for
uh here here's what I really think I
think nuanced ideas are extremely
difficult I think the government is
extremely powerful staring down the
barrel of the government um and deciding
that you're going to stand up to them I
just do not fault the average person for
not being willing to do that so I have
deep empathy for people who either a
don't understand it don't want to spend
their time wrapping their head around it
or if they do believe as as I quite
frankly do that at some point and
honestly the ETFs maybe give me a little
bit of comfort because I'm like okay
that that gives them a way that and
other centralized exchanges like
coinbase give them a way to to grab it
to to do a thing with it right to feel
like they have control and then people
that are sort of hey I would at least
like to hedge my bets um you know when
you think about uh the Second Amendment
not to get into this debate but when you
think about the idea behind that was hey
the government may go tyrannical at some
point and you may need to be able to
defend
yourself that I think people lose sight
of that and they think that oh a gun is
you know for a home invasion or whatever
sure that too yes but like the original
intention was the government may turn on
you and you need to be able to protect
yourself and that America anyway was set
up with with that in mind like we're
putting all these uh balances of power
because governments tend towards tyranny
and so you need a way to protect so
anyway that having Bitcoin is a bit like
the the financial equivalent of the
Second Amendment I have the right to
maintain my own money I have the right
to control it I don't have to I can keep
it in a centralized system because good
Lord it is so easy to lose your crypto
if you are not very careful clicking on
an errant link for getting your uh seed
phrase I mean just woof uh it does make
me tense on that side as well but at at
least I know that I have the right it's
interesting and I thank you for letting
me think through this stuff in real time
um but that is why I find myself so
drawn to this is okay we have a broken
system that is an affront to human
dignity using your words uh because of
the way that it can be
inflated I think that people I think the
memes law says that you should just be
able to tell somebody save your money
and you're going to be fine I know that
we don't necessarily agree on that but
that feels really true to me that that
should just be a right that that no one
should be able to take your money and
spread it across everybody else I have a
feeling that's going to be one of the
more controversial things that I say
today um just trying to predict the
comments but so you start putting that
together and you give me the Second
Amendment of of financials and now I can
take custody of my own money uh I don't
think it's unseizable I think maybe I'm
uh against the the Bitcoin tied on that
I think the government can wrench attack
you with Cru oh yeah the hammer attack
is the low Tech is the hammer attack
Hammer knee private key okay so here you
go I've never heard that before that's
good that that memes lot right there
that one will spread Hammer knee give me
your key yeah uh facts so what do you
think about the ETFs like is that a move
you're like oh man this is amazing or do
you think cuz a lot of people are like
hey Black Rock could end up owning so
much of Bitcoin that it becomes a
problem so I think that Bitcoin is
decentralized peer-to-peer anyone should
be able to own it and if we've
constructed the game theory and the
economic incentives in the right way we
should have created a system that should
be able to prevent sort of one
centralized entity passively destroying
the system we're going to find out if
blackre owns I don't know 20 30% of
the float of Bitcoin and there's changes
that need to be made and you need to
have the community Buy in could their
passivity obstruct that process I don't
know we're going to have to find out
about that but the beautiful thing about
Bitcoin which is different than gold is
that Bitcoin must move to have value
because the miners who spend energy
doing Pro of work to upkeep the system
and process transactions must have
transactions a process so that they earn
fees to pay for the electricity um and
the energy that they're expending versus
gold gold is just a piece of it's a
thing just be if the gold sits in a
vault for the next 10,000 years it's
still it's still gold if Bitcoin if no
one trades bit another Bitcoin ever
again it falls to zero so if we do get a
centralizing force in Bitcoin that
essentially Hoovers up all the supply
and doesn't do anything with it then it
goes to zero that's beautiful we have
the out already coin is worthless if you
do nothing with it if we do nothing with
the the tenants of peerto PE centralized
money you've essentially just gone
around in a circle and done nothing and
so I think that what people start to
realize that that we must do things for
the ecosystem we must use this currency
we must try to create a farm to table
Bitcoin powered economy so that the
currency moves in a circle around you
know humans and maybe AIS in the
future then we've done something we've
created the movement that creates the
value for Bitcoin if all we've done is
stuffed it in our wallet or stuffed it
in our retirement account in on a black
rock ETF we've accomplished nothing we
have not done what Bitcoin is there to
do and therefore we will be rewarded
with a [ __ ] zero and so I think
that's absolutely beautiful and that is
and then we can rebuild the system again
it's just it's a common delusion that we
created this computer game called
Bitcoin and now it has economic value we
can do it again and try to make re
rectify the mistakes that we made in the
first
iteration so do you think that Bitcoin
has a fatal
flaw no I don't think it has a fatal
flaw I think that um it's a resetting
system that will respond to you know if
the the external environment doesn't
create movement the currency isn't
moving if it's not being used then it
should be worth nothing
interesting uh tell me why that's a good
thing because if again if we go back to
the the rate ta like just a person
sitting on a Government Bond and doing
[ __ ] all with their
life not improving The Human Condition
and all but they get to enjoy the fruits
of everyone else's labor um by doing
nothing is that a a sustainable
situation because that is what the fiat
currency system is accumulate a bunch of
assets sit on your ass do nothing and
because you're rich you're going to be
fine or you can accumulate a lot of
Bitcoin but you better do something with
it you better
invest in companies
or spend your Bitcoin on services to
prove that this is a currency system
that should be used or do something to
increase the value of this system
otherwise what youve spent all your
effort doing is going to amount to
nothing you don't just get to sit on
your ass just because you're
rich at the extreme obviously we're not
at that point right now this is a very
you know down theine type of thinking um
taken to the extreme but I think that
Bitcoin in its design solves this issue
of the rentier situation where you have
a bunch of um very lazy rich people who
are rich because they're rich and they
don't do anything else to keep them
Rich okay um that feels weird to me so
I've heard I'm assuming when you say
renas you're talking about what people
commonly refer to as rent Seekers which
was a concept I never quite no I mean
maybe maybe it's more of like the it's
like a pre French Revolutionary like
essentially you had rentier which was
the French
Government Bond and it paid I don't know
three or 4% coupon whatever it was right
and so you has basically had all the
Nobles did [ __ ] all they owned all these
government bonds that paid all this
interest and the government just taxed
the [ __ ] out of all the Surfs and
everyone working on the farmland and so
then everyone else got to build their
nice chat and sit on their ass right
that's what I mean by rentier it's
somebody who just earns interest they do
nothing great life if you if you're able
to have it but you're not producing any
sort of productive value for the economy
and obviously that was a corrosive
factor that led to part of the reason
that led to the French Revolution that's
what I mean when I say R it's I've got a
lot of capital I just own a security
that pays me some interest but I'm not
doing anything else to contribute to
society I'm not making money essentially
move similar to bitcoin if it's all just
sits in an ETF it's not moving it's not
doing anything what have we really
created okay just another financial
asset that's held in a portfolio that's
not why it was valuable in the first
place it was valuable in the first place
because we had created a new way to move
value throughout a human economy so it
must move it must do something to be
valuable to prove that it's a
peer-to-peer
decentralized monetary system if it's
just sitting in a portfolio then just
own something else why why own Bitcoin
you're not owning it for what it's there
to do so this sounds like a
contradiction of the narrative around
Bitcoin being digital gold because what
you what I hear you describing is a
no ethereum so I'll separate Bitcoin as
money it's a monetary system you're able
to move monetary values around ethereum
is a decentralized computer now ethereum
and Bitcoin could have I think competed
on Mone if not for the
2016 Dow hack situation so for those of
you who don't know what happened there
were uh there's a company called slockit
U Steven Tool uh and he wanted to
basically do a big raise of money for
his um I an iot protocol called slockit
so he said why don't I create the first
decentralized VC firm where everybody
could put in ethereum into this fund and
then people would get these governance
Tokens The Dow the central autonomous
organization the dowo token and they
could vote on projects guess what the
first project was SLU it his company and
so the Dow as this inovative way to
crowdfund raise I think at the time $150
Million worth of eth now unfortunately
the Acumen of the engineers and maybe
some people say there was some file play
involved I don't know um created a
situation where somebody was able to
execute the smart contract in a way that
wasn't
anticipated and they were able to siphon
off money from the the Dow Treasury and
so you had this situation where the
ethereum network this is I don't know
what percent of the network this was it
is massive this is back in 2016 ethereum
had only launched a year a little bit
over a year prior on
2015 so falic and all of the you know
big stakeholders in ethereum had a
problem if we ascribe to the moneyness
that blockchain what happens on the
blockchain nothing can change it's
immutable we should never change it
because we want to be sound a sound
Crypt cryptographic piece of money that
means that the Dow hack should be left
alone and okay too bad that people lost
you know all their money on this project
which was a big percentage of the
network at the time we're going to be
money money says you can't ever change
just like Bitcoin immutable there is no
changing you send Bitcoin to the wrong
place sorry that's it um the community
and vitalic and some of the other people
thought no we want to be the
decentralized computer and to forward
this vision of being a decentralized
computer we needed to be usable we need
to this have this network continue and
therefore we're going to advocate for a
hard Fork that rolls back the network to
a time before the Dow hack was created
fix this issue so that everybody gets to
keep their money right and this is what
happened they chose let's be a better
decentralized computer and get more
users on board and give them a redo
versus being the hardest money ever
known which is Bitcoin and obviously the
community voted in favor of this because
there was two currencies created uh
ethereum under the symbol eth and
ethereum classic under the symbol Etc
look at the price of the two ethereum is
I don't know what is it now 4,000
whatever it is ETC is maybe it's a few
hundred bucks um if that I don't even
know if it still exists so the community
voted we don't want money we've got
Bitcoin bitcoin's money we want a
decentralized computer be the best
decentralized computer you can ever be
ethereum and that's what they've done so
I this and I know lots of people in
crypto will disagree with me on this but
that is how my mind works on the
difference between Bitcoin and ethereum
and predicated on this pivotal event in
2016 then if I'm understanding you
correctly Bitcoin you believe anybody
holding Bitcoin if they want to really
make this a thing they're going to have
to build on that Network and be able to
buy a cup of coffee with
Bitcoin or do something maybe it's not a
cup of coffee maybe it's I'm going to
settle Sovereign Nations trade FL FL and
bit whatever it just needs to be used
for something it just can't just sit in
in an address and do nothing for the
next thousands of years now obviously
you can do that right now because it's
only 15 years old we're talking about a
very longtail situation U not something
that's going to happen anytime soon it's
more of a philosophical discussion what
you think Bitcoin should be doing in the
next 100 or 200
years yeah you said earlier that we
could reset the system and solve the
flaws that we built into it so I'm
having a heart because when you describe
that that sounds like a flaw to me uh as
somebody who really likes the idea of
Bitcoin as digital gold I I have
admittedly had in the the distant
recesses of my mind that question of
well what happens when the last block
reward is given and that's it all all 21
million Bitcoin are now out there and I
know that that's you know decades away
but um that was sort of in the back of
my mind now it feels like a flaw to me
that you would need like hey I need
somebody to do something with gold to to
make sure that we can keep it as gold
like I want gold to just be the thing
that we all agree um has properties I
don't buy Peter schiff's argument that
the thing that makes gold valuable is
its um utility in jewelry and whatever I
think that the reason that people like
it for jewelry is that they believe it's
a quote unquote precious metal and if
they didn't believe it was because I can
make something look like gold but if you
then believe it isn't actually gold then
you're buming out so the only thing that
really makes that cool is that it's rare
uh and that we all agree oh it's a rare
thing that we all agree has utility Okay
cool so that's going to be the thing
that so many cultures over time have
gravitated to and said this is a thing
that stores money better than seashells
as an example or glass beads whatever
it's just super hard to fake in a way
that like diamonds are easy to fake at
least now um gold is very hard to fake
gold is scarce cool we're going to use
gold okay Bitcoin to me that narrative
like I'm here for that but when I think
about oh hey Tick Tock y'all better find
a reason for this to exist otherwise the
the um miners now minors but in the
future they won't be minors uh they they
need to have a way to generate
funds to pay for the elction electricity
as you said to secure the network that
feels like a ticking Time
Bomb well it's it's a very important
subtle fundamental difference between
Bitcoin and gold gold is a financial
asset it's not a monetary Network
Bitcoin is a monetary Network plus the
financial asset so what is the monetary
network of gold people walking so what
did I do before I had any way how do I
transport my gold somewhere else I got
off my ass I picked up my gold coin I
walked over there and I did something
with it the monetary network is me a
human being eating getting calories
doing something right or I set it in a
horse and carriage or now I have a
Brinks truck right that's the monetary
network of gold and the asset is gold
they're two different things whereas
Bitcoin is a network and a monetary
asset in the same thing Bitcoin has
value because it was created through
this monetary network if the monetary
network doesn't have activity it's not
worth anything therefore just like
Bitcoin the monetary Network must do
something or it has no value and
therefore the currency its native
currency has no value either if it
doesn't do anything so that's what
people get mixed up when they think
about gold versus Bitcoin yes it's a
very simple analogy digital gold but
when you actually think about what is
gold and what is bitcoin at a very first
principles basis they're different and a
very fundamental and subtle
way yep that that is clear man it is
crazy how no matter how much I learn
about all this stuff I as the island of
my knowledge grows so grows the shore of
my ignorance it is uh it's it's
unbelievable so is Sailor out of his
mind is he playing a genius G okay tell
me more so if there's if there's the
looming like we have to find something
to do with this he is betting everything
on the fact that we will figure out
something because that that man is Le
rided so guess what so sailor is doing
very smart trade which is he's borrowing
money in a depreciating asset at a low
rate because he has a corporate entity
that's able to access this market so if
you're a you know a listed company in
the US or elsewhere you're able to
access the corporate bond market and
you're able to borrow at a very very
attractive rate so he's able to borrow
US Dollars we know that US dollars the
quantity of them will increase in the
future what does he take this
depreciating asset and does with it he
buys Bitcoin so he short dollar long
Bitcoin short the thing that's going to
increase infinitely long the thing that
only can have a certain amount so from a
corporate finance
perspective it's a expected value
positive trade because the asset this
this funding currency is going to in
inflate his the thing he's buying is
going to have a fine amount and so you
know I don't know what he pays on his
debt like two or 3% he has a he has
other you know software business on top
so the the interest cost of his debt is
either partially or in full covered by
the income he earns from his software
business so he basically has created a
almost a free option or an option with a
very very low carry on the the future
value of Bitcoin so what does he do
prior to the ETF he had two value
drivers for his company anyone who
wanted to buy Bitcoin from a traditional
trfi basis couldn't because they didn't
have a vehicle to do it but anyone in
trafi can buy a listed US security which
is what micro strategy is so if his
company is just a Bitcoin option play
and you want to buy Bitcoin you buy
micro strategy and you don't give a [ __ ]
what he does because
it's he's the only game in town for this
strategy okay now it's a bit different
with with the ETF but the ETF now Powers
a second Le of his strategy which is
Bitcoin number go up okay well if
there's only so much Bitcoin that's
freely tradeable because a lot of it's
held in wallets or lost or hasn't been
buying yet whatever and now you have
this Juggernaut Black Rock um Fidelity
and all these people who are buying I
don't know how many billions they've
bought Bitcoin in the last uh eight
weeks or so that makes the Fiat number
of what Bitcoin is worth go up and he is
a he's a corporation he cares about his
Fiat value because that is what his his
reporting currency is now so before he
got the value of I'm G to get influ into
my company because they want to own a
Bitcoin proxy but can now they have
another Bitcoin proxy called an ETF I
get number go up on the other side and
this option becomes very very valuable
and so again
genius okay let's uh let's look at it
from a slightly different angle for a
second so time Horizons matter a lot so
maybe this won't matter at all because
he's got enough time to figure that out
the The Narrative last cycle on bitcoin
was digital gold The Narrative this
cycle or the meme I should say the meme
this cycle is never
sell now hearing what you're
saying that does not make sense to me at
all so it becomes a keep an eye on
whether this actually becomes a
functioning Network for something other
than just
storing um wealth that if you see that
it's not going anywhere positive then
you better get the hell out while the
getting is good that and that is a far
less compelling um argument so the only
thing and because again I like to try to
predict the comments to see um to see my
own argument from the outside which is
why I do that uh seeing argument from
the outside people are going to say
that's ridiculous of course we will come
up with something um you're 15 years in
do you think that there's anything
meaningful other than Bitcoin as a as a
um awesome
narrative as a as it being a store of
wealth is there anything lightning
Network or otherwise so if you're not
familiar with
ordinals they are NS on bitcoin nfts on
bitcoin but not really we that we can
get into the reason why really really
interested in that but just yeah if the
meme is simple nft is on bitcoin so what
are we doing we're bringing human
culture and I think nfts as a data
contract bring human culture to crypto
so we're going to bring human culture to
the biggest most valuable crypto of them
all Bitcoin and ordinals have already
proven that they've generated massive
amounts of transaction fees for the
miners as people are inscribing them and
trading them with each other and this is
only going to increase so I think we
have found one killer transaction
generating method which is let's bring
culture to bitcoin people like to trade
these things now you can trade an orinal
on bitcoin versus you know a punk on
ethereum or whatever right so the we
have proven that we have we have done
something someone's come up with uh some
innovative ways to use the the tap rout
technology to inscribe these ordinals
and create this demand for culture on
bitcoin and that's generating massive
amounts of transaction fees that are
going to miners to keep them fed so
again we've we've done something in the
short term but I would push back on this
notion of like in
markets I operate in sort of like two to
three year cycles and so obviously what
goes up comes down it's not that Bitcoin
is not going to experience another 75
90% fall from whatever the all-time high
is this cycle but right now the
narrative is never sell do you want to
go short against that narrative
absolutely [ __ ] not don't if you if
you don't believe in the narrative just
don't enter it all but do not go short
because you're gonna get blown the [ __ ]
up as somebody just found out shorting
micro strategy stock on some sort of
like an Arbitrage trade between micro
strategy in Bitcoin because the implied
bitcoin price of micro strategy is
higher than what the spot price of
Bitcoin is and so people did went long
Bitcoin short Michel straty and the
premium is keeping is gapping and
forcing people out of their positions so
sailor is a meme God right now he's got
the hold I'm one of his memes I'm I'm
well aware yeah how many chairs am I
sitting on yes oh he's got he's got the
The Narrative do not short him if you
don't believe in what he's saying you
think it's complete [ __ ] just don't
own the stock don't short the stock
don't do anything with it but don't go
short very interesting yeah look I uh
needless to say am a huge believer in
Bitcoin um
it is a very I like to know what is true
that's that is always my guiding force
um if ordinals actually solve the
problem we'll see because I think
there's now going to be a um I mean
maybe just multiple communities will
spring up but right now you've got nfts
I would assume from a trading volume
position is just absolutely orders of
magnitude larger than ordinals I don't
know that so maybe I'm wrong and the
problem's already solved U that's my gut
instinct is that
true I don't know I would assume that
trading volume on like erc20 nfts is
definitely higher than ordinals there's
not even major wallets yet that support
it obviously I I've invested in one um
but yeah it's it's a nent space but
we've proven that there is demand for
Block space that isn't just let me just
move some Bitcoin between my coinbase
and binance account right so I think
that that's that's the thing that I want
to see not that we've solved the problem
of how do we keep the miners
incentivized the action fees to keep
their machines on in 2140 when the theit
Bitcoin block reward ends it's okay we
all know this problem is coming there
are different communities spreading up
creating intrinsic demand for Block
space on the Bitcoin blockchain if we
can do what with ordinals what will be
the next thing that the community comes
up with I don't know but to say that
you're going to not participate in this
bull market because of something that's
going to happen in
2140 okay fine but then yeah sit it out
but that's probably if you're thinking
about it from an investment or trading
perspective that's probably not the
right way to look at
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Lumen what is the right way so um yeah
we'll just ask that what is the right
way if you're somebody who is very you
know into markets and you like to manage
your money and this is something that
you enjoy doing which obviously this is
what I do for a living momentum trades
especially in such a meme culture like
crypto where there's no manipulation
from outside try for es the trend is
your friend until it ain't we're not at
that point yet where it ain't so you
follow the trend and I think it usually
it becomes obvious obvious to you in
sort of absurd moments of why the the
trend is probably time to fade the trend
like there are very M there are multiple
opportunities for people to get off the
train in 2021 and early
2022 some people did a lot of people
didn't but you just have to understand
what you're doing and understand that
nothing goes up forever nothing goes up
in a straight line there are ups and
downs uh and at a certain point then
there will be uh a correction but be
ready for
it okay before I ask my next question I
really want to Prime people so I I
started doing Financial content for one
reason and one reason only when covid
hit I didn't understand money printing
so I was really worried about so my
background I don't know how much you
know about it but I used to work in the
inner cities uh so I have seen a lot of
people up close that are in the grips of
poverty and I was like they're going to
get destroyed by what's happening now uh
they're living paycheck to paycheck
businesses are going to be closing down
they're going to lose jobs like this is
really going to be a blood bath and so I
wanted to start making content around
how I thought they could approach it
just on a day-to-day level what should
they do so the basic stuff get your
spending under control invest uh in uh
um an index fund like don't try to be
clever don't try to time the market
don't be a Trader just like get your
money into an index fund there's a guy
named Wall Street Trapper who I think is
is brilliant at speaking to people that
don't have a financial mindset that did
not grow up with that and he was really
help is helping them migrate into think
like an owner make sure you own equities
if you're going to uh wear Louis Vuitton
own Louis Vuitton stock right so it was
just really that that's really what
started getting me into this and then as
you ask more questions you know as as
the island of your knowledge grows show
so grows the shore of your ignorance I
just started realizing oh wait like I
don't understand this part I don't
understand that part and so you finally
end up at Robert Breedlove and what is
money and then it all starts to unravel
uh and then I was like wait a second the
thing that I was trying to protect
people from it's a totally different
game and this is terrifying so we're
about to go into a part of this game
trading looking at Trends riding waves
looking for signs to get off the train
all of that but I want to say because I
I just really believe that the vast
majority of people should have a
long-term Horizon that they should buy
something and not mess with it like for
instance uh I'm very heavy in Bitcoin
Bitcoin and and ethereum are just by far
my two biggest positions in anything I
own some gold I own stocks but other
than maybe treasuries I'm just not in
anything like I'm in Bitcoin and
ethereum I didn't sell anything during
the the bare Market I was like my thesis
is still true tomorrow is going to be
more digital than today um therefore I
believe that money is just going to get
more and more digital meaning more and
more people will rely on cryptocurrency
just to say it in this most blunt way
possible so I'm like as long as I
believe that to be true I I will
certainly ride this out now I also have
markers where I'm like yeah I would
because I know that we're probably still
in a cyclical or I should say because I
believe that we are still in a cyclical
cycle I don't think we're in what people
call the super cycle and it's only going
to go up and it's then going to
stabilize from here probably going to
reach wrench would be my guess uh so if
I miss out on some upside whatever it is
what it is so I have certain triggers
where I'm like if it hits this number I
will sell some of it I would never sell
all of it but just taking some of my
profits uh okay so with all of that
highly encouraging people to be very
thoughtful and this is something you and
I talked about last time the reason that
cliche of Buy Low sell high is so of
repeated that it is a cliche is because
people actually do the exact
opposite if you can hear my voice right
now the odds that you buy high and sell
low border on 100% because it's so hard
man it gets so exciting and even my dad
a like a month ago he was pressuring me
to help him like get his um his coinbase
account going so that he could start
selling his Bitcoin because it was like
starting to rise but then it started
Rising much he text me back and he's
like actually I don't want to sell right
now I want to hold and I was like Dad
you need to pick a number what is that
number where you'd be mortified that it
hit and you didn't sell don't get sucked
in okay that's a long Preamble but I
feel
extremely um to be true to myself in my
mission I had to say that all right what
are the signs that people should be
looking for in this bull run to know
whether it's time to get off the train
or to keep
adding more there's no like one thing
right so if you think about the last
cycle what was it so FTX this company
came out of nowhere S bman
free you know Wonder kid of the world as
I said in my essay the right kind of
white boy just crushing it he put his
company logo on a stadium in Miami for
$135 million I don't know how much he
paid the Major League Baseball
Association in the US the FTX logo on
all the Umpire outfits in in the uh in
the United States and to that that's
that's interesting that this company
that didn't exist you know two years ago
is buying all these things what does
that say about the business that this
person is in and this is obviously in
late
20 21 and you probably would have
thought that was extremely strange that
this kid that You' never heard of within
you know a year and a half was able to
to start buying all these sports teams
uh logos hanging out with politicians
blah blah blah maybe something's a bit
overvalued now what really got me sort
of bearish and I wrote about this at the
time probably in December of
20121 obviously I'm a big macro investor
consumer of research I spend probably a
few hundred thousand dollars a year on
various research
Publications and there's a person that I
really respect his name is Felix zolof I
like to call him my macro daddy he's an
older Swiss dude who used to run the
large trading desk at UBS and he has a
research outfit and he's very attuned to
credit cycles and credit Cycles being
the amount of money and what's the rate
of change is momentum accelerating or
decelerating now obviously if momentum
of Mone I understand that rate of change
what so
the the
momentum as in like how fast is
something changing so is the second
derivative yeah the creation how much
credit is there in the world right how
much Fiat is they floating around so
traditionally you look at you know US
dollar euro Chinese Yuan Japanese Yen
focus on those four economy you
basically have the entire world economy
how much are those countries central
banks and governments creating of credit
money is that accelerating or
decelerating now ever since Co that had
been accelerating as different
governments in the US being the biggest
had certain covid stimulus measures
right and so the amount of money that
was gushing into the world was probably
larger than since World War II and so
obviously crypto and everything else
just zoomed higher starting in late
2021 as inflation started to show up
that that momentum started to roll over
and so I remember I was sitting in my
apartment I forgot where I was and I
read read one of his reports in in
December and pissed that together with
all this Ridiculousness set of FTX
paying all this money for these these
Sports sponsorships and I was like this
doesn't look right time to get off the
train and so over the next two days I
dumped my entire portfolio except for
essentially Bitcoin and ethereum entire
crypto portfolio and then I wrote a
massive essay about why I was going why
I I sold all my
stuff now did I top did I top tick the
market no I think top tick of Mark was
like November 2021 I probably finished
selling in end of December uh of
2021 but that is sort of the the mental
process is there obscene things going on
in crypto and are they out of whack with
sort of like the
macro narrative and I'm really focused
on how much Fiat liquidity there is
there in the world because to forecast
how useful the technology is from a
fundamental basis just very very
difficult I think a lot of the returns
are usually driven by Fiat debasement
rather than Bitcoin or ethereum or any
of these other cryptos are um massive
networks because to be fair there's only
a few million people if that who use
these things right now for
anything um other than just I don't know
setting money between their different
Exchange accounts so that's sort of my
mental
worldview now that was 2021 what does
this cycle look like I think this cycle
is a cycle where we break the sovereign
debt markets where every single major
country finally admits that we will do
anything it takes to make sure that the
government does not go bankrupt and so
we're going to remove all this pretense
about caring about sound money and we're
just going to start printing money like
it's going out of
style and so I think this cycle is going
to be a bit different than the last
cycle where the fed and then every other
Central Bank said oh we've overdone it
let's try to reduce it they tried but
the governments are still printing money
because they need to get reelected and
we're in an inflationary environment you
know there's too many old people
everyone's going to go to war at some
point so everyone's beefing up on
defense and so the central banks have
come back in and say okay we got to
print money but we can't really call it
quantitative easing or the you know the
things that we call it before so we'll
make up new names for it um but it's the
same thing and so we want to protect the
government bond market and make sure the
government can continue to borrow at
below the economic growth that they're
creating so I think right now we're in
this cycle where people are realizing
this and you have the professional
investor class are also realizing it
because they've had the worst Bond
performance at least in the United
States since the War of 1812 um over the
last three years us treasuries 30-year
treasury is down 50% um on a real basis
that is the worst return since 1812 now
you would know that by listening to the
financial press but Bond investors are
getting absolutely eviscerated and as
they come to the realization that this
is not good maybe we should own
something else that's sort of this
secular rise and sort of of Bitcoin so I
don't think it's going to be a similar
type of credit event that's going to
cause prick the bubble and and crypto
and everything else that happened in
2021 but there's going to be some change
in that mindset and that's what I'm
looking for and there's no real one
thing you can point to it's kind of just
be cognizant of the fact of why do you
think the Market's going up is there
something that's happening that's
challenging that world view I really
want to push you on this this is very
interesting okay so you said uh a lot of
things in that so I just want to cycle
through recap what you just said make
sure I understand it and then I'm going
to see if we can start prognosticating
about some of the things that might be
the signs this time okay so in 21 um we
were at a point where
for people inside the know of crypto
yeah sure everybody knew about it but
something happened in 2017 during that
bull run where it really started to like
I was starting to hear about it they
were making documentaries about it and
at the time I was not somebody that paid
attention to finance at all dude I could
not have been more heads down building
businesses and but I was still hearing
about it like it it sort of cracked that
first thing and then it just disappeared
now I didn't realize there was a you
know a retrenchment I wasn't paying
attention like that but it people just
sto talking talking about it then
obviously I think it was in 2020 it
starts really popping off again and then
in 2021 it's insane so okay now we have
if I had to boil down what you were
looking at in that moment the rate of
adoption speed to awareness however you
want to think about that was just way
outpacing what you would expect to
happen from a this isn't Euphoria
perspective and in fact that's that's a
um a marker I want to put on the table
right now this Euphoria I'd never felt
it before cultural Euphoria obviously
I'd felt it in my own life but cultural
Euphoria is a very different thing and
then I I now know it when I see it
and so that starts really popping off
okay so the rate of growth of just to
use FTX as an example was just too much
okay so question number one the second
thing that you look for is the momentum
in the credit Market credit liquidity
being the same thing it's money printing
so they're just the governments are
pouring artificial money into the
system those two things in 21 they gave
you the signals that okay we've got
heavy Euphoria things are moving too
quickly in terms of rate of adoption um
and the very thing that crypto is a
response to inflation of the money
supply has slowed time to get out makes
perfect
sense now um as we go into this next
cycle you've said something multiple
times in this interview and sometimes
you say it very casually as you just did
which is everyone's going to be going to
war soon so they're building up their
military hold on uh that's a very big
statement so is that going to be part of
what you're looking at because um one of
my employees here was doing his
breakdown of what he's going to look for
what his selling signs are and he very
similar to what you just broke down for
21 but I worry that he's going to get
blindsided because he's looking at Old
signals in a new market um do you have
sort of the beginnings of an idea of
what you're going to be looking for in
this moment is it a build towards war is
it Euphoria if it's not credit like what
what is on your
mind well I think that we're going to
get some sort
of credit event in the Government Bond
markets
uh and say you thought they were just
gonna print print print print print
print print yeah they're going to print
print print and I think some people are
going to try to exert an influence of
saying hey we these Bond markets they
still matter um we're not going to buy
uh a treasury at 4% when nominal growth
is at 6% or whatever it is right um and
there will be a an event and there'll be
a s there will be a way in off ramp to
say okay we want to reform the system or
or change something and we'll see what
the authorities decide to do I think
they're just going to keep printing more
money and we keep going higher can you
say more about that please if we think
back to the stats I just said so the
bond market as of uh we want to think
about really when this this bull market
started to gain a lot of steam was it
October of last
year um so essentially what happened and
I'm going to focus on the US Treasury
Market because that's the most important
important one uh globally and every
other Market sort of depends on that
from a Government Bond perspective you
have this thing
where interest rates on the debt was
Rising but at the long end it was Rising
faster so um post the September fed
meeting the the spread between the
10-year bond and the two-year Bond was
increasing meaning the 10-year yield is
rising faster than the two-year yield
and in general both are R the yields are
both rising at the same time which is
basically called a a bare steepener in
fixed income trading terms and that is
deadly for banks and the entire
Financial system because the entire
Financial system is modeled post sort of
1970s 80s on this assumption that when
backend interest rates rise too quickly
that the uh authorities will come in and
hint money to save the system now they
did do it so the market got it right but
in the meantime all these financial
institutions in the way that their
complex Financial derivatives are
structured ignore this particular
quadrant of the potential outcomes and
thus have massive losses and this is
what we were seeing across the banking
system so if you looked at the you know
Regional Bank stock index or KBW index
which is all US Banks they're getting
crushed going into um late October of
last year and so what happened
the you US Treasury and Janet Yellen she
said okay I'm I'm going to save this
Market I'm going to issue a bunch of
short-term debt and take money out of
the reverse repel program at the FED
which is just this2 trillion doll
facility of cash just sitting there
that's outside of the financial system
and she offered a higher rate on
short-term treasury bills to entice this
money out and which reflate the system
gives more credit money into the system
and that sort of helped
you know fuel this bull run that started
essentially on November 1st um of
2023 so we're going to get another event
like that because if the fed the
treasury and their other Global central
banks and fiscal governments if they
continue to do what they're
doing but say that on the one hand we
want to try to fight inflation by not
printing money we're GNA get another
situation like we got in the third
quarter of last year where the bond
market says hold on a second
what do you want to do do you want to
safeguard the value of fiat currency or
do you want to make sure that the
government is
funded and I don't know when that
situation is going to happen there's
lots of tricks that they can pull
probably a little bit too mundane for
this particular um venue if you really
want to get into US money markets uh but
there's going to be another situation
like that and you could see a general
you know risk off meaning Financial
assets decline on that situation on the
fear that maybe this time they're not
going to save the banks and print the
money and you know reflate the system I
I don't think that's going to happen I
think they'll do the same thing they've
done every single other time but you
could get a situation like
that but if I have to really think about
what could stop this particular bull
market it's going to be something about
the belief of Institutions buying
Bitcoin so what's the narrative right
now you never sell because the
institutions like C and Fidelity they're
they have to buy all this Bitcoin
because there's all this pent-up demand
from institutions who want to Inc
incorporate Bitcoin into their
portfolios and there's all these Diamond
hands out there who aren't going to sell
their Bitcoin so is a very low Supply
Bitcoin left to sell which means the
price goes Asm totic on on the upside
now obviously that can be true for a
while but it won't be true forever and
so at the point in time where we start
to see
a a massive leveling off of the
allocations of money into these products
then that narrative starts to shift and
people become less confident that there
will be you know a few hundred million
dollars of buying a Bitcoin every day
from all these major ETF fund
managers and I think that might be the
thing that I'll be looking for which
says okay whatever the price of Bitcoin
is at that point maybe it's time that I
think about at least for the other non
Bitcoin ethereum assets getting out of
all of those right and I have a I have a
very big Venture Capital portfolio of
early stage crypto tokens that will need
to be
liquidated and then on a more
philosophical level I have to think
about well if Bitcoin has risen to such
a high level relative to the energy that
it represents maybe I should own a power
plant or a massive stake in Exon Mobile
or something where I actually own the
fundamental energy source and I got it
at a very cheap price relative to the
price of Bitcoin
and that's a way that I can take some T
chips off the table in Bitcoin terms but
what I probably won't be doing is
selling Bitcoin or ethereum for Fiat
because I still think that the Fiat
system is [ __ ] and I don't want to
participate in that but primary energy
if I can own those resources at a very
attractive price because Bitcoin and
etherum and these other assets have been
bid up to such an insane level then
that's probably something I should be
doing okay so to recap the thing that I
found um really intriguing because I've
not heard this idea before is that
there's going to be an incident in the
bond market now what I took that to mean
is that something is going to happen
that will make the biggest buyers of
bonds step back and say we're not going
to buy bonds anymore and now the US
government is in a really dark place and
I think it was you that said um poell is
just out there flexing the person who's
actually in control is Janet yelen
because the treasury can ultimately just
tell them what to do um and
because I think it was poell that said
like we can't keep doing this we can't
just keep printing printing printing
yeah he says it but he has no power he
can't he can't tell the federal
government what to spend his money on
he's just he's just you know the central
bank that's interesting you say it like
that so am I right is that what you're
saying that people will say um and and
inact we are not going to keep buying
bonds because um your fiscal policy is
irresponsible and it's causing um
strangeness in the the bond market that
makes it problematic for the reasons
that you explained earlier
um and that is I mean that that's
catastrophe for the treasury if I'm
understanding this right exactly their
number one job is to make sure that
Janet jelen's job is to fund the
president and whatever he or she would
like to do right if B wants to spend
Tron on through bonds so she must have a
well functioning US Treasury Market and
she will do whatever she can to make
sure that is the case uh and so if it
means changing the rules on the fly or
if it means co-opting the the central
bank to do what you need to do she will
do that or whoever is in the her seat if
she leaves after the Biden
Administration so that's that person's
job and they will do that and so when
this really bad thing happens in the
bond market then we get to the final
stage of essentially the The Sovereign
Bond bubble which is okay let's stop
[ __ ] around we will print money in
whatever quantity is needed to keep the
10-year bond rate at X whatever that is
right they'll go full Japan that's the
end game then we get Bitcoin 1 million
10 million whatever whatever and and
then it's okay at some point we get off
the train and like okay well bitcoin's
great it's gone to this insane value
because they printed all this money is
there a real asset real energy producing
asset that we should
own that is more essential than Bitcoin
and I've gotten it at a great price
because of how high Bitcoin has been bid
to again it's more of a theoretical
philosophical thing of is there
something else to buy when you want to
sell Bitcoin that's not
Fiat well that that's the second part so
there's two things you said that I think
are really interesting one is what
happens the second one is how you
respond um
okay so the what happen scenario I was
actually misunderstanding it so I'm glad
that you clarified so what's really
happening is the bad thing happens in
the bond market that pisses the bond
purchasers off they stamp their feet and
say hey you need to um calm the bond
market down which they're going to do by
saying we got you we're going to print
money until the end of time don't worry
um we're going to maintain the price
that you need to not end up being
underwater that is going to cause a
massive run into cryptocurrency and
that's going to create that just hyper
Euphoria potentially obviously I know
you're this is just the I've asked for
the thing that's in the back of your
mind this isn't uh the thesis you're
operating on right now but um that could
potentially cause a massive run into
crypto which creates that euphoria that
I was talking about drives the price up
the numbers you threw out a million 10
million whatever I know those are sort
of the fantasy numbers that you hear
people in crypto circles throwing out is
the endgame uh but if it makes that kind
of run you're like okay now's probably a
time where I go um all the big wins have
been had I mean this is just like Warren
Buffett said uh all the ey popping wins
of Berkshire hathway are in the rearview
mirror like you're not going to get that
anymore because there's I'm having a
hard time finding a place to put this
money um so you know that that isn't
going to be we're now getting into the
Zone I was talking about earlier where
Bitcoin just becomes sort of boring it
just chops side to side for the next two
decades and that's when you start
looking for in the example that you gave
the underlying energy producing asset
that you can be in once you've taken
sort of the max out of the value the the
volatile value of crypto it's a put
option on Government Bond Market and so
I think we're at the point where the
largest Government Bond Market admits
that we can't afford this so we're just
going to print the money anyways and
that's that's the option that you're
really trading on on bitcoin you want to
you want to be around for that because
that's going to be and if it happens
this cycle it's going to be absolutely
insane and so that's when I I'm running
an essay right now and you know the
tenant of the essay is people don't have
enough imagination about how ridiculous
this bull market can get so if we
combine the Bitcoin is now available
from a financial perspective to be in
ingested into tradify
portfolios and you have tradify
portfolios do not want to own bonds
because everybody knows that this is
what's going to happen in the treasury
market and you know jgb
Market um ecb's bonds Trina bonds all
all the different Bond markets if these
Confluence of factors this is the
situation where the 40% of managed money
that's in fixed income or basically
Sovereign bonds globally a portion of
that goes into crypto and so you have a
massive amount of fat that can only go
through a very very small door you just
get insane price appreciations across
the whole space I don't think people
appreciate that right now they're like
oh is bitcoin's at 70,000 maybe I should
take some off the T no you [ __ ]
shouldn't this is a time if this is the
narrative that you were operating under
when Bitcoin was 16,000 we haven't even
gotten to that point yet we've just
started this is just like the Amo Bou
it's not even the [ __ ] entree yet so
it's we're just getting started in this
thesis of the collapse in terms of we
have this one ret that's real we have
this whole fugazi Financial system for
the first time in history we have an
ability to express a put option on these
Bonds in an easy digital fashion versus
you know going out and holding a vault
of gold which is quite difficult so that
is the insane bull market thesis that
I've been operating under we're marching
towards that I don't want to be under
allocated if I'm right if if I'm wrong
we get you know maybe Bitcoin goes to
100,000 200,000 whatever it is and okay
cool made a good good Chuck of money
we'll prepare for the next cycle because
it's coming if it's not in the 2025 2027
time frame it'll be when there's the
global World War of the you know end of
the decade or little B after as we've
come to this situation where every
government's printing money because
they're going to war with each other so
that's the trade it only is going to
happen once he's got to be around for it
okay okay so that is the uh I mean for
anybody that's holding Bitcoin that is
certainly the fantasy scenario
um do you
see going to 100K in this cycle as an
inevitability or do you see something
that could derail us from that now I
think it's an inevitability and more and
because now we have the banking system
at least in the west and obviously
there'll be ETFs in China and in UK
China being Hong Kong and Europe as well
so you have trafi now has a stake has
skin in the game and like this is
amazing we have had the fastest growth
in Assets in these products of any ETF
ever and so Black Rock largest asset
manager in the world this is their best
selling product so far right trading
billions of dollars a day they're you
know getting injested hundred of
millions of dollars a day of inflows
they're charging fees on that Fidelity
all these other asset managers crushing
it right but you have all these
institutions the sells side financial
institutions who depend on the fee that
black rock pays them to access the
markets so if you think that you're a
trading desk and a JP Morgan a City Bank
of Goldman Sachs Morgan Stanley blah
blah blah you're like [ __ ] yeah I love
crypto black rock is has a price and
sensitive buyer all these people
allocating they need to buy and sell
Bitcoin every single day to manage their
fund there are people doing Arbitrage
trades who now need to interact with me
on a try basis to trade these assets if
there's an ETF ETF uh ethereum ETF or
some of the other altcoin ETFs that
these funds want to launch great more
fees more times for me that I have to do
things for these large asset managers
and it's volatile they're there's buying
and there's selling there's opaque
markets people don't know what the price
of these things should be as a sside
Investment Bank you're like this is
[ __ ] amazing and so they aren't going
to stop with Bitcoin you know I think
there was I read some tweet today that
some lawmakers in America were
Democratic lawmakers are saying oh
petitioning gendler to say don't allow
the ethereum ETF now maybe that would
have been a very convincing argument if
the banks didn't have a skin in the game
but Banks run governments the trii
banking system in the US runs the US
government and now they have a stake in
let's financialized crypto let's make as
much money in fees as possible off of
this amazing product that has been doing
gang going gang busters for the past
eight weeks [ __ ] that we're going to
launch every single crypto we can while
the going is good and earn these fees
and so I think there just going to be
more Capital coming into play as you
have the trafi financial ecosystem
putting on a full-court marketing press
to convince people why oh yes look at
the US government it's unsustainable
Jamie Diamond says this about every
single quarterly report and his said US
government is spending too much money
there will be a fiscal crisis and now he
has a way to directly profit off that
which is oh yeah we have a Bitcoin ETF
I'm going to change my tune on bitcoin
I'm gonna Safeguard the way for my
clients to own Bitcoin as long as you
custody with JP Morgan and use a Black
Rock product
it's all gravy because we're getting
paid to do it and so now you have the
trafi marketing machine out there saying
it is safe to invest in crypto here's
our product that you can do it it's
custody by these big Banks why wouldn't
you own it so we have interest aligned
in terms of a price perspective for a
very short period of time so I think
again we're just getting started it's
just Bitcoin why wouldn't you do more of
it if it's so successful an ethereum ETF
a Solana ETF every [ __ ] crypto you
can during the cycle do it it's
literally just paperwork and watch the
billions of dollars gush in the fixed
income Market is however many you know
hundreds of trillions of dollars
obviously not all that's going to go
into crypto but even a small portion of
that that says I don't want to own
government bonds because of all the
things that we've talked about today and
now JP Morgan my my uh raia is telling
me that I can invest in this product and
it's custody at the bank I don't have to
worry about private Keys it fits into my
investment mandate don't have to do any
more forms [ __ ] it let's go I get to
import this thing that is going to uh on
its face solve the problem that I'm
trying to escape which is a Government
Bond Market that is not paying me what I
should pay to take on this sort of risk
hearing you talk it really there's
something about the the energy the
intensity around the bond market that's
making me see the relationship between
us the buyers of bonds and the
government in way that I never really
thought about it I always saw it as this
is a place for me to put my money that's
safe that I'm going to get some sort of
mild return but when you start thinking
about it in terms of hey you're asking
me to fund the government and all the
things that it's doing you better pay me
a worthwhile return in order to do that
this goes back to one of the things you
were saying earlier I don't remember
what triggered this thought but um the
thing I really want people to be able to
do is just something super simple to put
their money in to not have to think
about it to get that return um but of
course that for some people to win
somebody else is going to lose um but
gets very interesting with bonds helping
fund them grow uh to grow the things
that they're trying to spend the money
on um very intriguing let me ask you
where what do you think happens with
ETFs when the natural volatility of
crypto kicks in like when I think about
okay Bitcoin yes volatility super strong
narrative eth yes maybe a little bit
less conviction on my part uh for eth
just because I think it's a harder
narrative around the distributed
computer just think it's harder for
people to understand how does that
translate the am my storing wealth in
the in eth like I don't so that one's a
little trickier once you get down to
like salana now it's like whoa now we're
really talking narrative you've got to
be deep in that com it it becomes like
do you buy into the tribe so that feels
like it's it's really going to have
volatility which could be amazing
briefly and then really traumatic so how
do you think ETFs will respond to that
level of volatility the banking system
is saved by the central banks and the
government squashing volatility and
printing money to save them every time
they [ __ ] up but at the same time they
essentially take all the fun out of
markets nothing [ __ ] moves anymore
investing is destroying the banks
because they can't earn any money
because nothing moves there's no
dispersion there's no difference between
Tesla Microsoft and Nvidia right so why
even invest in the stock market just put
your money in your you know in
retirement account check the box and it
just goes into you know spies and
qes so if you think about a trading
floor and obviously a lot of friends who
work in trading no one's getting paid
like they used to because nothing's
[ __ ] moving so now we have a new
asset class
it's and you have insane volatility you
have a fundamental appetite for a new
type of financial system and you are the
gatekeeper between Capital that can't
exit the trfi system and these crypto
products it's going to be amazing you
can write research reports for days you
have thousands of different things doing
thousand like different people
characters saying they're going to do
this that and the other thing you have
so much dispersion so much volatility so
many things to talk about you could call
your client maybe it's salana today
maybe it's you know dog with hat
tomorrow doesn't [ __ ] matter you have
a you have an ability as a salesperson
have a conversation with your client to
solve their problem Government Bond
markets aren't paying me hey guess what
this week it's salana next week it's eth
next week is Bitcoin this happened that
happened there's stuff going on you have
a conversation oh great okay I'm gonna
allocate here oh sell this buy that sell
this by that sell this by that trading
fees emotion p this is what markets are
made of and what has been destroyed by
central banks over the past you know 30
years banks are going to love this the
trading Des are going to love this they
have a reason to call their clients now
these products are going to make them
billions of dollars because we are
unlocking human emotion in a form that's
digestible for these trafi institutions
in a way that hasn't been available to
them probably since you know 20 20 1997
and 2001 in the do area so that's what
this is going to bring to trfi and
they're going to [ __ ] love it and
they're going to do whatever they can
politically to make sure that there's
nothing stopping these ETF fund managers
from onboarding as many different crypto
assets as possible now that they've
gotten through the Bitcoin hurdle and
they've seen how successful it is and
how much money they're making from
it okay
so uh that is a really interesting
picture that I have um never heard
anybody else say taking a um a different
angle on that it feels
like an angle that has to be considered
is the people that are in ETFs want the
set and forget thing that you think is
destroying the passive investing that
you think is destroying the markets and
that when there's volatility there there
is going to be an outcry to the
government to protect them uh louder
than anything you've heard in a long
time because you know when somebody's
thinking about being in an ETF it's like
they're not going to the asake to go and
buy and figure it out themselves so
there is an amount of I don't want to
deal with it I just want somebody else
to do it so two things are going to
happen one volatility hits and the they
they a subset of people will freak the
[ __ ] out and then it becomes a question
of how does the government respond I'm
guessing with regulation uh so that'll
be interesting and then the second thing
is
um when you
have people having a reason to call
their
clients I worry that you get into The
Wolf of Wall Street days of penny stocks
and hyping people up and selling
narrative and there is a reason that
those guys went to prison are you not
worried about
the the way that people will get
suckered in by
conmen well the conmen and if let's take
it let's assume that this is what
happens the commment iser JP Morgan
salesperson is that guy going to jail
probably not Jamie Diamond gon to go to
jail for anything that happened at JB
bgan absolutely not now again I think
that the trii banks will overdo it right
they're going to pump this narrative
they're goingon to beat the drum as loud
as they can because this is it's going
to be soon to show let's see maybe end
of the year there's going to be some
banks that were probably very crypto
forward and you're going to see in their
financial Resort results and they're
going to tell the market hey what my
sales and trading operation beat
Expectations by some wide margin because
we went hard into crypto trading and
facilitating the flows related to these
whatever the suet of the ETFs are and
OTC trading and blah blah blah blah blah
right and then every other Investment
Bank in their you know managing director
committees like well what's our response
to that we can't let XYZ Bank have this
desk and we've been poo pooing it for
the last decade go hire a team now now
we need to be this that and the other
that's how these Banks work it's you
know usually it's Goldman Sachs and JP
Morgan make the money first and then
everybody else SC was a follow and [ __ ]
it up uh and so that's probably what's
going to happen here and I agree with
you of course the volatility is going to
be insane on the upside and things go
down as much as they go up sometimes and
when the bare Market starts and maybe
some of these more questionable cryptos
that got put into some of these
investment products go down 95% because
something happened on the network
workers you know some developer rug them
yes of course there's going to be public
outcry of oh no my in my retirement
account had this ETF and I I watched the
commercial on CNBC and you know that guy
in the suit said this was a great
investment sir and I put my money in and
oh [ __ ] I lost it um representative XYZ
you got to [ __ ] these people because
that shouldn't I shouldn't have been
allowed to buy this product I absolutely
agree with you and the second that we
start seeing that as a movement catching
Steam and the bank's ability to beat
back that narrative
they they can't forall that that's
probably a sign that we probably might
we've Reed a peak Peak saturation of
like the institutions in crypto and
whatever the price is at the time it
might be time to take things off the
table so I hadn't thought of that before
but as you say that that is probably
another thing I'm going to keep in the
back of my mind as a signpost of okay
has it gotten so out of hand and loss
has started to creep in that the banks
political power to just Ram things
through um has been checked a bit by
some outrage
um small mom and pop
investors yeah I so nothing another
thing that I said last time but nothing
is ever as good as you hope it will be
and nothing is ever as bad as you fear
it will be I have a feeling that a lot
of this like there's going to be just
enough volatility in uh Bitcoin that
slows down the eth ETFs then there's
going to be enough volatility in eth
that people really stop to think that we
really want to do salana and then
there'll be some Scandal on one of those
as you know a bunch of people get sold a
narrative right as it dips and they you
know God forbid if they're doing it on
margin but they find themselves in
trouble uh and they get they lose their
money get liquidated whatever whatever
and I have a feeling that will just slow
things down like the this sort of Wolf
of Wall Street orgastic picture that you
were painting while it got my blood
pumping and I was excited uh I wouldn't
participate in that Madness but um I
could certainly see how that would be
thrilling because I think that
volatility is a feature not a bug which
was a a weird realization for me that I
found myself moving towards volatility
not moving away even though I would
advise other people like hey you have to
be really careful it's so volatile but I
was like wait a second that's actually
why I'm doing it is because I have a
thesis that I think will overcome the
short-term
volatility but I want that I want the
opportunity to buy low so that there's
ultimately the shot at selling High okay
so um sloth
slow I think the train wreck will happen
so slowly that it might be more
imperceptible than we think how long can
we print money before that bad thing
happens in the bond market and I'll set
the table with Japan as far as I know
they print money like fiends
um is there an obvious breaking point or
are we like at the 10% of what we can
print Mark 90% of what we can print so
let's use two countries and the big
narrative and this is sort of the
Keynesian
monetary modern monetary Theory mmt
crowd is the government there's infinite
capacity for a federal government to
have debt and the first example they
look at Japan they have a I don't know
what the debt to GDP of at the
government level is like 300% or
something and look this perfectly fine
you go to Japan everyone's nice food's
great trains run on time super safe blah
blah blah what they don't understand is
what Japan actually did there's a great
report by Deutsch bank and I forgot what
it is and it's the label is um Japan the
best car the biggest Cary Trade ever run
so everyone always looks at the the
central government's debt to GDP and
they say oh it's ridiculous they forget
that you know they think Japan if you
ever been to Japan and done any business
there realize that Japan is a socialist
country with hoisted with capitalism
that was hoisted on it they're they are
very collectivist culture and I'm not
saying that in a negative way that's
just how they are so you have to combine
things that you otherwise wouldn't
believe as one into one to get the real
Financial picture of Japan so you have
to look at okay yes you have government
debt then you have the corporate and
private sector of Japan the people of
Japan they
own something like three trillion US
dollars worth of assets around the world
Japan is probably the richest country in
the world on sort of an aggregate basis
because what happened after the war the
US made Japan a colony for a bit lent
them a bunch of money helped them get
off their feet and said we're going to
give you access to our Market please
sell us [ __ ] the Japanese said great
we're going to essentially subsume the
individual and promote the collective so
everyone we're going to financially
repress you we're going to make really
really good stuff you're going to have a
job for Life we'll pay for your
education Health Care cheap
Transportation good food work really
hard so that these major companies can
sell great stuff to America and that's
what Japan did they started with America
then it went to Europe then went to
China and Southeast Asia they are the
largest holder of us treasuries which is
just the savings of the nation plus they
own in total about3 trillion of just
assets mainly in United States but
around the world with all their savings
so if you add that back to their debt
and then you add back the private
Savings of people which is estimated of
like5 trillion dollars of just money on
just sitting in bank accounts of the
Japanese people because they haven't
spent anything for the past 30 [ __ ]
years because of the deflation that
they've been having you get a much
different picture you get a dut of GDP
of around like 100% something much
different so Japan can print all this
money because it owns the [ __ ] world
they're not that broke
and so people say oh Japan just prints a
bunch of money it's okay you it's okay
because they were extremely productive
they had a captive Market in that the
richest country in the world from a GDP
perspective of America they could freely
sell anything they wanted into America
and that's how they got so wealthy so
that's the Japan example on the why it
doesn't really work then you get to
China China says we're completely State
socialist again not saying that in in a
bad way the central government owns
essentially all the most productive
companies and we are going to debt
Finance our way out of the poverty of
the you know 1949 to 1980s right massive
transformation in the society and there
wasn't an infrastructure project that
China didn't love and they they've run
up with something like a 300% debt to
GDP they built all this stuff now if you
believe that debt you can print as much
debt as you want then why isn't China
responding to into this property bubble
by printing as much money as they can
and just doing the same thing they did
for the past 20 years because they've
reached the capacity of the amount of
debt they know that the more debt I
spend I produce no value and I just make
the problem bigger I create more angst
amongst the PO population I create more
desire for people not to have children I
create a declining population because
people you know cannot make ends meet
because I've just overproduced and
there's just not enough real turn there
so there is an internal capacity so
there China and Japan are probably the
two examples that prove the point that
I'm trying to make which is there is a
capacity limit for debt it's not some
number that we know once you go higher
than this that things you know
automatically happen um there's a paper
by Ken Ken rogoff I forgot what it is
and he did a study and basically the the
the study was that once you get above
about 130% debt to GD p on a government
level then you're almost you're assumed
to have a financial crisis sometime in
the near future now
again you can't put a time frame on it
the Us is around 130 140% so it's on
that path to doing so does it have
capacity to load itself up with a lot
more debt absolutely China's at 300% GDP
right so you can you can go that far or
even farther maybe but again then you
start to have the decay in society you
get to have you get to have this moral
angst that is amongst the population who
feel it they can't put their finger on
why they don't feel confident or why
they feel angry but the reason is that
the government has again taken away
their dignity by [ __ ] up the money
monetary Supply so again I don't know
what that number is we're in the
territory where something could happen
and so my thought is as an investor I
want to be long that volatility by being
long aut option on The Sovereign bond
market which is crypto I don't when it's
going to happen but it's going to happen
if they continue doing these same same
things so want I buy something where I
have insane upside if it [ __ ] up and
what's my downside it's a super liquid
asset as soon as if it's not working
then I sell a bit of it whatever so I
have an asymmetric return debt the debt
flywheel uh how is it possible given our
need to at a minimum make interest
payments that we aren't already in
trouble so I think right now our
interest payments are already our third
biggest line item it's more than our
National
Defense we're adding a trillion dollars
to our debt every roughly 100
days that will compound so what takes
100 days now will be 95 and then 90 and
then 80 and then 60
uh I don't understand how we're not at
the end what what am I
missing because the money because
there's so much money trapped in the ffi
Western Financial system it's there to
be inflated it's there to be taxed every
dollar you have in your retirement
account every dollar you have in the in
your trei big account every stock that
you hold that is required to trade on
the you know the clearing functions of
the US or the European governments is
ripe to get taken by the government by
an inflation tax so that's how they're
able to do it because this capital is
sitting around and not doing anything
the Pension funds are forced to own
government bonds the banks are almost
forced to take their excess reserves and
buy government bonds and so that's how
they're able to keep the game going
because there's all this Capital that's
sitting around that they can inflate
away now that's why crypto is such a
fundamental problem because it's an
Escape valve it's outside the system I
take my Fiat I sell it and now I buy
Bitcoin can't take it away from me you
don't even know I have it and so that's
why the ETF is such a key component
which is okay recognize that we have a
problem we're not going to change our
spending we don't want to outright ban
the thing okay now it's time to allow
these fund managers to ingest this Fiat
into a derivative but keep the Bitcoin
within the system you know so that is
why you can afford to do this and of
course the US is a reserve currency
issuer largest military in the world
again you have the ability as the the
the Empire to to do this a lot longer
than other countries can now to the
extent that other countries stop saying
I'm willing to sell you oil or food or
whatever in dollars then the ability to
keep this game going uh the time frame
diminishes
yeah what do you think about the Petro
dollar being used to um have at least a
response to our financial Warfare which
may be a little unfair but when we for
people that haven't thought through this
yet when we inflate the currency that
spreads it to people like Japan that own
trillions of dollars in bonds um so
we're we're exporting the inflation tax
do you see people weaponizing that do
you think cuz I've heard people say oh
my God dollarization is imminent and
I've heard other people say get out of
here there's literally nothing else um
so people would flee the dollar to
what so I think that they're getting
missing the point so dollarization
started in 2008 when the US authorities
decided that they're going to save the
banking system by this massive uh money
Printing and if you look at the charts
and you take a look at U amount of gold
that foreign central banks started
buying with the nater was in 2008 now
it's ticking up similarly for the um the
effect of foreign central banks on
buying us treasuries the height 2008 now
it's tapering off so detalization is
happening slowly at the margins the
Roman Empire the the British Empire
these Empires didn't fall like overnight
it's not like overnight you just stop
using these currency it's a it's it's a
slow process it happens at the mar
margins we're already seeing it in 2023
20% of all oil sales were in a currency
other than the US dollar highest ever so
the Petro dollar is breaking down slowly
at the
margin of course the Western world and
the US major allies are going to
continue using the dollar whether you
know China Saudi Arabia whoever uses it
or not that's not the question the point
of for an investor and trying to save is
okay align myself with the
Trend but don't get blown out of water
if it takes a long time if dollarization
is a trend if the trend is to have a
multi-polar situation of currencies
being used what do I know that central
banks and countries have used in the
past to trade between themselves to
settle debts and trade flows gold okay
that's why I own gold I own gold because
I know that countries who are not going
to use the dollar to settle their trade
in balances will use gold and are using
more gold want to be alongside that
trade okay well what about the people
the people don't want to continue to be
[ __ ] over by inflation whether they're
rich or poor here's a global
decentralized digital system that anyone
rich or poor can access okay I want that
system too another put option on the
current you know order of things and
again I think people try to get Mor
realistic about it like right or wrong
like I believe America's good or bad it
doesn't matter all all I'm saying is
we're going to change and I want to be
la the change and I don't know what it's
going to happen in the future I just
know it won't be like it was
yesterday is there anything right now
that is um a plausible replacement for
the dollar is it um brics I know is
trying to back their currency with gold
I think central banks are buying up gold
is it a return to a gold standard is
there another um governmental currency
that has more respectability less
inflation I would say the you know in my
view the most outcome is that countries
will continue to use the dollar or
whatever currencies to trade amongst
each other so let's say that I'm you
know I have a I have some oil and but I
also import food so if I sell more oil
than food I need to import I say okay
don't pay me the difference in dollars
pay me in Gold but I can still invoice
my oil in dollars or whatever depending
on who's buying it so I I don't think
there's going to be one particular
Global Reserve currency I think there
will be different economic spheres and
the trade between those economic spheres
the net of that trade will be settled in
Gold interesting okay are you surprised
at all that gold does not go up in a
similar fashion to
bitcoin no because gold is different
it's bigger door um it's not digital
it's not the new new thing the drivers
of gold are very very slow methodical um
Central Bank purchases the crazy
volatility in goal will be when let's
say that you know the US government
wants to help the situation they devalue
the dollar and gold and say okay I think
the gold on the on the fed's balance
sheet is held at $35 an ounce same price
it's been since 1970s right they say now
our gold on the FED balance sheet is
valued at $10,000 an ounce which is
basically them devaluing the dollar gold
shoots up
massively and now all of a sudden a lot
of these financial problems go away
because the FED has so much gold they're
valuing it at a certain price and now
the dollar is seen as a stronger
currency so that's a situation that
could happen which would massively oneof
increase the price of gold by 3 to 5x
and other countries could do the same
thing who hold gold at an artificially
low value but could revalue it higher on
their own balance sheets so that is
probably the gold bull market scenario
that I'm sort of that's why own thing
that's the optionality that I'm um
playing is a revaluation by central
banks to make their currency seem
stronger in Gold
terms I've never heard that before what
what would trigger
that oh a war budget crisis I mean the
same things that you know the
government's done in the past right the
when the gold
window Clos I think
FDR
um appreciated the dollar and gold terms
by like 80% overnight or whatever it was
but obviously you couldn't own gold as a
person he did it after that said okay
I'm gonna take all your gold now I got
all your [ __ ] gold guess what dollar
is worth the gold is worth way more
dollars now
sorry so I think that's a s sort of
situation that could
occur okay let me see if I understand
this uh
you're I don't understand this why would
you want to make gold more expensive
what do you plan to do with that buy
more gold buy more dollars like what are
you doing no you already have a bunch of
gold so at least the US is a very Stark
example the US Federal Reserve has
however many metric tons of gold a lot
of it it's held at I think it's $35 an
ounce or whatever that price is very low
value gold right now is valued at are
they artificially holding that price
down holding it say this is what this is
what we value gold at so this is so our
balance sheet if you think of think
about what's a dollar worth it's worth
the assets that they hold what's the
only real asset that the federal
government has in a monetary sense it's
gold how much gold do you have what do
you value at so us being the reserve
currency issuer could say overnight we
think that gold is worth $20,000 an
ounce and guess what we have I don't
know how much they have but and so all
of a sudden I was like oh [ __ ] they've
just devalued the dollar and gold terms
but they own a bunch of gold so now the
dollar instead of being a US Treasury
backed currency and the US treasuries
are trash because of all this spending
it's now a goldback currency and guess
what they've got a lot of gold and it's
worth $20,000 an
ounce so hold on hold on sorry sorry
sorry I my brain is just too small for
this uh but I really want to understand
this uh so are you saying that they are
reping the dollar to gold in this
scenario
yes well it wouldn't be a peg per se
it's it's what do you think a dollar is
worth right if if this if you're if you
believe in this dollarization thing and
that country saying I don't want to hold
the dollar because it's inflating away
it has no value it has no assets back in
that I don't believe in the US Tres well
then the federal government and the FED
could say oh actually guess what we've
got all this gold it used to be worth
this now it's worth that this new price
that we believe gold is worth is
massively above the current clearing
price of gold for certain individuals
we'd be willing to exchange gold for
dollars not everyone obviously only
certain individuals certain probably
Sovereign Nations and all of a sudden
the dollar becomes a strong currency
again because it why on Earth why on
Earth would a government do that like if
I saw that you just changed the value of
your dollar
massively why then would I exchange gold
because I'm thinking oo dollars are
still great I still want to have dollars
and I have gold and so now I'm going to
get those dollars like to to me again
I'm sure I'm just missing something but
to me I would see that as such a wild
manipulation of the currency I'd be like
I don't want anything to do with a
currency that just changed three to five
old Bitcoin but this is how Fiat
currencies have worked in the past and
this and this was done in the 19 what's
the incentive is it because you have to
devalue the currency you the US needs a
weaker currency a weaker currency helps
you sell your exports get I get our
incentive but something is only worth
what someone else is willing to pay why
is someone else willing to trade their
gold for dollars in that scenario
obviously someone is or they wouldn't do
it well no one no one has to trade
anything I'm saying the the government
itself says that we believe gold is
worth this price right now they say it's
worth $45 or $35 whatever it is on their
balance sheet now it's worth we will
exchange go at this price way up here
and they're able to do that because they
own a [ __ ] ton of gold if you didn't own
a lot of gold then I would agree with
you that why would you do that this is
more with a way to engender a belief
that the dollar has a a large gold value
well okay here's what we value gold at
on our balance sheet and we're able to
do this because we're the central bank
and you can exchange gold at this price
now it's much higher than the price that
it is around the world now that only
works if you have a lot of gold us has a
lot of gold China has a lot of gold
Russia has a lot of gold so there's
there is a thinking out there that any
number one of these countries that have
been accumulating a lot of gold could
say our currency is very strong guess
what we're willing to bid for gold at
this high price therefore sell me oil in
my currency because you know that you're
going to get gold at a very attractive
price because this is what it's worth
sell me medicine sell me wheat whatever
it is so it's a confidence game amongst
other issues other trading partners to
say my currency is worth a lot of gold
because gold has historically been the
real currency of the world not these
Fiat things man again so that seems
false what you're saying is my gold is
worth a lot of currency my currency is
worth a tiny bit of gold if my currency
used to be um $35 buys you an ounce of
gold and now it's ,000 buys you an ounce
of gold the gold got expensive the
currency devalued in its purchasing
power anyway probably tearing their hair
out right now say that again but I also
but I also have a trillions of dollars
of debt so now my currency devalued in
Gold terms but I owe a fixed amount of
debt right so the reason why and that's
the reason why I devalue your currency
is well I own I owe a lot of it I I owe
a lot of it and now it's worth less I've
decided it's worth less so I can pay you
back but you're getting paid back in
depreciated dollars now obviously going
forward people who trade going forward
have a different deal than people who
have traded stuff in the past so again
yeah I agree with you it's a [ __ ] up
way to treat people who invested in in
your bonds but again it's another option
that you can use as a sovereign country
is devaluing your currency and gold
terms to pay back an unsustainable debt
load if you don't want to outright
default by saying I'm just not going to
pay you back instead of saying that
you're saying okay I'll devalue in Gold
I'm gonna say psych it's worth like one
tenth of what uh you thought it was
worth that's crazy I can't believe that
they can do that uh insane okay let's
talk about uh all the liabilities since
we're on the
subject uh do you think that the US so
going back to this idea of Argentina
comes in they slash spending uh for the
US to get back on track they would have
to SL spending um Social Security is
basically a pyramid scheme
um would they be wise to Lop off Social
Security and uh could you see that
actually happening with any sort of
political
plausibility United States given that
boomers are more uh politically active I
would say that it would probably be a
death sentence for most politicians to
try to take away those health benefits
now a very skilled politician who's able
to get a lot more younger people out to
vote and explain to them how they've
gotten [ __ ] over by the old people in
the country if that person's able to do
that and put in that kind of work then
yes I think that you know a Reformation
of the United States's healthc care
system could be on offer but if if
you're not willing to put in that sort
of political work to re-energize the
younger constituents there's no [ __ ]
way he'll be able to do it
did you see the um video that um Ben
Shapiro posted about retirement and
Social Security
no it's very interesting lighting the uh
the internet on fire and he basically
said look Social Security is not going
to play out the way that you think
you're probably not going to be able to
reap the benefits um not with people
retiring as early as they are you should
you know look at pushing retirement back
or removing retirement altogether
um if you look at managing a fiscally
responsible country is that an option on
the table for you or do you think that
there are better ways to get that
done absolutely you should remove I I I
think these these programs are great for
the people you know the Boomers right
they're the biggest beneficiaries of of
all these you know around the world
these sort of like Social Security
Programs depending on how you you pay
for them and removing them would remove
that that dead weight but I think at the
other end you also need to sort of
Reform like you know Global sick care
which is the health industry and the
misalign incentives right people
shouldn't be dying the way they're dying
based on the shitty food that we eat and
the overprescribed medicines there
shouldn't be and that's why people oh I
need to have this healthc care because
everybody gets sick why does everyone
get sick because we eat [ __ ]
processed food and all this dog [ __ ]
that's you know put out to us as healthy
there's a reason why everybody spends a
majority of their money in the last like
two years of their life dying of
horrible cancers and heart disease and
all this kind of [ __ ] right we're
poisoning ourselves every single day
with these [ __ ] up food chains so I
think it's not just let's remove the
retirement benefits in the healthcare as
well let's get at the root problem of
why do we treat people the way we treat
them in the Healthcare Systems around
the world let's have a better
relationship with
food yeah one thing I don't think people
really understand is that you can
obviously because we print to make all
these problems go away but if health
care costs you know let's say 10x what
it needs to cost if people were actually
healthy um you are quote unquote
bankrupting the country and that you get
to a point where there's no way that the
productivity uh of the country could
possibly match that so you've got the
interest payments just absolutely insane
you've got sickcare management insane
you you got Social Security retirement
um all of it becomes really
unmanageable I have until recently I had
no visceral relationship with how those
expenses actually played out in terms of
the budget until I started looking at
how much the government spends versus
the actual GDP of the country that stuff
gets very
scary and that's why we race towards War
we fled into crypto it all comes back
there all right then let me ask you
where does eth go we've talked about
Bitcoin where do you think eth goes from
where it's at now oh maybe 30
40,000 uh
whoa that's
mosive what what do you think gets us
there just the knock on effect of
everything that happens to bitcoin has a
trickle down to eth checkle down you
have you have the um eth ETF possibly
the the ethereum is the decentralized
computer and the decentralized computer
has a commodity the eth the currency
that pays an intrinsic 4% yield which is
the staking yield of it's the only you
know crypto asset of that size that has
this intrinsic yield and that's going to
draw a lot of it's the internet Bond
it's the bond of the internet computer
and pays you a yield to own it and so I
think that's going to be a very powerful
narrative as people start to think a bit
about more about what actually what eth
actually is and they're going to
allocate and say oh well not only do I
get sort of this
deflationary network value increase in
the eth the currency I'm also getting
paid 4% yeld and E where else do I get
that sort of return that's great I want
to allocate to this and there's all
sorts of different interest rate
strategies you can do around that but I
think that's going to be a big narrative
for people who are going to get into eth
and understand oh great I get to
participate in let's create a new
Digital internet on Defi and I get 4%
yield why do you think that right now
eth seems to be more to the upside I
don't know if this is true to the dollar
but it seems to be more to the upside
than Bitcoin so I'll see Bitcoin dip but
eth just keep going not that it hasn't
had its own dips but um are people
pricing
in the future in a greater way than
they're pricing in the reality of
Bitcoin
today I don't think so it's a smaller
asset right so smaller things move
faster just law of large numbers so I'm
not
really yeah I don't think so so do you
think its rate of um rate of increase
will speed up if an ETF goes for sure
just like Bitcoin just more more assets
and you know if people are actually
using the ethereum network post the the
merge you it becomes the the supply e
actually
declines so there's less eth available
the more people use the thing so if we
believe in Defi and the network activity
grows in defi because more people know
about it they want to experiment then
not only the the total supply of eth
declines and then you have the ETF you
know taking eth out of circulation as
well so you get sort of a double whammy
effect uh on on sort of the price on the
upside the narrative that I've been
hearing is you're going to get big gains
in Bitcoin you're going to get bigger
gains in eth and then you're going to
get even bigger gains in salana is that
just one do you agree with that
narrative and two is that just a law of
large numbers or is this um people
seeking out the highest volatility
clearest narrative
assets it's oh I guess timing is
everything so we think about last cycle
so Bitcoin went down something went from
69,000 down to 16,000 right Solana went
from 2 50 I think to 7even so yes from 7
to 250 is going to be a bigger return
from 16,000 to 69,000 right it's just
it's the um path dependency of returns
and the time in which you get in and out
of an asset so you could make much more
money on salana or some other much lower
market cap shitcoin than you could make
in Bitcoin but if your ass doesn't get
off the train at the right time you're G
to get absolutely wrecked versus Bitcoin
yeah you might get wrecked but it won't
be as bad as going from 250 to 7 so
again it's it's one of those things
where yes you can make more money in
lower market cap shitcoins but if you
don't time it right you're going to lose
more of the downside so you have to sort
of balance those those two together all
right as a Trader you seem very
comfortable with what I'll call trading
on culture trading on um Trends
momentum because when I talk to people
about why I'm a Believer in Bitcoin why
I'm a Believer in ethereum I can say
very robustly that I have a thesis
around where the world is going and
those are going to be long-term
adoptions they're not fugazi as you have
said about other things including the
trafi system um there there's just
something really intrinsic about them
now there's a flaw in the Bitcoin thing
if it can't whether it's ordinals or
whatever whether it can't become another
thing which it it has that sort of
looming Spectre but that narrative
digital gold it being the store of value
makes sense uh ethereum world's computer
it's a bond in the distributed world's
computer cool those make sense beyond
that when you get into nfts maybe salana
although if they can speak to maybe
gaming uh web through gaming or
something like that then there there
could really be a core thing there um
but I have a feeling that's not why
you're trading on it that this is really
just about H people get hyped about a
thing I'm able to read the tea leaves I
see what they're getting hyped about I
know the signs to get on the train I
know the signs to get off the train and
I trade on that is that an accurate
assessment yes so I believe that I have
a at least for the assets that I large
in my portfolio I have a fundamental
understanding of like what they are what
they're not and I can trade on the
narrative and know when the narrative
gets out of whack with what they
fundamentally are then maybe it's time
for me to step off versus I don't
understand what these things I've never
read the white paper for Bitcoin or
ethereum or you know reading research
from very much smarter individuals on
the like technical things that are going
on I just know what I read on Twitter
your ass is going to get wrecked because
you don't even know whether you're
believing in something that's true or
false at least if I know I'm trading a
piece of [ __ ] I know it's a piece of
[ __ ] and I'll size my position
accordingly that's interesting uh okay
so everything is gambling getting in the
elevator versus walking up the stairs is
a gamble I think that people would do
well to
conceptualize all of investing to an
extent as a gamble know where your break
points are know what your risk um
comfort is make your decisions
accordingly dude every time I get to
spend with you is is absolutely amazing
where can people follow along on your
insane
Journey uh so on X at crypto Haze I have
a medium as well crypto hazee and
substack crypto hazee as well so I write
long form articles I hope that you can
stomach a half an hour read I think it's
some interesting information or you can
read my bite-size information on
X I love it everybody if you haven't
already be sure to subscribe and until
next time my friends be legendary take
care
peace if you like this conversation
check out this episode to learn more you
are being slaughtered and you don't
realize this there could be a dollar
crisis they're debating the currency by
15% a year I mean it is inevitable that
it's going to happen I'm not saying
everybody is wrong I'm saying the people
that believe in Bitcoin are
wrong