WEBVTT 1 00:00:00.080 --> 00:00:03.000 They just keep printing bad money and it eventually crowds 2 00:00:03.040 --> 00:00:06.200 out the good money. Bitcoin is going to do reverse 3 00:00:06.240 --> 00:00:10.359 Greshoms law. The good money will eventually crowd out all 4 00:00:10.439 --> 00:00:13.199 the bad money. In a world where the white guys 5 00:00:13.240 --> 00:00:16.359 decide what the interest rate is, that's not a free market. 6 00:00:16.399 --> 00:00:21.839 That's market manipulation. You get a persistent theft of real 7 00:00:22.000 --> 00:00:25.120 wealth from the masses to the few. 8 00:00:25.280 --> 00:00:28.920 They're all bending the knee. Vanguard capitulated JP Morgan's new intokenization, 9 00:00:29.039 --> 00:00:31.679 City Banks talking about custody and launching its own stable coin. 10 00:00:31.800 --> 00:00:33.439 Are we seeing the full capitulation here? 11 00:00:33.759 --> 00:00:34.359 Yes, But. 12 00:00:39.799 --> 00:00:42.240 This episode is brought to you by Treasure. Treasure makes 13 00:00:42.280 --> 00:00:45.880 beautifully crafted hardware wallets that allow you to easily and 14 00:00:45.960 --> 00:00:49.000 safely store your crypto assets. Treasure has been in the 15 00:00:49.039 --> 00:00:51.960 game for a very long time since twenty thirteen. They 16 00:00:51.960 --> 00:00:55.840 were the pioneers of hardware wallets and the seed phrase setup, 17 00:00:56.039 --> 00:00:58.920 and their hardware wallets are open source. In fact, my 18 00:00:59.039 --> 00:01:02.799 favorite is the Treasure Save five. 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So if you'd like 30 00:01:36.879 --> 00:01:40.799 to learn more, visit the link in the description. Hey, folks, 31 00:01:40.879 --> 00:01:43.560 welcome into the Thinking Crypto podcast. I'm your host, Tony 32 00:01:43.640 --> 00:01:46.079 Edward and joining me today is Mark Usco, who is 33 00:01:46.120 --> 00:01:50.799 the founder, CEO and CIO of Morgan Creek Capital Management. Mark, 34 00:01:50.840 --> 00:01:53.079 great to see you, Great to see great to be 35 00:01:53.120 --> 00:01:53.359 with you. 36 00:01:54.000 --> 00:01:56.840 It's been a little too long, so great to catch 37 00:01:56.959 --> 00:01:59.120 up again and hope you had a good summer. And 38 00:01:59.200 --> 00:02:03.840 now fall is fully engaged football season. And although I 39 00:02:03.879 --> 00:02:06.280 was gonna say colder weather, but it's eighty one degrees 40 00:02:06.280 --> 00:02:08.639 here in Chapel Hill today, so no cold weather yet. 41 00:02:08.840 --> 00:02:10.759 Yeah, it's eighty three here in New Jersey, so it 42 00:02:10.800 --> 00:02:14.319 can't complain. And bitcoin hitting new all time highs. Mark 43 00:02:14.360 --> 00:02:15.879 I figured I got to get you on to get 44 00:02:15.879 --> 00:02:18.360 your perspective on everything that's happening. You know, what are 45 00:02:18.360 --> 00:02:20.520 your thoughts on bitcoin hitting this new all time high 46 00:02:20.680 --> 00:02:22.879 and then the outlook for Q four. 47 00:02:24.560 --> 00:02:30.919 I mean, look, there's an inevitability about bitcoin's price in 48 00:02:31.039 --> 00:02:33.479 dollars or yen or euros or whatever you want to 49 00:02:33.479 --> 00:02:40.080 price it in rising as countries devalue their fiat currency, 50 00:02:40.639 --> 00:02:43.599 and the more they devalue, the higher the price. You know, 51 00:02:43.639 --> 00:02:48.639 it's funny most of us talk about bitcoin in dollars, 52 00:02:48.960 --> 00:02:52.080 that's our kind of reference point. But like if you 53 00:02:52.240 --> 00:02:57.719 looked at bitcoin in Lira, it's been making all time 54 00:02:57.800 --> 00:03:02.680 highs for years because the lira has literally devalued ninety 55 00:03:02.759 --> 00:03:07.000 nine point nine percent, saything in Venezuela. So there is this, 56 00:03:07.719 --> 00:03:11.400 you know, I call it home market myopia, where one 57 00:03:11.479 --> 00:03:13.599 you think all the smart people are in your home market, 58 00:03:13.960 --> 00:03:16.840 which is clearly not true. Two you think you dominate 59 00:03:17.199 --> 00:03:19.680 every market, like you know, all the stocks are traded 60 00:03:19.680 --> 00:03:22.199 in the United States. Well it's not actually true. I mean, 61 00:03:22.800 --> 00:03:25.240 some of our stocks now are crazy valuations. So they 62 00:03:25.520 --> 00:03:29.439 they you know, dwarf, you know, Nvidia dwarfs the entire 63 00:03:29.520 --> 00:03:32.759 Japanese market in the MSCI World Index, I mean in 64 00:03:32.800 --> 00:03:36.840 Spain and France, and so that can definitely happen. But 65 00:03:37.639 --> 00:03:40.439 in digital assets, I think it's interesting. You know, you 66 00:03:40.520 --> 00:03:42.719 got our president saying, oh, we want to be the 67 00:03:42.719 --> 00:03:45.960 crypto capital of the world, and then the bitcoin is like, no, no, 68 00:03:46.039 --> 00:03:48.199 we want to be the bitcoin capital of the world. Okay, fine, 69 00:03:48.520 --> 00:03:52.240 but neither one is going to happen. Right, We're twenty 70 00:03:52.280 --> 00:03:58.199 odd percent of global activity. You know, binances orders of magnitude, 71 00:03:58.199 --> 00:04:01.719 bigger than coinbase's greatest coinbase and as great as Kraken 72 00:04:01.879 --> 00:04:06.120 and Gemini and these other exchanges are. You know, finance 73 00:04:06.319 --> 00:04:10.159 run circles around them on a global basis. So Tether 74 00:04:10.360 --> 00:04:13.919 is this gigantic beast of a company. You know, we're 75 00:04:13.919 --> 00:04:17.839 all excited about Circle, right, Circle goes public, great, goes 76 00:04:17.920 --> 00:04:21.199 up to forty billion dollar market cap, fantastic, excited for 77 00:04:21.279 --> 00:04:24.800 Jeremy and the crew. But I heard a stat that 78 00:04:24.879 --> 00:04:29.399 Teather makes more every four days then Circle will make 79 00:04:29.439 --> 00:04:32.560 in a year. Wow, you know, so what's that worth? Now? 80 00:04:32.680 --> 00:04:35.759 Now they're trying to raise money? I heard, yeah, at 81 00:04:35.800 --> 00:04:39.839 a five hundred billion dollar valuation, which would make it 82 00:04:39.920 --> 00:04:44.839 the second largest bank by market cap in the world 83 00:04:44.959 --> 00:04:48.879 behind JP Morgan. It's pretty impressive for a company with 84 00:04:49.079 --> 00:04:54.519 like fifty employees. So that's a rambling, kind of strange 85 00:04:54.560 --> 00:04:56.519 answer to your question about how to feel about the 86 00:04:56.519 --> 00:05:02.759 all time I but it is a high, right, I mean, 87 00:05:02.839 --> 00:05:07.680 one twenty six yesterday is higher than we've ever been. 88 00:05:09.319 --> 00:05:12.600 But when you inflation adjust and you look at it 89 00:05:12.639 --> 00:05:16.480 relative to how much devaluation has occurred and how much 90 00:05:16.639 --> 00:05:19.439 M two has been created, and actually what gold prices 91 00:05:19.439 --> 00:05:23.399 have done are actually not at a high now. I 92 00:05:23.439 --> 00:05:28.279 think we will, we'll get there. And then the big 93 00:05:28.360 --> 00:05:31.920 question on everybody's mind, and yesterday was interesting, you know, 94 00:05:31.959 --> 00:05:35.199 October sixth, we're recording on the seventh. October sixth is 95 00:05:35.240 --> 00:05:39.720 interesting in that if you look at the previous two cycles, 96 00:05:39.720 --> 00:05:42.279 the seventeen cycle and the twenty one cycle, and now 97 00:05:42.319 --> 00:05:44.600 the twenty five cycle. If you look at seventeen and 98 00:05:44.639 --> 00:05:51.560 the twenty one, the time from cycle peak to low 99 00:05:52.040 --> 00:05:55.399 is three hundred and sixty four days in both of them, precisely. 100 00:05:56.040 --> 00:05:59.120 And then the time from cycle low to cycle high 101 00:05:59.600 --> 00:06:03.639 is one and sixty four days, and so one thy 102 00:06:03.759 --> 00:06:07.959 sixty four days from the previous low was yesterday. And 103 00:06:08.000 --> 00:06:10.800 what's crazy is there's a guy and I wish I 104 00:06:10.839 --> 00:06:13.160 remember his name, so give him credit. But I saw 105 00:06:13.360 --> 00:06:16.399 there's this guy that tweeted in twenty twenty three, two 106 00:06:16.480 --> 00:06:22.839 years ago that the simulation will be repeated and the 107 00:06:22.920 --> 00:06:27.639 new high will occur on October sixth, and then we 108 00:06:27.680 --> 00:06:28.319 head back down. 109 00:06:28.839 --> 00:06:29.680 That's pretty wild. 110 00:06:29.720 --> 00:06:32.360 Wow. Now there are a whole bunch of people like, no, no, 111 00:06:32.399 --> 00:06:34.839 we're going to the moon by the end of the year. 112 00:06:36.399 --> 00:06:40.160 I mean maybe maybe so anyway, lots of stuff talk about, 113 00:06:40.360 --> 00:06:42.360 but mark is your base case still. 114 00:06:43.160 --> 00:06:45.800 I think you alluded to it. The currency devaluation that's 115 00:06:45.839 --> 00:06:48.759 happening around the globe by central banks. That's driving asset 116 00:06:48.800 --> 00:06:51.079 prices higher because as you mentioned, gold is ripping, you 117 00:06:51.199 --> 00:06:53.600 got real estate ripping, even though the mortgage industry is 118 00:06:53.720 --> 00:06:56.959 like flatline. And then you have the stock market going nuts. 119 00:06:57.240 --> 00:07:00.639 So are all these assets moving with the liquid from 120 00:07:00.720 --> 00:07:01.319 around the globe? 121 00:07:01.319 --> 00:07:04.120 One hundred percent of liquidity drives markets. One of my 122 00:07:04.160 --> 00:07:06.800 favorite things to tweet. And at the end of the day, 123 00:07:07.720 --> 00:07:13.399 this is money illusion. Right. Stocks are not at all 124 00:07:13.439 --> 00:07:18.120 time hives, right. I mean, yes, nominally they are, and 125 00:07:18.160 --> 00:07:22.360 you can't debate that, but in real terms, meaning if 126 00:07:22.399 --> 00:07:25.000 you price them in anything other than you know, the 127 00:07:25.079 --> 00:07:28.160 toilet paper, which is the US dollar or the yen 128 00:07:28.319 --> 00:07:30.360 or the euro, which you're going to race to the 129 00:07:30.399 --> 00:07:34.720 bottom to devalue if you priced it in anything solid, 130 00:07:35.439 --> 00:07:42.120 pun intended like gold. Here's the crazy stat. Stocks are 131 00:07:42.319 --> 00:07:48.240 down since nineteen hundred priced in gold. Wow, actually not 132 00:07:48.360 --> 00:07:52.399 up now, but that doesn't count. Well, it kind of does. 133 00:07:52.959 --> 00:07:58.920 And look, most of us don't feel it when things 134 00:07:58.959 --> 00:08:02.920 are more expensive. Our rent is higher, are you know 135 00:08:02.959 --> 00:08:05.480 the price of a hamburger is higher? You know, you're 136 00:08:05.560 --> 00:08:08.399 up in New York, New Jersey. There's this place in 137 00:08:08.519 --> 00:08:12.199 downtown New York where you know, they only take cash, 138 00:08:12.439 --> 00:08:14.959 and there's a huge line and you get the privilege 139 00:08:15.240 --> 00:08:19.639 of paying thirty dollars for a hamburger. And I went 140 00:08:19.800 --> 00:08:22.720 once with one of my guys, and it was a 141 00:08:22.720 --> 00:08:28.600 perfectly fine hamburger. But it wasn't like twenty times better, 142 00:08:29.199 --> 00:08:31.839 you know, or ten times better than the other hamburgers 143 00:08:31.879 --> 00:08:36.200 I've had. I'd probably prefer shakeshacks hamburger over that. But 144 00:08:36.360 --> 00:08:43.960 that illusion is what's happening when inflation right, which robs 145 00:08:44.080 --> 00:08:49.720 us of our wealth, and for most of our existence, 146 00:08:49.879 --> 00:08:54.039 up until two thousand and nine, there was no alternative. Right, 147 00:08:54.320 --> 00:08:57.320 you lived in the fiat world. You I everyone lived. 148 00:08:57.360 --> 00:09:01.879 We lived in the Fiat world. Well, we tried to 149 00:09:01.960 --> 00:09:07.480 save dollars, but the problem was in saving dollars if 150 00:09:07.480 --> 00:09:10.080 we didn't put them at risk, like if we just 151 00:09:10.120 --> 00:09:14.159 put them in cash, then every day they're stealing a 152 00:09:14.159 --> 00:09:17.120 little bit back through this thing called inflation. And what's 153 00:09:17.159 --> 00:09:25.919 really funny about inflation is the normal state of a productive, 154 00:09:26.480 --> 00:09:33.600 innovative society is deflation, not inflation. What I mean when 155 00:09:33.639 --> 00:09:37.720 you think about it, if you innovate, then you make 156 00:09:37.840 --> 00:09:41.879 things better. Right, you're getting more for the same amount. 157 00:09:42.080 --> 00:09:47.080 That's deflation or cheaper. Right, you can produce more like 158 00:09:47.120 --> 00:09:50.240 the model t for it. We discover the assembly line, 159 00:09:50.279 --> 00:09:54.080 and so cars started to go down in price. And 160 00:09:54.120 --> 00:09:57.440 from seventeen seventy six, when we started as a republic 161 00:09:57.919 --> 00:10:01.639 till nineteen thirteen, there was no such thing as inflation. 162 00:10:02.240 --> 00:10:06.559 We had a persistent deflation now was interrupted by a 163 00:10:06.600 --> 00:10:10.000 couple big wars and a depression like the depression of 164 00:10:10.080 --> 00:10:13.519 eighteen It was like eighteen forty eight or something like 165 00:10:13.559 --> 00:10:16.159 that was worse than the Great Depression. But no one 166 00:10:16.200 --> 00:10:18.840 ever talks about it because it's too long ago. To remember. 167 00:10:19.639 --> 00:10:23.440 So in nineteen thirteen the FED was created. What does 168 00:10:23.480 --> 00:10:29.600 the FED do? Well, the FED artificially manipulates markets. So 169 00:10:29.720 --> 00:10:36.440 free markets are prone to deflation because if I can compete, 170 00:10:36.879 --> 00:10:40.840 Let's say there's some provider of a gooder service. If 171 00:10:40.879 --> 00:10:43.159 I'm in a free market and I can compete against 172 00:10:43.159 --> 00:10:45.799 that person, I'm going to try to win business by 173 00:10:45.799 --> 00:10:51.639 maybe underpricing or making something better, both deflationary. Well, if 174 00:10:51.639 --> 00:10:54.159 the market is not free, right, if there are barriers 175 00:10:54.399 --> 00:11:02.279 or tariffs or restrictions or regulations, then you tend toward inflation. Well, 176 00:11:02.320 --> 00:11:04.840 if you manipulate the price of money, meaning in a 177 00:11:04.879 --> 00:11:11.480 free market, people would bid openly on the acceptable return 178 00:11:11.600 --> 00:11:15.039 that they would take for safety. Right, someone said well 179 00:11:15.080 --> 00:11:18.320 I need six percent. Someone will say, well I need 180 00:11:18.360 --> 00:11:21.000 five and a half, I need five, I need four 181 00:11:21.000 --> 00:11:25.519 and a half. And there's a natural market clearing price 182 00:11:26.000 --> 00:11:29.919 for risk assets. Well, in a world where a bunch 183 00:11:29.919 --> 00:11:32.000 of old white guys, I had to say it, but 184 00:11:32.080 --> 00:11:35.440 an old white guys decide what the interest rate is, 185 00:11:35.960 --> 00:11:39.960 that's not a free market. That's market manipulation. And so 186 00:11:40.679 --> 00:11:45.200 in that environment you get a persistent theft and I 187 00:11:45.279 --> 00:11:51.039 use the word intentionally of real wealth from the masses 188 00:11:51.919 --> 00:11:55.960 to the few, so income and wealth generate income and 189 00:11:56.039 --> 00:12:00.960 wealth ownership that divide becomes great, gater and greater and greater. 190 00:12:01.039 --> 00:12:05.200 Today it's the highest it's ever been in history. And 191 00:12:05.279 --> 00:12:09.360 I think it's interesting, Like, I understand why the people 192 00:12:09.840 --> 00:12:11.840 in the club right to say it's a small club 193 00:12:12.000 --> 00:12:13.799 and you ain't in it, right. I understand why the 194 00:12:13.840 --> 00:12:16.480 people in the club want that. What I don't really 195 00:12:16.600 --> 00:12:19.200 understand is why the rest of us don't pick up 196 00:12:19.240 --> 00:12:23.720 the pitchforks literally at some point and say no, no, Moss, 197 00:12:23.960 --> 00:12:26.799 Like we want open in free markets. We don't want 198 00:12:26.840 --> 00:12:34.600 this manipulated market inflation. Like who convinced an entire population 199 00:12:34.679 --> 00:12:39.200 of people that taking half of my purchasing power every 200 00:12:39.240 --> 00:12:43.679 thirty years is a good thing? That makes no sense, right, 201 00:12:43.759 --> 00:12:46.960 I mean, I worked hard for that money. And you know, 202 00:12:47.039 --> 00:12:48.840 Jimmy Song, I'm sure you've probably even had him on 203 00:12:48.879 --> 00:12:51.600 the podcast, but Jimmy and the cowboy Hat, and Jimmy 204 00:12:52.240 --> 00:12:54.519 made an impression on me. I heard him speak, you know, 205 00:12:54.759 --> 00:12:56.440 kind of around the same time we met back in 206 00:12:56.759 --> 00:13:00.879 twenty eighteen, maybe twenty seventeen, and he said something very 207 00:13:00.879 --> 00:13:03.399 profound that you know, people get really agitated when I 208 00:13:03.399 --> 00:13:04.960 say it. But it's like he said, Look, if you 209 00:13:05.120 --> 00:13:10.320 work for a salary, you're a slave. Everyone. Oh, you 210 00:13:10.399 --> 00:13:13.039 can't use that word. That's a bad word. It's like, no, 211 00:13:13.120 --> 00:13:16.919 think about it. You're a slave. Right, you get paid, 212 00:13:17.399 --> 00:13:20.440 you put your money in savings, and then they take 213 00:13:20.480 --> 00:13:23.600 it back from you if you don't spend it through 214 00:13:23.639 --> 00:13:28.080 this thing called this stealth tax called inflation. Well, if 215 00:13:28.120 --> 00:13:31.519 you work and get paid in bitcoin, you're no longer 216 00:13:31.559 --> 00:13:38.200 a slave because your money actually appreciates. Now here's the thing. 217 00:13:38.360 --> 00:13:43.000 Bitcoin didn't change. One bitcoin, one bitcoin, the bitcoin we 218 00:13:43.080 --> 00:13:46.480 talked about seven years ago, and the bitcoin today, it's 219 00:13:46.519 --> 00:13:49.759 the same thing. It's one bitcoin. The amount of dollars 220 00:13:49.799 --> 00:13:53.360 you need from sixteen thousand to one hundred and twenty 221 00:13:53.399 --> 00:13:57.919 six thousand, that's different, but it's still the same bitcoin. 222 00:13:58.240 --> 00:14:02.759 So what changed was the money worse, not Bitcoin getting better. Now, 223 00:14:02.759 --> 00:14:05.279 Bitcoin did get better. It's got better hash rate, it's 224 00:14:05.320 --> 00:14:08.720 got more decentralization, it's all. It actually is better. The 225 00:14:08.759 --> 00:14:11.799 network is better, and that's why the value of it increases. 226 00:14:12.240 --> 00:14:13.879 But at the end of the day, is the fiat 227 00:14:14.519 --> 00:14:19.159 that went down in value? And what's interesting about saving 228 00:14:20.000 --> 00:14:24.480 in bitcoin versus saving in fiat if you save in bitcoin, 229 00:14:24.720 --> 00:14:28.039 and again I'll give Jimmy full credit for this, he says, 230 00:14:28.080 --> 00:14:32.919 you you actually unleashed the most powerful force in all 231 00:14:32.960 --> 00:14:36.960 of human history, which is human creativity. Because if you 232 00:14:37.200 --> 00:14:42.519 don't have to constantly be working and striving to preserve 233 00:14:42.919 --> 00:14:46.840 the pursoning power of your money, and you your money 234 00:14:46.840 --> 00:14:53.080 actually grows, you have some time to think, to create, 235 00:14:53.919 --> 00:14:58.320 to maybe start a new business, right, maybe build a 236 00:14:58.360 --> 00:15:01.039 new product. You know, you don't have to just do 237 00:15:01.159 --> 00:15:05.840 this slave labor and get paid in this depreciating asset. 238 00:15:05.879 --> 00:15:09.679 So again, long answer to an instant question, but it 239 00:15:10.679 --> 00:15:13.799 to me, it all kind of weaves together in that 240 00:15:14.919 --> 00:15:23.320 why bitcoin is such an important innovation, why the construct 241 00:15:24.120 --> 00:15:30.879 of money is changing in it. Look, money is a 242 00:15:31.000 --> 00:15:34.440 very unique thing. It's an asset that exists in the 243 00:15:34.559 --> 00:15:39.200 absence of a liability, right, That's what money is. And 244 00:15:39.320 --> 00:15:42.279 that basically the only thing that meets that criteria that 245 00:15:42.399 --> 00:15:48.559 is used is gold. Silver meets that criteria. You know, copper, 246 00:15:49.440 --> 00:15:51.519 you know, puka shells. There are a lot of things 247 00:15:51.519 --> 00:15:54.879 that would meet that, but but the only one that's 248 00:15:54.919 --> 00:15:59.600 been used for five thousand years roughly because of belief 249 00:15:59.600 --> 00:16:03.279 and custom, is gold. But gold. You know, we've talked 250 00:16:03.279 --> 00:16:06.000 about this before. Gold suffers from two problems. It's not 251 00:16:06.240 --> 00:16:09.000 very portable, meaning it's really heavy, and you can't like 252 00:16:09.039 --> 00:16:11.440 stuff it in your pocket a gold bar and walk through. 253 00:16:11.600 --> 00:16:14.080 Actually you can walk through the radar detector, I mean 254 00:16:14.120 --> 00:16:18.720 the metal detector because it's inert. But anyway, so gold 255 00:16:19.120 --> 00:16:22.080 isn't very portable, and it's not very divisible. Like if 256 00:16:22.080 --> 00:16:23.879 I had a bar and I wanted to break it 257 00:16:23.919 --> 00:16:25.639 in half, I'm not strong enough. And even if I 258 00:16:25.679 --> 00:16:27.480 could break it in half, I couldn't stuff it in 259 00:16:27.480 --> 00:16:30.279 the computer and send it to you. You know, all 260 00:16:30.320 --> 00:16:32.320 the bitcoin in the world fits right here now. I 261 00:16:32.320 --> 00:16:34.879 don't have any on my phone. Don't sim swap me. 262 00:16:34.960 --> 00:16:37.440 It's not worth it. I keep mine in cold storage. 263 00:16:37.440 --> 00:16:39.720 In fact, I'm wearing my Chili Willy socks today for 264 00:16:39.799 --> 00:16:43.240 bitcoin cold storage. The point is that it's also very divisible. 265 00:16:43.279 --> 00:16:47.000 I can send you one one hundred millionth of a 266 00:16:47.000 --> 00:16:49.679 bitcoin right there. That's a one satosha. I can send 267 00:16:49.679 --> 00:16:53.120 you one satoshi for free, and that's better than the 268 00:16:53.159 --> 00:16:58.080 current system. So it is this technological improvement that takes 269 00:16:58.960 --> 00:17:03.519 old money, five thousand year money, into new age money. 270 00:17:03.519 --> 00:17:05.720 For the next five thousand years. But it was says, well, 271 00:17:05.799 --> 00:17:08.839 that's not money. Money is dollars and yeend in euros, like, no, 272 00:17:08.960 --> 00:17:12.640 those aren't money, those are currency. And you know, JP 273 00:17:12.759 --> 00:17:15.079 Morgan said it right, gold is money. Everything else is 274 00:17:15.160 --> 00:17:18.720 just credit because they're backed by debt and sailor you 275 00:17:18.759 --> 00:17:21.799 know can so oh, no, bitcoin is money, everything else. Okay, great, 276 00:17:22.839 --> 00:17:26.359 but it's true, right, everything else is credit, everything else 277 00:17:26.440 --> 00:17:29.759 is debt. Everything else lives in a world where governments 278 00:17:30.039 --> 00:17:32.480 can print it. Now, in the old days, you literally 279 00:17:32.519 --> 00:17:35.039 had to printing, press it and cut the paper and 280 00:17:35.079 --> 00:17:38.759 fold them up and hand them out. Now you just 281 00:17:38.799 --> 00:17:41.759 push a button and you create more ones than zeros. 282 00:17:41.920 --> 00:17:45.559 Well that's just too easy. There's no proof of work, right, 283 00:17:45.960 --> 00:17:48.039 which is you know, one of the great innovations of 284 00:17:48.119 --> 00:17:50.519 a bitcoin. But anyway, I digress. 285 00:17:51.200 --> 00:17:53.720 So on that note mark, we see that the United 286 00:17:53.759 --> 00:17:56.599 States has established a strategic bitcoin reserved or using the 287 00:17:56.599 --> 00:17:59.240 bitcoin the confiscated from bad actors over the years. But 288 00:17:59.519 --> 00:18:02.000 what's being discuss right now is how can they use 289 00:18:02.200 --> 00:18:05.480 revenue neutral ways to buy bitcoin to add to the reserve. 290 00:18:05.680 --> 00:18:07.920 So whether it's selling some of the goal reserve or 291 00:18:08.079 --> 00:18:10.279 using the tariff revenue. What are your thoughts on that 292 00:18:10.319 --> 00:18:11.400 and how that might play out? 293 00:18:11.480 --> 00:18:16.119 So one one caveat right, we actually don't have the 294 00:18:16.160 --> 00:18:18.839 strategic bitcoin reserve, which would be awesome if we did. 295 00:18:18.880 --> 00:18:23.920 What we have is the stockpile, the digital asset stockpile. Now, 296 00:18:23.960 --> 00:18:26.799 why is there a difference. That's the distinction without difference. Well, 297 00:18:27.440 --> 00:18:31.759 it's because you center Lumas and a couple others. We're 298 00:18:31.759 --> 00:18:34.599 trying to get this strategic bitcoin reserve to get the 299 00:18:34.680 --> 00:18:37.519 government to buy two hundred thousand bitcoin every year for 300 00:18:37.559 --> 00:18:41.440 the next five years. And and it makes perfect sense, 301 00:18:41.519 --> 00:18:45.200 right if you are a central bank and you have 302 00:18:45.680 --> 00:18:48.759 the money layer. Right, the way the money layer works 303 00:18:48.839 --> 00:18:53.319 is the central banks own gold. Sometimes they own other stuff, 304 00:18:53.359 --> 00:18:56.279 like the Swiss central Bank. I shouldn't say this, but 305 00:18:56.400 --> 00:18:58.000 isn't a real country. No, I'm just kidding around. I 306 00:18:58.039 --> 00:18:59.839 mean they don't make stuff. I mean it's just like 307 00:18:59.839 --> 00:19:02.640 a that it's like a it's a neutral place where 308 00:19:02.880 --> 00:19:05.960 you hide your money in Swiss banks, So that's what 309 00:19:06.000 --> 00:19:09.200 it is. But their central bank owns stocks and stuff 310 00:19:09.640 --> 00:19:12.200 because it's not a real central bank. It's like a 311 00:19:12.200 --> 00:19:16.079 private company that must to make money, so they buy stocks. 312 00:19:17.519 --> 00:19:21.799 But real central banks like you know, the Central Bank 313 00:19:21.799 --> 00:19:23.440 of the US or the Central Bank of China, the 314 00:19:23.480 --> 00:19:28.039 Central Bank of Europe, although that was less real. They 315 00:19:28.079 --> 00:19:30.920 buy gold and sometimes I buy euros or yan or 316 00:19:30.960 --> 00:19:33.559 dollars or whatever, but mostly they buy gold. Well that's 317 00:19:33.599 --> 00:19:38.200 the base layer of money. Then they issue debt to 318 00:19:38.240 --> 00:19:41.160 create you know, their paper currency out of thin air. 319 00:19:41.440 --> 00:19:48.519 That's called fiat. So in that environment we should think 320 00:19:48.559 --> 00:19:54.440 about replacing gold with bitcoin. Makes it perfect sense or partially. 321 00:19:55.200 --> 00:19:58.000 I mean I could go all the way. I mean 322 00:19:58.039 --> 00:19:59.720 I don't need to go all the way. I mean 323 00:19:59.799 --> 00:20:04.559 they they can coexist. But for me, I transition. I mean, 324 00:20:04.640 --> 00:20:09.200 I get I have nothing against gold. It's it just 325 00:20:09.480 --> 00:20:13.960 isn't as good as bitcoin, sure so, and it doesn't 326 00:20:13.960 --> 00:20:16.759 mean gold is bad. But just like gold beat silver. 327 00:20:17.160 --> 00:20:20.799 Remember in the early days, nineteen hundreds nineteen twenties, you 328 00:20:20.839 --> 00:20:24.039 had things called silver certificates, Like if you had a 329 00:20:24.039 --> 00:20:27.880 piece of paper money. It wasn't like today where it 330 00:20:27.880 --> 00:20:30.240 says in God we trust and it's worth nothing. Like 331 00:20:30.279 --> 00:20:33.559 if you gave that to the government, they give you nothing. Right, 332 00:20:33.640 --> 00:20:36.119 you don't get gold, you don't get silver, you don't 333 00:20:36.160 --> 00:20:38.400 get tax or seats, you don't get anything. You don't 334 00:20:38.400 --> 00:20:42.240 get teriff revenue. You get nothing. It is just a 335 00:20:42.279 --> 00:20:46.519 piece of paper to settle debts between private or public borrowers, 336 00:20:47.000 --> 00:20:48.839 so it has no value. But in the old days 337 00:20:49.400 --> 00:20:54.319 it was backed by silver, like every dollar you printed 338 00:20:54.640 --> 00:20:57.200 had to have gold or silver in the vault that 339 00:20:57.240 --> 00:20:59.640 if someone surrendered that money to you, you had to 340 00:20:59.640 --> 00:21:02.640 give them the hard asset. That went out the window 341 00:21:02.680 --> 00:21:04.880 in nineteen thirty three and then again in nineteen seventy one. 342 00:21:05.559 --> 00:21:09.720 But gold nudged out silver, and silver nudged out bronze, 343 00:21:09.759 --> 00:21:12.799 and bronze nudged out puka shells or stone wheels or 344 00:21:12.839 --> 00:21:15.680 whatever it was in the early days thousands of years ago. 345 00:21:16.880 --> 00:21:22.000 Because people have always wanted a medium of exchange. Right, 346 00:21:22.119 --> 00:21:25.519 Let's say you grow chickens and I grow cows, carrying 347 00:21:25.559 --> 00:21:28.119 our cows and chickens around with us all the time 348 00:21:28.400 --> 00:21:31.960 so we can barter. That's a pain in the ass. 349 00:21:32.240 --> 00:21:35.440 So let's have you know, you would print little tokens 350 00:21:35.480 --> 00:21:37.319 with chickens on them, and I'd print little tokens with 351 00:21:37.359 --> 00:21:40.440 cows on them, and we'd exchange those. But then how 352 00:21:40.440 --> 00:21:42.839 do we know how much a chicken token is worth us? 353 00:21:43.079 --> 00:21:46.799 A cow token sounds sounds like now right, everyone prints 354 00:21:46.839 --> 00:21:49.960 thrown token, so it didn't really work. So then they said, well, 355 00:21:50.039 --> 00:21:53.119 let's have one token and let's call it. You know, 356 00:21:53.680 --> 00:21:59.160 your first one in China was called flying money because 357 00:21:59.240 --> 00:22:02.559 literally it was made of paper and it's actually more linen. 358 00:22:03.279 --> 00:22:05.079 But it would fly away in the wind, right because 359 00:22:05.079 --> 00:22:07.640 it wasn't like you know, gold, it would not fly away. 360 00:22:08.000 --> 00:22:10.880 That was the first one, and then the Dutch came 361 00:22:10.920 --> 00:22:15.440 along with the dolar, and then we've copied that and 362 00:22:15.480 --> 00:22:18.519 we made the dollar. So we have these these things 363 00:22:19.039 --> 00:22:21.319 that we can we create them out of thin air, 364 00:22:21.799 --> 00:22:27.039 and gold would be better than those as a store value, 365 00:22:27.440 --> 00:22:29.680 but bitcoin is better than that. So to me, it's 366 00:22:29.759 --> 00:22:35.359 logical and natural that all nations states should migrate to bitcoin, 367 00:22:36.359 --> 00:22:38.640 not tomorrow, but over time. That makes sense to me. 368 00:22:39.119 --> 00:22:41.599 You know, Murray Stall, who's right up there your neck 369 00:22:41.640 --> 00:22:43.880 of the woods runs Horizon Kinetics used to have them 370 00:22:43.920 --> 00:22:47.519 on the show sometime. He explained this way better than 371 00:22:47.519 --> 00:22:50.880 I do. How you normally in the world, there's something 372 00:22:50.880 --> 00:22:54.720 called Gresham's law where bad money crowds out good And 373 00:22:54.759 --> 00:22:59.000 we've seen all the stories Venezuela, Turkey, you know, Zimbabwe. 374 00:22:59.559 --> 00:23:01.079 You know, I have over there on my desk, a 375 00:23:01.200 --> 00:23:05.480 one hundred trillion Zimbabwe dollar bill. Wow, right, and wouldn't 376 00:23:05.480 --> 00:23:08.599 buy a loaf of bread? Right? One hundred trillion. And 377 00:23:08.799 --> 00:23:11.799 they just keep printing bad money and it eventually crowds 378 00:23:11.839 --> 00:23:14.359 out the good money, and the and the country goes 379 00:23:14.680 --> 00:23:19.279 down the toilet. So that's Gresham's law. Well, Murray describes 380 00:23:19.359 --> 00:23:23.480 Bitcoin is going to do reverse Gresham's law. The good 381 00:23:23.559 --> 00:23:27.599 money will eventually crowd out all the bad money. And 382 00:23:27.680 --> 00:23:32.319 even though gold is money and it's good money, bitcoin 383 00:23:32.559 --> 00:23:34.839 should even crowd that out. So in the short term 384 00:23:34.880 --> 00:23:36.440 I probably have a little bit of both, but over 385 00:23:36.519 --> 00:23:43.000 long term it's Bitcoin. Governments like Fiat because governments are 386 00:23:43.079 --> 00:23:48.759 run by a small number of individuals, right, Congressman, senators, politicians, presidents, 387 00:23:48.880 --> 00:23:53.640 vice presidents, pretty small group those people. When they come 388 00:23:53.680 --> 00:23:57.599 to power, they're usually not very rich. Occasionally someone's already rich, 389 00:23:57.640 --> 00:23:59.920 but most of them actually aren't very rich. They're doing 390 00:24:00.000 --> 00:24:04.119 and as public servant. By the end they're super rich. Yeah, 391 00:24:05.000 --> 00:24:07.400 how's that happen? Like if you get paid one hundred 392 00:24:07.440 --> 00:24:09.400 grand and you got to pay your bills, you're not 393 00:24:09.440 --> 00:24:11.920 going to get rich that way, so you must be 394 00:24:11.920 --> 00:24:15.160 getting rich some other way, well, it's the payola for 395 00:24:15.240 --> 00:24:18.480 this project, or or hey, let's just print money and 396 00:24:19.319 --> 00:24:21.960 you know, allocate it back to ourselves, like hey, I know, 397 00:24:22.680 --> 00:24:28.799 we'll allow ourselves to buy companies before either the government 398 00:24:28.880 --> 00:24:31.680 buys them or some big announcement happens, because you know, 399 00:24:31.720 --> 00:24:33.920 it's just the committee and we're on the FDA, and 400 00:24:34.000 --> 00:24:35.720 we know that something's going to get approved, so we'll 401 00:24:35.720 --> 00:24:38.119