1 00:00:00,080 --> 00:00:02,880 Speaker 1: The Coin Bureau Podcast is a production of I Heart 2 00:00:03,040 --> 00:00:08,480 Speaker 1: Radio Mike One Earth is happening. It's tough out there, 3 00:00:08,960 --> 00:00:11,560 Speaker 1: It's where where is? Where is my money? What is 4 00:00:11,560 --> 00:00:15,480 Speaker 1: my portfolio? Look very red? There's a lot of red. 5 00:00:15,480 --> 00:00:18,960 Speaker 1: There's blood in the streets. And yes, yeah, okay, welcome 6 00:00:18,960 --> 00:00:21,840 Speaker 1: everyone to the Coin Bureau Podcast. This is a change 7 00:00:22,040 --> 00:00:26,760 Speaker 1: to our scheduled programming. Yeah, as you as you may 8 00:00:26,800 --> 00:00:29,440 Speaker 1: have noticed, the crypto market is um is having a 9 00:00:29,440 --> 00:00:32,240 Speaker 1: bit of a tough time and moment. So I thought 10 00:00:32,800 --> 00:00:35,960 Speaker 1: Mike and I would get together and talk about why 11 00:00:36,000 --> 00:00:52,520 Speaker 1: that is happening. So stay tuned, okay, Mike, Yeah, it's 12 00:00:52,680 --> 00:00:56,080 Speaker 1: it's not looking good. The crypto market has absolutely tanked 13 00:00:56,120 --> 00:00:58,480 Speaker 1: the last few days. Now, I just wanna put a 14 00:00:58,520 --> 00:01:00,880 Speaker 1: little bit of context into this because as this is 15 00:01:00,920 --> 00:01:04,560 Speaker 1: a very kind of fast moving state of affairs at 16 00:01:04,560 --> 00:01:08,080 Speaker 1: the moment. So we're recording this on Tuesday, the tenth 17 00:01:08,200 --> 00:01:12,360 Speaker 1: of May, and yeah, the situation in the crypto market 18 00:01:12,400 --> 00:01:15,200 Speaker 1: has got kind of markedly worse overnight, and I'll go 19 00:01:15,240 --> 00:01:18,560 Speaker 1: into the specific kind of reason for that a little 20 00:01:18,640 --> 00:01:21,560 Speaker 1: later on, but I just want to talk about there 21 00:01:21,560 --> 00:01:23,520 Speaker 1: are quite a few There are quite a number of 22 00:01:23,520 --> 00:01:26,360 Speaker 1: factors basically weighing on the crypto markets at the moment, 23 00:01:26,959 --> 00:01:30,000 Speaker 1: which are keeping prices down. And I thought we just 24 00:01:30,240 --> 00:01:33,520 Speaker 1: kind of discuss a few of those, now a few 25 00:01:33,640 --> 00:01:35,920 Speaker 1: most of them are kind of macro factors, so you know, 26 00:01:36,000 --> 00:01:40,240 Speaker 1: kind of factors from the global economy, and then there 27 00:01:40,280 --> 00:01:42,960 Speaker 1: are a few crypto specific ones as well. So I 28 00:01:43,000 --> 00:01:44,440 Speaker 1: thought I just talked you through and try and give 29 00:01:44,440 --> 00:01:46,560 Speaker 1: you a little bit of reassurance because I think in 30 00:01:46,640 --> 00:01:52,080 Speaker 1: situations like this, it's although understanding is half of the 31 00:01:52,200 --> 00:01:54,240 Speaker 1: half of the planet, because you know, there are so 32 00:01:54,280 --> 00:01:58,800 Speaker 1: many factors that can influence things, and if you have 33 00:01:58,960 --> 00:02:03,600 Speaker 1: like a understanding of why, then it makes more sense, 34 00:02:03,600 --> 00:02:06,800 Speaker 1: and you can understand, you can see potentially where things 35 00:02:07,120 --> 00:02:09,919 Speaker 1: can get better or where maybe you can get worse 36 00:02:09,960 --> 00:02:12,400 Speaker 1: before it gets better. Yeah, you got it, exactly. Yeah, 37 00:02:12,480 --> 00:02:15,360 Speaker 1: it's some it's situations like there's sometimes it's just good 38 00:02:15,400 --> 00:02:18,320 Speaker 1: to have some answers. It doesn't necessarily make the situation 39 00:02:18,400 --> 00:02:20,600 Speaker 1: any better, but just just tell me the answers. What 40 00:02:20,720 --> 00:02:23,960 Speaker 1: where's my money got? Okay, let's get into it. And 41 00:02:24,000 --> 00:02:27,320 Speaker 1: I should say, folks that none of the following is 42 00:02:27,360 --> 00:02:32,680 Speaker 1: financial advice. All right, good, Okay, So what's happening. Let's 43 00:02:32,680 --> 00:02:35,880 Speaker 1: just quickly sketch out the situation. So as we stand 44 00:02:35,880 --> 00:02:39,960 Speaker 1: at the moment, Bitcoin is down over fifty from its 45 00:02:40,000 --> 00:02:42,839 Speaker 1: all time high. Now that was in November last year. 46 00:02:43,639 --> 00:02:47,160 Speaker 1: That was that was when it peaked just around sixty dollars. 47 00:02:47,200 --> 00:02:51,040 Speaker 1: It's now kicking around kind of the thirty dollar mark 48 00:02:51,360 --> 00:02:53,960 Speaker 1: is not good. And less than a week ago it 49 00:02:54,040 --> 00:02:58,400 Speaker 1: was around forty dollars. So yeah, it's a pretty precipitous slide. 50 00:02:58,440 --> 00:03:00,880 Speaker 1: It's kind of gathered pace of the last few days, 51 00:03:01,280 --> 00:03:03,920 Speaker 1: and it's not just Bitcoin. Basically all cryptos have been 52 00:03:03,919 --> 00:03:07,720 Speaker 1: posting big, big losses. Now the talk in the crypto 53 00:03:07,800 --> 00:03:10,760 Speaker 1: community is that we are now in a bear market 54 00:03:10,880 --> 00:03:13,320 Speaker 1: than the ballmarket has come to an end. Now, this 55 00:03:13,480 --> 00:03:16,120 Speaker 1: is kind of up for debate. It's becoming it is 56 00:03:16,160 --> 00:03:18,560 Speaker 1: admittedly becoming harder and harder to say that we're not 57 00:03:18,639 --> 00:03:21,800 Speaker 1: in a bear market. It's certainly beginning to look very 58 00:03:21,919 --> 00:03:23,880 Speaker 1: very barish out there. But I don't really want to 59 00:03:23,919 --> 00:03:25,600 Speaker 1: get too far into that today because that can be 60 00:03:25,680 --> 00:03:28,480 Speaker 1: a bit of a rabbit hole. Basically, lots of people, 61 00:03:28,520 --> 00:03:32,079 Speaker 1: probably most people, I would hazard to guess saying, are 62 00:03:32,200 --> 00:03:35,040 Speaker 1: deep in the red, and I want to also say 63 00:03:35,080 --> 00:03:37,880 Speaker 1: that this is a problem that we're seeing in other 64 00:03:37,920 --> 00:03:41,120 Speaker 1: markets as well, stock markets getting absolutely hammered to and 65 00:03:41,240 --> 00:03:45,640 Speaker 1: particularly tech stocks. Now this is relevant because we have 66 00:03:45,760 --> 00:03:51,400 Speaker 1: been seeing recently a very strong correlation between bitcoin and 67 00:03:51,640 --> 00:03:53,880 Speaker 1: tech stocks, and some people are sort of going as 68 00:03:53,880 --> 00:03:55,680 Speaker 1: far to say that bitcoin is kind of a tech 69 00:03:55,720 --> 00:04:00,120 Speaker 1: stock in in a weird way. So yeah, bitco. So 70 00:04:00,280 --> 00:04:03,280 Speaker 1: there is this correlation in the markets, and yeah, it's 71 00:04:03,400 --> 00:04:06,720 Speaker 1: not just crypto that's getting hammered, but of course because 72 00:04:06,760 --> 00:04:11,760 Speaker 1: this is crypto, it's getting the headlines. Well, it's it's 73 00:04:11,840 --> 00:04:14,800 Speaker 1: kind of suffering more basically, you know, stock market, a 74 00:04:14,840 --> 00:04:17,000 Speaker 1: bad a bad day in the stock market might be 75 00:04:17,120 --> 00:04:20,240 Speaker 1: a you know, sort of a two to four, but 76 00:04:20,320 --> 00:04:24,000 Speaker 1: because of the swings are are a lot more extreme. 77 00:04:24,160 --> 00:04:27,320 Speaker 1: Crypto is way more volatile. So two to four in 78 00:04:27,320 --> 00:04:31,719 Speaker 1: a day for crypto is small is small beer. But yeah, 79 00:04:31,880 --> 00:04:35,520 Speaker 1: it's we are seeing we're seeing double digit percentage drops 80 00:04:35,720 --> 00:04:38,279 Speaker 1: you know, on on the our charts in some cases 81 00:04:38,480 --> 00:04:41,760 Speaker 1: in crypto at the moment. So now, there are a 82 00:04:41,800 --> 00:04:44,440 Speaker 1: few reasons causing this. As I said, the first one 83 00:04:44,560 --> 00:04:50,719 Speaker 1: and the biggest is COVID. Okay, Now, I think the 84 00:04:50,800 --> 00:04:53,880 Speaker 1: perception is certainly here in the UK, and I think 85 00:04:53,880 --> 00:04:57,000 Speaker 1: elsewhere across the world, a lot of people are kind 86 00:04:57,000 --> 00:04:59,920 Speaker 1: of thinking that COVID is behind us and we've kind 87 00:05:00,040 --> 00:05:03,360 Speaker 1: have moved on from that. Well it ain't. We are 88 00:05:03,440 --> 00:05:06,640 Speaker 1: still officially in a pandemic that the World Health Organization 89 00:05:06,880 --> 00:05:10,400 Speaker 1: has not come out and said otherwise. So COVID is 90 00:05:10,440 --> 00:05:14,040 Speaker 1: still very very much with us. But this, this current 91 00:05:14,120 --> 00:05:17,880 Speaker 1: situation that we're seeing is kind of more. I think 92 00:05:18,000 --> 00:05:22,680 Speaker 1: the bill for COVID basically coming in now. You may 93 00:05:22,720 --> 00:05:27,680 Speaker 1: remember that when everything went into lockdown in March, and 94 00:05:28,160 --> 00:05:30,600 Speaker 1: you know that it was all looking a bit apocalyptic 95 00:05:30,640 --> 00:05:36,000 Speaker 1: and stocks and crypto crashed then as well. Basically central 96 00:05:36,000 --> 00:05:40,560 Speaker 1: banks around the world stepped in because the economy was 97 00:05:41,200 --> 00:05:44,159 Speaker 1: the world economy was basically grinding to a halt. So 98 00:05:44,320 --> 00:05:49,000 Speaker 1: what the central banks, and particularly particularly pertinently the Federal Reserve, 99 00:05:49,080 --> 00:05:51,480 Speaker 1: the Central Bank of the US of A, what they 100 00:05:51,520 --> 00:05:55,360 Speaker 1: did was basically inject money into the system in order 101 00:05:55,480 --> 00:05:59,799 Speaker 1: to in order to keep businesses and and individuals afloat. 102 00:06:00,640 --> 00:06:03,039 Speaker 1: And you know, you'll remember here in here in the UK, 103 00:06:03,200 --> 00:06:05,480 Speaker 1: people were getting kind of COVID loans to make up 104 00:06:05,520 --> 00:06:09,120 Speaker 1: for lost pay. Businesses were getting COVID loans, and that 105 00:06:09,240 --> 00:06:12,640 Speaker 1: was the case in most countries, I think certainly most 106 00:06:12,680 --> 00:06:17,880 Speaker 1: developed countries. So money was basically pumped into the system 107 00:06:17,960 --> 00:06:22,880 Speaker 1: to keep everyone afloat. Now what this has meant is inflation, 108 00:06:23,320 --> 00:06:26,960 Speaker 1: because if you increase the money supply in value of it, 109 00:06:27,000 --> 00:06:29,200 Speaker 1: the cruse the value of it decreases. And we are 110 00:06:29,240 --> 00:06:32,440 Speaker 1: now seeing a forty year high in inflation in the 111 00:06:32,520 --> 00:06:36,240 Speaker 1: United States and elsewhere. Now inflation and the the official 112 00:06:36,279 --> 00:06:38,960 Speaker 1: figure for inflation in the US is eight point five, 113 00:06:39,400 --> 00:06:44,680 Speaker 1: but it's higher almost certainly, almost certainly, And I think 114 00:06:45,000 --> 00:06:46,800 Speaker 1: the Bank of England came out the other day and 115 00:06:47,080 --> 00:06:50,159 Speaker 1: said we're around ten percent here, and it's it's much 116 00:06:50,279 --> 00:06:53,520 Speaker 1: much higher in other countries as well. So inflation is 117 00:06:53,600 --> 00:06:57,280 Speaker 1: running hot. So what this means is obviously prices are 118 00:06:57,279 --> 00:07:00,919 Speaker 1: going up, money is becoming less value evil and the 119 00:07:01,000 --> 00:07:04,640 Speaker 1: Federal Reserve and other central banks around the world they 120 00:07:04,839 --> 00:07:07,800 Speaker 1: have to act to try and tame this inflation. I mean, 121 00:07:07,839 --> 00:07:10,440 Speaker 1: the Federal Reserve basically has a dual mandate. It has 122 00:07:10,520 --> 00:07:14,000 Speaker 1: to keep inflation under control. And by under control, I 123 00:07:14,040 --> 00:07:16,760 Speaker 1: think that the kind of the agreed upon figure is 124 00:07:16,760 --> 00:07:22,400 Speaker 1: around two. Yeah, that's that's generally seen as as a 125 00:07:22,400 --> 00:07:26,120 Speaker 1: good rate of inflation. And some people would argue that 126 00:07:26,160 --> 00:07:29,120 Speaker 1: we you know, we need inflation, and a little bit 127 00:07:29,160 --> 00:07:32,080 Speaker 1: of inflation can be can be healthy, can can stimulate growth. 128 00:07:32,800 --> 00:07:35,360 Speaker 1: But but yeah, basically they've got to try and get 129 00:07:35,360 --> 00:07:38,080 Speaker 1: it down and the only real weapon they have in 130 00:07:38,120 --> 00:07:42,600 Speaker 1: their arsenal to do this is to raise interest rates. Now, 131 00:07:42,640 --> 00:07:46,400 Speaker 1: interest rates for the past few years have been been, 132 00:07:47,520 --> 00:07:49,760 Speaker 1: isn't it. Well, they've been low for a long time, 133 00:07:50,440 --> 00:07:53,040 Speaker 1: but especially over the past few years. I mean in 134 00:07:53,080 --> 00:07:56,200 Speaker 1: some cases they've been at zero. So what this has 135 00:07:56,240 --> 00:07:59,200 Speaker 1: meant that what this has meant is that borrowing money 136 00:07:59,280 --> 00:08:02,360 Speaker 1: has become very, very cheap because you know, there's there's 137 00:08:02,600 --> 00:08:05,440 Speaker 1: little or in some cases no interest to pay on it. 138 00:08:05,640 --> 00:08:10,640 Speaker 1: So lots of people, lots of companies, lots of industries 139 00:08:10,840 --> 00:08:13,440 Speaker 1: have across the world have borrowed a lot of money 140 00:08:13,480 --> 00:08:16,560 Speaker 1: because it made financial sense. You know, if it's cheap 141 00:08:16,600 --> 00:08:18,880 Speaker 1: to borrow, you borrow because that that way you can 142 00:08:18,920 --> 00:08:21,960 Speaker 1: fund growth. And governments have as well. I mean the 143 00:08:22,080 --> 00:08:25,480 Speaker 1: US government has borrowed. Basically, there is a lot of 144 00:08:25,520 --> 00:08:30,480 Speaker 1: debt sloshing around the system, and if interest rates go up, 145 00:08:30,760 --> 00:08:34,280 Speaker 1: which they kind of have to, then that debt suddenly 146 00:08:34,320 --> 00:08:39,040 Speaker 1: becomes a lot more expensive to service, and so the 147 00:08:39,120 --> 00:08:42,360 Speaker 1: Federal Reserve are in And I talk about the Federal 148 00:08:42,400 --> 00:08:45,480 Speaker 1: Reserve because basically, obviously America is the world's largest economy, 149 00:08:45,520 --> 00:08:47,719 Speaker 1: and what happens in America it kind of ripples out 150 00:08:47,760 --> 00:08:49,839 Speaker 1: through the rest of the world. So the Federal Reserve, 151 00:08:49,880 --> 00:08:53,120 Speaker 1: whether we like it or not, its decisions are relevant 152 00:08:53,200 --> 00:08:57,720 Speaker 1: to to us. All. So the Federal Reserve is in 153 00:08:57,760 --> 00:09:01,880 Speaker 1: this really tricky situation. It has to tame inflations. It 154 00:09:02,200 --> 00:09:04,839 Speaker 1: kind of has to raise interest rates, but at the 155 00:09:04,880 --> 00:09:07,560 Speaker 1: same time, it knows that if it raises rates too 156 00:09:07,640 --> 00:09:11,760 Speaker 1: high or too fast or both, then it's going to 157 00:09:11,840 --> 00:09:14,120 Speaker 1: really kill the economy. It's going to tank the economy. Yeah, 158 00:09:14,240 --> 00:09:18,360 Speaker 1: and the the the the example that I used the 159 00:09:18,360 --> 00:09:20,040 Speaker 1: other day in a video was it's it's a bit 160 00:09:20,080 --> 00:09:22,240 Speaker 1: like trying to kind of land a jumbo jet on 161 00:09:22,280 --> 00:09:27,040 Speaker 1: an aircraft carrier. You know, it's very or as or 162 00:09:27,200 --> 00:09:28,840 Speaker 1: a bit like being a one legged man as an 163 00:09:28,840 --> 00:09:31,680 Speaker 1: ask kicking context. You know, you're in a very very 164 00:09:31,679 --> 00:09:35,880 Speaker 1: You're in a kind of impossible position. So yeah, So, 165 00:09:36,280 --> 00:09:39,560 Speaker 1: and what happens when interest rates start going up and 166 00:09:39,640 --> 00:09:43,040 Speaker 1: when people are looking at having to pay back their debts, 167 00:09:43,120 --> 00:09:46,680 Speaker 1: you know, having to having more expensive debts, they have 168 00:09:46,800 --> 00:09:48,880 Speaker 1: to they have to free up cash, they have to 169 00:09:48,920 --> 00:09:52,840 Speaker 1: free up liquidity, so they start selling out of riskier assets. 170 00:09:53,160 --> 00:09:56,280 Speaker 1: And the assets that kind of fall into the risky 171 00:09:56,400 --> 00:10:00,920 Speaker 1: bucket are things like stocks, and of course crypto Crypto 172 00:10:01,040 --> 00:10:03,199 Speaker 1: is you know, arguably seen as one of the riskiest 173 00:10:03,200 --> 00:10:06,360 Speaker 1: assets out there, and so this could be to free 174 00:10:06,440 --> 00:10:08,960 Speaker 1: up capital to you know, to pay off debts, or 175 00:10:09,080 --> 00:10:11,079 Speaker 1: it could be to free up capital to move into 176 00:10:11,200 --> 00:10:13,600 Speaker 1: what are seen as safer assets, things like long term 177 00:10:13,640 --> 00:10:18,200 Speaker 1: bonds and gold things like that. But obviously, when this 178 00:10:18,360 --> 00:10:21,320 Speaker 1: sell off starts, when when people start selling assets, that 179 00:10:21,360 --> 00:10:23,319 Speaker 1: means the price goes down. And this is what we're 180 00:10:23,320 --> 00:10:25,760 Speaker 1: seeing in crypto at at the moment. A lot of 181 00:10:25,800 --> 00:10:29,240 Speaker 1: people are going, I gotta get money from somewhere, I 182 00:10:29,280 --> 00:10:32,920 Speaker 1: need to I need to start selling. And I guess 183 00:10:32,960 --> 00:10:35,760 Speaker 1: to anyone who's maybe just got into crypto in the 184 00:10:35,840 --> 00:10:39,000 Speaker 1: last year or so and seeing their portfolio right down, 185 00:10:39,040 --> 00:10:41,839 Speaker 1: you know, they're seeing great, big losses. This can seem 186 00:10:41,880 --> 00:10:44,920 Speaker 1: pretty nonsensical, like why would you sell at a loss? 187 00:10:45,360 --> 00:10:47,319 Speaker 1: And I think there are a couple of things to 188 00:10:47,320 --> 00:10:49,760 Speaker 1: consider here. First, you might not have any choice. You know, 189 00:10:50,240 --> 00:10:52,160 Speaker 1: you might just you might just have to take what 190 00:10:52,280 --> 00:10:55,240 Speaker 1: money you can off the table um in order to 191 00:10:55,280 --> 00:10:58,400 Speaker 1: allocate it to two more important to more important things. 192 00:10:58,640 --> 00:11:00,440 Speaker 1: I mean, let's face it, some people people are going 193 00:11:00,480 --> 00:11:03,480 Speaker 1: to eat people mortgages, mortgages. Yeah, people are going to 194 00:11:03,559 --> 00:11:05,560 Speaker 1: meet their mortgage payments and things like that. So a 195 00:11:05,559 --> 00:11:07,960 Speaker 1: lot of people may have no choice to sell at 196 00:11:08,000 --> 00:11:11,000 Speaker 1: a loss, and a lot of other people will actually 197 00:11:11,000 --> 00:11:13,760 Speaker 1: still be in profit because, you know, bitcoint it's a 198 00:11:13,800 --> 00:11:17,640 Speaker 1: lot earlier than yeah, yeah, i mean the top of 199 00:11:17,679 --> 00:11:24,000 Speaker 1: the last ballmarket in sort of late yeah for bitcoin 200 00:11:24,120 --> 00:11:26,680 Speaker 1: was just shy of twenty k. So you know, even 201 00:11:26,720 --> 00:11:28,640 Speaker 1: anyone who bought at the top of the last bull 202 00:11:28,679 --> 00:11:31,880 Speaker 1: market will still be in profit now. So I'm sure 203 00:11:31,880 --> 00:11:34,640 Speaker 1: there are lots of people who are going, well, I 204 00:11:34,720 --> 00:11:38,520 Speaker 1: kind of wish i'd sold it sixt k, but I've 205 00:11:38,559 --> 00:11:40,600 Speaker 1: got to take some money off the table. So still 206 00:11:40,600 --> 00:11:43,080 Speaker 1: going to banque, you know, still going to bank a 207 00:11:43,160 --> 00:11:51,959 Speaker 1: healthy profit. But also straight after that that market it 208 00:11:52,040 --> 00:11:55,720 Speaker 1: dropped to five it did it? Did? It plummeted? So 209 00:11:56,160 --> 00:12:03,160 Speaker 1: we've been here before, yes, not quite the same, uh situation. 210 00:12:03,240 --> 00:12:06,560 Speaker 1: Obviously that was more China related, wasn't it. Yes, Yes, 211 00:12:06,600 --> 00:12:09,360 Speaker 1: that's right, that's right. And at that point sort of 212 00:12:09,440 --> 00:12:11,240 Speaker 1: China came out with a lot of kind of anti 213 00:12:11,240 --> 00:12:14,559 Speaker 1: crypto legislation, you know, it really moved against crypto in 214 00:12:14,600 --> 00:12:17,040 Speaker 1: a big way, and that kind of exacerbated what was 215 00:12:17,080 --> 00:12:20,320 Speaker 1: already this time came out with something else. Well, we 216 00:12:20,400 --> 00:12:23,600 Speaker 1: haven't heard anything from China yet. Someone pointed out there 217 00:12:23,600 --> 00:12:26,560 Speaker 1: was a very good video by the folks over at 218 00:12:26,559 --> 00:12:28,840 Speaker 1: the Defiant, which is a YouTube channel that I follow 219 00:12:28,880 --> 00:12:30,800 Speaker 1: a lot, and they kind of finished that up by saying, 220 00:12:31,240 --> 00:12:33,440 Speaker 1: all this kind of needs now is for some bad 221 00:12:33,480 --> 00:12:37,000 Speaker 1: news to come out of China. So you know, let's see, 222 00:12:37,240 --> 00:12:39,520 Speaker 1: let's let's hope China pipes down. We're going to talk 223 00:12:39,520 --> 00:12:43,280 Speaker 1: about China in a minute, actually, But now going back 224 00:12:43,320 --> 00:12:47,199 Speaker 1: to interest rates, basically, last week the Fed raised interest 225 00:12:47,280 --> 00:12:51,920 Speaker 1: rates by fifth fifty basis points, basically half a percent, 226 00:12:52,640 --> 00:12:56,680 Speaker 1: which is not massive. It might not seem like much, 227 00:12:56,840 --> 00:13:03,080 Speaker 1: but that is the biggest interest rate hike in twenty years, 228 00:13:03,160 --> 00:13:07,480 Speaker 1: So it is it is a lot. And bear in mind, um, 229 00:13:07,800 --> 00:13:09,600 Speaker 1: you know that's the kind of that's the kind of 230 00:13:09,640 --> 00:13:12,680 Speaker 1: base rate. You know, this is this the the rate 231 00:13:12,760 --> 00:13:15,600 Speaker 1: of the interest rates in the US are now at 232 00:13:15,760 --> 00:13:20,160 Speaker 1: zero point seven seventy five basis points, which again doesn't 233 00:13:20,200 --> 00:13:23,400 Speaker 1: seem like a lot, but bear in mind the if 234 00:13:23,400 --> 00:13:25,760 Speaker 1: you're getting a loan from a bank or anything like that, 235 00:13:25,920 --> 00:13:28,680 Speaker 1: or a mortgage, it's going to be higher. You know, 236 00:13:28,720 --> 00:13:30,800 Speaker 1: you won't get it at the actual rate of inflation. 237 00:13:30,840 --> 00:13:33,079 Speaker 1: The banks will add at least, you know, a couple 238 00:13:33,120 --> 00:13:35,320 Speaker 1: of percent on. That's that's how they make their money, 239 00:13:35,360 --> 00:13:38,760 Speaker 1: that's their spread. So this is going to be felt 240 00:13:38,800 --> 00:13:41,280 Speaker 1: by by the consumer, by the by the man and 241 00:13:41,320 --> 00:13:45,800 Speaker 1: woman in the street. And there are almost certainly going 242 00:13:45,800 --> 00:13:49,520 Speaker 1: to be more rate hikes on the cards because I 243 00:13:49,559 --> 00:13:53,440 Speaker 1: don't think anyone, even the most optimistic of people, believe 244 00:13:53,520 --> 00:13:56,880 Speaker 1: that having interest interest rates at less than a percent 245 00:13:57,160 --> 00:13:59,280 Speaker 1: is going to do anything to tame eight point five 246 00:13:59,280 --> 00:14:03,200 Speaker 1: percent inflation. So we are going to see more rate 247 00:14:03,280 --> 00:14:06,240 Speaker 1: hikes on the cards and over the course of the year. 248 00:14:07,640 --> 00:14:09,760 Speaker 1: Now as yeah, as I said, the Feds, and this 249 00:14:09,800 --> 00:14:11,520 Speaker 1: is the Fed's mandate, this is what the FED has 250 00:14:11,559 --> 00:14:14,520 Speaker 1: to do to keep inflation under control. And actually yesterday 251 00:14:14,840 --> 00:14:19,240 Speaker 1: on on Monday, the fourth of sorry Monday, the ninth 252 00:14:19,240 --> 00:14:23,160 Speaker 1: of May, um Joe Biden, US President came out and 253 00:14:23,200 --> 00:14:28,360 Speaker 1: stated that my top priority is fighting inflation. Now, what 254 00:14:28,440 --> 00:14:32,520 Speaker 1: this suggests is that inflation is not getting any lower, 255 00:14:32,800 --> 00:14:35,720 Speaker 1: and all eyes are kind of on what happens tomorrow 256 00:14:35,800 --> 00:14:39,840 Speaker 1: on Wednesday, the eleventh of May, when the CPI figures 257 00:14:39,920 --> 00:14:43,520 Speaker 1: come out in the US. Now, if these are higher 258 00:14:43,520 --> 00:14:47,120 Speaker 1: than expected, this means inflation is running higher than expected, 259 00:14:47,160 --> 00:14:51,640 Speaker 1: and that is more bad news. So I'm afraid, Yeah, 260 00:14:51,680 --> 00:14:55,120 Speaker 1: I think there's a fairly good chance that we are 261 00:14:55,160 --> 00:14:57,280 Speaker 1: going to have to Yeah, inflation is going to be 262 00:14:57,320 --> 00:15:01,080 Speaker 1: declared higher again, and this is probably going to increase 263 00:15:01,160 --> 00:15:04,520 Speaker 1: calls for rises and interest rates. Basically, it ain't getting 264 00:15:04,560 --> 00:15:08,200 Speaker 1: better anytime soon. By the way, if anyone has tuned 265 00:15:08,240 --> 00:15:11,920 Speaker 1: in for good news, I'm afraid there's not. There's not 266 00:15:12,000 --> 00:15:15,840 Speaker 1: a lot of it about um. But anyway, let's let's 267 00:15:15,840 --> 00:15:20,600 Speaker 1: move on. So, Yeah, if interest rates rise too quickly, 268 00:15:21,480 --> 00:15:25,680 Speaker 1: then the world will go into a recession again. If 269 00:15:25,680 --> 00:15:28,400 Speaker 1: the US goes into a recession, the world follows. The 270 00:15:28,520 --> 00:15:34,000 Speaker 1: UK basically has murmured that we're in We're going into recession. Yeah. 271 00:15:34,000 --> 00:15:36,080 Speaker 1: The Bank of England is making those is making those 272 00:15:36,120 --> 00:15:39,640 Speaker 1: noises now, and which is basically going to make us 273 00:15:39,680 --> 00:15:43,080 Speaker 1: go into recession. Because yeah, that's an interesting point actually, 274 00:15:43,120 --> 00:15:46,960 Speaker 1: because yeah, I mean if this announcements like that, since 275 00:15:47,080 --> 00:15:50,400 Speaker 1: the market and the markets are all about confidence, So yeah, 276 00:15:50,440 --> 00:15:52,880 Speaker 1: if investors, if investors see something like that from the 277 00:15:52,880 --> 00:15:54,640 Speaker 1: Bank of anything, they go, oh, yeah, it's a self 278 00:15:54,640 --> 00:15:59,360 Speaker 1: fulfilling prophecy if you like. But I mean, I think again, 279 00:15:59,440 --> 00:16:02,560 Speaker 1: only the most hopeless optimist, I think would be looking 280 00:16:02,640 --> 00:16:07,080 Speaker 1: at the current situation and going, maybe we can we 281 00:16:07,120 --> 00:16:09,400 Speaker 1: can survive, maybe we can get by without a recession. 282 00:16:09,440 --> 00:16:12,800 Speaker 1: Now that the interestingly, the definition of a recession is 283 00:16:12,880 --> 00:16:18,840 Speaker 1: two consecutive months of of negative GDP gross domestic product. 284 00:16:18,880 --> 00:16:21,840 Speaker 1: Now we've already had one in the US. Last month, 285 00:16:22,320 --> 00:16:25,200 Speaker 1: the last month the US saw a decline in GDP, 286 00:16:26,000 --> 00:16:28,680 Speaker 1: and yeah, if this, if this month sees the same, 287 00:16:29,080 --> 00:16:31,680 Speaker 1: it's official. We're in a recession. We'll talk about we'll 288 00:16:31,720 --> 00:16:35,720 Speaker 1: talk about recession in in a little bit. Um. Basically, 289 00:16:35,760 --> 00:16:37,680 Speaker 1: as I said, as I said a few minutes ago, 290 00:16:37,880 --> 00:16:40,880 Speaker 1: we are getting the bill for all the money printing 291 00:16:40,920 --> 00:16:45,160 Speaker 1: that went on during one And if you'll remember that 292 00:16:45,160 --> 00:16:49,240 Speaker 1: that period saw a huge boom in markets. Crypto boomed, 293 00:16:49,280 --> 00:16:52,040 Speaker 1: the stock market booms. You know, we saw things like Tesla, 294 00:16:52,560 --> 00:16:56,040 Speaker 1: Tesla shares going to absolutely insane valuations all the time 295 00:16:56,080 --> 00:16:58,760 Speaker 1: while the economy was under performing because people were stuck 296 00:16:58,800 --> 00:17:01,240 Speaker 1: at home and there were all sorts of other issues 297 00:17:01,280 --> 00:17:05,879 Speaker 1: that COVID was causing. Uh And basically that's a party 298 00:17:05,960 --> 00:17:08,600 Speaker 1: that that could never that could never last. So we 299 00:17:08,640 --> 00:17:11,919 Speaker 1: are and we are entering severe hangover territory here. The 300 00:17:11,960 --> 00:17:16,439 Speaker 1: money tap is basically being turned off. So yeah, it 301 00:17:16,560 --> 00:17:19,439 Speaker 1: basically this is this is a result of COVID, and 302 00:17:19,480 --> 00:17:22,679 Speaker 1: I think we should remember as well that COVID is 303 00:17:22,720 --> 00:17:27,000 Speaker 1: not gone, is not gone, and this is particularly relevant 304 00:17:27,000 --> 00:17:29,320 Speaker 1: to China. We may be bored of it, Yeah, we 305 00:17:29,440 --> 00:17:31,879 Speaker 1: may be really really sick of it, you know, we 306 00:17:31,960 --> 00:17:35,359 Speaker 1: may Shanghai is on lockdown. Yeah, that's what I wanted 307 00:17:35,400 --> 00:17:37,320 Speaker 1: to That's what I mean wanted to mention. Next year, 308 00:17:37,400 --> 00:17:41,080 Speaker 1: China is basically PISO pursuing a zero COVID policy at 309 00:17:41,080 --> 00:17:44,199 Speaker 1: the moment, it's trying to eradicate it completely. And what 310 00:17:44,280 --> 00:17:48,320 Speaker 1: this means is really strict lockdowns. And Shanghai has been 311 00:17:48,359 --> 00:17:51,520 Speaker 1: locked down for weeks now. And what this is doing 312 00:17:51,640 --> 00:17:58,040 Speaker 1: is causing absolute havoc with manufacturing. Remember, China basically makes everything, 313 00:17:58,960 --> 00:18:02,480 Speaker 1: um this so we're seeing we're seeing factories shut down, 314 00:18:02,680 --> 00:18:05,960 Speaker 1: We're seeing ports being closed, We're seeing truckers getting goods 315 00:18:06,000 --> 00:18:10,320 Speaker 1: from the factories to the ports they're being quarantined. And yeah, 316 00:18:10,359 --> 00:18:14,480 Speaker 1: basically this is playing absolute havoc with global supply chains. Now, 317 00:18:14,520 --> 00:18:19,439 Speaker 1: global supply chains have been in a mess throughout COVID 318 00:18:19,520 --> 00:18:21,760 Speaker 1: because obviously you know this, this same thing has been 319 00:18:22,040 --> 00:18:24,200 Speaker 1: been going on for a while now, you know, so 320 00:18:24,400 --> 00:18:29,520 Speaker 1: global trade has been really badly affected, and we're now seeing, 321 00:18:29,800 --> 00:18:32,200 Speaker 1: you know, because so much of China is shutting down 322 00:18:32,240 --> 00:18:35,800 Speaker 1: Shanghai as a massive port, so goods aren't getting out 323 00:18:35,800 --> 00:18:38,480 Speaker 1: of there, they're not getting in and this is this 324 00:18:38,520 --> 00:18:42,040 Speaker 1: is again yeah, so again prices are going up, this 325 00:18:42,119 --> 00:18:46,119 Speaker 1: is this is adding to inflation in floating it. Yeah, 326 00:18:46,520 --> 00:18:49,000 Speaker 1: it's not looking good. So we've got this factor weighing 327 00:18:49,080 --> 00:18:51,600 Speaker 1: on the global economy as well. Basically, everything that we've 328 00:18:51,600 --> 00:18:54,960 Speaker 1: talked about for the past few minutes is COVID related. 329 00:18:55,440 --> 00:18:59,080 Speaker 1: So any sense that we are shot of COVID, however 330 00:18:59,160 --> 00:19:03,960 Speaker 1: bored we are of it, I'm afraid is misplaced. COVID yeah, 331 00:19:04,280 --> 00:19:07,560 Speaker 1: is thrown on top of that like a small wall, 332 00:19:07,920 --> 00:19:15,119 Speaker 1: which is influencing sort of. Yeah, European power. Yeah, gas 333 00:19:15,119 --> 00:19:18,840 Speaker 1: and oil prices. Let's well, I'm coming about that. Let's 334 00:19:18,880 --> 00:19:20,960 Speaker 1: take it. Let's take a quick break to digest that 335 00:19:21,040 --> 00:19:23,000 Speaker 1: lot of bad news before we get into the other 336 00:19:23,040 --> 00:19:43,439 Speaker 1: best the main course. Exactly just before the break, you 337 00:19:43,440 --> 00:19:47,480 Speaker 1: you mentioned the war in Ukraine. Yes, this is another 338 00:19:47,640 --> 00:19:51,480 Speaker 1: another reason why the global economy is wobbling, and I 339 00:19:51,520 --> 00:19:54,240 Speaker 1: mean there are It doesn't take it doesn't take an 340 00:19:54,280 --> 00:19:56,560 Speaker 1: economist to work out why, but you know, let's kind 341 00:19:56,560 --> 00:19:59,280 Speaker 1: of dig into it a little bit. So I think firstly, 342 00:19:59,400 --> 00:20:03,359 Speaker 1: these sanc that have been leveled against Russia, these are 343 00:20:03,480 --> 00:20:07,720 Speaker 1: causing energy prices to soar, especially in Europe. But these 344 00:20:07,760 --> 00:20:11,320 Speaker 1: sorts of because because the global economy is so interconnected, 345 00:20:11,880 --> 00:20:14,359 Speaker 1: just because energy prices go up in Europe, it doesn't 346 00:20:14,400 --> 00:20:16,480 Speaker 1: mean that that's not going to ripple out. So energy 347 00:20:16,520 --> 00:20:19,399 Speaker 1: prices are are creeping up worldwide. But they're seeing in 348 00:20:19,480 --> 00:20:23,400 Speaker 1: America and they've got gas prices. Yeah, and they're a 349 00:20:23,440 --> 00:20:26,240 Speaker 1: big producer. Yeah, Russia is a is a major is 350 00:20:26,240 --> 00:20:30,520 Speaker 1: a major producer of of of gas and oil as well. 351 00:20:31,240 --> 00:20:35,080 Speaker 1: And because they're because it's no longer being able to 352 00:20:35,119 --> 00:20:37,560 Speaker 1: export so much as it some people still need that. 353 00:20:37,640 --> 00:20:41,720 Speaker 1: So they're they're looking at other other sellers. Yeah, so yeah, 354 00:20:41,880 --> 00:20:46,639 Speaker 1: gas prices, petrol prices are going up and around the world, 355 00:20:46,760 --> 00:20:50,600 Speaker 1: and now this is obviously terrible for consumers. And a 356 00:20:50,640 --> 00:20:52,239 Speaker 1: lot of the talk at the moment here in the 357 00:20:52,320 --> 00:20:56,159 Speaker 1: UK is around kind of cost of living and fuel 358 00:20:56,200 --> 00:20:58,840 Speaker 1: poverty and and things like that, and basically, yeah, people 359 00:20:59,200 --> 00:21:03,160 Speaker 1: were already seeing people being unable to afford to heat 360 00:21:03,200 --> 00:21:05,239 Speaker 1: their homes. And I think one of the most just 361 00:21:05,320 --> 00:21:07,280 Speaker 1: one of the bleakest things I've heard in a long 362 00:21:07,320 --> 00:21:11,359 Speaker 1: time was that um food banks, which have become, you know, 363 00:21:11,440 --> 00:21:14,919 Speaker 1: just a common site here in the UK in the past, 364 00:21:15,000 --> 00:21:19,400 Speaker 1: in the past decade, people are turning turning down things 365 00:21:19,440 --> 00:21:22,639 Speaker 1: like pasta because it's too expect They can't afford to heat, 366 00:21:22,680 --> 00:21:25,000 Speaker 1: they can't afford to heat up a pan to cook it, 367 00:21:25,680 --> 00:21:28,560 Speaker 1: they can't afford to boil the kettle. It's just just 368 00:21:28,760 --> 00:21:32,919 Speaker 1: I mean, yeah, it's it's terrible and you can I 369 00:21:32,920 --> 00:21:36,520 Speaker 1: mean it just you can imagine what it's like, isn't it. 370 00:21:36,840 --> 00:21:39,480 Speaker 1: People people can't afford to heat their homes. They're having 371 00:21:39,480 --> 00:21:42,480 Speaker 1: to go without on on so many fronts, and so 372 00:21:42,560 --> 00:21:45,600 Speaker 1: this is terrible for the consumer, but it's also really 373 00:21:45,640 --> 00:21:49,679 Speaker 1: bad for industry as well, because industry needs power, it 374 00:21:49,760 --> 00:21:53,800 Speaker 1: needs gas, it needs petrol for transportation and things like that, 375 00:21:54,119 --> 00:21:58,680 Speaker 1: so industrial costs are creeping up as well. Add to this, 376 00:21:58,960 --> 00:22:02,800 Speaker 1: Russia is a big water of of other commodities, precious metals, 377 00:22:02,800 --> 00:22:06,160 Speaker 1: things like that, you know, metals used in all sorts 378 00:22:06,160 --> 00:22:09,400 Speaker 1: of construction. So commodity prices are also going up. Raw 379 00:22:09,440 --> 00:22:12,719 Speaker 1: materials are costing more, production costs are going up, So 380 00:22:12,760 --> 00:22:15,760 Speaker 1: this means prices for the goods that these things are 381 00:22:15,840 --> 00:22:18,840 Speaker 1: used to make. Cost of living goes up, therefore cost 382 00:22:18,920 --> 00:22:23,600 Speaker 1: of of manpower goes up. Yeah. Yeah, everything is just everything. 383 00:22:23,680 --> 00:22:27,200 Speaker 1: Prices are just going up everywhere, And of course, yeah, 384 00:22:27,760 --> 00:22:29,760 Speaker 1: the only way is up. The only way is up. 385 00:22:29,800 --> 00:22:32,359 Speaker 1: But yeah, in a lot sort of in a less 386 00:22:32,400 --> 00:22:36,440 Speaker 1: cheery way, in a less optimistic way. Yeah. And if 387 00:22:36,480 --> 00:22:39,679 Speaker 1: that wasn't bad enough, Ukraine and Russia also produce a 388 00:22:39,720 --> 00:22:42,920 Speaker 1: lot of the world's grain and other essential food stuff 389 00:22:43,000 --> 00:22:45,919 Speaker 1: I think, things like sunflower oil that the the Ukraine 390 00:22:46,000 --> 00:22:48,520 Speaker 1: is a big I think maybe even the biggest single 391 00:22:48,560 --> 00:22:52,160 Speaker 1: producer of sunflower oil. This may not be as relevant 392 00:22:52,200 --> 00:22:55,280 Speaker 1: to some of the American listeners, but there was talks 393 00:22:55,280 --> 00:22:59,600 Speaker 1: about fish and chip shops not being able to cook fish. 394 00:23:00,200 --> 00:23:02,520 Speaker 1: That's a big deal in England. I think I think 395 00:23:02,560 --> 00:23:06,440 Speaker 1: that could very well precipitate a complete collapse in British society. 396 00:23:06,440 --> 00:23:08,160 Speaker 1: That's what's going to cause the riots. If I can't 397 00:23:08,200 --> 00:23:10,199 Speaker 1: have my fish and chips for breakfast, that will be 398 00:23:10,359 --> 00:23:14,320 Speaker 1: the final straw, won't it. Yeah. So yeah, we've got 399 00:23:14,359 --> 00:23:17,000 Speaker 1: we've got food prices going up as well, adding to 400 00:23:17,359 --> 00:23:19,760 Speaker 1: adding to the cost of living. Now how do we 401 00:23:19,920 --> 00:23:23,680 Speaker 1: circle back and tie this into crypto. Well, everyone is 402 00:23:24,400 --> 00:23:28,359 Speaker 1: worse off. Everyone is getting poorer, which means on a 403 00:23:28,400 --> 00:23:30,359 Speaker 1: retail trade affront, you know, people like you and me, 404 00:23:30,440 --> 00:23:33,760 Speaker 1: we're going to have less money to invest, so we're 405 00:23:33,800 --> 00:23:36,400 Speaker 1: not going to buy We're not going to buy as 406 00:23:36,440 --> 00:23:40,000 Speaker 1: much stocks, as much crypto, you know, these riskier assets. 407 00:23:40,000 --> 00:23:42,240 Speaker 1: So there's going to be there's going to be less 408 00:23:42,680 --> 00:23:46,119 Speaker 1: money flooding into those sorts of markets. And again a 409 00:23:46,160 --> 00:23:48,320 Speaker 1: lot of people will be looking at these rising costs 410 00:23:48,359 --> 00:23:51,000 Speaker 1: and go I need to sell I need to sell 411 00:23:51,040 --> 00:23:53,159 Speaker 1: this this bitcoin, or I need to sell these shares 412 00:23:53,200 --> 00:23:58,360 Speaker 1: in order to in order to live. So yeah, this 413 00:23:58,440 --> 00:24:00,520 Speaker 1: is these are these are kind of the ELTs of 414 00:24:00,800 --> 00:24:04,119 Speaker 1: of what's happening in Ukraine. And of course something that 415 00:24:04,160 --> 00:24:06,399 Speaker 1: puts all of the kind of puts this into a 416 00:24:06,440 --> 00:24:09,640 Speaker 1: lot of perspective. Is we've got a humanitarian crisis unfolding 417 00:24:09,680 --> 00:24:12,400 Speaker 1: there as well, which is way more serious than than 418 00:24:12,760 --> 00:24:15,840 Speaker 1: you know, a few investors being out of pocket. But 419 00:24:16,800 --> 00:24:19,520 Speaker 1: somehow money is going to be is going to have 420 00:24:19,600 --> 00:24:22,119 Speaker 1: to be found to to care for these people, to 421 00:24:22,400 --> 00:24:25,560 Speaker 1: you know, to keep them alive, and eventually at some 422 00:24:25,600 --> 00:24:27,800 Speaker 1: point in the future, to try and to try and 423 00:24:27,840 --> 00:24:30,920 Speaker 1: re home them, to say nothing of what's going to 424 00:24:30,960 --> 00:24:34,280 Speaker 1: have to be spent to rebuild Ukraine after the war. 425 00:24:34,400 --> 00:24:36,920 Speaker 1: But I mean in that in that sense that this 426 00:24:36,960 --> 00:24:39,840 Speaker 1: war is is, I think everyone is now pretty much 427 00:24:39,840 --> 00:24:41,880 Speaker 1: resigned to the fact that it's going to go on 428 00:24:42,080 --> 00:24:45,680 Speaker 1: for a long long time. I mean, I can't see 429 00:24:45,680 --> 00:24:49,959 Speaker 1: it ending anytime soon because I think Putin has you know, 430 00:24:50,040 --> 00:24:54,159 Speaker 1: he's it's been a disaster for Russia. But can Puttin 431 00:24:54,200 --> 00:24:56,680 Speaker 1: aford to pull back? You know, he's been he's had 432 00:24:56,680 --> 00:24:59,120 Speaker 1: his face, Yeah, he's had his ass handed to him. 433 00:24:59,240 --> 00:25:02,199 Speaker 1: But you know, if if he was to retreat, I 434 00:25:02,240 --> 00:25:05,560 Speaker 1: think that would that could you know, destabilize him. So 435 00:25:06,160 --> 00:25:09,080 Speaker 1: there doesn't seem to be and Ukraine is not going 436 00:25:09,119 --> 00:25:12,760 Speaker 1: to lay down's arms anytime soon. So what we're looking 437 00:25:12,760 --> 00:25:14,959 Speaker 1: at is a kind of protracted war I think probably 438 00:25:14,960 --> 00:25:17,800 Speaker 1: in the East of Ukraine, which is just going to 439 00:25:18,320 --> 00:25:25,960 Speaker 1: suck in people and resources and money and and hope. Yeah. 440 00:25:26,040 --> 00:25:28,640 Speaker 1: And and that's a good point because I mean, this 441 00:25:28,680 --> 00:25:32,600 Speaker 1: war has sown a massive amount of uncertainty and fear, 442 00:25:32,840 --> 00:25:37,800 Speaker 1: and it's these are not factors. These are not things 443 00:25:37,800 --> 00:25:41,000 Speaker 1: that contribute to a good environment to investing it. They 444 00:25:41,000 --> 00:25:45,520 Speaker 1: don't contribute to investor confidence. Um and the markets markets 445 00:25:45,560 --> 00:25:48,720 Speaker 1: hate uncertainty, you know. And actually what was what was 446 00:25:48,800 --> 00:25:52,560 Speaker 1: kind of weird was sometimes when these disasters happened, like 447 00:25:52,560 --> 00:25:55,199 Speaker 1: there was a lot of uncertainty before the war. Do 448 00:25:55,200 --> 00:25:58,600 Speaker 1: you remember sort of in the in January and kind 449 00:25:58,640 --> 00:26:02,960 Speaker 1: of early February of this year when everyone could see 450 00:26:03,000 --> 00:26:05,879 Speaker 1: that there were Russian forces kind of massing along the border. 451 00:26:05,880 --> 00:26:08,840 Speaker 1: There was a lot of uncertainty. Then Russia went in 452 00:26:09,680 --> 00:26:12,439 Speaker 1: and obviously, you know, you saw a great big tumble 453 00:26:12,480 --> 00:26:15,720 Speaker 1: in prices of assets then, but then weirdly they kind 454 00:26:15,760 --> 00:26:18,439 Speaker 1: of ticks back up again because people were like, oh, 455 00:26:18,520 --> 00:26:20,800 Speaker 1: it's probably not going to be well. I think people 456 00:26:20,800 --> 00:26:23,520 Speaker 1: were more like this thing that we were worried about 457 00:26:23,960 --> 00:26:26,359 Speaker 1: and that we were you know, pretty sure was going 458 00:26:26,400 --> 00:26:30,280 Speaker 1: to happen. It's happened. You know, it kind of restored 459 00:26:30,400 --> 00:26:33,520 Speaker 1: some certainty to the markets. It's it's a very strange thing, 460 00:26:33,560 --> 00:26:35,480 Speaker 1: but you you see it time and again, and often 461 00:26:35,560 --> 00:26:39,200 Speaker 1: in crypto. Sometimes. We saw this with this interest rate 462 00:26:39,280 --> 00:26:43,040 Speaker 1: rise last week. Everyone was expecting a fifty basis point 463 00:26:43,160 --> 00:26:47,520 Speaker 1: hike and we got it, and there was this brief 464 00:26:47,600 --> 00:26:50,600 Speaker 1: kind of spike where everyone went, oh, that's what we expected. 465 00:26:50,720 --> 00:26:54,120 Speaker 1: We priced that in um and so yeah, you saw 466 00:26:54,160 --> 00:26:56,840 Speaker 1: this weird kind of bounce which then and then everyone 467 00:26:57,840 --> 00:27:00,840 Speaker 1: they hangover set in was like cliff, Yeah, Everyone's sort 468 00:27:00,840 --> 00:27:03,480 Speaker 1: of like, oh yeah, hang on, this is terrible news. 469 00:27:03,560 --> 00:27:08,280 Speaker 1: So yeah, so that's that's the war in Ukraine. And again, 470 00:27:09,200 --> 00:27:11,959 Speaker 1: like like COVID, this is a problem that is not 471 00:27:12,000 --> 00:27:13,359 Speaker 1: going to go away. We're going to be we're going 472 00:27:13,440 --> 00:27:15,879 Speaker 1: to be living with this for a long time. And 473 00:27:16,880 --> 00:27:20,720 Speaker 1: again this kind of stokes fears about recession. And as 474 00:27:20,720 --> 00:27:23,920 Speaker 1: I said, the US recorded a decline in GDP last month, 475 00:27:24,480 --> 00:27:27,400 Speaker 1: and if we see a second consecutive month, then it's 476 00:27:27,440 --> 00:27:31,119 Speaker 1: official we have a recession. And going back to China 477 00:27:31,160 --> 00:27:34,440 Speaker 1: again as well, China's GDP is almost certainly going to 478 00:27:34,520 --> 00:27:36,800 Speaker 1: fall as well because of these lockdowns, because of the 479 00:27:37,720 --> 00:27:41,320 Speaker 1: general slowdown in the world economy. And as I said before, 480 00:27:41,680 --> 00:27:47,440 Speaker 1: because China makes pretty much everything, a slowdown means less 481 00:27:47,480 --> 00:27:50,560 Speaker 1: demand for the goods it makes because people cut back 482 00:27:50,640 --> 00:27:53,360 Speaker 1: on non essential items so they won't be buying, you know, 483 00:27:53,800 --> 00:27:55,760 Speaker 1: so many iPhones or something, which I think are all 484 00:27:55,800 --> 00:28:00,560 Speaker 1: made in China, so and tons of other consumers as well. 485 00:28:00,600 --> 00:28:02,040 Speaker 1: You know that those things are going to be very 486 00:28:02,119 --> 00:28:08,440 Speaker 1: much dispensable when when people have to tighten their belts. 487 00:28:08,520 --> 00:28:12,120 Speaker 1: So what this all means is that we are likely 488 00:28:12,280 --> 00:28:16,240 Speaker 1: in for a period of what is called stagflation. So 489 00:28:16,320 --> 00:28:21,440 Speaker 1: this is basically low or stagnant growth and high inflation. 490 00:28:22,240 --> 00:28:24,719 Speaker 1: And this is a really nasty combo. This is this 491 00:28:24,760 --> 00:28:27,520 Speaker 1: is going to make life tough for so many people. 492 00:28:27,720 --> 00:28:32,840 Speaker 1: And we haven't seen this since the seventies. Yeah, so like, 493 00:28:32,880 --> 00:28:35,920 Speaker 1: are we going to go back to seventies eighties sort 494 00:28:35,960 --> 00:28:42,120 Speaker 1: of interest rates? Well, it's people are people are wondering that. Yeah, 495 00:28:42,200 --> 00:28:45,240 Speaker 1: people are wondering that interest rates have been low for 496 00:28:45,440 --> 00:28:49,000 Speaker 1: such a long time that I think, you know, there's 497 00:28:49,040 --> 00:28:51,680 Speaker 1: an argument to be made. It's like, what's what goes 498 00:28:51,760 --> 00:28:56,480 Speaker 1: down must eventually go up again. You know, economies move 499 00:28:56,560 --> 00:28:59,880 Speaker 1: in cycles, so it could be that everything that we 500 00:29:00,080 --> 00:29:04,800 Speaker 1: seeing is basically precipitating an era of of higher interest rates, 501 00:29:05,280 --> 00:29:08,120 Speaker 1: whether we will get to kind of nine seventies levels, 502 00:29:08,160 --> 00:29:12,840 Speaker 1: because that's how back in the nineteen seventies, when when 503 00:29:12,880 --> 00:29:16,880 Speaker 1: inflation was running hot, like you know, really like well 504 00:29:16,920 --> 00:29:20,600 Speaker 1: into double digits, um, Paul Volker, who was then the 505 00:29:20,680 --> 00:29:24,400 Speaker 1: Chairman of the Federal Reserve, he basically brought it down 506 00:29:24,440 --> 00:29:28,360 Speaker 1: by by hiking interest rates, you know, really high. So 507 00:29:28,440 --> 00:29:30,720 Speaker 1: I think I can't I can't remember the exact sort 508 00:29:30,720 --> 00:29:32,120 Speaker 1: of rates, but I think we were seeing sort of 509 00:29:32,160 --> 00:29:36,360 Speaker 1: around kind And I remember if you talk to if 510 00:29:36,360 --> 00:29:38,520 Speaker 1: you talk to our parents generation and things like that, 511 00:29:38,560 --> 00:29:41,920 Speaker 1: you know, our generation tends to complain about how difficult 512 00:29:41,960 --> 00:29:45,200 Speaker 1: it is to buy a house, and our parents generation 513 00:29:45,280 --> 00:29:48,440 Speaker 1: will say, well, yeah, but okay, when we were able 514 00:29:48,480 --> 00:29:51,840 Speaker 1: to buy a house, our mortgage payments were insane, like 515 00:29:51,920 --> 00:29:55,800 Speaker 1: you know, you're paying like on your on your mortgage. 516 00:29:55,800 --> 00:29:58,479 Speaker 1: Whereas we, if we're those of those of us who 517 00:29:58,520 --> 00:30:00,840 Speaker 1: have actually been able to get a mortgage, our interest 518 00:30:00,920 --> 00:30:03,920 Speaker 1: payments have been much much lower. Yeah, And so back 519 00:30:03,960 --> 00:30:06,800 Speaker 1: then paying rent was the easy option. Right now, it's 520 00:30:06,880 --> 00:30:11,120 Speaker 1: kind of ultimately more expensive than a mortgage, yeah in 521 00:30:11,160 --> 00:30:15,840 Speaker 1: some places obviously, So yeah, things are things are not 522 00:30:15,880 --> 00:30:17,960 Speaker 1: looking good on that front as well. So shall we 523 00:30:17,960 --> 00:30:20,280 Speaker 1: take another quick break to digest all that, and then 524 00:30:20,360 --> 00:30:22,480 Speaker 1: we'll come back with a few a few things that 525 00:30:22,520 --> 00:30:25,840 Speaker 1: are crypto specific that going on the markets, just just 526 00:30:25,840 --> 00:30:43,200 Speaker 1: just to round this off. Okay, here we are, folks, 527 00:30:43,200 --> 00:30:45,360 Speaker 1: back for part three, and I want to talk about, yeah, 528 00:30:45,400 --> 00:30:48,560 Speaker 1: a few kind of more crypto specific things that that 529 00:30:48,640 --> 00:30:52,080 Speaker 1: really aren't helping. Okay, So obviously we're talking about why 530 00:30:52,120 --> 00:30:54,920 Speaker 1: crypto markets are down. It's impossible to really have this 531 00:30:54,960 --> 00:30:58,040 Speaker 1: conversation at the moment without talking about the wider global 532 00:30:58,120 --> 00:31:02,760 Speaker 1: situation and other other asset markets. But yeah, they as 533 00:31:02,840 --> 00:31:05,160 Speaker 1: as I said at the beginning, these kind of tumbles 534 00:31:05,200 --> 00:31:09,719 Speaker 1: are especially bad in crypto and yeah, on today, the today, 535 00:31:09,760 --> 00:31:13,800 Speaker 1: the tenth of May, it's not a pretty site. Now, 536 00:31:14,520 --> 00:31:16,760 Speaker 1: over the past twenty four hours, one of the things 537 00:31:16,800 --> 00:31:19,480 Speaker 1: that the thing that's really spooked the crypto market is 538 00:31:19,520 --> 00:31:23,880 Speaker 1: all around a decentralized stable coin called u ST. Now, 539 00:31:24,080 --> 00:31:28,480 Speaker 1: we have talked about stable coins before, and I was 540 00:31:28,520 --> 00:31:31,640 Speaker 1: going to do a dedicated episode on them at some point, 541 00:31:31,720 --> 00:31:34,280 Speaker 1: which we we will get to in the future. But 542 00:31:35,200 --> 00:31:37,720 Speaker 1: if you might remember, basically, a stable coin is a 543 00:31:37,800 --> 00:31:41,240 Speaker 1: cryptocurrency that is pegged to the value of a of 544 00:31:41,280 --> 00:31:43,920 Speaker 1: a national currency, and the vast, vast majority of them 545 00:31:43,960 --> 00:31:46,840 Speaker 1: are all pegged to the US dollar. Now, there are 546 00:31:47,120 --> 00:31:50,080 Speaker 1: lots of stable coins on the market at the moment, 547 00:31:50,200 --> 00:31:54,000 Speaker 1: and the biggest is USDT, which is issued by a 548 00:31:54,040 --> 00:31:57,600 Speaker 1: company called Tether, and U s d C, which is 549 00:31:57,600 --> 00:32:02,720 Speaker 1: issued by a company called Circle. Now these are both 550 00:32:03,600 --> 00:32:07,320 Speaker 1: centralized what are called centralized stable coins. Tether and Circle 551 00:32:07,560 --> 00:32:10,760 Speaker 1: control the issuance of these stable coins, that they control 552 00:32:11,400 --> 00:32:15,640 Speaker 1: the supply of them. They can they can restrict supply. 553 00:32:15,800 --> 00:32:19,360 Speaker 1: So you know, if if you were someone holding holding USDC, 554 00:32:19,720 --> 00:32:24,480 Speaker 1: for example, and the US governments didn't like you, the U. 555 00:32:24,560 --> 00:32:28,960 Speaker 1: S Government could theoretically lean on Circle to restrict your 556 00:32:29,000 --> 00:32:33,080 Speaker 1: access to that U s DC. For this reason and others, 557 00:32:33,080 --> 00:32:37,000 Speaker 1: for this centralization. Because of this centralization, there's been a 558 00:32:37,000 --> 00:32:39,360 Speaker 1: lot of concern around these around these sorts of types 559 00:32:39,400 --> 00:32:42,800 Speaker 1: of stable coins, and over the past year or so, 560 00:32:43,680 --> 00:32:46,840 Speaker 1: us T which is a decentralized stable coin and is 561 00:32:46,840 --> 00:32:53,120 Speaker 1: issued by a company called Terror, has become really really popular. Yah. Now, 562 00:32:53,160 --> 00:32:55,040 Speaker 1: I just want to go in this This can get 563 00:32:55,160 --> 00:32:56,800 Speaker 1: quite complex, so I'm going to keep it sort of 564 00:32:57,000 --> 00:33:00,640 Speaker 1: fairly simple if I can. That's that's quite all right. 565 00:33:01,320 --> 00:33:03,480 Speaker 1: But I'm just going to talk about quickly how us 566 00:33:03,560 --> 00:33:07,480 Speaker 1: T works. So, if you want to mint some us T, 567 00:33:08,480 --> 00:33:12,680 Speaker 1: you need to burn an equivalent amount of lunar, which 568 00:33:12,720 --> 00:33:17,080 Speaker 1: is the native token of the terror network. Okay, So, 569 00:33:17,200 --> 00:33:21,800 Speaker 1: as a simple example, if one lunar is worth ten dollars, 570 00:33:22,520 --> 00:33:25,080 Speaker 1: if you burn that one lunar, you will get ten 571 00:33:25,600 --> 00:33:30,400 Speaker 1: U S T. Okay. Now, U s T can also 572 00:33:30,480 --> 00:33:34,120 Speaker 1: be burned to mint an equivalent amount of lunar and 573 00:33:34,200 --> 00:33:37,560 Speaker 1: equivalent dollar amount of lunar. Now, what this does is 574 00:33:37,680 --> 00:33:43,120 Speaker 1: create the economic incentive necessary for us T to maintain 575 00:33:43,400 --> 00:33:46,600 Speaker 1: its peg to the U S dollar. Okay, does that 576 00:33:46,600 --> 00:33:51,920 Speaker 1: make sense? So, if for example, us T is trading 577 00:33:51,960 --> 00:33:56,800 Speaker 1: at let's say a dollar fifty, then lunar holders can 578 00:33:56,840 --> 00:34:00,760 Speaker 1: burn their lunar to mint U S T and make 579 00:34:00,800 --> 00:34:06,520 Speaker 1: a fifty profit. And eventually, if enough lunar holders do this, 580 00:34:06,520 --> 00:34:09,120 Speaker 1: this process brings the peg back down to a dollar 581 00:34:09,200 --> 00:34:11,960 Speaker 1: because the supply of U S T has increased and 582 00:34:12,239 --> 00:34:17,000 Speaker 1: it balances out. Alternatively, if us T slips off its peg, 583 00:34:17,040 --> 00:34:20,320 Speaker 1: and is trading at fifty cents. Then us T holders 584 00:34:20,400 --> 00:34:23,920 Speaker 1: could burn their U s T to mint Lunar for 585 00:34:24,160 --> 00:34:27,080 Speaker 1: and basically double their money, make too x profit. And 586 00:34:27,239 --> 00:34:30,640 Speaker 1: this then reduces the amount of us T in circulation, 587 00:34:30,800 --> 00:34:33,640 Speaker 1: meaning it climbs back up to its peg. And it's 588 00:34:33,680 --> 00:34:36,640 Speaker 1: kind of an equilibrium sort of situation. Yeah. Yeah, So 589 00:34:36,680 --> 00:34:39,640 Speaker 1: you've got this kind of minting and burning mechanism between 590 00:34:39,880 --> 00:34:44,160 Speaker 1: us T and Lunar and base, and holders of both 591 00:34:44,239 --> 00:34:47,439 Speaker 1: have an incentive to do so in order to keep 592 00:34:47,600 --> 00:34:52,560 Speaker 1: us T on its peg. Now, the problem is that 593 00:34:53,000 --> 00:34:56,080 Speaker 1: with the market down for all the reasons that we've 594 00:34:56,080 --> 00:34:58,320 Speaker 1: been talking about for the past half an hour or whatever, 595 00:34:59,040 --> 00:35:03,000 Speaker 1: Lunars you has tanked along with along with the rest 596 00:35:03,000 --> 00:35:06,640 Speaker 1: of the crypto market. And basically this has caused holders 597 00:35:06,760 --> 00:35:09,560 Speaker 1: of U s T, of which I myself and one 598 00:35:09,880 --> 00:35:13,239 Speaker 1: I also hold Lunar as well. It's basically caused a 599 00:35:13,239 --> 00:35:16,400 Speaker 1: lot of us T holders to worry about ust slipping 600 00:35:16,400 --> 00:35:20,120 Speaker 1: off its peg. So they've lost confidence in their us 601 00:35:20,200 --> 00:35:22,960 Speaker 1: T and they've unloaded, they've sold it, you know, they 602 00:35:23,080 --> 00:35:26,080 Speaker 1: may be converted it into another stable coin, or perhaps 603 00:35:26,080 --> 00:35:29,880 Speaker 1: they've bought the dip or whatever. Now, what this has 604 00:35:29,920 --> 00:35:32,640 Speaker 1: meant is that more lunar has had to be minted, 605 00:35:33,280 --> 00:35:36,879 Speaker 1: and that's increased the supply of lunar and pushed down 606 00:35:36,920 --> 00:35:40,120 Speaker 1: the price because obviously an increase in in supply but 607 00:35:40,320 --> 00:35:45,040 Speaker 1: not an increase in demand means the price goes down. Now, 608 00:35:45,080 --> 00:35:48,880 Speaker 1: this is what is known as a death spiral basically, 609 00:35:49,239 --> 00:35:52,360 Speaker 1: and this has really spooke to the market. And what 610 00:35:52,440 --> 00:35:55,640 Speaker 1: it's meant is that u s T has slipped right 611 00:35:55,680 --> 00:35:58,480 Speaker 1: off its peg. I went to bed last I I 612 00:35:58,520 --> 00:36:00,520 Speaker 1: had an early night last night because I just could 613 00:36:00,520 --> 00:36:03,959 Speaker 1: not look at the at the charts anymore, and us 614 00:36:04,000 --> 00:36:06,480 Speaker 1: T was slipping off its peg. Then when I got 615 00:36:06,560 --> 00:36:09,759 Speaker 1: up this morning, it was at seventy cents. It had 616 00:36:09,800 --> 00:36:15,120 Speaker 1: lost thirty of its value. Okay, so this has, as 617 00:36:15,120 --> 00:36:17,479 Speaker 1: I say, this is really spooke to the market because 618 00:36:17,560 --> 00:36:20,560 Speaker 1: us T is big. Us T is the biggest decentralized 619 00:36:20,560 --> 00:36:24,280 Speaker 1: stable coin and it's also one of the biggest scripture. 620 00:36:24,280 --> 00:36:26,880 Speaker 1: It's still even off its peg. It's still I believe, 621 00:36:26,960 --> 00:36:29,440 Speaker 1: let me just double check. I mean, it's comfortably in 622 00:36:29,440 --> 00:36:31,760 Speaker 1: the top twenty. It is. Yeah, it's currently at number 623 00:36:31,800 --> 00:36:35,120 Speaker 1: ten on the charts in terms of market cap. So 624 00:36:35,320 --> 00:36:40,120 Speaker 1: it's it's a big, big project. And basically what the 625 00:36:40,239 --> 00:36:43,960 Speaker 1: Lunar Foundation, who coordinate this, you know, who coordinate Terror 626 00:36:44,000 --> 00:36:48,480 Speaker 1: and us T um The Lunar Foundation earlier this year 627 00:36:48,600 --> 00:36:52,200 Speaker 1: brought a load of bitcoin to further to kind of 628 00:36:52,239 --> 00:36:55,480 Speaker 1: create a further reserve for us T. Now, this was 629 00:36:55,760 --> 00:36:57,920 Speaker 1: this was interesting because this was kind of pumping the 630 00:36:57,960 --> 00:37:01,040 Speaker 1: market a few weeks ago when there really, i mean, 631 00:37:01,160 --> 00:37:03,160 Speaker 1: when all this other bad news that we've talked about 632 00:37:03,239 --> 00:37:06,839 Speaker 1: was still even more current than it is now, and 633 00:37:07,239 --> 00:37:09,200 Speaker 1: it was Terror was seen to be very much propping 634 00:37:09,280 --> 00:37:12,759 Speaker 1: up the market by buying all this bitcoin. The opposite 635 00:37:12,760 --> 00:37:15,759 Speaker 1: has now happened. Basically, Terror has had to sell all 636 00:37:15,760 --> 00:37:19,160 Speaker 1: this bitcoin in order to try and you provide liquidity 637 00:37:19,200 --> 00:37:21,279 Speaker 1: for us T in order to try and get us 638 00:37:21,360 --> 00:37:24,160 Speaker 1: T back up onto its peg. And all this selling 639 00:37:24,200 --> 00:37:27,000 Speaker 1: of bitcoin has added further cell pressure to the market. 640 00:37:27,000 --> 00:37:29,520 Speaker 1: Now it hasn't been as bad as it could have been. 641 00:37:29,560 --> 00:37:35,480 Speaker 1: It's basically been sold over the counter. Yeah, it over 642 00:37:35,480 --> 00:37:38,560 Speaker 1: the counter trades don't tend to move the market so much. 643 00:37:38,840 --> 00:37:40,960 Speaker 1: But at the same time, I think it's safe to 644 00:37:40,960 --> 00:37:44,080 Speaker 1: say that probably some of it is being sold at 645 00:37:44,120 --> 00:37:46,640 Speaker 1: spot prices. And also, like the market knows, you know, 646 00:37:46,719 --> 00:37:50,080 Speaker 1: we can see on chain that this that this BTC, 647 00:37:50,239 --> 00:37:55,360 Speaker 1: this bitcoin has been unloaded. So it's terror and this 648 00:37:55,400 --> 00:37:57,960 Speaker 1: whole business with the us T has basically made what 649 00:37:58,120 --> 00:38:02,120 Speaker 1: is already a bad situation much worse. Yeah, and as 650 00:38:02,160 --> 00:38:04,640 Speaker 1: we speak now, this could this could change, and I 651 00:38:04,680 --> 00:38:06,640 Speaker 1: mean it's changing by the hour, real changed by the 652 00:38:06,680 --> 00:38:09,319 Speaker 1: minute almost. But at the moment, what we're seeing is 653 00:38:09,600 --> 00:38:12,840 Speaker 1: various vcs who back up Terror. They are having to 654 00:38:12,920 --> 00:38:16,480 Speaker 1: inject billions to try and keep this whole project afloat, 655 00:38:16,600 --> 00:38:18,560 Speaker 1: try and get us T back up to its PEG. 656 00:38:20,080 --> 00:38:23,680 Speaker 1: So there's that. That's that. I think at the moments 657 00:38:23,719 --> 00:38:26,040 Speaker 1: great timing, it really is. Yeah, I mean this is 658 00:38:26,040 --> 00:38:28,000 Speaker 1: the thing, isn't it When things are bad? And and 659 00:38:28,160 --> 00:38:32,040 Speaker 1: actually you know when when the market and because bitcoin 660 00:38:32,120 --> 00:38:34,120 Speaker 1: was dipping, because the market as a whole was dipping, 661 00:38:34,120 --> 00:38:36,960 Speaker 1: as I said, this caused the value of lunar to plunge, 662 00:38:37,040 --> 00:38:40,080 Speaker 1: and this this affected us T as well. I mean, 663 00:38:40,080 --> 00:38:43,879 Speaker 1: these things bad news always comes in threes, doesn't it. Really. 664 00:38:43,920 --> 00:38:46,720 Speaker 1: I mean, it could be a good time to get involved. 665 00:38:47,640 --> 00:38:50,040 Speaker 1: Well yeah, well, if I've got a little bit of 666 00:38:50,040 --> 00:38:53,319 Speaker 1: money that you don't need for heating your pasta, it 667 00:38:53,400 --> 00:38:56,759 Speaker 1: could be in a month, look at the markets and 668 00:38:56,800 --> 00:38:59,440 Speaker 1: make your own decision, do your own research. We'll talk 669 00:38:59,480 --> 00:39:01,799 Speaker 1: about that in just a moment. I think I want 670 00:39:01,840 --> 00:39:04,959 Speaker 1: to consider a couple of other crypto specific factors before 671 00:39:05,000 --> 00:39:08,440 Speaker 1: people start kind of making up their minds or or 672 00:39:08,520 --> 00:39:12,280 Speaker 1: just going going back to bed to hide under the duve. Now, 673 00:39:13,200 --> 00:39:15,720 Speaker 1: I think it's fair to say now already we're seeing 674 00:39:15,800 --> 00:39:18,920 Speaker 1: kind of there's a lot of questions around the regulation 675 00:39:18,920 --> 00:39:21,319 Speaker 1: of crypto, and these are starting to get kind of 676 00:39:21,360 --> 00:39:24,719 Speaker 1: louder at the moment. And this this volatility, all this 677 00:39:24,800 --> 00:39:27,200 Speaker 1: business we're seeing with terror and U s T. I 678 00:39:27,239 --> 00:39:29,839 Speaker 1: think this is going to increase calls for regulations. Now 679 00:39:29,840 --> 00:39:33,840 Speaker 1: we've seen the SEC the good old Securities Exchange Commission, 680 00:39:34,160 --> 00:39:37,399 Speaker 1: it's recently announced that it's expanding its crypto division. It's 681 00:39:37,400 --> 00:39:40,840 Speaker 1: basically getting more people on board to you know, to 682 00:39:40,880 --> 00:39:44,080 Speaker 1: try and regulate the crypto space. And I think this 683 00:39:44,160 --> 00:39:47,400 Speaker 1: means it's going to have more personnel, more resources to 684 00:39:47,480 --> 00:39:50,319 Speaker 1: come after crypto projects in the future. So we are 685 00:39:50,440 --> 00:39:55,120 Speaker 1: staring down the barrel of of further regulations. Now. I 686 00:39:55,200 --> 00:39:58,960 Speaker 1: don't think that sensible regulation is in the future is 687 00:39:59,080 --> 00:40:02,680 Speaker 1: necessarily a bad thing. In fact, I think some sensible 688 00:40:02,719 --> 00:40:06,400 Speaker 1: regulation is necessary in order to in order to restore 689 00:40:06,440 --> 00:40:09,520 Speaker 1: people's confidence in the crypto markets, especially the confidence of 690 00:40:09,560 --> 00:40:13,080 Speaker 1: institutions and things like that. The worry is that bodies 691 00:40:13,120 --> 00:40:17,359 Speaker 1: like the SEC have shown that they yeah, they yeah, 692 00:40:17,360 --> 00:40:19,640 Speaker 1: they're very much overreached themselves. They've shown that I think 693 00:40:19,640 --> 00:40:22,200 Speaker 1: in a lot of cases they don't really understand crypto 694 00:40:22,440 --> 00:40:25,760 Speaker 1: And we've seen a lot of a lot of nonsense 695 00:40:25,800 --> 00:40:28,160 Speaker 1: being talked around Washington and things like that about you know, 696 00:40:28,239 --> 00:40:31,399 Speaker 1: overly harsh regulations, which if they are put into force, 697 00:40:31,440 --> 00:40:33,960 Speaker 1: and I don't think that's necessarily going to happen, but 698 00:40:33,960 --> 00:40:37,680 Speaker 1: the certain people are proposing them, that could really damage 699 00:40:37,719 --> 00:40:41,279 Speaker 1: the crypto industry. So this is all very speculative. It's 700 00:40:41,280 --> 00:40:43,720 Speaker 1: going to play out over the next few months and years, 701 00:40:44,400 --> 00:40:47,560 Speaker 1: but the crypto industry is kind of staring down the 702 00:40:47,600 --> 00:40:50,560 Speaker 1: barrel of regulation at some point in the future. This 703 00:40:50,719 --> 00:40:53,920 Speaker 1: again is not going to be helping with confidence at 704 00:40:53,960 --> 00:40:58,040 Speaker 1: this particular moment. And I think stable coins have been 705 00:40:58,239 --> 00:41:00,879 Speaker 1: kind of in the regulatory cross as on and off 706 00:41:01,040 --> 00:41:04,560 Speaker 1: for a while, and there's been speculation recently than actually 707 00:41:04,640 --> 00:41:09,920 Speaker 1: US authorities probably it's in their interest to support stable 708 00:41:09,960 --> 00:41:13,200 Speaker 1: coins because because they're all denominated to the US dollar. 709 00:41:13,640 --> 00:41:16,719 Speaker 1: This kind of increases the strength of the dollar overseas 710 00:41:16,760 --> 00:41:20,120 Speaker 1: if everyone's trading them. So um, but I think this 711 00:41:20,239 --> 00:41:23,440 Speaker 1: business with us T unless it's unless it's resolved, and 712 00:41:23,480 --> 00:41:26,000 Speaker 1: even perhaps in spite of that, I think we could 713 00:41:26,000 --> 00:41:29,400 Speaker 1: see more regulations coming around stable coins in the future 714 00:41:29,440 --> 00:41:32,600 Speaker 1: as well. So that's that's not always bad though, is it, 715 00:41:32,640 --> 00:41:36,720 Speaker 1: Because there's are questions about how they like stable coins 716 00:41:36,760 --> 00:41:40,000 Speaker 1: will where what is it backed by? Yeah, and and 717 00:41:40,000 --> 00:41:43,319 Speaker 1: and those questions are particularly being particularly pertinent around us 718 00:41:43,360 --> 00:41:48,120 Speaker 1: DT because this this one issued by Tether, and I noticed, Yes, 719 00:41:48,440 --> 00:41:52,040 Speaker 1: Tether just sort of created a whole load more USDT, 720 00:41:52,440 --> 00:41:56,080 Speaker 1: but no one knows where it got the money to 721 00:41:56,160 --> 00:41:59,799 Speaker 1: do that. So yeah, there's there's going to be We're 722 00:41:59,800 --> 00:42:01,800 Speaker 1: going to be hearing a lot more about stable coins 723 00:42:01,840 --> 00:42:05,080 Speaker 1: from regulators in in the in the near future. A 724 00:42:05,120 --> 00:42:08,480 Speaker 1: couple of other things worth mentioning, which again are a 725 00:42:08,560 --> 00:42:11,160 Speaker 1: result basically of the downturn, but they make it worse. 726 00:42:11,480 --> 00:42:14,760 Speaker 1: A lot of crypto minors are capitulating as well, basically 727 00:42:14,800 --> 00:42:18,080 Speaker 1: selling off Yeah. Yeah, energy costs as well are really 728 00:42:18,160 --> 00:42:21,040 Speaker 1: hurting them, and the fact that the value of their 729 00:42:21,080 --> 00:42:23,560 Speaker 1: holdings is going down there having to also sell off 730 00:42:23,760 --> 00:42:25,680 Speaker 1: a lot of crypto, you know, a lot of bitcoin 731 00:42:25,719 --> 00:42:27,920 Speaker 1: and things like that in order to stay afloat in 732 00:42:28,040 --> 00:42:31,560 Speaker 1: order to fund their operations. This obviously adds further cell 733 00:42:31,600 --> 00:42:34,879 Speaker 1: pressure to the market. And one other thing I want 734 00:42:34,920 --> 00:42:38,240 Speaker 1: to mention now, this happens every single time the crypto 735 00:42:38,280 --> 00:42:42,440 Speaker 1: market takes a dip, and it's really really frustrating, but 736 00:42:42,520 --> 00:42:47,640 Speaker 1: basically liquidations. So anyone who was long on bitcoin, for instance, 737 00:42:47,640 --> 00:42:50,880 Speaker 1: anyone who thought that the price of of of bitcoin 738 00:42:51,080 --> 00:42:53,240 Speaker 1: was going to go up and had put a leverage 739 00:42:53,239 --> 00:42:55,640 Speaker 1: trade on that basically traded with money they didn't have 740 00:42:55,800 --> 00:43:00,319 Speaker 1: to try and increase their profits. Their positions have been 741 00:43:00,440 --> 00:43:03,040 Speaker 1: wiped out. And what this means is that the crypto 742 00:43:03,040 --> 00:43:05,680 Speaker 1: they put up as collateral basically gets sold and that 743 00:43:05,719 --> 00:43:08,800 Speaker 1: adds yet more cell pressure to the market. This happens 744 00:43:08,840 --> 00:43:11,560 Speaker 1: every single time. You see people who have gone long 745 00:43:11,600 --> 00:43:15,080 Speaker 1: traded with leverage basically getting wiped out, and yeah, it 746 00:43:15,120 --> 00:43:21,000 Speaker 1: makes a bad situation worse again. So those are I think, 747 00:43:21,120 --> 00:43:22,960 Speaker 1: just well, there's just a few of the reasons why 748 00:43:23,040 --> 00:43:26,200 Speaker 1: we're in this situation at the moment, and those are 749 00:43:26,200 --> 00:43:27,600 Speaker 1: the main ones. I think. There are lots of other 750 00:43:27,640 --> 00:43:31,000 Speaker 1: factors that you consider. You can consider, but that's kind 751 00:43:31,000 --> 00:43:33,960 Speaker 1: of where we are as we as we stand now, 752 00:43:34,880 --> 00:43:36,800 Speaker 1: as I said, we will try and get this podcast 753 00:43:36,800 --> 00:43:38,640 Speaker 1: out very very quickly, so it's kind of you know, 754 00:43:38,680 --> 00:43:41,319 Speaker 1: it's relevant. But I'm sure the situation is going to 755 00:43:41,440 --> 00:43:44,560 Speaker 1: change in the next few days. We're going to see 756 00:43:44,640 --> 00:43:46,200 Speaker 1: We're going to see a lot of adjustment, We're going 757 00:43:46,200 --> 00:43:49,400 Speaker 1: to see a lot more volatility. I'm I'm going to 758 00:43:49,480 --> 00:43:51,479 Speaker 1: put it out there and say I can't see things 759 00:43:51,520 --> 00:43:54,840 Speaker 1: getting an awful lot better. I think if us T 760 00:43:55,000 --> 00:43:58,919 Speaker 1: can get back on its peg, that may increase confidence 761 00:43:59,120 --> 00:44:03,359 Speaker 1: a little bit in the market, but we I think 762 00:44:03,400 --> 00:44:06,160 Speaker 1: confidence in us T has been damaged an awful lot, 763 00:44:06,239 --> 00:44:08,719 Speaker 1: so we might see more people dumping their holdings either 764 00:44:08,800 --> 00:44:11,319 Speaker 1: into other stable coins again, or into other cryptos, or 765 00:44:11,360 --> 00:44:15,040 Speaker 1: maybe just cashing out into into US dollars or or 766 00:44:15,080 --> 00:44:19,200 Speaker 1: you know, their national currencies or whatever. So I don't 767 00:44:19,239 --> 00:44:23,000 Speaker 1: see this situation getting better anytime soon. I'm afraid. And 768 00:44:23,040 --> 00:44:25,480 Speaker 1: I said this the other day. I was chatting with 769 00:44:26,040 --> 00:44:29,480 Speaker 1: Rob from Digital Asset News at our Coin Bureau conference 770 00:44:29,480 --> 00:44:31,919 Speaker 1: which happened last weekend, and we were having a chat 771 00:44:31,920 --> 00:44:35,000 Speaker 1: on stage about the state of the markets, and we 772 00:44:35,120 --> 00:44:38,440 Speaker 1: both said, like, yeah, we can't really give you any 773 00:44:38,680 --> 00:44:42,400 Speaker 1: kind of hopium at the moment. You know, there's not 774 00:44:42,480 --> 00:44:46,280 Speaker 1: an awful lot of positivity out there. So perhaps people 775 00:44:46,480 --> 00:44:49,560 Speaker 1: are people out there listening are thinking, well, what the 776 00:44:49,560 --> 00:44:51,319 Speaker 1: heck can I do? What do I do in a 777 00:44:51,400 --> 00:44:55,800 Speaker 1: situation like this? Well, I would start off by saying, 778 00:44:56,600 --> 00:45:00,160 Speaker 1: there's probably not an awful lot you can do, which 779 00:45:00,239 --> 00:45:02,520 Speaker 1: isn't a perhaps the answer that a lot of people 780 00:45:02,560 --> 00:45:05,759 Speaker 1: are looking. But also that's quite comforting in fact that like, 781 00:45:06,960 --> 00:45:09,759 Speaker 1: it's the decision is out of your hands. Yeah, you 782 00:45:09,800 --> 00:45:14,080 Speaker 1: need to just look if it's if it's not as 783 00:45:14,160 --> 00:45:16,799 Speaker 1: dire as you know, you've you've you're in a liquidations 784 00:45:16,840 --> 00:45:20,200 Speaker 1: position where you've you've you've basically gambled on it, let's 785 00:45:20,200 --> 00:45:23,040 Speaker 1: sit tight. Yeah. Yeah, I think that's why. I think 786 00:45:23,080 --> 00:45:24,920 Speaker 1: that's very true. There. There is this kind of certain 787 00:45:26,560 --> 00:45:29,000 Speaker 1: calming effect from that, isn't there knowing that there's nothing 788 00:45:29,040 --> 00:45:31,279 Speaker 1: you can do, It's like, well, yeah, just sit tight, 789 00:45:31,560 --> 00:45:34,239 Speaker 1: hoddle in other words, and I think a lot of 790 00:45:34,239 --> 00:45:38,360 Speaker 1: people listening will have probably no other choice than to 791 00:45:38,480 --> 00:45:42,719 Speaker 1: do that. Again, none of this is financial advice. I 792 00:45:42,719 --> 00:45:46,200 Speaker 1: think It's also very important to to kind of stay 793 00:45:46,200 --> 00:45:51,600 Speaker 1: calm because this is crypto. We have seen these sorts 794 00:45:51,640 --> 00:45:54,759 Speaker 1: of we have seen the worst massive swings, but these 795 00:45:54,800 --> 00:45:57,919 Speaker 1: massive swings, these are common in the crypto markets. And 796 00:45:58,239 --> 00:46:01,719 Speaker 1: I wonder if perhaps you can crypto holders themselves can 797 00:46:01,800 --> 00:46:03,600 Speaker 1: kind of take heart from the fact that this is 798 00:46:03,640 --> 00:46:07,680 Speaker 1: not a problem that's specific to crypto. The whole economy, 799 00:46:07,800 --> 00:46:11,520 Speaker 1: the whole global economy. All asset markets are suffering to 800 00:46:11,640 --> 00:46:17,400 Speaker 1: a greater or lesser degree. So crypto is not dying. Okay, 801 00:46:17,719 --> 00:46:20,200 Speaker 1: it's not going it's not all going to go to zero. 802 00:46:20,320 --> 00:46:23,640 Speaker 1: We have got difficult months ahead of us, but it 803 00:46:23,800 --> 00:46:28,000 Speaker 1: is important to to kind of look long term, and 804 00:46:28,040 --> 00:46:30,960 Speaker 1: I truly believe that crypto will, like the other asset 805 00:46:31,000 --> 00:46:35,040 Speaker 1: markets out there, will weather this storm. Now it's also 806 00:46:35,120 --> 00:46:36,880 Speaker 1: a case so we're not going to go mad max 807 00:46:37,080 --> 00:46:40,919 Speaker 1: in by Christmas. I don't think so. But if we are, 808 00:46:41,239 --> 00:46:44,640 Speaker 1: if we are eating lizards and driving around a radioactive 809 00:46:44,640 --> 00:46:48,200 Speaker 1: desert in six months time, then I give you. I 810 00:46:48,320 --> 00:46:50,319 Speaker 1: give you full permission to say I told you so, 811 00:46:51,000 --> 00:46:55,359 Speaker 1: and yeah and and boot me out of your souped up, 812 00:46:55,800 --> 00:47:00,719 Speaker 1: souped up the Laurean yet um and yeah. I guess 813 00:47:00,760 --> 00:47:03,160 Speaker 1: a lot of people now sort of wondering perhaps, you know, 814 00:47:03,200 --> 00:47:05,440 Speaker 1: perhaps if they're in profit on their crypto, wondering whether 815 00:47:05,440 --> 00:47:07,799 Speaker 1: they should sell or hold. I mean, it's all about 816 00:47:07,880 --> 00:47:10,239 Speaker 1: priorities at the moment. You know, what are your what 817 00:47:10,320 --> 00:47:15,120 Speaker 1: are your investment priorities? And yeah, if you want financial advice, 818 00:47:15,160 --> 00:47:18,239 Speaker 1: speak to a financially to Mad Mike Mooch, speak to 819 00:47:19,200 --> 00:47:25,080 Speaker 1: very very impartial, free impartial. Uh could you call it advice. 820 00:47:25,320 --> 00:47:29,600 Speaker 1: It's more ranting, Yeah, it's more sort of incoherent rambling. Yes, yeah, 821 00:47:29,880 --> 00:47:32,719 Speaker 1: I um, yes, I think that's Another good bit of 822 00:47:32,760 --> 00:47:35,839 Speaker 1: advice that I can give everyone is don't don't go 823 00:47:36,000 --> 00:47:41,320 Speaker 1: to Mad Mike Mooch. Don't don't ask Mooch what to do. Yeah, 824 00:47:41,560 --> 00:47:44,319 Speaker 1: so this is Yeah, this is difficult time. But I 825 00:47:44,360 --> 00:47:48,000 Speaker 1: think staying calm and just I often say, like, at 826 00:47:48,040 --> 00:47:51,080 Speaker 1: times like this, looking at your portfolio can be such 827 00:47:51,120 --> 00:47:53,440 Speaker 1: a horrible experience. The best thing is to just not 828 00:47:53,480 --> 00:47:58,760 Speaker 1: look at it. I'm listening to a great audiobook called 829 00:47:58,800 --> 00:48:02,719 Speaker 1: Soul for Happy, Soul for Happy, Solve for Happy, and 830 00:48:04,040 --> 00:48:07,359 Speaker 1: it's it's basically about how you can train your mind 831 00:48:07,360 --> 00:48:10,120 Speaker 1: to be happy. And one of the bits is is 832 00:48:10,200 --> 00:48:14,480 Speaker 1: kind of like that. The brain automatically we're conditioned to 833 00:48:14,800 --> 00:48:18,400 Speaker 1: revisit trauma. So like you know how you're in the 834 00:48:18,440 --> 00:48:21,800 Speaker 1: shower and you start screaming because you said something awkward 835 00:48:21,840 --> 00:48:24,520 Speaker 1: to a girl in in high school or something like that, 836 00:48:24,560 --> 00:48:28,279 Speaker 1: and you just revisit that trauma. That's what you're doing 837 00:48:28,840 --> 00:48:32,360 Speaker 1: when you're just constantly looking at your portfolio. Okay, so 838 00:48:33,120 --> 00:48:36,320 Speaker 1: that makes sense. Delete the app for a bit, m 839 00:48:37,239 --> 00:48:39,840 Speaker 1: put it out of your mind, go for a walk, 840 00:48:41,239 --> 00:48:43,920 Speaker 1: and and you know, focus on something else that and 841 00:48:43,920 --> 00:48:47,800 Speaker 1: and try to force not not revisit that trauma because 842 00:48:47,840 --> 00:48:50,520 Speaker 1: it's not going to do any good. Yeah, absolutely right. 843 00:48:50,560 --> 00:48:53,880 Speaker 1: I couldn't agree more. It's um, you know, we know 844 00:48:54,040 --> 00:48:55,600 Speaker 1: at the moment that if we take a look at 845 00:48:55,680 --> 00:48:57,960 Speaker 1: Cay and Gecko, or we take a look at our portfolio, 846 00:48:58,480 --> 00:49:00,120 Speaker 1: we're not going to get much in the way of 847 00:49:00,160 --> 00:49:04,200 Speaker 1: good news. So don't the markets. As I said, do 848 00:49:04,200 --> 00:49:06,560 Speaker 1: you listen to this podcast. You listen to this podcast. 849 00:49:06,600 --> 00:49:09,040 Speaker 1: This is absolutely vital. Yes, don't don't go out for 850 00:49:09,080 --> 00:49:11,959 Speaker 1: a lovely walk in the woods without without listening. Yeah, 851 00:49:12,200 --> 00:49:16,320 Speaker 1: but just don't look at the app. Yeah, yeah, exactly, 852 00:49:16,880 --> 00:49:19,120 Speaker 1: keep listening. That's so that's Our final bit of advice 853 00:49:19,200 --> 00:49:22,040 Speaker 1: is keep listening to the Coin Euro podcast and that'll 854 00:49:22,040 --> 00:49:24,680 Speaker 1: get you through that. Yeah. And hey, maybe we just 855 00:49:24,719 --> 00:49:26,560 Speaker 1: want to talk about it. Maybe we'll just talk about 856 00:49:26,560 --> 00:49:30,200 Speaker 1: something else. Yeah, I think Yeah, Poppies and and and 857 00:49:30,320 --> 00:49:33,200 Speaker 1: Condy Cotton Candy do a special episode on on on 858 00:49:33,239 --> 00:49:35,960 Speaker 1: all the nice Things. Yeah, okay, that's a good idea. 859 00:49:38,920 --> 00:49:42,759 Speaker 1: My final bit of advice I should say is referencing 860 00:49:42,760 --> 00:49:45,160 Speaker 1: what I said earlier, is if you are going to trade, 861 00:49:45,160 --> 00:49:46,600 Speaker 1: if you are going to go out into the markets, 862 00:49:46,600 --> 00:49:50,759 Speaker 1: then please, folks, don't trade with leverage. Don't trade with 863 00:49:50,880 --> 00:49:54,600 Speaker 1: money you don't already have. It is it is a 864 00:49:54,680 --> 00:49:57,600 Speaker 1: path to it is a path to ruin, so please 865 00:49:57,640 --> 00:50:00,600 Speaker 1: don't do it. So, my do you want to do 866 00:50:00,640 --> 00:50:09,040 Speaker 1: you want to close us up with some words of encouragement? No? No, no, 867 00:50:09,040 --> 00:50:12,480 Speaker 1: not sorry. Yeah, listen, listen. Look, this has been a 868 00:50:12,480 --> 00:50:15,640 Speaker 1: bit of a doomy, gloomy thing. You've got something in 869 00:50:15,680 --> 00:50:18,319 Speaker 1: your life that is is going to bring you joy. 870 00:50:19,000 --> 00:50:21,719 Speaker 1: Focus on that for the next week until you listen 871 00:50:21,760 --> 00:50:24,640 Speaker 1: to us again. Good idea, Go ahead and enjoy the spring. 872 00:50:25,200 --> 00:50:27,760 Speaker 1: It's spring in a lot of places, isn't it. So 873 00:50:28,239 --> 00:50:31,560 Speaker 1: there we are folks, we've Yeah, there's a there's an 874 00:50:31,600 --> 00:50:35,000 Speaker 1: explanation as to why things are as they are at 875 00:50:35,040 --> 00:50:38,799 Speaker 1: the moment um, and some words of advice, non financial 876 00:50:38,960 --> 00:50:44,000 Speaker 1: and perhaps even non useful, definitely from Mike and myself. 877 00:50:44,760 --> 00:50:47,319 Speaker 1: But stay strong, folks. We're all in this. Yeah, we're 878 00:50:47,360 --> 00:50:49,160 Speaker 1: all in this together. If there's not much we can 879 00:50:49,200 --> 00:50:52,120 Speaker 1: do about it, just do something else. Yeah. If you 880 00:50:52,160 --> 00:50:54,160 Speaker 1: want the rainbow, you've got to put up with the 881 00:50:54,239 --> 00:50:58,440 Speaker 1: rain See you all very soon. But thank you so 882 00:50:58,520 --> 00:51:01,200 Speaker 1: much for listening to the coin Bureau podcast. If you'd 883 00:51:01,200 --> 00:51:04,000 Speaker 1: like to learn more about cryptocurrency, you can visit our 884 00:51:04,080 --> 00:51:07,640 Speaker 1: YouTube channel at YouTube dot com forward slash coin Bureau. 885 00:51:08,000 --> 00:51:10,040 Speaker 1: You can also go to coin bureau dot com for 886 00:51:10,120 --> 00:51:13,320 Speaker 1: loads more information about all things crypto. You can follow 887 00:51:13,360 --> 00:51:15,640 Speaker 1: me on Twitter and at coin bureau or one word, 888 00:51:15,719 --> 00:51:18,759 Speaker 1: and I'm also active on TikTok and Instagram as well. 889 00:51:19,239 --> 00:51:22,000 Speaker 1: First of all, it's not thank you for listening. You're 890 00:51:22,080 --> 00:51:27,000 Speaker 1: welcome for great content. Yeah, like this is free and 891 00:51:27,040 --> 00:51:30,399 Speaker 1: they're learning about a fairly great topic in a non 892 00:51:30,440 --> 00:51:33,080 Speaker 1: boring way. If you'd like to visit me and hear 893 00:51:33,120 --> 00:51:35,920 Speaker 1: more about me, go to mooch about m o o 894 00:51:36,120 --> 00:51:49,319 Speaker 1: C h A, b o U, T or else. For 895 00:51:49,440 --> 00:51:52,399 Speaker 1: more podcasts from I heart Radio, visit the i heart 896 00:51:52,480 --> 00:51:56,400 Speaker 1: Radio app, Apple Podcasts, or wherever we get your podcasts. 897 00:52:04,160 --> 00:52:07,440 Speaker 1: The coin Beera podcast is a production of iHeartRadio.