WEBVTT - The Bullish Case For Bitcoin w/ Vijay Boyapati 0:00:00.000 --> 0:00:02.280 Hello, and welcome to another episode of the Mark Mos Show, 0:00:02.279 --> 0:00:05.440 where we're talking about the decentralized Revolution. We're talking about 0:00:05.800 --> 0:00:08.840 where politics, finance and technology come together. Of course, it's 0:00:08.840 --> 0:00:12.760 always technology that changes the world, and that technology is bitcoin, 0:00:12.840 --> 0:00:14.160 the decentralized revolution. 0:00:14.600 --> 0:00:14.760 You know. 0:00:14.800 --> 0:00:16.439 I like to bring to you some interesting guests. You 0:00:16.480 --> 0:00:17.919 don't have to listen to me talk all the time, 0:00:17.920 --> 0:00:20.080 and that's what I have today. I'm joined by VJ 0:00:20.440 --> 0:00:22.919 Boya Patti. He's the author of the Polish Case for 0:00:22.960 --> 0:00:26.840 Bitcoin and now previously with Google, now a senior engineer. 0:00:26.920 --> 0:00:30.680 Was Swan a big friend of the show for sure. Anyway, VJ, 0:00:30.800 --> 0:00:31.560 thanks for joining me. 0:00:32.159 --> 0:00:33.840 Thanks Mom, it's so good to see you again. 0:00:34.120 --> 0:00:36.400 Now, I kind of cut you off before we jumped 0:00:36.400 --> 0:00:40.040 in here because I was explaining to you how my 0:00:40.200 --> 0:00:44.080 Twitter account got hacked. So about almost three months ago, 0:00:44.520 --> 0:00:47.240 I got what happened is I guess now that I've 0:00:47.320 --> 0:00:49.000 looked into it, they got my email address, put it 0:00:49.000 --> 0:00:51.800 into like some like spambot thing or whatever, and all 0:00:51.840 --> 0:00:54.720 of a sudden, my email just started getting flooded with emails, 0:00:54.760 --> 0:00:57.640 like thousands subscribed me to like thousands of like newsletters, 0:00:58.000 --> 0:00:59.280 and so then I figured they're going to try to 0:00:59.320 --> 0:00:59.720 hide something. 0:01:00.400 --> 0:01:02.120 There was like a password to reset for Twitter. 0:01:02.800 --> 0:01:05.080 I was able to get in and reset my password, 0:01:05.440 --> 0:01:08.160 but they set up a two FA divide two second 0:01:08.200 --> 0:01:12.400 factor authentication and I've probably filled out thirty requests from 0:01:12.959 --> 0:01:17.160 on Twitter. And interesting enough, just before I stopped, my 0:01:17.480 --> 0:01:20.080 good friend George Gammon also had the same thing happened 0:01:20.080 --> 0:01:23.720 to him, and he has an attorney that filed a 0:01:23.800 --> 0:01:26.560 suit against Twitter because they're still billing us and we 0:01:26.600 --> 0:01:31.000 can't get access, and they're responding to the suit. They're 0:01:31.040 --> 0:01:34.520 going back and forth with the attorney, but they just 0:01:34.560 --> 0:01:37.440 won't reset the stupid two FA. I mean, it's like 0:01:37.480 --> 0:01:41.480 the most like just reset the two FA anyway. So 0:01:41.520 --> 0:01:43.119 you were going to tell me that something that you've 0:01:43.160 --> 0:01:46.440 done to protect your privacy. 0:01:45.280 --> 0:01:48.840 Yeah, it's actually. One thing I've noticed is that I've 0:01:48.880 --> 0:01:51.640 had friends and family who use services where they get 0:01:51.760 --> 0:01:55.960 built on this regular cadence and then for whatever reason, 0:01:56.440 --> 0:01:58.800 something happens with that service. They didn't like it any more, 0:01:59.280 --> 0:02:02.000 like in your case, you got hacked. They continue to 0:02:02.120 --> 0:02:04.720 get charged and they don't feel like there's any way 0:02:04.760 --> 0:02:07.120 they can get out of it because they the service 0:02:07.160 --> 0:02:10.120 has their credit card information and they just continue to 0:02:10.120 --> 0:02:12.920 build and there's no way to stop it. I really 0:02:13.000 --> 0:02:15.839 like and recommend this service called privacy dot com, which 0:02:15.880 --> 0:02:19.440 allows you to create sort of disposable credit cards on 0:02:19.480 --> 0:02:23.280 the fly, and you connect it to your bank account, 0:02:23.280 --> 0:02:28.280 and it's kind of this protective layer between your bank 0:02:28.280 --> 0:02:31.520 account and the merchant that you're using. And so you 0:02:31.560 --> 0:02:34.800 generate a temporary credit card, and you know, when you 0:02:34.840 --> 0:02:36.440 sign up for a service like Twitter, you put in 0:02:36.440 --> 0:02:40.920 your temporary credit card number that they give you, and 0:02:41.000 --> 0:02:43.200 you have full control over how that credit card can 0:02:43.240 --> 0:02:45.200 be used. You can say the maximum amount that can 0:02:45.200 --> 0:02:48.520 be charged is ten dollars per month, or per year, 0:02:49.040 --> 0:02:51.639 or per transaction. If you ever don't like the service, 0:02:51.680 --> 0:02:53.600 you can say I don't want you can delete the card. 0:02:53.760 --> 0:02:57.200 You can set the maximum amount that can be charged 0:02:57.200 --> 0:02:59.919 down to one dollar, for instance. And this has been 0:03:00.320 --> 0:03:03.359 for me great protection because our feat world is broken 0:03:03.400 --> 0:03:08.080 in so many ways that we need things like this 0:03:08.160 --> 0:03:11.200 to protect us, because once companies can get our bank 0:03:11.240 --> 0:03:13.440 account details or a credit card details, they can do 0:03:13.600 --> 0:03:18.320 huge damage to us. And unfortunately you're having this experience 0:03:18.360 --> 0:03:21.959 with it actually well known and well established company. It's 0:03:22.040 --> 0:03:24.640 not a scamm or it's just a well known company 0:03:24.680 --> 0:03:28.280 that just happens to not be helping you. And another 0:03:28.360 --> 0:03:30.919 example of this, my wife signed up for twenty four 0:03:30.919 --> 0:03:33.120 hour Fitness and I'm sure many people in America know 0:03:33.160 --> 0:03:37.320 about this company that do this kind of marketing scam 0:03:37.360 --> 0:03:41.200 to get you on board, and she just couldn't unsubscribe 0:03:41.240 --> 0:03:43.440 and they were charging us like fifty dollars a month. 0:03:44.240 --> 0:03:49.960 So that motivated me to find this service, privacy dot com. 0:03:50.080 --> 0:03:52.720 I'm not affiliated with them, not an investor or anything 0:03:52.760 --> 0:03:55.080 like that. It's just one of those services I've had 0:03:55.120 --> 0:03:58.760 such a great experience with. And whenever I hear friends 0:03:58.800 --> 0:04:01.760 and family tell me about this their experiences where they 0:04:01.760 --> 0:04:04.080 feel like they're getting scammed or they feel like they're 0:04:04.080 --> 0:04:06.120 getting charged and they can't stop it, I'm like, well 0:04:06.320 --> 0:04:08.720 you should try this out. Once you try it out, 0:04:09.000 --> 0:04:11.320 you want everyone to go back because it gives you 0:04:11.320 --> 0:04:14.240 that level of control where if they have your credit 0:04:14.240 --> 0:04:16.720 card information, you can really limit the damage they can 0:04:16.760 --> 0:04:17.120 do to you. 0:04:17.600 --> 0:04:19.760 All right, well, I'm definitely gonna check that out. For sure, 0:04:20.560 --> 0:04:22.040 I could at least stop my charge. 0:04:21.839 --> 0:04:23.160 Maybe they'd maybe they'd want me more. 0:04:23.160 --> 0:04:26.040 If they won't get my money, I'll have to see 0:04:26.720 --> 0:04:29.000 you said that the Fiat world is broken in so 0:04:29.080 --> 0:04:34.359 many ways. I would agree with that. There's probably no 0:04:34.560 --> 0:04:36.120 end to the amount of conversations we can have in 0:04:36.120 --> 0:04:38.000 all the ways it was broken. There was a video 0:04:38.040 --> 0:04:40.640 clip that I saw sort of going viral. Jordan Peterson 0:04:40.720 --> 0:04:43.040 just had this big conference, our conference going out in London, 0:04:43.080 --> 0:04:46.400 I think it was this last week, and the guy 0:04:46.400 --> 0:04:49.159 from trigonometry, Constantine I think his name is, had like 0:04:49.200 --> 0:04:51.880 a pretty a talk that went pretty viral, and in 0:04:51.920 --> 0:04:55.679 the end he said, he said, hey, and a message 0:04:55.680 --> 0:04:59.200 to all you conservatives. You're not gonna be able to 0:04:59.240 --> 0:05:01.599 get the youth of vote for your conservative ways trying 0:05:01.600 --> 0:05:05.520 a conservaive system that no longer works for them in 0:05:05.560 --> 0:05:07.559 a world where they can't afford to buy a house, 0:05:07.880 --> 0:05:09.000 they can't afford. 0:05:08.680 --> 0:05:10.359 To buy a car. You know, the system is no 0:05:10.400 --> 0:05:12.200 longer working. How are they going to vote for you? 0:05:12.680 --> 0:05:15.840 And I thought about that, and I was thinking about 0:05:15.839 --> 0:05:18.840 maybe doing a video on that, just that it's not 0:05:18.960 --> 0:05:20.600 a I mean, I guess it sort of is a 0:05:20.600 --> 0:05:23.320 political thing. But the reason why it's not working for 0:05:23.320 --> 0:05:25.440 these people they can't afford a house or car is 0:05:25.480 --> 0:05:27.320 the Fiat money system that's broken. 0:05:27.880 --> 0:05:31.760 You agree with that, Yeah, absolutely, And this is we've 0:05:31.760 --> 0:05:35.200 seen the culmination of a pure fiat money system that's 0:05:35.240 --> 0:05:40.880 only really existed for let's say fifty years. About fifty years, 0:05:41.000 --> 0:05:43.680 I mean, the US was on a gold standard. And 0:05:44.040 --> 0:05:46.640 some people think that US went off the gold standard 0:05:46.760 --> 0:05:51.279 in nineteen thirty three when Franklin Roosevelt confiscated people's gold 0:05:51.400 --> 0:05:55.200 from the bank vaults, but really the US went off 0:05:55.240 --> 0:05:58.520 the gold standard fully in nineteen seventy one. I believe 0:05:58.520 --> 0:06:02.159 it was when Nixon closed the gold window. So the 0:06:02.160 --> 0:06:08.440 goldstand is still acted as an anchor on the credit 0:06:08.520 --> 0:06:11.920 expansion that was happening, and once that anchor was completely detached, 0:06:11.960 --> 0:06:15.640 the credit expansion went crazy. So we've been living this 0:06:15.720 --> 0:06:19.279 experiment for about fifty years, and I think we're seeing 0:06:19.480 --> 0:06:26.240 the full effects now. And yeah, it really has pervasive 0:06:26.279 --> 0:06:32.600 impact throughout society. It really increases people's time preference and 0:06:32.720 --> 0:06:36.200 in terms of the people who are growing up today 0:06:36.200 --> 0:06:38.400 and who are moving into the workforce. This is really 0:06:38.400 --> 0:06:41.919 the first generation in I don't know, like two hundred 0:06:42.040 --> 0:06:46.160 years which can confidently say we're not doing as well 0:06:46.160 --> 0:06:48.719 as our parents, We're actually doing worse than our parents. 0:06:49.320 --> 0:06:53.119 That's the first time that's really happened. Every generation prior 0:06:53.160 --> 0:06:56.200 to us could say confidently, I'm living a better lifestyle 0:06:56.240 --> 0:06:59.440 than my parents and my grandparents. And that's a really 0:07:01.160 --> 0:07:03.560 sad statement I think about. 0:07:04.560 --> 0:07:09.080 I hadn't really know about that, But what it makes 0:07:09.080 --> 0:07:10.760 sense as you say that, So which ways do you 0:07:10.800 --> 0:07:13.560 think it's a less quality of life? 0:07:14.520 --> 0:07:18.680 I mean people used to, you know, have this expectation 0:07:18.800 --> 0:07:20.960 that when they left the house, you get a job 0:07:21.160 --> 0:07:25.120 and afford a house, right, That's that's one basic thing 0:07:25.440 --> 0:07:29.440 they could afford to have a family. There are a 0:07:29.480 --> 0:07:31.160 lot of people now who don't believe they can have 0:07:31.200 --> 0:07:33.680 a family. They're parts of parts of the country where 0:07:34.040 --> 0:07:38.400 people just don't think they's it's a possibility for them anymore. 0:07:38.480 --> 0:07:41.280 Like you look at the major cities on the West 0:07:41.280 --> 0:07:46.320 coast or on the East coast too. If you're living 0:07:46.360 --> 0:07:49.600 in one of those places, it's just if you're living 0:07:50.640 --> 0:07:53.040 a regular middle class lifestyle, or even if you have 0:07:53.080 --> 0:07:56.240 a good job. Let's say two engineers at Google, for instance, 0:07:56.240 --> 0:07:59.360 who are earning good salaries. A lot of people like that, 0:07:59.560 --> 0:08:02.360 married who have two good salaries, can't afford to buy 0:08:02.400 --> 0:08:07.240 a home in the Bay Area. That's crazy now there's 0:08:07.240 --> 0:08:10.080 some local factors involved as well. It's not just the 0:08:10.080 --> 0:08:12.720 fact that we've been dealing with fifty years of uncontrolled 0:08:12.760 --> 0:08:17.280 credit expansion and inflation. Local factors involved, such as bad 0:08:17.320 --> 0:08:20.920 policies that they don't let people build more in the 0:08:20.920 --> 0:08:24.800 Bay Area. But as a general rule, it's a really 0:08:25.000 --> 0:08:32.320 strange thing that people can no longer expect to have 0:08:32.360 --> 0:08:38.280 a lifestyle better than their parents, given how much technology 0:08:38.320 --> 0:08:43.160 has improved over time, and given how much we've advanced 0:08:43.200 --> 0:08:47.000 in so many different aspects of society, that this expectation 0:08:47.120 --> 0:08:49.720 shouldn't continue into the future. We need to sort of 0:08:49.720 --> 0:08:53.120 reflect on what is going on, what is broken in 0:08:53.160 --> 0:08:58.080 our current system that's making this new reality come about. 0:08:58.320 --> 0:09:00.400 Yeah, yeah, I think when you talk about that, there's 0:09:00.400 --> 0:09:03.520 other factors such as like building regulations and things like that. 0:09:03.559 --> 0:09:05.760 But a lot of the problems with building regulations and 0:09:05.760 --> 0:09:09.480 so forth is also because of the broken fiat money 0:09:09.480 --> 0:09:11.679 system that we have, as well as you know, overreaching 0:09:11.679 --> 0:09:14.880 government and misaligned incentives and things like that. If you're 0:09:14.880 --> 0:09:16.760 just tuning in you're listening to the Mark Mass Show, 0:09:16.960 --> 0:09:19.760 I'm sitting down with VJ. Boya Patty, the author of 0:09:19.800 --> 0:09:23.120 the Bullish Case for Bitcoin senior engineer at Swan Bitcoin. 0:09:23.640 --> 0:09:26.000 We're talking about bitcoin, we're talking about privacy, we're talking 0:09:26.000 --> 0:09:27.920 about the vac currency, and we are going to talk 0:09:27.960 --> 0:09:30.320 about the bull case and a lot more. Don't go away, 0:09:30.320 --> 0:09:31.720 We'll be right back after a short break. 0:09:32.280 --> 0:09:33.000 All right, Welcome back. 0:09:33.040 --> 0:09:34.480 If you're just tuning in, you're listening to the Mark 0:09:34.520 --> 0:09:37.439 Moss Show, sitting down with Vja Boya Potty, the author 0:09:37.480 --> 0:09:40.240 of the Bullish Case for Bitcoin and the senior engineer 0:09:40.240 --> 0:09:43.440 at Swan Bitcoin. A great place to get bitcoin if 0:09:43.440 --> 0:09:45.040 you're trying to get something, you might want to after 0:09:45.080 --> 0:09:47.839 this conversation, now, j we were just talking about sort 0:09:47.840 --> 0:09:50.240 of like this fiat money system being broken, and like 0:09:50.240 --> 0:09:51.640 I said, we could sit here and talk about that 0:09:51.720 --> 0:09:53.679 all day. The one thing I was thinking though, as 0:09:53.720 --> 0:09:56.840 you were saying, how it's sort of changed people's time preference, 0:09:57.360 --> 0:10:00.720 and that one is a whole topic and itself, but 0:10:01.280 --> 0:10:05.839 I always think back to Vladimir Lenin was quoted saying 0:10:05.880 --> 0:10:08.920 that the best way to destroy capitalism is to debouch 0:10:08.960 --> 0:10:13.480 the currency through inflation, and through inflation you can arbitrarily steal. 0:10:13.520 --> 0:10:15.520 And then he said until all relation is lost, until 0:10:15.559 --> 0:10:20.239 the best way to get rich is through gambling and theft, 0:10:20.640 --> 0:10:22.959 and today it sort of seems like that could never 0:10:23.040 --> 0:10:24.839 be more true, right, I mean, everyone's just out for 0:10:24.960 --> 0:10:28.440 gambling and theft. It's like yolo into some whatever options 0:10:28.440 --> 0:10:30.920 trade or crypto trade or whatever it may be, or 0:10:31.000 --> 0:10:34.160 like theft. Maybe not out well in the Bay Area, 0:10:34.240 --> 0:10:37.440 outright theft and maybe there's a lot of grift and 0:10:37.480 --> 0:10:38.240 graph going on. 0:10:40.160 --> 0:10:43.080 Yeah, I think that's true. We lived through this period 0:10:43.120 --> 0:10:46.320 recently which is sort of unprecedented in history, where we 0:10:46.400 --> 0:10:51.120 had fifteen years of negative real interest rates. The Federal 0:10:51.120 --> 0:10:56.480 Reserve held interest rates at zero, and there's positive inflation 0:10:56.559 --> 0:11:00.520 during that period, so you really being punished for saving. 0:11:01.600 --> 0:11:05.760 If you kept money in cash or dollar denominated assets, 0:11:05.800 --> 0:11:09.280 you generally punished for doing that. And so this creates 0:11:09.280 --> 0:11:12.679 this massive incentive to go out there and go further 0:11:12.720 --> 0:11:16.040 out on the risk curve and find assets that are 0:11:16.720 --> 0:11:20.880 almost chasing momentum, essentially trying to find those assets that 0:11:20.920 --> 0:11:23.920 are going up just because there's this inflation and the 0:11:23.520 --> 0:11:28.640 money that exists has to go and find safety outside 0:11:28.640 --> 0:11:32.199 of a regular bank account, for instance. So they ran 0:11:32.280 --> 0:11:34.600 this experiment for fifteen years and we kind of saw 0:11:34.640 --> 0:11:37.959 the consequence as inflation started the inflation. Genie really got 0:11:38.000 --> 0:11:41.559 out of the bottle during the pandemic, and they're trying 0:11:41.600 --> 0:11:44.280 to put it back in the bottle. And so now 0:11:44.320 --> 0:11:49.440 we're actually back to what would be considered fairly normal historically, 0:11:49.559 --> 0:11:52.960 where you have real interest rates, real positive interest rates. 0:11:52.960 --> 0:11:54.920 If you are a saver and you put your money 0:11:54.960 --> 0:11:58.000 in the bank, you will get a real return, which 0:11:58.000 --> 0:12:03.520 is treasury absolutely right. Sorry, you're correct. If you put 0:12:03.559 --> 0:12:09.160 it in short term dollar denominated bond securities, then you're 0:12:09.160 --> 0:12:10.959 going to get a real rate of return, and this 0:12:11.559 --> 0:12:14.360 has not been true for most of the last fifteen years. 0:12:15.000 --> 0:12:18.319 This has a beneficial effect in that it encourages people 0:12:18.360 --> 0:12:22.160 to save and it changes the way they plan for 0:12:22.200 --> 0:12:26.120 the future as well. Unfortunately, I think this is going 0:12:26.200 --> 0:12:28.480 to be very short lived experiment. I think the FED 0:12:28.559 --> 0:12:32.240 is going to go back to what their default behavior 0:12:32.240 --> 0:12:34.520 has been for the last better part of the last 0:12:34.559 --> 0:12:38.840 two decades because the FIAT system can't survive like this. 0:12:39.440 --> 0:12:44.360 It can't survive because fundamentally, the US government has this 0:12:44.600 --> 0:12:47.920 massive amount of debt that needs to be serviced, and 0:12:48.160 --> 0:12:50.360 with interest rates as high as they are. While that's 0:12:50.400 --> 0:12:53.440 good for society as a whole, the US government can't 0:12:53.520 --> 0:12:57.080 continue to function servicing a debt that large one hundred 0:12:57.040 --> 0:13:03.640 and approaching one hundred and forty percent. So the Federal Reserve, 0:13:03.760 --> 0:13:06.560 being a part of the US government, will eventually cave 0:13:06.640 --> 0:13:09.400 in because they will see that the government can't function 0:13:09.559 --> 0:13:12.040 like this and the system as a whole can't function. 0:13:12.160 --> 0:13:14.640 So we're going to go back to negative real interest rates. 0:13:15.520 --> 0:13:17.520 The reason the FED is doing what it's doing right 0:13:17.559 --> 0:13:21.400 now is they need to establish some credibility. They said 0:13:21.440 --> 0:13:23.560 that they have an inflation of target of two percent. 0:13:24.120 --> 0:13:26.319 They could say they could change their mind to say, actually, 0:13:26.400 --> 0:13:29.960 our inflation type, we're changing our inflation target. We're going 0:13:30.040 --> 0:13:33.040 to make it three percent or five percent. But that's 0:13:33.080 --> 0:13:36.480 what banana republics do. And the FED really has only 0:13:36.559 --> 0:13:39.920 one weapon, and that weapon is their credibility that they're 0:13:39.960 --> 0:13:43.640 able to keep inflation under control because people believe that 0:13:43.679 --> 0:13:45.520 they will stick to their word and when they say 0:13:45.559 --> 0:13:47.440 they're going to bring interest rates down to two percent, 0:13:47.520 --> 0:13:51.360 they will. I don't think they can though. I don't 0:13:51.360 --> 0:13:53.800 think they can sustainably do that because they've let the 0:13:53.800 --> 0:13:57.800 inflation genie out of the bottle and they have this 0:13:57.920 --> 0:14:01.720 huge constraint of if they really try and kill inflation. 0:14:02.360 --> 0:14:04.520 They make it so that the US debt is not 0:14:04.640 --> 0:14:07.360 serviceable anymore. And if they have to choose between these 0:14:07.400 --> 0:14:11.200 two things, make it so the US government cannot service 0:14:11.240 --> 0:14:16.600 its debt anymore, which basically implodes the government, or letting 0:14:16.600 --> 0:14:18.319 the inflation genie out of the bottle. They're going to 0:14:18.400 --> 0:14:20.880 go with the former. That's what central banks have done 0:14:21.320 --> 0:14:24.480 for you know, the entire history of central banking. It's 0:14:24.560 --> 0:14:25.480 just a matter of time. 0:14:25.680 --> 0:14:28.280 Yeah, And they have no choice. I mean, to your point, 0:14:28.400 --> 0:14:30.800 they lose credibility. I would say they've already lost credibility. 0:14:30.840 --> 0:14:33.480 Maybe most people for some reason haven't lost credibility with them. 0:14:33.520 --> 0:14:36.120 But now they told this inflation was transitory, this and 0:14:36.160 --> 0:14:38.960 that that obviously proved to be wrong. But I think 0:14:39.000 --> 0:14:41.040 there's a couple of big problems they have. One is 0:14:41.080 --> 0:14:46.120 that they can only try to basically limit consumer spending 0:14:46.400 --> 0:14:48.960 so they can make you and eyebroke. But unfortunately, at 0:14:48.960 --> 0:14:52.280 this point now the government, the fiscal spending is overpowering 0:14:52.400 --> 0:14:54.640 the consumer spending, so they can only crush. 0:14:54.440 --> 0:14:55.040 Us so much. 0:14:55.280 --> 0:14:58.240 They got to stop the government spending like a drunken sailor. 0:14:58.760 --> 0:15:03.640 And the US fiscal deficit was a trillion dollars last quarter, 0:15:03.720 --> 0:15:06.440 and now the numbers came out, they're projecting one point 0:15:06.440 --> 0:15:08.120 five trillion for the next two quarters. 0:15:09.600 --> 0:15:15.680 Yeah, that's the problem exactly right. And the US government 0:15:15.840 --> 0:15:18.800 and the population as a whole is in a really 0:15:18.840 --> 0:15:22.640 difficult place for fixing this problem. We need fiscal responsibility, 0:15:23.240 --> 0:15:27.880 but we have such unprecedented polarization in the country. We 0:15:27.960 --> 0:15:31.240 can't agree to anything. So it's very hard to come 0:15:31.280 --> 0:15:34.240 together and say things like, hey, can we make a 0:15:34.280 --> 0:15:38.080 compromise on your side and my side and get this 0:15:38.320 --> 0:15:43.200 sort of fiscal picture under control. It's just not going 0:15:43.240 --> 0:15:45.960 to happen. And so I think what we can expect 0:15:46.160 --> 0:15:49.360 given the political reality we live in, is that the 0:15:49.720 --> 0:15:52.320 fiscal picture is going to continue to get worse. The 0:15:52.360 --> 0:15:55.560 government is going to rack up more and more deficits. 0:15:55.920 --> 0:15:58.920 At some point, there is a breaking point when the 0:15:58.960 --> 0:16:02.160 debt is actually not serviceable, when the amount of money 0:16:02.160 --> 0:16:04.600 that the US is bringing through tax revenue is not 0:16:04.920 --> 0:16:07.640 enough to pay interest on the debt. That's when you 0:16:07.680 --> 0:16:10.200 get the moment of crisis, which is what do we do. 0:16:10.200 --> 0:16:13.960 Do we cut spending, do we raise taxes that's also 0:16:14.080 --> 0:16:17.360 politically very infeasible, or do we go for the last option, 0:16:17.440 --> 0:16:20.560 which almost all countries go for in the end, which 0:16:20.600 --> 0:16:23.640 is the easiest option because it's the politically easiest option. 0:16:24.160 --> 0:16:28.200 Let's just inflate the money supply. Let's reduce the debt 0:16:28.440 --> 0:16:30.520 by making it so that the amount of money the 0:16:30.600 --> 0:16:34.320 denominator is much much greater, and then then servicing the 0:16:34.360 --> 0:16:37.480 debts no problem, because it's always money sloshing around. Yep, 0:16:38.480 --> 0:16:41.600 that's what's going to happen. And the question is what 0:16:41.760 --> 0:16:45.840 is the breaking point for the US government. What percentage 0:16:45.840 --> 0:16:49.960 of GDP does it become unserviceable? 0:16:51.480 --> 0:16:53.640 Well, they got to get the GDP up. 0:16:54.560 --> 0:16:56.560 I just have a couple of years of double triple 0:16:56.600 --> 0:17:00.160 digitiflation and that GDP number goes up, right, So I 0:17:00.160 --> 0:17:04.680 mean they can get that number down. I mean that's 0:17:04.720 --> 0:17:07.800 the most likely scenario, this financial repression playbook. You know 0:17:07.840 --> 0:17:10.840 that they ran in the forties, the Israel ran in 0:17:10.880 --> 0:17:12.800 the eighties. The IMF put out a white paper in 0:17:12.800 --> 0:17:15.479 twenty fifteen called Liquidation of Government Debt, which is basically 0:17:15.480 --> 0:17:16.320 spelling that out. 0:17:16.680 --> 0:17:18.440 If the debt to GDP is an equation. 0:17:18.560 --> 0:17:20.600 If we can't get the debt down, let's just get 0:17:20.600 --> 0:17:23.359 the GDP up And so It's like, hey, we're selling 0:17:23.400 --> 0:17:25.480 iPhones for a thousand bucks. If we sell ten of them, 0:17:25.520 --> 0:17:28.919 that's ten thousand. But if we take the inflation pushes 0:17:28.920 --> 0:17:31.040 the price of two thousand, and we still sell ten iPhones, 0:17:31.080 --> 0:17:31.800 now it's two thousand. 0:17:31.840 --> 0:17:34.480 Right, It's a magic trick. And now too. 0:17:34.720 --> 0:17:36.720 I think maybe the last piece that I want to 0:17:36.760 --> 0:17:39.560 get into is you have this. Maybe you said contrary 0:17:39.600 --> 0:17:45.400 and take as to this bitcoin bull market, but I'll 0:17:45.400 --> 0:17:47.679 say this, I gotta take a quick break. But you know, 0:17:48.240 --> 0:17:53.240 can the Fed admit defeat and change the target. It's 0:17:53.280 --> 0:17:55.000 going to be very difficult for them to do that 0:17:55.080 --> 0:17:59.120 and maintain credibility unless we have a war. Jannet Allen says, 0:17:59.119 --> 0:18:00.920 we can afford to fight two wars at the same time, 0:18:00.960 --> 0:18:03.080 and so maybe that could be the scapegoat. If you're 0:18:03.119 --> 0:18:04.720 just tune in, you're listening to the Mark Mass Show. 0:18:04.720 --> 0:18:07.199 I'm sitting down with VJ. Boya Potty, the author of 0:18:07.240 --> 0:18:10.560 the Bullish Case for Bitcoin, and a scene engineer at 0:18:10.600 --> 0:18:12.680 Swan Bitcoin. We'll be back with more in a minute 0:18:12.680 --> 0:18:13.440 after a very short break. 0:18:13.480 --> 0:18:14.639 Don't go away, We're back. 0:18:14.520 --> 0:18:16.040 All right, Welcome back. If you just tune in, you're 0:18:16.040 --> 0:18:18.400 listening to the Mark Maas Show, sitting down with VJ. 0:18:18.480 --> 0:18:21.000 Boya Potty, the author of the bullish case for Bitcoin, 0:18:21.040 --> 0:18:24.400 and the senior engineer over at Swan Bitcoin, and we're 0:18:24.440 --> 0:18:28.040 kind of going through, I don't know what we'll call it, 0:18:28.080 --> 0:18:31.159 the unwinnable situation that the US is in, and not 0:18:31.200 --> 0:18:33.720 just the US, every every government, every central bank is 0:18:33.760 --> 0:18:35.320 sort of in this same scenario. 0:18:35.400 --> 0:18:36.680 And I kind of threw out at the end. 0:18:37.800 --> 0:18:40.200 You know, if the Fed FED doesn't want to lose credibility, 0:18:40.240 --> 0:18:42.119 they're trying to regain credibility by getting back to that 0:18:42.119 --> 0:18:44.280 two percent target unless they can come up with some 0:18:44.400 --> 0:18:47.399 good reason scapegoat as to why they can't do that, 0:18:47.520 --> 0:18:50.800 potentially like multiple wars. You kind of shook your head 0:18:50.800 --> 0:18:53.919 and discussed when I said that, So if you want 0:18:53.960 --> 0:18:54.679 to address that, you can. 0:18:54.760 --> 0:18:56.600 But then you had said that you think that. 0:18:56.520 --> 0:19:00.200 Maybe this bull market in bitcoin has already started, which 0:19:00.280 --> 0:19:04.440 might be controversial for some who think that there's this 0:19:04.680 --> 0:19:08.160 massive macro picture that's going to crash everything down. 0:19:08.840 --> 0:19:10.320 So maybe explain that to me. 0:19:11.720 --> 0:19:15.679 Yeah, you know, one thing, this prior ballmarket was really 0:19:15.960 --> 0:19:19.480 shortened or curtailed. I think, you know, people have put 0:19:19.480 --> 0:19:21.520 out a lot of reasons, but I think the main 0:19:21.600 --> 0:19:25.280 reason was that the FED ended this unprecedented period of 0:19:25.320 --> 0:19:30.400 fifteen years of zero interest rates. And I think when 0:19:30.480 --> 0:19:33.280 there are positive real interest rates in the market, that's 0:19:33.359 --> 0:19:37.440 generally bad for competing monetary goods. And the classic example 0:19:37.480 --> 0:19:40.639 of this is gold. You go back to the nineteen 0:19:40.680 --> 0:19:45.360 seventies when gold was going through this decade long bullmarket 0:19:45.400 --> 0:19:49.880 and parabolic moving gold very similar to one of bitcoin's 0:19:50.720 --> 0:19:53.560 bull cycles. The graphs actually look very similar. These hype 0:19:53.560 --> 0:19:58.399 cycles are almost identical. Then Paul Volker, the central banker 0:19:58.440 --> 0:20:01.640 at the time, really was determined to get inflation under 0:20:01.640 --> 0:20:05.560 control and set interest rates close to twenty percent, I believe, 0:20:06.359 --> 0:20:10.719 and had very real high, positive real interest rates, so 0:20:10.760 --> 0:20:13.879 you would earn money, you would earn real value by 0:20:13.960 --> 0:20:18.439 keeping money in the bank. That's generally a period of 0:20:18.480 --> 0:20:20.879 time which is bad for competing monetary goods, and it 0:20:20.920 --> 0:20:23.399 was really bad for gold. It was bad for gold 0:20:23.560 --> 0:20:26.760 for two decades. So I think the same thing happened 0:20:26.760 --> 0:20:30.680 with bitcoin at the end of the ball market. How 0:20:30.760 --> 0:20:32.640 long can the FED go along with this, I think 0:20:32.720 --> 0:20:36.000 that's that's that's an open question, but I think about to. 0:20:35.960 --> 0:20:38.120 That point real quick though, So if you look at 0:20:38.160 --> 0:20:41.639 like Bitcoin's history, which isn't super long, so it's not like, 0:20:42.119 --> 0:20:44.320 you know, super conclusive, I guess. But if you look 0:20:44.320 --> 0:20:47.720 at like the Having market data, for example, we can 0:20:47.800 --> 0:20:52.399 see that on every Having, the peak of bitcoin is 0:20:52.480 --> 0:20:54.240 eighteen months after the Having. 0:20:54.640 --> 0:20:56.600 So so far that's been true. 0:20:56.920 --> 0:20:59.720 And I, you know, going into this this last event 0:21:00.240 --> 0:21:03.359 after the Having, knowing that as eighteen months, but we'd 0:21:03.400 --> 0:21:05.520 all thought maybe the price at bitcoin would be you know, 0:21:05.520 --> 0:21:07.560 one hundred and fifty thousand or wherever it was going 0:21:07.640 --> 0:21:10.000