Speaker 1: Hello, Welcome back to another episode of The Markmas Show,
Speaker 1: where we talk about the decentralized Revolution. Each and every
Speaker 1: week we bring you through what is happening around the world,
Speaker 1: trying to narrate it for you so it kind of
Speaker 1: makes sense of what's going on. Of course, I talked
Speaker 1: about the decentralized revolution, the way the world has been
Speaker 1: centralizing and now it's about to be decentralized that we
Speaker 1: can see it happening all over the world, and of course,
Speaker 1: UM it's being led by new technology like bitcoin and cryptocurrencies.
Speaker 1: You now in the in the bitcoin cryptocurrency space. Over
Speaker 1: the last couple of months, it's been been pretty bad
Speaker 1: for a lot of people. We've seen, UM a blow
Speaker 1: up similar to the Great Financial Crash, which I've covered
Speaker 1: UM at length. I know for a lot of people
Speaker 1: they got caught up in this crash and I and
Speaker 1: I I don't hope for anyone to lose money. It
Speaker 1: makes me sad to think of anybody that's being being
Speaker 1: hurt by this, and I've heard, unfortunately, I've heard countless
Speaker 1: stories of people that have lost everything. UM. I believe
Speaker 1: I've even heard of people taking their own lives over
Speaker 1: how much money they've lost. It's that bad. So I
Speaker 1: don't I don't wish that on anybody, UM, but I
Speaker 1: also hope that people learn their lessons from it. But
Speaker 1: for those people that might be caught up in the
Speaker 1: in the mix, there might be some good news hopefully. So, UM,
Speaker 1: I've kind of been keeping you up to date on
Speaker 1: what's going on, and we saw, um, you know, when
Speaker 1: this domino started dropping down, UM, bigger companies started getting
Speaker 1: getting caught up in this, and Celsius is one of
Speaker 1: those companies that really got up, got caught, got caught
Speaker 1: in this mess. You know. They had just way too
Speaker 1: much exposure to these risky protocols and they stopped letting
Speaker 1: withdrawals happen about a month ago. And UM, I've been
Speaker 1: trying to keep you up to date on this in
Speaker 1: case you have money that's locked up on there. And UM,
Speaker 1: while I don't want to falsely encourage you and tell
Speaker 1: you to hold your breath, I do you know there
Speaker 1: is maybe a little bit of hope. UM. In the beginning,
Speaker 1: when it first started happening with Celsius, they were in
Speaker 1: danger of getting their positions liquidated because bitcoin was falling
Speaker 1: so fast and they had wrapped up a bunch of
Speaker 1: bitcoin and locked it up on some of these defied protocols.
Speaker 1: And because it's in this defied decentralized finance protocols, um,
Speaker 1: there's transparency. So most of the people could see where
Speaker 1: that was apt and uh, you could see where their
Speaker 1: liquidation price. I think at the beginning when they first
Speaker 1: locked up withdraws, it was about eighteen thousand, so bitcoin
Speaker 1: had hit about eighteen thousand, Celsius would be liquidated. But
Speaker 1: then Celsius has been putting back more collateral, more collateral,
Speaker 1: more collateral onto the system to lower that liquidation level.
Speaker 1: Then they got it down to like fifteen, and then
Speaker 1: the thirteen, and then to like eight and then to five.
Speaker 1: And that's potentially good news if you have money locked
Speaker 1: on Celsius because they have Uh, well, it's good for everybody.
Speaker 1: Uh it's good for if you're in crypto at all.
Speaker 1: But if you have money locked up in there, it's
Speaker 1: it's potentially good because maybe if they don't get completely liquidated,
Speaker 1: maybe there's a chance you get money back again. Don't
Speaker 1: hold your breath, um, but maybe there's a little bit
Speaker 1: of hope there for you. It's also good for the
Speaker 1: bitcoin space, uh, even bigger, crypto space, even bigger, because
Speaker 1: if they got liquidated, it could instantly put a lot
Speaker 1: of bitcoin and cryptocurrencies onto the market and dump it
Speaker 1: at a time when there's very thin liquidity, and it
Speaker 1: could push the price down even lower. So we saw
Speaker 1: this week. It says Celsius pays off their last defied
Speaker 1: loan and reclaims nearly two hundred million of bitcoin from
Speaker 1: um Compound, which is a decentralized finance protocol. It says
Speaker 1: the troubled crypto lender previously paid off loans from Ave
Speaker 1: and Maker, and so basically what happens is, in order
Speaker 1: to get these loans, they had to put up they
Speaker 1: had overcollateralize them. So they had to put up, you know,
Speaker 1: about a hundred and fifty percent of the amount they
Speaker 1: wanted to borrow back. And these are on these like protocols,
Speaker 1: so there's nobody to call up and say like, hey, buddy,
Speaker 1: you know we've done business for a long time, can
Speaker 1: you hold off for a second. Um, there's no Uh,
Speaker 1: that's different. So Celsius is c FI centralized finance. These
Speaker 1: are defied decentralized finance. There's nobody to call and ask
Speaker 1: if they could give you a favor, UM, And so
Speaker 1: they paid them off from a they paid them off
Speaker 1: for maker, and now they paid them off from Compound.
Speaker 1: Now we can see that. Um. Like I said, they've
Speaker 1: been facing these liquidity problems, facing getting liquidated, but now
Speaker 1: they've been able to pay off this two million. They
Speaker 1: had paid down fifty million to Compound on Wednesday, and
Speaker 1: then that got them back ten thousand bitcoin, which was
Speaker 1: pretty pretty big number. Like I said, even if you
Speaker 1: don't have any money on these, still nice to not
Speaker 1: have to see ten thousand bitcoin get dumped into the
Speaker 1: UM into the market at one time, that'd be pretty bad.
Speaker 1: That was worth about a million current prices. So they
Speaker 1: with with fifty million paid down, they got access to
Speaker 1: about two hundred million back UM, which, like I said,
Speaker 1: maybe it is pretty good. Um. He said. The maneuver
Speaker 1: followed a similar treasury management tactic that Celsius used recently
Speaker 1: to pay out to fully pay off and closes loans
Speaker 1: from a van maker. The loans on these protocols are overcollateralized,
Speaker 1: me in the borrows to lock up. So we've already
Speaker 1: covered that now. UM. Is that a good thing or
Speaker 1: is it a bad thing, Well, there's could be potential
Speaker 1: legal problems from this, and the reason why is that, so,
Speaker 1: how are they able to pay these down? Where are
Speaker 1: they getting the money to do this? And if they
Speaker 1: have money to pay these down, why are they not
Speaker 1: giving money back to people who had money on the exchange?
Speaker 1: Why are they not paying back to positors. What happens
Speaker 1: is whenever you run into legal problems and you have
Speaker 1: to go into some sort of a restructuring or some
Speaker 1: sort of a reorganization, there's typically an order process of
Speaker 1: who gets their money back first. Now, typically creditors get
Speaker 1: money back before depositors, so UM in a traditional publicly
Speaker 1: traded company, for example, bondholders who are creditors would money
Speaker 1: back before equity holders or stockholders right um. Or for example,
Speaker 1: on a house you have like a first trustee, you
Speaker 1: could have a second trustee, the third, fourth, et cetera.
Speaker 1: And the first money would go to pay back the
Speaker 1: first trusteed, and then whatever is left we go to
Speaker 1: the second. If there's anything left goes to the third, etcetera.
Speaker 1: There's typically an order of that, and we can see
Speaker 1: that there's all types of legal questions that are being
Speaker 1: raised of who should get paid first, and there's an
Speaker 1: article that came out of Bloomberg that says the leaguered
Speaker 1: crypto lender has paid back a string of death totally
Speaker 1: more than nine hundred million, which is good except for
Speaker 1: should some of that llion gone back to the depositors. Well,
Speaker 1: it says the paydowns have raised the spectru of a
Speaker 1: legal debate on how and in what order should distress
Speaker 1: crypto companies payback creditors. Now, no matter what the typical
Speaker 1: order is, people are not going to be happy about this,
Speaker 1: and so it's definitely gonna be a legal debate and
Speaker 1: it's definitely going to bring all types of legal concerns
Speaker 1: about this, uh haiing back these platforms as we talked
Speaker 1: about Compound Maker, et cetera. So it's because the loans
Speaker 1: from defied platforms are often required to be overclatteralized. Doing
Speaker 1: so what allows Celsius to reclaim the extra coins locked
Speaker 1: on the platform, thus securing more assets on a net basis.
Speaker 1: So you know, they did pay out fifty million, but
Speaker 1: they got two hundred million back, so I guess that's
Speaker 1: a good thing. But it says like uh, like most things,
Speaker 1: crypto were an uncharted territory in terms of who shouldn't
Speaker 1: ultimately get paid back ahead of other parties, which is
Speaker 1: complicated by the smart contracts implicated and by the intertwined
Speaker 1: defined lending contractual relationships. So it says Celsius has been
Speaker 1: exploring options, including a restructure and of its liability. So
Speaker 1: they're trying to figure out how to restructure this. They
Speaker 1: can see who gets their money back. Now, from what
Speaker 1: I've been able to dig in and find out, it
Speaker 1: looks like Celsius was holding money in a couple different ways.
Speaker 1: So some people just had money deposited there, so Celsius
Speaker 1: was just holding it on their behalf. So I think
Speaker 1: if you just had money being deposited there, then that
Speaker 1: probably comes back first. Then if you were getting a loan,
Speaker 1: so you gave them collateral and they they gave you
Speaker 1: a loan back, that might be second. And if you
Speaker 1: gave them money and they were paying you yield back,
Speaker 1: that would probably be the last to get paid back.
Speaker 1: So it looks like depend on how you had money,
Speaker 1: or if you had money and how you had it
Speaker 1: on Celsius, that would be the order that you get
Speaker 1: paid back. Hopefully, maybe it depends on where you're at.
Speaker 1: There is that Celsius repaying some debt ahead of a
Speaker 1: potential bankruptcy raises the issue of so called quote unquote
Speaker 1: preference claims in a Chapter eleven bankruptcy, some creditors aren't
Speaker 1: supposed to end up better off than others. Quote. It's
Speaker 1: fair to say that any payments or exchange is made
Speaker 1: while not allowing creditors to get their money in the
Speaker 1: ordinary course of business or potentially subject to clawbacks in bankruptcy.
Speaker 1: So if Celsius gave you some money back and then
Speaker 1: through bankruptcy court they found they shouldn't have, they could
Speaker 1: come after you to get some of that money back.
Speaker 1: Something to keep in mind now, probably nobody listening to
Speaker 1: this is getting money back from Celsius. If you have,
Speaker 1: I'd love to hear from you. Hit me up on
Speaker 1: social media at one Mark Moss. That's at just the
Speaker 1: number one Mark Boss. I'm gonna come back. I got
Speaker 1: a whole lot more to cover today, talking about what's
Speaker 1: happening with cryptocurrencies, what's happened with the US Treasury, um
Speaker 1: happening in South Africa. There's been a whole lot of
Speaker 1: news this week. I got a lot to get through. Um,
Speaker 1: you're listening to the Mark Mos Show talking about the
Speaker 1: decentralized Revolution, talking about bitcoin, cryptocurrencies and macroeconomics. Be back
Speaker 1: with that and more in a minute. So don't go away,
Speaker 1: all right, welcome back. You are listening to the Mark
Speaker 1: Mass Show. We're talking about the decentralized Revolution. We're talking
Speaker 1: about bitcoin cryptocurrencies, We're talking about the macro economic picture
Speaker 1: of the world, the geopolitics picture of the world, and
Speaker 1: so much more. You know, I don't have a lot
Speaker 1: to dig into the geopolitics side today, um, but we
Speaker 1: have to look at all of that. I'm trying to
Speaker 1: really bring everything that's happening in the world today into context.
Speaker 1: And you have to understand what's happening with politics and
Speaker 1: the geopol Understand where the financial markets are moving, because
Speaker 1: unfortunately it's become very political. Um. And we can see
Speaker 1: some of that happening. UM. So, for example, we saw
Speaker 1: the US Treasury. So the United States has a central bank,
Speaker 1: the Federal Reserve, right, and then they also have the
Speaker 1: U S Treasury. Now, the Federal Reserve is a semi
Speaker 1: quasi private institution. It's kind of run by the banks. Um.
Speaker 1: There's a there's a lot to be said about that. Um,
Speaker 1: if you'd like to know more about that, you can
Speaker 1: hit me up on social media tell me you want
Speaker 1: me to talk about that more, or just check out
Speaker 1: the book The Creature from Jekyl Island. They really get
Speaker 1: into that. It's pretty good. Um. So, the FED is
Speaker 1: this kind of semi quasi private you know, institution that
Speaker 1: basically creates money from thin air, and they loan it
Speaker 1: to the banks, the commercial banks, and then the commercial
Speaker 1: banks create that money into existence. Now the government also
Speaker 1: needs money. The the US government is in debt thirty
Speaker 1: one trillion dollars. How do they get the Well, people
Speaker 1: have to loan it to them. So who loans it
Speaker 1: to them? Well, uh, if you have money and a
Speaker 1: pension fund or a four oh one K fund or
Speaker 1: something like that, there's a good chance there's a good
Speaker 1: chance you have loaned money to the US government. If
Speaker 1: you have bonds in your portfolio, there's a good chance
Speaker 1: you've loaned money to the government. Other nations loan money
Speaker 1: to the government. So Japan and China have loan money
Speaker 1: to the government by buying bonds. So when they buy
Speaker 1: the bonds, they do that. So how does the problem is?
Speaker 1: Is that the US government runs a deficit, meaning they
Speaker 1: have to live off debt, and they have less and
Speaker 1: less people wanting to loan them money. So the amount
Speaker 1: of the amount of people that want to loan money
Speaker 1: to the US government has been dropping. China doesn't want
Speaker 1: to lend money to the government anymore. Japan doesn't have
Speaker 1: any money to borrow, buy money, or lend money to
Speaker 1: the government anymore. So then who does Well, that's where
Speaker 1: the Federal Reserve comes in. So the Federal Reserve can
Speaker 1: create money from thin air and then loan it to
Speaker 1: the government. Pretty interesting, right, So that's uh, I broke
Speaker 1: I broke that down for you so you can understand.
Speaker 1: That's with the U. S. Treasury. The U. S. Treasury
Speaker 1: is the the accountant there, the CFO of the government
Speaker 1: right there, the bookkeeper whenever you want to call it.
Speaker 1: So the Treasury Department handles the money issuance. So these
Speaker 1: are the dollars, the coins that we have, and they
Speaker 1: also issue you know, the treasury there, the accounting department,
Speaker 1: so they manage who gets paid. Do we give out
Speaker 1: welfare U b I, do we give out you know,
Speaker 1: tax re rebase refunds? Right, And so they get the
Speaker 1: money out to the public. And this is why a
Speaker 1: lot of times people say that the federal Reserve isn't
Speaker 1: really inflationary because the federal Reserve can't get money to
Speaker 1: the public. The Federal Reserve can only get money, um,
Speaker 1: they can buy debt of the government and then the
Speaker 1: government can now put more money out into the public.
Speaker 1: And so that's just kind of the difference of the U. S.
Speaker 1: Treasury versus the follow Reserve. Now, the U. S. Treasury
Speaker 1: um has at times throughout history made their own currency. Um,
Speaker 1: they're talking about creating their own currency. Again. A lot
Speaker 1: of people that understand how that works think, so, wait
Speaker 1: a minute, why does the Treasury have to borrow money
Speaker 1: from the federal reserve that has no reserves. They're not
Speaker 1: federal and they have no reserves, And they basically loaned
Speaker 1: me money that they created from thin air. So why
Speaker 1: wouldn't I just create money from thin air? And if
Speaker 1: you ask that question, that would be a very good
Speaker 1: question to ask, and we'd all like to know the answer. Now,
Speaker 1: in history, there's been really one time in where the
Speaker 1: Treasury has said, you know what, we'll just make our
Speaker 1: own money. And they did. They were it was a
Speaker 1: type of money called a green back. Now a lot
Speaker 1: of people think that the green back is a slang
Speaker 1: term for the dollar, which it kind of is, but
Speaker 1: it was actually a different type of money. And that's
Speaker 1: when then President Abraham Lincoln said, we don't need to
Speaker 1: create borrow money from the FED. That creates it from
Speaker 1: thin air. Well, it wasn't the it wasn't the FED
Speaker 1: at the time. Sorry, it was the National Bank. But
Speaker 1: we'll we'll just create our our money, our green back,
Speaker 1: which they did. Of course Abraham Lincoln died. Might have
Speaker 1: a connection, maybe not. I'll leave that for you to
Speaker 1: decide and draw your own flight. Are your own lines there?
Speaker 1: But we've seen that the President Joe Biden he ordered
Speaker 1: he had an executive order in March on cryptocurrencies directed
Speaker 1: at the Treasury Department for them to take the lead
Speaker 1: among other government agencies and developing policy recommendations on cryptocurrency.
Speaker 1: So it's not up to the FED. A lot of
Speaker 1: times people would say, why would the central banks ever
Speaker 1: allow bitcoin to succeed? They don't want to give up
Speaker 1: control over the money. Well, the FED doesn't create laws.
Speaker 1: It's not up to the Fed to decide if they
Speaker 1: can let a succeed or not. The government they make
Speaker 1: the laws, and so here we have The President had
Speaker 1: an executive order in March directing the Treasury to come
Speaker 1: up with policy recommendations on bitcoin and cryptocurrencies. Now the Department,
Speaker 1: the State Department of the Treasury, has requested comments from
Speaker 1: the public on the potential opportunities and risks of digital
Speaker 1: assets and compliance with that executive order. So whenever whenever,
Speaker 1: a lot of times when the government is going to
Speaker 1: create new laws or policies and regulations, they'll put things
Speaker 1: out for a public comment so they can hear what
Speaker 1: the public has to say. It's not quite a vote,
Speaker 1: but at least they're getting information. So a lot of
Speaker 1: times you'll see you know, think tanks and you know
Speaker 1: law firms chime in on this. In the cryptocurrency space,
Speaker 1: it's been common in the past for individual users to
Speaker 1: start flooding on the comments, and that's kind of what's happening.
Speaker 1: And it says in a Tuesday announced with the Treasury
Speaker 1: said it was asking for input from the public that
Speaker 1: will quote inform its work in reporting to the President
Speaker 1: and possible implications of digital assets on the financial markets
Speaker 1: and payment infrastructures. UM so that's something that you can
Speaker 1: do if you would like your voice to be heard.
Speaker 1: It's not gonna be done at the ballot box with
Speaker 1: a vote, It's going to be done through comment like this.
Speaker 1: It says, quote. For consumers, digital assets may present potential
Speaker 1: benefits such as faster payments, as well as potential risks,
Speaker 1: including risks related to frauds and scams. There's always frauds
Speaker 1: and scams. If you need the government to protect you
Speaker 1: from being defrauded or scammed, you should probably go look
Speaker 1: in the mirror again. If you think the government can
Speaker 1: protect you from getting fraud or scammed. Uh, I have
Speaker 1: a bridge to tell you. I've been talking about that
Speaker 1: a lot to tay. Um says the Treasury is seeking
Speaker 1: to benefit from the expertise of the American people and
Speaker 1: market participants by soliciting public comment as we engage in
Speaker 1: the important work. Um, so is buying a lottery ticket
Speaker 1: like I be in a scam? I mean, what's the
Speaker 1: chance of you getting your money back? Uh? They don't
Speaker 1: stop that anyway. The public has until August eight to
Speaker 1: submit comments to the Treasury on what they believe would
Speaker 1: be the implications of this. It says that the potential
Speaker 1: impact of introducing new financial products and services. In addition,
Speaker 1: the Government Department requested Americans waigh in on potential risks,
Speaker 1: including losing private keys and the authenticity of digital assets.
Speaker 1: Think about that, um, The government requested Americans weigh in
Speaker 1: on the potential risks of losing your private keys. So
Speaker 1: the revolution. The revolution is that I can hold my
Speaker 1: assets in a way that can't be c stolen from me.
Speaker 1: And I do that by me taking personal responsibility and
Speaker 1: holding my cryptographic key. I don't have to I can
Speaker 1: I don't have to buy it, I can leave it,
Speaker 1: let someone else management key. But but I have the
Speaker 1: ability to hold my key. But if you lose your key,
Speaker 1: then you know, then you lose your key. So they
Speaker 1: want to They want Americans to weigh in on the
Speaker 1: risks of losing your private key. So if everyone says, well,
Speaker 1: it's way too risky, it's way to risk you should
Speaker 1: do something about feel that they're going to make it
Speaker 1: illegal for you to hold your own keys. Now, think
Speaker 1: long and hard about that. That's what they're talking about.
Speaker 1: That's their words, not mine. Man. You listen to the
Speaker 1: Marktmas show. We're talking about the decentralized Revolution. We're talking
Speaker 1: about bitcoin, cryptocurrencies, macroeconomics, politics as well, talking about US
Speaker 1: Treasury deciding whether you should use cryptocurrencies or if they're
Speaker 1: too risky. I got a lot more to cover in
Speaker 1: a minute when I come back, so don't go away.
Speaker 1: I'll be right back. Hello, welcome back. You are listening
Speaker 1: to the Markma Show. We're talking about the Decentralized Revolution.
Speaker 1: We're talking about bitcoin cryptocurrencies, We're talking about geopolitics, we're
Speaker 1: talking about macroeconomics. We just got done talking about the
Speaker 1: politics side, talking about the Biden administration and the Treasury um.
Speaker 1: And you know how they want to protect you from
Speaker 1: the risks that are in the bitcoin cryptocurrency space. And
Speaker 1: it's not just the US government that wants to protect
Speaker 1: you from your own self. We see in other countries
Speaker 1: as well. The thought of needing the government to protect
Speaker 1: me from myself it kind of makes me mad. I mean,
Speaker 1: the fact that anybody would need would want I should
Speaker 1: say I could see, I could see that some people
Speaker 1: may want it. But the fact that anybody thinks they
Speaker 1: need the government to protect them from theirselves, I guess
Speaker 1: it just kind of shows you where we're at in
Speaker 1: the world today where you know, with great freedom comes
Speaker 1: great responsibility, Like if I have the freedom to hurt myself,
Speaker 1: I have to be responsible enough not to hurt myself. Um.
Speaker 1: I guess the government could take away my freedom to
Speaker 1: hurt myself and they don't have to have the responsibility
Speaker 1: of being able to hurt myself. But is that the
Speaker 1: world that you want to live in? But some people
Speaker 1: do It's it's insane, So I guess the government needs
Speaker 1: to keep doing that. But it seems in saying to me,
Speaker 1: I'd love to hear your thoughts. Hit me up on
Speaker 1: social media at one Mark Moss, just at the number
Speaker 1: one Mark Moss, hit me up on Twitter or Instagram.
Speaker 1: Let me know what you think on that. But we
Speaker 1: can see it's happening in South Africa. This week we
Speaker 1: saw the same thing. Um. The South Africa's Reserve Bank
Speaker 1: will regulate cryptocurrencies as financial assets, and new laws are
Speaker 1: expected to come in over the next twelve months. Now
Speaker 1: regulating as financial assets, I suppose that's okay. That's how
Speaker 1: they're regulated the United States already as financial assets. So
Speaker 1: a lot of people get confused by this. Um. Basically,
Speaker 1: if you buy and sell bitcoin and cryptocurrencies. It's no
Speaker 1: different than buying selling stocks, buying selling gold, buy and
Speaker 1: selling real estate. It's the same thing. It's not a
Speaker 1: big deal. Your normal tax advisors fuel to help you
Speaker 1: with that. UM. It's being taxed as property financial assets.
Speaker 1: Now UM, they're they're similar to that, but they're not that,
Speaker 1: which is where the problem comes in. UM. Bitcoin and
Speaker 1: cryptocurrencies could be and and I believe they will be
Speaker 1: used as payment as currencies. They already are UM throughout
Speaker 1: the world, mostly developing markets, which they definitely are an
Speaker 1: El Salvador where it's actually legal tender UM in the
Speaker 1: Central African Republic they are UM. In Central America they
Speaker 1: are El Salvador. As they said, Panama they are UM.
Speaker 1: In the United States they are as well. A lot
Speaker 1: of people use them. The problem is that in areas
Speaker 1: of the United States where they're regulated as a financial asset,
Speaker 1: then every payment becomes a taxable event. So let's say
Speaker 1: I bought bitcoin whenever, and then I went down to
Speaker 1: Starbucks and I bought I bought a cup of coffee
Speaker 1: with with my bitcoin. Then that's a taxable events and
Speaker 1: I have to figure out, well, when did I buy
Speaker 1: this bitcoin. What was the price at that bitcoin at
Speaker 1: the time, and and then I bought it? So I
Speaker 1: bought I bought five with a bitcoin at this price,
Speaker 1: and then I sold four dollars and twenty seven cents
Speaker 1: at this price. And so how much of that did
Speaker 1: I sell at this price? And what's the taxable event?
Speaker 1: And then I have to fill out tax reform. I mean,
Speaker 1: that's just insanity. So who wants to do that? So
Speaker 1: the problem is, as long as they're classified as financial assets,
Speaker 1: it's gonna greatly reduce the use of them being used
Speaker 1: as currencies because of that onerous regulation. Who wants to
Speaker 1: deal with that? Um that, which is why in the
Speaker 1: African Republic, which is why we've seen in Panama, in
Speaker 1: El Salvado, etcetera, they've they've removed that so now you
Speaker 1: can just buy or not buy it, but you can
Speaker 1: use it freely. It says here the cryptocurrency use in
Speaker 1: South Africa is in a healthy space, with around thirteen
Speaker 1: percent of the population estimated to own some form of cryptocurrency.
Speaker 1: That's a that's a big number. Let me tell you
Speaker 1: why that number is important. When you look at new
Speaker 1: technologies telephone, color TV, washing machine, Internet, whatever. Um. There's
Speaker 1: what's known as the diffusion of innovation, and it shows
Speaker 1: how fast or how long it takes for a new
Speaker 1: technology to reach a level of saturation or a level
Speaker 1: of of you know, people using it. And when you
Speaker 1: look back throughout history and you see all the different
Speaker 1: things with the telephone and the color TV and the Internet, etcetera,
Speaker 1: they all have different time frames and typically you measure
Speaker 1: it to about an eight percent adoption rate and then
Speaker 1: use something called an curve. And so if you look
Speaker 1: at all these in a chart, which I can't show
Speaker 1: you because you don't see it, uh, but if we
Speaker 1: look at that, they all have this escort where they
Speaker 1: kind of move in parallel the bottom very slow adoption cycle,
Speaker 1: very very slow. It moves up slowly, and then there's
Speaker 1: a point, this inflection point, where it starts to move
Speaker 1: up and starts going up vertical pretty quickly. And then
Speaker 1: it goes up vertical for quite a while, and then
Speaker 1: it starts to taper off and it starts to move
Speaker 1: to the right and moves horizontal very slowly. Again. The
Speaker 1: way that s curve works and is reliable or lots
Speaker 1: of different metrics is that typically the time it takes
Speaker 1: to go from zero to ten percent adoption is the
Speaker 1: same amount of time we would take to go from
Speaker 1: ten percent to adoption. So the first ten percent is
Speaker 1: very slow and the last ten percent is very slow.
Speaker 1: The middle typically goes very fast. The reason why is
Speaker 1: is an important number is because the time it took
Speaker 1: to go from zero is the same time it take
Speaker 1: to go from ten to thirty. So we're already asked
Speaker 1: the ten percent adoption um that was reached in about
Speaker 1: two twenty, so that means using s curve, which is
Speaker 1: very reliable, that means that we should see bitcoin and
Speaker 1: cryptocurrency reach an adoption by the end of the decade,
Speaker 1: which for some people might seem like a long way away.
Speaker 1: For some people who don't seem that far, it probably
Speaker 1: depends on how old you are. The older you get,
Speaker 1: the more time goes by fast and so um we
Speaker 1: can see in countries all around the world we've well
Speaker 1: surpassed the ten percent mark in pretty much every country,
Speaker 1: and so we are on track to see about a
Speaker 1: nine adoption rate by the end of the decade. That
Speaker 1: means that this decade is going to change the world
Speaker 1: faster than we've ever realized because it's technology that changes
Speaker 1: the world. If you go back through thousands of years
Speaker 1: of history, it's always one technological advancement that changes the world.
Speaker 1: Let me give you an example. Um, for thousands of years,
Speaker 1: people rode horses. The Roman army, which is the most powerful,
Speaker 1: the biggest army in the world, rode horses. But they
Speaker 1: would ride their horses to the battle. Then they'd get
Speaker 1: off the horse and they'd fight. UM. But in the
Speaker 1: medieval times there was a new technological advancement. It was
Speaker 1: something known as the stirrup. The stirrup allows the rider
Speaker 1: to get on top of the horse and more importantly
Speaker 1: allows them to put their feet into these stirrups on
Speaker 1: a saddle and kind of stand up on the horse
Speaker 1: a little bit. With that new invention, it allowed a
Speaker 1: night with full armor to get up on that horse
Speaker 1: and now sit on that horse and have control with
Speaker 1: his feet. And now they could fight from a horse.
Speaker 1: It seems like they should have that a long time ago,
Speaker 1: but they didn't, and so that changed everything. So now
Speaker 1: one night on a horse could take out a hundred
Speaker 1: peasants or surfs. That technological advancement changed the world. It
Speaker 1: changed warfare as we knew it. Then in the hundreds
Speaker 1: we had something called the gunpowder Revolution, which is guns
Speaker 1: and now one or for one peasant with a gun
Speaker 1: could now take out a hundred nights. And so those
Speaker 1: technolical technological advancements change the balance of power, and then
Speaker 1: it changed the world. And so that's what we're witnessing
Speaker 1: today and we're on track in South Africa and most
Speaker 1: of the world to get to there before the end
Speaker 1: of the decade. It says, with more than six million
Speaker 1: people in the country having cryptocurrency exposure. It's a lot
Speaker 1: but there. But currently it's required to be recognized as
Speaker 1: a financial there anyone who's involved in it is required
Speaker 1: to be a financial service provider. Of course, they want
Speaker 1: to protect against money laundering and tax evasion, of course
Speaker 1: terrorism finance, because they're horrible things. We wouldn't want that
Speaker 1: to happen. But they said, by all definitions, it's cryptocurrencies,
Speaker 1: they're not a currency, it's an asset. It's something that
Speaker 1: is tradeable, is something that is created. Those are true.
Speaker 1: Those are true. But to try to define a brand
Speaker 1: new technological revolution in a in a in a small
Speaker 1: classification like that, it's too small. When when electricity was
Speaker 1: first created, it was sort of like a digital candle,
Speaker 1: and it was that, but it became so much more.
Speaker 1: When the Internet first came out, it was a way
Speaker 1: to send electronic messages. It was that it still is today,
Speaker 1: but it became so much more. And so to say
Speaker 1: it's only an asset, it's not a currency, it's right
Speaker 1: and it's wrong. Yes, it's an asset, but it's so
Speaker 1: much more. Listening to the Mark Mo Show, we're talking
Speaker 1: about the decentralized Revolution, talking about the way the world
Speaker 1: is changing through technology with bitcoin, cryptocurrencies, macroeconomics, geopolitics like
Speaker 1: we're talking about today. I got a lot more to
Speaker 1: cover when I come back in a minute. Um oh,
Speaker 1: I don't know if I can get through it all.
Speaker 1: Don't go away, You're not gonna want to miss what
Speaker 1: I have to say. We're back in a minute. Don't
Speaker 1: go away. Hello, Well, welcome back. You're listening to the
Speaker 1: Mark Mo Show. We're talking about the decentralized Revolution. We're
Speaker 1: talking about the way the world is changing right before
Speaker 1: our very eyes, of course, being led by bitcoin and cryptocurrencies.
Speaker 1: We're talking about it from a geopolitics and a macroeconomic
Speaker 1: viewpoints you can understand exactly what's going on. And we've
Speaker 1: covered a lot of stories today. Um, hopefully you're here listening.
Speaker 1: If not, where are you been. If you're not driving,
Speaker 1: pull your phone, put a reminder to join me on
Speaker 1: this channel at this time each and every week. And
Speaker 1: if you did miss any of it, don't worry. I
Speaker 1: got your back. You can check me out on the podcast.
Speaker 1: Just search Mark Moss Show or Mark Moss Podcast on
Speaker 1: any of your favorite players iTunes or the I Heart
Speaker 1: Radio app or whatever. You'll find me there. Oh and yeah,
Speaker 1: if you wouldn't mind, I'd love a nice review. I
Speaker 1: could share you some extra reviews to get my um
Speaker 1: get a little bump up in the algorithm. Alright, So
Speaker 1: I got a lot to cover. Are already covered a
Speaker 1: lot hopefully. If you've missed some of that, go check
Speaker 1: that out. But the big news this week, and the
Speaker 1: trend that's been kind of going through all the headlines
Speaker 1: has been that we have seen another record cp I print.
Speaker 1: Another inflation number has reached and all time high. Now,
Speaker 1: as I said, we haven't seen this high since forty
Speaker 1: one years. Um. However, that's a really manipulated number and
Speaker 1: the reality is we're higher than we've ever been, um,
Speaker 1: and so it's causing a lot of problems in the marketplace.
Speaker 1: And um, what exactly is going to happen? Well, right now,
Speaker 1: stocks and risk assets, so tech stocks and bitcoin were
Speaker 1: stumbling a little bit, although they seem to pick back up.
Speaker 1: But this, this problem, this this is a big problem,
Speaker 1: and it's important to understand. One of the reasons what
Speaker 1: we talk about bitcoin and the decentralized revolution is because
Speaker 1: nobody should be controlling the money. It's ridiculous that a
Speaker 1: group of people at the Federal Reserve decide when they
Speaker 1: want to increase the money supply and decrease the money
Speaker 1: supply arbitrarily up to them. It's insanity. And if I
Speaker 1: could show you a chart right now, show you a
Speaker 1: chart that shows just how insane it is. Every boom
Speaker 1: and bust we've had since the creation of the Federal
Speaker 1: Reserve has gotten bigger and bigger and bigger. I mean,
Speaker 1: I could just give you an example. So in two
Speaker 1: thousand and eight they had to create seven hundred billion
Speaker 1: dollar is to plug the hole in March. It was
Speaker 1: um not seven billion, it was about seven trillion. Wow,
Speaker 1: it's a big difference. The next one could take twenty trillion,
Speaker 1: so you can start to see the magnitude of these.
Speaker 1: Now some of the things, Uh, I'd like to say
Speaker 1: that inflation, it's not. I don't want to say that.
Speaker 1: The definition of inflation, per the Austrian economist view is
Speaker 1: that inflation is the increase in the money supply. Prices
Speaker 1: going up are the results of that, and we're seeing
Speaker 1: some signs of that all over the place. One of
Speaker 1: the reasons why inflation is so high is because rents
Speaker 1: in the US are rising at their fastest pace since
Speaker 1: six more More says more so the more supply and
Speaker 1: signs of a peak could ease the market. Well, that's
Speaker 1: what this is. I don't agree. It says the gap
Speaker 1: between wage growth and rent increases is narrowing. So for
Speaker 1: this article I read this week, it says rents rose
Speaker 1: in the US last month at the fastest pace since,
Speaker 1: helping to propel overall inflation to a fresh four decade high. Now,
Speaker 1: first of all, this is greatly misunderstated in the CPI
Speaker 1: numbers Like insane um and the next measuring rent of
Speaker 1: a primary residence was zero point eight percent higher in
Speaker 1: June than the month before. An acceleration from the zero
Speaker 1: point six percent increase recorded in May. So, first of all,
Speaker 1: what this is saying is that rents are still going up,
Speaker 1: just at a little bit of a slower number. According
Speaker 1: to the Labor Departments of report on Consumer Prices published Wednesday,
Speaker 1: in the twelve months through June, rents were up five
Speaker 1: point eight percent. Now that's insane. I don't know where
Speaker 1: they get that number from. UM, well I do they
Speaker 1: They got it from the Labor Department. I don't know
Speaker 1: why they're getting that from the labor Department. I would
Speaker 1: think there's be way better places to get that from.
Speaker 1: So it says according to the Labor Department's Report on
Speaker 1: Consumer Prices published Wednesday, in the twelve months through June,
Speaker 1: rents were up. Now, if I go on to rent
Speaker 1: dot com, UM as of June fifteenth, the report was
Speaker 1: last update, says that a monthly look at the average
Speaker 1: rent price trends across the United States. It says that
Speaker 1: year over year, a a two bedroom apartment went up
Speaker 1: by twenty six point eight percent, so about a year
Speaker 1: over year. So how did the labor mark the UM?
Speaker 1: How did the Labor departments report show five point eight
Speaker 1: percent it's a big discrepancy, isn't it. We should probably
Speaker 1: get to the bottom of that. I would think it's
Speaker 1: a pretty big difference. Now, Um, part of the thing
Speaker 1: is that there is no such thing as the real
Speaker 1: estate market. I make this case all the time. There's
Speaker 1: thousands of markets broken up by size, type, everything, And
Speaker 1: we can see that, for example, in the state of California,
Speaker 1: rents went up by on average for the whole state,
Speaker 1: But in Oregon they went up by forty five percent.
Speaker 1: So two in California, fort in Oregon. Now, if I
Speaker 1: go to month, if I go to let's see Nevada,
Speaker 1: they only went up by five percent. These are rents, Okay,
Speaker 1: this is per rent dot com. So okay, Nevada did
Speaker 1: go by five percent. So if I go back to
Speaker 1: this report here, it says that the Labor Department's report says, okay,
Speaker 1: so for Nevada, that's correct. I can see, uh, Nebraska's
Speaker 1: three point six that's pretty good, Okay, Minnesota's five percent,
Speaker 1: Wisconsin six percent. But everywhere else, I mean, Ohio is
Speaker 1: thirty five percent, Pennsylvania's North Carolina's South Carolina's thirty five,
Speaker 1: Florida's forty two Louisiana's thirty eight, Arkansas is thirty five,
Speaker 1: Texas is thirty Uh oh, New Mexico went down, so um,
Speaker 1: it's certainly not an average. The average is twenty seven percent,
Speaker 1: not five percent, so you can see how grossly misunderstated
Speaker 1: this is. The Other thing to keep in mind is
Speaker 1: that rents are a very long lagging indicator because most
Speaker 1: people have a one year lease, some people have two
Speaker 1: or three, and so those rents don't get marked up
Speaker 1: again until that lease ends, So um, we might not
Speaker 1: see the increase of these things for quite some time.
Speaker 1: So it's a it's definitely the wrong major metric to
Speaker 1: look at. He says. The Labor Department measures tends to
Speaker 1: lag behind other estimates, so it's likely that rent increases
Speaker 1: will contribute to rise and inflation in the Consumer Price
Speaker 1: Index through the rest of this year. Now there's a
Speaker 1: big deal because the rent or the owner's equivalent of rent,
Speaker 1: is about I think thirty percent of the CPI basket measurement.
Speaker 1: So if they say it's five percent, but the real
Speaker 1: number is twenty eight percent and it makes up a
Speaker 1: majority of that back skit, then CBI is way higher
Speaker 1: than the nine point one at they're stating we're probably oh, no,
Speaker 1: eleven twelve percent. I should probably do the math on that.
Speaker 1: UM Now, it says the good news is that market
Speaker 1: rents appeared to be topping out. UM. Yeah, right, I
Speaker 1: don't know where. UM now. Again, as I said, these
Speaker 1: are averages, so there are places that went down. As
Speaker 1: a matter of fact, we can see here that UM Austin,
Speaker 1: Texas went up by a hundred and twenty one percent.
Speaker 1: Long Beach, California, went up by six. Tacoma, Washington went
Speaker 1: up by fifty percent. New Jersey, Jersey City went up
Speaker 1: by forty percent. New York, New York, New York went up. Okay,
Speaker 1: but some places went down. So Cleveland, Ohio went down,
Speaker 1: Pittsburgh went down by six, Indianapolis went down by Las Vegas,
Speaker 1: Nevada went down by fourteen percent. So some areas did
Speaker 1: go down while some went up. UM. So you know,
Speaker 1: wherever they're getting their data, it's uh, it's obviously completely wrong.
Speaker 1: And it's not just rents that are the problem. We
Speaker 1: see gasoline prices remain high, nearly higher than the same
Speaker 1: time last year, and it says that it's cutting off
Speaker 1: people's summer leisurely driving. As a matter of fact, they
Speaker 1: say it's keeping more drivers off the road than the
Speaker 1: COVID nineteen pandemic did at the same time two years ago.
Speaker 1: So the FED wants to destroy demand and it looks
Speaker 1: like it's working. People are so broke or feel so
Speaker 1: broke today that they're driving less than they did two
Speaker 1: years ago when they weren't allowed to drive on the roads.
Speaker 1: It's pretty bad. And on top of all that, you're
Speaker 1: being completely lied to about the seat right number because
Speaker 1: the rents are not five percent, they are twenty eight
Speaker 1: percent on average for a two bedroom nationwide. What do
Speaker 1: you think about that? I'd love to hear from you.
Speaker 1: Hit me up on social media at number one. Mark
Speaker 1: moss at one Mark moss Um. If you're listening to
Speaker 1: the Market Mos Show, of course we're talking about the
Speaker 1: decentralized Lucien talking about bitcoin, cryptocurrencies, talking about macroeconomics and geopolitics,
Speaker 1: so you can have more understanding of the world as
Speaker 1: we go through it. That's what I got for you today.
Speaker 1: Thanks for listening.