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Speaker 1: What's up, everybody.

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Speaker 2: Welcome to financial Heresy, where we talk about how money

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Speaker 2: works so that you can make more, keep more, and

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Speaker 2: give more. Today, I've got a fantastic guest on the show.

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Speaker 2: His name is Jeff dist Jeff is the former president

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Speaker 2: of the Mesas Institute. He's a writer, he's a public speaker.

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Speaker 2: We have a fantastic conversation here about economics and politics

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Speaker 2: and growth, and he is currently with the with monetary

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Speaker 2: metals and so really excited for this conversation here and

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Speaker 2: without further ado, let's dive in. All right, Well, thank

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Speaker 2: you so much Jeff for joining me today. Really excited

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Speaker 2: for this conversation. I've been following you for a long

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Speaker 2: time now and so I'm really excited to be able

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Speaker 2: to pick your brain on some of these topics in here.

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Speaker 2: Here's some of the insights that you've been able to

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Speaker 2: build along the way.

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Speaker 1: So thank you, thank you, thank you for having me.

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Speaker 2: Let's start off for those of anybody who is not

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Speaker 2: familiar with a brief outline line of your story and

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Speaker 2: how you got where you are right now.

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Speaker 1: Well, in the nineties I had a friend going to

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Speaker 1: UNLV where Murray Rothbard and Hans Happa taught, and so

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Speaker 1: through him I was introduced to Austrian economics and developed

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Speaker 1: an interest in money and interest rates and issues surrounding money, inflationism,

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Speaker 1: how we finance government, how government finances all kinds of

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Speaker 1: bad things it does. Happa likes to say that the

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Speaker 1: market produces goods, governments and central banks produce bads, but

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Speaker 1: nonetheless they produce these things. And so really I've been

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Speaker 1: interested in economics strictly from a lay perspective. I'm not

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Speaker 1: an economist really since the nineties, so I would say

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Speaker 1: I'm a reasonably well read layman in econ and I

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Speaker 1: have obviously interests in the broader cultural and political program

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Speaker 1: of what we'd like to see as a better or

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Speaker 1: freer society.

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Speaker 2: Mmm. I like that. I've heard you talk about before

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Speaker 2: how how wealth is accumulated, and I really like the

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Speaker 2: way that you framed it. But you know a lot

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Speaker 2: of you know, modern economics, which we'll get into kind

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Speaker 2: of the m MT talk in a little bit, but

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Speaker 2: the kind of it seems like the concept, uh is,

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Speaker 2: is that we we have the ability, through monetary policy

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Speaker 2: or fiscal policy, just basically through policy making, to decide

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Speaker 2: what wealth there is and then decide how to distribute it.

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Speaker 2: And you've talked about kind of a different frame that

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Speaker 2: wealth is built and accumulated over time and kind of

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Speaker 2: passed down even things like knowledge. So can you talk

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Speaker 2: about that that that capital accumulation over time and how

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Speaker 2: that process works contrary to you know, the view that

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Speaker 2: policy just decides.

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Speaker 1: All of that. Well, that that's such a broad question.

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Speaker 1: There are broad and narrow definitions of capital. We can

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Speaker 1: talk about things like human capital and cultural capital, and

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Speaker 1: you know, the knowledge and wisdom and know how and

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Speaker 1: life lessons and understanding of human nature that hopefully we're

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Speaker 1: passing down generation after generation. But there's the narrower Economists

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Speaker 1: talk about capital in the sense of, you know, wealth

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Speaker 1: used to produce income. So we can really view capital

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Speaker 1: in two different ways. But I think most of modern

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Speaker 1: economics is not only doing no good, it's doing a

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Speaker 1: lot of bad in the sense that we have flipped

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Speaker 1: our fundamental understanding on its head, which is that a

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Speaker 1: healthy economy is based on consumption rather than production. So

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Speaker 1: you know, you can go back and talk about mark

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Speaker 1: or you can talk about Canes, you can talk about

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Speaker 1: neoclassicals or Austrians, or you know, any kind of school

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Speaker 1: or brands are thinking in economics that you want to

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Speaker 1: talk about. And then there's the political overlay. But at

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Speaker 1: the end of the day, any economy has to produce,

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Speaker 1: it has to produce goods and services, and so it's

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Speaker 1: from that production that we all have the ability to

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Speaker 1: demand other things. Right, if you and I don't get

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Speaker 1: up in the morning and work for a living and

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Speaker 1: produce some income, we won't have any demand as consumers.

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Speaker 1: Now we might wish for things, I mean, our desires

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Speaker 1: are unlimited. It's our ability to actually produce and purchase

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Speaker 1: things which is finite. And so economies have to produce.

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Speaker 1: And somehow it's absolutely bizarre. It's during the twentieth century

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Speaker 1: is losing sight of that. And so we've developed this

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Speaker 1: idea that fiscal and monetary policy I hate both those terms,

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Speaker 1: but will use them in the normal way that they're used,

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Speaker 1: That economies can be engineered, that they can be commanded,

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Speaker 1: that we can have policy tweaks on things like money

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Speaker 1: and interest rates, the regulatory structure of the tax burden,

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Speaker 1: whatever it might be, and that we can sort of

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Speaker 1: fine tune things. Well, it turns out that really all

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Speaker 1: we can do is destroy capital and destroy production by

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Speaker 1: doing that, and that we at best governments and central

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Speaker 1: mix can get out of the way and set the

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Speaker 1: conditions for human beings to go do what they do. So,

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Speaker 1: you know, I worry a lot about economics because economics

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Speaker 1: is a social science. Unlike the natural sciences, economics is

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Speaker 1: not dealing with molecules or atoms, or gravity or mathematical equations.

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Speaker 1: It's dealing with these strange, stubborn, crazy emotional creatures called humans.

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Speaker 1: And how is it eight billion of them, seven billion

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Speaker 1: of them get up every day in the world and

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Speaker 1: interact with one another. So that's a decidedly social science

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Speaker 1: and in my opinion, not fit for modeling and not

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Speaker 1: fit for aggregates and data. It's a social science and

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Speaker 1: that it's supposed to help us understand human relationships in

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Speaker 1: the world. And I don't think economics does that today.

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Speaker 1: I think it obscures things. I think it forces us

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Speaker 1: into aggregates like GDP and CPI and all these other

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Speaker 1: meaningless ideas. And so when we lose sight of what

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Speaker 1: economics is supposed to be as a discipline or as

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Speaker 1: a field studying human or interaction, and then when you know,

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Speaker 1: we've start to view economies as things that can be

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Speaker 1: commanded or controlled, we really get into a position where

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Speaker 1: we're flying blind. And I think the economics profession today

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Speaker 1: is flying blind. I think central bankers are flying blind.

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Speaker 1: I think politicians are flying blind. And we've got a

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Speaker 1: lot of hope. We've got a lot of hopium in

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Speaker 1: the West. We're rich, and so we'll just always be

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Speaker 1: rich and it doesn't really matter what we do, and

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Speaker 1: incentives don't matter. And we can command things like green energy,

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Speaker 1: we can command things like a living wage, we can

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Speaker 1: command things like income equality, we can command things like

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Speaker 1: prosperity on the third world. And none of these things

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Speaker 1: are true. So we're living in this opium time and uh,

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Speaker 1: you know, I've got a couple of teenagers and they,

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Speaker 1: you know, their future and their material well being done there.

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Speaker 1: That's that's my number one concern.

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Speaker 2: Now, do you think it's it's difficult for me to

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Speaker 2: uh to play the devil's advocate here, but I'm going

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Speaker 2: to try. Do you think that the idea is you

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Speaker 2: know that that most people agree that if you have

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Speaker 2: policies that are bad enough, you can destroy you can

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Speaker 2: destroy wealth. And so the idea would be Hey, we

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Speaker 2: are doing things incorrectly right here. You think we should

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Speaker 2: go one way, Let's say modern monetary theorists suggests we

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Speaker 2: should go another way, and the debate is on which

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Speaker 2: one of those will produce the Well, we'll we'll create

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Speaker 2: the foundation that will help produce the most manwealth. For instance,

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Speaker 2: like you mentioned, like the living wage thing, if we

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Speaker 2: just make it a law that the minimum wage is

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Speaker 2: fifty thousand dollars per year, and just that the downstream

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Speaker 2: effects of that, while there is a cost to that

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Speaker 2: will will be will be, those costs will be offset

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Speaker 2: by the net benefits.

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Speaker 1: Well, I would say, not only do we not agree

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Speaker 1: on systems or approaches, I'm not so sure we agree

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Speaker 1: on goals. I think there are plenty of people in

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Speaker 1: the progressive left who would say, no, no, no, A

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Speaker 1: wealthier society in total is not the goal. The goal

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Speaker 1: is a fairer society where the existing wealth is distributed

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Speaker 1: more evenly, and we would actually accept less total wealth

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Speaker 1: in exchange for more parody in how to get point right?

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Speaker 1: So you know, at some point it's awfully hard to

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Speaker 1: imagine a political compromise or an economic program that we're

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Speaker 1: going to work out with people who just fundamentally see

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Speaker 1: the world so differently. And that's why I'm a huge

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Speaker 1: advocate of any sort of political decentralization, of moving away

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Speaker 1: from central banks and central governments, allowing more regional or

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Speaker 1: local control over economics matters. I might not get my

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Speaker 1: wish there, but nonetheless, you know, so I'm not so

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Speaker 1: sure that there's a way to, let's say, persuade MMTS

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Speaker 1: at this point. I'm more interested in separation and persuasion

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Speaker 1: because look, the broad strokes of a libertarian political program,

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Speaker 1: the broad strokes of a laissez faire economic program have

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Speaker 1: been laid out for over one hundred years, and with

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Speaker 1: the digital era, there's no longer you know this idea

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Speaker 1: that well, people just haven't heard these ideas or they

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Speaker 1: haven't been exposed to it. I mean, you can basically

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Speaker 1: be exposed to any kind of political or economic thinking

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Speaker 1: for free at your fingertips on your phone today if

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Speaker 1: you care to take the time. So I think we

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Speaker 1: have to understand that to an extent here, we're moving

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Speaker 1: beyond persuasion. The the irony of the digital information age

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Speaker 1: is it hasn't caused people to become more open mind.

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Speaker 1: It's caused them to dig in and and and dig

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Speaker 1: into their to their priors. We might say, so, I'm

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Speaker 1: not confident that our time, and when I say I

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Speaker 1: mean like minded people, that our time is well spent

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Speaker 1: trying to convince m mters of the insanity of their perspective.

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Speaker 1: I think it's better to acknowledge that they're just wired differently.

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Speaker 1: They believe things which which we fundamentally disagree with, and

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Speaker 1: try to go about building things, you know, on our

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Speaker 1: own where we can. I think that idea of kind

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Speaker 1: of decentralization bottom up, you know, or even just you

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Speaker 1: do you, I do me, parallel societies. I think.

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Speaker 2: We'll touch on that a couple of times. So at

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Speaker 2: the rest of this conversation, the first place I'd like

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Speaker 2: to dive into that a little bit more is the

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Speaker 2: idea of let's say, either secession or national divorce. It

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Speaker 2: seems like in the last year or so, I've noticed

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Speaker 2: a few times where that conversation gets brought up, you know,

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Speaker 2: on a you know, by a major politician or a

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Speaker 2: person who has a large audience, and it seems like

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Speaker 2: there's always a huge backlash against that, when, in my opinion,

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Speaker 2: I look at that and think, well, that means everybody

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Speaker 2: gets what they want. Like you, you get to try

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Speaker 2: out what you want. I get to try out what

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Speaker 2: I want. What do you think the root cause of

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Speaker 2: that backlash is? And do you think that we will

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Speaker 2: end up getting there either by choice or through just

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Speaker 2: the current system breaking?

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Speaker 1: Oh gosh, it's so hard to say. On the one hand,

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Speaker 1: we don't want the Balkanization of the West or of

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Speaker 1: America because of the potential for violence that would come

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Speaker 1: with that. But on the other side, we don't want

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Speaker 1: to be vanquished by progressives. And progressives tend to not

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Speaker 1: want to give up any control over any area. They

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Speaker 1: view their program as inevitable, as part of a deterministic

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Speaker 1: arc of human history, the wig theory, we might say.

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Speaker 1: And so when you start to say, look, progressives, you

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Speaker 1: could have everything you want right here and right now,

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Speaker 1: but only in certain states and then let these other

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Speaker 1: states be their way, they tend to say no to

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Speaker 1: that bargain. Now. But could a greater degree of more

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Speaker 1: aggressive federalism alleviate some of these things we're feeling, And

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Speaker 1: I'll speak to America in particular. I think the answer

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Speaker 1: is yes. I think we saw during COVID, a lot

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Speaker 1: of soft secession happening, people voting with their feet. Obviously,

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Speaker 1: places like Florida and Phoenix and Dallas, Fort Worth and

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Speaker 1: Austin just absolutely boomed during COVID. A lot of places

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Speaker 1: like New York and New Jersey and certain cities in

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Speaker 1: California hemorrhaged residents during that same period. So, regardless of

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Speaker 1: what people say, we like to watch what they do,

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Speaker 1: for one, but more importantly, you know, at some point,

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Speaker 1: I think we just have to say, the country's too big,

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Speaker 1: it's two and wielded to have let's say, one Supreme

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Speaker 1: Court decision of five justices making rules that three hundred

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Speaker 1: and thirty million people have to live by concerning abortion

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Speaker 1: or concerning guns. You know, maybe we could have different

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Speaker 1: rules for guns in Manhattan than we do in the

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Speaker 1: middle of nowhere in Alaska. You know, there's is you know,

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Speaker 1: kind of a I don't mean to be trite, but

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Speaker 1: there's an example of where federalism just makes sense to

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Speaker 1: most people. So I view federalism the kind of aggressive

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Speaker 1: federalism that really the original Costitution I think was designed

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Speaker 1: for with a ninth and tenth Amendment as a path,

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Speaker 1: I'm not sure that we can sell that, but it's

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Speaker 1: better than any other idea I have at the moment.

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Speaker 1: Let me put you that way.

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Speaker 2: Yeah, yeah, that makes sense. So can you can you

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Speaker 2: explain just very very briefly, just you know, basically that

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Speaker 2: idea of federalism versus and I don't even know if

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Speaker 2: I'm making a right comparison here libertarianism versus anarchical capitalism. Like,

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Speaker 2: what what you mean when you say federalism.

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Speaker 1: Well, to me, federalism simply contemplates devolving power away from

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Speaker 1: the central government in any system and increasing authority or

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Speaker 1: power more locally or regionally. That doesn't mean it would

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Speaker 1: always provide a better answer necessarily, but we could look

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Speaker 1: at Switzerland as a great example of an explicitly federalist system.

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Speaker 1: We're so much is designed not at the federal level,

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Speaker 1: not even at the cantonal level, which is the equivalent

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Speaker 1: of our US states, but the commune level, the communal level,

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Speaker 1: which is the equivalent of our cities. And here in

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Speaker 1: the US our tax were intends to run about eighty

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Speaker 1: percent federal, maybe twenty percent state, And well in Switzerland

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Speaker 1: it's flipped, so you have more of a say over

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Speaker 1: presumably the local happenings or local affairs, especially if you

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Speaker 1: tend to if you're in a smaller commune or something.

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Speaker 1: In Switzerland, down to even questions of immigration, local communal

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Speaker 1: votes can have an effect on whether someone's allowed to

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Speaker 1: become a Swiss citizen, for example, or a Swiss resident,

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Speaker 1: whereas in the US and most western countries, immigration, which

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Speaker 1: is a really thorny question, is entirely at the national level.

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Speaker 1: So I think Switzerland and its constitution. If you go

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Speaker 1: to the Swiss government's website, which is of course in

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Speaker 1: four languages, five languages, it's got some really interesting language

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Speaker 1: about the principle of subsidiarity and how the Swiss view

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Speaker 1: this is a way of de escalating social problems, and

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Speaker 1: I think we could learn a lot from that. But

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Speaker 1: you know, federalism is simply to me working within our

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Speaker 1: current federal system where we have the three branches of government,

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Speaker 1: YadA YadA, and saying, hey, look, Article one, section eight

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Speaker 1: of the Constitution grants Congress really pretty limited powers, enumerate

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Speaker 1: in powers, and basically anything not listed under Article one,

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Speaker 1: section eight. In my opinion, Congress is not supposed to

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Speaker 1: be legislating about. Now, Okay, that you know, virtually everything

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Speaker 1: they legislate is wildly beyond their Article one section eight powers.

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Speaker 1: But nonetheless you can use that as a as a

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Speaker 1: guiding north star and say, okay, we've got Article one,

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Speaker 1: section eight, how does that work with the ninth and

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Speaker 1: tenth amendments and g whiz. A lot more ought to

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Speaker 1: be done at the stage or even local level. And

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Speaker 1: I think that's that there's a lot of promise there,

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Speaker 1: because again I don't I don't want to vanquish progressives.

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Speaker 1: You know, progressives exist, they exist in large numbers, and

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Speaker 1: I don't necessarily just mean that in the left or

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Speaker 1: right idea of the term progressive. I mean more on

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Speaker 1: the idea that we have to constantly be perfecting humans

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Speaker 1: so that they can serve the state better. That you know,

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Speaker 1: I don't I don't really care to vanquish progressives. And

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Speaker 1: I understand that subsidiarity or federalism is imperfect in the

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Speaker 1: sense that you might be that non progressive person stuck

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Speaker 1: in a really progressive district, let's say, really progressive part

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Speaker 1: of the country, let's say the San Francisco Bay Area,

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Speaker 1: and before Jeff's idea of federalism came along, or aggressive federalism.

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Speaker 1: You know, more things were decided in Washington, d C.

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Speaker 1: And now that some of those things are decided in

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Speaker 1: Sacramento or even San Francisco City Hall, and you know,

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Speaker 1: so I feel even worse off. Yes, there are going

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Speaker 1: to be casualties of federalism, but overall, I think it

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Speaker 1: is a workable approach within the framework of national, state

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Speaker 1: and local government we have, within the framework of the

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Speaker 1: constitution we have. So it's not scary to people. It's

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Speaker 1: you know, it takes us away from this idea that

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Speaker 1: we're you know, having a civil war, a cold civil war.

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Speaker 1: Takes us away from this idea of scary secession in

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Speaker 1: the civil war and all the things that that conjus up.

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Speaker 1: So you know, better, not perfect, I think is how

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Speaker 1: we out of view federalism.

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Speaker 2: And it exists within the current system, So that makes

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Speaker 2: that makes sense. Okay, Now you mentioned an issue that

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Speaker 2: seems like it is becoming extremely contentious recently, which is

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Speaker 2: which is immigration. And uh, you know, different administrations have,

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Speaker 2: you know, handled it different ways. It seems like immigration

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Speaker 2: right now, illegal immigration is probably higher than it's been

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Speaker 2: in h in a while. So this is something that

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Speaker 2: I think there's even it seems like big disagreement on

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Speaker 2: in like libertarian circles. You know, this idea of open

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Speaker 2: borders versus versus closed borders. What are your thoughts on that,

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Speaker 2: and how do you know, like property rights and public property,

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Speaker 2: how do you deal with that.

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Speaker 1: Yeah, it's a very tough question because there's been so

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Speaker 1: many layers added to the onion over the years. You know,

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Speaker 1: it's a very different environment than nineteen hundred when people

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Speaker 1: would come here almost penniless, with no ability to return

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Speaker 1: necessarily and no real welfare state to speak of, and

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Speaker 1: you know, really wide open parts of the country for

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Speaker 1: homesteading or whatever it might be, or for growth. So yeah,

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Speaker 1: it is authority question. It's made thornier by the fact

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Speaker 1: that we don't have, in my opinion, strong property rights

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Speaker 1: to the United States, We have a welfare state, we

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Speaker 1: have these other complicating factors. But I really think that

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Speaker 1: there's a neat and simple and elegant approach to it,

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Speaker 1: which is simply sponsorship, which is to say that immigrants

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Speaker 1: either on their own have to obtain a bond by

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Speaker 1: saving up enough money or whatever to purchase such a bond,

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Speaker 1: or through sponsorship. That could be anything from family in

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Speaker 1: the US to an organization like Catholic charities. Any number

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Speaker 1: of sponsors in America could simply fit the bill for

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Speaker 1: their bond, and that bond would guarantee or trigger against

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Speaker 1: any criminal or welfare activity by the immigrant, let's say,

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Speaker 1: for the first ten years of his or her time

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Speaker 1: in the United States, and then also extinguish or put

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Speaker 1: off any citizenship or voting rights for extended period, so

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Speaker 1: that the immigrant could effectively prove that he or she

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Speaker 1: had assimilated, that he or she was not a criminal

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Speaker 1: or welfare burden on the United States. And this would

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Speaker 1: eliminate a lot of the national control uh you know,

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Speaker 1: I n ass and all that, and simply you know,

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Speaker 1: I mean, a bond simply means that there's someone here

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Speaker 1: inviting them, willing to vouch. That's the difference between you know,

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Speaker 1: goods and services, when when we advocate for free market

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Speaker 1: trade and goods coming into the United States, by definition

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Speaker 1: someone's ordered them, you know, and goods don't have volition

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Speaker 1: to go do things once they're here, unlike humans. So

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Speaker 1: you know, this sponsorship idea of I think is the

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Speaker 1: most humane and sensible and workable compromise we might have

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Speaker 1: in the short term, the idea of bonding and sponsoring immigrants.

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Speaker 1: But yeah, I think it's going to be you know,

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Speaker 1: what we've seen in Israel over the past couple weeks

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Speaker 1: has probably done some injury to the open borders narrative here.

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Speaker 1: And you know, I think the nation state, for all

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Speaker 1: of it's good and bad, plenty of bad there. I

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Speaker 1: think the nation state, the idea of a sovereign nation state,

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Speaker 1: is going to be more stubborn and more enduring than

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Speaker 1: the Francis Fukuyamas thought it was. I mean, if you

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Speaker 1: told Woodrow Wilson over one hundred years ago now that

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Speaker 1: the nation state would still be the central organizing principle

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Speaker 1: for most of the world by twenty twenty three, I

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Speaker 1: think he would have been surprised and shocked, probably unhappy.

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Speaker 1: But so the fact that, you know, a lot of

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Speaker 1: states are drawn along artificial borders, like what we've done

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Speaker 1: in Iraq in the Middle East is a prime example

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Speaker 1: of that. So nations and states are not contiguous. But

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Speaker 1: I do think that there is a stubborn human tendency

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Speaker 1: to group. We can call that a nation for lack

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Speaker 1: of a better term, where that's racial, linguistic cultural, ethno religious,

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Speaker 1: whatever it might be, and that these attachments are not

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Speaker 1: so simply done away with with some sort of globalist project,

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Speaker 1: and that if we're going to be good praxeologists, or

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Speaker 1: if we're going to have you know, hopefully a fewer

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Speaker 1: wars and conflicts, fewer mass migrations causing problems, all that

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Speaker 1: that we ought to you know, understand human nature and

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Speaker 1: accept it for what it is and work within it.

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Speaker 1: So I personally am not an open borders advocate. I

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Speaker 1: don't in my opinion, and there's differences, you know, to

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Speaker 1: even within my own firm, Monitary Metals on this, and

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Speaker 1: you know where I used to work at the Mesa's Institute.

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Speaker 1: There are certainly differences of opinion there. But I don't

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Speaker 1: believe that open borders is a principle. I think it's

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Speaker 1: a policy, and I think that policy depends. I think

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Speaker 1: the right to leave a place, in other words, to

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Speaker 1: not be a slave or to be falsely imprisoned, is

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Speaker 1: different than the right to enter a place. And so

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Speaker 1: I do not fall into the open border's crowd, but

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Speaker 1: I certainly understand the sentiment, and so the the the

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Speaker 1: sponsorship thing is my stab at an approach.

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Speaker 2: I like that, and a lot of the things that

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Speaker 2: you're talking about are kind of you know, from the

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Speaker 2: perspective of, uh, there's you know, in my mind, maybe

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Speaker 2: some ideal that we that is hypothetically possible, but looking

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Speaker 2: at the world realistically, there's a very very small chance

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Speaker 2: we could ever actually approach that. So given where we

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Speaker 2: are currently in our current reality, here's a solution that

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Speaker 2: I think would move us in the right direction. And

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Speaker 2: it's actually a solution that is is doable with with

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Speaker 2: that kind of with that kind of you know, frame

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Speaker 2: of reference. Looking at something like fiat money, it seems

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Speaker 2: like sometimes there's nothing that that can be can be done.

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Speaker 2: It's like the dollar is so entrenched around the world

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Speaker 2: that it almost seems like, you know, any any solution

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Speaker 2: or suggestion to try and move in the right direction

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Speaker 2: is you know, just as has low of likelihood. Is

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Speaker 2: something that we would say, okay, return to a you know,

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Speaker 2: one hundred percent gold standard tomorrow or something like that.

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Speaker 2: So getting into the kind of this idea of of

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Speaker 2: of money, can you talk a little bit about you know,

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Speaker 2: we have you know, the the you know, debate about

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Speaker 2: currency versus money. It's just government money versus market money.

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Speaker 2: What are the differences between those two and kind of

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Speaker 2: how did we get to where we are today with

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Speaker 2: this terrible money entrench in our system that we can't

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Speaker 2: escape from.

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Speaker 3: Well, it's a it's a sad tale, you know, but

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Speaker 3: part of the reason we got there in America is

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Speaker 3: that we've had it so good for so long that

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Speaker 3: the average American hasn't had to think.

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Speaker 1: Much about money. Right, the US dollar was a pretty

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Speaker 1: strong performer, to put it mildly, and our status is

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Speaker 1: the world's reserve currency, as you know, has allowed us

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Speaker 1: to export a lot of inflation. And it turns out

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Speaker 1: that when you go to Walmart and flip flops or

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Speaker 1: six bucks, you know, that's pretty nice. That makes Americans

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Speaker 1: feel wealthier, and in fact, we are wealthier as a

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Speaker 1: result of the dollar is the world's reserve currency. The

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Speaker 1: problem is that we've been sleepwalking for so long that

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Speaker 1: the troubles, the cracks are starting to show in the foundation,

432
00:26:43,359 --> 00:26:46,560
Speaker 1: and we don't even really know what money is conceptually.

433
00:26:46,600 --> 00:26:48,639
Speaker 1: I think as a society we've lost sight of that.

434
00:26:48,760 --> 00:26:52,520
Speaker 1: We now view money as a creation of government. It's

435
00:26:52,920 --> 00:26:57,639
Speaker 1: a political tool. It's a carrot and a stick. Sometimes

436
00:26:57,640 --> 00:27:02,440
Speaker 1: it's literally bombs and tanks and plays. Sometimes it's literally

437
00:27:02,680 --> 00:27:05,399
Speaker 1: welfare in the form of foreign aid. So that's the

438
00:27:05,440 --> 00:27:09,639
Speaker 1: care and the stick. And we've completely lost sight of

439
00:27:09,680 --> 00:27:13,240
Speaker 1: the idea that money originally arose as the most saleable

440
00:27:13,280 --> 00:27:19,520
Speaker 1: commodity in an economy, with that convenient from salt to seashells,

441
00:27:19,560 --> 00:27:24,520
Speaker 1: to gold to silver, and then ultimately to fiat, maybe

442
00:27:24,520 --> 00:27:29,680
Speaker 1: some day to bitcoin. So the idea of what money is,

443
00:27:30,160 --> 00:27:33,680
Speaker 1: I think, has been largely lost on Western audiences. More importantly,

444
00:27:33,800 --> 00:27:38,119
Speaker 1: or as importantly, I should say, money, credit, and interest rates,

445
00:27:38,960 --> 00:27:41,840
Speaker 1: three very separate and distinct things have sort of become

446
00:27:41,960 --> 00:27:45,080
Speaker 1: glombed together in people's minds. Again, interest rates are a

447
00:27:45,119 --> 00:27:49,919
Speaker 1: policy tool, something to be set by central banks. You know,

448
00:27:50,240 --> 00:27:55,520
Speaker 1: the difference between money and debt's what's actual money versus

449
00:27:55,600 --> 00:27:59,800
Speaker 1: what's a credit instrument. Well, a dollar wasn't Originally money

450
00:28:00,160 --> 00:28:04,280
Speaker 1: was a note that you were able to redeem for money.

451
00:28:04,680 --> 00:28:07,320
Speaker 1: It was the coupon that you could go get real money. Goal.

452
00:28:07,440 --> 00:28:10,159
Speaker 1: But then eventually the dollar, the paper dollar, became the

453
00:28:10,200 --> 00:28:13,600
Speaker 1: thing unto itself, and that was when in people's minds,

454
00:28:13,640 --> 00:28:18,560
Speaker 1: in our conception, the idea of commodity money was really severed.

455
00:28:19,160 --> 00:28:23,040
Speaker 1: And you know, now that's at least, you know, since

456
00:28:23,040 --> 00:28:25,960
Speaker 1: the nineteen thirties, so almost one hundred years now, and

457
00:28:25,960 --> 00:28:29,920
Speaker 1: then things accelerated with Bretton Woods, things accelerated in nineteen

458
00:28:29,960 --> 00:28:34,080
Speaker 1: seventy one with Richard Nixon. So now we've all just

459
00:28:34,119 --> 00:28:37,720
Speaker 1: gotten used to the dollar as this political tool. And so,

460
00:28:39,040 --> 00:28:41,840
Speaker 1: as you said, it's awfully hard to get away from that,

461
00:28:41,920 --> 00:28:44,320
Speaker 1: and the rest of the world might wish to get

462
00:28:44,320 --> 00:28:48,920
Speaker 1: away for that. People are geopolitical enemies, so to speak, China, Russia,

463
00:28:49,600 --> 00:28:52,520
Speaker 1: the bricks. However you want to look at it. In

464
00:28:52,600 --> 00:28:57,120
Speaker 1: the long run, Iran, they might all benefit very much

465
00:28:57,760 --> 00:29:01,240
Speaker 1: from seeing the US dollar knocked up. However, in the

466
00:29:01,240 --> 00:29:04,480
Speaker 1: short run, they got lots of dollars themselves, or they

467
00:29:04,480 --> 00:29:09,480
Speaker 1: have lots of treasury bills themselves. So it's a very strange,

468
00:29:09,720 --> 00:29:15,560
Speaker 1: almost pregnant situation where, you know, we've never really seen

469
00:29:15,640 --> 00:29:19,840
Speaker 1: the world's reserve currency, at least not a Fiat one crash.

470
00:29:20,160 --> 00:29:23,880
Speaker 1: The Spanish managed to produce too much sober for a period,

471
00:29:24,680 --> 00:29:27,640
Speaker 1: and so that's kind of the historical example. But for

472
00:29:27,680 --> 00:29:32,600
Speaker 1: the most part, we don't know what a sovereign, what

473
00:29:32,680 --> 00:29:36,000
Speaker 1: a global currency crisis looks like we know what happens

474
00:29:36,240 --> 00:29:39,720
Speaker 1: when the Deutsche mark flames out in Wymer, Germany. We

475
00:29:39,760 --> 00:29:43,000
Speaker 1: know what happens when the Argentine peso goes south in

476
00:29:43,040 --> 00:29:46,280
Speaker 1: the late nineties. We know what's happened in Venezuela in

477
00:29:46,440 --> 00:29:49,000
Speaker 1: just the recent the past five years or so. You know,

478
00:29:49,080 --> 00:29:55,360
Speaker 1: we understand what currents hyper what devaluation or hyper inflation

479
00:29:55,440 --> 00:29:59,280
Speaker 1: looks like at the national level where we can isolate

480
00:29:59,320 --> 00:30:04,040
Speaker 1: it and observe it visa these other currencies, visavise trying

481
00:30:04,080 --> 00:30:07,040
Speaker 1: to bring imports into those countries. Heck, even Turkey right

482
00:30:07,080 --> 00:30:11,080
Speaker 1: now is really in a bad place with their currency

483
00:30:11,120 --> 00:30:13,560
Speaker 1: relative to the Euro and the dollar. But what we

484
00:30:13,720 --> 00:30:16,480
Speaker 1: don't really know, and what is above my pay grade,

485
00:30:17,320 --> 00:30:20,320
Speaker 1: is what happens when the world's reserve currency melts down.

486
00:30:20,360 --> 00:30:23,840
Speaker 1: And I can only imagine it melts down relative to

487
00:30:23,920 --> 00:30:30,800
Speaker 1: actual goods and services oil, food, commodities, gold, et cetera.

488
00:30:30,960 --> 00:30:36,720
Speaker 1: And that's that's a scary day. And so I'd like

489
00:30:36,840 --> 00:30:41,640
Speaker 1: to think that we, as rational people would work today

490
00:30:41,920 --> 00:30:45,560
Speaker 1: to try to prevent that from happening, and we would

491
00:30:45,560 --> 00:30:49,160
Speaker 1: take steps today to try to gain some control over

492
00:30:49,200 --> 00:30:52,480
Speaker 1: our monetary system. But it doesn't look like it doesn't

493
00:30:52,520 --> 00:30:54,640
Speaker 1: look like Congress is ever going to stop spending. It

494
00:30:54,640 --> 00:30:57,760
Speaker 1: doesn't look like the Fed and the Treasury in combination

495
00:30:58,360 --> 00:31:01,320
Speaker 1: are ever going to stop printing. Why you use that

496
00:31:01,320 --> 00:31:09,160
Speaker 1: euphemistically electronically in producing and increasing the amount of dollars

497
00:31:09,200 --> 00:31:12,920
Speaker 1: circulation M two. The empty money spot was actually going

498
00:31:12,960 --> 00:31:14,880
Speaker 1: down there for the first time in about forty years.

499
00:31:14,880 --> 00:31:18,920
Speaker 1: It's gone back up. You know. Interest rates have shot

500
00:31:19,000 --> 00:31:24,320
Speaker 1: up enormously since that forty year basic fall for eighty

501
00:31:24,360 --> 00:31:27,240
Speaker 1: two to twenty twenty two, and so now we find

502
00:31:27,240 --> 00:31:32,160
Speaker 1: ourselves in the very uncharted territory of having the safest

503
00:31:32,240 --> 00:31:37,640
Speaker 1: collateral of all the US Treasury bond actually becoming a

504
00:31:37,720 --> 00:31:42,200
Speaker 1: risky investment because if you hold treasuries issued at three

505
00:31:42,200 --> 00:31:45,760
Speaker 1: percent and now they're paying five, you're badly underwater on

506
00:31:45,800 --> 00:31:48,480
Speaker 1: your holdings. A lot of small banks for funding that out.

507
00:31:48,560 --> 00:31:52,880
Speaker 1: So it really is just a crazy time because there's

508
00:31:52,920 --> 00:31:56,280
Speaker 1: so many forces at work that are at odds with

509
00:31:56,320 --> 00:32:01,120
Speaker 1: each other. I don't think the US dollar crash anytime soon.

510
00:32:02,000 --> 00:32:07,160
Speaker 1: I think, if anything, tremors in the global economy still

511
00:32:07,320 --> 00:32:11,640
Speaker 1: lead to what's perceived as a flight to safety, which

512
00:32:11,760 --> 00:32:15,320
Speaker 1: is still the US dollar relative to other assets and

513
00:32:17,440 --> 00:32:20,520
Speaker 1: you know, for the moment, I think people holding dollars

514
00:32:21,000 --> 00:32:23,720
Speaker 1: are probably wise and there may be some bargains to

515
00:32:23,760 --> 00:32:26,080
Speaker 1: be had if a real crash comes. A lot of

516
00:32:26,080 --> 00:32:29,520
Speaker 1: people got very wealthy during the Great Depression because instead

517
00:32:29,520 --> 00:32:33,960
Speaker 1: of being debtors, they had cash. And let me just say,

518
00:32:33,960 --> 00:32:37,040
Speaker 1: as an aside to your listeners, I strongly recommend to

519
00:32:37,080 --> 00:32:40,840
Speaker 1: the extent you're able to have one thousand, five twenty

520
00:32:40,880 --> 00:32:44,880
Speaker 1: thousand dollars in physical cash. You know, look, I'm no

521
00:32:44,960 --> 00:32:47,600
Speaker 1: fan of the to be a dollar, but paper money hidden,

522
00:32:48,240 --> 00:32:51,080
Speaker 1: you know, spaced around your home, so that if there

523
00:32:51,080 --> 00:32:55,080
Speaker 1: were ever a bank holiday, a bank shutdown, some kind

524
00:32:55,240 --> 00:33:00,239
Speaker 1: of national emergency, you know, another COVID, a terrorist events

525
00:33:00,280 --> 00:33:02,720
Speaker 1: are things that could prevent you from getting access to

526
00:33:02,920 --> 00:33:08,040
Speaker 1: your dollars, and the digital payment systems might fail. I

527
00:33:08,040 --> 00:33:10,520
Speaker 1: think having some cash on hand to go deal with

528
00:33:10,560 --> 00:33:12,400
Speaker 1: the rest of the world in the in the immediate

529
00:33:12,400 --> 00:33:13,640
Speaker 1: short term is a great idea.

530
00:33:15,760 --> 00:33:19,520
Speaker 2: Yeah, yeah, that makes sense, especially considering money is pretty

531
00:33:19,560 --> 00:33:22,440
Speaker 2: much all digital. Even something as simple as a cyber attack,

532
00:33:23,360 --> 00:33:26,040
Speaker 2: which you know, not not simple, but it could render

533
00:33:26,120 --> 00:33:31,720
Speaker 2: even temporarily your digital money inaccessible, So that certainly makes sense.

534
00:33:33,120 --> 00:33:35,600
Speaker 2: There's I believe This is a quote from Mesus and

535
00:33:35,640 --> 00:33:38,480
Speaker 2: I could be butchering this, but it's something to the

536
00:33:38,520 --> 00:33:43,400
Speaker 2: effect of that, over long enough time horizon, every government

537
00:33:43,640 --> 00:33:49,000
Speaker 2: only exists at the consent of the governed. And so

538
00:33:49,200 --> 00:33:51,240
Speaker 2: a correct me, I'm the head if I'm wrong. But

539
00:33:51,240 --> 00:33:53,560
Speaker 2: but b do you think that that sentiment also applies

540
00:33:53,600 --> 00:33:58,280
Speaker 2: to money, That even money imposed on a system through

541
00:33:58,520 --> 00:34:02,920
Speaker 2: you know, declaration by law, over a long enough time horizon,

542
00:34:03,120 --> 00:34:05,960
Speaker 2: it becomes market money. I mean, if you look at

543
00:34:05,960 --> 00:34:08,640
Speaker 2: what's happening in Lebanon right now, one of the worst

544
00:34:08,719 --> 00:34:11,640
Speaker 2: rates of inflation. They try and get rid of the pounds,

545
00:34:11,680 --> 00:34:15,080
Speaker 2: and they get try and get dollars. So do you

546
00:34:15,080 --> 00:34:18,040
Speaker 2: think that sentiment somewhat applies And I or did I

547
00:34:18,040 --> 00:34:18,880
Speaker 2: completely butcher it?

548
00:34:19,360 --> 00:34:22,799
Speaker 1: No, Misas did say that talking about governments are as

549
00:34:22,800 --> 00:34:27,360
Speaker 1: liberal as illiberal over time as their citizens will accept.

550
00:34:27,360 --> 00:34:30,400
Speaker 1: And I think that's true. And you know, we like

551
00:34:30,480 --> 00:34:33,040
Speaker 1: to joke about that in America. Oh you know, as

552
00:34:33,040 --> 00:34:35,400
Speaker 1: long as you have your social media and your NFL

553
00:34:35,440 --> 00:34:39,239
Speaker 1: football and your Budweise, your Americans are so you know,

554
00:34:39,280 --> 00:34:43,799
Speaker 1: they'll never rise up and wise up. And you know

555
00:34:44,120 --> 00:34:47,840
Speaker 1: then no, I mean that that to me is ridiculous.

556
00:34:48,000 --> 00:34:50,759
Speaker 1: There's nothing wrong with that. You know, if people are

557
00:34:50,760 --> 00:34:55,160
Speaker 1: materially comfortable, we don't all have to be these hyper

558
00:34:55,239 --> 00:35:00,000
Speaker 1: political animals spending all of our time thinking about monetary

559
00:35:00,080 --> 00:35:02,640
Speaker 1: policy or something like that. I mean, people have mortgages,

560
00:35:02,680 --> 00:35:05,880
Speaker 1: they have kids, they have school, they have health problems.

561
00:35:05,920 --> 00:35:06,120
Speaker 2: You know.

562
00:35:06,520 --> 00:35:09,440
Speaker 1: I think sometimes people in our camp tend to be

563
00:35:09,640 --> 00:35:13,840
Speaker 1: a little dismissive towards average folks. I mean, the dollars

564
00:35:13,920 --> 00:35:17,000
Speaker 1: works pretty darn well for average folks up until the

565
00:35:17,080 --> 00:35:21,520
Speaker 1: last last averages COVID and all the all the stimulus

566
00:35:21,560 --> 00:35:24,920
Speaker 1: that set inflation to a hyperdrive. But you know, the

567
00:35:25,000 --> 00:35:28,040
Speaker 1: dollars work pretty well. And so I think Mesi's was

568
00:35:28,200 --> 00:35:32,440
Speaker 1: largely correct. I think it's human nature to go along

569
00:35:32,520 --> 00:35:36,040
Speaker 1: with something as long as it's not too onerous. A

570
00:35:36,160 --> 00:35:39,760
Speaker 1: revolution or a war is generally something that only pretty

571
00:35:39,760 --> 00:35:44,080
Speaker 1: desperate people will engage in, if history is our guide,

572
00:35:44,400 --> 00:35:46,239
Speaker 1: and so I think we should expect that again. And

573
00:35:46,280 --> 00:35:51,360
Speaker 1: that that that probably goes to Brent Johnson's dollar milkshake

574
00:35:51,440 --> 00:35:53,719
Speaker 1: theory and the idea that the US dollar is not

575
00:35:53,760 --> 00:35:56,879
Speaker 1: going to likely is not going to be knocked off

576
00:35:56,880 --> 00:35:57,879
Speaker 1: its perch any time.

577
00:35:58,040 --> 00:36:05,279
Speaker 2: To speaking of competitors to the dollar from the standpoint of,

578
00:36:05,480 --> 00:36:08,520
Speaker 2: you know, something that would be viewed as a more

579
00:36:08,680 --> 00:36:13,160
Speaker 2: sound alternative. Usually there's two camps, you know, bitcoin versus gold.

580
00:36:14,480 --> 00:36:17,680
Speaker 2: One of the it's okay, so this is I guess

581
00:36:17,680 --> 00:36:19,960
Speaker 2: I'm asking your opinion on this. It's sometimes tatted as

582
00:36:19,960 --> 00:36:22,359
Speaker 2: a feature. Sometimes tatted is like a you know, it'll

583
00:36:22,360 --> 00:36:25,200
Speaker 2: be the last nail on the coffin. Is the limited

584
00:36:25,200 --> 00:36:29,600
Speaker 2: supply eventually gets, you know, the pure scarcity gets to

585
00:36:29,640 --> 00:36:32,759
Speaker 2: a point where you really can't have debt in a

586
00:36:33,400 --> 00:36:39,440
Speaker 2: pure bitcoin monetary system because the limited limited supply really

587
00:36:39,480 --> 00:36:42,120
Speaker 2: you can't have, you know, a system of credit and

588
00:36:42,120 --> 00:36:46,160
Speaker 2: interest rates on top of that. Can you can you

589
00:36:46,200 --> 00:36:49,280
Speaker 2: talk about your you know, opinion on gold versus bitcoin

590
00:36:49,400 --> 00:36:53,680
Speaker 2: and what what the what the the benefit if there

591
00:36:53,760 --> 00:36:56,640
Speaker 2: is any benefit or utility to having a credit system,

592
00:36:56,960 --> 00:36:59,960
Speaker 2: uh built on top of my.

593
00:37:01,520 --> 00:37:04,400
Speaker 1: Well, I think credit is something that naturally arises in

594
00:37:04,440 --> 00:37:07,759
Speaker 1: the marketplace, and so it's human. It's for human for

595
00:37:07,880 --> 00:37:10,120
Speaker 1: credit to be issued, and so we shouldn't think credit

596
00:37:10,200 --> 00:37:14,799
Speaker 1: is per se bad. What's bad about credit today is

597
00:37:14,800 --> 00:37:20,200
Speaker 1: that the amount of credit available and the rate at

598
00:37:20,239 --> 00:37:23,760
Speaker 1: which one has to borrow, both of those are tinkered

599
00:37:23,800 --> 00:37:27,280
Speaker 1: with by governments and central banks, as opposed to simply

600
00:37:27,320 --> 00:37:30,279
Speaker 1: reflecting the marketplace. What I mean by reflecting the marketplace

601
00:37:30,360 --> 00:37:33,799
Speaker 1: is that we should have savers and borrowers, and the

602
00:37:33,880 --> 00:37:37,160
Speaker 1: more people save money, the more money is available to lend,

603
00:37:37,160 --> 00:37:40,120
Speaker 1: and we would expect the interest rate to fall and

604
00:37:40,200 --> 00:37:43,520
Speaker 1: vice versa. Right, interest rates should be an exchange rato

605
00:37:43,560 --> 00:37:47,880
Speaker 1: that should reflect the time preference of borrowers and savers. Instead,

606
00:37:47,920 --> 00:37:52,040
Speaker 1: we have interest rates which are again effectively policy tools,

607
00:37:52,200 --> 00:37:57,200
Speaker 1: not entirely but somewhat set by central banks, targeted by

608
00:37:57,280 --> 00:38:01,319
Speaker 1: central banks. So I think that's a real problem. You know,

609
00:38:01,440 --> 00:38:07,360
Speaker 1: the ultimately finite amount of bitcoin, which makes it the

610
00:38:07,440 --> 00:38:09,920
Speaker 1: hardest money in that sense, in terms of its stock

611
00:38:10,000 --> 00:38:14,680
Speaker 1: to flow ratio, ultimately differs from gold. Gold can continue

612
00:38:14,719 --> 00:38:18,400
Speaker 1: to be produced even when gold shoots up in price

613
00:38:19,040 --> 00:38:23,759
Speaker 1: and the economics workout for minors. It takes almost superhuman

614
00:38:24,000 --> 00:38:27,719
Speaker 1: levels of mining effort to increase the gold supply by

615
00:38:27,880 --> 00:38:30,839
Speaker 1: let's say two percent in any given calendar year. It's

616
00:38:30,880 --> 00:38:34,560
Speaker 1: really hard. So gold is very hard too in terms

617
00:38:34,600 --> 00:38:37,440
Speaker 1: of its stock to flow ratio. You know, one thing

618
00:38:37,520 --> 00:38:39,840
Speaker 1: Rothbart said is we don't care about the money supply

619
00:38:39,920 --> 00:38:42,880
Speaker 1: per se prices will adjust. What we care about is

620
00:38:43,239 --> 00:38:47,000
Speaker 1: government monkey around with the money supply, and I think

621
00:38:47,040 --> 00:38:51,720
Speaker 1: that's true. Keith Wiener, who's our founder at Monetary Metals,

622
00:38:51,760 --> 00:38:54,400
Speaker 1: is a big critic of bitcoin, among other reasons, in

623
00:38:54,440 --> 00:38:58,080
Speaker 1: that sense that how do you create a credit and

624
00:38:58,160 --> 00:39:02,040
Speaker 1: financial system off of an asset that is fixed in

625
00:39:02,120 --> 00:39:04,520
Speaker 1: a mouth. I guess the short answer is, well, you

626
00:39:04,560 --> 00:39:08,120
Speaker 1: can hypothecate it digitally. You can slice up. When we

627
00:39:08,160 --> 00:39:10,040
Speaker 1: get to twenty one million, you know, you can slice

628
00:39:10,080 --> 00:39:16,239
Speaker 1: it up as much as you want. And also, you know,

629
00:39:16,360 --> 00:39:23,720
Speaker 1: gold has gold has the transportability issue. You know, gold

630
00:39:23,760 --> 00:39:29,279
Speaker 1: has its its own challenges. Central banks basically sort of

631
00:39:29,480 --> 00:39:32,759
Speaker 1: you know, overtook the gold standard and the private gold

632
00:39:32,760 --> 00:39:35,480
Speaker 1: standard turned it into a governmental gold standard. So there

633
00:39:35,480 --> 00:39:41,240
Speaker 1: are critiques of both. I'm I'm I straddle both camps

634
00:39:41,760 --> 00:39:45,160
Speaker 1: because I want I want. I think gold will continue

635
00:39:45,160 --> 00:39:47,400
Speaker 1: to have a moneyness. I think it will continue to

636
00:39:47,440 --> 00:39:50,480
Speaker 1: act as a financial asset because it has for thousands

637
00:39:50,520 --> 00:39:54,440
Speaker 1: of years, and until proven otherwise, I'm not going to

638
00:39:54,520 --> 00:39:58,719
Speaker 1: bet against its many thousand year track record. I want

639
00:39:58,760 --> 00:40:03,840
Speaker 1: bitcoin to succeed because, uh, the idea of resting government,

640
00:40:04,040 --> 00:40:08,760
Speaker 1: resting money away from government and from any centralized issuer.

641
00:40:09,320 --> 00:40:13,400
Speaker 1: I think is a is an exceedingly noble political project,

642
00:40:13,719 --> 00:40:17,480
Speaker 1: and uh, one that that I want to support. So

643
00:40:19,520 --> 00:40:25,640
Speaker 1: bitcoiners don't like that I'm a gold guy, but nonetheless

644
00:40:25,640 --> 00:40:27,600
Speaker 1: I am.

645
00:40:27,680 --> 00:40:32,399
Speaker 2: Yeah, yeah, that that makes a lot of sense. One

646
00:40:32,440 --> 00:40:35,319
Speaker 2: of the one of the critiques that is commonly brought

647
00:40:35,360 --> 00:40:38,759
Speaker 2: against gold is that it's you know, it's a yellow rock,

648
00:40:38,840 --> 00:40:40,920
Speaker 2: it's a brick. It does nothing. It just sits there,

649
00:40:41,000 --> 00:40:44,200
Speaker 2: doesn't produce anything. And so I'd like to hear your

650
00:40:44,200 --> 00:40:48,000
Speaker 2: thoughts on that, because well, number one, monetary metals is

651
00:40:48,080 --> 00:40:50,279
Speaker 2: you know, obviously changing that I want to I want

652
00:40:50,280 --> 00:40:54,239
Speaker 2: to hear kind of your your your thoughts and your

653
00:40:54,239 --> 00:40:57,399
Speaker 2: explanation on that. But number two, when you look at

654
00:40:57,440 --> 00:41:00,279
Speaker 2: something like real yields have been rising, uh, you know,

655
00:41:00,400 --> 00:41:02,879
Speaker 2: treasury rates have been going up for the last two

656
00:41:02,960 --> 00:41:07,720
Speaker 2: years now while the inflation rate CPI has been dropping.

657
00:41:08,320 --> 00:41:11,040
Speaker 2: So real rates have been rising, and gold has not

658
00:41:12,000 --> 00:41:14,560
Speaker 2: done what you would have typically expected it to do.

659
00:41:14,640 --> 00:41:17,560
Speaker 2: You know, everybody says, hey, really rates rise. You know,

660
00:41:17,600 --> 00:41:21,240
Speaker 2: gold's gonna fall because it's it doesn't produce a yield.

661
00:41:22,480 --> 00:41:24,719
Speaker 2: And so what there is, you know, I guess, is

662
00:41:24,880 --> 00:41:26,440
Speaker 2: this is a couple of questions wrapped up in one.

663
00:41:26,440 --> 00:41:28,799
Speaker 2: But there's a monetary premium to gold, for sure. It's

664
00:41:28,840 --> 00:41:30,520
Speaker 2: you know, it's worth a lot more than just its

665
00:41:30,560 --> 00:41:36,200
Speaker 2: industrial use use value right now. But number two, historically

666
00:41:36,960 --> 00:41:40,920
Speaker 2: credit has always existed and gold was always money. So

667
00:41:41,040 --> 00:41:43,720
Speaker 2: you can't really say that gold has no yield because

668
00:41:43,880 --> 00:41:45,799
Speaker 2: it always has in the past. I mean, just like

669
00:41:45,880 --> 00:41:48,279
Speaker 2: the rock in your hand doesn't, but the way that

670
00:41:48,320 --> 00:41:52,640
Speaker 2: it's used, you can. You can turn it into a

671
00:41:52,640 --> 00:41:53,880
Speaker 2: producing asset.

672
00:41:54,440 --> 00:41:56,640
Speaker 1: Well, you could say the same thing about a piece

673
00:41:56,680 --> 00:41:59,359
Speaker 1: of paper money. You know, it just sits there. Gold

674
00:41:59,440 --> 00:42:01,680
Speaker 1: is shining, it just sits there. A piece of paper

675
00:42:01,719 --> 00:42:04,359
Speaker 1: just sits there. I heard an interesting podcast a couple

676
00:42:04,360 --> 00:42:06,719
Speaker 1: of months ago with Caitlyn Long from Custodia Bank out

677
00:42:06,760 --> 00:42:08,799
Speaker 1: in Wyoming. She's a big bitcointerer, a lot of you

678
00:42:08,840 --> 00:42:12,000
Speaker 1: probably know her name, and a guy named Tom Luongo

679
00:42:12,000 --> 00:42:14,880
Speaker 1: who's a really interesting thinker that I've gotten to start

680
00:42:14,920 --> 00:42:17,160
Speaker 1: reading the last couple of years. And Caitlin made the

681
00:42:17,200 --> 00:42:21,680
Speaker 1: comment that once we lost gold backing for currency, you know,

682
00:42:21,760 --> 00:42:23,880
Speaker 1: completely in nineteen seventy one, in the case of the

683
00:42:23,960 --> 00:42:26,600
Speaker 1: United States, where even foreign governments can no longer redeem

684
00:42:26,600 --> 00:42:30,360
Speaker 1: their paper notes for gold. She said gold lost any use.

685
00:42:30,440 --> 00:42:32,600
Speaker 1: You know, at that point the whole point of gold

686
00:42:32,719 --> 00:42:35,840
Speaker 1: is to act as a tether on debt, and once

687
00:42:36,000 --> 00:42:38,320
Speaker 1: you don't have that anymore, what's the point of gold?

688
00:42:38,360 --> 00:42:41,680
Speaker 1: And by that she meant, you know, it ought to

689
00:42:41,719 --> 00:42:45,360
Speaker 1: be now reduced to basically its industrial or jewelry uses.

690
00:42:46,000 --> 00:42:48,400
Speaker 1: But yet I would argue it hasn't. In the fifty

691
00:42:48,480 --> 00:42:51,560
Speaker 1: years since nineteen seventy one, fifty two years now, since

692
00:42:51,640 --> 00:42:56,080
Speaker 1: nineteen seventy one, gold has maintained a price per ounce

693
00:42:56,200 --> 00:43:00,200
Speaker 1: in dollars, which I would argue is well above it's

694
00:42:59,719 --> 00:43:03,600
Speaker 1: purely for industrial or jewelry uses. So that tells me

695
00:43:03,880 --> 00:43:09,680
Speaker 1: that for fifty years since gold has been irredeemable, there's

696
00:43:09,760 --> 00:43:13,840
Speaker 1: still a financial or monetary premium placed on its value.

697
00:43:13,880 --> 00:43:17,000
Speaker 1: So I think that is very very interesting, especially as

698
00:43:17,000 --> 00:43:19,080
Speaker 1: I mentioned, you know, a couple of thousand years prior

699
00:43:19,080 --> 00:43:22,840
Speaker 1: to that, it was money money, So I think gold

700
00:43:22,880 --> 00:43:26,880
Speaker 1: does retain some money. Thisss And look, there is something

701
00:43:26,960 --> 00:43:31,080
Speaker 1: like thirteen trillion dollars worth of market cap physical gold,

702
00:43:31,160 --> 00:43:35,000
Speaker 1: and it's laying around, it's a shiny yellow lump all

703
00:43:35,000 --> 00:43:38,960
Speaker 1: over the world, and not only just laying there people

704
00:43:38,960 --> 00:43:43,080
Speaker 1: are paying to ensure and store it. So you know

705
00:43:43,160 --> 00:43:45,840
Speaker 1: we've got all these you know, we've got people just

706
00:43:45,960 --> 00:43:48,799
Speaker 1: desperate for finance and capital right now. It's a very

707
00:43:48,840 --> 00:43:52,080
Speaker 1: tough environment for startups. It's a very tough environment for

708
00:43:52,200 --> 00:43:55,520
Speaker 1: lending in general. As you know, people are paying eight

709
00:43:55,640 --> 00:43:59,760
Speaker 1: points on mortgages. People are paying ten percent on car loans,

710
00:43:59,760 --> 00:44:04,680
Speaker 1: which is just absolutely crazy. So there's a credit crunch

711
00:44:04,800 --> 00:44:09,200
Speaker 1: which I still can't quite put, you know, wrap my

712
00:44:09,320 --> 00:44:12,399
Speaker 1: arms around that, because we've done produced nothing but money

713
00:44:12,440 --> 00:44:15,840
Speaker 1: and credit since eight on hyperdrive. I mean, it was,

714
00:44:16,760 --> 00:44:19,839
Speaker 1: why did the FEDS balance sheet go from far less

715
00:44:19,880 --> 00:44:22,840
Speaker 1: than a trillion to over nine trillion, and yet somehow

716
00:44:22,840 --> 00:44:25,640
Speaker 1: we have a credit crunch. Look, I realized that fed's

717
00:44:25,719 --> 00:44:29,120
Speaker 1: balance sheet is mostly reserves. Their reserves were not let out, okay,

718
00:44:29,200 --> 00:44:32,200
Speaker 1: blah blah blah. But nonetheless, how does our FED going

719
00:44:32,200 --> 00:44:34,279
Speaker 1: to hyperdrive? We still have this credit crunch? You think

720
00:44:34,600 --> 00:44:37,880
Speaker 1: you think we would have credit dropping from heaven and

721
00:44:38,200 --> 00:44:40,600
Speaker 1: you know your local Cadillact deal would be coming by.

722
00:44:40,640 --> 00:44:44,360
Speaker 1: You say, Jeff, here's a point oh one percent Cadillac,

723
00:44:45,080 --> 00:44:50,240
Speaker 1: But no, a Cadillac's ten percent. I don't understand that completely.

724
00:44:50,280 --> 00:44:53,279
Speaker 1: But nonetheless, there's thirteen trillion dollars a goal out there.

725
00:44:53,320 --> 00:44:55,440
Speaker 1: Why don't we use it? Why don't we put it

726
00:44:55,480 --> 00:44:59,279
Speaker 1: to use? It could collateralize anything from giant insurance companies,

727
00:45:00,719 --> 00:45:04,400
Speaker 1: it could. It could serve as collateral for all kinds

728
00:45:04,400 --> 00:45:08,200
Speaker 1: of loans. It could. It could, you know, without moving

729
00:45:08,239 --> 00:45:11,239
Speaker 1: any of it, without any transaction costs, you know, just

730
00:45:11,280 --> 00:45:15,040
Speaker 1: simply by lawyers moving paper around. You could pledge gold

731
00:45:15,120 --> 00:45:17,080
Speaker 1: to all kinds of projects to back them up. You

732
00:45:17,080 --> 00:45:20,640
Speaker 1: could use gold for insurance and reinsurance purposes and monetary models.

733
00:45:20,719 --> 00:45:25,359
Speaker 1: We use it for basically for inventory and companies that

734
00:45:25,480 --> 00:45:32,880
Speaker 1: produce gold, you know, refiners, mining companies, jewelry companies, industrial uses.

735
00:45:32,960 --> 00:45:36,160
Speaker 1: So there is there are uses that gold can be

736
00:45:36,160 --> 00:45:39,640
Speaker 1: put to, and I think that all flows from it's

737
00:45:40,080 --> 00:45:43,880
Speaker 1: it's moneiness. It still holds a degree of moneyness fifty

738
00:45:43,960 --> 00:45:47,759
Speaker 1: years on from nineteen seventy one. So that's that, to me,

739
00:45:48,560 --> 00:45:53,239
Speaker 1: is an interesting project. Let's use gold to finance production,

740
00:45:53,560 --> 00:45:56,759
Speaker 1: actual production of goods and services. Companies need money, they

741
00:45:56,800 --> 00:46:00,080
Speaker 1: go out and borrow money, they issue, you know, they

742
00:46:00,080 --> 00:46:02,319
Speaker 1: go out and get commercial credit if they can at

743
00:46:02,320 --> 00:46:04,560
Speaker 1: a pretty high rate right now, or they issue a

744
00:46:04,600 --> 00:46:09,160
Speaker 1: bond if they can at a pretty high rate, or

745
00:46:09,200 --> 00:46:13,640
Speaker 1: they sell equity if they can at a pretty onerous

746
00:46:13,880 --> 00:46:18,560
Speaker 1: evaluation relative to the issuing company. You know, So we've

747
00:46:18,600 --> 00:46:21,120
Speaker 1: got this thirteen trillion dollars worth of gold that's just

748
00:46:21,160 --> 00:46:25,040
Speaker 1: totally overlooked. It's just sitting there. If thirteen trillion dollars

749
00:46:25,120 --> 00:46:29,840
Speaker 1: worth of cash we're sitting somewhere, people would be tapping

750
00:46:29,880 --> 00:46:33,600
Speaker 1: into it. Yeah, they'd be borrowing it, they'd be pledging it,

751
00:46:33,640 --> 00:46:38,040
Speaker 1: they'd be using it. And yet somehow gold escapes this analysis.

752
00:46:38,080 --> 00:46:41,040
Speaker 1: So we're you know, I hope that some of that

753
00:46:41,080 --> 00:46:42,680
Speaker 1: thirteen trillion be put to use.

754
00:46:44,520 --> 00:46:47,719
Speaker 2: Well, I really, I really like the work that Monetary

755
00:46:47,719 --> 00:46:51,279
Speaker 2: Metals is doing in this regard. You know, just number one,

756
00:46:51,440 --> 00:46:53,920
Speaker 2: I'm a customer at number two. I'm an investor in

757
00:46:53,960 --> 00:46:57,719
Speaker 2: the company as well, and the company has sponsored my

758
00:46:57,760 --> 00:46:59,120
Speaker 2: YouTube channel, The Passed as well.

759
00:46:59,239 --> 00:47:02,400
Speaker 1: So I'm, you know, all on board.

760
00:47:03,000 --> 00:47:06,399
Speaker 2: The The idea that I talk about sometimes is kind

761
00:47:06,400 --> 00:47:07,759
Speaker 2: of like a little bit of what we were talking

762
00:47:07,800 --> 00:47:10,040
Speaker 2: about earlier, kind of like that those parallel systems where

763
00:47:10,040 --> 00:47:11,960
Speaker 2: it's like, you know, hey, here's what I think the

764
00:47:12,000 --> 00:47:15,080
Speaker 2: ideal should be, but here's one practical step that we

765
00:47:15,080 --> 00:47:19,160
Speaker 2: could actually take and for me, one part of that

766
00:47:19,400 --> 00:47:22,920
Speaker 2: is kind of like putting yourself on your own sound

767
00:47:23,000 --> 00:47:26,240
Speaker 2: money standard. So it's like, yeah, it'd be great if

768
00:47:26,719 --> 00:47:30,600
Speaker 2: we could convince the Federal Reserve or the government to

769
00:47:30,640 --> 00:47:33,480
Speaker 2: shut down the Federal Reserve and just have you know,

770
00:47:33,800 --> 00:47:37,640
Speaker 2: a money that's purely decided by the market. But since

771
00:47:37,680 --> 00:47:41,960
Speaker 2: that's not really in our power to make that happen,

772
00:47:42,440 --> 00:47:46,400
Speaker 2: what I can do is, you know, personally, you know,

773
00:47:46,960 --> 00:47:49,839
Speaker 2: use products or services and act in a way where

774
00:47:49,840 --> 00:47:52,800
Speaker 2: I'm kind of emulating that, you know, a sound money

775
00:47:52,800 --> 00:47:56,279
Speaker 2: standard for myself. One of those products is you know,

776
00:47:56,640 --> 00:47:59,759
Speaker 2: our companies helping people do that. As monetary metals, can

777
00:47:59,800 --> 00:48:04,279
Speaker 2: you explain, like the from the individual like customer standpoint,

778
00:48:04,400 --> 00:48:06,400
Speaker 2: what it is that they're able to do that's so

779
00:48:06,440 --> 00:48:10,400
Speaker 2: different than just like buying gold that you're paying somebody

780
00:48:10,400 --> 00:48:11,680
Speaker 2: else to vault.

781
00:48:12,080 --> 00:48:14,759
Speaker 1: Well, yes, you might take a company that uses or

782
00:48:14,800 --> 00:48:20,160
Speaker 1: producers gold. Let's say a jewelry manufacturer. They might need

783
00:48:20,200 --> 00:48:23,520
Speaker 1: a couple million dollars worth of gold in ounces to

784
00:48:24,400 --> 00:48:27,719
Speaker 1: make some jewelry and sell it so they can go

785
00:48:27,840 --> 00:48:30,480
Speaker 1: out and spend their working capital. They can tie up

786
00:48:30,640 --> 00:48:32,680
Speaker 1: a few million dollars in cash and buy a bunch

787
00:48:32,719 --> 00:48:36,000
Speaker 1: of gold. Well, that has two downsides. One is that

788
00:48:36,040 --> 00:48:38,200
Speaker 1: they're cash that they might be using for rent, or

789
00:48:38,239 --> 00:48:41,000
Speaker 1: payroll or all kinds of things is tied up in

790
00:48:41,080 --> 00:48:44,879
Speaker 1: the inventory. And number two, while they hold that few

791
00:48:44,920 --> 00:48:47,440
Speaker 1: million dollars worth of gold and they're producing jewelry and

792
00:48:47,480 --> 00:48:50,160
Speaker 1: selling it, the price of gold might be going like this.

793
00:48:50,680 --> 00:48:54,239
Speaker 1: So if they bought a two million dollars worth of gold,

794
00:48:54,280 --> 00:48:57,799
Speaker 1: and if that stays even, they will sell that as

795
00:48:57,960 --> 00:49:01,240
Speaker 1: jewelry for three million dollars. But all of a sudden,

796
00:49:01,280 --> 00:49:03,120
Speaker 1: that two million dollars worth of gold drops down to

797
00:49:03,160 --> 00:49:05,440
Speaker 1: one point five million dollars worth of gold. All of

798
00:49:05,440 --> 00:49:08,759
Speaker 1: a sudden, the money they make has been you know,

799
00:49:09,120 --> 00:49:12,440
Speaker 1: has been impacted over the period of time it takes

800
00:49:12,480 --> 00:49:15,360
Speaker 1: them to produce the jewelry. So what we're able to

801
00:49:15,400 --> 00:49:19,920
Speaker 1: do is a mass of physical metals and provide it

802
00:49:20,040 --> 00:49:24,319
Speaker 1: to our third party customers and in exchange for a

803
00:49:24,320 --> 00:49:27,279
Speaker 1: certain number of ounces paid back at the end of

804
00:49:27,320 --> 00:49:30,080
Speaker 1: generally a one year lease for example, and so they

805
00:49:30,160 --> 00:49:32,279
Speaker 1: know exactly what they're going to have to pay back.

806
00:49:32,640 --> 00:49:35,600
Speaker 1: The fluctuating price of gold doesn't matter to them because

807
00:49:35,640 --> 00:49:38,560
Speaker 1: they're using it and then selling it at market rates

808
00:49:38,640 --> 00:49:40,640
Speaker 1: the amount you know, the one ounce piece of jewelry,

809
00:49:40,719 --> 00:49:45,279
Speaker 1: let's say, plus the premium the markup for their jewelry,

810
00:49:45,400 --> 00:49:47,719
Speaker 1: you know, as the as the price of gold fluctuates,

811
00:49:47,719 --> 00:49:50,920
Speaker 1: they're selling it at market conditions, replacing R one outs

812
00:49:50,960 --> 00:49:54,400
Speaker 1: at then market condition, so they know what their cost

813
00:49:54,600 --> 00:49:57,319
Speaker 1: for that inventory is going to be fixed for a year.

814
00:49:57,360 --> 00:49:59,560
Speaker 1: So that provides them with the ability to have that

815
00:49:59,600 --> 00:50:03,160
Speaker 1: certainty and do not have to head using futures contracts

816
00:50:03,480 --> 00:50:06,920
Speaker 1: against fluctuations in the price of gold. So that's in

817
00:50:06,960 --> 00:50:12,160
Speaker 1: a nutshell, the model for leasing gold. We also do

818
00:50:12,239 --> 00:50:14,600
Speaker 1: gold bond, which is lending gold. So that would be

819
00:50:14,640 --> 00:50:16,640
Speaker 1: a much more long term project for let's say a

820
00:50:16,719 --> 00:50:21,320
Speaker 1: mine or a refiner. We might lend them several thousand

821
00:50:21,480 --> 00:50:25,239
Speaker 1: or tens of thousands of ounces over a three four

822
00:50:25,360 --> 00:50:29,240
Speaker 1: five year period, and so that's just a bond. Instead

823
00:50:29,239 --> 00:50:31,440
Speaker 1: of issuing a bond for ten million dollars, they issue

824
00:50:31,480 --> 00:50:35,120
Speaker 1: a bond for x thousand ounces of gold. But nonetheless

825
00:50:35,120 --> 00:50:39,000
Speaker 1: it is capital available to them throughout the lifetime of

826
00:50:39,040 --> 00:50:41,920
Speaker 1: the bond that they pay back in installments, just like

827
00:50:42,000 --> 00:50:46,000
Speaker 1: you pay back a mortgage. So it's an interesting concept.

828
00:50:46,200 --> 00:50:50,400
Speaker 1: We're definitely growing the number of deals that we're doing rapidly,

829
00:50:51,880 --> 00:50:54,400
Speaker 1: and we hope that we hope that we're going to

830
00:50:54,400 --> 00:50:58,960
Speaker 1: make a difference in the market and make a name

831
00:50:59,000 --> 00:50:59,680
Speaker 1: for this company.

832
00:51:01,360 --> 00:51:03,719
Speaker 2: Well, I think it's I think it's such a such

833
00:51:03,719 --> 00:51:06,120
Speaker 2: a fantastic idea. I mean, like you talked about it,

834
00:51:06,120 --> 00:51:10,839
Speaker 2: it eliminates the volatility and the uncertainty and the complication

835
00:51:11,000 --> 00:51:15,319
Speaker 2: by being able to denominate in gold. It also, you

836
00:51:15,360 --> 00:51:17,560
Speaker 2: know when you talk about when you talk about win win,

837
00:51:18,200 --> 00:51:21,399
Speaker 2: I guess win win win scenarios from the person who

838
00:51:21,520 --> 00:51:24,799
Speaker 2: has you know, one hundred ounces of gold that I'm

839
00:51:24,880 --> 00:51:28,120
Speaker 2: paying to have it stored in a vault. So it's

840
00:51:28,160 --> 00:51:31,080
Speaker 2: actually you know, the it's got a negative yield on it.

841
00:51:33,280 --> 00:51:36,239
Speaker 2: Being able to take a part of that and put

842
00:51:36,239 --> 00:51:39,120
Speaker 2: it to work. Not only is it actually just you know,

843
00:51:39,760 --> 00:51:45,120
Speaker 2: it's it's being used productively in society to do things

844
00:51:45,480 --> 00:51:50,240
Speaker 2: that are actually you know, creating more wealth, economic growth.

845
00:51:50,880 --> 00:51:53,520
Speaker 2: But also I get to grow my ounces and I

846
00:51:53,520 --> 00:51:55,560
Speaker 2: don't have to worry about you know, what the what

847
00:51:55,560 --> 00:51:58,400
Speaker 2: the price is. It's not like I'm getting you know, dollars, uh,

848
00:51:58,920 --> 00:52:00,920
Speaker 2: you know, it's not denominated in dollars where I have

849
00:52:00,960 --> 00:52:01,560
Speaker 2: to worry about.

850
00:52:01,600 --> 00:52:02,399
Speaker 1: Hey, is that enough?

851
00:52:02,480 --> 00:52:02,640
Speaker 3: You know?

852
00:52:02,680 --> 00:52:05,200
Speaker 2: If the price of gold is changing, it's like, no,

853
00:52:05,400 --> 00:52:09,319
Speaker 2: the actual ounces are are growing because that's that's what

854
00:52:09,400 --> 00:52:13,279
Speaker 2: it's denominated and paid in. And so I think it's

855
00:52:13,480 --> 00:52:16,359
Speaker 2: I think it's revolutionary and I'm really excited to see

856
00:52:16,400 --> 00:52:18,960
Speaker 2: where it goes. And it also it's I love it

857
00:52:19,040 --> 00:52:28,160
Speaker 2: when kind of the philosophical uh mindset behind behind something matches,

858
00:52:28,960 --> 00:52:32,600
Speaker 2: matches what it's doing. And I know yourself and and

859
00:52:32,719 --> 00:52:38,520
Speaker 2: Keith and uh, the the general ethos behind the company

860
00:52:38,600 --> 00:52:41,520
Speaker 2: is something that I can stand behind other than just

861
00:52:42,120 --> 00:52:44,440
Speaker 2: what the what the company is doing with its products

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00:52:44,440 --> 00:52:47,680
Speaker 2: and services. So really excited to see to see what

863
00:52:47,719 --> 00:52:51,240
Speaker 2: happens here. And thank you so much for joining me today.

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00:52:51,360 --> 00:52:54,200
Speaker 2: This was a really really fun conversation I love talking

865
00:52:54,200 --> 00:53:00,160
Speaker 2: about We talked on a ton of different issues here, but.

866
00:52:59,160 --> 00:53:00,000
Speaker 1: But it was good converse.

867
00:53:00,320 --> 00:53:01,160
Speaker 2: So thanks for joining me.

868
00:53:01,640 --> 00:53:02,439
Speaker 1: Yeah, thank you, Joe.

869
00:53:03,880 --> 00:53:06,040
Speaker 2: I'll have that linked below. And then for anybody who

870
00:53:06,080 --> 00:53:09,880
Speaker 2: wants to get more and and follow you more, I

871
00:53:09,920 --> 00:53:13,479
Speaker 2: know you're pretty active on Twitter. Is there any other

872
00:53:13,520 --> 00:53:16,480
Speaker 2: place where you'd like to send people if they want more?

873
00:53:16,600 --> 00:53:18,759
Speaker 1: Now, you can find me on Twitter and occasionally at

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00:53:18,800 --> 00:53:22,160
Speaker 1: the Minetary Metals website, selfware on the Monetary Metals YouTube page.

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00:53:23,719 --> 00:53:26,960
Speaker 2: Perfect all right, Well, thanks so much and we'll talk

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00:53:27,000 --> 00:53:27,799
Speaker 2: to you next time. Thanks,