WEBVTT - Where Does Bitcoin Fit Into Traditional Finance 0:00:04.600 --> 0:00:07.680 So the big question is this, how do investors like 0:00:07.880 --> 0:00:11.800 us get access to the ideas, information, and most importantly, 0:00:12.039 --> 0:00:14.840 the right people that give us the tools and information 0:00:15.000 --> 0:00:19.000 we need to make informed and educated decisions to have success. 0:00:19.600 --> 0:00:22.319 That is the question, and this podcast will give us 0:00:22.360 --> 0:00:25.480 the answers. This is Mark Moss, your host. Let's get 0:00:25.520 --> 0:00:30.400 this started. Welcome to another episode of the Market Disruptors podcast. 0:00:31.040 --> 0:00:34.519 You know, understanding the intricacies of the global financial markets 0:00:34.760 --> 0:00:38.040 is difficult, if not almost impossible for the average person. 0:00:38.560 --> 0:00:42.600 It takes a lot of specialty training, education and dedication 0:00:42.840 --> 0:00:45.600 to study these markets and understand how they work. And 0:00:45.600 --> 0:00:48.040 today we sit down with Nick Batia. He's a researcher 0:00:48.200 --> 0:00:52.360 with Tantra Labs. He's an adjunct professor at usc speaking 0:00:52.440 --> 0:00:55.600 and teaching about the bond market, the financial market, and 0:00:55.640 --> 0:00:57.800 he gives us some great insights. We're get into some 0:00:57.840 --> 0:01:01.720 conversations talking about his three of money, how it works 0:01:01.800 --> 0:01:07.479 different types of assets, from currencies, treasuries, oil, gold, et cetera. 0:01:07.640 --> 0:01:11.399 Of course cryptocurrencies bitcoin. We talked about what he saw 0:01:11.480 --> 0:01:15.440 in the traditional financial markets buying and selling treasuries that 0:01:15.640 --> 0:01:18.640 kind of caused him to want to jump over into bitcoin. 0:01:18.880 --> 0:01:21.480 Full time. We have a lot of good conversations about 0:01:21.480 --> 0:01:26.200 bitcoin itself, specifically, including how it's exactly where it needs 0:01:26.200 --> 0:01:29.440 to be today, how it's scaling, what the evolution of 0:01:29.440 --> 0:01:32.360 bitcoin looks like today, and where it's going over the 0:01:32.360 --> 0:01:35.559 next five and ten years. We both agree it's exactly 0:01:35.600 --> 0:01:37.280 where it needs to be, it's doing exactly what it 0:01:37.319 --> 0:01:40.120 needs to be doing, and it's on the course to 0:01:40.160 --> 0:01:42.280 set it up for a huge success in the future. 0:01:42.480 --> 0:01:44.800 It was a great conversation with Nick that I really enjoyed. 0:01:45.160 --> 0:01:47.600 So let's go ahead and just jump right into it. Everyone, 0:01:47.680 --> 0:01:50.560 Welcome to another episode of the Market Disruptors podcast. Today, 0:01:50.600 --> 0:01:53.600 I'm joined by Nick Botia. He has a he does 0:01:53.640 --> 0:01:58.040 research with Tantra Labs and open Nodes. He's also an 0:01:58.080 --> 0:02:01.760 adjunct professor at USC talking about finance and bond markets 0:02:01.760 --> 0:02:03.760 and stuff. So many things that we could talk about. 0:02:03.760 --> 0:02:06.320 We're trying to keep appointed. I'm excited for this interview. 0:02:06.360 --> 0:02:09.000 So Nick, welcome to the show. Thank you for having me. 0:02:09.000 --> 0:02:12.480 I appreciate it. Yeah. So, like I said, there's a 0:02:12.520 --> 0:02:14.000 lot of things we could talk about, but but I 0:02:14.040 --> 0:02:16.400 want to keep it on track. But before we dive 0:02:16.480 --> 0:02:18.120 into all that, why don't you just kind of give 0:02:18.160 --> 0:02:21.200 us a background of of kind of how you got here, 0:02:21.200 --> 0:02:24.320 on what you're working on right now. Sure. So I 0:02:24.600 --> 0:02:28.240 joined the bitcoin industry formally just a few months ago 0:02:28.600 --> 0:02:34.200 as a research strategist for open node payment processor that's 0:02:34.280 --> 0:02:38.320 enabled by the Lightning Network UM, as well as Tantile Labs. 0:02:38.560 --> 0:02:43.480 It is a hedge fund. They're both here in Los Angeles. UM. 0:02:43.520 --> 0:02:47.639 They're both extremely exciting opportunities UM, and I'm really happy 0:02:47.639 --> 0:02:50.440 to be part of both of them. Before that, I 0:02:50.560 --> 0:02:55.079 was part of the traditional finance industry. I was a 0:02:55.120 --> 0:02:58.800 bond trader trading US treasuries and other interest rate products 0:02:58.840 --> 0:03:02.239 for an asset manager UM for a few years, and 0:03:02.480 --> 0:03:04.440 worked at a hedge fund before that for a couple 0:03:04.480 --> 0:03:07.960 of years. UM. So I'm really just excited to have 0:03:08.080 --> 0:03:12.000 made the transition from the bond market to bitcoin. Yeah. 0:03:12.120 --> 0:03:15.160 So what a what a big jump to go from 0:03:15.160 --> 0:03:18.960 like traditional finance working with billions or trillions of dollars 0:03:19.320 --> 0:03:22.720 to go into like this small kind of brand new technology. Uh. 0:03:22.960 --> 0:03:25.960 What was that decision like to go from you know, 0:03:26.000 --> 0:03:29.360 the big traditional market to something that's like risky and 0:03:29.440 --> 0:03:32.800 unproven and small. Sure, well, it was a process that 0:03:32.919 --> 0:03:37.160 happened over a few years. First started with my interest 0:03:37.160 --> 0:03:40.560 in bitcoin and the dive down the all the bitcoin 0:03:40.640 --> 0:03:43.960 rabbit holes, um, and that you know process lasted a 0:03:43.960 --> 0:03:47.000 couple of years. Then I started writing about bitcoin last 0:03:47.080 --> 0:03:50.240 year and some of that work was embraced by the 0:03:50.280 --> 0:03:54.240 bitcoin community. They encouraged me to write more and I 0:03:54.480 --> 0:03:56.960 wanted to have conversations about some of the things that 0:03:57.000 --> 0:04:00.760 I was interested in, and all that snowball all into 0:04:01.280 --> 0:04:04.880 meeting real bitcoiners in person and starting to form relationships, 0:04:05.560 --> 0:04:09.800 going to events and uh, and then the gravity of 0:04:09.800 --> 0:04:13.720 bitcoin just kind of pulled me in. And in the end, UM, 0:04:13.880 --> 0:04:17.479 I made the you know decision that it was it 0:04:17.560 --> 0:04:21.279 was time. I love that the gravity of bitcoin pulls 0:04:21.279 --> 0:04:23.640 you in. Man, it's success all in, doesn't it. So 0:04:23.720 --> 0:04:28.760 when you were working for like a traditional manager institutional manager, UM, 0:04:28.800 --> 0:04:30.520 and you were trading treasuries, like I said, I mean, 0:04:30.560 --> 0:04:32.640 those are those are big markets, global markets, So you 0:04:32.680 --> 0:04:35.400 were looking at like the big kind of macro global 0:04:35.480 --> 0:04:38.280 picture when you were when you're doing those things, and UM, 0:04:38.360 --> 0:04:40.840 what what were you looking at? Um? What were there 0:04:40.839 --> 0:04:42.800 certain things that you were seeing that that we're kind 0:04:42.800 --> 0:04:45.440 of pushing asset prices around that kind of caused alarm 0:04:45.520 --> 0:04:48.680 for you. Well, you know, one of the things as 0:04:48.720 --> 0:04:50.880 a treasury trader that you really sink your teeth in 0:04:51.240 --> 0:04:55.119 is this bull market that treasuries have been in for 0:04:55.800 --> 0:04:59.680 uh three three plus decades in the United States, um 0:04:59.720 --> 0:05:04.000 SA the eighties when interest rates were at and so 0:05:04.200 --> 0:05:06.760 then you start to ask yourself, why have rates been 0:05:06.760 --> 0:05:11.120 trending lower for decades even though they can pop higher 0:05:11.600 --> 0:05:14.000 for a couple of years at a time. If you 0:05:14.120 --> 0:05:18.080 zoom out, what you see is just this persistent demand 0:05:18.160 --> 0:05:21.800 for US treasuries. So I started to ask myself what 0:05:21.880 --> 0:05:25.920 are the things that cause this persistent demand? And those 0:05:25.920 --> 0:05:28.160 were the things that I ended up focusing on. And uh, 0:05:28.400 --> 0:05:31.760 you know, some of those things are just the unlimited 0:05:31.800 --> 0:05:38.400 demand for safety and liquidity um of of safe, relatively 0:05:38.480 --> 0:05:42.080 safe assets versus all the other risky assets out there. 0:05:42.560 --> 0:05:44.920 Let's let's unpack that just a little bit. So um, 0:05:46.080 --> 0:05:48.080 for those that aren't aren't kind of tuned in, what 0:05:48.200 --> 0:05:50.920 are treasuries? Real quickly? I mean, how how does that? 0:05:51.040 --> 0:05:54.520 How does that work? Right? So, treasuries are obligations from 0:05:54.560 --> 0:05:58.039 the US government, So they are it's a it's a 0:05:58.120 --> 0:06:04.800 debt instrument, and and the buyer the bond is lending 0:06:04.839 --> 0:06:07.200 money to the US government, and over time, the US 0:06:07.279 --> 0:06:10.919 government pays back that that lender with interest payments and 0:06:10.920 --> 0:06:13.560 then eventually the principle at the end, the reason why 0:06:13.680 --> 0:06:18.200 treasuries are held as this quote unquote risk free asset, 0:06:18.520 --> 0:06:21.920 even though we know that the government could default, um, 0:06:22.320 --> 0:06:25.040 the fact of the matter is that they haven't, and 0:06:25.560 --> 0:06:31.000 that precedent the US government's credit worthiness has positioned treasury 0:06:31.000 --> 0:06:34.240 bonds as the quote unquote risk free asset of the 0:06:34.400 --> 0:06:38.520 entire financial system. Right, and so because of that, because 0:06:38.560 --> 0:06:41.000 the dollars the reserve currency of the world, and the 0:06:41.080 --> 0:06:43.560 United States has kind of been the underpinnion of the 0:06:43.560 --> 0:06:47.080 financial system. That's why their bond, where their treasury is 0:06:47.120 --> 0:06:49.360 the most risk free asset, and they have the track 0:06:49.400 --> 0:06:52.159 record I guess as well, not defaulting, that's right. And 0:06:52.440 --> 0:06:55.480 uh and uh part of part of that is that 0:06:55.839 --> 0:06:59.080 the dollar isn't backed by gold anymore, so you know, 0:06:59.240 --> 0:07:03.719 the people look for, uh an asset that is a 0:07:03.839 --> 0:07:07.080 safe haven away from the dollar. Um, they look to 0:07:07.160 --> 0:07:10.640 US treasuries because the dollar is not backed by anything 0:07:10.680 --> 0:07:13.720 but the treasury or the bond is backed by the government. 0:07:13.840 --> 0:07:17.080 The credit of the government. That's right. Well, see, the 0:07:17.080 --> 0:07:22.720 thing is that the dollar is backed by the Federal reserve, right. Um, 0:07:22.800 --> 0:07:25.600 that's if you have a cash note, those are federal 0:07:25.640 --> 0:07:29.120 reserve notes. Um. Dollars that are in a bank are 0:07:29.800 --> 0:07:34.800 liabilities of that bank, their dollar deposits, and so those 0:07:34.880 --> 0:07:39.040 dollar deposits aren't backed by anything but that bank. And 0:07:39.120 --> 0:07:41.840 that's really why people seek the safe haven of treasuries 0:07:42.280 --> 0:07:44.720 in the financial system. It's kind of the default thing 0:07:44.760 --> 0:07:48.400 that you own instead of bank deposits because you don't 0:07:48.440 --> 0:07:50.400 want to have to trust that bank. You'd rather trust 0:07:50.400 --> 0:07:53.360 the government. Right. And so we're talking like on the 0:07:53.440 --> 0:07:57.600 billion scale, the trillion scale, so like other sovereigns, right, 0:07:57.680 --> 0:08:00.800 other governments and things like that. Yeah, and you said, 0:08:00.840 --> 0:08:03.160 over the last thirty years, we've had this massive demand 0:08:03.240 --> 0:08:05.840 growth for that for those treasuries as interest rates have 0:08:05.960 --> 0:08:10.520 gone down. Um. Is that is that because other governments 0:08:10.520 --> 0:08:12.640 are kind of falling left and right, in the US 0:08:12.720 --> 0:08:16.280 just continues to get stronger and stronger. Well, it's a 0:08:16.320 --> 0:08:20.920 combination of several things. Um, inflation rates in general have 0:08:20.960 --> 0:08:25.040 been low in the Western world for a long time, 0:08:25.600 --> 0:08:30.640 and UM growth expectations as well. UM. And so you know, 0:08:30.800 --> 0:08:33.960 interest rates are kind of that combination of growth and 0:08:34.040 --> 0:08:37.800 inflation expectations of the future, and so as those two 0:08:37.840 --> 0:08:41.640 things have trended down, so have interest rates. Now, I 0:08:41.720 --> 0:08:44.480 mean currently, right now we're seeing the kind of this 0:08:44.559 --> 0:08:47.280 race to the bottom where all these other governments are 0:08:47.320 --> 0:08:50.040 starting to try to devalue their currency to kind of 0:08:50.040 --> 0:08:52.520 play that game. And so that's only making the US 0:08:52.600 --> 0:08:58.160 dollar stronger or the treasury is even stronger and more demand. Well, um, 0:08:58.160 --> 0:09:02.079 it's it's it's interesting because the US dollar is the 0:09:02.120 --> 0:09:07.000 center of the financial system and for that reason, um, 0:09:07.000 --> 0:09:09.400 as goes the US goes the rest of the world, 0:09:09.600 --> 0:09:12.200 and so I actually like to think more in terms 0:09:12.280 --> 0:09:15.439 of the rest of the world trying to devalue their 0:09:15.440 --> 0:09:18.000 currency is simply just a reaction to what's going on 0:09:18.040 --> 0:09:24.240 in the dollar system. Right. Okay, Now you talked about 0:09:24.720 --> 0:09:26.960 we talked about treasuries, but when you were looking at 0:09:26.960 --> 0:09:29.880 the macro markets, I mean, did you look at treasuries, 0:09:29.960 --> 0:09:33.000 which are you know, credit essentially of the government. But 0:09:33.320 --> 0:09:35.800 you kind of referenced before you also looking at gold 0:09:36.120 --> 0:09:40.680 and oil equities? How they all related together. Um, gold 0:09:40.720 --> 0:09:44.080 and oil obviously our commodities, those are real world assets. 0:09:44.120 --> 0:09:48.079 That's that's real wealth, right versus treasuries just being credit. 0:09:48.760 --> 0:09:51.719 How do you see those moving together or or what 0:09:51.960 --> 0:09:54.600 do you see there when you look at those together? Yeah, 0:09:54.640 --> 0:09:57.800 so the best thing you can try to do is 0:09:58.640 --> 0:10:02.640 UM just under stand which wants to watch. Trying to 0:10:02.679 --> 0:10:06.079 predict which causes the other to move or how they 0:10:06.120 --> 0:10:09.680 all react in you know, in relation to each other 0:10:10.240 --> 0:10:14.920 is really almost an impossible task. And unless you um 0:10:14.960 --> 0:10:17.680 you know, you have the quantitative tools, which actually there 0:10:17.679 --> 0:10:22.160 are a few hedge funds out there that you know, 0:10:22.240 --> 0:10:26.040 have dedicated hundreds of millions of dollars into the infrastructure 0:10:26.040 --> 0:10:31.360 to analyzing this data. So tracking it, being able to 0:10:31.360 --> 0:10:33.720 try to predict it is not something that I did. 0:10:33.800 --> 0:10:35.559 The only thing that I was trying to do is 0:10:36.200 --> 0:10:40.640 look at what was moving and why it was moving 0:10:41.200 --> 0:10:43.160 and and try to understand, you know, some of the 0:10:43.200 --> 0:10:49.840 relationships between asset classes, equity, fixed income, currencies and commodities. 0:10:50.200 --> 0:10:52.600 I guess what I was asking is UM. So. I 0:10:52.679 --> 0:10:55.720 just recently did a video on YouTube where I talked 0:10:55.760 --> 0:11:00.120 about UM the doubt of gold ratio and we I 0:11:00.160 --> 0:11:02.160 was basically talking about, you know, which a lot of 0:11:02.400 --> 0:11:04.600 people are kind of in tune with, but like gold 0:11:04.679 --> 0:11:07.920 being real wealth or real value. It's priced in dollars, 0:11:07.960 --> 0:11:09.880 and it looks like gold is getting more expensive. It 0:11:09.920 --> 0:11:12.040 looks like houses are getting more expensive. Looks like all 0:11:12.040 --> 0:11:13.880 these things are getting more expensive. But really the dollar 0:11:14.040 --> 0:11:17.400 is going down in value. And you when you look 0:11:17.440 --> 0:11:20.079 at um, when you look at home, the medium home 0:11:20.120 --> 0:11:22.200 price in the United States fifty years ago was twenty 0:11:22.280 --> 0:11:27.200 seven thousand. Today it's two. But when you price it 0:11:27.200 --> 0:11:29.319 in gold, it's kind of priced the same amount of 0:11:29.320 --> 0:11:31.439 ounces per gold or whatever. So that's I guess that's 0:11:31.440 --> 0:11:33.880 what I was curious about. So over the last you know, 0:11:33.920 --> 0:11:36.560 since nine seventy one or whatever, as that money supply 0:11:36.640 --> 0:11:39.520 has been exploding, I would imagine we've probably seen similar things, 0:11:39.520 --> 0:11:44.240 like in the treasury bond market. Um. Yeah, they definitely 0:11:44.320 --> 0:11:48.760 the the cost of living and especially the cost of 0:11:49.120 --> 0:11:53.120 things that have been subsidized by government programs. UM like 0:11:53.280 --> 0:11:57.680 the mortgage market and uh, the student loan market and 0:11:57.840 --> 0:12:02.040 the healthcare market. These three things have massive government subsidies 0:12:02.040 --> 0:12:05.880 here in the United States. UM. And it just leads 0:12:05.920 --> 0:12:11.640 to higher and higher prices bubbles, that's right, anywhere they 0:12:11.640 --> 0:12:14.880 want to put money because it creates artificial demand, right, 0:12:14.920 --> 0:12:17.600 And so you create artificial demand and it produces bubbles. Now, 0:12:17.800 --> 0:12:21.160 you wrote a paper recently called the Triumvirate, which was 0:12:21.440 --> 0:12:23.400 which was really cool as well received in the community. 0:12:23.400 --> 0:12:25.520 I know, I got a lot of a lot of 0:12:25.800 --> 0:12:27.920 publicity and and there was some really good stuff in there. 0:12:27.920 --> 0:12:29.880 And you talked about a little bit about the history 0:12:29.880 --> 0:12:33.440 of money, um, gold and then dollars built on top 0:12:33.480 --> 0:12:36.160 of gold. Um. But really there was a point where 0:12:36.160 --> 0:12:38.960 the euro dollar was created. It kind of change the 0:12:39.000 --> 0:12:43.840 whole system. Um before really we even lost the gold standard. 0:12:44.320 --> 0:12:47.360 What was that difference? Maybe real quickly as you walk 0:12:47.400 --> 0:12:51.880 through that sure, so um, what you did, what basically 0:12:51.880 --> 0:12:56.400 happened was in Europe after World War two, UM and 0:12:56.480 --> 0:12:58.880 the breton Wood system was started, where the dollar was 0:12:58.920 --> 0:13:03.800 the reserve currency. Banks in Europe needed a way to 0:13:03.840 --> 0:13:07.760 settle balances between each other, so they came up with 0:13:07.960 --> 0:13:13.880 this system of a dollar liability and uh that wasn't 0:13:13.920 --> 0:13:19.760 connected to the federal reserve regulated onshore US dollar system. 0:13:20.000 --> 0:13:23.200 But what were they using before that? Just dollars? That's well, 0:13:23.360 --> 0:13:28.160 they were using the balances between the between um between 0:13:28.320 --> 0:13:31.920 the two banks. And so those balances, whether they were 0:13:31.960 --> 0:13:37.160 denominated in the currency Europe or in gold um. They 0:13:37.679 --> 0:13:43.840 weren't able to facilitate the economic activity that was required 0:13:43.880 --> 0:13:46.800 of them in dollars because they just couldn't have the 0:13:46.840 --> 0:13:51.960 access to that many dollars with their own in currency, 0:13:52.120 --> 0:13:55.360 the euro dollar to help facilitate that trade. That's right. 0:13:55.400 --> 0:13:58.320 So they still had dollars, right, and those dollars um 0:13:58.880 --> 0:14:04.680 were actual notes, and but that only limits them to 0:14:05.000 --> 0:14:07.440 facilitate the amount of dollars that they had. So if 0:14:07.440 --> 0:14:09.240 they wanted to grow their business, they have to come 0:14:09.280 --> 0:14:11.280 up with something else. So they came up with this 0:14:11.320 --> 0:14:15.360 tool called the euro dollar to actually facilitate payment beyond 0:14:15.360 --> 0:14:19.600 the actual dollars that they had, right and so um 0:14:19.680 --> 0:14:21.840 that was a big turning point. You think in like 0:14:21.920 --> 0:14:25.680 the the the change in our money from golden dollars 0:14:25.680 --> 0:14:28.360 to then kind of the system that we have today. Well, 0:14:28.400 --> 0:14:32.240 what happened was the supply of these euro dollars started 0:14:32.280 --> 0:14:35.280 to increase and then they started to mix in with 0:14:35.440 --> 0:14:39.720 regular on shore dollars. So the Federal Reserve admitted sometime 0:14:39.960 --> 0:14:42.520 by the nineteen eighties that they had lost track of 0:14:42.560 --> 0:14:46.440 the money supply and they went from targeting money supply 0:14:46.640 --> 0:14:49.720 in their monetary policy to the price of money, which 0:14:49.800 --> 0:14:52.520 was you know, the federal refunds rate. They started targeting 0:14:52.560 --> 0:14:55.280 interest rates instead of the money supply because they actually 0:14:55.280 --> 0:14:59.400 didn't they lost track of it completely. And they they 0:14:59.440 --> 0:15:03.320 they have ad did this, uh, you know, slowly, but 0:15:03.480 --> 0:15:07.560 surely you know since the nineteen eighties, and um, in 0:15:07.600 --> 0:15:10.480 some papers that I was reading in preparation for this article. 0:15:10.760 --> 0:15:12.440 Sure they used to track it. They used to say, 0:15:12.480 --> 0:15:14.680 like because it was backed by gold, and they'd say, 0:15:14.720 --> 0:15:17.320 like how many times more than gold? And then they 0:15:17.320 --> 0:15:18.840 at tracked it for quite a while and then they 0:15:18.880 --> 0:15:21.720 just gave up and said, I forget it. Right, Um, 0:15:21.880 --> 0:15:24.320 you made a point that that in the paper, you 0:15:24.320 --> 0:15:26.600 made a point that at that point, Um, the dollars 0:15:26.640 --> 0:15:30.360 were no longer that risk free trade, and that's kind 0:15:30.360 --> 0:15:33.800 of what started pushing everybody into the treasuries. That's right, shift, 0:15:34.320 --> 0:15:37.240 that's right. So once the Fed you know, admits that 0:15:37.280 --> 0:15:40.920 they've kind of lost track of the supply of the dollar, um, 0:15:40.960 --> 0:15:44.160 the whole system realizes that the dollar is just a 0:15:44.240 --> 0:15:48.480 banking liability and not really an asset that's worth holding 0:15:48.480 --> 0:15:51.960 onto for any long duration of time. And so that's 0:15:52.000 --> 0:15:55.000 what causes the demand for US treasuries because you can 0:15:55.040 --> 0:15:57.680 think just think of it as the dollar substitute, and 0:15:57.720 --> 0:16:00.440 if the dollar is a banking line of liability, then 0:16:00.480 --> 0:16:04.440 you just substitute it with the government's liability. And that 0:16:04.600 --> 0:16:10.280 is basically what happened in the capital markets where um 0:16:10.480 --> 0:16:14.200 cash doesn't actually sit in cash, it sits in treasuries, 0:16:14.240 --> 0:16:16.960 T bills, et cetera, because that's a safe way to 0:16:17.000 --> 0:16:21.400 store dollars. It's interesting, you know. I saw just recently, 0:16:21.680 --> 0:16:23.040 in the last couple of weeks, I think I saw 0:16:23.040 --> 0:16:27.920 a survey and it said something like maybe up to 0:16:27.960 --> 0:16:30.840 thirty percent of people still think the dollar is backed 0:16:30.840 --> 0:16:34.120 by gold. And really there was kind of the sly 0:16:34.920 --> 0:16:38.440 switcher rue bait and switch whatever, where the dollar still 0:16:38.520 --> 0:16:41.600 looks the same, right, they changed it at the top 0:16:41.680 --> 0:16:42.920 that some of the text a little bit, but for 0:16:42.920 --> 0:16:44.360 the most part of the dollars the same, so the 0:16:44.360 --> 0:16:47.920 most people think it's still the same. Um. I thought 0:16:47.920 --> 0:16:50.760 it was interesting is that people thought it was still 0:16:50.760 --> 0:16:55.080 backed by gold. I wonder how many people never even 0:16:55.160 --> 0:16:58.640 knew it was even backed by gold, though that's probably 0:16:58.680 --> 0:17:01.920 a pretty high number. Yeah, I mean, it's it's it's funny. 0:17:02.000 --> 0:17:05.800 I um, you know, I didn't start trying to understand 0:17:05.800 --> 0:17:10.399 what the dollar was until I started studying economics, uh 0:17:10.640 --> 0:17:13.680 in in college. So you know, I think that it's 0:17:13.720 --> 0:17:17.240 just not on most people's radar. The dollar is their 0:17:17.359 --> 0:17:21.000 store value, it's their medium of exchange, and it's their 0:17:21.080 --> 0:17:25.679 unit of account. The dollar works, um. And so because 0:17:25.720 --> 0:17:28.679 of that, uh, people tend to not notice. But if 0:17:28.720 --> 0:17:30.560 you zoom out like you were saying, and you look 0:17:30.840 --> 0:17:34.000 over a multidecade time horizon, that's when you start that's 0:17:34.000 --> 0:17:36.359 when you start to notice that maybe this isn't the 0:17:36.440 --> 0:17:40.560 best way to store value. Yeah, that's such a good 0:17:40.600 --> 0:17:43.000 point that you made. Just like in the last week, 0:17:43.440 --> 0:17:45.919 another tweet that that kind of went around the world 0:17:46.040 --> 0:17:49.520 was that I think it was Larry Cernac posted or 0:17:49.560 --> 0:17:52.960 something and said that you know, the dollar by design 0:17:53.119 --> 0:17:56.840 is supposed to inflate by two annually, and even though 0:17:56.880 --> 0:17:59.280 it steals money from people or value from people, they're 0:17:59.280 --> 0:18:02.120 not supposed to be storing their wealth in in dollars, right, 0:18:02.440 --> 0:18:05.600 And he said they should be buying treasuries. Um. But 0:18:05.880 --> 0:18:08.680 as the point you just made, which I agree with, yeah, 0:18:08.680 --> 0:18:10.560 I was, person has no idea. They just think that 0:18:10.600 --> 0:18:14.200 they store their money in dollars, right, Yes, And that's 0:18:14.240 --> 0:18:18.080 why we also see that most of the stock market 0:18:18.840 --> 0:18:21.439 is owned by UM. You know, I think it's ten 0:18:21.520 --> 0:18:24.879 or fifteen percent of the American population, So you know, 0:18:24.880 --> 0:18:31.600 most people don't own financial assets in general. Yeah, what's 0:18:31.600 --> 0:18:34.639 interesting when you go through history, and again bitcoin drags 0:18:34.680 --> 0:18:37.040 you into all these different little rabbit holes as we 0:18:37.080 --> 0:18:38.479 call them. But when you go through history, you can 0:18:38.520 --> 0:18:41.119 see how UM, you know, in the mid I don't know, 0:18:41.160 --> 0:18:45.040 fourteen fifteen century, the whole world got onto the standardized 0:18:45.080 --> 0:18:47.720 gold system where all the coins had the same size 0:18:47.760 --> 0:18:50.640 and weight, and how it just blew up free trade 0:18:50.920 --> 0:18:53.359 and allowed everyone to start specializing. And then the world 0:18:53.359 --> 0:18:57.360 had several hundred years of massive prosperity UM during that period, 0:18:58.800 --> 0:19:03.080 and UM people were able to specialize, store their value 0:19:03.119 --> 0:19:06.880 and have it retain its purchasing power. But today, let's 0:19:06.880 --> 0:19:09.480 even if you're the best brain surgeon in the world, 0:19:09.680 --> 0:19:11.040 you should be able to be a good brain surgeon 0:19:11.040 --> 0:19:13.439 and park your money, have its store its value. But 0:19:13.560 --> 0:19:16.880 you can't, and so now everyone's forced to be an investor. 0:19:17.920 --> 0:19:20.040 And then it's created this whole financial system that would 0:19:20.040 --> 0:19:22.800 wouldn't even be necessary if we could just store our value. 0:19:23.280 --> 0:19:25.960 That's right, that's what happens. And when you're in a 0:19:26.119 --> 0:19:29.040 credit based or debt based money system is that it 0:19:29.119 --> 0:19:33.840 has to gradually inflate to stay alive. And it caused 0:19:33.920 --> 0:19:36.480 yet it causes everybody to have to be an investor. 0:19:37.320 --> 0:19:41.639 What's interesting, And you have the traational finance background, and 0:19:41.680 --> 0:19:44.680 it seems like a lot of people still because maybe 0:19:44.760 --> 0:19:47.679 the way that's predominantly taught is that we have to 0:19:47.720 --> 0:19:50.720 have this inflationary system, which I think is the point 0:19:50.720 --> 0:19:53.160 that he was trying to make on that tweet, because 0:19:53.480 --> 0:19:56.080 we need this system to inflate. And I sent a 0:19:56.119 --> 0:19:59.240 follow up tweet out and I said, would you rather 0:19:59.480 --> 0:20:02.399 your money I'm more in the future or less in 0:20:02.440 --> 0:20:05.680 the future. And everybody, of course wants more money or 0:20:06.000 --> 0:20:09.200 to buy more in the future. Um, but they want 0:20:09.280 --> 0:20:12.199 us to believe we need our money to inflate. But 0:20:13.440 --> 0:20:15.400 really it's the debt, right. Do you want to pay 0:20:15.560 --> 0:20:17.880 less for your debt in the future or pay less 0:20:17.960 --> 0:20:20.720 or pay more for your debt? Right? Yes? And I'm 0:20:20.760 --> 0:20:22.959 glad you brought that up because it's one of the 0:20:22.960 --> 0:20:24.679 things that I'm going to be spending a lot of 0:20:24.720 --> 0:20:28.320 time on over the next several months is coming up 0:20:28.359 --> 0:20:31.760 with an answer to your question about UM, how do 0:20:31.800 --> 0:20:35.600 we answer the criticism that we need to have this 0:20:35.720 --> 0:20:40.520 moderate early, moderately inflationary system UM, and that you know, 0:20:40.760 --> 0:20:44.920 the deflationary system of bitcoin is bad. So I'm I'm 0:20:44.920 --> 0:20:47.640 gonna be spending a lot of time researching, writing, trying 0:20:47.680 --> 0:20:50.480 to come up with ideas, asking some smart people there. 0:20:50.520 --> 0:20:55.520 There have been great pieces written about bitcoins, specifically with 0:20:55.560 --> 0:20:59.000 this UM, but also in terms of the gold system 0:20:59.040 --> 0:21:02.320 that we used to have UM. So I'm looking to 0:21:02.960 --> 0:21:05.800 research and summarize some of that stuff. I think. I mean, 0:21:05.840 --> 0:21:09.280 I think an inflationary currency only we're only helps, is 0:21:09.320 --> 0:21:12.760 only good in a credit based system. UM. In a 0:21:12.840 --> 0:21:16.560 non credit based system, you want a deflationary currency, of course. 0:21:16.920 --> 0:21:18.919 And and they want to say, well, people want to 0:21:18.960 --> 0:21:21.960 feel like their true wages are going up, UM, But 0:21:22.080 --> 0:21:24.520 I don't know. I think even though yeah, our wages 0:21:24.520 --> 0:21:26.159 went from four dollars and our eight dollars an hour, 0:21:26.280 --> 0:21:28.840 we know that they buy less today. So I don't 0:21:29.160 --> 0:21:32.119 that's not a great argument. What's that It's not a 0:21:32.119 --> 0:21:34.760 great argument to say that people, you know, want to 0:21:34.840 --> 0:21:36.880 feel like the numbers are going up, so that's why 0:21:36.920 --> 0:21:40.120 we have an inflationary system. No, it's not a good 0:21:40.200 --> 0:21:42.320 argument at all, you know, so it only helps the 0:21:42.320 --> 0:21:45.040 people with the credit. Now. You also made a point 0:21:45.080 --> 0:21:49.480 in that Triumgrant article that really the banks broke um 0:21:49.520 --> 0:21:52.320 the dollar in two thousand seven, and and now we're 0:21:52.400 --> 0:21:56.120 in a system of permanent disrepair? You said, yes, And 0:21:56.200 --> 0:21:58.720 so why is that? What happened there? Well? So the 0:21:58.800 --> 0:22:03.480 system of euro dollar interbank liabilities UM was kind of 0:22:04.680 --> 0:22:10.920 uh free reign system, strike of the pen um, not 0:22:11.000 --> 0:22:14.760 with a lot of limits, and not with really any 0:22:14.760 --> 0:22:18.640 worry uh what would go wrong? Um? And then when 0:22:18.680 --> 0:22:21.760 it did go wrong in two thousand and seven and 0:22:21.800 --> 0:22:25.639 they realized that you can't just leverage up six two 0:22:25.680 --> 0:22:31.920 one and survive um. That at that from that point forward, 0:22:32.400 --> 0:22:36.640 the banks trust of each other really just started to unwind. 0:22:37.200 --> 0:22:40.000 And so the reason why I say that we're in 0:22:40.080 --> 0:22:44.000 permanent disrepair is because we keep from going through these 0:22:44.040 --> 0:22:47.920 periods where banks uh just stop lending to each other 0:22:48.240 --> 0:22:50.840 and we can see that the system is not the 0:22:50.880 --> 0:22:53.600 same as it used to be. Now you say that 0:22:53.680 --> 0:22:55.960 in two thousand seven, So that's that right before the 0:22:55.960 --> 0:22:59.840 great financial crash happened, Um, they realized they can't leve 0:23:00.119 --> 0:23:04.320 up fifty one. But did they really? Aren't they levered 0:23:04.400 --> 0:23:09.760