Speaker 1: Lynn, I have so much to talk to you about.
Speaker 1: There's so much going on in the world, and I
Speaker 1: have some interesting things that I want to take us into.
Speaker 1: But anyway, thanks for joining me today.
Speaker 2: Happy to be here, Thanks for having me again.
Speaker 1: Yeah, So, a lot of stuff going on in the world,
Speaker 1: and you've been tweeting about a lot of different things,
Speaker 1: and I think you've been sort of recognized in the
Speaker 1: industry as thinking a little bit differently about things. It's
Speaker 1: probably your engineering background that you have. But I want
Speaker 1: to start on some big macro topics and then we'll
Speaker 1: take this down into a couple of different rabbit holes
Speaker 1: that people maybe haven't really heard us discussed before. But
Speaker 1: let's sort of start with like this big broad macro picture.
Speaker 1: I like to think of things in politics, finance, and
Speaker 1: technology and really where these three things converge because it
Speaker 1: gives better context. So I want to get into some
Speaker 1: of those topics, more of the technology stuff. But if
Speaker 1: we start with just like this macro picture. I've seen
Speaker 1: you talking about quite a bit how we're sort of
Speaker 1: going into this period of fiscal dominance, and so I
Speaker 1: recently did a video talking about how really the central
Speaker 1: bank interaction in the market have really changed since two
Speaker 1: thousand and eight. They've been much more involved and really
Speaker 1: been more proactive instead of as reactive as they were.
Speaker 1: And so we can talk about this fiscal dominance, but
Speaker 1: what I kind of want to talk about is a
Speaker 1: lot of assumptions that it seems like we've had about
Speaker 1: the markets have really been challenged in the last year
Speaker 1: or two since the Fed's gone on this tightening cycle,
Speaker 1: and so a lot of things maybe biases or just
Speaker 1: historical assumptions that people make, such as well, when the
Speaker 1: risk free rate goes up, the stocks have to be
Speaker 1: repriced down, but they haven't been. When rates, when mortgage
Speaker 1: rates go up so high, home prices have to come down,
Speaker 1: but they haven't been. So it seems like a lot
Speaker 1: of assumptions have been challenged here, and so I guess
Speaker 1: the bigger question is if we're in this period where
Speaker 1: the FED is fiscal dominance, they're really driving markets, we're
Speaker 1: seeing assumptions being challenged, then the big challenges do the
Speaker 1: markets have to crash?
Speaker 2: So it's a good question. My base case has been
Speaker 2: range bound for a lot of different assets, which which
Speaker 2: points towards not very good real returns over say a
Speaker 2: five plus year period, but not necessarily expecting a crash either.
Speaker 2: So I've neither been a kind of a you know,
Speaker 2: melts up bowl or a deflationary crash bear. I've been
Speaker 2: more in that range bound camp, which so far has
Speaker 2: been working out both in the housing market in aggregate
Speaker 2: and the stock market in aggregate. Obviously, there are very
Speaker 2: different industries that can be up or down, there are
Speaker 2: very different geographies that can be up or down. But
Speaker 2: overall that's kind of the general path we've been on.
Speaker 2: And if we look back historically, I kind of classify
Speaker 2: the long term debt cycle Ray Dalio's work, for example,
Speaker 2: and then additional work I put into it to kind
Speaker 2: of really flesh out and explore this concept. I know
Speaker 2: you've covered it quite a bit as well. It's basically
Speaker 2: the observation that you go through a number of normal
Speaker 2: business cycles, but you build up instability in the system
Speaker 2: a couple of different ways, including on the public debt side.
Speaker 2: And so if we characterize the past forty years, we
Speaker 2: had ever rising public debts, so whenever we had a recession,
Speaker 2: we would have you know, industries get cut that allows
Speaker 2: higher debt levels and you get you know, lower lows
Speaker 2: and lower highs in indust rates and higher highs and
Speaker 2: higher lows in both private sector and public sector debts
Speaker 2: is a percentage of GDP and that coincided with basically
Speaker 2: the peace dividend, the opening up of the world. You know,
Speaker 2: China opened up to the world in the nineteen eighties,
Speaker 2: Soviet Union fell in the early nineties, and so we
Speaker 2: kind of entered this more connected world for a period
Speaker 2: of time, and we basically brought Western capital together with
Speaker 2: Eastern labor and resources, and that was a very kind
Speaker 2: of productive, disinflationary time. Some people were hurt by it,
Speaker 2: but a lot of people were helped by it, and
Speaker 2: that's kind of been the era we've been and that
Speaker 2: allowed for lower indust rates and when you look at
Speaker 2: the government expenditure, if you have hired higher debt to
Speaker 2: GDP but lower and lower indust rates, your overall interest
Speaker 2: expense remains manageable. And when we had the global financial crisis,
Speaker 2: a lot of things changed there. We had a bank recapitalization,
Speaker 2: We hit the peak in terms of private debt relative
Speaker 2: the GDP, but we push a lot of that debt
Speaker 2: onto the public sector in multiple countries, especially the United States,
Speaker 2: and so when we look back at prior long term
Speaker 2: debt cycles, they do tend to come in a one
Speaker 2: two punt. First you have the private debt bubble kind
Speaker 2: of break apart, which is disinflationary. But then the second
Speaker 2: stage is when all that gets pushed up to the
Speaker 2: public sector and then that becomes more of an inflationary
Speaker 2: type of crisis. So kind of ever since the past
Speaker 2: call it three four years, we've been in that second
Speaker 2: phase of the bubble, and so I think that's one
Speaker 2: of the best ways to look at it from a
Speaker 2: historical lens. But then of course I have to think, okay,
Speaker 2: what is different now in terms of culture, in terms
Speaker 2: of technology, in terms of just the way the world looks,
Speaker 2: you know, what is different? Even though that's a useful baseline,
Speaker 2: and it's you know, these types of periods are all weird,
Speaker 2: and so there's going to be challenging things to navigate
Speaker 2: that you didn't necessarily expect, which is why it's useful
Speaker 2: to have a framework, but to also be very flexible
Speaker 2: with your thinking to see what sort of curveballs might
Speaker 2: or may not come, and then you know, adjust that
Speaker 2: over time based on what's happening.
Speaker 1: So then if to recap, so your base case isn't
Speaker 1: a big crash, it's sort of just chopping along sideways.
Speaker 1: This crab market, if you will, I think is kind
Speaker 1: of what you said two very similar. You've been talking
Speaker 1: about a lot, and I think it's very helpful to
Speaker 1: kind of look at sort of what we saw in
Speaker 1: the thirties and forties as a better sort of proxy
Speaker 1: or representation of what we're where we're at today as
Speaker 1: opposed to like the seventies era. However, what you're saying
Speaker 1: is that we need to remain flexible. So it's good
Speaker 1: to have some sort of like models that we can
Speaker 1: view the world through, but be flexible because who knows
Speaker 1: right if I frame that up right?
Speaker 2: Yeah, And as an example, you know, back in early
Speaker 2: twenty twenty two, when it became clear that the FED
Speaker 2: was going to be quite hawkish, that was you know,
Speaker 2: my expectation was we'd have a recession by kind of
Speaker 2: later in the year and that it'd be tough to
Speaker 2: get in straights over three percent before you'd have kind
Speaker 2: of those types of problems. And for the most of
Speaker 2: twenty twenty two that was correct. We had slowing economic indicators.
Speaker 2: We had two quarters of negative real GDP growth, even
Speaker 2: though they weren't technically a recession because they didn't have
Speaker 2: like an unemployment spike and stuff. But we had a
Speaker 2: period of softness as the price has had a pretty
Speaker 2: bad time across the board. But then by early twenty
Speaker 2: twenty three, I started to see signs that it was
Speaker 2: playing out differently that basically the fiscal deficits, ironically from
Speaker 2: part of that, the monetary tightening, so the higher interest
Speaker 2: expense from the federal deficits were starting to actually kind
Speaker 2: of balance themselves out. They were becoming kind of inflationary
Speaker 2: and stimulatory. And then when you had the kind of
Speaker 2: the minibanking crisis and the FEDS willingness to reinject some
Speaker 2: liquidity in there to stop contagion, these things really kind
Speaker 2: of added up to a shift in how I viewed things.
Speaker 2: So you know, that's that's an example being flexible, where
Speaker 2: you have a view it starts playing out, but then
Speaker 2: after a certain point it kind of starts being a
Speaker 2: little different. It's almost like if you're very tired and
Speaker 2: you stay up all night and you just kind of
Speaker 2: force yourself through it. Eventually you almost get like another
Speaker 2: burst of being awake. Again right, that that's and that's
Speaker 2: kind of what we saw in markets where they got
Speaker 2: so tight on the on the fiscal side and the
Speaker 2: and the monetary side, they kind of went past the
Speaker 2: looking glass towards actually being so much stimulatory. Because a
Speaker 2: lot of the private sector debt is low and fixed rate,
Speaker 2: especially in the in the household sector and in the
Speaker 2: investment grade corporate sector, so those industries have held up
Speaker 2: pretty well, whereas a lot of the US federal debt
Speaker 2: is short term and so that's been refinanced at at
Speaker 2: much higher rates. And so this the we have like
Speaker 2: two very powerful competing forces here. One is that the
Speaker 2: industrates are putting downward pressure on a number of industrate
Speaker 2: sensitive industries, you know, commercial real estate and small businesses
Speaker 2: and junk rated companies and the like. But the other hand,
Speaker 2: that interest expense is just completely blowing out the deficit,
Speaker 2: which is on its own, and it's a stimulatory inflationary force.
Speaker 2: And in the past year so they've been roughly balanced.
Speaker 1: Yeah. I think maybe it was Joseph Waang or somebody
Speaker 1: said this was something like I'm so bearish on bullish
Speaker 1: kind of a thing, right, So it's like things are
Speaker 1: so bad. It's actually sort of bullish. It's stimulatory, to
Speaker 1: your point. And so we're starting to see more and
Speaker 1: more of the spending being from the government and this
Speaker 1: deficit spending, and so you've talked about extensively, how as
Speaker 1: things continue to get worse, that deficit spending goes up,
Speaker 1: and that's really the sort of main driver of a
Speaker 1: lot of this inflation that we have. I guess it
Speaker 1: is sort of the point that you're sort of making.
Speaker 1: Now you have what I was kind of saying earlier
Speaker 1: in the intro sort of like I charted out sort
Speaker 1: of the change in central bank policy sort of from
Speaker 1: two thousand and eight and so like, for example, in
Speaker 1: two thousand and six, the housing market had started to crash.
Speaker 1: The housing starts went down by twenty six percent, but
Speaker 1: yet it took thirty months before the Fed did anything
Speaker 1: in the markets. From the time bear Stearns went bankrupt,
Speaker 1: it was seven months before they even got a package.
Speaker 1: It was one hundred billion dollars or one hundred million
Speaker 1: dollars that they had ready to go or no, it's sorry,
Speaker 1: one hundred million dollars. But in twenty twenty three, when
Speaker 1: the banks went bankrupt, it was six days, so we
Speaker 1: kind of see the difference. In twenty twenty, the FED
Speaker 1: set up I think it was thirteen different special funding facilities,
Speaker 1: three four letter agencies, and again you know, the BTFP
Speaker 1: was set up in like six days. So it shows
Speaker 1: at least it looks like to me that they're much
Speaker 1: more proactive now they've gone around and set up all
Speaker 1: these swap lines, not just with friendly countries, but now
Speaker 1: even you know what maybe Tier two central banks, et cetera.
Speaker 1: So it seems like their fingers on the trigger and
Speaker 1: they're ready to go. And so, you know, if you
Speaker 1: understand that we're in this debt based monetary system and
Speaker 1: the debt is the asset, it's the collateral on more debt,
Speaker 1: they have to keep that system from unraveling. But then
Speaker 1: you might have somebody like a Jeff Snyder who says, well,
Speaker 1: but really the Fed has no control because it's really
Speaker 1: the euro dollar market overall. So are they able to
Speaker 1: sort of have this dominance where they can continue to
Speaker 1: keep these things elevated with these special funding facilities and
Speaker 1: these swap lines and the fiscal side can continue to
Speaker 1: spend or are we sort of like in this period
Speaker 1: where maybe there's this out of control beasts that we
Speaker 1: can't control.
Speaker 2: So there's been this narrative for several years that they
Speaker 2: can't create inflation, that the markets are too deflationary to
Speaker 2: them to do it. And I wrote an article back
Speaker 2: in twenty nineteen where I said, are bonds in a
Speaker 2: bubble or is this a new normal? And the conclusion
Speaker 2: of the article was it is a bubble, and I
Speaker 2: talked about how I was like, look, a lot of
Speaker 2: things look disinflationary, but if in the next downturn, central banks,
Speaker 2: you know, they can completely change the rules and they
Speaker 2: can work with physical authorities and just have massive monetized
Speaker 2: physical deficits. There's almost eerie. You know, I didn't talk
Speaker 2: about a pandemic in that article, but it's almost eerie
Speaker 2: what happened less than a year after that article came out.
Speaker 2: It was just completely, you know, completely the rules were changed.
Speaker 2: And that's what we've seen. And the reason I had
Speaker 2: that view is because that's when you get towards a
Speaker 2: sovereign debt kind of cycle nearing its its sort of completion,
Speaker 2: and a completion can take a decade. It doesn't mean
Speaker 2: a completion like this six months. I mean like this era,
Speaker 2: the rules change, the cycles get tighter. Similarly, during March
Speaker 2: twenty twenty, I wrote an article called why this isn't
Speaker 2: like the Great Depression, And that was like just an
Speaker 2: early sign of seeing somebody stimulus. And so my view is, no, no,
Speaker 2: this is not going to be disinflationary. This is likely
Speaker 2: going to be inflationary because the cavalies response time is quicker,
Speaker 2: and because it's more like the forties, not like the thirties.
Speaker 2: So I would consider the two thousand and eight crisis
Speaker 2: to be very similar to the nineteen twenty nine crisis.
Speaker 2: That was all the hallmarks of a private debt bubble unwinding.
Speaker 2: But I think we're past that now. I think now
Speaker 2: we're towards the sovereign debt bubble. And the closer you
Speaker 2: get to the sovereign, the quicker the trigger finger is
Speaker 2: to come in with any sort of thing, because it
Speaker 2: starts to potentially make the treasure market get illiquid. So
Speaker 2: if you looked last year during the twenty twenty two
Speaker 2: guilt market blow up, right, so it's September of last year,
Speaker 2: the UK guilt market blew up and the Bank of
Speaker 2: England had to come in and do emergency QE for
Speaker 2: a number of weeks, even though they had ten percent
Speaker 2: inflation at the time, and they had to cancel a
Speaker 2: speech about bounce sheet reduction they were going to have
Speaker 2: the next day, because you literally had a vicious cycle
Speaker 2: of more bond selling and at the same time, the
Speaker 2: US treasure market was like one step behind. It was
Speaker 2: like very I liquid bond auctions were not going well.
Speaker 2: It was looking very wildly and he started to see
Speaker 2: the treasury offset the Fed, so you know, the Fed
Speaker 2: was still being somewhat tight. The treasure started drawing down
Speaker 2: it's treasurey generally count and taking other measures. That was
Speaker 2: kind of the part of the reversal. So basically my
Speaker 2: view is that when push comes a shove, and when
Speaker 2: it gets closer to the sovereign, inflationary forces can always
Speaker 2: be used to override the various debt driven disinflationary driven
Speaker 2: forces in the economy, and so I will generally always
Speaker 2: air towards that inflationary outcome while risk managing it along
Speaker 2: the way and basically having a realistic timeframe and diversification.
Speaker 1: Yeah, yes, you know, something that I was thinking about
Speaker 1: in regards to that too, is like sure, so maybe
Speaker 1: the FED doesn't have total control, but sure to your point,
Speaker 1: the fiscal the government could do that spending or increase that,
Speaker 1: and so a couple things. So, like you mentioned some
Speaker 1: of these things that are more interest rate sensitive, sort
Speaker 1: of like the commercial real estate market, specifically the mortgage
Speaker 1: bond market in the real estate sector is two point
Speaker 1: nine trillion dollars of debt that could potentially blow up,
Speaker 1: and people look at that as like this big you know,
Speaker 1: maybe not a black swan but a gray squand that
Speaker 1: could sing things. But like the FED could just take
Speaker 1: all that under their books. They've done that before, Like
Speaker 1: why wouldn't they. So when you go through a lot
Speaker 1: of these things, at least for me, I'm like, okay,
Speaker 1: sure that's bad, but like we've seen before that they
Speaker 1: could just take that on their books and just sort
Speaker 1: of put that over on the side. So when you
Speaker 1: start look at these things. Also we saw I think
Speaker 1: some of the banks in Europe were guaranteeing banks loans,
Speaker 1: So banks don't want to loan money out because they're
Speaker 1: afraid that you know, the market's you know, shaky, there's
Speaker 1: a recession there, so the banks don't want to loan
Speaker 1: the money out, but the government just says, hey, we'll
Speaker 1: just backstop your loans like go ahead, and so then
Speaker 1: the banks well of course will loan if there's no risk.
Speaker 1: So there's lots of things. I guess when I look
Speaker 1: at some of these people that I've been studying for
Speaker 1: a long time, like Harry Dent Junior, I've probably read
Speaker 1: five of his books. I love his research. I think
Speaker 1: his research is correct. But trying to continue to time
Speaker 1: when this crash is going to happen is obviously failed
Speaker 1: for him, and I think a lot of it is
Speaker 1: we just continue to fail. How many more tricks they
Speaker 1: have up their sleeve? Would you say that.
Speaker 2: When they change they unit up account, it's like changing
Speaker 2: the rule. It's a kobyashi maru, right, You just change
Speaker 2: the rules of the test is basically what they do.
Speaker 2: And so you know, a country that controls its own
Speaker 2: unit of account is when a push comes to shove,
Speaker 2: they print. And I'd be careful that doesn't mean fully
Speaker 2: risk on because for example, you know the FED right
Speaker 2: now under Drone Pale, his legacy is on the line.
Speaker 2: He is serious about tightening and it's one of those
Speaker 2: things where he doesn't you know, if the stock market
Speaker 2: drops twenty percent. He's not going to care if credit
Speaker 2: markets have problems, if there's a big cycle of commercial
Speaker 2: real estate bankruptcy, he's not going to care. If anything,
Speaker 2: they're good that he that thinks he'd probably like to
Speaker 2: see the markets where they jump in quickly. Are bank
Speaker 2: contagion anything adjacent to that, like ripo spikes like they
Speaker 2: did in twenty nineteen, or the tragy market itself, right,
Speaker 2: those are those are the cores of the system that
Speaker 2: I You know that they're very unlikely to let struggle
Speaker 2: for long periods of time, whereas almost anything else you
Speaker 2: do it be quite careful of. That's part of why
Speaker 2: I don't expect and for a while I have not
Speaker 2: expected good stock or or broad real estate returns, especially
Speaker 2: on a real basis. You know, when you're comparing that
Speaker 2: to CPI, or when you're comparing that's what you can
Speaker 2: get on a T bill and things like that. The
Speaker 2: the overall risk of those markets remains pretty high. But
Speaker 2: you know, another way of looking at as you mentioned
Speaker 2: two point nine trillion in debt, but it's like we
Speaker 2: have one point seven trillion annual physical deficits, right, It's
Speaker 2: like there's a fire hose of depthits going to the market.
Speaker 2: So you can have trillion dollar bankruptcies that are kind
Speaker 2: of offset by trillion dollars just ongoing physcal injections. And
Speaker 2: so even if the FED doesn't come to the rescue there,
Speaker 2: it's just that one industry is suffering, you know, arguably
Speaker 2: right sizing, I mean, commercial real estate does have to
Speaker 2: go through a repurposing, and you know it's a change
Speaker 2: because we've changed, our technologies changed, our locations have changed.
Speaker 2: But the other hand, you know, I don't think you're
Speaker 2: gonna see like restaurants sales go bust because the people
Speaker 2: that go to restaurants a lot of them are on
Speaker 2: the receiving side of these very large physical deficits. And
Speaker 2: so it's a very kind of industry by industry market
Speaker 2: and I think the overall aggregate is this is kind
Speaker 2: of stagflationary, range bound type of thing where it's a
Speaker 2: very some people feel like what recession. I don't see recession,
Speaker 2: and other people are racking up credit card debt to
Speaker 2: get by because for them it already is a recession.
Speaker 2: And it's just very industry specific, individual specific, and the
Speaker 2: overall range is that kind of murky sideways action.
Speaker 1: Yeah, in two thousand and eight, I was in southern
Speaker 1: California developing real estate. Orange Scanty, California was like the
Speaker 1: epicenter of the mortgage industry, and we got hit really,
Speaker 1: really hard. But there was plenty of other industries that
Speaker 1: didn't really feel that recession as much, Right, So that's
Speaker 1: sort of an example. And to your point about the restaurants,
Speaker 1: you know, we also have, like, for example, the baby
Speaker 1: boomers sitting on tens of trillions of dollars worth of
Speaker 1: wealth and they're like they're gonna die, so like I
Speaker 1: might as just go to spend my money. So they're
Speaker 1: not really a sense of tip to those things. And
Speaker 1: so there's a lot of plays here, or a lot
Speaker 1: of things in play. I guess to kind of wrap
Speaker 1: this up back to so one, the market doesn't have
Speaker 1: to crash. It doesn't have to Potentially the maybe shorter term,
Speaker 1: maybe the next twelve months, is more uncertain. It seems
Speaker 1: to me the longer term is more certain. Because of
Speaker 1: the debt based montary system that we have, we need
Speaker 1: more inflation and most likely asset prices will be higher
Speaker 1: over the next three to five years. Maybe we don't know,
Speaker 1: the next six to twelve months. That's sort of my
Speaker 1: base case. Would you agree with that or no?
Speaker 2: Yeah, generally, and I think, you know, crash, it helps
Speaker 2: to define it specifically, right, So I mean the fact
Speaker 2: that we had like a twenty percent draw down and
Speaker 2: then a partial retrace and then we're having like another
Speaker 2: draw down, now you know that's to be expected. I mean,
Speaker 2: you could have a ten to twenty percent move with
Speaker 2: not much of a problem, especially over a multi month
Speaker 2: period or over the course for you.
Speaker 1: And you might even consider that a healthy pullback after
Speaker 1: the run.
Speaker 2: That I wouldn't consider that a crash. I think, I
Speaker 2: think a useful models to look at emerging markets when
Speaker 2: they go through recessions or just in general, when they're
Speaker 2: kind of in a malaise. Often the stock market's not
Speaker 2: going down big in nominal currency terms. It's kind of
Speaker 2: it's doing bad in dollar terms, but it's usually doing
Speaker 2: fine in nominal local currency terms. And I think that
Speaker 2: basically when when developed countries go through sovereign debt crises
Speaker 2: or things like we're having now, it's basically like a
Speaker 2: developed market with emerging market characteristics. And so either, like
Speaker 2: you know, I use the nineteen forties analog a lot,
Speaker 2: but potentially more accessible analog for people. Just look at
Speaker 2: emerging markets, you know, not I'm not saying the absolute
Speaker 2: basket case ones, but just like the standard quintessential merging market,
Speaker 2: what do their recessions look like? What are their stock
Speaker 2: markets doing in nominal terms versus say, compared to dollars
Speaker 2: or gold or whatever. And I think that there's there's
Speaker 2: some comparisons there that are instructive. So I would expect
Speaker 2: a range bound and that range could be pretty big
Speaker 2: and then not great real returns probably, you know, we've
Speaker 2: had negative real returns since you know, like early twenty
Speaker 2: twenty one, mid twenty twenty one, and I would expect
Speaker 2: that to continue for a number of years because I
Speaker 2: think that some of the more defensive assets like literally
Speaker 2: you know, T bills, tips, you know that at their
Speaker 2: positive real rates are interesting. Now I prefer gold and bitcoin,
Speaker 2: I you know, I think there's some emerging markets that
Speaker 2: are attractive if you choose them selectively. There are a
Speaker 2: mix of assets out there that are interesting, but I
Speaker 2: think the ones that have been expensive and crowded into
Speaker 2: are just unlikely to do good returns, and that you know,
Speaker 2: things can correct in price, or they can correct in time.
Speaker 2: They can just be in a arrange for a long time,
Speaker 2: and that is eventually a correction.
Speaker 1: Right now, and we have to sort of zoom out
Speaker 1: of just the macro and look at the bigger picture
Speaker 1: to sort of understand things as well. And so now
Speaker 1: it seems like when things, when all things fail, high inflation, whatever,
Speaker 1: like let's just go to war, and here we are.
Speaker 1: Janet Ellen comes out and says we can fight two wars,
Speaker 1: we might have a third war shaping up China, sending
Speaker 1: warships over to the Middle East as well. Right now
Speaker 1: in light of that, in light of looks like potential
Speaker 1: massive military spending is in the cards for us in
Speaker 1: the near future, at least probably for the next year.
Speaker 1: How does that change things? I mean, that's going to
Speaker 1: be massive inflation or does that give them a cover
Speaker 1: potentially a cover of letting things run hot, getting that
Speaker 1: inflation they need to get that GDP up to bring
Speaker 1: the debt to GDP down or how do you see
Speaker 1: that plane out?
Speaker 2: Yeah, I think it potentially does. And a common thing
Speaker 2: you see during the sovereign debt crisis is financial oppression.
Speaker 2: So various ways to kind of keep financing to the
Speaker 2: government affordable while trying to restrict private sector lending too
Speaker 2: much and trying to restrict private sector capital flow. So
Speaker 2: you know, basically various capital controls. That was a place
Speaker 2: across the developed world in the nineteen forties. And when
Speaker 2: you see emerging markets like today there are multiple merging
Speaker 2: markets that all various frictions on purpose for people that
Speaker 2: want to get their capital elsewhere. They basically add various
Speaker 2: hurdles to them. And so that's that's something we should expect,
Speaker 2: and but part of that has to be done with narrative, right.
Speaker 2: It's like, you know, in order to be successful, they
Speaker 2: have to have something your plausibility with it, which gets
Speaker 2: a lot of the public on board. And so you know,
Speaker 2: right now we've seen, for example, there's been a lot
Speaker 2: of misinformation in the in the financial media around how
Speaker 2: much terrorists receive financing from crypto right. That's that's been
Speaker 2: a big thing, and it's been it's been pretty soundly debunked.
Speaker 2: Now even the sources that some of those media articles
Speaker 2: used themselves said no, no, this is completely misconstrued. The
Speaker 2: numbers like less than one percent of what you said
Speaker 2: it was most of the financing comes from traditional existing
Speaker 2: financial rails. This is like a rounding error. But that
Speaker 2: doesn't change the fact that there are certain senators and
Speaker 2: certain politicians that are like, look, look, we have to
Speaker 2: go after this. Now, this, this crypto is all terrorist financing.
Speaker 2: And if you can drill that enough people's heads, people
Speaker 2: get scared. They think, yeah, no, we have to block this.
Speaker 2: Like it's just people are not very quantitative on average,
Speaker 2: and politicians will use that and just shape the narrative
Speaker 2: over and over again. And so I think that that's
Speaker 2: an ongoing thing now. Luckily, the combination of social media
Speaker 2: and things like bitcoin or stable coins do allow for
Speaker 2: more peer to peer transfer information and value, which makes
Speaker 2: it a lot harder for them to do the types
Speaker 2: of financial oppression that they've done in prior cycles. But
Speaker 2: that's not guaranteed. That's something that has to be protected.
Speaker 2: Fault for people educated on lies kind of called out
Speaker 2: a well evidenced and I think that that's kind of there. Basically,
Speaker 2: there is a kind of cultural battle behind the scenes.
Speaker 2: And the reason I talked about that is because having
Speaker 2: studied the nineteen forties a lot and studying emerging markets today,
Speaker 2: this is actually a very common occurrence during these cycles
Speaker 2: to use kind of these temporary crisses for permanent restrictions
Speaker 2: or to kind of shift narratives around to help get
Speaker 2: people more on board with the financial oppression that they
Speaker 2: kind of mathematically get stuck into.
Speaker 1: Yeah, I mean it's yeah, don't let a crisis go
Speaker 1: away sort of sort of thing. And so it wasn't
Speaker 1: just the forties. We continue to see that being in
Speaker 1: the playbook, but sort of going back to what you're
Speaker 1: talking about, this financial repression, and so in order to
Speaker 1: get the debt to GDP down, they can either bring
Speaker 1: the debt down unrealistic or get the GDP up. So
Speaker 1: there's this financial repression where you let inflation run really hot.
Speaker 1: So GDP goes up because of the inflation. But the
Speaker 1: problem is then they have to kind of restrict the
Speaker 1: capital within that and so it's not politically pattable at
Speaker 1: this point to let inflation run hot. But if they
Speaker 1: could blame it on a war, Oh, it's Putin's fault,
Speaker 1: it's Israel, it's just Homasice fault, whatever it may be,
Speaker 1: then we could potentially get that inflation that they want,
Speaker 1: that they need and blame it on the war. That's
Speaker 1: the narrative part that you're talking about.
Speaker 2: Yeah, the same exactly. Yeah, they can't just say, look,
Speaker 2: our decade of you know, kind of just broad based
Speaker 2: spending and tax policies have contributed to a destabilizing situation,
Speaker 2: and therefore it's going to just kind of inflate on
Speaker 2: its own. They definitely need an external reason, right, and
Speaker 2: so that anything that they can use, they're they're willing
Speaker 2: to jump on. And you know, in the prior kind
Speaker 2: of a couple of years, I think the Federal Reserve
Speaker 2: intended to be slower to raise rates and respond to
Speaker 2: the inflation. They kind of signed that pretty strongly, but
Speaker 2: the public reaction to that inflation was pretty you know, negative,
Speaker 2: pretty quickly, and so they change course pretty quickly, and
Speaker 2: so that was not enough cover for them to do
Speaker 2: what they want to do. But potentially a war is
Speaker 2: and so I think that, you know, we'll see how
Speaker 2: this plays out. But basically, the more that they can
Speaker 2: blame inflation on an external source and then therefore also
Speaker 2: blame the need for capital controls and things like that
Speaker 2: on an external source, and to drive up the fear
Speaker 2: of security, you know, that's that's really what kind of
Speaker 2: captures a lot of people.
Speaker 1: So war is like this perfect double whammy so to speak.
Speaker 1: Not only can they get an excuse to get inflation up,
Speaker 1: but they also get an excuse to get capital controls
Speaker 1: in place at the same time, which they need both,
Speaker 1: and yeah, that's perfect. You put out a tweet and
Speaker 1: you said technology changes how humans have to interact with things,
Speaker 1: and unfortunately it takes time and experience. And you were
Speaker 1: talking about the fall of publisher media gatekeepers is good,
Speaker 1: but it means we have to pick our media if
Speaker 1: we don't want to be uninformed. And then you also
Speaker 1: said the fall of money security gatekeepers also mean we
Speaker 1: have to pick our money. So it's technology, as I
Speaker 1: say the same thing. It always changes the way the
Speaker 1: world works because of how we communicate and we organize,
Speaker 1: changes the way we organize as well. And so sort
Speaker 1: of what you're saying is this the way that we're
Speaker 1: communicating now is much faster. We don't need a gatekeeper
Speaker 1: to get information out there anymore, and that's good for us.
Speaker 1: So it's creating this sort of like ground level decentralized movement,
Speaker 1: but it's sort of the opposite of what the gatekeepers want.
Speaker 1: And so now there's multiple battles being fought, and so
Speaker 1: now sort of and you put another tweet sort of
Speaker 1: referencing the Patriot Act. And so now they see maybe
Speaker 1: this disruption in these open monetary or open let's say
Speaker 1: communication networks and in this you know, just in this
Speaker 1: war scenario, they are using that as a way to
Speaker 1: clamp down on Is that what you're seeing with the
Speaker 1: Patriot Act reference.
Speaker 2: Yeah, we've been seeing that, and the Patriot Act was
Speaker 2: specifically there was a recent Finsend proposal to basically dramatically
Speaker 2: increase the reporting requirements on various private types of crypto
Speaker 2: transactions to the point where it's so broadly and vaguely
Speaker 2: worded that it applies to almost everything. And so it's
Speaker 2: basically a pretty draconian thing. And they cite Section three
Speaker 2: one one of the Patriot Act as part of their
Speaker 2: justification for it, so that parts of the patriarch are
Speaker 2: alive and well all these you know, a couple of
Speaker 2: decades later, and so I think that's that's kind of
Speaker 2: a challenge. And going back to the gatekeeper point. Basically
Speaker 2: in the old model, and this was largely just technology driven,
Speaker 2: the limitations we had is that if you wanted to
Speaker 2: publish a book, or if you wanted to have a
Speaker 2: radio show or have a TV show, these were kind
Speaker 2: of gate kept. There's publishers, there were broadcasters, and there's
Speaker 2: a lot of cons that come with that, especially in
Speaker 2: a less free society. A couple pros or that they
Speaker 2: you know, they filter out some of the you know,
Speaker 2: there's some quality filter to it. In a healthy market.
Speaker 2: You know, it's if the whole world's watching Walter Cronkite,
Speaker 2: they are at least on the kind of the same
Speaker 2: set of facts they're working with as they debate each other.
Speaker 2: But as that devolves into either more propaganda type of
Speaker 2: media or just more captured corporate captured media, that that
Speaker 2: kind of disintegrates. And so the fact that we've the
Speaker 2: technology has made it easier to self publish a book
Speaker 2: or easier to start your own radio show or start
Speaker 2: your own TV show. That's literally what we're doing right now.
Speaker 2: These more peer to peer interactions bring down the importance
Speaker 2: of the gatekeepers, which is a net good, but then
Speaker 2: it takes adjustment to that because you also a lot
Speaker 2: of low quality stuff enters the market and people get
Speaker 2: can get silent into their own echo chambers, right, so
Speaker 2: where they they have a bubble and they only follow
Speaker 2: people that are kind of just like them, and then
Speaker 2: they end up getting shocked and certain outcomes because they
Speaker 2: forget that they're in a small bubble and that most
Speaker 2: of the world doesn't think like them. But most of
Speaker 2: the world's in their own bubbles too, and so increasingly
Speaker 2: there's people in their own little bubbles. And so I
Speaker 2: think that as we have this more peer to peer world,
Speaker 2: it does take some adjustment and more responsibilit in our
Speaker 2: part to go out and make sure we have a
Speaker 2: higher level of view, like what is this silo of thinking?
Speaker 1: Now?
Speaker 2: What is this silo of thinking? What soiloce am I
Speaker 2: unconsciously in that I might not be questioning enough? Right,
Speaker 2: So I think it takes more effort on the part
Speaker 2: of the person and self awareness on the part of
Speaker 2: the person to go out and actually, you know, it's
Speaker 2: kind of like eating right, you have to go out
Speaker 2: and eat healthy things on purpose, and you have to
Speaker 2: go and your information diet has to be somewhat diversified
Speaker 2: and somewhat you know, just a healthy, healthy thing. And
Speaker 2: when it comes to financial gatekeepers, that's the latest one
Speaker 2: that's being brought down because you.
Speaker 1: Know, let's talk about the media. Let's talk about the
Speaker 1: media gate keepers for a minute before you get into
Speaker 1: the financial side, because there's a whole lot to jump
Speaker 1: into on that. You referenced Walter Kronkite, and to your point,
Speaker 1: he was sort of like the main newscaster for a
Speaker 1: long time, and really before internet, we had like three
Speaker 1: TV channels and like a couple of newspapers, and I
Speaker 1: remember growing up as a kid, like we all listened
Speaker 1: to the same music, and we all watched the same movies,
Speaker 1: like just what it was. But Walter Cronkite got into
Speaker 1: trouble and there was like Kronkite Gate, where he was
Speaker 1: caught sort of lying or bringing false facts about some stories.
Speaker 1: And so then that brought down the trust that he had.
Speaker 1: And so you know, while I guess I would I
Speaker 1: certainly would agree with you, like it's going to be
Speaker 1: way better if we all agree, and so if we
Speaker 1: only get one source of information, then I guess we
Speaker 1: could all agree. It's sort of the premise at that
Speaker 1: book Fahrenheit four fifty one was written on I don't
Speaker 1: know if you've seen that book or read that book,
Speaker 1: but where they destroyed all the books. There was a
Speaker 1: for the listeners, there was a massive civil war, world war,
Speaker 1: and so they said it was because people had different information,
Speaker 1: and so they just destroyed all the books. And then
Speaker 1: the government became the central source of truth. And then
Speaker 1: they said, hey, we'll have peace if everybody reads the
Speaker 1: same thing. And so certainly the world would work better
Speaker 1: that way. But at the same time, we need to
Speaker 1: decide what is truth and not decide truth by a gatekeeper.
Speaker 1: But I think that truth is found through open, honest dialogue, right,
Speaker 1: so like it should be. It seems like we're in
Speaker 1: this maybe transition period. It's very difficult. But if we
Speaker 1: could get to a point where information is more decentralized
Speaker 1: and going to be openly discussed, then we could find
Speaker 1: truth through discussion that then maybe people could tap into
Speaker 1: as opposed to trying to have it delivered to us
Speaker 1: by a trusted party.
Speaker 2: We agree with it, I agreed. I think that takes
Speaker 2: a while. Is my point that basically, as we enter
Speaker 2: this more decentralized world, which is which is just objectively
Speaker 2: it's a it's a much better thing, but we have
Speaker 2: to learn, Okay, there's gonna be a lot of lower
Speaker 2: quality stuff coming to market, and so there's a lot
Speaker 2: of higher quality stuff that would otherwise have been blocked,
Speaker 2: but there's also a lot of a long tail of
Speaker 2: low quality stuff. And then there's our responsibility to make
Speaker 2: sure that we don't get trapped into silos because what
Speaker 2: happens is a lot of the old style kind of
Speaker 2: propaganda media gets recreated in this more decentralized world. Basically,
Speaker 2: people either get audience captured, so they're telling their audience
Speaker 2: what they want to know. Like if they if they
Speaker 2: challenge their audience and they get pushed back from it, uh,
Speaker 2: they that's like a pain point. They said, no, no, I'm
Speaker 2: just gonna feed the audience what they want. Then I
Speaker 2: know what my audience wants and they're gonna So that
Speaker 2: that's one method. The other one is obviously, like you know,
Speaker 2: donor capture or or advertiser capture, where you know they
Speaker 2: have to kind of parrot pair it of financing source
Speaker 2: to their people and that they always have to take
Speaker 2: a side, and they become more like actors in a
Speaker 2: similar way that that state you know, kind of state
Speaker 2: media or corporate media. In many ways they're acting right
Speaker 2: and so you can see, unfortunately, see the same thing
Speaker 2: emerge in some of these peer to peer communication channels,
Speaker 2: and so I think that partly that's a transition phase
Speaker 2: that we over time, years and generations of this, we
Speaker 2: get better at filtering, hopefully and hopefully that the markets
Speaker 2: kind of take care of themselves. I think that the
Speaker 2: market analogy is a good one because basically it's a
Speaker 2: market for information, and if people are always kind of
Speaker 2: on the same line whether it's right or wrong, eventually
Speaker 2: that should filter itself out and that there become trusted
Speaker 2: sources that are more reliably useful and pieces of information.
Speaker 2: So it's more it's trust in a sense, but it's
Speaker 2: more decentralized trust. It's basically trying to filter out signal
Speaker 2: from the noise. And you know, in order for a
Speaker 2: society to get through this, it's just we have to
Speaker 2: have more self reflection, more seeking out alternative views, which
Speaker 2: is hard because when you go through these big debt
Speaker 2: cycles and big macro cycles, they tend to be very
Speaker 2: polarized environments. You know, both of us are familiar with
Speaker 2: the fourth herning. I think that's what we're going through,
Speaker 2: and so one of the dangers that are fourth herding
Speaker 2: is that everybody's polarized, and now they're polarized in their
Speaker 2: own bubbles, and then they didn't even know what's with
Speaker 2: AI or with kind of state propaganda. You don't even
Speaker 2: know it's true like Russia. Russia can go and say, Okay,
Speaker 2: here's this like woke group and here's this like patriot group,
Speaker 2: and they can make these little fake groups that are
Speaker 2: arguing with each other. But they're both not real. They're
Speaker 2: both just an illusion. They're purposely for destabilization. And the
Speaker 2: United States can go do the same thing to Russia,
Speaker 2: do the same thing to another country where we kind
Speaker 2: of stir up, you know, social things like kind of
Speaker 2: real sticking points that are there. But then you just
Speaker 2: add fuel to the fire. And there's really the only
Speaker 2: way to handle it is for people to be aware
Speaker 2: of that and then try to cross silo and start
Speaker 2: more proactively filtering for truth.
Speaker 1: I think I want to dig into that, but before
Speaker 1: it sort of seems, as you're talking about it and
Speaker 1: I was listening, sort of seems like it's a problem
Speaker 1: that we have in this current system, but in a
Speaker 1: new system, we wouldn't have that same problem. And what
Speaker 1: do I mean by that, you know, Jeff Booth always
Speaker 1: talks about, you know, it's hard to see the new
Speaker 1: system when we're in an existing system. And so we're
Speaker 1: in this existing system today where we have massive government,
Speaker 1: central massive central planning. Something I think I've thought about again,
Speaker 1: if technology always changes the way that we organize. One
Speaker 1: of technology is both. It can be centralizing, it can
Speaker 1: be decentralizing. So you could argue the Stirrup allowed for
Speaker 1: the feudal system to grow, right, and I could do that,
Speaker 1: and then you had a gunpowder revolution, and now that
Speaker 1: sort of decentralized the government. The Industrial Revolution brought us
Speaker 1: back into cities, and it got mass manufacturing. You had
Speaker 1: Henry Ford created the assembly line, right, So we had
Speaker 1: these mass corporations, you had mass manufacturing. In order to
Speaker 1: manage the masses. You had smart people and dumber people
Speaker 1: work even on an assembly line. So then we had
Speaker 1: to manage them like cogs and a wheel, so to speak.
Speaker 1: So we got created a new management structure, and then
Speaker 1: we sort of had this new government structure to manage that.
Speaker 1: But we're not in that world anymore. That was like
Speaker 1: the Industrial age, and so now we're in like this
Speaker 1: information world. And so we're with in this big government structure,
Speaker 1: in this Fiat money system that we have, like these
Speaker 1: endless wars, and you know, a lot of what we're seeing,
Speaker 1: so you say, like rally the Russians against the Ukrainians
Speaker 1: or against the US, and so using these deep fakes
Speaker 1: to get people on team USA or Team Russia. But
Speaker 1: that's a symptom of the world we're in where we
Speaker 1: have these big nations on this Viat money system that
Speaker 1: want to go to war, and potentially maybe in a
Speaker 1: new structure, on a sound money system like a Bitcoin standard,
Speaker 1: where we don't have these big governments going to endless
Speaker 1: war all the time, maybe them creating these deep fakes
Speaker 1: to get me on team USA and someone else on
Speaker 1: Team Russia. Maybe that's not even a problem anymore.
Speaker 2: I think, well, first of all, I think that'd be
Speaker 2: a it's a while away. You know that we have
Speaker 2: to go through a period to get to that future. Too.
Speaker 2: Is that I think that even in that world, you
Speaker 2: still have to navigate the issue. It's just different issues.
Speaker 2: So instead of country to country, it can be more.
Speaker 1: Like tribe to tribe or tribe to tribe, or.
Speaker 2: Corporate corporate to corporate, like corporate disinformation, you know, kind
Speaker 2: of like that, you know, like a dystopian tech novel
Speaker 2: where you have like just kind of corporations that are
Speaker 2: just kind of cynically doing whatever they're going to do.
Speaker 2: That that becomes more of the risk in that world.
Speaker 2: So I think that that's something that's always with us,
Speaker 2: that we always have to be aware of, and it's.
Speaker 1: Problems still there, just at a different level.
Speaker 2: Yeah, different level.
Speaker 1: So then the answer to that, then you had said
Speaker 1: in your tweet is we need a more intelligent society.
Speaker 1: One of my old favorite punk rock bands, No Effects,
Speaker 1: they have a song that's like, what's the point of
Speaker 1: democracy when ignorance is celebrated? Right, And so like we
Speaker 1: need people to be smarter otherwise this sort of information society.
Speaker 1: So if we've if we've left the industrial age and
Speaker 1: we're now in this information age, then we need people
Speaker 1: to be smarter to decipher this information.
Speaker 2: Yeah, And I think, I mean, obviously it's it's something
Speaker 2: that it's like every generation wants the next generation. They
Speaker 2: always complain about the next generation. Uh, It's like a
Speaker 2: classic thing throughout history. And I think part of the
Speaker 2: fourth turning concept is that society kind of goes through
Speaker 2: these trends for multiple decades and then some sort of
Speaker 2: crisis happens or some sort of pushback happens, and you
Speaker 2: go in another direction. So I think we're seeing, you know,
Speaker 2: we're seeing early signs. People are questioning the nutrition advice
Speaker 2: they've been given, they're questioning the medical advice they're given,
Speaker 2: they're questioning the military industrial complex, they're they're questioning the
Speaker 2: money system.
Speaker 1: Right, And so do you think that's because of the
Speaker 1: rise of decentralized information.
Speaker 2: I do, yeah, because you so before, you know, you'd
Speaker 2: have to like advertise your little group in like a
Speaker 2: magazine and by mail, and like, you know, it's like
Speaker 2: a very small niche thing. Uh, And now it's people
Speaker 2: people with with divergent views can find each other and
Speaker 2: then even travel for like conferences. You know, they can
Speaker 2: go to conferences together and meet each other in person
Speaker 2: in addition to being online. And and that's that's that's
Speaker 2: one of the things. That's why I call this a
Speaker 2: very positive thing. So there's a lot of good that
Speaker 2: comes from it, and so just but like most new technologies,
Speaker 2: you have to just manage the downsides. Like you know,
Speaker 2: video games are great, but if you get kind of
Speaker 2: just always playing video games or if you know, computers
Speaker 2: are great, but if you're on the computer all the
Speaker 2: time and you're straining your eyes and your back, you know,
Speaker 2: there's downsides to this powerful technology. And I think the
Speaker 2: same is generally true for this where there's so much
Speaker 2: power unlocked by decentralized media in all of its forms.
Speaker 2: But we do have to adjust to that and be
Speaker 2: able to filter out some of the downsides that come
Speaker 2: with any any new technology.
Speaker 1: So I want to ask you how you do that,
Speaker 1: because you're such a I love the way you think,
Speaker 1: so I want to get into that. But before we
Speaker 1: do the other thing though, that we have and so
Speaker 1: we can look back to, you know, the Protestant Reformation
Speaker 1: as a really good sort of model for that, where
Speaker 1: you had sort of this this and state combined that
Speaker 1: had to keep this narrative. But previously we had a
Speaker 1: new technology called the printing press that decentralized information, and
Speaker 1: it created heresy and heretics, and they would you know,
Speaker 1: anyone who would read the Bible and speak out against
Speaker 1: the church was put to death, etc. Didn't matter because
Speaker 1: the information was out there, and today is something similar, right,
Speaker 1: So now instead of having Walter Cronkite tell us what
Speaker 1: to eat. Instead of the FDA telling us what to eat,
Speaker 1: now we have independent people saying, oh, seed oils is
Speaker 1: bad and you should try carnivore dide or whatever it
Speaker 1: may be. And now we're starting to see sort of
Speaker 1: like this ideas being discussed and we're starting to see
Speaker 1: which ones work. We can try different things for ourselves
Speaker 1: as opposed to just getting this one narrative. However, the
Speaker 1: problem seems to be if we sort of break things
Speaker 1: down to a first principles level, in order for a
Speaker 1: central power to stay in power, they have to be
Speaker 1: able to control the narrative somewhat. And it seems like
Speaker 1: when you look, you know, study the history of empires
Speaker 1: or democracies, they tend towards and maybe some of this
Speaker 1: fourth turning, but they tend towards corruption. And as they
Speaker 1: get more corrupt, and especially as the people see this more,
Speaker 1: they get more unhappy, and so the government has to
Speaker 1: control this narrative. And so it seems like we're in
Speaker 1: this collision course where if central powers want to stay
Speaker 1: in power, they have to control the narrative. But we
Speaker 1: have technology over here that's taking away their ability to
Speaker 1: control the narrative, and so like we're heading on this
Speaker 1: collision course that I think we're already starting to see. Now.
Speaker 1: We've seen this, yes, in the United States nineteen seventeen,
Speaker 1: we saw the Sedition Act, we saw the Smith Act,
Speaker 1: we saw you know, different things like that where they've
Speaker 1: regulated speech based off of wartime. But do you see
Speaker 1: this collision course, I guess, and I think you maybe
Speaker 1: alluded to this earlier. We're gonna have to fight for
Speaker 1: this because because of these two imposable forces that are
Speaker 1: coming together. The government needed to control the narrative, but
Speaker 1: at the same time technology taking away their ability to.
Speaker 2: Do so absolutely, And I think that's happening globally. You know,
Speaker 2: some countries more than others, but I think in the
Speaker 2: United States, in Europe, this already happens a lot in
Speaker 2: developing countries, you know, throughout the world. I think we're
Speaker 2: seeing increasing restrictions on you know, basically, they want to
Speaker 2: control the final system. They don't want to let these
Speaker 2: new technologies kind of break out of the silo. So
Speaker 2: they're trying to push back there. And I think we're
Speaker 2: gonna see more control. You know, we're already seeing a
Speaker 2: lot of control over social media. For example, you know,
Speaker 2: certain things on YouTube have a tough time staying up
Speaker 2: rather than letting the audience, you know, if they don't
Speaker 2: like it, they can just not look at it, and
Speaker 2: instead they either put weird disclaimers on them and point
Speaker 2: them to some kind of old school like authority that
Speaker 2: was like has a bad track record anyway, or they
Speaker 2: take it down outright. And so I think that's that's
Speaker 2: an ongoing challenge. It's going to exist, and it's a
Speaker 2: lot of it comes down to making sure people are
Speaker 2: aware of that narrative were And for me, the biggest
Speaker 2: one I like to focus on is that financial freedom aspect.
Speaker 2: Because social media is already largely won. There's there's various
Speaker 2: kind of attempts at cloging some of that back. But
Speaker 2: I also like there's new technologies like Noster for example,
Speaker 2: that make even more decentralized social media. So instead of
Speaker 2: just relying on these centralized silos of media, there's various
Speaker 2: things you can go to if you're deplatformed if you
Speaker 2: don't want you know, kind of various either corporations or
Speaker 2: governments kind of enticing corporations to censor them so one
Speaker 2: is that I like the more decentralized social media model.
Speaker 2: And then two, when it comes to the transfer of value,
Speaker 2: that's the one that's newer. It's kind of like a say,
Speaker 2: a decade or more behind the you know, the decentralization
Speaker 2: of information, uh, and that one's still in its earlier stage.
Speaker 2: It's still a little bit more easily disruptible. And so
Speaker 2: that's that's the one I tried to protect a little
Speaker 2: bit more with my words, my writing, my actions, trying
Speaker 2: to my best to make sure the public's aware of that.
Speaker 2: And I think that the good news is that with
Speaker 2: this decentralized media, and because the status quo is kind
Speaker 2: of having struggling under its own weight, this is doable.
Speaker 2: I mean, for example, the other day I ratioed Bloomberg
Speaker 2: like seven thousand likes to like one hundred light It
Speaker 2: was like an insane ratio, wow, because it was just
Speaker 2: a really bad article. And I actually like most Bloomberg articles,
Speaker 2: but this particular one, I was like, it was like
Speaker 2: basically about how like it was kind of a negative
Speaker 2: article about bitcoin transactions from someone who likely never sent
Speaker 2: a bitcoin transaction based on what he wrote, and was
Speaker 2: like if you're sending a bitcoin traction, you're probably doing
Speaker 2: something illegal. And it was like it it feels like
Speaker 2: it's written in like silk road days, Like it feels
Speaker 2: so out of date, and so I called them out
Speaker 2: on it, and there was a huge reaction because you know,
Speaker 2: in these types of environments when there's just more pushback
Speaker 2: against kind of yes in the media or in you
Speaker 2: know what we see in like political theater.
Speaker 1: But that's exactly the point is, like good ideas winning
Speaker 1: in open and open debates. So they put their narrative out.
Speaker 1: You put their narrative out, and then the audience the
Speaker 1: people sort of chimed in. You got seven thousand likes,
Speaker 1: they got one hundred, and so then those good ideas
Speaker 1: were challenged and people were able to kind of choose. So,
Speaker 1: you know, I look at censorship and really, like I said,
Speaker 1: really the central powers needing to hang on to power,
Speaker 1: and so then in order to do that they have
Speaker 1: to censor. So one censor our speech, right, which also
Speaker 1: sensors what we can read in our ideas, our thoughts,
Speaker 1: but also our money. To your point that you're talking
Speaker 1: about the financial piece, and so what we've seen for example,
Speaker 1: just recently with like Russell Brand, they went after his
Speaker 1: ability to earn money. They wanted to take his monetization
Speaker 1: off of his YouTube channel. I'm sure you saw the
Speaker 1: letter that the UK Parliament i think wrote to Parlor saying, hey,
Speaker 1: we're troubled that he can still make money like what
Speaker 1: you have. Like Alex Jones, he was probably the first
Speaker 1: person that was deplatformed, right wiped off the face of
Speaker 1: the earths. But he's probably bigger today than ever, still
Speaker 1: on the Internet. But it's the money that they go after.
Speaker 1: And so we have these open monetary networks. The Internet
Speaker 1: is somewhat decentralized already. And now, like to your point, Noster,
Speaker 1: which I'll just say, I've been still locked out of
Speaker 1: my Twitter account for almost three months now. It's for devastated,
Speaker 1: going on three months. Elon, if you're listening, please turn
Speaker 1: me back on. George Gammon's also locked out of his
Speaker 1: account the same thing, and both of us are the
Speaker 1: same problem. They reset our two FA and we just
Speaker 1: filled out like twenty support reguys. Just reset my TWFA
Speaker 1: and the rub is they're still charging me monthly for
Speaker 1: my blue subscription. Anyway, maybe I should have just started
Speaker 1: posting on a noster. But anyway, so we have these
Speaker 1: decentralized platforms and really, now this money piece is this
Speaker 1: is this next piece. So they need to censor that,
Speaker 1: They need to control that, if you will, not just
Speaker 1: the speech, but our money, our value transfer as well.
Speaker 1: This is sort of what we've seen throughout history creative destruction.
Speaker 1: Right the lud Heites, they went and destroyed the looms.
Speaker 1: They didn't like the looms, putting them out of jobs. Right,
Speaker 1: the candlemakers didn't electricity, the buggy makers didn't like the cars.
Speaker 1: But this is different. You know, the movie companies and
Speaker 1: the movie industry and the music industry didn't like streaming.
Speaker 1: But maybe this is different because it's government. But it
Speaker 1: seems to me that when the technology is so much better,
Speaker 1: when it's one hundred times, when it's a thousand times better,
Speaker 1: it just wins out. It's a rough transition, but at
Speaker 1: the end, it just wins out. Would you agree?
Speaker 2: I agree? This is the hardest battle. You know, when
Speaker 2: you when you.
Speaker 1: Go it's the final boss, it's the big boss.
Speaker 2: This is the final boss, like you know when you
Speaker 2: we kind of went through gatekeeper after gatekeeper after gatekeeper,
Speaker 2: and the biggest one left is the state and their
Speaker 2: money and and so that like that's not gonna be
Speaker 2: that's it's not gonna be left.
Speaker 1: But it's bread is broken and it has to be fixed.
Speaker 2: So I agree, I agree, and I think And it's
Speaker 2: also different countries have different levels of pushback. And so
Speaker 2: for example, simple there's there's nothing that Argentina can do
Speaker 2: about the fact that stable coins and bitcoin keep penetrating
Speaker 2: into their country, right because there's nothing they can do
Speaker 2: about it. They can they've already tried to cut off
Speaker 2: the bank and the fintech uh friction points going in there.
Speaker 2: But the more ubiquitous and widely known liquid these assets get, uh,
Speaker 2: it's it's just you're you're trying to like build a
Speaker 2: sand wall against the rising tide. It's just it's just
Speaker 2: gonna you can hold it back, you can hold it back,
Speaker 2: but you're you're fighting something that's almost inevitable. Now. Obviously,
Speaker 2: entities like the United States and China and the European
Speaker 2: Union have more ammo uh to go at this, and
Speaker 2: so that's that's more of a longer term battle, I think.
Speaker 2: So I don't think that people should just assume that
Speaker 2: they win because with these things. I mean, things can
Speaker 2: get set back a generation, right, So if you want,
Speaker 2: like yourself and your kids to enjoy that, you know,
Speaker 2: it's it's like, you know, you don't want to you
Speaker 2: don't want to take it for granted and have the
Speaker 2: whole thing happen fifty years late and fear that's yeah,
Speaker 2: that's the risk. And so this technology exists now even
Speaker 2: if it's somehow killed, it can reform itself, but it's
Speaker 2: you know, ideally you want it to win on the
Speaker 2: first try. You don't want to have to have to
Speaker 2: go into the dark ages for a period of time
Speaker 2: and then come back. And WikiLeaks was a great example.
Speaker 2: One of the first use cases of bitcoin was WikiLeaks
Speaker 2: was deplatformed monetarily and they turned a bitcoin. And now
Speaker 2: in recent months we've seen wiki leaks has put some
Speaker 2: of the information itself in the bitcoin blockchain. So, in
Speaker 2: addition to bitcoin being decentralized money, kind of a lesser
Speaker 2: use case for it is it's the most decentralized database
Speaker 2: that we know how to build for small amounts of information,
Speaker 2: and so important documents or information can be put in
Speaker 2: there and that doesn't necessarily mean that they're true, but
Speaker 2: it means that they've not been changed since they're put in.
Speaker 2: And so you know, someone wants to put in the
Speaker 2: book nineteen eighty four or Animal Farm or you know,
Speaker 2: fair Knight for Bible or the Bible, or these wikilies cables,
Speaker 2: you know, whatever the case may be. You can put
Speaker 2: in information that you you want to exist in the
Speaker 2: future and say, okay, well regards whatever happens, as long
Speaker 2: as this decentralized network, which is you know, stored in
Speaker 2: tens of thousands of nodes, it's something that is provably
Speaker 2: unchanged since that was put in. And so that's that's
Speaker 2: one of the non monetary use cases for it. But
Speaker 2: you know, the money wants the bigger one overall, but
Speaker 2: I think that second one shouldn't be overlooked.
Speaker 1: Yeah, and I also like, you know, sort of like
Speaker 1: what Jack has done with what Blue Sky and using
Speaker 1: the Bitcoin blockchain to hash the d i ds in there,
Speaker 1: so a decentralized identifier and so you know, potentially in
Speaker 1: a world hopefully not too far away, instead of having
Speaker 1: Facebook and Google have our sso or login IDs, we
Speaker 1: could own our IDs. I think it's pretty cool. Maybe
Speaker 1: it's a noster using a private key. We don't know
Speaker 1: how that will win out. But as of right now,
Speaker 1: those de ideas, I guess are recognized by the World
Speaker 1: Wide Web Consortium or whatever it is. But it's used,
Speaker 1: it's it's being hashed in the bitcoin blockchain. So we
Speaker 1: sort of have the bitcoin network and then we have
Speaker 1: the bitcoin as an asset. So there's sort of like
Speaker 1: two things going on. I guess is that sort of
Speaker 1: how you see it?
Speaker 2: Yeah, I And you know, we'll see what layers went out.
Speaker 2: I think Noster has a little bit more organic. It's
Speaker 2: a little bit kind of simpler, you know, like basically
Speaker 2: sometimes simple protocols uh just kind of went out and
Speaker 2: and Jack himself spends quite a bit of time on Noster. Uh.
Speaker 2: But you know, we'll see it. And there doesn't necessarily
Speaker 2: to be one. You can have. You can have different
Speaker 2: layers for different purposes or different use cases or just
Speaker 2: different choices. Uh. And they make they make use of
Speaker 2: bitcoin in their own ways. Uh. And so I think
Speaker 2: that these technologies, as long as there's a spark a
Speaker 2: live somewhere in the world, you know, some some jurisdictions
Speaker 2: will push back on other jurisdictions will open up to
Speaker 2: it and say if you want to build this stuff
Speaker 2: come to us. And as long as there are people
Speaker 2: advancing this, which there currently are, I think both information
Speaker 2: and money are on track to get more and more decentralized.
Speaker 1: Yeah, and that's that game theory piece. I read this book.
Speaker 1: You might have heard it before. It's The Revolt of
Speaker 1: the Public. It was written by Martin Gurry. He's a
Speaker 1: CIA analyst, and he talks about how basically the Internet
Speaker 1: has given us so much information that the center, the
Speaker 1: central planning, the Center could never hold because the public
Speaker 1: is too broad. But anyway, he talks about how this
Speaker 1: Internet is and he kind of goes through history and
Speaker 1: talks about how in the Arab Spring, how the Facebook
Speaker 1: was used to kind of overthrow the government in Egypt,
Speaker 1: and he talks about Israel, etc. But the point that
Speaker 1: he makes is that the governments are sort of caught
Speaker 1: between this rock and a hard place where if they
Speaker 1: allow this freedom of the Internet, this freedom of ideas
Speaker 1: and communication, if they allow it, their country is going
Speaker 1: to flourish. It's going to create all these new jobs
Speaker 1: and businesses and people will be smart, etc. But then
Speaker 1: they'll probably lose power. They could choose to not allow it,
Speaker 1: but then they hold themselves back in the dark ages,
Speaker 1: and so they kind of have like they're trying to
Speaker 1: kind of ride this line. You can be North Korea
Speaker 1: and like sense or everything, but then your North Korea. Right.
Speaker 1: So that's where this kind of game theory plays out,
Speaker 1: hopefully in a shorter period of time and not a
Speaker 1: longer period of time. But to your point about you know,
Speaker 1: hopefully this doesn't leap frog a decade or generation. You know,
Speaker 1: it scares me seeing these seventy eighty year olds in
Speaker 1: office making laws against things that they just don't understand.
Speaker 1: I mean, the average age of a fortune five hundred
Speaker 1: CEO is in their fifties, like fifty five, certainly not eighty,
Speaker 1: and certainly not passing laws to your point that could
Speaker 1: impact generations. I know we're kind of starting to run
Speaker 1: down on time here, so I want to get to
Speaker 1: one last thing I want to ask you about, because,
Speaker 1: like I said a couple times in this interview, like
Speaker 1: the way that you think and process information is amazing.
Speaker 1: I haven't gotten through this whole book yet, I have
Speaker 1: to just say that, but it's a great book. Everyone
Speaker 1: should check out this book. I'm also a paid subscriber
Speaker 1: to your newsletter. It's amazing. We'll link to that in
Speaker 1: the notes down below. But like, the way that you
Speaker 1: process information is very analytical. I guess maybe it's your
Speaker 1: engineering background. So you put on a tweet talking about
Speaker 1: like deciphering information, and you were talking about that, and
Speaker 1: it's something that I've kind of said as well. But
Speaker 1: it's that in the past, maybe the problem was getting information,
Speaker 1: and today we have too much. You said, we have
Speaker 1: too much info? What can we filter out? On social media?
Speaker 1: We resort to patterns, but patterns breed tribalism. It takes effort,
Speaker 1: extra effort to have a global view and ask how
Speaker 1: can people of all types flourish. So in this world
Speaker 1: that you framed up for us, and this tweet talks
Speaker 1: about where we have too much information, what do you do?
Speaker 1: What are practical steps that you do or that other
Speaker 1: people could do to sort of decipher this and find
Speaker 1: some truth there.
Speaker 2: I think one step is to be aware of the
Speaker 2: tribes that exist or or the echo chambers that naturally form.
Speaker 2: They used to be formed largely due to geography, and
Speaker 2: now now it's more digital, right, So it's not a
Speaker 2: physical tribe, it's a digital tribe. And so the one
Speaker 2: is to say, okay, which echo chambers are forming, which
Speaker 2: ones am I maybe finding myself in. So those things
Speaker 2: start seeming increasingly obvious because all the people I follow
Speaker 2: are kind of saying the same thing. And then they're
Speaker 2: you know, and I'm attracting followers that think that too,
Speaker 2: and we're kind of feeding on each other. How can
Speaker 2: we challenge ourselves? So you identify what tribes you might
Speaker 2: be in, identify the other tribes that exist, and then say, okay,
Speaker 2: they're they're the other tribes are not all dummies, they
Speaker 2: have they have smart people in there too, at least most,
Speaker 2: I mean some some you know, some ideas are just
Speaker 2: really bad. But like most other tribes, there's this is
Speaker 2: a complex world. So it's okay, what can identify some
Speaker 2: of the most high signal intelligent people from those other
Speaker 2: tribes and make sure I'm aware of what they're saying,
Speaker 2: what their argument are. Can I can I recite their
Speaker 2: argument back to them in a way that they would
Speaker 2: be pleased with even if I disagree with it. It's
Speaker 2: the process of steel manning an argument. So instead of
Speaker 2: straw meaning an argument by saying this other tribe thinks this,
Speaker 2: and it's like, you know, you're mischaracterizing their views. You're
Speaker 2: giving a simplistic view. You're saying, Okay, here is this
Speaker 2: person I disagree with. They're saying this argument, and if anything,
Speaker 2: you're trying to make their argument sound even better, and
Speaker 2: then you're saying, okay, here's why I disagree with it.
Speaker 2: So I think basically that that intentionality of purposely keeping
Speaker 2: your finger on the pulls of multiple different silos, echo chambers, tribes,
Speaker 2: what every want to call them, the more at least,
Speaker 2: the more intelligent side of each of them, because each
Speaker 2: one's going to have a spectrum of thought leaders versus
Speaker 2: just pure tribalists. So you identify the highest you people,
Speaker 2: and that that just gives you a more global perspective.
Speaker 2: It helps you. It helps you see errors where you
Speaker 2: might be wrong or where you might be maybe you're right,
Speaker 2: but you realize that you're in a small minority than
Speaker 2: you think. Uh, and then therefore you have to just
Speaker 2: probable outcomes for certain things, even if you prefer your outcome.
Speaker 2: There's multiple kind of reasons why that ends up being useful.
Speaker 2: In addition, it helps you if you wanted to have
Speaker 2: your ideas spread to them the more effective you're going
Speaker 2: to be is if you understand their ideas more thoroughly,
Speaker 2: if you can recite their ideas back to them in
Speaker 2: a way that they actually can tell you actually understand
Speaker 2: what they're thinking, and then you say, well, here's why
Speaker 2: I disagree. You can make inroads into there in a
Speaker 2: way that most people can't, and.
Speaker 1: So I open honest dialogue.
Speaker 2: It works exactly, And so both for both challenging your
Speaker 2: own ideas and making sure you're in the right echo
Speaker 2: chambers or just ideally not an echo chamber, but basically
Speaker 2: both stress testing yourself and figure out how to spread
Speaker 2: your ideas to others. It really takes that intentionality, to
Speaker 2: that open mindness and that intentionality to go out and say, look,
Speaker 2: there are people that are smart, but they disagree with me,
Speaker 2: and I want to make sure I know what they're
Speaker 2: saying and what they're thinking and what they're focused on,
Speaker 2: so that I don't get too caught up in a
Speaker 2: small thing that I assume is bigger than it really is.
Speaker 1: So then one you need to find the signal, the
Speaker 1: highest signal people you can follow, but making sure you're
Speaker 1: following people on both sides of the aisle. So you're
Speaker 1: not just getting feedback from your own echo chamber, you're
Speaker 1: also getting the opposite side of the argument as well.
Speaker 1: Trying to take time to understand the argument and then
Speaker 1: engage in honest dialogue so that you can understand that better.
Speaker 1: I mean, that's sort of like the high.
Speaker 2: Level of it. Yeah, and approach it, and a lot
Speaker 2: of times approach it like a questioner. So don't approach
Speaker 2: it like you're already one hundred percent correct, because nonither
Speaker 2: of us, none of us are gonna be a hundredercent
Speaker 2: correct and everything. So approach it as though, like, Okay,
Speaker 2: you've thought certain things out. There could be areas that
Speaker 2: you've thought about less than other areas, and that you
Speaker 2: could learn something from a person you otherwise disagree with,
Speaker 2: just as you would hope that they would learn something
Speaker 2: from you. And so it's not just seeking out to
Speaker 2: challenge them, but it's seeking out to understand them more,
Speaker 2: to fully stress test your own ideas. And like, for example,
Speaker 2: Broken Money, the book, you know, I purposely wrote it
Speaker 2: in such a way to try to reach a pretty
Speaker 2: wide audience to say, Okay, if you don't care at
Speaker 2: all about bitcoin, it's like, let's explore the history of
Speaker 2: money and some of these future technologies for where we're going.
Speaker 2: And then if you are to bitcoin, it basically says, Okay,
Speaker 2: here's some ideas that you might not have explored as
Speaker 2: thoroughly from other bitcoin books, and then therefore you might
Speaker 2: be caught off guard by certain arguments that they can make.
Speaker 2: So it kind of like seeks out intelligent people from
Speaker 2: multiple camps as it explores the history of money. And
Speaker 2: I just think basically that kind of technique applied to
Speaker 2: multiple different subjects is important, and especially when we're you know,
Speaker 2: we sovereign debt crisis can lead to war, and work
Speaker 2: can lead to sovereign debt crisis. These things tend to
Speaker 2: feed on each other, and so in this world, and
Speaker 2: then especially when we add things like AI and purposeful
Speaker 2: misinformation either from state actors or corporate actors or tribes
Speaker 2: or whatever the case is, it just takes a lot
Speaker 2: of responsibility. It's really on us how well we get
Speaker 2: through this era. You know, it's like it come down
Speaker 2: to individual people making better decisions. Why do some cultures
Speaker 2: flourish and others fail. It's because a critical mass of
Speaker 2: the people kind of just cut through the noise and say, look,
Speaker 2: these are the virtues I'm going to stick with. Uh,
Speaker 2: these are I'm going to be educated. I'm going to
Speaker 2: seek out multiple views since I can fill to the
Speaker 2: right ones. I'm gonna try to empathize the people I
Speaker 2: disagree with and say, what would what would the smartest
Speaker 2: version of this alternative argument look like? And what what
Speaker 2: does my argument look like to them?
Speaker 1: Right?
Speaker 2: So, what is a smart version of my argument sound
Speaker 2: like to someone who disagrees with it? What point do
Speaker 2: they specifically think I'm not thinking through? Because there's there's
Speaker 2: a lot of problems in the world. There's a lot
Speaker 2: of emotions. Uh, it comes down to political views, religious views,
Speaker 2: control versus subjects. There's so many vectors here and the
Speaker 2: stakes are pretty high, and I think we just all
Speaker 2: have to challenge ourselves.
Speaker 1: Yeah, I love that. I think of it. I know
Speaker 1: you're into martial arts and you do. I think about
Speaker 1: it like verbal sparring, Like I love to just talk
Speaker 1: to someone with the opposing views and if we can
Speaker 1: have a good dialogue, it's kind of fun. Just like
Speaker 1: I would go a spar against an opponent and we
Speaker 1: get to try each other's technique against each other. It's
Speaker 1: one of the reason why I love sitting down with
Speaker 1: Peter McCormick. We see we're kind of set on opposite sides,
Speaker 1: but we can have a good honest dialogue about it.
Speaker 1: My show producer Q he's also on a different political
Speaker 1: ideology than I am a little bit for the most part,
Speaker 1: but we have good honest dialogue and it helps both
Speaker 1: of us to kind of explore these ideas if we
Speaker 1: can talk about it. It's when they throw out the
Speaker 1: nuclear bomb arguments that it kind of goes sideways. But
Speaker 1: I have time for maybe one more question. And so
Speaker 1: you mentioned the bitcoin piece, and so I just want
Speaker 1: to maybe ask one more question there. A lot of
Speaker 1: people are starting to kind of hang their hopes on
Speaker 1: this Bitcoin ETF being this like big catalyst that we need.
Speaker 1: I have this view that we talk about, you know,
Speaker 1: bitcoin is money for your enemy, so to speak. Right,
Speaker 1: So like bitcoin is aid for peer to peer transactions,
Speaker 1: So it's sort of like anti establishment. You know, we
Speaker 1: don't need gatekeepers, We don't need that anymore. But a
Speaker 1: lot of times people say in the United States don't
Speaker 1: really understand why we need that, because our money works
Speaker 1: pretty good in third world countries. They do understand it,
Speaker 1: especially when their money is really really bad. To your point,
Speaker 1: do you think that Wall Street could be the catalyst
Speaker 1: that gets it going? Or I'm starting to think that
Speaker 1: maybe what we really need is a more adversarial lens
Speaker 1: against bitcoin for it to prove its real value and worth,
Speaker 1: to prove its utility. So like in North Korea or
Speaker 1: in Afghanistan, you could understand why you need a money
Speaker 1: that moves peer to peer and it's not censors, but
Speaker 1: maybe in the US we don't. So what do you
Speaker 1: think it could be both? Or do you think one
Speaker 1: is better catalyst than the other.
Speaker 2: I think we're gonna get both together because I think
Speaker 2: Wall Street is likely going to help in price, which
Speaker 2: is good for the network. But meanwhile, the government, through
Speaker 2: Finsen and various Patriot Act kind of references, are going
Speaker 2: to really after the privacy side and the self custodial
Speaker 2: side potentially, And so I think that there's there's two fronts,
Speaker 2: you know, kind of on this war here. I think
Speaker 2: it's inevitable.
Speaker 1: That, but that's also a US centric view, right, So
Speaker 1: what about globally?
Speaker 2: Well, So what I was gonna get to is that
Speaker 2: ironically the reason it's so interlinked, right, So as an
Speaker 2: asset monetizes, it achieves certain liquidity. Like, for example, when
Speaker 2: it traded a few thousand dollars a day, someone couldn't
Speaker 2: just ape into it a million dollars. When it trades
Speaker 2: a few million dollars a day, someone couldn't just ape
Speaker 2: into it the billion dollars. When it trades a few
Speaker 2: billion dollars a day. There's even bigger pools of capital
Speaker 2: that still have they can move the price if they
Speaker 2: get too bullish or bearish in a day. The larger
Speaker 2: and more widespread and more kind of ubiquitous it is,
Speaker 2: the more types of pools of capital that own non
Speaker 2: zero amounts of it, the bigger and more liquid it gets,
Speaker 2: the harder it becomes for any one entity to move it.
Speaker 2: I think that's healthy for the network. If you go
Speaker 2: to and this is where I tie it ties in
Speaker 2: the rest of the world. If you go to some
Speaker 2: in Argentina and you say, why aren't you like all
Speaker 2: in bitcoin, they're like, well, it's super volatile. You know.
Speaker 2: I like bitcoin, but I have to hold mostly stable
Speaker 2: coins because I have to know what my value is
Speaker 2: going to be worse than two months, right, bitcoin I
Speaker 2: can hold for five years, but I have to I
Speaker 2: have to have something more stable in the shorter term.
Speaker 2: But bitcoin only achieves that lower volatility if it becomes
Speaker 2: more big, ubiquitous liquid, And it's also just its inevitability.
Speaker 2: Basicallyf we hit higher levels of monetization, eventually larger pools
Speaker 2: of capital want to join. Maybe a central bank somewhere
Speaker 2: adds it to their balance sheet, maybe black Rock apes
Speaker 2: into it. Right, there's certain empties that start going after it,
Speaker 2: and not only do they become relevant for their own countries.
Speaker 2: Like so, for example, it is good for people in
Speaker 2: there are various four to one k's if they can
Speaker 2: have a non zero bitcoin position in there, you know,
Speaker 2: for their own kind of protection. If we if some
Speaker 2: of the things we talked about play out, like a
Speaker 2: stagflationary stock market and a housing market and a bond market.
Speaker 2: You know, if they have a non zier amount of
Speaker 2: bitcoin and their four wing k it's one, and if
Speaker 2: that capital is kind of stuck there anyway, and if
Speaker 2: they're you know, age sixty and maybe they don't want
Speaker 2: to get a cold card, you know, and there are
Speaker 2: sixty year olds that love cold cards, but maybe not
Speaker 2: everyone that's an access point for them. But then in addition,
Speaker 2: even if Americans then are not using bitcoin in the
Speaker 2: way that we would maybe prefer, they would use it
Speaker 2: like I recommend self custody, I recommend swan or any
Speaker 2: of the other kind of bitcoin focused on ramps. But
Speaker 2: for people that are not using it that way, they
Speaker 2: still strengthen the network for people in other countries. If
Speaker 2: bitcoin is five x bigger or ten x bigger and
Speaker 2: it's somewhat less volatile, still gonna be volatile for a
Speaker 2: while until it's like ubiquitous. But if it's less volatile
Speaker 2: and it's more known and it's had another cycle of growth,
Speaker 2: that can bring it to more awareness for people in
Speaker 2: all these other countries that can use it in hopefully
Speaker 2: the more cipherpunk way.
Speaker 1: And so then the US centric sort of financialization of
Speaker 1: bitcoin is maybe a shorter term catalyst in a sense
Speaker 1: where it brings more money to it, which then makes
Speaker 1: the market caap bigger, which then makes it more stable,
Speaker 1: and then the other nations might recognize that as more
Speaker 1: stable and they could adopt it better. So you think
Speaker 1: the sort of I guess money argument is a better
Speaker 1: catalyst than the near term than the sort of adversarial
Speaker 1: lens even though we're seeing you know, because I guess
Speaker 1: maybe those transactions in other countries where the demand is
Speaker 1: higher from the adversarial lens, the transaction volumes are too low,
Speaker 1: so it doesn't really bring the stabilization that's needed to it.
Speaker 2: Yeah, And I think the way I would describe it
Speaker 2: is that there's just kind of some to give inevitability
Speaker 2: to it. But that I view it both. It's adversarial
Speaker 2: at the same time as it's advantageous because on one hand,
Speaker 2: like America as a government does kind of want a
Speaker 2: walled garden this thing. And so for example, I don't
Speaker 2: view the bitcoin et apps the best way to hold it,
Speaker 2: but I do think that ironically that adds stability to
Speaker 2: the market. It's just another it's not like a unique
Speaker 2: level of stability. It's just another level of stability. If
Speaker 2: Japan's central bank decides to have a five percent Bitcoin position,
Speaker 2: that's another you know, it's a completely different example. There
Speaker 2: are all these big pools of capital that for a
Speaker 2: while bitcoin's been too small for them or unclear if
Speaker 2: it's going to work out, and it reaches a certain
Speaker 2: critical mass though, you know, sovereign wealth funds, central banks,
Speaker 2: and the black rock. You know, just large pools of
Speaker 2: capital suddenly get interested in having it as a reserve
Speaker 2: as a product. Uh, and maybe it's not great, but
Speaker 2: that's just it's part of a monetization of an asset.
Speaker 2: But I, you know, I proactively then go out and
Speaker 2: invest in say privacy technologies or self custodial technologies. Uh,
Speaker 2: focusing more on these other countries or other markets or
Speaker 2: you know, ways that I think is preferable to hold bitcoin.
Speaker 2: I think that it has been stress tested, like for example,
Speaker 2: during the Canadian trucker protest when they try to then
Speaker 2: you know, black this bitcoin address to the grafter them.
Speaker 2: That was kind of a stress test to say, okay,
Speaker 2: what can we have done better next time? Mount Gox
Speaker 2: was a stress test. It helped us bring you know,
Speaker 2: like hardware, wallets and things like that. Every time there's
Speaker 2: like you know, when China banned bitcoin mining, you know,
Speaker 2: they had multiple failed bands and one of them finally
Speaker 2: kind of stuck and it actually helped decentralize mining a
Speaker 2: little bit more than it already was, and some mining
Speaker 2: re emerged in China. Anyway, So bitcoin does go through
Speaker 2: these challenges over time. So far, it's been successful at
Speaker 2: being anti fragile when it faces them, and I think
Speaker 2: this is yet another one. This one comes with both
Speaker 2: pros and cons. It's good for price and liquidity, which
Speaker 2: can be good for eventually for volatility, but it also
Speaker 2: comes with you know a lot of people just kind
Speaker 2: of get trapped into walled gardens. And I think that
Speaker 2: this is just it's another phase that bitcoin was destined
Speaker 2: to go through should it ever reach this level, which
Speaker 2: is what it reached now. And to be clear, I
Speaker 2: don't think that bitcoin needs a spotty TF and I
Speaker 2: think that if a spotty theft never comes, I still
Speaker 2: think there's going to be a bitcoin bull cycle. I
Speaker 2: think it's going to be heavily tied to global liquidity,
Speaker 2: and its tied to like the Hoddler wave. So basically
Speaker 2: during bear markets, the strong hands keep accumulating coins and
Speaker 2: then you get a having and then just you know,
Speaker 2: the supplies like gets very tight. So it only takes
Speaker 2: this tiny spark of new demand to really kind of
Speaker 2: lift the price neck. So I think that regardless to
Speaker 2: whether a spot bitcoin ETF comes, I think we're going
Speaker 2: eventually have another cycle. The spot ETF can just potentially
Speaker 2: accelerate or magnify that cycle, and that has some pros
Speaker 2: and cons, but I think it's mostly pros in the
Speaker 2: sense that one it's inevitable, and two, any higher level
Speaker 2: of liquidity and size is good for the overall network,
Speaker 2: especially for people that ironically not in those walled gardens,
Speaker 2: that are still benefiting from the stability and liquidity and
Speaker 2: market size and price action that those walled gardens are
Speaker 2: giving the whole network.
Speaker 1: Yeah. Wow, there's a there's a lot there, but we'll
Speaker 1: end it. We'll end it with that. I know we've
Speaker 1: gone a long time. It was pretty interesting to see
Speaker 1: Larry Fink come out and say that people are using
Speaker 1: it to fly to safety. So we're starting to see
Speaker 1: that shift for sure for everyone listening. You talked about
Speaker 1: investing into some of these privacy companies and stuff. I
Speaker 1: know with EGO Death Capital, which is investing in that.
Speaker 1: I of course have the big one Opportunity Fund. We're
Speaker 1: investing into that. So we're both trying to build the
Speaker 1: world that we want in a way for everyone listening,
Speaker 1: check out Broken Money. We'll make sure we link to
Speaker 1: that in the show notes down below. And Lynn Alden
Speaker 1: I subscribed to our newsletter, will link to that down
Speaker 1: below as well. Anything else that you want to let
Speaker 1: people know about.
Speaker 2: Now, that's it. Check out Broken Money and hopefully we
Speaker 2: can do our little part to kind of push back
Speaker 2: on the financial oppression and the misinformation that's out there
Speaker 2: and just kind of help shape the world in some
Speaker 2: tiny way, hopefully in a better direction.
Speaker 1: All right, Thanks, Lynn, appreciate it.