1
00:00:00,240 --> 00:00:03,400
Speaker 1: A seven sigma event is something that's only supposed to

2
00:00:03,400 --> 00:00:07,000
Speaker 1: happen one every thousand years. We're getting seven sigma events

3
00:00:07,000 --> 00:00:10,280
Speaker 1: every seven years, and they're getting even closer to each other.

4
00:00:10,600 --> 00:00:11,479
Speaker 2: So what does it mean.

5
00:00:12,080 --> 00:00:15,080
Speaker 1: It means that what is being sold right now are

6
00:00:15,520 --> 00:00:18,920
Speaker 1: ten plus year treasuries. There are three things that we

7
00:00:19,000 --> 00:00:22,640
Speaker 1: can see to determine just how specific this selling is.

8
00:00:23,200 --> 00:00:27,560
Speaker 1: Number one. Number two is that the move has come

9
00:00:27,640 --> 00:00:30,080
Speaker 1: from The third is.

10
00:00:30,040 --> 00:00:31,800
Speaker 2: That are collapsing.

11
00:00:32,080 --> 00:00:36,000
Speaker 1: The supply of money is a liability deposits M two.

12
00:00:36,400 --> 00:00:40,919
Speaker 1: That's a liability that is supply. So of course supply

13
00:00:41,040 --> 00:00:43,599
Speaker 1: of money will go up when the assets go up,

14
00:00:43,800 --> 00:00:47,120
Speaker 1: but liabilities not the way that we measure it the

15
00:00:47,159 --> 00:00:50,479
Speaker 1: way that I feel like liabilities or M two. It's

16
00:00:50,520 --> 00:00:54,840
Speaker 1: a trailing liquidity index. If bitcoin can just be that

17
00:00:55,040 --> 00:00:58,280
Speaker 1: generational money, like cash and like real estate is today,

18
00:00:58,680 --> 00:01:02,880
Speaker 1: then people can think, oh, yeah, it can go to ten.

19
00:01:02,760 --> 00:01:04,080
Speaker 2: Million dollars in the future.

20
00:01:04,400 --> 00:01:06,759
Speaker 1: I suggest that bitcoin will be at one million dollars

21
00:01:06,760 --> 00:01:09,440
Speaker 1: in the next several years. To give people that taste

22
00:01:09,680 --> 00:01:12,919
Speaker 1: of the potential growth that you're not late, you're still

23
00:01:13,000 --> 00:01:15,440
Speaker 1: early in this asset class. You give them the proper

24
00:01:15,520 --> 00:01:18,399
Speaker 1: context for that the price of a home in the

25
00:01:18,440 --> 00:01:21,040
Speaker 1: last ten years has gone from one thousand bitcoin to

26
00:01:21,120 --> 00:01:25,400
Speaker 1: five bitcoin. That trend will continue. They have to understand

27
00:01:25,480 --> 00:01:27,919
Speaker 1: the long term mindset.

28
00:01:29,400 --> 00:01:32,720
Speaker 3: Man, Nick, we have so much to go through. I

29
00:01:32,760 --> 00:01:34,360
Speaker 3: always love talking to you because you are a wealth

30
00:01:34,360 --> 00:01:37,760
Speaker 3: of a knowledge and you are sort of specifically positioned

31
00:01:37,760 --> 00:01:39,279
Speaker 3: to talk about what's going on in the world today.

32
00:01:39,440 --> 00:01:43,759
Speaker 3: Right former US Treasuries and money market trader. So we're

33
00:01:43,760 --> 00:01:45,920
Speaker 3: talking about we're going to talk about bonds today, Professor

34
00:01:45,920 --> 00:01:48,720
Speaker 3: of USC Marshall School Business. I love that because a

35
00:01:48,800 --> 00:01:51,080
Speaker 3: video I made earlier today was like in this world

36
00:01:51,080 --> 00:01:52,920
Speaker 3: of theory, but in the real world. So you can

37
00:01:53,040 --> 00:01:56,919
Speaker 3: understand the business side. Do you understand the treasury side.

38
00:01:57,280 --> 00:02:00,000
Speaker 3: We're gonna talk about money. We're talking about your new book,

39
00:02:00,720 --> 00:02:04,160
Speaker 3: so so much stuff there. But we could say that

40
00:02:04,320 --> 00:02:08,919
Speaker 3: maybe since the Trump administration announced the tariff plan, it's

41
00:02:08,960 --> 00:02:13,080
Speaker 3: triggered all types of chaos. Stocks, bond market, treasure yields

42
00:02:13,080 --> 00:02:15,519
Speaker 3: whips on back and forth. It's been super volatile. People

43
00:02:15,600 --> 00:02:19,320
Speaker 3: on x are whispering about a Bretton Woods agreement. Would

44
00:02:19,320 --> 00:02:20,720
Speaker 3: you say this at the beginning of the end for

45
00:02:20,800 --> 00:02:24,240
Speaker 3: the FIAT system or just another panic in an already

46
00:02:24,400 --> 00:02:25,480
Speaker 3: chaotic decade.

47
00:02:25,600 --> 00:02:28,280
Speaker 1: Well, it's not the end of the Fiat system in

48
00:02:28,360 --> 00:02:33,120
Speaker 1: my opinion. What it is it's an attempt to realign

49
00:02:33,320 --> 00:02:36,079
Speaker 1: the world and re order the world. So I think

50
00:02:36,080 --> 00:02:39,120
Speaker 1: that we've been under a regime of globalization for the

51
00:02:39,200 --> 00:02:42,560
Speaker 1: last few decades, and a big part of that has

52
00:02:42,680 --> 00:02:50,480
Speaker 1: been the US consumer reliant on the Chinese exporter for

53
00:02:50,639 --> 00:02:56,239
Speaker 1: cheap goods and the US government reliant on the Chinese

54
00:02:56,240 --> 00:03:01,200
Speaker 1: surplus for financing. That relationship has been going on for

55
00:03:01,280 --> 00:03:01,880
Speaker 1: quite some time.

56
00:03:01,960 --> 00:03:03,279
Speaker 2: It's a two way streets.

57
00:03:06,520 --> 00:03:10,280
Speaker 1: Yes, you can say that that China has risen up

58
00:03:10,280 --> 00:03:12,800
Speaker 1: and take advantage of the US in this situation, but

59
00:03:12,880 --> 00:03:16,440
Speaker 1: it is a two way street. However, the President has

60
00:03:16,680 --> 00:03:22,200
Speaker 1: made it very clear himself, his Treasury secretary, his Commerce Secretary,

61
00:03:22,680 --> 00:03:26,399
Speaker 1: and the chief of his Council of Economic Advisors, all

62
00:03:26,480 --> 00:03:28,960
Speaker 1: of them have made it very clear that that.

63
00:03:29,000 --> 00:03:30,600
Speaker 2: Era has ended.

64
00:03:31,320 --> 00:03:36,200
Speaker 1: Tariffs are one of the first steps on the path

65
00:03:36,280 --> 00:03:40,640
Speaker 1: to re ordering and to figuring out the new regime.

66
00:03:40,920 --> 00:03:43,360
Speaker 1: What are we going to be in now that we've

67
00:03:43,400 --> 00:03:47,440
Speaker 1: declared the old regime null and void or that that's

68
00:03:47,440 --> 00:03:48,480
Speaker 1: what we are attacking.

69
00:03:48,560 --> 00:03:49,800
Speaker 2: So that's the way I see it.

70
00:03:50,080 --> 00:03:53,880
Speaker 1: Yes, that the market is experiencing an enormous amount of

71
00:03:53,960 --> 00:03:59,640
Speaker 1: volatility off of uncertainty. And that's what volatility is. Volatility

72
00:03:59,680 --> 00:04:03,120
Speaker 1: comes from options prices, as you know, and option prices

73
00:04:03,320 --> 00:04:07,760
Speaker 1: imply volatility. So when market makers are uncertain they step

74
00:04:07,840 --> 00:04:12,440
Speaker 1: away from the writing of options, it gaps out implied volatility.

75
00:04:12,520 --> 00:04:15,760
Speaker 1: By definition. That is where you know volatility comes from.

76
00:04:15,800 --> 00:04:20,640
Speaker 1: It comes from uncertainties. People don't understand fully what is

77
00:04:20,680 --> 00:04:25,480
Speaker 1: the plan obviously, because even the president is a negotiator,

78
00:04:25,680 --> 00:04:29,360
Speaker 1: he's not even laying out all of the things that

79
00:04:29,400 --> 00:04:31,920
Speaker 1: he's going to do, just the ones that he needs

80
00:04:31,960 --> 00:04:35,440
Speaker 1: to get his way. And in that we are in

81
00:04:35,520 --> 00:04:38,880
Speaker 1: that world. Now we live in President Trump two point

82
00:04:38,960 --> 00:04:42,159
Speaker 1: zero world, and we are if you want to play

83
00:04:42,160 --> 00:04:46,320
Speaker 1: by the rules, you have to understand that volatility is

84
00:04:46,800 --> 00:04:48,480
Speaker 1: probably going to be the name of the game.

85
00:04:48,839 --> 00:04:51,000
Speaker 3: Yeah, I want to talk about that plan. We were

86
00:04:51,000 --> 00:04:52,880
Speaker 3: saying how you kind of have to read every single

87
00:04:52,920 --> 00:04:54,760
Speaker 3: word they're laying it out, but you have to listen

88
00:04:54,800 --> 00:04:57,720
Speaker 3: to it. But before that, so you talk about the volatility,

89
00:04:58,040 --> 00:04:59,920
Speaker 3: we can look at the sentiment in the market as well,

90
00:05:00,080 --> 00:05:03,320
Speaker 3: and there are like readings that we haven't seen since

91
00:05:03,680 --> 00:05:06,479
Speaker 3: the global pandemic when like the whole world was literally

92
00:05:06,520 --> 00:05:08,680
Speaker 3: shut down and everyone was going to die, or like

93
00:05:08,720 --> 00:05:11,880
Speaker 3: the global financial crisis, when the whole banking system shut down.

94
00:05:12,160 --> 00:05:14,920
Speaker 3: I mean, do you think that amount of negative sentiment

95
00:05:15,040 --> 00:05:18,080
Speaker 3: and volatility is warranted? I mean, is it as bad

96
00:05:18,160 --> 00:05:20,719
Speaker 3: as the whole world dying and shutting down in twenty twenty.

97
00:05:20,800 --> 00:05:23,800
Speaker 1: So this goes back to one of the core parts

98
00:05:23,839 --> 00:05:27,839
Speaker 1: of my new book Thesis, which is, you know, the

99
00:05:27,839 --> 00:05:30,520
Speaker 1: book is called Bitcoin Age, and it's not just about

100
00:05:30,600 --> 00:05:34,320
Speaker 1: bitcoin mark It's about the credit system that's the backdrop

101
00:05:34,360 --> 00:05:39,960
Speaker 1: for our world. And that credit system is it dies

102
00:05:40,040 --> 00:05:42,880
Speaker 1: if it can't continue to expand.

103
00:05:42,880 --> 00:05:44,640
Speaker 3: Because we're in a debt based monetary system.

104
00:05:44,640 --> 00:05:48,000
Speaker 1: That's correct, and in a debt based monetary system, the

105
00:05:48,520 --> 00:05:53,120
Speaker 1: increase year over year in debt is necessary for the survival.

106
00:05:53,680 --> 00:05:59,640
Speaker 1: And the banks that are controlling this credit system have

107
00:05:59,839 --> 00:06:06,040
Speaker 1: in instituted a political and economic system around them, including government,

108
00:06:06,080 --> 00:06:11,520
Speaker 1: government regulation, central banks, and international trade agreements that allow

109
00:06:11,640 --> 00:06:16,040
Speaker 1: for these banks to receive a bailout or to receive

110
00:06:16,080 --> 00:06:23,719
Speaker 1: the support from the people actually extract the people's future president,

111
00:06:23,839 --> 00:06:28,440
Speaker 1: future earnings and tax revenue for the benefit of this system.

112
00:06:28,520 --> 00:06:34,000
Speaker 1: All in the name of that system provides jobs for

113
00:06:34,279 --> 00:06:36,880
Speaker 1: the world, and so they use the scare tactic of

114
00:06:37,080 --> 00:06:41,600
Speaker 1: contraction to avoid it. So, because we live in that system,

115
00:06:42,279 --> 00:06:45,960
Speaker 1: it's gone. It's contracted and expanded so many times that

116
00:06:46,040 --> 00:06:49,800
Speaker 1: the leverage is so large in the system that what

117
00:06:49,920 --> 00:06:54,880
Speaker 1: you get during these times of volatility are my mentor

118
00:06:54,920 --> 00:06:58,039
Speaker 1: taught taught it to me in these words, he goes,

119
00:06:59,360 --> 00:07:02,520
Speaker 1: a seventh sigma event is something that's only supposed to

120
00:07:02,560 --> 00:07:07,159
Speaker 1: happen one every thousand years. We're getting seven sigma events

121
00:07:07,160 --> 00:07:10,680
Speaker 1: every seven years, and they're getting even closer to each other.

122
00:07:10,960 --> 00:07:14,880
Speaker 1: So what does it mean. It means that the perceived

123
00:07:15,080 --> 00:07:21,400
Speaker 1: normal distribution of returns doesn't exist. It returns are not

124
00:07:21,600 --> 00:07:27,040
Speaker 1: normally distributed. Neither are volatility events. Volatility events that are

125
00:07:27,080 --> 00:07:29,360
Speaker 1: supposed to happen once every thousand years are happening every

126
00:07:29,400 --> 00:07:34,120
Speaker 1: few years. So statistically it's supposed to be impossible. However

127
00:07:34,160 --> 00:07:39,280
Speaker 1: we're experiencing it. And I believe the volatility events that

128
00:07:39,360 --> 00:07:45,000
Speaker 1: are happening so often are simply a symptom of our

129
00:07:45,040 --> 00:07:49,600
Speaker 1: credit system being so based on a lot of thin air.

130
00:07:49,680 --> 00:07:54,200
Speaker 3: Basically, yeah, the leverage in the system magnifies the volatility

131
00:07:54,280 --> 00:07:56,600
Speaker 3: that's right. It's like if I had four or five

132
00:07:56,640 --> 00:07:58,240
Speaker 3: books in my hand, I could balance it. If I

133
00:07:58,240 --> 00:08:02,320
Speaker 3: have four or five hundred books, the thing swinging wildly. Yeah.

134
00:08:02,360 --> 00:08:07,680
Speaker 1: And if we think about the volatility and the expected returns,

135
00:08:09,080 --> 00:08:13,480
Speaker 1: you all of these portfolios are built on models, and

136
00:08:13,560 --> 00:08:19,880
Speaker 1: so when the expected volatility spikes like that, the AI

137
00:08:20,600 --> 00:08:23,120
Speaker 1: which runs a lot of these portfolios, it doesn't know

138
00:08:23,160 --> 00:08:26,920
Speaker 1: what to do, right, and it literally aerrs out and

139
00:08:27,240 --> 00:08:30,600
Speaker 1: for cells. So that's actually what you're witnessing is it's

140
00:08:30,640 --> 00:08:35,920
Speaker 1: a computerization. It's an algorithmic dominance of financial markets. All

141
00:08:35,920 --> 00:08:39,160
Speaker 1: of these are components that lead to these large moves,

142
00:08:39,160 --> 00:08:43,760
Speaker 1: but it doesn't I think you need to understand that

143
00:08:43,760 --> 00:08:46,840
Speaker 1: that is part of the market structure, as opposed to

144
00:08:47,640 --> 00:08:55,000
Speaker 1: take each volatility event as something that should be taken uniquely,

145
00:08:55,080 --> 00:08:57,360
Speaker 1: meaning that in the pandemic, what you had is the

146
00:08:57,440 --> 00:09:02,400
Speaker 1: largest contraction ever in GDP, the quickest largest contraction ever GDP,

147
00:09:02,720 --> 00:09:06,559
Speaker 1: and the quickest expansion from monetary and fiscal.

148
00:09:06,320 --> 00:09:07,080
Speaker 2: That you ever saw.

149
00:09:07,600 --> 00:09:10,280
Speaker 1: That's just another example of what I'm talking about, is

150
00:09:10,280 --> 00:09:12,480
Speaker 1: that when it contracts, you have to expand it. So

151
00:09:12,800 --> 00:09:16,160
Speaker 1: that was another magnified one we're just experiencing these now

152
00:09:16,200 --> 00:09:16,720
Speaker 1: more and more.

153
00:09:16,880 --> 00:09:19,880
Speaker 3: Yeah, so let's get back to the plan. You said,

154
00:09:19,920 --> 00:09:21,720
Speaker 3: So we're sort of in Trump's world. We have to

155
00:09:21,760 --> 00:09:24,120
Speaker 3: know what Trump's plan is. You're paying attention to all

156
00:09:24,200 --> 00:09:26,160
Speaker 3: these words that are being said, so you can understand that.

157
00:09:27,200 --> 00:09:30,800
Speaker 3: Let's look at it from a historical basis for a minute, right,

158
00:09:30,840 --> 00:09:32,880
Speaker 3: because we were kind of talking about earlier where like

159
00:09:33,720 --> 00:09:36,240
Speaker 3: a lot of people are saying like Trump doesn't shouldn't

160
00:09:36,240 --> 00:09:37,640
Speaker 3: do this, He doesn't have the right to do this.

161
00:09:37,720 --> 00:09:39,720
Speaker 3: Who is he to crash the markets? These types of things.

162
00:09:39,760 --> 00:09:43,120
Speaker 3: But presidents do these things. And so we can look

163
00:09:43,160 --> 00:09:45,319
Speaker 3: back just through a couple so like the Brettonwood's Agreement,

164
00:09:45,960 --> 00:09:49,120
Speaker 3: the Plaza Cord, and in nineteen eighty five. And what's

165
00:09:49,160 --> 00:09:52,200
Speaker 3: interesting about those is it sort of seems like they

166
00:09:52,240 --> 00:09:57,000
Speaker 3: were trying to fix the same problem, which is trade imbalances. Right,

167
00:09:57,040 --> 00:09:59,160
Speaker 3: So that's what I think nineteen forty four is about.

168
00:09:59,200 --> 00:10:01,240
Speaker 3: I think that's what the Plause cordabouts. So you sort

169
00:10:01,240 --> 00:10:05,160
Speaker 3: of have this free market. The world realigned and pegged

170
00:10:05,160 --> 00:10:07,400
Speaker 3: back to the dollar in nineteen forty four, and then

171
00:10:07,440 --> 00:10:09,640
Speaker 3: the imbalances grew nineteen eighty five, we had to kind

172
00:10:09,640 --> 00:10:12,680
Speaker 3: of bring it back in and then today we're talking

173
00:10:12,720 --> 00:10:13,679
Speaker 3: about trade and balances.

174
00:10:13,720 --> 00:10:20,480
Speaker 1: Again what the President's chief of his chief economic advisor

175
00:10:20,520 --> 00:10:24,800
Speaker 1: has said, we are living in this world where the

176
00:10:25,559 --> 00:10:31,440
Speaker 1: Chinese exporting has hollowed out US manufacturing. It seems very

177
00:10:31,480 --> 00:10:34,200
Speaker 1: cliche to talk about it because it's that's a theme

178
00:10:34,240 --> 00:10:36,560
Speaker 1: that's been with us for quite some time, a few decades,

179
00:10:37,040 --> 00:10:40,120
Speaker 1: but now they're ready to address it. It also seems

180
00:10:40,120 --> 00:10:43,600
Speaker 1: cliche to say that a strong economy has to have

181
00:10:43,640 --> 00:10:47,880
Speaker 1: strong manufacturing when the US, which is the world's largest economy,

182
00:10:48,160 --> 00:10:49,880
Speaker 1: has hollowed out manufacturing.

183
00:10:50,360 --> 00:10:52,040
Speaker 2: So people they're.

184
00:10:51,920 --> 00:10:55,760
Speaker 1: Unable to see necessarily that we need the manufacturing back

185
00:10:56,320 --> 00:10:59,400
Speaker 1: to survive on the long term because in the short term,

186
00:10:59,640 --> 00:11:02,959
Speaker 1: all of these technology services that we provide as a

187
00:11:03,040 --> 00:11:07,800
Speaker 1: nation are consumed by everyone across the world. So it

188
00:11:07,960 --> 00:11:12,000
Speaker 1: is keeping our economy going right. The whole IT sector

189
00:11:12,280 --> 00:11:15,720
Speaker 1: and technology sector, even social media. When you think about

190
00:11:16,040 --> 00:11:18,600
Speaker 1: where are all the social media companies based and where

191
00:11:18,640 --> 00:11:21,319
Speaker 1: have they come from? All the strong internet companies over

192
00:11:21,320 --> 00:11:24,560
Speaker 1: the last few decades, they're all United States based. So

193
00:11:24,679 --> 00:11:27,880
Speaker 1: why do we need manufacturing? They are saying that, yes,

194
00:11:27,960 --> 00:11:31,320
Speaker 1: we do need it, and it is to address this

195
00:11:31,800 --> 00:11:36,080
Speaker 1: permanent trade deficit that we are in. It creates a

196
00:11:36,120 --> 00:11:39,840
Speaker 1: permanent capital account surplus, and that's one of the keys

197
00:11:40,280 --> 00:11:43,720
Speaker 1: if you have the If you have this huge capital

198
00:11:43,720 --> 00:11:46,920
Speaker 1: account surplus, it means that the world, the rest of

199
00:11:46,960 --> 00:11:50,880
Speaker 1: the world, is holding your debt and that makes you

200
00:11:50,920 --> 00:11:53,840
Speaker 1: subject to them also in a way. So all of

201
00:11:53,880 --> 00:11:55,520
Speaker 1: these things are trying to be addressed here.

202
00:11:56,000 --> 00:11:58,480
Speaker 3: Do you think I want to get to the manufacturing back,

203
00:11:58,520 --> 00:11:59,960
Speaker 3: But like, let's just talk about the trade and bud

204
00:12:00,040 --> 00:12:02,640
Speaker 3: lence is for a minute, right, because Trump's talked about

205
00:12:02,640 --> 00:12:06,080
Speaker 3: trying to close those trade and balances and obviously talked

206
00:12:06,080 --> 00:12:07,720
Speaker 3: about the tariffs for each nation that we have that

207
00:12:08,000 --> 00:12:10,160
Speaker 3: and some of them look ridiculous, like the trade and

208
00:12:10,200 --> 00:12:14,680
Speaker 3: balance maybe with Vietnam for example, right, but it doesn't

209
00:12:14,760 --> 00:12:17,160
Speaker 3: include to the point that you just made, right, that's

210
00:12:17,200 --> 00:12:20,400
Speaker 3: like what are we exporting to Vietnam? Like what can

211
00:12:20,400 --> 00:12:22,720
Speaker 3: they buy of ours? But it doesn't seem to include

212
00:12:23,120 --> 00:12:26,079
Speaker 3: what we really export what you said, or the tech sector.

213
00:12:26,160 --> 00:12:29,640
Speaker 3: So we have so we've grown our way from making

214
00:12:29,640 --> 00:12:32,480
Speaker 3: textiles like one hundred years ago, and we've moved a

215
00:12:32,559 --> 00:12:36,320
Speaker 3: higher level things. So now we produce science, medicine, technology,

216
00:12:36,480 --> 00:12:39,760
Speaker 3: and we export the technology and so they receive that technology,

217
00:12:39,760 --> 00:12:41,920
Speaker 3: but that doesn't show up in those trade balances.

218
00:12:42,200 --> 00:12:44,360
Speaker 1: Well, what they and that's what they're trying to address

219
00:12:44,360 --> 00:12:46,360
Speaker 1: with tariffs is they're trying to make them pay for

220
00:12:46,440 --> 00:12:48,439
Speaker 1: some of those things coming in so that there's.

221
00:12:48,280 --> 00:12:49,080
Speaker 2: More of a balance.

222
00:12:49,920 --> 00:12:53,320
Speaker 1: They're also trying to make sure that I'm sorry, what

223
00:12:53,360 --> 00:12:56,120
Speaker 1: they're trying to do with their protective tariffs, like in

224
00:12:56,120 --> 00:12:59,880
Speaker 1: a Vietnam, if they have protective tariffs, they are preventing

225
00:13:00,160 --> 00:13:03,959
Speaker 1: US goods from coming in. Those technology products are tax

226
00:13:04,040 --> 00:13:06,560
Speaker 1: doubles so that they might go and get them from China,

227
00:13:06,679 --> 00:13:10,080
Speaker 1: for example. Those are the some of the things that

228
00:13:10,120 --> 00:13:12,800
Speaker 1: are trying to be addressed in terms of exporting to

229
00:13:12,880 --> 00:13:18,200
Speaker 1: a country like Vietnam. But what they've said, part of

230
00:13:18,240 --> 00:13:20,880
Speaker 1: this dual public good that the United States provides to

231
00:13:20,920 --> 00:13:24,120
Speaker 1: the world, one of them is defense. The other is

232
00:13:24,440 --> 00:13:29,720
Speaker 1: US dollars and US treasuries. The defense side seems to

233
00:13:29,760 --> 00:13:33,400
Speaker 1: be something that they want to make sure the trade

234
00:13:33,480 --> 00:13:36,960
Speaker 1: deficit is closed with the rest of the world, because

235
00:13:37,000 --> 00:13:43,400
Speaker 1: if you simply buy more US weaponry, that will shrink

236
00:13:43,440 --> 00:13:48,240
Speaker 1: the trade deficit. And what you're doing is that you're

237
00:13:48,240 --> 00:13:50,800
Speaker 1: doing a couple things at the same time. You're lowering

238
00:13:50,840 --> 00:13:53,320
Speaker 1: the amount of money that you have to spend as

239
00:13:53,320 --> 00:13:58,000
Speaker 1: the United States on protecting the world because your ally

240
00:13:58,679 --> 00:14:03,120
Speaker 1: is now going to build up army, but not opposed

241
00:14:03,160 --> 00:14:07,880
Speaker 1: to you, but in alliance with you. So that foreign

242
00:14:08,440 --> 00:14:12,240
Speaker 1: country buys weapons from the United States, that gives us,

243
00:14:12,679 --> 00:14:15,640
Speaker 1: you know, a balance of trade in our favor. And

244
00:14:15,679 --> 00:14:17,800
Speaker 1: if so we're buying if we're buying things from them,

245
00:14:17,840 --> 00:14:20,120
Speaker 1: it is more balanced if they're buying weapons from US.

246
00:14:20,160 --> 00:14:23,880
Speaker 1: So that does seem to be part of the agenda.

247
00:14:24,320 --> 00:14:28,120
Speaker 1: So I expect, I expect a big boost to the

248
00:14:28,200 --> 00:14:31,920
Speaker 1: demand for US the US military industrial complex.

249
00:14:32,160 --> 00:14:35,560
Speaker 3: Yeah, well, I mean that's part of the uh that

250
00:14:35,680 --> 00:14:38,720
Speaker 3: was my kind of thesis of this Amazon prime, which

251
00:14:38,760 --> 00:14:42,240
Speaker 3: is what would would Trump has been saying, how with NATO,

252
00:14:42,320 --> 00:14:44,240
Speaker 3: each countrys supposed to pay a percentage of the GDP

253
00:14:44,400 --> 00:14:47,120
Speaker 3: towards security. That was the agreement. They haven't done yet.

254
00:14:47,440 --> 00:14:49,960
Speaker 3: So what you're saying is the big push is him

255
00:14:50,000 --> 00:14:51,800
Speaker 3: to do that. So if these countries were to take

256
00:14:51,840 --> 00:14:54,360
Speaker 3: two percent four percent of the GDP back towards military,

257
00:14:54,360 --> 00:14:56,080
Speaker 3: that could help offset that trade and balance.

258
00:14:56,200 --> 00:14:59,600
Speaker 1: Yeah, and we've been talking here about China. We've been

259
00:14:59,600 --> 00:15:04,040
Speaker 1: talking about Vietnam. Before we started, we were talking about

260
00:15:04,080 --> 00:15:06,680
Speaker 1: the potential for a deal with India and how is

261
00:15:06,720 --> 00:15:09,720
Speaker 1: it going to look with Russia with the United States,

262
00:15:09,760 --> 00:15:11,760
Speaker 1: are that were going to go into more of an

263
00:15:11,760 --> 00:15:14,160
Speaker 1: alliance with them and try to pull them away from China.

264
00:15:14,800 --> 00:15:20,960
Speaker 1: Europe is an entirely different theater of this reordering, and

265
00:15:21,480 --> 00:15:23,920
Speaker 1: you know, to talk about Europe and the role of

266
00:15:24,000 --> 00:15:26,640
Speaker 1: NATO and all that it is, it starts to be

267
00:15:26,680 --> 00:15:29,600
Speaker 1: a different conversation than what we're talking about with China

268
00:15:29,720 --> 00:15:33,160
Speaker 1: hollowing out the US manufacturing or trying to find ways

269
00:15:33,440 --> 00:15:36,960
Speaker 1: to get non China and non Europe countries to pay

270
00:15:37,360 --> 00:15:38,400
Speaker 1: more of their fair share.

271
00:15:38,600 --> 00:15:44,000
Speaker 3: Right. We were talking about how when you start connecting

272
00:15:44,000 --> 00:15:45,520
Speaker 3: a lot of dots, you can see that. One of

273
00:15:45,560 --> 00:15:47,280
Speaker 3: the things Trump did when he first came in was

274
00:15:47,280 --> 00:15:50,040
Speaker 3: he threatened the bricks. So the tons of videos I've

275
00:15:50,080 --> 00:15:51,920
Speaker 3: talked about, it's been all over the bricks. The bricks,

276
00:15:51,920 --> 00:15:55,120
Speaker 3: the bricks their own currency, golback currency, they're growing power,

277
00:15:55,160 --> 00:15:58,600
Speaker 3: et cetera, et cetera. And he sort of warned the bricks, hey,

278
00:15:58,600 --> 00:16:00,480
Speaker 3: if you try to launch your own currency, one hundred

279
00:16:00,480 --> 00:16:02,920
Speaker 3: percent tariffs against you. Anyone who moves away from the dollar,

280
00:16:03,280 --> 00:16:07,200
Speaker 3: and so the bricks is this coalition, this trading block,

281
00:16:08,160 --> 00:16:11,760
Speaker 3: and the sea in bricks is China, which is the

282
00:16:11,760 --> 00:16:14,320
Speaker 3: big one. So in one way you can see that

283
00:16:14,440 --> 00:16:16,960
Speaker 3: was one of his focal points. And it seems like

284
00:16:17,040 --> 00:16:18,680
Speaker 3: part of what he's trying to do then is sort

285
00:16:18,720 --> 00:16:21,640
Speaker 3: of reorg. Maybe the US doesn't have enough power against

286
00:16:21,680 --> 00:16:23,480
Speaker 3: China necessarily, but if we could pull some of that

287
00:16:23,600 --> 00:16:26,720
Speaker 3: trading block away from China, then the US could have

288
00:16:27,080 --> 00:16:27,720
Speaker 3: more power there.

289
00:16:28,280 --> 00:16:32,240
Speaker 1: And you know, you can't dismiss what he's saying. You

290
00:16:32,280 --> 00:16:35,280
Speaker 1: have to listen to it because it's it's fascinating to

291
00:16:35,280 --> 00:16:37,160
Speaker 1: see the speed at which some of these things are

292
00:16:37,200 --> 00:16:41,920
Speaker 1: now happening. Listening to one of your recent episodes talk

293
00:16:41,960 --> 00:16:45,680
Speaker 1: about bricks, I what I realized that he's actually trying

294
00:16:45,680 --> 00:16:50,000
Speaker 1: to kill bricks in that he's trying to take the

295
00:16:50,520 --> 00:16:56,360
Speaker 1: sea China and isolate China. And to do that you

296
00:16:56,480 --> 00:17:01,400
Speaker 1: have to bring Brazil, Russia, India and South Africa and

297
00:17:01,440 --> 00:17:04,399
Speaker 1: the others like the United Arab Emirates, which who is

298
00:17:04,480 --> 00:17:09,440
Speaker 1: already announced over one trillion investment in the United States.

299
00:17:10,760 --> 00:17:13,720
Speaker 2: That is maybe the big play here.

300
00:17:13,800 --> 00:17:17,640
Speaker 1: It's the thesis for the last few years was Cana

301
00:17:17,640 --> 00:17:23,120
Speaker 1: Bricks alliance rise up as a trading block and threatened

302
00:17:23,320 --> 00:17:26,439
Speaker 1: the US dollar realm by using their own swap lines.

303
00:17:27,440 --> 00:17:31,360
Speaker 1: Now maybe Bricks is he's just trying to end that

304
00:17:31,520 --> 00:17:37,280
Speaker 1: alliance in one swift move and isolating China. And that's

305
00:17:37,280 --> 00:17:38,960
Speaker 1: what we saw with the ninety day pause.

306
00:17:40,000 --> 00:17:41,040
Speaker 3: Is that exactly.

307
00:17:41,160 --> 00:17:45,760
Speaker 1: You know, you go fifty percent even more on China

308
00:17:46,240 --> 00:17:49,400
Speaker 1: and you pause everyone else. But why because seventy five

309
00:17:49,400 --> 00:17:52,800
Speaker 1: countries called them and they're not making that up. We

310
00:17:52,920 --> 00:17:56,200
Speaker 1: have the bilateral confirmation. I don't know if seventy five

311
00:17:56,240 --> 00:17:59,679
Speaker 1: they always love to exaggerate, but doesn't matter. The calls

312
00:17:59,720 --> 00:18:03,960
Speaker 1: came in, the deals are already penciled in, the meetings

313
00:18:04,000 --> 00:18:08,720
Speaker 1: are being set, all of those tariffs are coming down. Maybe,

314
00:18:08,760 --> 00:18:11,000
Speaker 1: And so that's part of you know, your four chest.

315
00:18:11,040 --> 00:18:14,280
Speaker 1: There's so much going on and we just have to

316
00:18:14,320 --> 00:18:17,800
Speaker 1: do our best. Yes, I teach at USC but unless

317
00:18:17,800 --> 00:18:21,600
Speaker 1: you're a student, and I know you're reading history left

318
00:18:21,640 --> 00:18:24,720
Speaker 1: and right, mark every day. Unless you're a student.

319
00:18:24,560 --> 00:18:26,560
Speaker 2: You can't. You won't be able to keep up.

320
00:18:26,720 --> 00:18:30,080
Speaker 3: Yeah, because the history is what gives you the perspective.

321
00:18:30,160 --> 00:18:32,680
Speaker 3: So again back to nineteen forty four or eighty five,

322
00:18:32,720 --> 00:18:35,560
Speaker 3: where the world did come together and did agree to

323
00:18:36,119 --> 00:18:38,840
Speaker 3: repeg back to the dollar, and did agree to reset

324
00:18:39,160 --> 00:18:41,840
Speaker 3: the trading balances, and did agree to allow the US

325
00:18:41,840 --> 00:18:45,119
Speaker 3: to devalue its currency right each of those times. And

326
00:18:45,160 --> 00:18:47,080
Speaker 3: so then you start to go, well, I guess every

327
00:18:47,320 --> 00:18:49,160
Speaker 3: you know, a couple decades, we just do this thing whatever,

328
00:18:49,200 --> 00:18:51,080
Speaker 3: we just do it again, right, And you get that perspective.

329
00:18:52,800 --> 00:18:55,040
Speaker 3: I think, you know, when the bricks started, it made

330
00:18:55,119 --> 00:18:57,240
Speaker 3: sense saying a little small trading block whatever. But now

331
00:18:57,320 --> 00:18:59,480
Speaker 3: China is big enough to rival the US, and I

332
00:18:59,480 --> 00:19:02,320
Speaker 3: think then it's sort of is like danger, we have

333
00:19:02,359 --> 00:19:05,280
Speaker 3: to kind of do that. I think also the you know,

334
00:19:05,400 --> 00:19:08,000
Speaker 3: the global supply or I say, the global pandemic and

335
00:19:08,040 --> 00:19:10,919
Speaker 3: supply chains breaking down really put the world on notice

336
00:19:10,960 --> 00:19:13,280
Speaker 3: as to especially in the United States, like, shoot, we

337
00:19:13,280 --> 00:19:14,880
Speaker 3: couldn't even go to war with China. We don't even

338
00:19:14,920 --> 00:19:18,600
Speaker 3: have medicine. And I think the Ukraine War even put

339
00:19:18,600 --> 00:19:21,200
Speaker 3: that more on blast, where NATO couldn't even produce enough

340
00:19:21,240 --> 00:19:23,919
Speaker 3: ammunition to keep up with Russia. And so I think

341
00:19:23,960 --> 00:19:27,240
Speaker 3: it's important to think about that. Back to Europe, for example,

342
00:19:27,359 --> 00:19:32,359
Speaker 3: I think it was interesting where Vonderland from the EU

343
00:19:32,520 --> 00:19:35,399
Speaker 3: was like we'll retaliate against the US. But then like

344
00:19:35,560 --> 00:19:37,679
Speaker 3: maloney from Italy is like, I'm gonna come over and

345
00:19:37,680 --> 00:19:41,520
Speaker 3: talk to you, and you know, like Germany might need

346
00:19:41,520 --> 00:19:44,520
Speaker 3: the US to buy its BMW's and Audi's and Volkswagens,

347
00:19:44,680 --> 00:19:47,480
Speaker 3: and you start thinking about then, well, the EU wants

348
00:19:47,560 --> 00:19:50,399
Speaker 3: to play you know, hardball, but then what about Germany

349
00:19:50,440 --> 00:19:53,240
Speaker 3: and what about you know, Italy and like the implications

350
00:19:53,240 --> 00:19:56,240
Speaker 3: of potentially breaking apart the EU. So seems like there's

351
00:19:56,280 --> 00:20:00,720
Speaker 3: some big moves being made and we don't know obviously

352
00:20:01,200 --> 00:20:03,760
Speaker 3: the world. This is a complex system and unintended consequences

353
00:20:03,800 --> 00:20:07,240
Speaker 3: will prevail, but it seems somewhat likely to work out.

354
00:20:07,560 --> 00:20:08,200
Speaker 3: What do you think.

355
00:20:08,520 --> 00:20:11,879
Speaker 1: I've been watching the you know, politics in the EU

356
00:20:12,400 --> 00:20:15,719
Speaker 1: to the best of my ability, and my opinion is

357
00:20:15,760 --> 00:20:19,840
Speaker 1: that if you are to see some grand reordering within

358
00:20:19,960 --> 00:20:23,400
Speaker 1: Europe because of this idea that Trump is looking for

359
00:20:23,440 --> 00:20:28,240
Speaker 1: more alliances and the EU as a block doesn't appear

360
00:20:28,320 --> 00:20:31,159
Speaker 1: to be allied with the United States. In this effort,

361
00:20:31,160 --> 00:20:33,080
Speaker 1: a lot of the agendas are opposed to each other.

362
00:20:34,000 --> 00:20:38,000
Speaker 1: That Italy will be the one that leads its way

363
00:20:38,040 --> 00:20:43,159
Speaker 1: out and can establish, you know, a bilateral relationship with

364
00:20:43,200 --> 00:20:47,720
Speaker 1: the United States, that protects Italy in its effort to leave. Now,

365
00:20:47,760 --> 00:20:51,560
Speaker 1: I'm not making the prediction, but that's the way I'm

366
00:20:51,560 --> 00:20:53,639
Speaker 1: thinking about it, Mark, So I'm thinking, I'm looking at

367
00:20:53,680 --> 00:20:58,040
Speaker 1: Italy and I'm watching their politics because it's the it's

368
00:20:58,080 --> 00:21:03,639
Speaker 1: the only country that is showing any hint of it,

369
00:21:04,480 --> 00:21:06,240
Speaker 1: and so that's the one that we have to watch.

370
00:21:07,200 --> 00:21:10,439
Speaker 3: Yeah, I mean, you're gonna have countries that I think

371
00:21:10,480 --> 00:21:13,159
Speaker 3: need it. They're hinting at it, countries that maybe need it,

372
00:21:13,200 --> 00:21:15,959
Speaker 3: like I said, Audi's and BMW's and Mercedes, and then

373
00:21:16,000 --> 00:21:18,639
Speaker 3: some countries need security. I want to talk about the

374
00:21:18,720 --> 00:21:22,120
Speaker 3: currencies we talked about, maybe some currencies not surviving, maybe

375
00:21:22,200 --> 00:21:24,720
Speaker 3: the sort of groundwork that's been laid with currencies, and

376
00:21:24,720 --> 00:21:26,639
Speaker 3: then obviously we're going to get into thesis of your book,

377
00:21:26,920 --> 00:21:28,880
Speaker 3: but let's just spend a minute talking about the treasury

378
00:21:28,920 --> 00:21:33,119
Speaker 3: market and the bond market. It's been super volatile. You

379
00:21:33,160 --> 00:21:36,640
Speaker 3: know a couple things about this, So I'm curious as

380
00:21:36,680 --> 00:21:39,560
Speaker 3: of the time of this recording, which is April eleventh,

381
00:21:40,240 --> 00:21:43,240
Speaker 3: today we see like it seems like a massive sell

382
00:21:43,280 --> 00:21:46,520
Speaker 3: off in the treasury market, which people are pegging back

383
00:21:46,560 --> 00:21:53,400
Speaker 3: to Europe. Speculation is potentially Europe is fighting against the US,

384
00:21:53,440 --> 00:21:55,920
Speaker 3: doesn't want the US to sort of break apart, or

385
00:21:56,000 --> 00:22:00,560
Speaker 3: potentially China has a bunch of treasuries in Europe. What

386
00:22:00,600 --> 00:22:01,960
Speaker 3: would you make of the situation?

387
00:22:02,520 --> 00:22:07,080
Speaker 1: So one to to your later point, China has treasuries

388
00:22:07,400 --> 00:22:13,000
Speaker 1: all places. So I've I used to face when I

389
00:22:13,040 --> 00:22:15,480
Speaker 1: was on the bond desk. I used to face Citadel,

390
00:22:16,080 --> 00:22:24,280
Speaker 1: which faced Safe sa Fe, which is the Chinese basically

391
00:22:24,280 --> 00:22:27,920
Speaker 1: their treasury portfolio. So I got to hear some stories,

392
00:22:27,960 --> 00:22:31,800
Speaker 1: and yes, China has treasuries around the world, different in

393
00:22:31,880 --> 00:22:36,240
Speaker 1: different parts including I believe it's Belgium and or Luxembourg.

394
00:22:38,359 --> 00:22:44,200
Speaker 1: So but what's happening in treasuries? Is there financial warfare

395
00:22:44,240 --> 00:22:46,879
Speaker 1: going on with Europe? I don't actually know. I've seen

396
00:22:47,520 --> 00:22:50,840
Speaker 1: some early research, but I haven't done enough work on

397
00:22:50,880 --> 00:22:53,120
Speaker 1: that because I just saw that this morning. So it's

398
00:22:53,119 --> 00:22:55,600
Speaker 1: something I'm going to be looking at. What is happening

399
00:22:55,600 --> 00:23:00,399
Speaker 1: in the treasure market is fascinating because it appeared to

400
00:23:00,480 --> 00:23:05,639
Speaker 1: be very, very focused selling. And the reason that I

401
00:23:05,680 --> 00:23:10,560
Speaker 1: say that is what is being sold right now are

402
00:23:11,480 --> 00:23:14,479
Speaker 1: ten plus year treasury so ten twenty and thirty year

403
00:23:14,520 --> 00:23:18,240
Speaker 1: treasuries and treasuries along that part of the curve. There

404
00:23:18,320 --> 00:23:23,359
Speaker 1: are only so many of those treasuries. Now, yes, it's

405
00:23:23,440 --> 00:23:26,880
Speaker 1: dragging yields up, but the price action, if we look

406
00:23:26,960 --> 00:23:30,520
Speaker 1: into it, there are three things that we can see

407
00:23:31,119 --> 00:23:36,520
Speaker 1: to determine just how specific this selling is. Number One,

408
00:23:37,040 --> 00:23:41,440
Speaker 1: the yield curve has dramatically steepened. Means that the front

409
00:23:41,560 --> 00:23:44,199
Speaker 1: end of the yield curve is not behaving in this

410
00:23:44,320 --> 00:23:48,000
Speaker 1: way at all, that it's all a steepening move, okay,

411
00:23:48,040 --> 00:23:52,679
Speaker 1: So meaning those that hold twos, threes, fives around the

412
00:23:52,760 --> 00:23:55,680
Speaker 1: world are not exhibiting any of this behavior.

413
00:23:57,160 --> 00:23:57,640
Speaker 2: That's one.

414
00:23:57,880 --> 00:24:01,840
Speaker 1: Number two is that the move has come from real yields.

415
00:24:02,359 --> 00:24:04,760
Speaker 1: So if we look at the market for a ten

416
00:24:04,800 --> 00:24:07,000
Speaker 1: yure treasuries at about four and a half percent today,

417
00:24:07,920 --> 00:24:10,720
Speaker 1: that can be decomposed into two components, the real yield,

418
00:24:10,800 --> 00:24:13,160
Speaker 1: which you can get in the market through the tips yield,

419
00:24:13,680 --> 00:24:16,360
Speaker 1: and then the difference, which is called the inflation break even,

420
00:24:16,359 --> 00:24:18,639
Speaker 1: which is a number that you back into. So the

421
00:24:18,640 --> 00:24:22,159
Speaker 1: real yield is a compensation for owning treasuries, and the

422
00:24:22,280 --> 00:24:26,720
Speaker 1: inflation component is a kicker what you get after the fact,

423
00:24:27,119 --> 00:24:31,040
Speaker 1: basically the plus CPI component. And so that calculation, the

424
00:24:31,119 --> 00:24:34,679
Speaker 1: inflation component is not moving. All of the move is

425
00:24:34,680 --> 00:24:35,840
Speaker 1: from real yields.

426
00:24:36,600 --> 00:24:37,040
Speaker 2: It don't.

427
00:24:37,200 --> 00:24:40,840
Speaker 1: It means it's not an inflation scare. Okay, okay, So

428
00:24:40,880 --> 00:24:44,919
Speaker 1: that's the second. The third is that swap spreads are collapsing.

429
00:24:45,480 --> 00:24:47,320
Speaker 1: And this is what people are talking about with the

430
00:24:47,359 --> 00:24:52,960
Speaker 1: Basis trade, where investors were long treasuries and short derivatives

431
00:24:53,040 --> 00:24:56,639
Speaker 1: against it, trying to arbitrage a small amount of profit.

432
00:24:57,960 --> 00:25:02,200
Speaker 1: Swap spreads have collapsed, which means that the selling is

433
00:25:02,320 --> 00:25:06,040
Speaker 1: being done on the cash instrument, which is treasury securities

434
00:25:06,040 --> 00:25:09,320
Speaker 1: ten twenties and thirties, and the buying to unwind the

435
00:25:09,359 --> 00:25:12,880
Speaker 1: trade is being done in derivatives. So the original position

436
00:25:13,080 --> 00:25:17,520
Speaker 1: was long securities and it's now selling the securities. So

437
00:25:17,560 --> 00:25:20,879
Speaker 1: whoever was long the Basis trade was financing treasuries in

438
00:25:20,880 --> 00:25:24,800
Speaker 1: the rebol market. They own all these treasuries. They're not

439
00:25:25,119 --> 00:25:28,560
Speaker 1: long the full risk because they are hedged on the

440
00:25:28,560 --> 00:25:33,240
Speaker 1: other side. So when rates move together, their trade doesn't change.

441
00:25:33,280 --> 00:25:38,159
Speaker 1: They just capture that difference over time. But now it

442
00:25:38,240 --> 00:25:42,640
Speaker 1: moved against them. What they were short was going down

443
00:25:42,680 --> 00:25:45,720
Speaker 1: faster than what they were long, right in the risk

444
00:25:45,760 --> 00:25:47,879
Speaker 1: off move, So this actually started.

445
00:25:48,640 --> 00:25:49,600
Speaker 2: I don't know who.

446
00:25:49,440 --> 00:25:53,080
Speaker 1: Owns this trade. And who's financing it and who's blowing up.

447
00:25:53,400 --> 00:25:56,600
Speaker 1: But what I see is that with swap spreads collapsing,

448
00:25:57,320 --> 00:26:01,040
Speaker 1: that means that the selling is so localized in these

449
00:26:01,080 --> 00:26:06,120
Speaker 1: ten twenties and thirties, it's very dramatic. I've only seen

450
00:26:06,160 --> 00:26:09,480
Speaker 1: this type of price action once and that was February

451
00:26:09,520 --> 00:26:14,520
Speaker 1: of twenty twenty when the pandemic was when that uncertainty

452
00:26:14,520 --> 00:26:18,480
Speaker 1: of what was happening and yields were actually collapsing, going

453
00:26:18,560 --> 00:26:22,200
Speaker 1: all the way to zero, and then after a certain

454
00:26:22,200 --> 00:26:26,280
Speaker 1: point the thirty year yield started gapping up in a

455
00:26:26,320 --> 00:26:28,560
Speaker 1: way that I mean, that's what we actually saw this time,

456
00:26:28,640 --> 00:26:31,760
Speaker 1: is that it was triggered by a bull move right.

457
00:26:32,760 --> 00:26:36,520
Speaker 1: It's wild, Mark, It's so crazy to watch. It's dynamic.

458
00:26:37,400 --> 00:26:41,040
Speaker 1: And instead of trying to predict, which I know everyone's

459
00:26:41,040 --> 00:26:43,560
Speaker 1: trying to say, who did this or who's blowing up,

460
00:26:44,160 --> 00:26:46,960
Speaker 1: I don't know, So instead of trying to speculate, which

461
00:26:46,960 --> 00:26:50,200
Speaker 1: I'm doing also, I'm just trying to understand the mechanics

462
00:26:50,200 --> 00:26:52,480
Speaker 1: and explain that to you my readers as well.

463
00:26:52,920 --> 00:26:57,240
Speaker 3: What would the psychology or the game theory behind this

464
00:26:57,560 --> 00:26:57,960
Speaker 3: tell you.

465
00:26:58,000 --> 00:27:04,520
Speaker 1: Potentially that's more in the speculative, So there's a theory

466
00:27:04,560 --> 00:27:07,840
Speaker 1: out there that, Yeah, there's a theory out there that

467
00:27:08,240 --> 00:27:12,040
Speaker 1: which I think is it's so close to the mar

468
00:27:12,040 --> 00:27:15,080
Speaker 1: A Lago acord that we're talking about, which is that

469
00:27:15,320 --> 00:27:18,199
Speaker 1: the credit system that I talk about in my book,

470
00:27:19,119 --> 00:27:22,840
Speaker 1: I explain that the dollar system is no longer a

471
00:27:23,040 --> 00:27:28,240
Speaker 1: US sovereign phenomenon. It's a global banking phenomenon, and they've

472
00:27:28,320 --> 00:27:33,600
Speaker 1: leveraged the country's currency to expand around the world. And

473
00:27:33,680 --> 00:27:37,480
Speaker 1: that is the euro dollar system, an offshore dollar system

474
00:27:37,800 --> 00:27:42,760
Speaker 1: that functions outside of the regulations of the United States.

475
00:27:43,040 --> 00:27:46,840
Speaker 1: They go by their own regulations, the Basel Accords, and

476
00:27:47,920 --> 00:27:57,160
Speaker 1: that world is allowing part of Steve Myron, the Council

477
00:27:57,400 --> 00:28:03,600
Speaker 1: of the White Houses main economic advisor, this dual public good,

478
00:28:03,880 --> 00:28:07,240
Speaker 1: one of them is the US dollar in US treasure securities.

479
00:28:07,760 --> 00:28:11,360
Speaker 1: So perhaps what they're saying with that dual public good

480
00:28:11,400 --> 00:28:14,800
Speaker 1: is that, hey, this euro dollar system that you're using,

481
00:28:15,080 --> 00:28:19,679
Speaker 1: you're using it free of charge. We're not agreeing with

482
00:28:19,800 --> 00:28:23,560
Speaker 1: you using it to that free of charge. Maybe we'll

483
00:28:23,640 --> 00:28:25,840
Speaker 1: let you still use it, but you have to pay

484
00:28:25,840 --> 00:28:33,040
Speaker 1: in some way. Maybe that action is triggering a financial

485
00:28:33,040 --> 00:28:37,159
Speaker 1: war between Europe and the United States. The European banks

486
00:28:37,200 --> 00:28:42,840
Speaker 1: specifically that utilize this euro dollar system. Who and if

487
00:28:42,840 --> 00:28:45,800
Speaker 1: it's happening, I'm not sure, but that's a theory that

488
00:28:46,280 --> 00:28:49,200
Speaker 1: I'm trying to work with right now.

489
00:28:49,520 --> 00:28:51,440
Speaker 2: And speck out.

490
00:28:51,680 --> 00:28:55,640
Speaker 4: Yeah, a small business owner, are you buried in all

491
00:28:55,720 --> 00:28:58,040
Speaker 4: types of work keeping you from the real thing that

492
00:28:58,040 --> 00:29:00,680
Speaker 4: makes you money? Well that's where just Works comes in.

493
00:29:00,720 --> 00:29:03,760
Speaker 4: They're the all in one platform that supports small business growth.

494
00:29:03,920 --> 00:29:06,560
Speaker 3: You can get all their tools that help with benefits

495
00:29:06,600 --> 00:29:11,160
Speaker 3: like payroll and HR and compliance with transparent pricing. Now

496
00:29:11,240 --> 00:29:14,760
Speaker 3: they help you hire top talent internationally, internew markets, quickly

497
00:29:15,040 --> 00:29:19,080
Speaker 3: scale international operations without the workload, and for every how

498
00:29:19,080 --> 00:29:20,080
Speaker 3: do I do it? Question?

499
00:29:20,240 --> 00:29:22,600
Speaker 4: You can reach out to their expert staff from sole

500
00:29:22,680 --> 00:29:26,560
Speaker 4: proprietor or a team of twenty. Just Works empowers all

501
00:29:26,640 --> 00:29:30,400
Speaker 4: kinds of small businesses with real human support. So visit

502
00:29:30,600 --> 00:29:34,160
Speaker 4: justworks dot com slash podcast to join the thousands of

503
00:29:34,160 --> 00:29:38,080
Speaker 4: small businesses that trust Just Works to take care of payroll, benefits,

504
00:29:38,240 --> 00:29:43,040
Speaker 4: compliance and more. Again that's Justworks dot com slash podcasts.

505
00:29:44,760 --> 00:29:46,920
Speaker 4: Then we have so you talk about the dollar, the

506
00:29:46,920 --> 00:29:49,560
Speaker 4: dollar systems. Then we have the currencies and so as

507
00:29:49,640 --> 00:29:51,280
Speaker 4: this is all trading, and then we sort of get

508
00:29:51,280 --> 00:29:54,080
Speaker 4: into that, and we had talked about, you know, I

509
00:29:54,120 --> 00:29:55,960
Speaker 4: had thrown out the comment which you seem to agree on,

510
00:29:56,000 --> 00:29:58,800
Speaker 4: that there's a handful of currencies around the world that

511
00:29:58,840 --> 00:30:02,479
Speaker 4: probably won't make it out of this year. Obviously this

512
00:30:02,560 --> 00:30:07,400
Speaker 4: pushes inflation out. Currencies are inflating. You seem to agree

513
00:30:07,400 --> 00:30:10,320
Speaker 4: with that. Tell me your view on potentially why some

514
00:30:10,360 --> 00:30:11,880
Speaker 4: currencies won't make it out this year.

515
00:30:11,960 --> 00:30:12,160
Speaker 3: Yeah.

516
00:30:12,200 --> 00:30:14,920
Speaker 1: So in my first book, Layered Money, I explain how

517
00:30:15,480 --> 00:30:20,000
Speaker 1: money used to be this relationship between commodity money and

518
00:30:20,320 --> 00:30:25,480
Speaker 1: credit money, and without that relationship anymore, the United States

519
00:30:25,560 --> 00:30:30,240
Speaker 1: dollar and US Treasury specifically rises to the top of

520
00:30:30,280 --> 00:30:33,720
Speaker 1: the pyramid of money in this world in the absence

521
00:30:33,720 --> 00:30:38,040
Speaker 1: of gold. And who's even above the US Treasury security

522
00:30:38,360 --> 00:30:41,280
Speaker 1: It's the US government, right, because they are the ones

523
00:30:41,320 --> 00:30:43,080
Speaker 1: that promise to pay US treasuries.

524
00:30:43,720 --> 00:30:45,880
Speaker 2: The dollar is simply.

525
00:30:46,080 --> 00:30:50,320
Speaker 1: What is accepted or what the Treasury decides to pay

526
00:30:50,320 --> 00:30:54,080
Speaker 1: out on its debt. That's what defines the dollar. And

527
00:30:54,360 --> 00:30:57,400
Speaker 1: that's the theoretical way to think about it. And so

528
00:30:57,680 --> 00:31:01,719
Speaker 1: if that is the case, leverage on top of leverage

529
00:31:01,720 --> 00:31:05,040
Speaker 1: on top of leverage for countries that don't have a

530
00:31:05,080 --> 00:31:09,560
Speaker 1: lot of real assets or things that underpin it makes

531
00:31:09,600 --> 00:31:13,280
Speaker 1: it so that in a world with bitcoin present and

532
00:31:13,640 --> 00:31:16,360
Speaker 1: US treasuries and the US government continuing to be strong,

533
00:31:16,600 --> 00:31:20,880
Speaker 1: you can envision currencies won't survive. Non US dollar currencies

534
00:31:21,080 --> 00:31:23,840
Speaker 1: won't survive in the long term. So I could think

535
00:31:23,880 --> 00:31:27,600
Speaker 1: about that a lot five years ago, but now we

536
00:31:27,680 --> 00:31:31,560
Speaker 1: are in a rapid reordering, as we've discussed, and in

537
00:31:31,600 --> 00:31:37,640
Speaker 1: that rapid reordering, you can quickly imagine that in the

538
00:31:37,680 --> 00:31:41,560
Speaker 1: next Mara a Lago accord, some currencies will just say

539
00:31:41,840 --> 00:31:46,600
Speaker 1: we'll do dollar stable coins and we'll figure out a

540
00:31:46,600 --> 00:31:51,280
Speaker 1: way to finance our own activity. That is something that

541
00:31:51,480 --> 00:31:53,720
Speaker 1: a currency is a national tool. So to get a

542
00:31:53,760 --> 00:31:56,360
Speaker 1: country to give up their currency, they're going to have

543
00:31:56,400 --> 00:31:59,760
Speaker 1: to get something in return because they need flexibility.

544
00:31:59,800 --> 00:32:00,880
Speaker 2: That it's a key here.

545
00:32:01,240 --> 00:32:08,760
Speaker 1: However, there is a path to non dollar countries now

546
00:32:08,800 --> 00:32:14,520
Speaker 1: taking the dollar and reorienting their financial system in an

547
00:32:14,520 --> 00:32:18,880
Speaker 1: alliance with the United States to avoid their perpetual devaluation.

548
00:32:19,040 --> 00:32:21,880
Speaker 1: So you mentioned Lebanon and you mentioned Turkey. These are

549
00:32:21,880 --> 00:32:24,800
Speaker 1: two countries that have had currencies that you know, the

550
00:32:24,880 --> 00:32:28,000
Speaker 1: chart just looks like a waterfall, and so you can't

551
00:32:28,040 --> 00:32:30,600
Speaker 1: even see actually the chart anymore. When you zoom out

552
00:32:30,640 --> 00:32:32,880
Speaker 1: what's happening. That's how much it's collapsed.

553
00:32:32,920 --> 00:32:35,760
Speaker 2: So it's it's much.

554
00:32:36,200 --> 00:32:39,920
Speaker 1: It's possible now in a way that maybe it was

555
00:32:40,120 --> 00:32:42,240
Speaker 1: more much more speculative before.

556
00:32:42,560 --> 00:32:44,280
Speaker 3: Well we've seen it to the point that you mentioned

557
00:32:44,320 --> 00:32:47,959
Speaker 3: a couple and probably these things accelerate that. Right. So,

558
00:32:48,080 --> 00:32:50,760
Speaker 3: like if these countries now have tariffs and they have

559
00:32:50,840 --> 00:32:53,960
Speaker 3: to come up with some trade balance, maybe instead of

560
00:32:53,960 --> 00:32:56,480
Speaker 3: retaliating they try to sort of work around it. Maybe

561
00:32:56,520 --> 00:32:59,720
Speaker 3: they're subsidizing some of their industries things like that. Well

562
00:32:59,720 --> 00:33:02,080
Speaker 3: that just means more hyperinflation for them. And then part

563
00:33:02,120 --> 00:33:05,200
Speaker 3: of maybe this marlawocord is similar to the Plaza Accords,

564
00:33:05,560 --> 00:33:07,880
Speaker 3: was allowing the US to devalue, which then pushes more

565
00:33:07,960 --> 00:33:09,960
Speaker 3: inflation in their way as well. Right, so both of

566
00:33:10,000 --> 00:33:12,040
Speaker 3: those things put a lot of pressure on their currency

567
00:33:12,040 --> 00:33:13,080
Speaker 3: which causes it to collapse.

568
00:33:13,200 --> 00:33:16,680
Speaker 1: Yes, So what we haven't talked about yet is the

569
00:33:16,720 --> 00:33:19,120
Speaker 1: currency aspect of it, of the trading, a side of

570
00:33:19,120 --> 00:33:22,120
Speaker 1: the equation. So that that's why tariffs are only one

571
00:33:22,160 --> 00:33:24,960
Speaker 1: part of it. Because if you put tariffs on a

572
00:33:25,240 --> 00:33:28,920
Speaker 1: let's say, of Vietnam, and then they cheapen, they say, okay,

573
00:33:29,120 --> 00:33:31,240
Speaker 1: we'll get rid of our tariffs, so you get rid

574
00:33:31,240 --> 00:33:34,920
Speaker 1: of your but then they cheapen their currency. That strengthens

575
00:33:34,960 --> 00:33:41,360
Speaker 1: the dollar, and that makes the agreement back to being

576
00:33:41,440 --> 00:33:46,560
Speaker 1: not fair. And so the protection against currency devaluation is

577
00:33:46,680 --> 00:33:49,440
Speaker 1: part of it, which means that the Mara a Lago

578
00:33:49,520 --> 00:33:52,760
Speaker 1: accord is part of this plan. That is where they

579
00:33:52,760 --> 00:33:55,560
Speaker 1: have to go, because if you agree, then you have

580
00:33:55,640 --> 00:33:58,920
Speaker 1: to say, okay, the tariffs are gone, and we agree

581
00:33:58,960 --> 00:34:02,840
Speaker 1: to fix our currency at this price and not manipulate it.

582
00:34:02,840 --> 00:34:05,640
Speaker 2: It is that it is part of the equation.

583
00:34:05,800 --> 00:34:09,960
Speaker 1: You can't actually discuss the tariff without the currency manipulation

584
00:34:10,640 --> 00:34:13,000
Speaker 1: side of it. They call it the non tariff cheating.

585
00:34:13,080 --> 00:34:16,360
Speaker 1: That's what the administration is calling it. If you address

586
00:34:16,440 --> 00:34:20,160
Speaker 1: that as well as the tariffs, then you can achieve

587
00:34:20,239 --> 00:34:23,400
Speaker 1: your goals of capping the dollar, which has been a

588
00:34:23,440 --> 00:34:24,160
Speaker 1: theme of ours.

589
00:34:24,480 --> 00:34:26,480
Speaker 3: And just for again for everyone listening, if you don't

590
00:34:26,520 --> 00:34:28,840
Speaker 3: understand history, like this is just what happens. This is

591
00:34:28,880 --> 00:34:30,919
Speaker 3: what happened in forty four, is what happened in eighty five,

592
00:34:31,400 --> 00:34:33,840
Speaker 3: and it's pegging back to the dollar and allowing the

593
00:34:33,880 --> 00:34:37,360
Speaker 3: dollar to devalue. And so these things start to accelerate

594
00:34:37,400 --> 00:34:39,960
Speaker 3: that and then you mentioned stable coins. You know, I

595
00:34:40,040 --> 00:34:42,120
Speaker 3: had talked about in this video I did, which you saw,

596
00:34:42,200 --> 00:34:44,640
Speaker 3: which was sort of some of the groundwork that Trump

597
00:34:44,680 --> 00:34:48,160
Speaker 3: had laid before even going into this reorg whatever you

598
00:34:48,239 --> 00:34:51,439
Speaker 3: want to call it, the new deal that he's trying

599
00:34:51,440 --> 00:34:53,720
Speaker 3: to push through, but it was pushing through some stable

600
00:34:53,719 --> 00:34:55,840
Speaker 3: coin bills. And we've seen, you know, you and I

601
00:34:55,880 --> 00:34:58,040
Speaker 3: in the bitcoin space, in the cryptospace, you've seeing the

602
00:34:58,080 --> 00:35:01,120
Speaker 3: stable coins, US dollar stable coins really and the gain acceptance.

603
00:35:01,160 --> 00:35:05,280
Speaker 3: And you have these other countries where their currencies are inflating, rapidly, inflating,

604
00:35:05,320 --> 00:35:08,520
Speaker 3: hyper inflating, and the people want to get into dollars,

605
00:35:08,840 --> 00:35:11,440
Speaker 3: but the countries don't allow them capital controls, and so

606
00:35:11,480 --> 00:35:13,319
Speaker 3: the stable coin has been a way for them to

607
00:35:13,320 --> 00:35:15,160
Speaker 3: sort of get around that. And so you have this

608
00:35:15,960 --> 00:35:19,160
Speaker 3: deal where I think partly the US and Trump wants

609
00:35:19,200 --> 00:35:22,759
Speaker 3: to strengthen the dollars role in the world. Number two,

610
00:35:22,960 --> 00:35:25,840
Speaker 3: you need to sell more and more treasuries. And on

611
00:35:25,880 --> 00:35:27,960
Speaker 3: the other side, you have people who want dollars, and

612
00:35:28,000 --> 00:35:29,600
Speaker 3: so if we can get them stable coins, we can

613
00:35:29,640 --> 00:35:32,480
Speaker 3: increase the dollar strength, and then we can make those

614
00:35:32,480 --> 00:35:35,240
Speaker 3: stable coin companies by US treasuries. So it's a pretty

615
00:35:35,239 --> 00:35:37,239
Speaker 3: good combo but then what that seems to do is

616
00:35:37,239 --> 00:35:40,880
Speaker 3: then accelerate their own native currencies, going into even faster

617
00:35:40,960 --> 00:35:42,000
Speaker 3: and faster hyper inflation.

618
00:35:43,120 --> 00:35:46,799
Speaker 1: And that's the wild card, because, like I just said

619
00:35:46,800 --> 00:35:51,200
Speaker 1: in my previous response, the currencies are a tool for

620
00:35:51,280 --> 00:35:55,280
Speaker 1: the countries. So if you go and shake down another

621
00:35:55,320 --> 00:35:57,760
Speaker 1: country and you say, hey, you have to addrop the dollar,

622
00:35:58,040 --> 00:35:59,960
Speaker 1: you don't get your own currency. You can't print my

623
00:36:00,239 --> 00:36:03,279
Speaker 1: when you go into a crisis, you can't come up

624
00:36:03,280 --> 00:36:06,520
Speaker 1: with a new deal for yourselves because you can't finance

625
00:36:06,560 --> 00:36:10,520
Speaker 1: it unless you go to our banks.

626
00:36:11,239 --> 00:36:12,359
Speaker 2: Is that is that fair?

627
00:36:12,960 --> 00:36:16,040
Speaker 1: And so I don't know the answer to your question.

628
00:36:16,840 --> 00:36:22,440
Speaker 1: I don't know how if you get the countries on

629
00:36:22,520 --> 00:36:26,560
Speaker 1: a dollar stable coin standard, how they're able to finance their.

630
00:36:26,440 --> 00:36:29,359
Speaker 3: Own What happened after forty four and after eighty five

631
00:36:29,440 --> 00:36:31,319
Speaker 3: when the country is sort of repegged back.

632
00:36:31,239 --> 00:36:33,719
Speaker 1: To the days, Well, what happened for fourteen years in

633
00:36:33,760 --> 00:36:36,600
Speaker 1: Europe is that you didn't have any free movement of

634
00:36:36,640 --> 00:36:41,279
Speaker 1: capital have you had capital controls And so the euro

635
00:36:41,400 --> 00:36:45,200
Speaker 1: dollar system actually started for many reasons, but one of

636
00:36:45,239 --> 00:36:48,600
Speaker 1: them is that the FX desks opened up for the

637
00:36:48,600 --> 00:36:51,640
Speaker 1: first time in fifty eight in the city of London,

638
00:36:51,719 --> 00:36:54,160
Speaker 1: in the late fifties. I discussed this in the book.

639
00:36:54,880 --> 00:36:57,680
Speaker 1: Now that you had currencies trading against each other for

640
00:36:57,760 --> 00:37:00,520
Speaker 1: the first time, or any exchange where a bank could

641
00:37:00,560 --> 00:37:04,160
Speaker 1: actually do it and make the market, then you got

642
00:37:04,440 --> 00:37:08,440
Speaker 1: currency cross currency arbitrage trades for the first time. And

643
00:37:08,520 --> 00:37:13,040
Speaker 1: that was because the City of London banks could raise

644
00:37:13,120 --> 00:37:18,360
Speaker 1: deposits in dollars in Europe, basically taking that surplus that

645
00:37:18,440 --> 00:37:20,719
Speaker 1: was over there and saying, hey, give us some of that,

646
00:37:21,239 --> 00:37:23,960
Speaker 1: we'll make a market in this currency, or we'll invested

647
00:37:24,000 --> 00:37:29,080
Speaker 1: in pounds and create and capture an arbitrage. So when

648
00:37:29,120 --> 00:37:32,719
Speaker 1: I think about the capital controls of nineteen forty four

649
00:37:32,840 --> 00:37:36,440
Speaker 1: to fifty eight, Breton Woods didn't just make it so

650
00:37:36,520 --> 00:37:40,120
Speaker 1: that every country could be exchanged for dollars, and dollars

651
00:37:40,160 --> 00:37:42,759
Speaker 1: could be exchanged for gold really easily, and that's what

652
00:37:42,880 --> 00:37:46,560
Speaker 1: kept a stable system. In fact, France in the sixties

653
00:37:46,840 --> 00:37:50,640
Speaker 1: said we don't want these dollars, we're taking the gold back.

654
00:37:51,239 --> 00:37:54,319
Speaker 3: But that was after decades of manipulation and inflating the dollar,

655
00:37:54,480 --> 00:37:57,640
Speaker 3: of course. So then we go to the next level,

656
00:37:57,680 --> 00:37:59,799
Speaker 3: which is then back sticking on the currencies for a minute.

657
00:38:00,080 --> 00:38:03,719
Speaker 3: Then we have potentially three hundred and three hundred fifty

658
00:38:03,760 --> 00:38:06,640
Speaker 3: trillion dollars of US dollar denominated debt in the world

659
00:38:06,760 --> 00:38:09,520
Speaker 3: with about eighty to one hundred trillion dollars of currency.

660
00:38:10,160 --> 00:38:12,760
Speaker 3: So then there's this massive demand or shortage for dollars.

661
00:38:13,160 --> 00:38:16,480
Speaker 3: And then you have the US, which aggressively, especially after

662
00:38:16,520 --> 00:38:19,000
Speaker 3: twenty twenty, has like opened up swap lines with all

663
00:38:19,040 --> 00:38:22,200
Speaker 3: these countries, And so is that another tool to sort

664
00:38:22,200 --> 00:38:24,600
Speaker 3: of reorient the world where it's like, hey, you need

665
00:38:24,640 --> 00:38:26,800
Speaker 3: the dollars for your debt, even China has given you

666
00:38:26,840 --> 00:38:30,120
Speaker 3: dollar denomenated debt, you want swap lines with US, maybe

667
00:38:30,160 --> 00:38:30,680
Speaker 3: you come over.

668
00:38:31,320 --> 00:38:35,400
Speaker 1: And the swap line is the formal extension of the

669
00:38:35,400 --> 00:38:38,239
Speaker 1: euro dollar system. And so when the swap line is

670
00:38:38,239 --> 00:38:41,440
Speaker 1: put on with the United States and another country, what

671
00:38:41,480 --> 00:38:44,520
Speaker 1: they're saying is that your dollar system, or if your

672
00:38:44,640 --> 00:38:48,319
Speaker 1: banks hold dollars, are oper eight dollars, we recognize that,

673
00:38:48,480 --> 00:38:51,080
Speaker 1: and we're going to arrange something so that you can

674
00:38:51,120 --> 00:38:54,279
Speaker 1: make sure that you access us. It actually started the

675
00:38:54,320 --> 00:38:58,279
Speaker 1: other way in when the dollar swap line started back

676
00:38:58,280 --> 00:39:02,920
Speaker 1: in the sixties. They were so that the US could

677
00:39:02,920 --> 00:39:07,880
Speaker 1: bring dollars back, right because dollars were piling up abroad,

678
00:39:08,000 --> 00:39:11,840
Speaker 1: so we wanted a way to actually pull those dollars back. Now,

679
00:39:12,120 --> 00:39:16,440
Speaker 1: the euro dollar system in theory and per two thousand

680
00:39:16,480 --> 00:39:19,360
Speaker 1: and seven, the crisis, they rely on dollars going out

681
00:39:20,400 --> 00:39:23,800
Speaker 1: in a crisis, and so those dollars going out in

682
00:39:23,880 --> 00:39:25,400
Speaker 1: a crisis in the swap line.

683
00:39:25,480 --> 00:39:27,840
Speaker 3: They need the dollars out to them because there's so

684
00:39:27,920 --> 00:39:29,640
Speaker 3: much debt. They don't have the dollars to repay the debt,

685
00:39:29,680 --> 00:39:31,000
Speaker 3: so we need to give them more dollars.

686
00:39:31,120 --> 00:39:34,000
Speaker 1: Their banks have issued dollar debt, and so if their

687
00:39:34,040 --> 00:39:36,440
Speaker 1: liquidity drives up, they need a source, they need a

688
00:39:36,440 --> 00:39:39,080
Speaker 1: funding source. And so that's what the swap line is

689
00:39:39,160 --> 00:39:42,200
Speaker 1: used for today, and it can and will be used

690
00:39:42,239 --> 00:39:45,640
Speaker 1: potentially as a political tool that you only get the

691
00:39:45,680 --> 00:39:50,640
Speaker 1: swap line if your banking system adheres by our new euro.

692
00:39:50,480 --> 00:39:52,280
Speaker 3: Dollar rules in our trading block.

693
00:39:52,640 --> 00:39:56,560
Speaker 1: Of course, yeah, that's part I mean, yes, that's the accord.

694
00:39:56,640 --> 00:39:56,799
Speaker 2: Right.

695
00:39:56,840 --> 00:39:59,479
Speaker 1: You have to get the trade in a way where

696
00:39:59,520 --> 00:40:02,440
Speaker 1: you're buying more American or you're building the factory here.

697
00:40:02,440 --> 00:40:07,600
Speaker 1: As you mentioned the Germans. There BMW factories in South Carolina,

698
00:40:07,760 --> 00:40:11,880
Speaker 1: so they're doing it. He'll just say make all of

699
00:40:11,920 --> 00:40:14,640
Speaker 1: them here, or you have to make ninety percent of

700
00:40:14,680 --> 00:40:16,399
Speaker 1: the stuff here. You have to ssemble it all here,

701
00:40:17,239 --> 00:40:21,279
Speaker 1: and so each country will have their own way of

702
00:40:21,960 --> 00:40:23,080
Speaker 1: paying for.

703
00:40:22,920 --> 00:40:24,160
Speaker 2: The dual public good.

704
00:40:24,239 --> 00:40:24,439
Speaker 3: Mark.

705
00:40:24,560 --> 00:40:26,759
Speaker 1: Some of it will be buying the weapons straight up,

706
00:40:27,080 --> 00:40:30,759
Speaker 1: and some of it will be through this multitude of tariffs,

707
00:40:30,800 --> 00:40:35,600
Speaker 1: reshoring manufacturing, restricting access to swap lines, and putting a

708
00:40:35,600 --> 00:40:37,880
Speaker 1: lid on their euro dollar systems within that part of

709
00:40:37,920 --> 00:40:38,280
Speaker 1: the world.

710
00:40:38,400 --> 00:40:40,279
Speaker 2: Yeah, fascinating, it is.

711
00:40:40,320 --> 00:40:45,239
Speaker 3: It's so fascinating. It seems like, I mean, we have

712
00:40:45,320 --> 00:40:47,480
Speaker 3: no idea how this turns out, obviously, but when you

713
00:40:47,480 --> 00:40:49,320
Speaker 3: live from a historical perspective and then you start to

714
00:40:49,320 --> 00:40:51,359
Speaker 3: see the game board starting to sort of be laid

715
00:40:51,360 --> 00:40:53,719
Speaker 3: out by listening to them and reading their papers and

716
00:40:54,000 --> 00:40:57,799
Speaker 3: things like that, it seems clear where we're going. It's

717
00:40:57,840 --> 00:40:59,239
Speaker 3: what does the path from here to there look like?

718
00:40:59,280 --> 00:41:00,800
Speaker 3: It's like we're in a jung We can see the

719
00:41:00,840 --> 00:41:02,600
Speaker 3: mountain top, but we don't know every twist and turn

720
00:41:02,640 --> 00:41:04,400
Speaker 3: we're gonna have along the way. So it's pretty interesting.

721
00:41:05,080 --> 00:41:08,439
Speaker 3: I want to I want to pivot into the old

722
00:41:08,480 --> 00:41:10,600
Speaker 3: system and now into the new system. So sort of

723
00:41:10,600 --> 00:41:12,680
Speaker 3: what your book is written about this new age, the

724
00:41:12,680 --> 00:41:16,200
Speaker 3: Bitcoin age and something that you know, I still haven't

725
00:41:16,200 --> 00:41:18,080
Speaker 3: got my head around, you're maybe still trying to figure

726
00:41:18,080 --> 00:41:20,759
Speaker 3: it out. We all are is sort of we have

727
00:41:21,040 --> 00:41:24,080
Speaker 3: gold and bitcoin being forced into the world. And when

728
00:41:24,080 --> 00:41:27,840
Speaker 3: I say forced into the world, I mean bitcoin specifically

729
00:41:27,880 --> 00:41:30,279
Speaker 3: because the United States has agreed to or decided to

730
00:41:30,280 --> 00:41:32,720
Speaker 3: have a strategic bitcoin reserve. They're talking about a sovereign

731
00:41:32,760 --> 00:41:36,200
Speaker 3: wealth fund, so sort of maybe forcing that into the world.

732
00:41:36,719 --> 00:41:39,680
Speaker 3: But then we also have them allowing gold to really

733
00:41:39,880 --> 00:41:43,320
Speaker 3: maybe take off, if you will. Obviously there's been a

734
00:41:43,360 --> 00:41:45,520
Speaker 3: lot of talk coming out of the Trump administration about

735
00:41:45,600 --> 00:41:48,919
Speaker 3: revaluing gold things like that. So we have these two

736
00:41:48,960 --> 00:41:53,480
Speaker 3: other assets that seem to be almost maybe contradictory to

737
00:41:53,840 --> 00:41:57,080
Speaker 3: the dollar remaining a dominant store value like they seem

738
00:41:57,160 --> 00:41:58,760
Speaker 3: to want it to be, with treasuries and whatnot.

739
00:41:59,440 --> 00:42:02,560
Speaker 1: So when we talk about the layered money pyramid, US

740
00:42:02,680 --> 00:42:07,560
Speaker 1: treasuries at the top, US government is above that and

741
00:42:07,600 --> 00:42:08,359
Speaker 1: so what they use.

742
00:42:08,400 --> 00:42:10,640
Speaker 3: By the way, for everybody listening, Nick has written two books.

743
00:42:10,960 --> 00:42:13,040
Speaker 3: So the first book was Layered Money, the next one

744
00:42:13,040 --> 00:42:14,719
Speaker 3: is the Bitcoin Aid. So we're talking about both, but

745
00:42:14,760 --> 00:42:17,120
Speaker 3: he's referencing the layered money, so you might want to

746
00:42:17,120 --> 00:42:17,839
Speaker 3: read that book to you.

747
00:42:17,880 --> 00:42:20,719
Speaker 1: That's right, And so at the top of the pyramid.

748
00:42:21,680 --> 00:42:26,279
Speaker 1: We have the US government above US treasuries. So if

749
00:42:26,320 --> 00:42:32,319
Speaker 1: the US government owns gold and bitcoin marked to market it,

750
00:42:33,280 --> 00:42:35,919
Speaker 1: what it does is it gives a way to guarantee.

751
00:42:36,840 --> 00:42:41,880
Speaker 1: It's a guarantee on the liability. So the way that

752
00:42:41,920 --> 00:42:46,120
Speaker 1: a capital structure works is that you have assets that

753
00:42:46,200 --> 00:42:50,960
Speaker 1: are funded by debt and equity. Well, if there's equity

754
00:42:51,120 --> 00:42:54,360
Speaker 1: in the country, and the country has a lot of equity, right,

755
00:42:54,480 --> 00:42:58,960
Speaker 1: the United States government itself has a lot of equity. Right,

756
00:42:59,520 --> 00:43:03,520
Speaker 1: all of that equity shows up as assets as long

757
00:43:03,560 --> 00:43:06,880
Speaker 1: as there's not a leverage against it and borrowing.

758
00:43:07,440 --> 00:43:09,759
Speaker 3: Also, that's mine's liabilities.

759
00:43:09,200 --> 00:43:09,600
Speaker 2: That's right.

760
00:43:09,640 --> 00:43:13,680
Speaker 1: And so in a in a liquidation scenario, obviously, in

761
00:43:13,719 --> 00:43:19,640
Speaker 1: a corporate liquidation scenario, the liabilities have a claim on

762
00:43:19,800 --> 00:43:23,719
Speaker 1: the assets of the entity. And so if you have

763
00:43:23,800 --> 00:43:27,719
Speaker 1: all these US treasuries and you have the government with assets,

764
00:43:28,000 --> 00:43:32,560
Speaker 1: obviously you can't convert a treasury to bitcoin in the future.

765
00:43:32,560 --> 00:43:35,640
Speaker 1: And I'm not projecting that at all. But if the

766
00:43:35,760 --> 00:43:41,120
Speaker 1: countries go back to more of an equity based system

767
00:43:41,440 --> 00:43:46,239
Speaker 1: in their own mentality, even where the assets of other countries,

768
00:43:46,480 --> 00:43:49,840
Speaker 1: it's not just US treasuries, but it's US treasuries, golden bitcoin,

769
00:43:50,560 --> 00:43:54,800
Speaker 1: that there's real equity that's non credit based that can

770
00:43:54,840 --> 00:43:58,960
Speaker 1: anchor so bitcoin. What gold did for the world for

771
00:43:59,320 --> 00:44:02,560
Speaker 1: centuries was it sets an anchor so that you can

772
00:44:03,160 --> 00:44:07,080
Speaker 1: devalue your currency versus gold. It gives them that flexibility.

773
00:44:07,120 --> 00:44:09,560
Speaker 1: So in the future, if you want to devalue your

774
00:44:09,560 --> 00:44:13,440
Speaker 1: currency versus the dollar or something, you might have to

775
00:44:13,560 --> 00:44:16,760
Speaker 1: have real assets on your balance sheet for the US

776
00:44:16,960 --> 00:44:19,080
Speaker 1: to even let you access the swaplan or let you

777
00:44:19,760 --> 00:44:23,480
Speaker 1: do something or take bitcoin or gold as tribute, because

778
00:44:23,480 --> 00:44:27,600
Speaker 1: that's something that we've seen all throughout history, is that

779
00:44:27,880 --> 00:44:30,160
Speaker 1: to participate in our system, you have to pay into

780
00:44:30,200 --> 00:44:30,680
Speaker 1: the system.

781
00:44:31,400 --> 00:44:35,920
Speaker 2: So maybe the tribute to.

782
00:44:35,280 --> 00:44:37,680
Speaker 1: Be part of the club like Amazon Prime is you

783
00:44:37,680 --> 00:44:40,480
Speaker 1: have to pay in gold or bitcoin. So when I

784
00:44:40,520 --> 00:44:44,600
Speaker 1: think about the future and then setting up a strategic

785
00:44:44,640 --> 00:44:48,960
Speaker 1: bitcoin reserve, is it possible that the strategic Bitcoin reserve

786
00:44:49,400 --> 00:44:52,680
Speaker 1: is simply the receive address for the United States government?

787
00:44:54,680 --> 00:44:58,480
Speaker 3: Possibly yes, and country is paying tribute in bitcoin the

788
00:44:58,520 --> 00:45:02,919
Speaker 3: received address going in that way, that's correct. Yeah, there's

789
00:45:02,920 --> 00:45:05,680
Speaker 3: a lot of talk about the strategic Bitcoin reserve. Is

790
00:45:05,719 --> 00:45:09,680
Speaker 3: it necessary? Is it not necessary? I made a video

791
00:45:09,719 --> 00:45:12,520
Speaker 3: recently talking about China's second fatal mistake, and I was

792
00:45:13,080 --> 00:45:15,680
Speaker 3: referencing it back to China's first what I called fatal

793
00:45:15,719 --> 00:45:18,600
Speaker 3: mistake was in eighteen seventy three when silver was demonetized.

794
00:45:18,840 --> 00:45:21,200
Speaker 3: The world moved to a gold standard, and China said,

795
00:45:21,200 --> 00:45:22,719
Speaker 3: we got a ton of silver, We're not going to

796
00:45:22,760 --> 00:45:25,960
Speaker 3: the gold standard. And that's fine. Everyone comes at the

797
00:45:26,000 --> 00:45:28,000
Speaker 3: price they deserve, right, So China decided not to, but

798
00:45:28,080 --> 00:45:31,200
Speaker 3: then silver got devalued. They lost about thirty percent of

799
00:45:31,200 --> 00:45:36,360
Speaker 3: their purchasing power. They eventually capitulated, however, that sort of

800
00:45:36,480 --> 00:45:38,040
Speaker 3: knocked them out of the world order. So a lot

801
00:45:38,040 --> 00:45:40,680
Speaker 3: of people think, with the strategic biccoin reserve, it's not necessary.

802
00:45:40,800 --> 00:45:42,919
Speaker 3: Why should the government use our tax dollars to buy

803
00:45:42,960 --> 00:45:45,239
Speaker 3: things like that? Is it really strategic, because like it's

804
00:45:45,239 --> 00:45:47,560
Speaker 3: not like oil, like we need oil, it's just bitcoin.

805
00:45:47,960 --> 00:45:51,640
Speaker 3: But in that frame, you see like if China or

806
00:45:51,680 --> 00:45:53,840
Speaker 3: another country decides to come over in five years or

807
00:45:53,880 --> 00:45:57,279
Speaker 3: ten years, do they get twenty third percent devaluation? Does

808
00:45:57,280 --> 00:45:57,959
Speaker 3: it repeat again?

809
00:45:58,760 --> 00:46:04,120
Speaker 1: So I think that that the I want to bring

810
00:46:04,200 --> 00:46:06,839
Speaker 1: up one thing about Trump again. One of the first

811
00:46:06,920 --> 00:46:10,680
Speaker 1: things that he said was we're gonna go to Fort Knox.

812
00:46:11,840 --> 00:46:14,719
Speaker 1: We're gonna go see if the gold is there, and

813
00:46:14,800 --> 00:46:18,759
Speaker 1: do you think that that's just Trump randomly saying something. No,

814
00:46:19,080 --> 00:46:22,800
Speaker 1: that's part of the plan. And so we talk about Bessent.

815
00:46:23,160 --> 00:46:28,080
Speaker 1: What a student of history he is. He mentioned gold

816
00:46:28,200 --> 00:46:31,319
Speaker 1: and bitcoin together in the same sentence on the all

817
00:46:31,360 --> 00:46:36,440
Speaker 1: in pod. Yeah, so you have to take their word

818
00:46:36,520 --> 00:46:38,840
Speaker 1: for it that they're thinking about it. So then I

819
00:46:38,880 --> 00:46:43,160
Speaker 1: would argue that to people that say it's not strategic,

820
00:46:43,560 --> 00:46:47,000
Speaker 1: why would they need strategic It's not like oil, I

821
00:46:47,040 --> 00:46:53,759
Speaker 1: would argue that that is completely not the case. If

822
00:46:53,800 --> 00:46:56,560
Speaker 1: we are going into a Breton Woods too, mar a

823
00:46:56,680 --> 00:47:01,359
Speaker 1: Lago and they've hinted that golden bitcoin are things that

824
00:47:01,400 --> 00:47:03,320
Speaker 1: they're thinking about, and it's not just thinking.

825
00:47:03,800 --> 00:47:05,480
Speaker 2: They said we're going to go to Fort Knox and.

826
00:47:05,400 --> 00:47:08,880
Speaker 1: They did a they created a strategic bitcoin reserve, so

827
00:47:08,920 --> 00:47:13,279
Speaker 1: they're on the policy side of it already. What they

828
00:47:13,280 --> 00:47:17,839
Speaker 1: are saying is that bitcoin is a strategic part of

829
00:47:18,120 --> 00:47:20,799
Speaker 1: the maral Lago Accord.

830
00:47:21,760 --> 00:47:26,239
Speaker 2: Digital currency. The digital Currency Executive Order came before the

831
00:47:26,239 --> 00:47:27,160
Speaker 2: bitcoin order.

832
00:47:27,760 --> 00:47:32,719
Speaker 1: Yep, the stable coin stuff came before the bitcoin order.

833
00:47:33,000 --> 00:47:37,200
Speaker 1: So they see bitcoin as an anchor to digital currency, right,

834
00:47:37,200 --> 00:47:39,840
Speaker 1: Because this is what I wrote about this in Layered

835
00:47:39,840 --> 00:47:44,799
Speaker 1: Money bitcoin to stable coin swap atomic swap is the

836
00:47:44,840 --> 00:47:51,160
Speaker 1: new is the new agreement, And I'm just realizing it

837
00:47:51,239 --> 00:47:55,359
Speaker 1: right now. Actually that that is, I mean, that's that

838
00:47:55,520 --> 00:48:00,560
Speaker 1: is the future, the bitcoin to stable coin atom swap,

839
00:48:00,640 --> 00:48:05,640
Speaker 1: setting the market for currencies and for the dollar, and

840
00:48:06,239 --> 00:48:12,640
Speaker 1: having the ability to swap stable coins for bitcoin through

841
00:48:12,680 --> 00:48:16,800
Speaker 1: a market maker, but being able to do that anchors

842
00:48:16,880 --> 00:48:21,320
Speaker 1: the world. Re anchors the world in a whatever period

843
00:48:21,360 --> 00:48:22,080
Speaker 1: of economics.

844
00:48:22,120 --> 00:48:22,839
Speaker 2: You want to take.

845
00:48:23,760 --> 00:48:28,680
Speaker 1: The gold standard, the gold exchange standard, the Breton Woods Agreement,

846
00:48:29,120 --> 00:48:31,440
Speaker 1: they all have an anchor. They all attempt to have

847
00:48:31,480 --> 00:48:34,279
Speaker 1: an anchor. They all need something at the top of

848
00:48:34,320 --> 00:48:38,560
Speaker 1: the monetary pyramid. That is the science of monetary hierarchy.

849
00:48:39,239 --> 00:48:41,960
Speaker 3: That's what the goldbugs would say, is that only gold

850
00:48:42,000 --> 00:48:44,600
Speaker 3: can work because what happens is when via currencies inevitably

851
00:48:44,680 --> 00:48:46,880
Speaker 3: blow up, which they always do because of human intervention,

852
00:48:47,560 --> 00:48:50,280
Speaker 3: you need to relaunch them. But they must be anchored

853
00:48:50,320 --> 00:48:52,600
Speaker 3: to something. And so that'suppose I hear from the gold bugs.

854
00:48:52,600 --> 00:48:54,680
Speaker 3: And even when you look at even like say Zimbabwe,

855
00:48:54,760 --> 00:48:57,080
Speaker 3: they would relaunch but anchor to the dollar. But you

856
00:48:57,120 --> 00:48:59,320
Speaker 3: need to anchor to something. And I think that's the

857
00:48:59,320 --> 00:49:01,200
Speaker 3: point you're saying so maybe in this new world is

858
00:49:01,239 --> 00:49:02,600
Speaker 3: anchoring to gold and bitcoin.

859
00:49:03,320 --> 00:49:08,160
Speaker 1: Yeah, that is the world that I see unfolding today, the.

860
00:49:08,160 --> 00:49:10,280
Speaker 3: Interim step the process that we're going through.

861
00:49:10,160 --> 00:49:13,000
Speaker 1: Right, And so if you just observe the price action

862
00:49:13,120 --> 00:49:16,120
Speaker 1: of each of these two assets over the last fifteen years,

863
00:49:16,239 --> 00:49:19,880
Speaker 1: that's what you're witnessing in many ways, And when you

864
00:49:19,920 --> 00:49:25,120
Speaker 1: look at currencies versus gold and bitcoin, it really helps

865
00:49:25,120 --> 00:49:27,680
Speaker 1: to look at non dollar prices too, because then you

866
00:49:27,680 --> 00:49:31,080
Speaker 1: can really see where the devaluation is happening.

867
00:49:31,239 --> 00:49:33,560
Speaker 3: Yeah, I want to go back to something you said,

868
00:49:34,800 --> 00:49:37,879
Speaker 3: Trump randomly saying things. It looks like he randomly says something,

869
00:49:38,000 --> 00:49:41,200
Speaker 3: and that's what the media narrative is. I would reference

870
00:49:41,280 --> 00:49:43,840
Speaker 3: back to again you were saying earlier, and I agree.

871
00:49:43,920 --> 00:49:46,000
Speaker 3: You have to go and listen to these people in theministration.

872
00:49:46,040 --> 00:49:47,279
Speaker 3: You have to listen to all the things that they're

873
00:49:47,280 --> 00:49:50,720
Speaker 3: saying because they're telling us. But there was an interview

874
00:49:50,760 --> 00:49:53,239
Speaker 3: with Lutnik on the All In podcast and he was like,

875
00:49:53,280 --> 00:49:55,600
Speaker 3: I've known Trump for thirty five years. We grew up

876
00:49:55,600 --> 00:49:56,799
Speaker 3: in New York. We used to go to all these

877
00:49:56,840 --> 00:49:58,520
Speaker 3: things together. He's like, I've known for thirty five years,

878
00:49:58,800 --> 00:50:02,600
Speaker 3: and he said he never says things off the cuff.

879
00:50:03,120 --> 00:50:06,360
Speaker 3: He always and gets goes gets all the research first,

880
00:50:06,560 --> 00:50:10,120
Speaker 3: and he knows exactly what's going on, and then he'll

881
00:50:10,120 --> 00:50:12,920
Speaker 3: only start talking about it after that point. So to

882
00:50:12,960 --> 00:50:15,040
Speaker 3: the meeting because he kind of like throws things out randomly.

883
00:50:15,120 --> 00:50:18,680
Speaker 3: You think he's talking randomly, but per Lutnik, thirty five

884
00:50:18,760 --> 00:50:20,960
Speaker 3: years they've been working together, he's like, he never does that.

885
00:50:21,200 --> 00:50:22,960
Speaker 3: He's like these trump thing or I'm sorry, the tear

886
00:50:22,960 --> 00:50:24,680
Speaker 3: off things. He's like, he's been talking about that since

887
00:50:24,680 --> 00:50:26,960
Speaker 3: the eighties. He's like, it wasn't like I brought that

888
00:50:27,000 --> 00:50:28,640
Speaker 3: to him. I started working for him, He gave it

889
00:50:28,680 --> 00:50:31,280
Speaker 3: to me. And so I think that's just an important piece.

890
00:50:33,200 --> 00:50:34,799
Speaker 3: We don't know if that's wrong or right, but take

891
00:50:34,800 --> 00:50:36,800
Speaker 3: it from someone who's been knowing him for thirty five years,

892
00:50:36,800 --> 00:50:38,919
Speaker 3: and then I think for me, that adds a little

893
00:50:38,920 --> 00:50:41,359
Speaker 3: bit more gravity to the things that he's saying. To

894
00:50:41,400 --> 00:50:44,000
Speaker 3: your point, like when Biscent talks about golden bitcoin together

895
00:50:44,000 --> 00:50:46,480
Speaker 3: at the same time, like we should certainly be listening.

896
00:50:46,520 --> 00:50:49,399
Speaker 1: He was talking about Japan dumping in nineteen eighty eight,

897
00:50:49,760 --> 00:50:55,680
Speaker 1: and that you can you can take the string right

898
00:50:55,680 --> 00:50:59,760
Speaker 1: from that comment about Japan in the late eighties to today.

899
00:51:00,239 --> 00:51:03,120
Speaker 3: Yeah, I want to get into the core thesis of

900
00:51:03,160 --> 00:51:05,600
Speaker 3: your book, the Bitcoin Age, and how really it talks

901
00:51:05,640 --> 00:51:07,200
Speaker 3: about all of this, But I just want to go

902
00:51:07,200 --> 00:51:10,560
Speaker 3: into one more topic first, because one thing that's talked about,

903
00:51:10,719 --> 00:51:13,000
Speaker 3: just at least I've talked quite a bit and sort

904
00:51:13,000 --> 00:51:17,279
Speaker 3: of it's gaining more momentum is global liquidity. Michael Howell

905
00:51:17,320 --> 00:51:20,200
Speaker 3: has been talking about it, you guys the Bitcoin Layer,

906
00:51:20,239 --> 00:51:24,800
Speaker 3: which by the way, is maybe my favorite newsletter to

907
00:51:24,880 --> 00:51:26,640
Speaker 3: keep me up the date on things. I try to

908
00:51:26,719 --> 00:51:28,799
Speaker 3: curate my news sources because it's hard to stand on

909
00:51:28,800 --> 00:51:31,280
Speaker 3: top everything. The Bitcoin Layer. We'll link to that down below.

910
00:51:31,360 --> 00:51:33,200
Speaker 3: Nick Nick and his team does an amazing job with that.

911
00:51:33,600 --> 00:51:36,400
Speaker 3: But you've created your own global equity layer. I like

912
00:51:36,480 --> 00:51:39,319
Speaker 3: that you actually told us how you created it. Unlike

913
00:51:39,320 --> 00:51:41,839
Speaker 3: Michael Hole it's like this black box. Ralph Paul Real

914
00:51:41,920 --> 00:51:45,560
Speaker 3: Vision's got one as well. But it seems that back

915
00:51:45,600 --> 00:51:47,480
Speaker 3: to we were talking, I think before we start recording,

916
00:51:47,840 --> 00:51:49,920
Speaker 3: Stanley druck and Miller the greatest of all time. He

917
00:51:50,000 --> 00:51:52,759
Speaker 3: realized early in his career was liquidy moves assets. You

918
00:51:52,840 --> 00:51:57,160
Speaker 3: measure global liquidity. We can get into, you know, bitcoin

919
00:51:57,239 --> 00:51:59,160
Speaker 3: moves off of global equity with an eight to twelve

920
00:51:59,200 --> 00:52:01,840
Speaker 3: week lag all those things. But my bigger question is,

921
00:52:03,320 --> 00:52:05,880
Speaker 3: in light of all of this, with the tariffs and

922
00:52:05,920 --> 00:52:08,960
Speaker 3: the trade wars and the angling for dollar supremacy and

923
00:52:09,000 --> 00:52:12,200
Speaker 3: all that, what does that do to global liquidity in

924
00:52:12,239 --> 00:52:12,960
Speaker 3: the short term.

925
00:52:13,080 --> 00:52:16,040
Speaker 1: In the short term, it hits it hard because one

926
00:52:16,040 --> 00:52:19,480
Speaker 1: of the main components of our index is bond volatility.

927
00:52:19,840 --> 00:52:23,440
Speaker 1: And so we were just talking about market maker stepping

928
00:52:23,440 --> 00:52:26,440
Speaker 1: back from the options market, basically saying I'm not going

929
00:52:26,480 --> 00:52:28,719
Speaker 1: to write you any options because I don't know what's

930
00:52:28,760 --> 00:52:32,600
Speaker 1: going to happen. When they do that, it makes the

931
00:52:32,640 --> 00:52:36,120
Speaker 1: whole system less able to create new money.

932
00:52:36,800 --> 00:52:39,399
Speaker 3: Why does it make the system less able to make

933
00:52:39,480 --> 00:52:40,040
Speaker 3: new money?

934
00:52:40,120 --> 00:52:42,839
Speaker 1: Yeah, so it comes down to collateral. When we think

935
00:52:42,880 --> 00:52:45,960
Speaker 1: about the way that our index is structured, we use

936
00:52:46,120 --> 00:52:50,680
Speaker 1: the asset side liquidity approach, and that's something that it

937
00:52:50,760 --> 00:52:53,520
Speaker 1: really sets us apart. I think that if people are

938
00:52:53,560 --> 00:52:56,600
Speaker 1: interested in liquidity as a concept, and people that have

939
00:52:56,680 --> 00:53:00,400
Speaker 1: liquidity indices, they need to understand are you using a

940
00:53:00,400 --> 00:53:03,880
Speaker 1: liability based metric or an asset based metric. That's the

941
00:53:03,920 --> 00:53:07,719
Speaker 1: first thing people that quote global M two or any

942
00:53:07,760 --> 00:53:11,480
Speaker 1: sort of M two based liquidity even when we think

943
00:53:11,520 --> 00:53:15,680
Speaker 1: about FED liquidity, which is you know, when the Treasury

944
00:53:15,719 --> 00:53:18,239
Speaker 1: General account goes up or down, or reverse repo goes

945
00:53:18,280 --> 00:53:22,280
Speaker 1: up or down. Those are all liability based metrics. Okay,

946
00:53:23,000 --> 00:53:27,240
Speaker 1: liabilities in the system today are deposits and shadow money

947
00:53:28,480 --> 00:53:32,080
Speaker 1: like repo, So an M two isn't going to capture

948
00:53:33,239 --> 00:53:37,480
Speaker 1: shadow money. And it's also the result of credit creation,

949
00:53:37,760 --> 00:53:41,680
Speaker 1: which can come from assets. So that's why we use

950
00:53:41,800 --> 00:53:46,160
Speaker 1: an asset based measure. We got that inspired by Michael

951
00:53:46,200 --> 00:53:49,799
Speaker 1: house Global Liquidity Index. I basically picked his brain over

952
00:53:49,840 --> 00:53:51,719
Speaker 1: the course of the last couple of years trying to

953
00:53:51,719 --> 00:53:53,600
Speaker 1: ask him, Hey, what's in it, how do you make it?

954
00:53:54,000 --> 00:53:59,040
Speaker 1: And without trying to ask him what the formula is

955
00:53:59,200 --> 00:54:01,720
Speaker 1: really trying to underst so people can read his book

956
00:54:02,239 --> 00:54:07,600
Speaker 1: Capital Wars and understand where that liquidity based metric comes from.

957
00:54:08,040 --> 00:54:11,560
Speaker 1: What you said earlier, about three hundred trillion in US

958
00:54:12,000 --> 00:54:15,160
Speaker 1: dollars denominated debt but only one hundred trillion in cash.

959
00:54:15,800 --> 00:54:21,080
Speaker 1: That is why we use asset based liquidity because the

960
00:54:21,320 --> 00:54:26,960
Speaker 1: asset side needs to get funded and the asset side

961
00:54:27,440 --> 00:54:30,000
Speaker 1: has to roll its money based off of only one

962
00:54:30,080 --> 00:54:31,919
Speaker 1: hundred million in liquidity out there.

963
00:54:32,800 --> 00:54:33,200
Speaker 2: And so.

964
00:54:35,160 --> 00:54:38,600
Speaker 1: The reason that we measure assets and collateral is that

965
00:54:38,680 --> 00:54:42,360
Speaker 1: if you have treasuries, treasuries are the asset base of

966
00:54:42,440 --> 00:54:46,120
Speaker 1: the financial system. When they go up in price, it

967
00:54:46,200 --> 00:54:51,120
Speaker 1: makes banks more able to create new money because mark

968
00:54:51,200 --> 00:54:54,440
Speaker 1: to market, the whole portfolio goes up in price, and

969
00:54:54,520 --> 00:54:58,000
Speaker 1: you multiply that throughout the rest of the financial system.

970
00:54:58,239 --> 00:55:03,120
Speaker 1: Falling interest rates which means rising bond prices, falling dollar

971
00:55:03,719 --> 00:55:07,840
Speaker 1: which means the ability for foreign countries to borrow more easily,

972
00:55:09,160 --> 00:55:14,160
Speaker 1: and falling bond volatility. All of those things boost the

973
00:55:14,320 --> 00:55:20,359
Speaker 1: size of the asset base of the banking system, and

974
00:55:20,520 --> 00:55:26,600
Speaker 1: that in itself allows liabilities liability money, whether it's deposits

975
00:55:26,920 --> 00:55:30,000
Speaker 1: or shadow money, or the printing of trades, to just

976
00:55:30,760 --> 00:55:34,319
Speaker 1: interest rate swaps when they get created out of thin air.

977
00:55:35,160 --> 00:55:38,839
Speaker 1: They do that because the bank is confident that its

978
00:55:38,920 --> 00:55:42,440
Speaker 1: asset base is fine, not that rates are rising, volatility

979
00:55:42,480 --> 00:55:45,520
Speaker 1: is spiking, and the dollar is spiking. All of that's

980
00:55:45,560 --> 00:55:49,560
Speaker 1: going to hit their ability to create money. So sorry

981
00:55:49,560 --> 00:55:53,279
Speaker 1: for the long answer, but that's what we're constructing.

982
00:55:52,800 --> 00:55:55,919
Speaker 3: Not just the monetary supply liquidity going up. It's even

983
00:55:55,960 --> 00:55:58,120
Speaker 3: the ability to create that's correct.

984
00:55:58,160 --> 00:56:01,480
Speaker 1: It's not the supply of money. The supply of money

985
00:56:01,640 --> 00:56:05,960
Speaker 1: is a liability deposits M two. That's a liability that

986
00:56:06,080 --> 00:56:06,640
Speaker 1: is supply.

987
00:56:07,200 --> 00:56:07,520
Speaker 2: It's not.

988
00:56:08,120 --> 00:56:13,800
Speaker 1: Of course, assets and liabilities match, so of course supply.

989
00:56:13,480 --> 00:56:16,040
Speaker 2: Of money will go up when the assets go up.

990
00:56:16,239 --> 00:56:18,960
Speaker 1: But liability is not the way that we measure it,

991
00:56:19,760 --> 00:56:23,000
Speaker 1: the way that I feel like liabilities or M two.

992
00:56:23,040 --> 00:56:29,120
Speaker 1: It's a trailing liquidity index. The leading one are bond

993
00:56:29,200 --> 00:56:32,319
Speaker 1: prices today, volatility today. That doesn't show up in M

994
00:56:32,360 --> 00:56:35,720
Speaker 1: two today. But we want to know what's happening today

995
00:56:35,920 --> 00:56:39,720
Speaker 1: in the market. Why did stocks crash today because bond

996
00:56:39,800 --> 00:56:44,560
Speaker 1: volatility exploded. When bond volatility explodes, market makers step back,

997
00:56:44,719 --> 00:56:48,239
Speaker 1: they stop printing trades. Liquidity seas is up, somebody has

998
00:56:48,280 --> 00:56:51,640
Speaker 1: to sell somebody's margin called then it's tight, and you

999
00:56:51,760 --> 00:56:54,560
Speaker 1: see how that happens. So we want to know what's

1000
00:56:54,560 --> 00:56:57,080
Speaker 1: happening right now, and that's what we're trying to build.

1001
00:56:57,640 --> 00:57:02,120
Speaker 3: So that's so right now now we're in high volatility,

1002
00:57:02,160 --> 00:57:04,439
Speaker 3: and so that means the global equity takes a little

1003
00:57:04,440 --> 00:57:07,279
Speaker 3: bit of a hit. That's in the short term? Is

1004
00:57:07,320 --> 00:57:11,760
Speaker 3: that to us centric? So back to maybe the second

1005
00:57:11,800 --> 00:57:13,719
Speaker 3: goat of all time, George Soros. He has something he

1006
00:57:13,800 --> 00:57:16,200
Speaker 3: called the imperial circle. Right, So then you have basically

1007
00:57:16,240 --> 00:57:18,560
Speaker 3: money flows around the world and specifically when you're looking

1008
00:57:18,600 --> 00:57:21,760
Speaker 3: at global assets like bitcoin or other commodities for example. Right, So,

1009
00:57:21,880 --> 00:57:24,560
Speaker 3: like that's certainly US centric, But what about these other

1010
00:57:24,600 --> 00:57:27,680
Speaker 3: countries that are forced to start debasing their currencies right now?

1011
00:57:27,720 --> 00:57:30,720
Speaker 3: We had obviously in Europe and Germany specifically, we talked about,

1012
00:57:30,760 --> 00:57:32,800
Speaker 3: you know, increasing five hundred million dollars of debt to

1013
00:57:33,360 --> 00:57:36,040
Speaker 3: build up their military. You have China dealing with their

1014
00:57:36,080 --> 00:57:38,320
Speaker 3: own problems over there, trying to inflate their currency. So

1015
00:57:39,520 --> 00:57:41,520
Speaker 3: how does that affect globally? I mean, is it just

1016
00:57:41,800 --> 00:57:43,640
Speaker 3: you just extrapolate that to the globe or are we

1017
00:57:43,720 --> 00:57:45,240
Speaker 3: looking at that to US centric there?

1018
00:57:45,400 --> 00:57:47,920
Speaker 1: Yeah, you know, over the last few years, Mark, I've

1019
00:57:48,000 --> 00:57:53,760
Speaker 1: joked around that gold is old, and you know, just

1020
00:57:53,840 --> 00:57:56,160
Speaker 1: this whole idea that gold is old. Right in a

1021
00:57:56,200 --> 00:57:59,440
Speaker 1: bitcoin world, it's it's exciting to think about the future

1022
00:57:59,440 --> 00:58:02,560
Speaker 1: and a bitcoin standard. Well, gold is no longer old

1023
00:58:02,800 --> 00:58:05,280
Speaker 1: in the Mara a Lago era, it's not.

1024
00:58:06,240 --> 00:58:08,080
Speaker 3: We making it sexy again.

1025
00:58:08,160 --> 00:58:11,000
Speaker 1: Well, if you think about the breakout, we flagged it

1026
00:58:11,040 --> 00:58:13,320
Speaker 1: at the bitcoin layer when it broke out twenty two hundred,

1027
00:58:13,720 --> 00:58:16,200
Speaker 1: we said, you know, three thousands a lock here, and

1028
00:58:16,240 --> 00:58:19,479
Speaker 1: that was about I think one year ago. We could

1029
00:58:19,480 --> 00:58:23,560
Speaker 1: see so the market was already telling us something was

1030
00:58:23,640 --> 00:58:27,520
Speaker 1: happening with gold. And so the answer to your question

1031
00:58:27,880 --> 00:58:32,880
Speaker 1: the devaluation, the bond volatility, what is hitting What is

1032
00:58:32,920 --> 00:58:37,640
Speaker 1: bond volatility hitting. It's hitting stocks, it's hitting corporate bonds,

1033
00:58:38,040 --> 00:58:41,720
Speaker 1: and it's bitcoin far less than I thought it might

1034
00:58:41,840 --> 00:58:44,120
Speaker 1: have in this type of event. Bitcoin is held in

1035
00:58:44,160 --> 00:58:46,720
Speaker 1: really well, but it's still ticking most of the time

1036
00:58:46,840 --> 00:58:49,160
Speaker 1: with a stock market. But gold is at an all

1037
00:58:49,200 --> 00:58:52,960
Speaker 1: time high. So bond volatility is not affecting gold in

1038
00:58:53,000 --> 00:58:54,720
Speaker 1: a negative way.

1039
00:58:54,800 --> 00:58:58,200
Speaker 2: It's it's potentially doing what it's supposed to do.

1040
00:58:58,760 --> 00:59:03,240
Speaker 1: It's potentially happening at the same time in the same portfolios.

1041
00:59:04,440 --> 00:59:09,560
Speaker 1: So that's what it's really hard to wrap my head around.

1042
00:59:09,600 --> 00:59:13,600
Speaker 1: But I'm a price action analyst, so I'm watching. Yeah,

1043
00:59:13,640 --> 00:59:16,640
Speaker 1: I watch daily returns, but I watch I watched five

1044
00:59:16,640 --> 00:59:20,280
Speaker 1: minute candles because in less, you're so crazy unless you're

1045
00:59:20,920 --> 00:59:23,560
Speaker 1: I and I only do that when it's volatile. Yeah,

1046
00:59:23,760 --> 00:59:27,360
Speaker 1: sometimes I won't look sometimes I won't even look at

1047
00:59:27,400 --> 00:59:30,680
Speaker 1: anything besides a daily or a weekly candle for weeks

1048
00:59:31,160 --> 00:59:33,960
Speaker 1: or months, even but when it's moving like this, I

1049
00:59:34,040 --> 00:59:36,120
Speaker 1: move to the five to fifteen minute candles that tick

1050
00:59:36,200 --> 00:59:39,400
Speaker 1: charts because I want to know who's buying and selling what.

1051
00:59:39,560 --> 00:59:41,120
Speaker 1: At the same time, I want to know what the

1052
00:59:41,120 --> 00:59:45,480
Speaker 1: correlations are. I want to know, And it's it's one

1053
00:59:45,480 --> 00:59:48,080
Speaker 1: of those things where right now, if you watch the

1054
00:59:48,160 --> 00:59:52,680
Speaker 1: gold price action reaching all time highs, the last three

1055
00:59:52,680 --> 00:59:56,040
Speaker 1: candles have been all time high candles on gold where

1056
00:59:56,280 --> 00:59:59,680
Speaker 1: above three thousand and two hundred today as of this recording.

1057
01:00:01,080 --> 01:00:04,920
Speaker 1: It's doing this with all the bond volatility. It's doing this.

1058
01:00:05,120 --> 01:00:08,120
Speaker 1: It's not like stocks have bounced back way up. They

1059
01:00:08,200 --> 01:00:10,920
Speaker 1: bounced a little bit, yeah, and are still chopping around.

1060
01:00:11,000 --> 01:00:13,120
Speaker 1: It's all within the range of you know, the current

1061
01:00:13,200 --> 01:00:17,720
Speaker 1: volatility index. So it's it's it's amazing to watch gold

1062
01:00:18,360 --> 01:00:24,040
Speaker 1: re emerge right now as potentially the anchor of the

1063
01:00:24,080 --> 01:00:27,040
Speaker 1: financial system until we get the Marlago cord.

1064
01:00:27,440 --> 01:00:29,640
Speaker 3: Would you say that's in contrast to like in two

1065
01:00:29,680 --> 01:00:31,880
Speaker 3: thousand and eight or twenty twenty, when the you know,

1066
01:00:32,040 --> 01:00:34,240
Speaker 3: s and P five hundred dropped, gold dropped with it.

1067
01:00:34,400 --> 01:00:36,720
Speaker 3: And so now what we're seeing to what you're saying, now,

1068
01:00:36,720 --> 01:00:38,840
Speaker 3: we're watching stocksdrop, but gold is going up.

1069
01:00:38,880 --> 01:00:41,720
Speaker 1: That's why I watch correlations and in the minute stuff.

1070
01:00:41,760 --> 01:00:45,960
Speaker 1: If you watch everything, you know, risk off, everything dumping,

1071
01:00:46,760 --> 01:00:50,000
Speaker 1: you don't get golds pump until the QI is announced later.

1072
01:00:50,120 --> 01:00:54,920
Speaker 1: You don't get it on the volatility event. So that's

1073
01:00:55,160 --> 01:00:59,280
Speaker 1: exactly the point here and why I do switch into

1074
01:00:59,320 --> 01:01:02,960
Speaker 1: those five minutes candles when we're in volatile times.

1075
01:01:03,640 --> 01:01:06,240
Speaker 3: Now. You had said earlier, back to your book the Bitcoin,

1076
01:01:07,280 --> 01:01:09,360
Speaker 3: the Bitcoin Age, you had talked about how it's not

1077
01:01:09,400 --> 01:01:11,520
Speaker 3: just about Bitcoin, it's about this whole age of the

1078
01:01:11,520 --> 01:01:14,600
Speaker 3: financial system that we're in right now. So tell us

1079
01:01:14,640 --> 01:01:17,080
Speaker 3: the thesis of the book and how that particularly fits

1080
01:01:17,120 --> 01:01:19,320
Speaker 3: into this sort of world that we're seeing sort of

1081
01:01:19,360 --> 01:01:20,240
Speaker 3: unravel right now.

1082
01:01:20,480 --> 01:01:26,120
Speaker 1: Bitcoin has established itself as a decentralized store of value

1083
01:01:26,680 --> 01:01:31,840
Speaker 1: for the next Internet generation. I believe that the Bitcoin

1084
01:01:31,880 --> 01:01:36,640
Speaker 1: age started sometime around twenty sixteen, when it became clear

1085
01:01:36,760 --> 01:01:41,120
Speaker 1: that it would be officially part of the financial system

1086
01:01:41,160 --> 01:01:41,960
Speaker 1: in twenty sixteen.

1087
01:01:42,200 --> 01:01:43,120
Speaker 2: And so that.

1088
01:01:43,080 --> 01:01:47,360
Speaker 1: Event where was the CME coming out and saying bitcoin

1089
01:01:47,480 --> 01:01:53,760
Speaker 1: futures and the indexing of bitcoin's price based off of

1090
01:01:54,400 --> 01:01:59,200
Speaker 1: actual bitcoin exchange data, not just some derivative, but the

1091
01:01:59,760 --> 01:02:03,600
Speaker 1: physically settled price at a certain time. On a bitcoin

1092
01:02:03,680 --> 01:02:07,080
Speaker 1: exchange linked into the financial system. We got futures that

1093
01:02:07,120 --> 01:02:10,480
Speaker 1: went live in twenty seventeen. Obviously ETFs in twenty twenty

1094
01:02:10,520 --> 01:02:11,880
Speaker 1: four as an echo.

1095
01:02:11,680 --> 01:02:12,640
Speaker 2: Boom of that future.

1096
01:02:13,240 --> 01:02:16,800
Speaker 1: The ETF approval was simply an echo boom of twenty seventeen.

1097
01:02:16,840 --> 01:02:20,800
Speaker 1: So that is really why I use that twenty sixteen

1098
01:02:20,960 --> 01:02:27,400
Speaker 1: moment as the graduation. Before that Bitcoin is a rising star,

1099
01:02:28,600 --> 01:02:31,720
Speaker 1: and after that Bitcoin is certified. But it's just it

1100
01:02:31,800 --> 01:02:33,600
Speaker 1: takes time for people to see it.

1101
01:02:33,880 --> 01:02:34,040
Speaker 3: Right.

1102
01:02:34,080 --> 01:02:37,160
Speaker 1: We get events like the Strategic Bitcoin Reserve which make

1103
01:02:37,240 --> 01:02:41,920
Speaker 1: people much more aware, but the process had been building

1104
01:02:42,000 --> 01:02:42,920
Speaker 1: for quite some time.

1105
01:02:43,600 --> 01:02:46,680
Speaker 3: It still continues to amaze me. I mean, I was

1106
01:02:46,720 --> 01:02:48,640
Speaker 3: in bitcoin in twenty sixteen. It wasn't clear to me,

1107
01:02:48,680 --> 01:02:51,800
Speaker 3: and I remember obviously that happening, and it still seemed

1108
01:02:51,840 --> 01:02:53,840
Speaker 3: like layer ones we're up for grabs in twenty seventeen,

1109
01:02:53,920 --> 01:02:57,120
Speaker 3: twenty eighteen. But you know, every time one of these

1110
01:02:57,160 --> 01:02:59,440
Speaker 3: things happens, it becomes more cemented, and even today, to

1111
01:02:59,480 --> 01:03:02,800
Speaker 3: your point, with the strateg Bitcoin Reserve, one of the

1112
01:03:02,840 --> 01:03:04,680
Speaker 3: biggest things we would always hear, at least for me,

1113
01:03:04,720 --> 01:03:06,880
Speaker 3: would be but what if the governments make it illegal

1114
01:03:06,920 --> 01:03:10,040
Speaker 3: and it's like that's gone. Now. Yeah, there's so many

1115
01:03:10,040 --> 01:03:13,040
Speaker 3: people that just still don't believe in this future. But

1116
01:03:13,160 --> 01:03:18,200
Speaker 3: so it's a legitimate asset. Does it expose sort of

1117
01:03:18,520 --> 01:03:21,080
Speaker 3: what I should say maybe the other way, does the

1118
01:03:21,120 --> 01:03:23,720
Speaker 3: more this mariologal accords that I should say, the need

1119
01:03:23,800 --> 01:03:27,600
Speaker 3: for these types of mariologal coords really expose the current

1120
01:03:27,640 --> 01:03:30,080
Speaker 3: existing financial system for what it is and really the

1121
01:03:30,080 --> 01:03:33,080
Speaker 3: flaws of it and always need to be reset. And

1122
01:03:33,080 --> 01:03:35,960
Speaker 3: how these trade imbalances when specifically around the credit sort

1123
01:03:36,000 --> 01:03:37,720
Speaker 3: of gets out of whack over time, and does it

1124
01:03:37,760 --> 01:03:40,560
Speaker 3: really like expose itself and then at the same time

1125
01:03:40,640 --> 01:03:41,600
Speaker 3: highlight Bitcoin.

1126
01:03:41,840 --> 01:03:44,640
Speaker 1: Well, I think that the system can survive if it

1127
01:03:44,720 --> 01:03:47,680
Speaker 1: rains in the leverage, because then you know, fractional reserve

1128
01:03:47,760 --> 01:03:51,720
Speaker 1: banking can operate in a responsible way. And I don't

1129
01:03:51,720 --> 01:03:53,400
Speaker 1: think that that's a I don't think that that's a

1130
01:03:55,600 --> 01:04:00,600
Speaker 1: thesis because we actually saw fractional reserve banking for millennium.

1131
01:04:00,640 --> 01:04:05,439
Speaker 1: I mean, the idea that money is only commodity money

1132
01:04:05,480 --> 01:04:08,840
Speaker 1: and expands when credit is based off commodity, it's not

1133
01:04:09,320 --> 01:04:13,560
Speaker 1: historically true. Credit and the extension of credit is what

1134
01:04:13,600 --> 01:04:19,160
Speaker 1: we need to let our economies function. If you restrict

1135
01:04:19,320 --> 01:04:25,320
Speaker 1: the access of money to commodity money, you prevent human

1136
01:04:25,920 --> 01:04:30,000
Speaker 1: exploration and expansion. I mean, if gold or bitcoin are

1137
01:04:30,040 --> 01:04:32,480
Speaker 1: growing at three percent or one percent a year, you're

1138
01:04:32,560 --> 01:04:36,360
Speaker 1: saying that we can only have four percent money growth forever,

1139
01:04:36,600 --> 01:04:40,880
Speaker 1: and that you're limiting the amount of productivity for the world.

1140
01:04:41,240 --> 01:04:45,920
Speaker 1: Buy simply your ability to get better plus the four percent,

1141
01:04:46,720 --> 01:04:50,400
Speaker 1: and the world has put a referendum on that. I

1142
01:04:50,480 --> 01:04:54,040
Speaker 1: believe in the last hundred years they say, no, we

1143
01:04:54,120 --> 01:04:58,000
Speaker 1: want to grow now. We want to create money now,

1144
01:04:58,280 --> 01:05:01,640
Speaker 1: borrow from the future, and and extend now. For the

1145
01:05:01,720 --> 01:05:04,400
Speaker 1: last fifty years since we went off the gold standard,

1146
01:05:04,720 --> 01:05:09,200
Speaker 1: and even in the decades before, with the advent of

1147
01:05:09,240 --> 01:05:14,120
Speaker 1: the Euro dollar system, fractional reserve banking expanded and expanded

1148
01:05:14,160 --> 01:05:17,080
Speaker 1: in a way where now it's like this nine sigma

1149
01:05:17,120 --> 01:05:21,600
Speaker 1: events happening every few years. It's completely unsustainable at the

1150
01:05:21,680 --> 01:05:25,040
Speaker 1: current level. So I believe mar Alago accord the attempt

1151
01:05:25,120 --> 01:05:29,080
Speaker 1: is to rain in some of it, to re establish

1152
01:05:29,280 --> 01:05:32,960
Speaker 1: an equity component to it, and in that way extending

1153
01:05:33,000 --> 01:05:37,240
Speaker 1: the life now. Don't I can't project after that or

1154
01:05:37,360 --> 01:05:39,840
Speaker 1: but I can see what they're trying to do and

1155
01:05:39,880 --> 01:05:43,120
Speaker 1: whether it will work or not, and whether fractional reserve

1156
01:05:43,160 --> 01:05:46,040
Speaker 1: banking can be operated in a responsible way in the future.

1157
01:05:46,360 --> 01:05:48,400
Speaker 1: I don't know, but if you have an equity component

1158
01:05:48,640 --> 01:05:53,440
Speaker 1: and you have less non tear of cheating currency devaluation abroad,

1159
01:05:53,800 --> 01:05:57,480
Speaker 1: then maybe it does progress toward that.

1160
01:06:00,000 --> 01:06:02,880
Speaker 3: I agree with that. I think there's always gonna be credit.

1161
01:06:02,920 --> 01:06:05,640
Speaker 3: We probably had barter and then credit before we had currency.

1162
01:06:05,760 --> 01:06:08,200
Speaker 3: Right it was like I know you here, I'll give

1163
01:06:08,200 --> 01:06:09,920
Speaker 3: you the wheat. I know you're good for the cow

1164
01:06:10,040 --> 01:06:11,080
Speaker 3: or the wheat or whatever it is.

1165
01:06:11,120 --> 01:06:14,280
Speaker 1: And Mark, I want to say that, you know I

1166
01:06:14,280 --> 01:06:18,640
Speaker 1: I'm now starting to understand that that's not anthropologically based,

1167
01:06:18,920 --> 01:06:22,240
Speaker 1: that the idea of barter. It's actually the idea of

1168
01:06:22,360 --> 01:06:24,520
Speaker 1: iowe you and you owe me. It's not that we

1169
01:06:24,640 --> 01:06:27,040
Speaker 1: have to trade right now. You give me what you

1170
01:06:27,160 --> 01:06:30,880
Speaker 1: have and maybe next week I'll give you what I have.

1171
01:06:31,120 --> 01:06:32,919
Speaker 3: So maybe it was credit first before barter.

1172
01:06:33,080 --> 01:06:33,760
Speaker 2: That's what that was.

1173
01:06:33,840 --> 01:06:35,680
Speaker 3: I mean, we're, you know, as a family, like hey,

1174
01:06:35,760 --> 01:06:37,360
Speaker 3: I'll give you this, Okay, you give me that or

1175
01:06:37,400 --> 01:06:39,919
Speaker 3: give it back to me later. Maybe it happened simultaneously.

1176
01:06:40,280 --> 01:06:43,760
Speaker 1: Money is what will settle the debt, and so that's

1177
01:06:43,760 --> 01:06:46,200
Speaker 1: why money could be you know, in history it could

1178
01:06:46,200 --> 01:06:48,240
Speaker 1: be bronze, or it could be auxen, or it could

1179
01:06:48,280 --> 01:06:53,160
Speaker 1: be anything that you know was accepted. So money is

1180
01:06:53,240 --> 01:06:57,560
Speaker 1: what's accepted. So today, right now, dollars are accepted, many

1181
01:06:57,600 --> 01:07:02,240
Speaker 1: people accept bitcoin, few or accept gold online. Right it's

1182
01:07:02,240 --> 01:07:05,680
Speaker 1: not something that people accept, but people accept it to

1183
01:07:05,760 --> 01:07:08,920
Speaker 1: transferm wealth to themselves in the future. So whatever is

1184
01:07:08,960 --> 01:07:12,800
Speaker 1: accepted is money. It doesn't mean money has to be commodity,

1185
01:07:13,080 --> 01:07:15,760
Speaker 1: or it has to be credit or a credit type

1186
01:07:15,760 --> 01:07:19,280
Speaker 1: of money like a dollar deposit. All of that stuff

1187
01:07:19,480 --> 01:07:23,600
Speaker 1: can be used as money. What exists is the human

1188
01:07:23,680 --> 01:07:30,840
Speaker 1: desire to produce, to explore, and to expand and exchange

1189
01:07:30,920 --> 01:07:36,120
Speaker 1: and exchange, and in that way they'll figure out the system.

1190
01:07:36,520 --> 01:07:38,920
Speaker 1: But how do you ultimately say, okay, it's time to

1191
01:07:38,960 --> 01:07:42,640
Speaker 1: settle up, pay me now. In the future it might

1192
01:07:42,720 --> 01:07:46,080
Speaker 1: be in treasuries, in dollar deposits, in gold, and bitcoin,

1193
01:07:46,120 --> 01:07:49,640
Speaker 1: and today it honestly is all of those things, just

1194
01:07:49,760 --> 01:07:53,120
Speaker 1: at varying degrees. So that's why all of those things

1195
01:07:53,160 --> 01:07:56,000
Speaker 1: can be considered money. And in the future the balance,

1196
01:07:56,160 --> 01:07:59,680
Speaker 1: obviously I believe, changes to weigh a little bit more

1197
01:07:59,800 --> 01:08:03,560
Speaker 1: to bitcoin relative And so you ask about the thesis

1198
01:08:03,560 --> 01:08:07,200
Speaker 1: of the book, Bitcoin can be compared to one hundred

1199
01:08:07,200 --> 01:08:11,040
Speaker 1: trillion in cash and three hundred trillion in real estate.

1200
01:08:11,320 --> 01:08:14,600
Speaker 1: Those are the two asset classes that bitcoin can compare

1201
01:08:14,640 --> 01:08:17,080
Speaker 1: itself right now to obviously gold.

1202
01:08:16,800 --> 01:08:18,880
Speaker 3: But why only real estate? Yeah? Why not gold? Or

1203
01:08:18,960 --> 01:08:21,639
Speaker 3: yeah so on market or why not collectibles or fine art.

1204
01:08:21,880 --> 01:08:24,599
Speaker 1: I talk about gold in the first book and how

1205
01:08:24,680 --> 01:08:28,799
Speaker 1: bitcoin can and should rise to gold on a historical basis.

1206
01:08:29,720 --> 01:08:34,200
Speaker 1: So historically gold is the best neutral money Bitcoin should take,

1207
01:08:34,240 --> 01:08:37,040
Speaker 1: that should capture that, but the market for it is

1208
01:08:37,120 --> 01:08:40,000
Speaker 1: much bigger than gold, and the reason it's cash and

1209
01:08:40,080 --> 01:08:42,559
Speaker 1: its real estate. These are two ways that money is

1210
01:08:42,560 --> 01:08:45,880
Speaker 1: stored over time, some of it for temporary some of

1211
01:08:45,920 --> 01:08:50,960
Speaker 1: it for a long term fixed income equity. These asset

1212
01:08:50,960 --> 01:08:53,479
Speaker 1: classes are part of the financial system. Some of it's

1213
01:08:53,560 --> 01:08:56,559
Speaker 1: used for production, some of it's used to lend money

1214
01:08:56,560 --> 01:08:59,400
Speaker 1: to production, and some of it in both of those

1215
01:08:59,479 --> 01:09:00,000
Speaker 1: asset class.

1216
01:09:00,120 --> 01:09:01,640
Speaker 2: This just uses wealth storage.

1217
01:09:01,840 --> 01:09:04,559
Speaker 1: But I want to explain to people that bitcoin at

1218
01:09:04,760 --> 01:09:11,639
Speaker 1: two trillion is still very small relative to what people

1219
01:09:11,720 --> 01:09:14,680
Speaker 1: are holding in cash and real estate. I feel like

1220
01:09:14,760 --> 01:09:18,840
Speaker 1: bitcoin and equities compliment each other. One is savings and

1221
01:09:18,840 --> 01:09:21,960
Speaker 1: one is investing in production. So I don't want to

1222
01:09:22,439 --> 01:09:25,559
Speaker 1: suggest that bitcoin just starts eating all of these asset

1223
01:09:25,560 --> 01:09:29,439
Speaker 1: classes at once, even though it will take part of equity,

1224
01:09:29,479 --> 01:09:32,360
Speaker 1: part of fixed income, and it is and part of gold.

1225
01:09:32,520 --> 01:09:38,000
Speaker 1: I want to give people that really high ceiling to

1226
01:09:38,080 --> 01:09:41,640
Speaker 1: where Bitcoin can expand to. If bitcoin can just be

1227
01:09:41,760 --> 01:09:45,519
Speaker 1: that generational money like cash and like real estate is today,

1228
01:09:46,400 --> 01:09:49,600
Speaker 1: then people can think, oh, yeah, it can go to

1229
01:09:50,240 --> 01:09:52,840
Speaker 1: ten million dollars in the future. And that's what I

1230
01:09:52,880 --> 01:09:55,840
Speaker 1: want people to walk away. I suggest that bitcoin will

1231
01:09:55,840 --> 01:09:57,960
Speaker 1: be at one million dollars in the next several years

1232
01:09:58,160 --> 01:10:01,639
Speaker 1: in the book to give people that taste of the

1233
01:10:01,680 --> 01:10:05,799
Speaker 1: potential growth that you're not late, You're you're still early

1234
01:10:05,880 --> 01:10:06,840
Speaker 1: in this asset class.

1235
01:10:07,120 --> 01:10:08,680
Speaker 2: You give them the proper context for that.

1236
01:10:08,880 --> 01:10:11,880
Speaker 3: Yeah. Yeah, I think about it like that's sort of

1237
01:10:12,120 --> 01:10:14,800
Speaker 3: like a venture capital frame, which is like uber Okay,

1238
01:10:14,880 --> 01:10:17,479
Speaker 3: what asked what markets is disrupting? What is the total

1239
01:10:17,479 --> 01:10:20,479
Speaker 3: addressable size of that market? What percentage do we think

1240
01:10:20,479 --> 01:10:22,960
Speaker 3: we can capture from that market? And so when you

1241
01:10:22,960 --> 01:10:26,839
Speaker 3: think about you know, bitcoin disrupting just store of value assets,

1242
01:10:26,880 --> 01:10:28,880
Speaker 3: you know, Michael Sailors talked about this nine hundred trillion

1243
01:10:28,880 --> 01:10:31,559
Speaker 3: dollars of store bias. That's where like, what are things

1244
01:10:31,560 --> 01:10:34,360
Speaker 3: people are storing their wealth in And so to your point,

1245
01:10:34,439 --> 01:10:36,519
Speaker 3: you know, equities and stuff, some of that is productive

1246
01:10:36,520 --> 01:10:38,599
Speaker 3: capital being loaned to those companies, are being raised by

1247
01:10:38,600 --> 01:10:41,439
Speaker 3: those companies, et cetera. But one thing that I worked out.

1248
01:10:41,479 --> 01:10:44,160
Speaker 3: I gave this talk at Bitcoin Mina a couple months

1249
01:10:44,160 --> 01:10:46,920
Speaker 3: ago in Abu Dhabi, and it's like that nine hundred

1250
01:10:46,960 --> 01:10:49,880
Speaker 3: trillion sailor says maybe half of it is store value,

1251
01:10:49,880 --> 01:10:51,960
Speaker 3: half of it's productive, but whatever you want to call that.

1252
01:10:52,000 --> 01:10:55,280
Speaker 3: But based off of the rate of growth from twenty

1253
01:10:55,320 --> 01:10:57,360
Speaker 3: ten to twenty twenty and from twenty twenty to twenty

1254
01:10:57,360 --> 01:11:00,040
Speaker 3: twenty four, twenty from twenty five now, based off the

1255
01:11:00,080 --> 01:11:02,679
Speaker 3: CBO projections, the deficit of spending, et cetera, et cetera,

1256
01:11:03,479 --> 01:11:06,960
Speaker 3: that basket continues to grow. So just at the rate

1257
01:11:07,000 --> 01:11:09,559
Speaker 3: it's on, by twenty thirty, that should be like one

1258
01:11:09,600 --> 01:11:12,200
Speaker 3: point three quadrillion. By twenty forty, that should be like

1259
01:11:12,240 --> 01:11:14,600
Speaker 3: three and a half quadrillion. So then the question is

1260
01:11:14,600 --> 01:11:17,160
Speaker 3: what percentage of that basket do we capture by twenty

1261
01:11:17,200 --> 01:11:20,160
Speaker 3: thirty or by twenty forty. Right, And so to your point,

1262
01:11:20,200 --> 01:11:21,759
Speaker 3: I what one hundred percent agree with you? Like, obviously

1263
01:11:21,760 --> 01:11:23,840
Speaker 3: you're not going to eat the whole basket. But by

1264
01:11:23,880 --> 01:11:26,759
Speaker 3: twenty thirty, if you get one point twenty five percent

1265
01:11:26,800 --> 01:11:28,559
Speaker 3: of the basket, it gets it to that twenty one

1266
01:11:28,560 --> 01:11:30,960
Speaker 3: trillion dollar market cap would be on par with gold

1267
01:11:31,120 --> 01:11:33,400
Speaker 3: and Uber and airbnab captured ten percent of their market

1268
01:11:33,439 --> 01:11:35,599
Speaker 3: shares in less than ten years. So one point two

1269
01:11:35,640 --> 01:11:38,880
Speaker 3: five percent is totally conservative and realistic if it is

1270
01:11:38,880 --> 01:11:40,240
Speaker 3: a better asset, which we think it is.

1271
01:11:42,600 --> 01:11:45,800
Speaker 1: Yeah, you know, when I think about where bitcoin can

1272
01:11:45,880 --> 01:11:48,680
Speaker 1: go and that one million dollar price and twenty one

1273
01:11:48,720 --> 01:11:54,400
Speaker 1: trillion market cap, I want people to understand that that is.

1274
01:11:56,160 --> 01:11:57,880
Speaker 2: My view over the.

1275
01:11:57,880 --> 01:12:02,280
Speaker 1: Coming years, not not something that I will have to

1276
01:12:02,280 --> 01:12:07,240
Speaker 1: wait for, right, right, And so it is based on

1277
01:12:07,479 --> 01:12:08,920
Speaker 1: math and.

1278
01:12:08,880 --> 01:12:12,040
Speaker 2: That relative addressable market.

1279
01:12:13,200 --> 01:12:17,360
Speaker 1: And unless you have those numbers and that frame of work,

1280
01:12:18,080 --> 01:12:20,800
Speaker 1: you might not be be able to imagine one million

1281
01:12:20,840 --> 01:12:23,880
Speaker 1: dollar bitcoin because that's just a random number. Actually, the

1282
01:12:24,120 --> 01:12:27,800
Speaker 1: number that matters is the market cap relative to other

1283
01:12:28,240 --> 01:12:30,040
Speaker 1: assets market caps.

1284
01:12:30,760 --> 01:12:33,000
Speaker 3: So, Nick speaking, if you're going to speak to, just

1285
01:12:33,000 --> 01:12:35,599
Speaker 3: stick to the average person, the average you know, working,

1286
01:12:37,880 --> 01:12:41,839
Speaker 3: middle age, working person saving dreaming of this better future,

1287
01:12:42,479 --> 01:12:44,840
Speaker 3: but you're feeling anxious because you see all this volatility

1288
01:12:44,880 --> 01:12:47,400
Speaker 3: and you're hearing about the system being reset, and you're

1289
01:12:47,439 --> 01:12:51,599
Speaker 3: looking at your portfolios moving up and down, the whole

1290
01:12:51,600 --> 01:12:55,880
Speaker 3: monetary system being reset. What would you tell them specifically

1291
01:12:56,000 --> 01:12:59,479
Speaker 3: and then tell them about the time to get into

1292
01:12:59,520 --> 01:13:00,000
Speaker 3: bitcoin now.

1293
01:13:00,640 --> 01:13:06,479
Speaker 1: Yeah, So in the book, I explain how the average

1294
01:13:06,560 --> 01:13:10,559
Speaker 1: price of an American home has gone from twenty five

1295
01:13:10,600 --> 01:13:13,679
Speaker 1: thousand to over four hundred thousand in the last fifty years,

1296
01:13:14,160 --> 01:13:17,080
Speaker 1: and incomes have only gone up from nine to eighty thousand,

1297
01:13:17,600 --> 01:13:19,240
Speaker 1: and so you would have needed two and a half

1298
01:13:19,320 --> 01:13:22,439
Speaker 1: times your earnings back then. Now you need five times

1299
01:13:22,479 --> 01:13:25,720
Speaker 1: your earnings to buy a home. So prices are expanding,

1300
01:13:25,760 --> 01:13:29,679
Speaker 1: but in a non equitable way, really in a distributed way.

1301
01:13:29,920 --> 01:13:33,360
Speaker 1: That works for some people and it works against many people.

1302
01:13:33,880 --> 01:13:37,280
Speaker 1: So in that way, the credit system is built to

1303
01:13:37,560 --> 01:13:41,800
Speaker 1: work against a huge segment of the population, especially those

1304
01:13:42,080 --> 01:13:46,920
Speaker 1: that aren't able to actively borrow and invest from that

1305
01:13:47,280 --> 01:13:50,960
Speaker 1: credit creation system, so that disadvantages people.

1306
01:13:51,640 --> 01:13:52,000
Speaker 2: And that.

1307
01:13:53,800 --> 01:13:57,400
Speaker 1: The price of a home in the last ten years

1308
01:13:57,439 --> 01:14:01,479
Speaker 1: has gone from one thousand bitcoin to five bitcoin. And

1309
01:14:03,040 --> 01:14:08,559
Speaker 1: to explain to people that that trend will continue, they

1310
01:14:08,600 --> 01:14:13,519
Speaker 1: have to understand the long term mindset. Bitcoin is super volatile,

1311
01:14:13,520 --> 01:14:17,479
Speaker 1: as we explain, it's subject to bond volatility, and it's

1312
01:14:17,600 --> 01:14:21,040
Speaker 1: subject to these one in a thousand year events happening

1313
01:14:21,400 --> 01:14:24,920
Speaker 1: every few years, and so that can create a lot

1314
01:14:24,920 --> 01:14:28,200
Speaker 1: of fear. It can also create a roller coaster.

1315
01:14:28,320 --> 01:14:31,840
Speaker 2: So you know, I love the fact that.

1316
01:14:33,479 --> 01:14:36,559
Speaker 1: When we lead with research, what we can do is

1317
01:14:36,680 --> 01:14:39,640
Speaker 1: express our opinion and lay it out for people to

1318
01:14:39,680 --> 01:14:42,400
Speaker 1: the best of our ability. I'm lucky that I don't

1319
01:14:42,439 --> 01:14:45,200
Speaker 1: have to trade other people's funds, you know, and time

1320
01:14:45,320 --> 01:14:48,280
Speaker 1: and time the market, because even if a client comes

1321
01:14:48,320 --> 01:14:51,559
Speaker 1: to you and say I'm ready to buy bitcoin and

1322
01:14:51,600 --> 01:14:54,760
Speaker 1: then they experience a forty percent and you say, oh,

1323
01:14:54,840 --> 01:14:56,599
Speaker 1: you know, just hold on, and then they pull their

1324
01:14:56,600 --> 01:15:01,360
Speaker 1: money out, you've impaired their portfolio, though they were the

1325
01:15:01,400 --> 01:15:04,599
Speaker 1: one who timed it and timed it on the way out.

1326
01:15:04,880 --> 01:15:08,120
Speaker 1: So people have to take that long term mindset. And

1327
01:15:08,160 --> 01:15:11,640
Speaker 1: I would also tell people that the United States of

1328
01:15:11,720 --> 01:15:15,640
Speaker 1: America has the best property law in the world, and

1329
01:15:15,720 --> 01:15:22,800
Speaker 1: so United States domiciled corporations broadly speaking, are investments that

1330
01:15:22,880 --> 01:15:28,760
Speaker 1: are relatively good compared to other things, and so bitcoin

1331
01:15:29,000 --> 01:15:34,000
Speaker 1: for savings and a long term mindset us production, those

1332
01:15:34,080 --> 01:15:38,960
Speaker 1: are the areas that I feel safe to operate in

1333
01:15:39,040 --> 01:15:44,160
Speaker 1: as an individual, And those are asset classes. I think

1334
01:15:44,200 --> 01:15:47,400
Speaker 1: that complement each other and our positioned for the future.

1335
01:15:48,400 --> 01:15:52,040
Speaker 3: Great. We're gonna end it with that Nick Botia the

1336
01:15:52,040 --> 01:15:54,479
Speaker 3: Bitcoin Layer, Like I said, one of my main newsletters

1337
01:15:54,479 --> 01:15:57,000
Speaker 3: I read, will link to that down below The Bitcoin Age.

1338
01:15:57,120 --> 01:16:00,080
Speaker 3: Get that. I'm just gonna say, get that book. And

1339
01:16:00,080 --> 01:16:02,240
Speaker 3: the reason why is because of what Nick just said.

1340
01:16:02,280 --> 01:16:03,880
Speaker 3: If you just try to buy a bitcoin but you

1341
01:16:03,920 --> 01:16:05,920
Speaker 3: don't understand it, even done the work, even the research,

1342
01:16:05,960 --> 01:16:08,040
Speaker 3: you don't have any conviction, you're borrowing Nick's conviction or

1343
01:16:08,040 --> 01:16:10,439
Speaker 3: my conviction. Gets your own. We'll link to that down below.

1344
01:16:10,640 --> 01:16:11,679
Speaker 3: Anything else you want to say.

1345
01:16:11,840 --> 01:16:13,880
Speaker 1: Uh, you guys can catch everything we're doing at the

1346
01:16:13,920 --> 01:16:17,280
Speaker 1: bitcoin layer dot com, the links to my books and everything.

1347
01:16:17,320 --> 01:16:19,000
Speaker 2: Mark, I appreciate you having me all right.

1348
01:16:19,040 --> 01:16:20,320
Speaker 3: Thank you,