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Speaker 1: Credit runs everything ladies and gentlemen. Equities are the tail

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Speaker 1: of the dog. The dog is credit equities get flung

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Speaker 1: around like a rag. Doll Um, you said that, you

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Speaker 1: know that it's it wags the dog, right, So um,

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Speaker 1: everything happens in the bond market first and like them

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Speaker 1: kind of its equities later. There used to be a

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Speaker 1: time like ten billion dollars with a lot of money. Uh,

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Speaker 1: it doesn't seem like it is anymore, right. It seems like,

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Speaker 1: you know, the the central banks to fed. The central banks,

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Speaker 1: they kind of have tools of their disposal monetary policy,

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Speaker 1: fiscal policy, so you know, basically inflation, I'm sorry, interest

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Speaker 1: rates and and and and debt creation um. And it

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Speaker 1: seems like we're seeing their tool chest empty out in

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Speaker 1: a sense where interest rates are basically at zero um

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Speaker 1: and debt is at levels that can't be seen. You

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Speaker 1: own the bonds, the bonds are losing value. You can

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Speaker 1: try and sell the bonds, or you can just say, hey,

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Speaker 1: I still think these bonds are worth a hundred cents

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Speaker 1: on the dollars, so why don't I just hedge that

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Speaker 1: up against equity. The financial markets are bubbling over. Turmoil

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Speaker 1: is on the verge of happening at any point that

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Speaker 1: you look at. Now, one of the things that most

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Speaker 1: people focus on is what's happening in the stock markets

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Speaker 1: and what is going to happen. Will stocks crash or

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Speaker 1: won't they Well, there's another way to look at this.

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Speaker 1: What the real professional investors look at are the bonds,

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Speaker 1: the debt markets, the credit markets are really what's leading

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Speaker 1: this whole thing. Um. Some people might say that the

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Speaker 1: stocks are just the tail of the dog, where the

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Speaker 1: bonds the credit markets are the actual dog themselves. UM.

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Speaker 1: So today I am sitting down with Greg Fosse. He's

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Speaker 1: been a thirty year veteran trading credit, trading bonds, and

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Speaker 1: he has some amazing insights into what's going on the market. Um.

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Speaker 1: He's going to break down what's happening with the bond yields, um,

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Speaker 1: how the Fed is looking at that, what they're going

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Speaker 1: to have to do to move and control those bond yields.

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Speaker 1: It's also going to talk about the total amount of

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Speaker 1: bond and credit debt that's out there in the world today,

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Speaker 1: and we're gonna talk about where that debt is going

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Speaker 1: to start transition into. We're gonna talk about some other

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Speaker 1: assets and he's even going to give us his forecast

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Speaker 1: of where he thinks these assets are going to go

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Speaker 1: in the near and the long term. It's an amazing

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Speaker 1: conversation with Greg, one that I really, uh really really

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Speaker 1: was excited to have. It was a great conversation, did

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Speaker 1: not disappoint and you were gonna like it. So squad,

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Speaker 1: just jump right into the interview with Greg. Hey, everyone,

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Speaker 1: welcome to another episode of the Market Disruptors Show. And

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Speaker 1: today I am joined by Greg Foss. He's a he's

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Speaker 1: he's an experienced credit trader in the bond markets, thirty

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Speaker 1: years trading in the credit market. He's also with a company,

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Speaker 1: valid As Power that's kind of changing the game in

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Speaker 1: bitcoin minding, which is pretty pretty pretty cool. UM. And

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Speaker 1: so anyway, Greg, thanks so much for joining me today.

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Speaker 1: What a pleasure. Thank you for having me so. Um.

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Speaker 1: I've been keeping up with you. Um, as I kind

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Speaker 1: of said earlier, I mean, you kind of stormed the

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Speaker 1: storm of the bitcoin scene. You have a lot of

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Speaker 1: really good takes and and I know that comes from

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Speaker 1: your deep experience. UM So for those that are just

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Speaker 1: catching up, do you want to give us a little

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Speaker 1: bit of that experience and kind of like what brought

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Speaker 1: you here? Sure, well thanks thanks for having me again.

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Speaker 1: And so yeah, I want board too many people. But

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Speaker 1: I've been doing this for thirty years doing what you

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Speaker 1: would ask I say, I've been managing credit risk for

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Speaker 1: thirty years and I'm a Canadian. Uh lived near Toronto,

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Speaker 1: but I grew up in Montreal, went to engineering and

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Speaker 1: that's important because engineering and bitcoin are very, very linked

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Speaker 1: in my opinion, and we'll get into that, but essentially

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Speaker 1: bitcoin is digital energy. So park that thought for a second.

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Speaker 1: I was an engineer at McGill, went down and decided

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Speaker 1: to do an MBA at Cornell in the United States

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Speaker 1: Ivy League Education. Very proud of that, but came back

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Speaker 1: and worked for Canada's largest financial institution in the bank

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Speaker 1: excuse me, a bank called the Role Bank of Canada

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Speaker 1: and I started in and it was an eye opening

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Speaker 1: experience because Royal Bank of Canada was insolvent. Row Bank

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Speaker 1: of Canada was no different. And then Chase Manhattan Manufacturer's

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Speaker 1: hand over all the big money center banks in New

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Speaker 1: York City. Everyone had far too much loan exposure to

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Speaker 1: lesser developed countries LDC. Lesser developed country's mostly focused on

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Speaker 1: South America, so Brazil and UH in Mexico. And what

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Speaker 1: does insolvent mean? Just for your viewers or refresher, it

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Speaker 1: means that if you were to mark to market the

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Speaker 1: value of those loans because they had defaulted, you would

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Speaker 1: have to write off an amount that exceeded the book

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Speaker 1: value of equity of the Royal Bank of Canada. This

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Speaker 1: is pretty eye opening, man. This is Canada's largest financial

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Speaker 1: institution is insolvent. Another word is bankrupt. There's a slight difference,

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Speaker 1: but it doesn't matter. UH. And hence Treasury Secretary Nicholas

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Speaker 1: Brady from the United States designed a brilliant solution called

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Speaker 1: the Brady Plant, which changed five year loans which had

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Speaker 1: which we're trading at twenty five cents on the dollar.

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Speaker 1: Not a lot of trading was taking place, but that

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Speaker 1: was essentially the market quote cents on the dollar. He

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Speaker 1: changed out five year obligation at a hundred cents on

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Speaker 1: the dollar into a thirty year obligation at a thirty

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Speaker 1: year obligation trading at twenty five cents on the dollar value.

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Speaker 1: But the banks did not have to write it down

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Speaker 1: because it was backed by Hey, guys, let me just

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Speaker 1: interrupt this interview real quick just to plug the show sponsor,

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Speaker 1: and that is Block five. Now. Block five is doing

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Speaker 1: amazing things in the bitcoin finance space. As a matter

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Speaker 1: of fact, they've cracked some really big news by bringing

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Speaker 1: on the x c f TC UM chair Chris gian

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Speaker 1: Carlo Um. And they are one of the most transparent,

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Speaker 1: most heavily regulated UM companies inside the United States, which

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Speaker 1: gives me a lot of trust into what their services are. Now,

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Speaker 1: I've recently did a video talking about how to retire

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Speaker 1: off bitcoin, and you can do that by leveraging debt

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Speaker 1: and interest against bitcoin. And Block five is the number

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Speaker 1: one company in the United States or maybe in the

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Speaker 1: world to go to and use UM. They are leading

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Speaker 1: the charges. Are paying interest on your bitcoin if you

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Speaker 1: park it with him, or you can borrow against it. Now,

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Speaker 1: as I broke down in that video, you can borrow

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Speaker 1: against your bitcoin, and when you take debt against it,

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Speaker 1: it's not taxable. It's not taxable. Event you can use

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Speaker 1: that debt for anything that you want, including to live

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Speaker 1: off of to leverage up and buy more or roll

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Speaker 1: it into another asset. UM. You can do something like

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Speaker 1: I've done recently, like sell some real estate, put that

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Speaker 1: money into bitcoin. Now as that bitcoin price has risen,

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Speaker 1: I'm able to borrow against it and go back and

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Speaker 1: buy the same real estate or something similar, and I

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Speaker 1: still own the bitcoin, and I also own the new

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Speaker 1: asset as well. Lots of ways you can do this

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Speaker 1: um and block five is the company that I recommend.

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Speaker 1: Down in the description, I have a link that you

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Speaker 1: can click on. If you choose to use that link,

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Speaker 1: you can earn up the two h fifty dollars in

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Speaker 1: bitcoin just for using that link. So check out block

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Speaker 1: fine now zero coupon US Treasury debt. Wow, what an

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Speaker 1: accounting gimmickry, right, And that being said, it was my

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Speaker 1: first experience to how is this possible? You know? Again,

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Speaker 1: you go all through business school and you're like, you

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Speaker 1: think you know something until you get into the real world,

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Speaker 1: and the reality is banks are frequently insolvent. I'll make

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Speaker 1: that statement on a marked market basis, and they are

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Speaker 1: twenty five times levered to their capital position. Not getting

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Speaker 1: too granular, but wire banks therefore have the confidence of

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Speaker 1: the public. Quite simple, they are too big to fail

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Speaker 1: generally and therefore backed by their governments. If they're backed

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Speaker 1: by the government's how does the government maintain this very

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Speaker 1: simple printing money. So back in I was looking for

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Speaker 1: a solution to the fiat Ponzi. I'll call it that

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Speaker 1: because that's what I believe it is. It's a pond

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Speaker 1: z because the backstop has always been the ability to

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Speaker 1: print money and fast forward. So I went into high

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Speaker 1: yield credit trading after the Royal Bank, I went into

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Speaker 1: high yield credit trading. I was Canada's first high yield

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Speaker 1: credit trader that took positions in this in fallen angel

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Speaker 1: and UH distressed credits in Canada. Now, New York had

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Speaker 1: a very vibrant high yield market, but Canada was about

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Speaker 1: twenty years behind. So I helped develop that market. I

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Speaker 1: lived through the long term credit UH debacle. UH. I

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Speaker 1: lived that was in I lived through the Great Financial

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Speaker 1: Crisis working at a hedge fund that honest to god,

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Speaker 1: I was wondering where the world would end any day

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Speaker 1: in two thousand and nine and UH. Through that, I

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Speaker 1: still questioned the stability. Will always questioned the stability, but

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Speaker 1: always understood it. So the ability to print money. And

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Speaker 1: then in two thousand and sixteen, I found bitcoin, and

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Speaker 1: it was the most beautiful technology that I've ever seen.

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Speaker 1: UH from an engineering perspective, Mark, this is important because

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Speaker 1: I saw the Bitcoin blockchain and action and I'm like, wow,

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Speaker 1: I'd heard of bitcoin, but I didn't realize it was

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Speaker 1: this beautiful. And then I said, and what there's twenty

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Speaker 1: one million of them only and what you know? And

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Speaker 1: I just started going down the rabbit hole and I said,

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Speaker 1: this thing is phenomenal. And for five years I've been

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Speaker 1: studying bitcoin essentially, So yeahs or to storm onto the

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Speaker 1: scene only because I only discovered Twitter and what a

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Speaker 1: valuable resource Twitter is. Because I'm fifty seven, Mark, and

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Speaker 1: when you're fifty seven, uh, you know a lot of

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Speaker 1: things aren't as natural as when you're twenty seven, meaning

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Speaker 1: Twitter and an iPhone and uh the such. So yeah,

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Speaker 1: I did how about this? I didn't storm onto the scene.

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Speaker 1: I stumbled onto the scene. And then I just said this, Okay,

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Speaker 1: I gotta help people understand the relationship between credit, where

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Speaker 1: I spent thirty years, and the necessity to protect yourself

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Speaker 1: against the regular disruptions in credit markets. Credit runs everything,

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Speaker 1: ladies and gentlemen. Equities are the tail of the dog.

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Speaker 1: The dog is credit equities get flung around like a

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Speaker 1: rag doll because the equity markets are tiny compared to

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Speaker 1: the credit markets, and credit regularly gurgles, and when credit

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Speaker 1: credit gurgles, equities get destroyed. So that's my that's my

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Speaker 1: little pitch. Yeah, well that's great. Well, so for everybody listening,

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Speaker 1: I mean, there's so much that we're gonna unpack right

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Speaker 1: here now. Uh, if you're listening, you know I routinely

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Speaker 1: dig into what's happening with central banks, the banking industry

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Speaker 1: and whatnot, because we obviously have to understand how we

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Speaker 1: can protect the money. I love I love what you

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Speaker 1: said there, Greg about really I'm trying to get people

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Speaker 1: to start focusing on really like it's purchasing power and

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Speaker 1: stop looking at like unit of account and denominators and whatnot. So, um,

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Speaker 1: I want to dig into that first and then we'll

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Speaker 1: kind of dig into solutions the life rafts that we have.

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Speaker 1: But um, you said that, you know that it's it

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Speaker 1: wags the dog, right, So, um, everything happens in the

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Speaker 1: bond market first, and like then kind of it's equities later.

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Speaker 1: And I know, you know, some of the smartest, the

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Speaker 1: best investors in the world really focus on the bond market.

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Speaker 1: And we can see that even just in the March

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Speaker 1: crash of last year where the FEDS really intervened in

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Speaker 1: the bond markets. So maybe you can kind of explain that,

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Speaker 1: maybe unpacked that a little bit, like why is it

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Speaker 1: that the bond market wags the wags the tail or

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Speaker 1: the equities or the tail of that dog. I guess Okay,

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Speaker 1: So pretty simply, first of all, they're much bigger. Uh. Secondly,

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Speaker 1: the whole world is levered. Okay, and given that leverage

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Speaker 1: essentially is debt uh in various forms, counterparty risk, etcetera, etcetera,

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Speaker 1: uh A. A frequent occurrence is when leverage gets taken

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Speaker 1: out of the system, whether hedge funds, you know the

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Speaker 1: latest archegos example where cf CSFB. There's there's rumors, you

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Speaker 1: know that CSFB was on the on the brink. I'm

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Speaker 1: not going to make that rumor. I'm not I don't

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Speaker 1: want hate mail. I'll just tell you that, you know,

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Speaker 1: they lost ten billion dollars. There used to be a

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Speaker 1: time when ten billion dollars was a lot of money. Uh.

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Speaker 1: It doesn't seem like it is anymore, right, But let

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Speaker 1: me just say that there's a tremendous number of critically

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Speaker 1: financial critical, critical financial institutions and stability. Uh and UH

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Speaker 1: if one of them goes down, and this is what

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Speaker 1: we saw with Lehman Brothers in two thousand and six. Uh.

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Speaker 1: Started in two thousand and six, two thousand seven, finished

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Speaker 1: in two thousand and line. Uh. You know, one one

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Speaker 1: domino can have tremendous repercussions. So but let's start because

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Speaker 1: the leverage and the counterparty risk. Right, Let's just say

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Speaker 1: you've hedged yourself up, but your counterparty is Lehman and

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Speaker 1: you're Bear Stearns, and you have protection bought from Lehman

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Speaker 1: or your hedge fund that that you know has a

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Speaker 1: counterparty risk with Lehman, and all of a sudden Lehman

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Speaker 1: UH is not able to make good on their on

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Speaker 1: their contracts. Well, look that's a huge black hole in

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Speaker 1: the hedge fund that has exposured other counterparties, et cetera. So,

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Speaker 1: but let's start with the reality. Okay, So credit has

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Speaker 1: first claim. If in the capital structure of a company

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Speaker 1: UM company ABC UM credit, the bonds have first claim

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Speaker 1: prior claims. So that means if the if the bonds

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Speaker 1: aren't worth a hundred cents on the dollar, the equities

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Speaker 1: war zero. Every single equity analyst out there needs to

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Speaker 1: start their analysis with understanding of what the credit rating

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Speaker 1: of that company is. It's six. I heard you say

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Speaker 1: that point before, and it's such a great point. Why

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Speaker 1: why to just explain that? So if the bonds aren't

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Speaker 1: worth the equities were zero, so how could you know

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Speaker 1: the equity is worth it? Listen. I've worked on trading

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Speaker 1: floors where the bond where the equity analysts are running

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Speaker 1: over to me all the time, like what's happening with

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Speaker 1: my credit with my my company ABC. I'm like, dude,

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Speaker 1: you know the bonds are getting destroyed. So there's hedge

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Speaker 1: funds out there that own the bonds that are shorting

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Speaker 1: the equity as protection against the bonds they own. Think

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Speaker 1: about that, right, that's a natural hedge. You own the bonds,

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Speaker 1: the bonds are losing value, you can try and sell

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Speaker 1: the bonds, or you can just say, hey, I still

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Speaker 1: think these bonds are worth a hundred cents on the dollars,

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Speaker 1: so why don't I just hedge that up against equity?

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Speaker 1: And there's a tremendous capital structure arbitrage market that goes

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Speaker 1: on in the markets. It's just it's fun, it's dangerous

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Speaker 1: because you can get squashed. But it is finance one

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Speaker 1: on one. The bonds are prior claim in the capital structure,

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Speaker 1: so any equity owner better understand where the bond you're trading.

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Speaker 1: This is why things like AMC and game Stop which

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Speaker 1: had high yield bonds outstanding, and therefore guys that were

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Speaker 1: short the equity against the bonds, they got railroaded because

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Speaker 1: all of a sudden they do a short squeeze, right,

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Speaker 1: and it's like they're putting on a good risk adjusted trade.

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Speaker 1: But shorts, it's dangerous to be short. As you know,

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Speaker 1: the bonds don't rally, but the equity goes through the roof.

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Speaker 1: It makes no sense on an enterprise value basis. But

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Speaker 1: that's the way the world can work. Okay, So let

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Speaker 1: let me see if we need to understand it's actual

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Speaker 1: want to unpack for the listeners here. So basically, if

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Speaker 1: you're not, if you're not really caught up with what

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Speaker 1: he's saying, I mean, bonds are debt. So a company

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Speaker 1: is taking on debt, and he talked about earlier kind

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Speaker 1: of insolvency. So the company's taken on debt, that's their bonds,

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Speaker 1: and then they have their equity price problem is is

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Speaker 1: that as an equity owner, when you own stocks, you

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Speaker 1: own equity, you own the company, but the debt is

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Speaker 1: is senior fi claim. Um, what he's saying is that

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Speaker 1: if their bonds aren't worth anything, then their bank be

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Speaker 1: careful and bonds trade. Well, there you go. That's but

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Speaker 1: let's just unpack that a little bit more. Bonds trade

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Speaker 1: for a price as well. Generally that price at issues

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Speaker 1: a hundred cents on the dollar. Let's just assume the

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Speaker 1: general level of interest rates don't change, and it's only

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Speaker 1: the credit quality of the company that comes into play.

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Speaker 1: If the credit quality improves, and the coupon that the

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Speaker 1: company was paying started as an eight percent and it

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Speaker 1: is fixed over time, and let's say the markets as well,

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Speaker 1: they that eight percent is now attractive because I think

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Speaker 1: that company should trade at a seven percent discount rate

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Speaker 1: or seven percent rate in their bonds. Um, I'm gonna

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Speaker 1: go out and buy some and people buy it and

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Speaker 1: bid it through par until the net present value calculation

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Speaker 1: makes it worth a seven percent yield. Conversely, let's say

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Speaker 1: you bought it at an eight percent yield and the

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Speaker 1: company hits some cash flow problems and all of a sudden,

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Speaker 1: you're like, jeez, this eight percent doesn't look so fancy anymore.

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Speaker 1: So you turn around, you try and sell it, and

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Speaker 1: maybe the market you know, trades in the nineties for

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Speaker 1: a little but then there's different levels of distress and

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Speaker 1: you go nineties eighties. Yeah, things are still okay. But

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Speaker 1: there's an expression. When bonds trade in the sixties, they

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Speaker 1: don't trade there for long. They either go into the

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Speaker 1: forties or go back to the sixties. When they go

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Speaker 1: into the forties, that essentially means they're going to declare bankruptcy.

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Speaker 1: And here's an example of Sometimes equity analysts get out

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Speaker 1: there and say, what about the equity of Hurts. Wow,

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Speaker 1: that equity looks somewhat exciting. What if Hurts makes it through? Hey, guys,

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Speaker 1: check the bond price first. Please, if the bonds are

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Speaker 1: in the forties, do not go out and buy the equity,

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Speaker 1: despite when any analysts tells you, including some editors of

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Speaker 1: some very influential financial publications. These are horrendous, horrendous advice

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Speaker 1: of people that have not checked the capital structure. And

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Speaker 1: I want to add one more thing. Why did the

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Speaker 1: FED get involved in high yield bonds for the first

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Speaker 1: time in the history of the FED, every ever saying

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Speaker 1: they are gonna, you know, get involved in different markets.

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Speaker 1: They picked high yield bonds this time, this COVID crisis.

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Speaker 1: Guess why. Therefore made a major American companies that if

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Speaker 1: they got downgraded from their current cusp of investment grade

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Speaker 1: into the junk bond or high yield market, they would

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Speaker 1: overwhelm the high yeld market. Those four companies, Ford, General Motors,

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Speaker 1: General Electric, and A T and T combined have more

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Speaker 1: debt than the entire high heeld bond market. The FED

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Speaker 1: would overwhelm because their combined debt is greater than the

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Speaker 1: combined high yield market in total. Can you imagine those

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Speaker 1: four guys coming into the high yield debt market. The

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Speaker 1: price of the high yield debt market would get destroyed.

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Speaker 1: The elephants are in the room, okay, and these downgrades

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Speaker 1: they're forced selling coming out of investment create accounts. The

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Speaker 1: FED had to walk into the market to stabilize the

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Speaker 1: market to be able to buy it in case these

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Speaker 1: companies got downgraded from high grade to high yield. Sort

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Speaker 1: of scary. But once again, I need to I need

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Speaker 1: to tell you you have to understand where the bonds

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Speaker 1: are trading before you worry about the equity, right, Yeah, now,

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Speaker 1: I mean that would that would be typical what you

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Speaker 1: should do. Right in a sense where um, I like

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Speaker 1: to I like to kind of use an analogy. Uh

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Speaker 1: like playing blackjack. So a very simple game. You dropped

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Speaker 1: two cards and you try to get twenty one. Um,

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Speaker 1: if I drew a nineteen and I was feeling really

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Speaker 1: lucky and I took a hit and I got a two,

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Speaker 1: I win. But that wasn't the right move because if

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Speaker 1: I played that right, if I play that way over

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Speaker 1: a long period time, I'm gonna lose. Um. And so

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Speaker 1: kind of to your point, Um, even though the bonds

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Speaker 1: are saying do not buy this stock game stock for example,

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Speaker 1: people people did buy the stock and they made that

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Speaker 1: it was a technicality, and there's enterprise value versus enterprise

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Speaker 1: value being the value of the market cap of the company.

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Speaker 1: The equity market cap plus the bonds gives you what

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Speaker 1: what's called an enterprise value. You're totally right, that's a technicality.

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Speaker 1: But on a basis of risk return, you're not supposed

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Speaker 1: to take. You're not supposed to say hit me when

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Speaker 1: you're at nineteen, you're not supposed to run in and buy.

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Speaker 1: But life is a probability analysis, okay, And sometimes you

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Speaker 1: say hit me, and sometimes you draw another ace, and

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Speaker 1: maybe then you say, hey, I'm going to see if

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Speaker 1: I can get that one last ace. And that's a

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Speaker 1: four out of fifty excuse me, it's a three out

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Speaker 1: of fifty two chance. Assuming the dealer doesn't have an

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Speaker 1: ace as well, there's a three out of fifty two

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Speaker 1: chance I'm going to get hit on another ace. Like

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Speaker 1: you can do that if you want, man, But look,

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Speaker 1: that's not what you're supposed to do. Life is a

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Speaker 1: game of probabilities. It's a game of smart investing, investing,

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Speaker 1: and yeah, that's exactly it. Yeah, yeah, yeah. And and

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Speaker 1: if you if you can get lucky, but like I

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Speaker 1: always like to say, like my my wealth, my future

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Speaker 1: is too important to leave up to luck. So you

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Speaker 1: play the odds, right, you, You play the strategy that

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Speaker 1: you know when these do. That's it. All you can

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Speaker 1: do is play probabilities. And that's why I always look

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Speaker 1: at things on an expected value basis. That means it

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Speaker 1: probability if some outcome times the value of that outcome,

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Speaker 1: and you have to add these probabilities in good cases

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Speaker 1: and bad cases, and you come with an expected value

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Speaker 1: that's correct. Right, And just like in that blackjack game,

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Speaker 1: you have to be Okay, you're gonna lose a couple

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Speaker 1: of hands, but you're gonna win the win. You lose

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Speaker 1: the battle, win the war kind of a thing, right,

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Speaker 1: So how about this if you're at the if you're

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Speaker 1: on the dealer's side, yes you are going to If

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Speaker 1: you're on the other side of the table, you better

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Speaker 1: be a really good card counter because you generally don't.

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Speaker 1: The house always wins. Okay, but let's not get into that. Sure,

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Speaker 1: we won't get into that. So um per per kind

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Speaker 1: of this example that you were giving us. Then you know,

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Speaker 1: I guess from the outside looking in and you see, um,

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Speaker 1: you see the government coming in and propping up the

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Speaker 1: bond markets and then bailing out you know, the airlines

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Speaker 1: for example. And I think a lot of people look

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Speaker 1: at that and say, well, they don't want to have

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Speaker 1: all that. All those people go unemployed, right, They they

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Speaker 1: they're trying to save jobs. But are you. You might

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Speaker 1: be coming from a different angle and saying no, no, no,

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Speaker 1: they weren't trying to protect the jobs. They're trying to

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Speaker 1: protect the markets from imploding. Is that maybe, Hey, look

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Speaker 1: that could So airlines typically are yield borrowers. There's some

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Speaker 1: good ones. Southwest is not high yield, but uh uh.

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Speaker 1: A credit rating is a function of the cyclicality of

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Speaker 1: the business. So there's something called business risk and every analysis.

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Speaker 1: So there's an argument that a steel company, for example,

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Speaker 1: is limited to the maximum credit rating to which it

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Speaker 1: can aspire just because of the business risk. Airlines are

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Speaker 1: the same thing. You need to understand that there are

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Speaker 1: cyclical industries and that cyclical cicklicality of an industry is risk,

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Speaker 1: and you call it a business risk. And then if

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Speaker 1: you start tacking leverage onto that cyclicality of the business,

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Speaker 1: that increases the risk, right, And that's the Those are

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Speaker 1: the components of things that go into a credit rating

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Speaker 1: and a credit analysis of whether you should own that. So, yeah,

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Speaker 1: they were they were worried about the employment. But you know,

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Speaker 1: it's also the fact that there's a lot of airline

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Speaker 1: bonds out there that that are in high yield index

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Speaker 1: and they opened the door to them being able to

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Speaker 1: buy high yield, and therefore there were people out there

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Speaker 1: this as well, maybe I should buy high yield before

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Speaker 1: the FED is buy it because I know I'm backstopped

427
00:22:01,640 --> 00:22:03,800
Speaker 1: by the FED. Come on that. Of course there's people

428
00:22:03,840 --> 00:22:07,280
Speaker 1: that front run it. So yes, that's what happened. So

429
00:22:07,359 --> 00:22:09,560
Speaker 1: let's talk about Um, let's take this and kind of

430
00:22:09,800 --> 00:22:11,640
Speaker 1: give it a bigger picture of like where we're at

431
00:22:11,760 --> 00:22:13,520
Speaker 1: right now and then maybe kind of transition to kind

432
00:22:13,520 --> 00:22:17,040
Speaker 1: of like where that goes. So, um, you know, with

433
00:22:17,040 --> 00:22:20,280
Speaker 1: with rates dropping like crazy, pushed and we have so

434
00:22:20,320 --> 00:22:22,359
Speaker 1: we kind of have two phenomenons right one, rate rates

435
00:22:22,359 --> 00:22:24,280
Speaker 1: and yields are dropping. At the same time, you have

436
00:22:24,680 --> 00:22:26,719
Speaker 1: the largest segment of the population, the baby boomers, are

437
00:22:26,720 --> 00:22:29,480
Speaker 1: retiring and they need income. So it's like they need income,

438
00:22:29,480 --> 00:22:31,439
Speaker 1: but rates are dropping. You have all these pensions and

439
00:22:31,480 --> 00:22:33,800
Speaker 1: stuff that have built this model off of this return

440
00:22:33,840 --> 00:22:35,320
Speaker 1: they're not getting. And it seems to me, and you

441
00:22:35,359 --> 00:22:37,359
Speaker 1: correct me if I'm wrong, but it's pushed people out

442
00:22:37,400 --> 00:22:39,359
Speaker 1: into risk your and risk your assets and so now

443
00:22:39,400 --> 00:22:42,360
Speaker 1: we have a lot of people with exposure to these

444
00:22:42,400 --> 00:22:45,920
Speaker 1: markets that are pretty dangerous. It seems like, okay, um,

445
00:22:45,960 --> 00:22:47,680
Speaker 1: there's a lot in there. How about this though, we

446
00:22:47,680 --> 00:22:49,840
Speaker 1: we start with bonds and we'll say that, okay, for

447
00:22:49,840 --> 00:22:53,600
Speaker 1: forty years when I started trading in. Interest rates were

448
00:22:53,640 --> 00:22:57,760
Speaker 1: at fourteen percent in the US okay UM, and they

449
00:22:57,760 --> 00:23:01,000
Speaker 1: had come down from eighteen percent the priority years uh

450
00:23:01,119 --> 00:23:06,360
Speaker 1: fourteen percent uh in nineteen eighties, a late eighties um

451
00:23:06,760 --> 00:23:11,840
Speaker 1: and uh. They bottomed out at the end of the

452
00:23:11,920 --> 00:23:14,600
Speaker 1: COVID create or at right at the COVID crisis about

453
00:23:14,600 --> 00:23:16,680
Speaker 1: a year ago at sixty basis points. I'm talking to

454
00:23:16,800 --> 00:23:21,880
Speaker 1: US Treasury ten years. Essentially, that is a forty year

455
00:23:22,040 --> 00:23:25,000
Speaker 1: bull market in bonds. Okay. Why is the bull market, Well,

456
00:23:25,040 --> 00:23:29,360
Speaker 1: because interest rates falling ten to or not ten, they

457
00:23:29,400 --> 00:23:32,439
Speaker 1: do make bond math. When an interest rates fall or

458
00:23:32,480 --> 00:23:35,720
Speaker 1: come down, the price of a bond increases, okay. And

459
00:23:35,840 --> 00:23:38,479
Speaker 1: so all you're really doing, though, is you're pulling forward

460
00:23:38,480 --> 00:23:41,440
Speaker 1: the coupons on that bond. But that being said, it's

461
00:23:41,440 --> 00:23:44,560
Speaker 1: a very fluid market. It it trades, it's uh. So

462
00:23:44,640 --> 00:23:47,359
Speaker 1: interest rates went from fourteen percent down to under one percent,

463
00:23:47,440 --> 00:23:49,480
Speaker 1: and now they've turned Okay, So now the ten years

464
00:23:49,520 --> 00:23:52,440
Speaker 1: one and a half, one one in three quarters, it's

465
00:23:52,480 --> 00:23:55,480
Speaker 1: all arounding air compared to fourteen percent. Let me tell

466
00:23:55,520 --> 00:23:58,679
Speaker 1: you it's fun to own US Treasury debt at fourteen percent.

467
00:23:58,840 --> 00:24:02,880
Speaker 1: I've done it, um, and it's quite easy. It's it's

468
00:24:02,880 --> 00:24:07,159
Speaker 1: sort of comforting. But what's happened there's two things. Okay,

469
00:24:07,160 --> 00:24:10,679
Speaker 1: So inflation expectations have come down, way down. So it

470
00:24:10,720 --> 00:24:14,520
Speaker 1: was a Paul Volker in the in beginning where he

471
00:24:14,320 --> 00:24:16,920
Speaker 1: he had a war on inflation. He jacked up FED

472
00:24:16,960 --> 00:24:21,399
Speaker 1: funds rate. So anyway battled inflation. It's successfully calmed down.

473
00:24:21,520 --> 00:24:23,680
Speaker 1: But my argument is this, Okay, it's not going to

474
00:24:23,760 --> 00:24:26,679
Speaker 1: be an inflation concern going forward. It's gonna be a

475
00:24:26,800 --> 00:24:31,840
Speaker 1: credit quality concern because what's happened in every single success

476
00:24:31,880 --> 00:24:36,040
Speaker 1: of financial crisis that I've witnessed, his been the risk

477
00:24:36,280 --> 00:24:40,399
Speaker 1: or financial leverage has been transferred to the government from

478
00:24:40,760 --> 00:24:45,160
Speaker 1: financial institutions. Okay, so two thousand and six to two

479
00:24:45,160 --> 00:24:48,240
Speaker 1: thousand and nine would essentially happened there with TARP troubled

480
00:24:48,240 --> 00:24:51,280
Speaker 1: Asset Relief program and all this printing of money was

481
00:24:51,359 --> 00:24:55,080
Speaker 1: the financial leverage in the in the big financial system

482
00:24:55,119 --> 00:24:59,399
Speaker 1: that Wall Street and global the global financial industry was

483
00:25:00,280 --> 00:25:05,040
Speaker 1: successfully transferred to the balance sheets of the government's Now successfully,

484
00:25:05,040 --> 00:25:07,359
Speaker 1: why do I say successfully, because it saved the world

485
00:25:07,560 --> 00:25:10,200
Speaker 1: in two thousand and nine we were on the brink.

486
00:25:10,280 --> 00:25:13,400
Speaker 1: I cannot tell you how many days in March two

487
00:25:13,440 --> 00:25:15,240
Speaker 1: thousand and nine. I rode the train to work and

488
00:25:15,280 --> 00:25:18,280
Speaker 1: I was wondering, is this the day that it all ends? Okay?

489
00:25:18,400 --> 00:25:20,879
Speaker 1: But but did it? It did end? Because well, we

490
00:25:20,920 --> 00:25:24,080
Speaker 1: can get into that, but we we and bigger today.

491
00:25:24,320 --> 00:25:27,199
Speaker 1: It prevented it from happening at that correct And what

492
00:25:27,320 --> 00:25:31,920
Speaker 1: happened was the leverage again over leavered financial institutions. Bear Stearns,

493
00:25:32,080 --> 00:25:35,800
Speaker 1: which whose stock was trading at a hundred and twenty

494
00:25:35,800 --> 00:25:38,600
Speaker 1: five bucks, was sold to JP Morgan at two bucks.

495
00:25:38,600 --> 00:25:42,240
Speaker 1: And guess what it was probably worth minus twenty five bucks,

496
00:25:42,280 --> 00:25:45,840
Speaker 1: easily minus twenty five bucks or more. Okay, because the

497
00:25:46,040 --> 00:25:49,399
Speaker 1: leverage in that bank, if you had marked that to market,

498
00:25:50,040 --> 00:25:53,560
Speaker 1: it wasn't worth anything above zero. But the FED engineer

499
00:25:53,680 --> 00:25:56,920
Speaker 1: to trade and got something to happen. Other things got

500
00:25:56,960 --> 00:25:59,800
Speaker 1: transferred to the balance sheets of the FED. When AI

501
00:26:01,160 --> 00:26:04,119
Speaker 1: was about to fail, and the FED stepped in to

502
00:26:04,240 --> 00:26:06,720
Speaker 1: rescue a I G. Because if A I G had failed,

503
00:26:07,359 --> 00:26:10,440
Speaker 1: Goldman Sachs would have failed and the domino effect would

504
00:26:10,480 --> 00:26:12,639
Speaker 1: have just this is what I'm telling you. It didn't happen,

505
00:26:13,080 --> 00:26:15,919
Speaker 1: and they pulled out all the leavers, and there's no

506
00:26:16,040 --> 00:26:19,160
Speaker 1: question they did everything they had to do to save

507
00:26:19,200 --> 00:26:22,080
Speaker 1: the system. But what did it do cause more money

508
00:26:22,240 --> 00:26:25,280
Speaker 1: caused leverage to be transferred from the financial system to

509
00:26:25,640 --> 00:26:28,760
Speaker 1: the balance sheets of governments. Yeah, yeah, and I think

510
00:26:28,800 --> 00:26:30,720
Speaker 1: that that was the first time we really started hearing

511
00:26:30,760 --> 00:26:33,160
Speaker 1: that too big to fail argument was right there around.

512
00:26:33,240 --> 00:26:35,119
Speaker 1: Isn't that interesting? You know, because I I learned it

513
00:26:35,160 --> 00:26:39,159
Speaker 1: in six at Cornell in Cornell University. That's when the

514
00:26:39,160 --> 00:26:42,639
Speaker 1: public got it. It's funny that it's my professor. I

515
00:26:42,640 --> 00:26:45,199
Speaker 1: remember specifically, she cut the she cut the article out

516
00:26:45,240 --> 00:26:47,200
Speaker 1: of the magazine. So there was some magazine that was

517
00:26:47,240 --> 00:26:50,719
Speaker 1: talking about too big to fail back in h might

518
00:26:50,760 --> 00:26:53,840
Speaker 1: have been some esoteric financial publication. I don't remember what

519
00:26:53,840 --> 00:26:56,280
Speaker 1: it was, but memory serves it was. It was something

520
00:26:56,320 --> 00:26:58,280
Speaker 1: like Forbes or something like that. So it doesn't matter.

521
00:26:58,320 --> 00:27:00,640
Speaker 1: It was. It was big enough that it just wasn't

522
00:27:00,680 --> 00:27:03,800
Speaker 1: part of the lexicon. I'll agree with that. Yeah, and

523
00:27:03,880 --> 00:27:06,200
Speaker 1: so um and so you know, it was that leverage

524
00:27:06,240 --> 00:27:08,320
Speaker 1: that was the problem. The other thing was I guess

525
00:27:08,440 --> 00:27:10,119
Speaker 1: and this is kind of a different Well, they're all

526
00:27:10,160 --> 00:27:13,080
Speaker 1: intertwined and intertwined subjects, but I mean, when those those

527
00:27:13,119 --> 00:27:16,800
Speaker 1: people weren't held accountable, then it allowed them to leverage

528
00:27:16,840 --> 00:27:18,840
Speaker 1: back up as opposed to that crazy right as a

529
00:27:18,880 --> 00:27:22,119
Speaker 1: real estate investor, I got completely wiped out and I

530
00:27:22,200 --> 00:27:25,360
Speaker 1: am still shell shocked over that. And my whole investing

531
00:27:25,320 --> 00:27:27,760
Speaker 1: in the last twelve years has been completely different because

532
00:27:27,760 --> 00:27:30,280
Speaker 1: of what happened to me then. Um, but for them

533
00:27:30,320 --> 00:27:32,160
Speaker 1: they haven't, which then they just basically went back into

534
00:27:32,200 --> 00:27:37,120
Speaker 1: the same action, you know, socializing losses. Right, so nobody

535
00:27:37,160 --> 00:27:40,280
Speaker 1: was held accountable, no one was thrown in jail. Um.

536
00:27:40,320 --> 00:27:43,959
Speaker 1: You know, it's there were just so many atrocities. Uh.

537
00:27:44,359 --> 00:27:47,560
Speaker 1: And yeah, who ends up paying for it? The public? Um. Yeah,

538
00:27:47,600 --> 00:27:50,880
Speaker 1: but that's part when you when capitalism is not allowed

539
00:27:51,160 --> 00:27:55,359
Speaker 1: to cleanse itself, i e. You socialize the losses. You

540
00:27:55,359 --> 00:27:58,480
Speaker 1: you you bail out long term capital management because you

541
00:27:58,520 --> 00:28:01,840
Speaker 1: know that what we do to our friends. I'm not

542
00:28:01,880 --> 00:28:04,320
Speaker 1: saying there was any chrony capitalism there, but I think

543
00:28:04,720 --> 00:28:09,000
Speaker 1: you'd be surprised if there wasn't. Um. Uh. Look, yes,

544
00:28:09,320 --> 00:28:12,359
Speaker 1: it is so dangerous to socialized losses because that's what

545
00:28:12,520 --> 00:28:17,200
Speaker 1: capitalism is is actually weeding out the weak players over

546
00:28:17,280 --> 00:28:20,560
Speaker 1: time so that the surviving players are stronger. Otherwise you

547
00:28:20,680 --> 00:28:23,639
Speaker 1: just get a bunch of really weak players and you

548
00:28:23,760 --> 00:28:25,520
Speaker 1: end up in a situation and I hate to say it,

549
00:28:25,560 --> 00:28:28,080
Speaker 1: but sort of like where we are right now. Yeah,

550
00:28:28,440 --> 00:28:32,000
Speaker 1: so um, it seems like um watching this and not

551
00:28:32,040 --> 00:28:33,879
Speaker 1: and more from the outside, not from the inside like

552
00:28:33,880 --> 00:28:36,679
Speaker 1: you've kind of been participated in. But um, it seems

553
00:28:36,720 --> 00:28:38,400
Speaker 1: like you know, the the central banks to fed, the

554
00:28:38,440 --> 00:28:40,360
Speaker 1: central banks, they kind of have tools of their supposal

555
00:28:40,400 --> 00:28:44,360
Speaker 1: monetary policy, fiscal policy, so you know, basically inflation, I'm sorry,

556
00:28:44,360 --> 00:28:47,560
Speaker 1: interest rates and and um and and debt creation. Um.

557
00:28:47,600 --> 00:28:51,360
Speaker 1: And it seems like we're seeing their tool chest empty

558
00:28:51,400 --> 00:28:54,320
Speaker 1: out in a sense where interest rates are basically at

559
00:28:54,400 --> 00:28:58,040
Speaker 1: zero UM and debt is at levels that can't be

560
00:28:58,080 --> 00:29:01,480
Speaker 1: seen and h it seems like their back is against

561
00:29:01,480 --> 00:29:04,000
Speaker 1: this against the wall right now, right where it's like

562
00:29:04,640 --> 00:29:07,200
Speaker 1: debt is so high and everybody requires so much debt

563
00:29:07,200 --> 00:29:11,640
Speaker 1: that rates can't really go up. But at the same time, UM,

564
00:29:11,680 --> 00:29:15,080
Speaker 1: they're you know, trying to protect the currency maybe um.

565
00:29:15,240 --> 00:29:17,440
Speaker 1: And so they're kind of stuck like do we save

566
00:29:17,480 --> 00:29:20,400
Speaker 1: the bond market? Do we save the currency market? And

567
00:29:20,440 --> 00:29:22,760
Speaker 1: like do you are they trying to or intertwined? Yes,

568
00:29:22,800 --> 00:29:28,240
Speaker 1: they are very simple. Mathematically is impossible. It's mathematically impossible

569
00:29:28,320 --> 00:29:32,120
Speaker 1: for the currency not to debase because your debt. Uh,

570
00:29:32,320 --> 00:29:35,800
Speaker 1: your debt burden right now, just to service the debt

571
00:29:37,800 --> 00:29:42,160
Speaker 1: is higher than your tax base or your g d

572
00:29:42,320 --> 00:29:45,080
Speaker 1: P can possibly grow. Okay, I could get I could

573
00:29:45,080 --> 00:29:48,600
Speaker 1: get into the granularity of that calculation. But I term

574
00:29:48,760 --> 00:29:52,640
Speaker 1: FIAT paper as the error term which solves the debt

575
00:29:53,000 --> 00:29:56,160
Speaker 1: d E b t spiral. Okay, the debt spiral is

576
00:29:56,200 --> 00:29:59,600
Speaker 1: that the numerator your total debt to your denominator, your

577
00:29:59,600 --> 00:30:02,600
Speaker 1: gross domestic product or your tax base is so large

578
00:30:03,640 --> 00:30:07,440
Speaker 1: that even the coupon on the debt cannot be serviced

579
00:30:07,440 --> 00:30:13,000
Speaker 1: by the growth in the GDP. Very simple math. Unfortunately,

580
00:30:13,040 --> 00:30:15,960
Speaker 1: too many people of failed math or they just take

581
00:30:16,040 --> 00:30:18,440
Speaker 1: for granted that, hey, it worked in the past, it's

582
00:30:18,480 --> 00:30:21,160
Speaker 1: gonna work going forward. Yeah. I did a video on that,

583
00:30:21,240 --> 00:30:23,480
Speaker 1: the death debt spiral, and I was kind of talking

584
00:30:23,480 --> 00:30:27,240
Speaker 1: about the debt to GDP level and the Kinseian multiplier,

585
00:30:27,280 --> 00:30:29,120
Speaker 1: which you know, states that if once the country gets

586
00:30:29,160 --> 00:30:32,280
Speaker 1: over to GDP that they're not getting enough growth for

587
00:30:32,320 --> 00:30:36,320
Speaker 1: the debt. And obviously now over thirty, I'm gonna I'm

588
00:30:36,360 --> 00:30:39,280
Speaker 1: gonna add the field to the fire. It's four. Okay,

589
00:30:39,360 --> 00:30:42,520
Speaker 1: the total global debt, total global debt. I'm not talking

590
00:30:42,560 --> 00:30:50,840
Speaker 1: government debt total global debt. Uh, so it's over three trillion.

591
00:30:50,840 --> 00:30:53,520
Speaker 1: But even if we went with that, okay, uh, total

592
00:30:53,520 --> 00:30:57,800
Speaker 1: global GDP around nine hundred uh nine trillion, So three trillion.

593
00:30:57,840 --> 00:30:59,760
Speaker 1: I think it's a little bit higher. So let's just

594
00:30:59,760 --> 00:31:03,560
Speaker 1: say the four times okay, total global GDP to close

595
00:31:03,960 --> 00:31:11,400
Speaker 1: totally correct, Total global debt is four times total global GDP. Okay,

596
00:31:11,520 --> 00:31:14,160
Speaker 1: Now why is that the important metric? In my mind? Again,

597
00:31:14,200 --> 00:31:18,800
Speaker 1: I'm a bond guy. Interest rates an interest expense are

598
00:31:18,880 --> 00:31:22,000
Speaker 1: tax deductible. It does not come out of your tax base,

599
00:31:22,360 --> 00:31:26,120
Speaker 1: meaning you can't tax it, okay, and therefore that's the

600
00:31:26,200 --> 00:31:29,640
Speaker 1: leverage that you need to be concerned about. More importantly,

601
00:31:29,880 --> 00:31:33,160
Speaker 1: when they keep recycling that debt, moving it from over

602
00:31:33,320 --> 00:31:37,160
Speaker 1: leaver companies onto the balance sheet of the governments. Hey,

603
00:31:37,200 --> 00:31:39,280
Speaker 1: it's it's just going up no matter what. So it'll

604
00:31:39,320 --> 00:31:43,360
Speaker 1: grow organically just because of the coupon on the debt.

605
00:31:43,400 --> 00:31:48,360
Speaker 1: It'll grow because of these monstrous deficits that they're announcing

606
00:31:48,480 --> 00:31:53,560
Speaker 1: to keep us out of recession or economic depression. Um.

607
00:31:53,600 --> 00:31:57,280
Speaker 1: But mathematically it's impossible for the tax base to keep up.

608
00:31:57,360 --> 00:32:00,680
Speaker 1: It's just again, it's only math. I'm so if it

609
00:32:00,760 --> 00:32:05,160
Speaker 1: offends anybody. But it's only mathematics, right. Well, um, some

610
00:32:05,200 --> 00:32:07,320
Speaker 1: people too plus two doesn't equal for anymore, so they're

611
00:32:07,320 --> 00:32:09,760
Speaker 1: not understanding that. But but math. I love math because

612
00:32:09,800 --> 00:32:12,160
Speaker 1: it's it's fact, right, It's well, it's the base layer

613
00:32:12,160 --> 00:32:15,080
Speaker 1: of language. Okay, that's what I love to say. Mathematics

614
00:32:15,160 --> 00:32:18,400
Speaker 1: is the base layer of language everybody, no matter what

615
00:32:18,560 --> 00:32:23,560
Speaker 1: language they speak. If they understand math in Chinese and

616
00:32:23,600 --> 00:32:28,000
Speaker 1: they understand the same math in American or Canadian or English,

617
00:32:28,040 --> 00:32:31,640
Speaker 1: you know, yeah, that's the base layer of language. Yeah. Yeah,

618
00:32:31,680 --> 00:32:33,080
Speaker 1: And you don't even need language. I mean, you could

619
00:32:33,120 --> 00:32:35,120
Speaker 1: just put some objects on the ground and two over here.

620
00:32:35,400 --> 00:32:37,520
Speaker 1: It's like, okay, it's about time. It's about time. We say.

621
00:32:37,360 --> 00:32:40,760
Speaker 1: It's like bitcoin. The base layer of bitcoin and the

622
00:32:40,760 --> 00:32:46,000
Speaker 1: base layer of language are both mathematics. You can go, yeah,

623
00:32:46,040 --> 00:32:47,960
Speaker 1: so there's a good tie. And so let's let's let's

624
00:32:48,040 --> 00:32:51,800
Speaker 1: kind of start transitioning into that. So, um, where does

625
00:32:51,840 --> 00:32:55,240
Speaker 1: this go? Right? So if rates are at zero, um,

626
00:32:55,440 --> 00:32:58,520
Speaker 1: and debt is already so high that it can never

627
00:32:58,600 --> 00:33:02,880
Speaker 1: be paid back, um, the I guess one side would

628
00:33:02,880 --> 00:33:05,280
Speaker 1: be a bust, which you said got saved in two

629
00:33:05,280 --> 00:33:07,040
Speaker 1: thousand and eight, And how bad that would have been.

630
00:33:07,080 --> 00:33:09,160
Speaker 1: If it happens today, it's gonna even be way worse,

631
00:33:09,200 --> 00:33:12,440
Speaker 1: and and that's gonna be bad. Um. Maybe the only

632
00:33:12,480 --> 00:33:15,240
Speaker 1: other option I see which is not a good option,

633
00:33:15,320 --> 00:33:17,720
Speaker 1: was some sort of like a debt jubilee. Uh and

634
00:33:17,800 --> 00:33:20,400
Speaker 1: maybe through some sort of like SDR currency basket they

635
00:33:20,440 --> 00:33:23,200
Speaker 1: kind of manipulate some sort of global debt. Seems like

636
00:33:23,200 --> 00:33:25,240
Speaker 1: it's happening a little bit right now. I mean it

637
00:33:25,360 --> 00:33:29,080
Speaker 1: is anyway through through more more debasement, right, So one

638
00:33:29,080 --> 00:33:31,680
Speaker 1: way or another. When you said SDR, though, you meant

639
00:33:31,840 --> 00:33:34,960
Speaker 1: special drawing rights, right, the I m F special drawing right. Yeah, Well,

640
00:33:35,000 --> 00:33:36,600
Speaker 1: you know I did a video on like the secret

641
00:33:36,640 --> 00:33:40,239
Speaker 1: money layers what I called let's basically, each country has

642
00:33:40,280 --> 00:33:43,080
Speaker 1: their own fiat currency R is like a central bank

643
00:33:43,120 --> 00:33:44,840
Speaker 1: of all central banks. And now they're just doing this

644
00:33:44,880 --> 00:33:47,920
Speaker 1: new what six billion? Okay, it's it's it's gimmickry. It's

645
00:33:47,920 --> 00:33:50,440
Speaker 1: all gimmick cry Okay. Look, first thing I'm gonna I'm

646
00:33:50,440 --> 00:33:53,640
Speaker 1: gonna say something, Right, all feats and there's a hundred

647
00:33:53,680 --> 00:33:56,600
Speaker 1: and eight of them in the world. They're all melting

648
00:33:56,600 --> 00:33:59,720
Speaker 1: ice cubes. Why because they're all in the same situation

649
00:33:59,760 --> 00:34:02,600
Speaker 1: where the fiat currency needs to be printed to solve

650
00:34:02,840 --> 00:34:06,240
Speaker 1: the debt spiral? Are we gonna call it a death spiral?

651
00:34:06,600 --> 00:34:09,319
Speaker 1: Not for G twenty countries. Maybe Turkey, which is a

652
00:34:09,360 --> 00:34:12,640
Speaker 1: G twenty country, maybe suffering a death spiral, But let's

653
00:34:12,640 --> 00:34:17,000
Speaker 1: just assume a debt spiral. There are other countries that

654
00:34:17,200 --> 00:34:22,280
Speaker 1: require I m F help all the time. They're the bottom. Unfortunately.

655
00:34:22,440 --> 00:34:24,560
Speaker 1: You know, I live in Canada. I'm a very lucky man,

656
00:34:25,640 --> 00:34:28,960
Speaker 1: but we're not the United States. Canada will fail before

657
00:34:29,000 --> 00:34:31,680
Speaker 1: the United States fails. But if Canada fails, the US

658
00:34:31,760 --> 00:34:34,080
Speaker 1: isn't going to get off scot free. Okay. The US

659
00:34:34,120 --> 00:34:36,920
Speaker 1: people might say, oh jeez, that's that's a pretty important

660
00:34:36,920 --> 00:34:40,040
Speaker 1: country that just failed. So there's contagion. There's all sorts

661
00:34:40,040 --> 00:34:42,640
Speaker 1: of different things that that happened. But countries do fail

662
00:34:42,680 --> 00:34:45,280
Speaker 1: all the time. Remember when I got into this business, Brazil,

663
00:34:46,600 --> 00:34:50,640
Speaker 1: Argentina and Mexico had all failed failed. What well, they

664
00:34:50,680 --> 00:34:54,319
Speaker 1: failed to stand up to their obligations to counterparties to

665
00:34:54,360 --> 00:34:59,279
Speaker 1: pay back their contractual debt. Just like Greece, Just like

666
00:34:59,320 --> 00:35:02,000
Speaker 1: Puerto Rico where I'm at today, right they failed on

667
00:35:02,040 --> 00:35:07,279
Speaker 1: their bond, same deal. It's it's happens it's that's what

668
00:35:07,320 --> 00:35:11,279
Speaker 1: I call um. Uh. You know, when it fails and

669
00:35:11,280 --> 00:35:15,120
Speaker 1: there's no bailout, that is capitalism. That is you know,

670
00:35:15,320 --> 00:35:18,520
Speaker 1: you you look your wounds to come back, you're right

671
00:35:18,560 --> 00:35:22,400
Speaker 1: off your stupid you're stupid investments. It's uh, you know,

672
00:35:22,440 --> 00:35:25,759
Speaker 1: it's constructive, it's painful, but it's good over over the

673
00:35:25,800 --> 00:35:30,600
Speaker 1: long term for creating uh, you know, new upcoming companies

674
00:35:30,600 --> 00:35:33,480
Speaker 1: that are better at managing their risks. Now. Countries, on

675
00:35:33,520 --> 00:35:35,480
Speaker 1: the other hand, are a little more difficult. It's not

676
00:35:35,560 --> 00:35:38,920
Speaker 1: like a country will replace another country like a company

677
00:35:38,960 --> 00:35:42,320
Speaker 1: can replace another company. Right, So this is where the

678
00:35:42,920 --> 00:35:46,400
Speaker 1: difficulty happens. And this is why I'm so convinced that

679
00:35:46,480 --> 00:35:50,480
Speaker 1: people need to start focusing on the credit risk of countries,

680
00:35:50,600 --> 00:35:54,520
Speaker 1: not on the credit risk necessarily of the biggest corporations,

681
00:35:54,600 --> 00:35:58,520
Speaker 1: although the two are intertwined. But everyone's always said, oh,

682
00:35:58,560 --> 00:36:02,640
Speaker 1: this treasury is own the inflation risk. No, guys, that's

683
00:36:02,680 --> 00:36:05,400
Speaker 1: not the case. There's credit risk in there. There always

684
00:36:05,400 --> 00:36:08,399
Speaker 1: has been, but that now there's really cool markets called

685
00:36:08,440 --> 00:36:11,840
Speaker 1: credit default swap markets, which will actually give you a

686
00:36:11,920 --> 00:36:14,360
Speaker 1: daily price on how much it costs to ensure yourself

687
00:36:14,480 --> 00:36:18,959
Speaker 1: against a potential default of various countries. So how should

688
00:36:19,000 --> 00:36:21,919
Speaker 1: regular people be thinking about that or you said, even

689
00:36:21,960 --> 00:36:26,239
Speaker 1: watching that they I mean, yeah, well, you know, I mean,

690
00:36:26,280 --> 00:36:28,239
Speaker 1: there's there's a web page. I think I sent it

691
00:36:28,239 --> 00:36:30,440
Speaker 1: to you, but I can link it. You can link

692
00:36:30,480 --> 00:36:34,080
Speaker 1: it to this podcast or whatever. It's a global CDs

693
00:36:34,239 --> 00:36:36,759
Speaker 1: rates by country, and then you'll see the neat the

694
00:36:36,800 --> 00:36:39,279
Speaker 1: neat premiums they have to pay right now, turkeys at

695
00:36:39,280 --> 00:36:41,440
Speaker 1: the bottom of the stack in terms of credit quality,

696
00:36:41,480 --> 00:36:44,560
Speaker 1: and rightly so. But it's a G twenty country. I mean,

697
00:36:44,600 --> 00:36:46,640
Speaker 1: you know, this is this is dangerous. And then there's

698
00:36:46,640 --> 00:36:49,479
Speaker 1: some Latin American countries that have also that are also

699
00:36:49,520 --> 00:36:52,080
Speaker 1: included in the G twenty that have had a history

700
00:36:52,120 --> 00:36:55,560
Speaker 1: of serial defaulting cereal S E R I L. Not

701
00:36:55,680 --> 00:37:00,000
Speaker 1: sereal like you eat. Okay, they're a serial defaulter. And hey,

702
00:37:00,160 --> 00:37:03,040
Speaker 1: but they're there, and eventually there's contagion. And this is

703
00:37:03,040 --> 00:37:07,600
Speaker 1: what I'm so scared about, because eventually the gig gets called.

704
00:37:07,719 --> 00:37:09,839
Speaker 1: And I saw it in two thousand and seven, two

705
00:37:09,840 --> 00:37:13,600
Speaker 1: thousand and eight. Okay, Lehman Brothers fell so quickly that

706
00:37:13,760 --> 00:37:18,800
Speaker 1: confidence got lost and nobody was out there in selling

707
00:37:18,800 --> 00:37:21,800
Speaker 1: insurance on Lehman Brothers. They only wanted to buy the insurance.

708
00:37:21,800 --> 00:37:23,880
Speaker 1: They saw the house was burning and they wanted to

709
00:37:24,040 --> 00:37:27,160
Speaker 1: buy insurance. Well, that's not when you buy insurance. You

710
00:37:27,200 --> 00:37:31,640
Speaker 1: need to buy insurance before your house is burning. Yeah. So, um,

711
00:37:31,719 --> 00:37:34,880
Speaker 1: I've made the case that, um in many videos that

712
00:37:34,920 --> 00:37:38,920
Speaker 1: I've done that, Um, the gig is coming to an end, right,

713
00:37:38,960 --> 00:37:40,239
Speaker 1: Like I like, I've already made a case like their

714
00:37:40,239 --> 00:37:43,080
Speaker 1: their toolboxes running out of tools. Um, like they could

715
00:37:43,120 --> 00:37:46,200
Speaker 1: you know, the can they roll the thirty year or

716
00:37:46,239 --> 00:37:48,520
Speaker 1: into a fifty year into a hundred year bond? I mean, right,

717
00:37:48,560 --> 00:37:51,200
Speaker 1: at some point like this comes to an end. But

718
00:37:51,239 --> 00:37:53,520
Speaker 1: I've I've kind of made the case that maybe they're

719
00:37:53,560 --> 00:37:55,439
Speaker 1: only kicking the can down there. Maybe they're only keeping

720
00:37:55,440 --> 00:37:58,720
Speaker 1: the game going until they're ready to make a switch,

721
00:37:59,440 --> 00:38:02,479
Speaker 1: and maybe they is like this point coming where maybe

722
00:38:02,480 --> 00:38:04,800
Speaker 1: they want to transition into this into this new system.

723
00:38:05,000 --> 00:38:07,440
Speaker 1: I need to I need to put myself in your chair,

724
00:38:07,520 --> 00:38:11,120
Speaker 1: and you need to understand how lucky you are sitting

725
00:38:11,280 --> 00:38:13,279
Speaker 1: in Well, you're in Puerto Rico now, but you're in

726
00:38:13,320 --> 00:38:16,479
Speaker 1: the United States, right. Puerto Rico is not even a state.

727
00:38:16,480 --> 00:38:19,400
Speaker 1: It's a preparatory right territory. Okay, so it doesn't matter

728
00:38:19,480 --> 00:38:21,560
Speaker 1: it doesn't matter. You're sort of part of the United States.

729
00:38:21,560 --> 00:38:24,480
Speaker 1: But let's just say people in the United States are

730
00:38:24,520 --> 00:38:28,760
Speaker 1: so darn lucky because every single other country and currency

731
00:38:29,000 --> 00:38:33,440
Speaker 1: will likely fail before the u S. Okay, so you

732
00:38:33,480 --> 00:38:35,920
Speaker 1: can say everything you want about what the treasure he's

733
00:38:36,000 --> 00:38:37,680
Speaker 1: doing and what they have to do. But if you

734
00:38:37,719 --> 00:38:41,280
Speaker 1: start seeing things falling, dominoes falling all around you, people

735
00:38:41,320 --> 00:38:43,239
Speaker 1: in the US are not stupid. They're gonna be like,

736
00:38:43,239 --> 00:38:46,520
Speaker 1: whoa geez, I mean, you know, imagine Canada. Okay, So,

737
00:38:47,160 --> 00:38:49,239
Speaker 1: up until a few years ago, Canada is the u

738
00:38:49,360 --> 00:38:52,520
Speaker 1: SS largest trading partner. We do not have a European

739
00:38:52,560 --> 00:38:56,400
Speaker 1: Central Bank backing us. Okay, so Italy is a basket case.

740
00:38:56,440 --> 00:38:59,879
Speaker 1: So is Greece, so Spain, so is Portugal, but they

741
00:39:00,000 --> 00:39:03,720
Speaker 1: have the ECB, the European Central Bank backing them. Canada

742
00:39:03,800 --> 00:39:06,360
Speaker 1: doesn't have like we don't. We have swap lines with

743
00:39:06,400 --> 00:39:10,200
Speaker 1: the US, but we don't have an implied guarantee from

744
00:39:10,480 --> 00:39:13,280
Speaker 1: the US to bail us out. The U S maybe

745
00:39:13,280 --> 00:39:15,560
Speaker 1: wise to bail us out. Don't don't take that the

746
00:39:15,560 --> 00:39:18,120
Speaker 1: wrong way. Okay, they would never be wise to bail Canada.

747
00:39:18,320 --> 00:39:20,440
Speaker 1: But the point is, if your largest trading partner falls

748
00:39:20,520 --> 00:39:24,040
Speaker 1: or your second largest trading partner falls. This is these

749
00:39:24,080 --> 00:39:27,839
Speaker 1: things disrupt finance. There's a lot of counterparty risk. There's

750
00:39:27,880 --> 00:39:31,560
Speaker 1: a lot of contracts that go unfulfilled. Just remember that

751
00:39:33,440 --> 00:39:36,800
Speaker 1: the luxury that you guys have. So what could happen

752
00:39:36,840 --> 00:39:38,680
Speaker 1: in the U S. Well, you could see the spreads

753
00:39:38,760 --> 00:39:43,839
Speaker 1: or the default premiums on the United States widening, indicating

754
00:39:43,880 --> 00:39:46,560
Speaker 1: a greater risk of default. But I don't expect it

755
00:39:46,640 --> 00:39:49,239
Speaker 1: just to happen overnight. This is gonna be something that

756
00:39:49,320 --> 00:39:52,160
Speaker 1: gradually ticks up, and then there's gonna be countries around

757
00:39:52,280 --> 00:39:54,840
Speaker 1: in different spots that this one just felt, you know

758
00:39:55,000 --> 00:39:58,040
Speaker 1: this one Turkey. Turkey only has about a seven percent

759
00:39:58,160 --> 00:40:01,280
Speaker 1: chance of default according to its credit faults swap spread

760
00:40:01,400 --> 00:40:04,960
Speaker 1: right now. But just like bonds that I said, they

761
00:40:04,960 --> 00:40:08,720
Speaker 1: don't stay in the sixties for long. CDs right around

762
00:40:08,760 --> 00:40:12,640
Speaker 1: five hundred credit default swap insurance right around five basis

763
00:40:12,640 --> 00:40:16,200
Speaker 1: points annually. My experiences, it doesn't stay there that long.

764
00:40:16,440 --> 00:40:19,200
Speaker 1: It can blow out to wider levels and that causes

765
00:40:19,239 --> 00:40:23,880
Speaker 1: the contagion within that country or within people who have

766
00:40:24,040 --> 00:40:28,280
Speaker 1: been selling protection on Turkey. They finally say, oh Jesus,

767
00:40:28,320 --> 00:40:30,600
Speaker 1: I'm really in trouble. I got to be a buyer now,

768
00:40:30,880 --> 00:40:34,279
Speaker 1: or how about this? They Texas says to themselves, I

769
00:40:34,320 --> 00:40:36,239
Speaker 1: can't Turkey is gonna go down, so I need to

770
00:40:36,280 --> 00:40:38,439
Speaker 1: get protection on another country. So that's gonna go down.

771
00:40:38,440 --> 00:40:41,640
Speaker 1: So they become buyers of Brazil. Okay, so they couldn't

772
00:40:41,640 --> 00:40:43,560
Speaker 1: protect themselves on Turkey, but they run out and they

773
00:40:43,560 --> 00:40:45,640
Speaker 1: buy protection on Brazil. So all of a sudden, there's

774
00:40:45,640 --> 00:40:48,480
Speaker 1: now a fire in Brazil because there was a fire

775
00:40:48,520 --> 00:40:51,560
Speaker 1: in Turkey. Okay, this is what happens. It's called contagion

776
00:40:51,640 --> 00:40:55,960
Speaker 1: and credit and it happens like scary fast. And have

777
00:40:56,080 --> 00:41:00,480
Speaker 1: I witnessed it, yes, many times, and it is it's

778
00:41:00,280 --> 00:41:02,480
Speaker 1: there's that pit in your stomach when you're just like,

779
00:41:02,560 --> 00:41:07,960
Speaker 1: there is no hedge until what was our hedge. Let's

780
00:41:08,000 --> 00:41:10,919
Speaker 1: let's let's let's talk about that. So, um, what i'd

781
00:41:10,920 --> 00:41:13,359
Speaker 1: what I'd start with, was it say that God, if

782
00:41:13,520 --> 00:41:15,239
Speaker 1: or when this all kind of comes to a head,

783
00:41:15,280 --> 00:41:18,719
Speaker 1: whether whether whatever some event happens or they decided to

784
00:41:18,719 --> 00:41:21,279
Speaker 1: make it happen, it's gonna be pretty painful for a

785
00:41:21,320 --> 00:41:23,560
Speaker 1: lot of people. Uh, As you said, like in two

786
00:41:23,600 --> 00:41:25,239
Speaker 1: thousand eight, they saved the world. I mean it would

787
00:41:25,239 --> 00:41:27,719
Speaker 1: have been It would have been really bad. But we

788
00:41:27,960 --> 00:41:30,479
Speaker 1: have a life raft. We have like an outlet right now,

789
00:41:30,560 --> 00:41:33,640
Speaker 1: which maybe one let's I want to throw this out there.

790
00:41:33,680 --> 00:41:38,920
Speaker 1: Maybe one it helps us as individuals where hey, I

791
00:41:39,080 --> 00:41:41,400
Speaker 1: can side step this, you can side step this. But

792
00:41:41,480 --> 00:41:43,759
Speaker 1: it's gonna be bad for most people, but maybe it

793
00:41:43,880 --> 00:41:46,919
Speaker 1: actually helps soften the blow for a lot of people

794
00:41:46,960 --> 00:41:49,759
Speaker 1: if enough people jump into the life raft. Uh, you

795
00:41:49,800 --> 00:41:52,879
Speaker 1: want to you want to talk about that, I'm gonna

796
00:41:52,920 --> 00:41:56,480
Speaker 1: have to. I think I know where you're going. What

797
00:41:56,480 --> 00:41:59,040
Speaker 1: I mean, what I mean What I mean by that is,

798
00:41:59,280 --> 00:42:01,160
Speaker 1: let's say that you and I are okay, we end

799
00:42:01,200 --> 00:42:03,160
Speaker 1: up with a bunch of money, and the whole world burns. Well,

800
00:42:03,200 --> 00:42:05,520
Speaker 1: that's gonna suck for the whole world. No, it's gonna

801
00:42:05,520 --> 00:42:07,959
Speaker 1: suck for us to Okay, come on, I mean, don't

802
00:42:07,960 --> 00:42:10,319
Speaker 1: forget Okay, what could happen in that case? Like you know,

803
00:42:10,440 --> 00:42:13,440
Speaker 1: the people turn around and they're like there's bands of

804
00:42:13,480 --> 00:42:16,440
Speaker 1: people that cannot feed themselves. They start, you know, and

805
00:42:16,480 --> 00:42:18,000
Speaker 1: I don't want to use that. I don't want that

806
00:42:18,040 --> 00:42:20,239
Speaker 1: to happen. No, And and we need we I mean,

807
00:42:20,400 --> 00:42:23,000
Speaker 1: wealth is goods and services. So if nobody's out there

808
00:42:23,000 --> 00:42:24,680
Speaker 1: producing goods and services. We can have all the money

809
00:42:24,719 --> 00:42:25,960
Speaker 1: in the world. Does it no good If you and

810
00:42:25,960 --> 00:42:27,720
Speaker 1: I are on a deserted island with a billion dollars

811
00:42:27,760 --> 00:42:29,759
Speaker 1: in a suitcase but nothing to spend it on, we're

812
00:42:29,800 --> 00:42:32,359
Speaker 1: not rich. If this transition takes a while and enough

813
00:42:32,400 --> 00:42:36,200
Speaker 1: people start exiting to this extra system, maybe that helps

814
00:42:36,239 --> 00:42:39,480
Speaker 1: soften the blow. If I mean half half the people

815
00:42:39,520 --> 00:42:41,440
Speaker 1: are able to kind of protect some of their well, well,

816
00:42:41,480 --> 00:42:44,840
Speaker 1: the whole world doesn't crash at one time. Yes, it's great. Okay,

817
00:42:44,840 --> 00:42:48,120
Speaker 1: so I see it. Now, there's gonna be in the

818
00:42:48,200 --> 00:42:51,760
Speaker 1: ideal situation. Okay, I'm gonna paint an ideal situation. Sometimes

819
00:42:51,760 --> 00:42:54,680
Speaker 1: I am an idealist. There will be a parallel system, okay,

820
00:42:54,920 --> 00:42:59,239
Speaker 1: fee it will be necessary to solve commerce. Okay, but

821
00:42:59,320 --> 00:43:02,759
Speaker 1: you're gonna have to keep your store of value in

822
00:43:03,160 --> 00:43:07,000
Speaker 1: other hard assets, one of which is bitcoin. Why because

823
00:43:07,040 --> 00:43:13,080
Speaker 1: it's transferable, portable, divisible, unsensible, UH, certified or verifiable, you

824
00:43:13,120 --> 00:43:15,440
Speaker 1: know all the things, um and it is the beautiful

825
00:43:15,480 --> 00:43:17,800
Speaker 1: It is the beautiful part of a store of value.

826
00:43:17,800 --> 00:43:22,239
Speaker 1: It's a technology. As Mr Breedlove or Ross Stevens from

827
00:43:22,280 --> 00:43:26,399
Speaker 1: ny dig eloquently penned UH money has always been a

828
00:43:26,440 --> 00:43:30,799
Speaker 1: technology for for storing the value of your work, or

829
00:43:30,840 --> 00:43:34,640
Speaker 1: your time, or your energy expended today to be consumed

830
00:43:34,640 --> 00:43:38,200
Speaker 1: in the future. Well, don't keep that energy in fiat. Okay,

831
00:43:38,239 --> 00:43:41,200
Speaker 1: that we've already mentioned is a melting ice cube. Can

832
00:43:41,200 --> 00:43:44,560
Speaker 1: that melting ice cube continue? Yes, it can do. I

833
00:43:44,640 --> 00:43:46,920
Speaker 1: hope it does. Yes, I do. Does it mean I

834
00:43:46,960 --> 00:43:49,320
Speaker 1: want to store my money in it? No it doesn't.

835
00:43:49,560 --> 00:43:52,480
Speaker 1: It's only so there will be a parallel system. And

836
00:43:52,480 --> 00:43:55,000
Speaker 1: what are we trying to do there? For help people

837
00:43:55,320 --> 00:44:02,560
Speaker 1: move their money out of a mathematically programmed uh piece

838
00:44:02,560 --> 00:44:07,360
Speaker 1: of money called fe it, mathematically programmed fe it to

839
00:44:07,600 --> 00:44:14,359
Speaker 1: debase into a technology called bitcoin. It is mathematically programmed

840
00:44:14,920 --> 00:44:18,680
Speaker 1: to be hard capped at one million. Does that mean

841
00:44:18,719 --> 00:44:22,480
Speaker 1: the number goes up? I think there's a good chance

842
00:44:22,520 --> 00:44:25,759
Speaker 1: that the number continues to go up. Therefore, I'm going

843
00:44:25,800 --> 00:44:29,680
Speaker 1: to protect myself. Hey, sorry to interrupt this video just

844
00:44:29,760 --> 00:44:32,200
Speaker 1: one more time. I'm not running Google ads, so it's

845
00:44:32,239 --> 00:44:34,560
Speaker 1: actually way less interruption than I normally would have on

846
00:44:34,600 --> 00:44:37,839
Speaker 1: a video. And that's because it's sponsored by block five UM.

847
00:44:37,880 --> 00:44:41,720
Speaker 1: They are opening up the world of bitcoin and financial products,

848
00:44:41,760 --> 00:44:45,319
Speaker 1: offering to pay you interest on your bitcoin. UM better

849
00:44:45,320 --> 00:44:47,000
Speaker 1: than known in a rental property that you have to

850
00:44:47,000 --> 00:44:48,799
Speaker 1: manage and control and have the risks. You can just

851
00:44:48,840 --> 00:44:51,600
Speaker 1: earn interest on it, or you can leverage against it. Now,

852
00:44:51,880 --> 00:44:55,080
Speaker 1: I plan to hold my bitcoin forever and literally never

853
00:44:55,400 --> 00:44:57,399
Speaker 1: sell my bitcoin. So how do you do that? Well,

854
00:44:57,640 --> 00:44:59,840
Speaker 1: if I need money, I don't want to sell that bitcoin.

855
00:44:59,880 --> 00:45:01,960
Speaker 1: I'm gonna pay tax on it, all right, I'm gonna

856
00:45:02,040 --> 00:45:04,280
Speaker 1: end up with less and I don't have the bitcoin anymore.

857
00:45:04,400 --> 00:45:06,480
Speaker 1: So a better way to do it is to borrow

858
00:45:06,600 --> 00:45:09,480
Speaker 1: against the bitcoin. So I've put all my money into bitcoin.

859
00:45:09,719 --> 00:45:11,359
Speaker 1: If I want to buy a car, or I want

860
00:45:11,360 --> 00:45:13,960
Speaker 1: to buy a house, I can borrow against it at

861
00:45:14,160 --> 00:45:17,080
Speaker 1: very very low competitive rates, get my house, get my car,

862
00:45:17,200 --> 00:45:20,000
Speaker 1: whatever that may be, and get to keep the bitcoin.

863
00:45:20,040 --> 00:45:22,520
Speaker 1: I've done a whole video on this. You can find it.

864
00:45:22,520 --> 00:45:24,480
Speaker 1: I'll link it down to the description below. How to

865
00:45:24,640 --> 00:45:27,000
Speaker 1: retire off a bitcoin without paying taxes and you can

866
00:45:27,040 --> 00:45:29,520
Speaker 1: do that with block fight services. I'll link to the

867
00:45:29,600 --> 00:45:31,200
Speaker 1: video down below. I'm also going to put a link

868
00:45:31,239 --> 00:45:32,960
Speaker 1: to block fight if you choose to click on that

869
00:45:33,000 --> 00:45:34,600
Speaker 1: link to check them out. You can earn up to

870
00:45:34,560 --> 00:45:37,200
Speaker 1: two fifty dollars in free bitcoin just for using that

871
00:45:37,239 --> 00:45:39,200
Speaker 1: link and that's it. Let's go ahead and get back

872
00:45:39,280 --> 00:45:42,120
Speaker 1: to the interview. Yeah, well you need you need two things, right.

873
00:45:42,120 --> 00:45:45,640
Speaker 1: You need scarcity, which is obviously one important aspect, but

874
00:45:45,680 --> 00:45:48,000
Speaker 1: then you need utility. So if you were and iron

875
00:45:48,200 --> 00:45:50,799
Speaker 1: on the back to that backdas Strang island, Um, and

876
00:45:50,840 --> 00:45:52,760
Speaker 1: we found like the only black rock on the island,

877
00:45:52,800 --> 00:45:54,359
Speaker 1: Well it's not really worth much money, but if there

878
00:45:54,400 --> 00:45:56,480
Speaker 1: was only one bottle of water left, yes, I think

879
00:45:56,719 --> 00:45:58,920
Speaker 1: a lot of money. Um, So it's it's and I

880
00:45:58,960 --> 00:46:00,919
Speaker 1: think I think bitcoin can and fill both of those.

881
00:46:01,200 --> 00:46:02,960
Speaker 1: But I think you had said earlier, and I think

882
00:46:03,000 --> 00:46:05,120
Speaker 1: this is a great point. Um, you'd said, really it's

883
00:46:05,160 --> 00:46:07,640
Speaker 1: like purchasing power. And so I think a lot of

884
00:46:07,640 --> 00:46:10,680
Speaker 1: people get caught up in um, you know, beat currency

885
00:46:10,760 --> 00:46:13,359
Speaker 1: and mediums of change and stores about and all those things.

886
00:46:13,480 --> 00:46:15,680
Speaker 1: But really we're just always trying to protect our purchasing power.

887
00:46:15,760 --> 00:46:17,480
Speaker 1: Or to your point, Um, the tech money is the

888
00:46:17,480 --> 00:46:21,360
Speaker 1: technology to preserve my power into the future. Right, And

889
00:46:21,400 --> 00:46:23,440
Speaker 1: so I decided to work on an extra couple of

890
00:46:23,440 --> 00:46:25,960
Speaker 1: hours today. The first eight hours covered my basic needs.

891
00:46:26,120 --> 00:46:28,680
Speaker 1: I worked for extra hours and I can now store

892
00:46:28,760 --> 00:46:31,400
Speaker 1: that energy I've exerted to go spend that later in

893
00:46:31,400 --> 00:46:33,640
Speaker 1: the future. And we want to store in something that's

894
00:46:33,960 --> 00:46:36,719
Speaker 1: not losing, that's not slipping, right, And so I'm gonna

895
00:46:36,800 --> 00:46:39,080
Speaker 1: end one fired as an engineer, you want to store

896
00:46:39,120 --> 00:46:44,040
Speaker 1: it in digital energy. What is bitcoin? Bitcoin is digital energy.

897
00:46:44,080 --> 00:46:47,920
Speaker 1: As Michael Saylor says, it's the first law of thermodynamics.

898
00:46:47,920 --> 00:46:50,479
Speaker 1: It's conservation of energy. So when I was twenty years

899
00:46:50,480 --> 00:46:52,839
Speaker 1: old and I had a summer job, and I'm out

900
00:46:52,840 --> 00:46:55,360
Speaker 1: in the hot sun, and I earned twenty bucks for

901
00:46:55,400 --> 00:46:57,919
Speaker 1: the whole day, okay, not an hour for the whole day.

902
00:46:57,960 --> 00:47:00,920
Speaker 1: I earned twenty bucks, okay, And I you know, I

903
00:47:00,960 --> 00:47:04,160
Speaker 1: was sweeping tennis courts. That was on a clay tennis court.

904
00:47:04,560 --> 00:47:06,920
Speaker 1: I was sweeping tennis courts and I made twenty bucks.

905
00:47:06,960 --> 00:47:09,120
Speaker 1: And do you think when I want to use that

906
00:47:09,160 --> 00:47:11,640
Speaker 1: twenty bucks in another ten years, do you think it's

907
00:47:11,680 --> 00:47:14,279
Speaker 1: worth anywhere close to the twenty dollars of very word

908
00:47:14,360 --> 00:47:16,680
Speaker 1: I put it. Come on, So I want to store

909
00:47:17,000 --> 00:47:24,080
Speaker 1: that time, power or work both are interchangeable energy in

910
00:47:24,320 --> 00:47:27,279
Speaker 1: something that will maintain its value. My belief is that

911
00:47:27,440 --> 00:47:31,160
Speaker 1: value is maintained beautifully in a system proof of work

912
00:47:31,200 --> 00:47:36,319
Speaker 1: system called bitcoin. Yeah, yeah, it's it's it's it's kind

913
00:47:36,320 --> 00:47:38,319
Speaker 1: of a simple subject, but most people have never really

914
00:47:38,320 --> 00:47:41,080
Speaker 1: thought about that way, right, where everything is everything boils

915
00:47:41,120 --> 00:47:43,399
Speaker 1: down to energy. And Michael Saylor didn't put it put

916
00:47:43,400 --> 00:47:45,520
Speaker 1: it really good in that in that perspective where and

917
00:47:45,840 --> 00:47:47,560
Speaker 1: you just did in your analogy too, right, where like

918
00:47:47,600 --> 00:47:50,560
Speaker 1: you worked on sweating your sweating your butt off, sweeping

919
00:47:50,600 --> 00:47:54,239
Speaker 1: those tennis courts, and you're exerting energy and then we

920
00:47:54,280 --> 00:47:57,480
Speaker 1: want to store that energy for for future consumption, which

921
00:47:57,480 --> 00:48:01,200
Speaker 1: is a perfect way to correctly lay that out. Yeah, um,

922
00:48:01,239 --> 00:48:03,960
Speaker 1: so I guess you know, so we have this perfect

923
00:48:03,960 --> 00:48:06,960
Speaker 1: store of value and we can go into that. But

924
00:48:08,560 --> 00:48:10,480
Speaker 1: when you're seeing all this trouble in the rise and

925
00:48:10,520 --> 00:48:13,440
Speaker 1: with this buns and whatnot, and and and a system,

926
00:48:13,480 --> 00:48:16,680
Speaker 1: as you said, even the currency is programmed to lose value.

927
00:48:16,680 --> 00:48:19,400
Speaker 1: I mean, the f's targeting two percent. You know it's higher,

928
00:48:19,640 --> 00:48:21,560
Speaker 1: but there target percent that so that means you're losing

929
00:48:21,600 --> 00:48:23,840
Speaker 1: two percent of your value. Okay, go with the growth

930
00:48:23,840 --> 00:48:26,680
Speaker 1: of the money supply is a much better. Uh, you know,

931
00:48:26,719 --> 00:48:29,120
Speaker 1: come on, if you have if there's ten dollars outstanding

932
00:48:29,160 --> 00:48:31,040
Speaker 1: and all of a sudden, there's twenty of these dollars

933
00:48:31,080 --> 00:48:34,360
Speaker 1: outstanding and the economy hasn't really changed that much. Uh,

934
00:48:34,400 --> 00:48:38,440
Speaker 1: you know that that twenty dollars is arguably may or

935
00:48:38,680 --> 00:48:41,320
Speaker 1: may have been worth twelve old dollars, but it's something

936
00:48:41,440 --> 00:48:44,799
Speaker 1: certainly not worth twenty old dollars. Guys, come on your house.

937
00:48:44,880 --> 00:48:47,040
Speaker 1: I've used this before and seems to get your house

938
00:48:47,120 --> 00:48:50,120
Speaker 1: is not going up in value. Okay, ladies and gentlemen,

939
00:48:50,239 --> 00:48:53,160
Speaker 1: Your unit, your unit of account, or your purchasing power

940
00:48:53,320 --> 00:48:56,480
Speaker 1: in fiat dollars is going down. Okay, that's all there is.

941
00:48:56,520 --> 00:49:00,759
Speaker 1: It's the same thing, hard assets. Um yeah, yeah, yeah,

942
00:49:00,760 --> 00:49:03,720
Speaker 1: So it just takes more dollars to buy those things today.

943
00:49:03,760 --> 00:49:05,319
Speaker 1: And that's why when you really kind of keep going

944
00:49:05,320 --> 00:49:07,840
Speaker 1: back to that purchasing power, you can see things differently.

945
00:49:07,920 --> 00:49:09,279
Speaker 1: I don't know the numbers up top of my head,

946
00:49:09,280 --> 00:49:11,480
Speaker 1: but let's say, you know, a median home price in

947
00:49:11,480 --> 00:49:15,439
Speaker 1: the US and nineteen fifties was fifty Today it's two dollars.

948
00:49:15,680 --> 00:49:17,560
Speaker 1: But if you look at that price at home compared

949
00:49:17,560 --> 00:49:19,799
Speaker 1: to other goods, how many barrels of oil, how many

950
00:49:19,800 --> 00:49:22,120
Speaker 1: ounces of bulls? How many bush of the weeks? Right?

951
00:49:22,120 --> 00:49:23,960
Speaker 1: And then you look at the average mopis okay, how

952
00:49:23,960 --> 00:49:26,200
Speaker 1: many ounces of goal today? I means barrels of oil.

953
00:49:26,360 --> 00:49:28,600
Speaker 1: You would see that the house hasn't really given you

954
00:49:28,640 --> 00:49:30,799
Speaker 1: any more purchasing power, even though it's worth a lot

955
00:49:30,800 --> 00:49:33,480
Speaker 1: more at alls. So it's sort of a pretty cool way, yes, exactly.

956
00:49:33,520 --> 00:49:38,000
Speaker 1: And and and that's called relative value, uh everything. You know,

957
00:49:38,080 --> 00:49:43,120
Speaker 1: when when Indians North American Indians started using wampum as currency,

958
00:49:43,560 --> 00:49:47,400
Speaker 1: you know there's a reason that they valued that. It

959
00:49:47,440 --> 00:49:50,360
Speaker 1: was because, uh, you know, there's that joke if you

960
00:49:50,400 --> 00:49:52,560
Speaker 1: hear the joke where the guy is, uh, he's he's

961
00:49:52,560 --> 00:49:55,120
Speaker 1: got a cow for sale for six hundred thousand bucks,

962
00:49:55,120 --> 00:49:57,560
Speaker 1: and he's walking through town with there's a first sale

963
00:49:57,600 --> 00:50:00,160
Speaker 1: sign on the cow for six hundred thousand bucks. All

964
00:50:00,200 --> 00:50:02,959
Speaker 1: the town's okay. So the town's folker yelling at him, dude,

965
00:50:02,960 --> 00:50:05,000
Speaker 1: you'll never get six hundred thousand dollars for that cow.

966
00:50:05,040 --> 00:50:08,080
Speaker 1: You're out of your mind. And about five days later,

967
00:50:08,120 --> 00:50:11,120
Speaker 1: he's walking through town and he's got three chickens, and

968
00:50:11,200 --> 00:50:13,440
Speaker 1: someone said, I told you would never get six hundred

969
00:50:13,440 --> 00:50:15,319
Speaker 1: thousand dollars for that cow, and he goes, darn right,

970
00:50:15,360 --> 00:50:17,360
Speaker 1: I did. I got three of these two hundred thousand

971
00:50:17,400 --> 00:50:21,120
Speaker 1: dollar chickens. Okay, it's only a unit of account. Okay,

972
00:50:21,360 --> 00:50:25,640
Speaker 1: if really you have to understand everything's relative relative relative,

973
00:50:25,760 --> 00:50:28,400
Speaker 1: So yes, comparing your house to oil is pretty smart.

974
00:50:29,280 --> 00:50:33,120
Speaker 1: It's even better to compare it to bitcoin, okay. And uh,

975
00:50:33,160 --> 00:50:35,319
Speaker 1: you know bitcoin has only been around for just over

976
00:50:35,400 --> 00:50:37,600
Speaker 1: ten years, so you can't really do that. But it's

977
00:50:37,600 --> 00:50:41,239
Speaker 1: the same principle, um, And this is why I have

978
00:50:41,480 --> 00:50:44,840
Speaker 1: I'm sold on this technology as being the most beautiful

979
00:50:44,840 --> 00:50:47,719
Speaker 1: store of value that I've seen thirty two years. To

980
00:50:47,800 --> 00:50:50,600
Speaker 1: expand on that, you know that that's a great perspective.

981
00:50:50,800 --> 00:50:53,080
Speaker 1: Everything is a trade, right, so it's always a trade off.

982
00:50:53,080 --> 00:50:55,879
Speaker 1: I'm trading one thing for another. And uh, I believe

983
00:50:55,920 --> 00:50:59,120
Speaker 1: it was Nieces that said that in economics there's no

984
00:50:59,200 --> 00:51:02,800
Speaker 1: such thing as a constant, and so in economics everything

985
00:51:02,880 --> 00:51:05,000
Speaker 1: is always changing, right that the supply of houses are

986
00:51:05,000 --> 00:51:06,680
Speaker 1: going to be down to supply of oil, unounts of

987
00:51:06,760 --> 00:51:09,480
Speaker 1: gold would have down, the currency, everything, everything's moving, and

988
00:51:09,560 --> 00:51:12,160
Speaker 1: so mesas said, in economics there's no susting as a constant.

989
00:51:13,719 --> 00:51:16,799
Speaker 1: Now now, now is the first time maybe we've ever

990
00:51:16,920 --> 00:51:19,680
Speaker 1: had a concept that can be applied to be that

991
00:51:19,800 --> 00:51:22,560
Speaker 1: denominator in that unit of so I I think that's

992
00:51:22,560 --> 00:51:26,200
Speaker 1: a wonderful so I haven't studied uh mesas and I

993
00:51:27,120 --> 00:51:28,719
Speaker 1: you know, I know what I know, and I know

994
00:51:28,840 --> 00:51:31,200
Speaker 1: what I don't know. But I will tell you that

995
00:51:31,480 --> 00:51:37,279
Speaker 1: it's important, always extremely important, yes, to understand your unit

996
00:51:37,320 --> 00:51:40,000
Speaker 1: of account and supply of that unit of account. Now, gold,

997
00:51:40,760 --> 00:51:44,600
Speaker 1: it's really interesting because gold grows at about two percent

998
00:51:44,680 --> 00:51:49,160
Speaker 1: a year, which is not a very large amount. But

999
00:51:49,280 --> 00:51:51,360
Speaker 1: the thing that always struck me as an engineer, did

1000
00:51:51,440 --> 00:51:54,960
Speaker 1: you know that there's twenty million pounds of gold in seawater?

1001
00:51:56,080 --> 00:52:00,680
Speaker 1: And the way that we are technologically advancing our uh

1002
00:52:01,600 --> 00:52:04,600
Speaker 1: you know, our abilities engineering and everything like that, it

1003
00:52:04,840 --> 00:52:09,120
Speaker 1: wouldn't surprise me that we determine an ecological way of

1004
00:52:09,239 --> 00:52:12,359
Speaker 1: removing gold from seawater at some point in time. Right now,

1005
00:52:12,400 --> 00:52:14,680
Speaker 1: there's lots of arsenic and everything required to do it.

1006
00:52:14,960 --> 00:52:18,239
Speaker 1: It's dual and there's just minute concentrations. But I'm not

1007
00:52:18,320 --> 00:52:20,760
Speaker 1: putting it past anyone. And I'm not dissing gold. Okay,

1008
00:52:20,960 --> 00:52:23,880
Speaker 1: gold is way better than fee it. Don't get me wrong, Okay,

1009
00:52:23,960 --> 00:52:26,080
Speaker 1: gold is way better than fee it. I just happened

1010
00:52:26,120 --> 00:52:29,640
Speaker 1: to think that bitcoin is better than gold. The problem

1011
00:52:29,719 --> 00:52:31,840
Speaker 1: that I have with gold, And again I told you

1012
00:52:32,160 --> 00:52:34,200
Speaker 1: I've been a bolt blug and now I'm really realized

1013
00:52:34,200 --> 00:52:36,080
Speaker 1: as a sound money advocate. But the problem that I

1014
00:52:36,160 --> 00:52:38,160
Speaker 1: have a gold, Um, yeah, I mean, okay, we can

1015
00:52:38,200 --> 00:52:39,880
Speaker 1: get it out of seawater, and maybe we're gonna mind

1016
00:52:39,920 --> 00:52:41,919
Speaker 1: it enough. I'm gonna asteroid two or whatever. Of course,

1017
00:52:42,000 --> 00:52:44,080
Speaker 1: the cost to do that would go up, and then

1018
00:52:44,080 --> 00:52:45,640
Speaker 1: it would change the price. But the problem that we

1019
00:52:45,680 --> 00:52:48,200
Speaker 1: have a gold is that, because of its size and

1020
00:52:48,239 --> 00:52:52,960
Speaker 1: its weight, it required centralization. And the centralization, as I say,

1021
00:52:53,000 --> 00:52:55,640
Speaker 1: always leads to manipulation. And that's exactly what's happening. So

1022
00:52:55,760 --> 00:52:57,919
Speaker 1: now there's no free market to the price of goals.

1023
00:52:57,960 --> 00:52:59,959
Speaker 1: So the price of gold set every morning in London

1024
00:53:00,000 --> 00:53:01,800
Speaker 1: and by a couple of guys in a room, And like,

1025
00:53:02,200 --> 00:53:04,960
Speaker 1: how is that going to work out? Obviously we can

1026
00:53:05,000 --> 00:53:07,000
Speaker 1: tell just from looking at the futures market and whatnot

1027
00:53:07,080 --> 00:53:09,840
Speaker 1: that there is no real price discovery on top of

1028
00:53:09,960 --> 00:53:13,439
Speaker 1: the whatever maybe five hundred paper ounces of everyone physical ounds.

1029
00:53:13,520 --> 00:53:15,720
Speaker 1: But then we have the price being you know, manually

1030
00:53:15,760 --> 00:53:19,120
Speaker 1: set and so Um. While at to your point of

1031
00:53:19,120 --> 00:53:22,480
Speaker 1: the inflation rate is decent, right, two one a half

1032
00:53:22,480 --> 00:53:25,400
Speaker 1: percent whatever it may be. Um, just the fact that

1033
00:53:25,480 --> 00:53:29,920
Speaker 1: it's manipulated, it's controlled. Uh, it's been captured or and

1034
00:53:30,040 --> 00:53:32,960
Speaker 1: the bigger one is it can be counterfeited, right or

1035
00:53:33,040 --> 00:53:35,080
Speaker 1: appears to be. I mean, you know how many times

1036
00:53:35,120 --> 00:53:37,520
Speaker 1: have you seen where they've actually what have they painted

1037
00:53:37,600 --> 00:53:40,520
Speaker 1: up in gold paint, titanium bars or something. Look, I'm

1038
00:53:40,520 --> 00:53:43,320
Speaker 1: not saying this is happening. But when the gold standard

1039
00:53:43,400 --> 00:53:45,640
Speaker 1: we saw, we saw the gold standard nine seventy one.

1040
00:53:45,680 --> 00:53:48,920
Speaker 1: Prior to that, the one European country, if I'm not mistaken,

1041
00:53:49,360 --> 00:53:51,320
Speaker 1: France might have sent it ships over to try and

1042
00:53:51,400 --> 00:53:53,520
Speaker 1: get the gold that it was old that owed out

1043
00:53:53,520 --> 00:53:56,080
Speaker 1: to Fort Knox And Okay, you're not gonna get it. Uh.

1044
00:53:56,160 --> 00:53:58,319
Speaker 1: And and therefore you know, he who has the keys

1045
00:53:58,360 --> 00:54:03,400
Speaker 1: has control. Okay you not to get it. So yes, centralization, no,

1046
00:54:03,760 --> 00:54:06,400
Speaker 1: no question if for the little guy. Uh even if

1047
00:54:06,440 --> 00:54:08,480
Speaker 1: you store it in your house, uh you know in

1048
00:54:08,560 --> 00:54:10,480
Speaker 1: a safe or whatever, We'll try and shave a few

1049
00:54:10,719 --> 00:54:12,960
Speaker 1: uh it slivers off of that to buy your your

1050
00:54:13,000 --> 00:54:15,160
Speaker 1: bottle of water that you need, right, I mean, and

1051
00:54:15,239 --> 00:54:17,799
Speaker 1: I'm not saying, Look, I don't want this to happen, Mark,

1052
00:54:17,920 --> 00:54:20,759
Speaker 1: This is there's a way for it to coexist. Uh.

1053
00:54:21,000 --> 00:54:25,200
Speaker 1: It is just about understanding one which is a currency

1054
00:54:25,440 --> 00:54:28,320
Speaker 1: for bart to to be assumed instead of barter. So no,

1055
00:54:28,560 --> 00:54:31,040
Speaker 1: no three cows for excuse me, no one cow for

1056
00:54:31,120 --> 00:54:34,440
Speaker 1: three chickens. Okay. It trades for a currency, but that

1057
00:54:34,560 --> 00:54:39,680
Speaker 1: currency loses its value pretty reliably over time, and um,

1058
00:54:40,360 --> 00:54:41,719
Speaker 1: you just have to live with that. So you have

1059
00:54:41,840 --> 00:54:44,600
Speaker 1: to put your value of your work time and energy

1060
00:54:44,760 --> 00:54:48,719
Speaker 1: into something that will store that value, right and and

1061
00:54:48,840 --> 00:54:50,799
Speaker 1: again you have a lot of choices. Obviously, some people

1062
00:54:50,840 --> 00:54:53,600
Speaker 1: are buying Amazon stock to store to store their value.

1063
00:54:53,840 --> 00:54:56,040
Speaker 1: Some people are buying real estate to store their value.

1064
00:54:56,080 --> 00:55:00,080
Speaker 1: Some people are nfortunately unfortunately Amazon, Okay, might be what

1065
00:55:00,239 --> 00:55:03,880
Speaker 1: is it? Is it a apples? A two chillion dollar company? Amazon?

1066
00:55:04,160 --> 00:55:06,480
Speaker 1: Probably is? I have to check, but you know it's

1067
00:55:06,480 --> 00:55:09,439
Speaker 1: a top ten global company, but it's two trillion bucks.

1068
00:55:09,480 --> 00:55:12,759
Speaker 1: You cannot run the world off of uh off of

1069
00:55:12,800 --> 00:55:15,440
Speaker 1: an Amazon stock? Okay? Like I know, you can purchase

1070
00:55:15,480 --> 00:55:18,440
Speaker 1: stuff from Amazon, but that can never become a global

1071
00:55:18,520 --> 00:55:22,680
Speaker 1: reserve asset. Bitcoin can become a global reserve asset. Why

1072
00:55:23,200 --> 00:55:25,520
Speaker 1: think about this? If it's truly digital energy, do you

1073
00:55:25,600 --> 00:55:28,279
Speaker 1: think Russia actually wants and they've proven they don't want

1074
00:55:28,520 --> 00:55:32,040
Speaker 1: to have US dollars as the reserve. It's placed in

1075
00:55:32,160 --> 00:55:34,080
Speaker 1: US dollars, but they don't want it. They're trying to

1076
00:55:34,160 --> 00:55:37,400
Speaker 1: get euros. They're also the Chinese are also doing the

1077
00:55:37,480 --> 00:55:40,720
Speaker 1: same thing. So there's this fiat currency wars. Bitcoin solves

1078
00:55:40,719 --> 00:55:44,480
Speaker 1: all this. Bitcoin I believe will become a unit of

1079
00:55:44,520 --> 00:55:48,160
Speaker 1: account for energy production or energy. I think there's a

1080
00:55:48,280 --> 00:55:51,839
Speaker 1: day that bitcoin and excuse me, that energy, natural gas,

1081
00:55:51,920 --> 00:55:54,759
Speaker 1: and oil will be priced in bitcoin. It's only natural, okay,

1082
00:55:54,760 --> 00:55:58,520
Speaker 1: because bitcoin is digital energy. When that happens, the US

1083
00:55:58,640 --> 00:56:02,160
Speaker 1: could lose it's and I'm just gonna even go as

1084
00:56:02,200 --> 00:56:04,880
Speaker 1: far as they will have lost their de facto world

1085
00:56:05,000 --> 00:56:10,799
Speaker 1: reserve uh currency status. Bitcoin though, won't be the world

1086
00:56:10,880 --> 00:56:14,759
Speaker 1: reserve currency, it will be the world reserve asset. And

1087
00:56:14,840 --> 00:56:17,399
Speaker 1: there's a big difference because you know, you can argue, okay,

1088
00:56:17,400 --> 00:56:20,040
Speaker 1: the Lightning Accord's going to do all this and that perhaps,

1089
00:56:20,480 --> 00:56:22,719
Speaker 1: But if we just go back to first principles, the

1090
00:56:22,880 --> 00:56:26,160
Speaker 1: store of value concept is what's important to the treasury

1091
00:56:26,320 --> 00:56:29,800
Speaker 1: at the Kremlin. You know, they don't care that you

1092
00:56:30,280 --> 00:56:32,359
Speaker 1: your your you can't you know, they don't care if

1093
00:56:32,400 --> 00:56:33,920
Speaker 1: you can buy your loves of bread. And what they

1094
00:56:34,000 --> 00:56:36,520
Speaker 1: care is they're storing the value of their They have

1095
00:56:36,680 --> 00:56:39,879
Speaker 1: sold their valuable natural resources, and they want in turn

1096
00:56:40,160 --> 00:56:43,000
Speaker 1: a currency or excuse me, they want in turn a

1097
00:56:43,200 --> 00:56:47,200
Speaker 1: payment in something that will store its value as well. Yeah,

1098
00:56:47,520 --> 00:56:49,400
Speaker 1: and if we, if we, if we think about that,

1099
00:56:49,600 --> 00:56:52,920
Speaker 1: I mean, there's there's two trade offs there. First off, um,

1100
00:56:53,640 --> 00:56:56,239
Speaker 1: money is power, and so you know, for them to

1101
00:56:56,680 --> 00:56:59,080
Speaker 1: any government or central bank to relinquish that power to

1102
00:56:59,160 --> 00:57:02,160
Speaker 1: great money, it's pretty tough to imagine them ever doing that. However,

1103
00:57:02,920 --> 00:57:06,399
Speaker 1: who would who would who? The Russians though, they would

1104
00:57:06,480 --> 00:57:10,239
Speaker 1: take it as payment because it's better than U. S.

1105
00:57:10,320 --> 00:57:14,120
Speaker 1: Dollars they don't control the US trading partner of a

1106
00:57:14,160 --> 00:57:16,240
Speaker 1: trading partner said hey, well we'll buy this. We want

1107
00:57:16,280 --> 00:57:18,760
Speaker 1: to pay you on bitcoin. They might, I mean they

1108
00:57:18,880 --> 00:57:21,040
Speaker 1: take it. I think they might call like chip it in,

1109
00:57:21,240 --> 00:57:24,240
Speaker 1: but like, come on, I'm like, and then they'd say, hey,

1110
00:57:24,320 --> 00:57:27,200
Speaker 1: by the way, these U S Dollar valuing uh north

1111
00:57:27,440 --> 00:57:30,040
Speaker 1: north north Sea Brent right, Like, why is north Sea

1112
00:57:30,080 --> 00:57:33,360
Speaker 1: Brent priced in US dollars? Well, I don't know. It's

1113
00:57:33,360 --> 00:57:37,160
Speaker 1: because the U. S. Dollar was declared the reserve you know,

1114
00:57:37,360 --> 00:57:41,040
Speaker 1: reserve currency status. Um, it's also the biggest economy, so

1115
00:57:41,160 --> 00:57:44,760
Speaker 1: there's not an argument. But then here comes China. But look,

1116
00:57:45,160 --> 00:57:47,680
Speaker 1: let's get back to the first principles of thermodynamics and

1117
00:57:48,040 --> 00:57:52,000
Speaker 1: store a value using energy. And that's why. Yeah, I

1118
00:57:52,120 --> 00:57:55,320
Speaker 1: also could see how it would It could create a

1119
00:57:55,360 --> 00:57:57,360
Speaker 1: lot of peace in the world because now we have

1120
00:57:57,760 --> 00:58:01,720
Speaker 1: you know, bitcoin is uh is is you know, independent,

1121
00:58:01,880 --> 00:58:05,560
Speaker 1: it doesn't matter who owns its non political, so it's

1122
00:58:05,640 --> 00:58:09,280
Speaker 1: fair right across every ecosystem. And so maybe even go okay,

1123
00:58:09,360 --> 00:58:12,120
Speaker 1: keep going, I'm sorry, So maybe even it leads to

1124
00:58:12,280 --> 00:58:14,800
Speaker 1: this much more open and peaceful world in a sense

1125
00:58:14,840 --> 00:58:17,200
Speaker 1: where you're not having currency wars and people trying to

1126
00:58:17,200 --> 00:58:19,760
Speaker 1: need value currencies against each other, and then and then

1127
00:58:19,880 --> 00:58:21,760
Speaker 1: risk of bonds and all these things, and so maybe

1128
00:58:21,840 --> 00:58:24,400
Speaker 1: it leads to something much better. I I happen to

1129
00:58:24,440 --> 00:58:26,880
Speaker 1: believe that. So beggar thy Neighbor is a theory they

1130
00:58:27,200 --> 00:58:30,760
Speaker 1: you know, I need to increase my trade with the country. Uh.

1131
00:58:31,080 --> 00:58:33,840
Speaker 1: You know, we're both competing. We're in Europe, Central Europe,

1132
00:58:33,840 --> 00:58:35,960
Speaker 1: and we both sell the same product. And a third

1133
00:58:36,040 --> 00:58:39,480
Speaker 1: party country, Uh it could buy from either of us,

1134
00:58:39,520 --> 00:58:41,200
Speaker 1: but it will buy from us if we're cheaper, So

1135
00:58:41,320 --> 00:58:43,520
Speaker 1: we debase our currency so that we can export to

1136
00:58:43,600 --> 00:58:46,800
Speaker 1: that other country. Okay, Uh yeah, beggar thy Neighbor so

1137
00:58:46,960 --> 00:58:50,120
Speaker 1: what does bitcoin do. Let's see just look, so every

1138
00:58:50,240 --> 00:58:56,000
Speaker 1: single every progress in human history has basically been uh

1139
00:58:56,960 --> 00:59:01,240
Speaker 1: calm or side by side with an increase in energy

1140
00:59:01,320 --> 00:59:07,760
Speaker 1: efficiency or energy uh the power to to create energy um,

1141
00:59:08,200 --> 00:59:13,040
Speaker 1: and I believe bitcoin is that same thing in monetary

1142
00:59:13,400 --> 00:59:19,680
Speaker 1: uh form. The key thing then is stranded energy resources

1143
00:59:19,800 --> 00:59:23,200
Speaker 1: in places in the world that otherwise wouldn't have civilization

1144
00:59:23,280 --> 00:59:26,960
Speaker 1: around it, can all of a sudden be an attraction

1145
00:59:27,360 --> 00:59:31,560
Speaker 1: for a civilization such as you know you're right now,

1146
00:59:31,840 --> 00:59:35,800
Speaker 1: Typically big cities were built around ports of call for shipping. Well,

1147
00:59:36,360 --> 00:59:39,200
Speaker 1: there could be times when cities of the future are

1148
00:59:39,240 --> 00:59:42,760
Speaker 1: built around I don't knows, well, yeah, correct, like this

1149
00:59:42,920 --> 00:59:46,680
Speaker 1: waterfall that just keeps flowing and you attach a turbine

1150
00:59:46,720 --> 00:59:49,440
Speaker 1: to it. Now, I know there's environmental considerations of building

1151
00:59:49,440 --> 00:59:53,320
Speaker 1: a dam and everything, but imagine these stranded energy resources

1152
00:59:53,440 --> 00:59:59,520
Speaker 1: that can bring uh different different populations to develop these

1153
01:00:00,080 --> 01:00:03,560
Speaker 1: energy Uh that's so far being you know, that's so

1154
01:00:03,680 --> 01:00:06,360
Speaker 1: far being unutilized. It's just out there and it's just

1155
01:00:06,560 --> 01:00:09,280
Speaker 1: part of the universe or part of the earth ecosystem

1156
01:00:09,360 --> 01:00:12,080
Speaker 1: that's not being utiful, you know, utilized, and it's too

1157
01:00:12,120 --> 01:00:14,360
Speaker 1: far away from the ports of call because you cannot

1158
01:00:14,400 --> 01:00:20,160
Speaker 1: efficiently transfer or transmit electricity more than about five miles, right,

1159
01:00:20,760 --> 01:00:23,600
Speaker 1: They lose too much over those high high voltage wires.

1160
01:00:23,720 --> 01:00:26,600
Speaker 1: So you know, there's just so much interesting stuff. They

1161
01:00:26,640 --> 01:00:31,120
Speaker 1: could improve the economies of the energy grids and everything

1162
01:00:31,280 --> 01:00:34,040
Speaker 1: in every civilization. So yes, I'll agree with you. It

1163
01:00:34,120 --> 01:00:36,880
Speaker 1: could really really really change the world. You'll get a

1164
01:00:36,960 --> 01:00:39,640
Speaker 1: lot of these environmentalists it will say, oh, that's just bunk,

1165
01:00:39,960 --> 01:00:43,840
Speaker 1: and I'll just say, look, bitcoin doesn't actually waste energy.

1166
01:00:44,280 --> 01:00:49,480
Speaker 1: It consumes energy waste even in hydro grids or even

1167
01:00:49,560 --> 01:00:53,320
Speaker 1: in grids rather electricity grids that you think, oh, you know,

1168
01:00:53,480 --> 01:00:58,080
Speaker 1: it's using a source of uh fuel. Those grids are

1169
01:00:59,000 --> 01:01:04,280
Speaker 1: are built two operate at peak capacity, and these turbines

1170
01:01:04,320 --> 01:01:08,000
Speaker 1: are turning even if the people aren't using the electricity,

1171
01:01:08,640 --> 01:01:11,400
Speaker 1: so it's stranded. That that is a stranded source of

1172
01:01:11,520 --> 01:01:14,760
Speaker 1: energy that can be used for bitcoin mining, creating a

1173
01:01:15,760 --> 01:01:18,680
Speaker 1: revenue stream that otherwise would not be there. So so

1174
01:01:18,840 --> 01:01:21,360
Speaker 1: many good things. I agree, it's hard to give people's

1175
01:01:21,520 --> 01:01:23,720
Speaker 1: minds around it, but that's where valid is power. This.

1176
01:01:24,240 --> 01:01:26,640
Speaker 1: You know, I talked about the flare gas opportunities with

1177
01:01:26,760 --> 01:01:30,960
Speaker 1: validous power, and so excited about that. Uh, and we did.

1178
01:01:31,040 --> 01:01:34,320
Speaker 1: Just today, our company announced a major deal with a

1179
01:01:34,440 --> 01:01:39,040
Speaker 1: Canadian bitcoin mining firm called hot eight that um that

1180
01:01:40,120 --> 01:01:42,960
Speaker 1: they are taking a hundred megawatts and a lot of that.

1181
01:01:43,200 --> 01:01:45,200
Speaker 1: I'm not gonna give you an exact percentage, and I

1182
01:01:45,240 --> 01:01:48,320
Speaker 1: don't want people to hold us to that exact percentage,

1183
01:01:48,360 --> 01:01:51,160
Speaker 1: but a substantial amount of that will be flare gas

1184
01:01:51,760 --> 01:01:56,320
Speaker 1: wasted energy. Okay, it's just otherwise being vented into the atmosphere,

1185
01:01:56,360 --> 01:02:00,080
Speaker 1: either vented and destroying the ozone or burned and createing

1186
01:02:00,120 --> 01:02:03,760
Speaker 1: acid rain and carbon dioxide and and yes, very environmentally

1187
01:02:03,800 --> 01:02:07,200
Speaker 1: harmful things. We can cleanse it, we can mind bitcoin,

1188
01:02:08,080 --> 01:02:10,920
Speaker 1: we can use that stranded energy resource, and we can

1189
01:02:11,040 --> 01:02:14,840
Speaker 1: create wealth. Yeah. Yeah, it's amazing. And I love that.

1190
01:02:14,920 --> 01:02:16,600
Speaker 1: I told you I was getting involved in that space

1191
01:02:16,680 --> 01:02:18,280
Speaker 1: so about a year year and a half ago as well.

1192
01:02:18,440 --> 01:02:21,440
Speaker 1: And what I really loved about that is really just

1193
01:02:21,680 --> 01:02:25,080
Speaker 1: changing this whole narrative because, um, so many words I

1194
01:02:25,160 --> 01:02:27,040
Speaker 1: think are so often misused, and a lot of people

1195
01:02:27,120 --> 01:02:29,520
Speaker 1: now look at capitalism as a bad word, and so

1196
01:02:29,600 --> 01:02:31,760
Speaker 1: I've I've even tried to abandon even using that word,

1197
01:02:31,920 --> 01:02:34,000
Speaker 1: and they look at capitalis a bad word and willing

1198
01:02:34,000 --> 01:02:35,760
Speaker 1: to do anything to make a book in this and that.

1199
01:02:36,160 --> 01:02:39,840
Speaker 1: But the reality is is that UM, entrepreneurs are capitalists,

1200
01:02:40,000 --> 01:02:42,480
Speaker 1: are looking to turn trash into treasure. Right, They're not

1201
01:02:42,560 --> 01:02:46,480
Speaker 1: looking to waste resources, They're looking to maximize resources. And so, UM,

1202
01:02:46,560 --> 01:02:49,960
Speaker 1: to your point, I mean, you're finding an asset that's

1203
01:02:50,040 --> 01:02:53,200
Speaker 1: completely not even being used. And in the point you

1204
01:02:53,280 --> 01:02:55,720
Speaker 1: were making, not that it's not just being used, it's

1205
01:02:55,720 --> 01:02:59,040
Speaker 1: actually harmful to leave it alone. And you're going and

1206
01:02:59,200 --> 01:03:02,600
Speaker 1: capturing that and turning that trash into treasure at the

1207
01:03:02,680 --> 01:03:06,360
Speaker 1: same time cleaning up the environment as well. And I think, um,

1208
01:03:06,760 --> 01:03:09,200
Speaker 1: you know, unfortunately the media education whatever you want to

1209
01:03:09,240 --> 01:03:11,760
Speaker 1: call it, has really put that bad, bad kind of

1210
01:03:11,840 --> 01:03:15,200
Speaker 1: image in people's head. But but capitalists and entrepreneur type

1211
01:03:15,240 --> 01:03:18,920
Speaker 1: endeavors that you're working on our forces for good. I

1212
01:03:19,000 --> 01:03:22,400
Speaker 1: think so as well. Um. Was it Margaret Thatcher that said, um,

1213
01:03:24,960 --> 01:03:30,960
Speaker 1: capitalism is the worst form of Uh, capitalism is the

1214
01:03:31,000 --> 01:03:35,080
Speaker 1: worst form of governance except for all the other forms, right,

1215
01:03:35,320 --> 01:03:39,080
Speaker 1: And she also said communism only works until you run

1216
01:03:39,120 --> 01:03:42,960
Speaker 1: out of other people's money. Okay. Um, So there's there's

1217
01:03:43,240 --> 01:03:47,400
Speaker 1: definite arguments. Uh. You know, there's people that that lean

1218
01:03:47,480 --> 01:03:50,120
Speaker 1: to the left, people that lean far left people that

1219
01:03:50,240 --> 01:03:52,680
Speaker 1: lean far right. I'll only say this, I'm a free

1220
01:03:52,760 --> 01:03:56,680
Speaker 1: market guy. I truly believe that open markets are the

1221
01:03:56,800 --> 01:04:01,800
Speaker 1: most effective way of increasing productivity. You're not socializing losses.

1222
01:04:01,880 --> 01:04:04,720
Speaker 1: You're licking your wounds. When you lose money, you come

1223
01:04:04,760 --> 01:04:07,680
Speaker 1: back and you fight harder. Or maybe it just blew

1224
01:04:07,720 --> 01:04:10,360
Speaker 1: it all on one shot and you did take you'd

1225
01:04:10,400 --> 01:04:12,440
Speaker 1: ask the dealer to hit you at twenty and uh

1226
01:04:12,600 --> 01:04:14,960
Speaker 1: guess what that least didn't come up. Okay, Like you

1227
01:04:15,120 --> 01:04:18,680
Speaker 1: just cannot live your life with no economic consequences of

1228
01:04:18,760 --> 01:04:22,520
Speaker 1: taking undue risk. Um Bitcoin, on the other hand, is

1229
01:04:23,120 --> 01:04:25,560
Speaker 1: a risk that I'll state if you don't own it.

1230
01:04:26,400 --> 01:04:30,280
Speaker 1: If you don't own bitcoin, you're taking more risk than

1231
01:04:30,320 --> 01:04:34,680
Speaker 1: if you own a five percent portfolio allocation. Okay, that

1232
01:04:35,080 --> 01:04:41,480
Speaker 1: is true, It's mathematically true. The asymmetric return opportunity in

1233
01:04:41,560 --> 01:04:44,080
Speaker 1: bitcoin is the best trade I've seen in thirty years,

1234
01:04:44,320 --> 01:04:47,680
Speaker 1: and my certain not I'm not a hunter percent sort,

1235
01:04:48,240 --> 01:04:50,959
Speaker 1: but I truly believe that bitcoin at this trading price

1236
01:04:51,160 --> 01:04:53,600
Speaker 1: is a rounding error compared to where it could go to,

1237
01:04:54,400 --> 01:04:58,080
Speaker 1: and in my opinion, where it's a higher likelihood than

1238
01:04:58,120 --> 01:05:00,080
Speaker 1: most people think it could go all I'm saying, do

1239
01:05:00,200 --> 01:05:03,440
Speaker 1: your expected value analysis. Uh, you've got to look at

1240
01:05:03,440 --> 01:05:06,240
Speaker 1: the global credit markets as a premium that people are

1241
01:05:06,320 --> 01:05:09,680
Speaker 1: asking or that people are paying to ensure that debt,

1242
01:05:09,760 --> 01:05:11,400
Speaker 1: and you can just say, hey, that the world is

1243
01:05:11,440 --> 01:05:13,360
Speaker 1: not all good. Okay, there are a lot of people

1244
01:05:13,400 --> 01:05:15,080
Speaker 1: that are worried about a lot of stuff out there.

1245
01:05:15,160 --> 01:05:18,000
Speaker 1: And I can calculate the value of bitcoin using credit

1246
01:05:18,080 --> 01:05:21,880
Speaker 1: default swap markets on sovereign countries. That show me right

1247
01:05:21,960 --> 01:05:24,960
Speaker 1: now that bitcoin today is worth between a hundred and

1248
01:05:25,040 --> 01:05:27,760
Speaker 1: ten thousand and a hundred and fifty thousand U S

1249
01:05:27,840 --> 01:05:31,640
Speaker 1: dollars per coin. That's intrinsic value to me based on

1250
01:05:31,880 --> 01:05:36,320
Speaker 1: something that I've spent thirty thirty years trading called credit

1251
01:05:36,400 --> 01:05:39,400
Speaker 1: default swaps or credit markets. You'll explain that how you

1252
01:05:39,440 --> 01:05:42,160
Speaker 1: get to that number. That'd be great. How about we

1253
01:05:42,280 --> 01:05:45,120
Speaker 1: just so how about every single country you could you

1254
01:05:45,160 --> 01:05:47,040
Speaker 1: could walk through the math that I'm going to walk

1255
01:05:47,080 --> 01:05:51,400
Speaker 1: you through. For the United States of America, the US

1256
01:05:51,480 --> 01:05:55,120
Speaker 1: has about thirty trillion dollars of outstanding debt and they

1257
01:05:55,160 --> 01:06:00,200
Speaker 1: have another hundred and sixty trillion of unfunded liabilities. That's

1258
01:06:00,240 --> 01:06:03,240
Speaker 1: Medicare and medicating Okay, let's round up and make the

1259
01:06:03,320 --> 01:06:06,440
Speaker 1: math easy. Let's say there's two hundred trillion dollars of

1260
01:06:06,720 --> 01:06:09,040
Speaker 1: US and why is it going to make it easy?

1261
01:06:09,080 --> 01:06:11,840
Speaker 1: Because there's state, municipality and all these other debt in there.

1262
01:06:11,880 --> 01:06:16,800
Speaker 1: That's de facto, you know, somewhat a federal obligation. Uh

1263
01:06:16,880 --> 01:06:21,000
Speaker 1: So there's two hundred trillion dollars US. Okay. Currently, the

1264
01:06:21,160 --> 01:06:27,840
Speaker 1: CDs market on five year uh US uh CDs credit

1265
01:06:27,920 --> 01:06:32,640
Speaker 1: default swap is about ten basis points. Okay. So ten

1266
01:06:32,720 --> 01:06:37,080
Speaker 1: basis points means, in Layman's terms, it costs you UH

1267
01:06:37,200 --> 01:06:41,720
Speaker 1: ten thousand dollars a year to ensure ten million dollars

1268
01:06:42,400 --> 01:06:46,640
Speaker 1: of US Treasury debt against default. Pretty small premium, but

1269
01:06:46,760 --> 01:06:50,600
Speaker 1: it's greater than zero. I'll remind you that Lehman Brothers

1270
01:06:50,680 --> 01:06:53,800
Speaker 1: traded at nine basis points in two thousand and six,

1271
01:06:54,400 --> 01:06:59,720
Speaker 1: and that nine thousand dollars annually went to six million

1272
01:06:59,800 --> 01:07:03,280
Speaker 1: box on ten million bucks. Okay, So this is what

1273
01:07:03,480 --> 01:07:07,120
Speaker 1: credit default swap markets can do. I'm not saying again, please,

1274
01:07:07,200 --> 01:07:09,440
Speaker 1: ladies and gentlemen, I'm not predicting this for the USA.

1275
01:07:09,560 --> 01:07:11,560
Speaker 1: There will be many other countries, but I'm just using

1276
01:07:11,680 --> 01:07:15,240
Speaker 1: USA as an example. So five year CDs is ten

1277
01:07:15,320 --> 01:07:20,000
Speaker 1: basis points. We need to adjust that tenor for about

1278
01:07:20,080 --> 01:07:22,720
Speaker 1: a twenty year obligation in my opinion, And there's no

1279
01:07:22,880 --> 01:07:26,600
Speaker 1: twenty year credit default swap markets, there's only five years.

1280
01:07:27,040 --> 01:07:31,120
Speaker 1: So if you adjust that market out to twenty years,

1281
01:07:31,280 --> 01:07:34,040
Speaker 1: is it fair that if it costs you ten basis

1282
01:07:34,120 --> 01:07:37,160
Speaker 1: points in the five years, could we see some sort

1283
01:07:37,160 --> 01:07:39,160
Speaker 1: of yield curve? And it's not a yield curve, it's

1284
01:07:39,200 --> 01:07:42,880
Speaker 1: a credit uh, a credit spread curve that it costs

1285
01:07:42,920 --> 01:07:45,520
Speaker 1: you fifty basis points in twenty years. I'll tell you yes,

1286
01:07:45,680 --> 01:07:50,400
Speaker 1: I think that's a good a good uh estimation of

1287
01:07:50,480 --> 01:07:53,200
Speaker 1: where your twenty year cd s would be. So fifty

1288
01:07:53,240 --> 01:07:56,479
Speaker 1: basis points. What's fifty basis points times twenty sorry, times

1289
01:07:56,480 --> 01:07:59,440
Speaker 1: two hundred trillion dollars Mark, I'm not good at math.

1290
01:07:59,520 --> 01:08:01,320
Speaker 1: You tell me. I'll tell you it's a trillion bucks.

1291
01:08:01,400 --> 01:08:05,760
Speaker 1: What's the value of bitcoin right now? Let's say it's

1292
01:08:05,760 --> 01:08:08,960
Speaker 1: a trillion bucks? Okay, right now, you are only paying

1293
01:08:09,800 --> 01:08:14,040
Speaker 1: for bitcoin that protects you for the US, You're getting

1294
01:08:14,080 --> 01:08:17,599
Speaker 1: everything else in the world for free. Every other single

1295
01:08:17,680 --> 01:08:21,000
Speaker 1: country in the world whose spreads or credit default swap

1296
01:08:21,080 --> 01:08:23,840
Speaker 1: premiums are wider generally than the United States are, right

1297
01:08:23,880 --> 01:08:26,680
Speaker 1: around it. If you're Germany and you know some of

1298
01:08:26,760 --> 01:08:30,439
Speaker 1: the top quality countries, you're not Canada. Canada's at thirty

1299
01:08:30,479 --> 01:08:33,639
Speaker 1: seven basis points. Even if we have a higher credit

1300
01:08:33,800 --> 01:08:37,000
Speaker 1: rating than the United States, which we do, the market

1301
01:08:37,120 --> 01:08:41,960
Speaker 1: is charging US three point seven times as much as

1302
01:08:41,960 --> 01:08:45,280
Speaker 1: in the United States. Okay, And because it doesn't matter,

1303
01:08:45,360 --> 01:08:47,320
Speaker 1: A credit rating is a credit rating, and a default

1304
01:08:47,360 --> 01:08:50,360
Speaker 1: premiums a default premium. Okay. So again, I just made

1305
01:08:50,400 --> 01:08:54,240
Speaker 1: the calculation that shows you you are getting every other

1306
01:08:54,360 --> 01:08:57,400
Speaker 1: country in the world default insurance on every other country

1307
01:08:57,479 --> 01:09:02,479
Speaker 1: in the world for free, even just calculating off the USA.

1308
01:09:02,600 --> 01:09:04,519
Speaker 1: So what I did is I calculated off all of

1309
01:09:04,680 --> 01:09:07,519
Speaker 1: some other major countries, g twenty countries. That's how I

1310
01:09:07,600 --> 01:09:11,120
Speaker 1: came up with a hundred countries, the amount of currency

1311
01:09:11,240 --> 01:09:14,320
Speaker 1: have currency and not currency currency debt, the total debt,

1312
01:09:14,439 --> 01:09:17,360
Speaker 1: the debt and the total unfunded and the default swap

1313
01:09:17,479 --> 01:09:20,680
Speaker 1: races adjusted for a ten or of a twenty year term.

1314
01:09:21,240 --> 01:09:24,280
Speaker 1: And that brings it to what kind of valuation again, uh,

1315
01:09:24,439 --> 01:09:26,960
Speaker 1: a bitcoin between a hundred and ten, between a hundred

1316
01:09:26,960 --> 01:09:28,800
Speaker 1: and ten and a hundred and sixty thousand, And I

1317
01:09:28,920 --> 01:09:31,479
Speaker 1: need to give you a range because again, my my

1318
01:09:32,160 --> 01:09:35,120
Speaker 1: estimation of what what a twenty year CDs rate would

1319
01:09:35,120 --> 01:09:37,400
Speaker 1: be is nothing more than an estimation. But I just

1320
01:09:37,600 --> 01:09:41,719
Speaker 1: ran you through the math for the United States. Now again,

1321
01:09:41,840 --> 01:09:43,880
Speaker 1: United States is going to be the last country. If

1322
01:09:43,920 --> 01:09:46,120
Speaker 1: it fails, it will be the last fied country to fail.

1323
01:09:46,439 --> 01:09:48,600
Speaker 1: But there's gonna be tons of others. A hundred and

1324
01:09:48,680 --> 01:09:52,840
Speaker 1: seventy other countries are in a very bad point. Tell

1325
01:09:52,920 --> 01:09:54,959
Speaker 1: me you didn't want to own some bitcoin and Venezuela,

1326
01:09:55,080 --> 01:09:57,920
Speaker 1: tell me you didn't want to own some bigcoin? Okay, yes,

1327
01:09:58,040 --> 01:10:01,800
Speaker 1: in Turkey, In Nigeria, in right now, India. Get you know,

1328
01:10:01,920 --> 01:10:04,639
Speaker 1: India is a triple B minus rated country. It isn't

1329
01:10:04,680 --> 01:10:09,519
Speaker 1: it interesting that a very credit uh fragile country is

1330
01:10:10,120 --> 01:10:15,519
Speaker 1: wanting to ban bitcoin. That's sort of telling. Okay, So okay,

1331
01:10:15,560 --> 01:10:17,880
Speaker 1: So I ran you through the math on just one country,

1332
01:10:18,000 --> 01:10:20,599
Speaker 1: so you do all of it with you know, major countries,

1333
01:10:20,760 --> 01:10:25,840
Speaker 1: And I'm I'm I'm absolutely convinced this is the best

1334
01:10:25,960 --> 01:10:29,639
Speaker 1: asymmetric trade I've ever seen because that value will change

1335
01:10:29,760 --> 01:10:33,280
Speaker 1: as the spreads widen over time to write, and it's

1336
01:10:33,320 --> 01:10:35,880
Speaker 1: not the only valuation metric. I was lucky enough today.

1337
01:10:36,280 --> 01:10:39,320
Speaker 1: Plan B actually was reading my paper and tweeted that

1338
01:10:39,400 --> 01:10:42,559
Speaker 1: he was reading my paper on on credit and actually

1339
01:10:42,680 --> 01:10:45,519
Speaker 1: said a complimentary Uh so, I thank you. I don't

1340
01:10:45,560 --> 01:10:47,679
Speaker 1: know who you are, but I know your your work,

1341
01:10:47,800 --> 01:10:52,240
Speaker 1: and you know your UM valuation models. Plan B. It's

1342
01:10:52,360 --> 01:10:55,880
Speaker 1: very Uh it's one other valuation model that goes into it.

1343
01:10:56,000 --> 01:10:59,040
Speaker 1: But I can get to valuations of bitcoin that will

1344
01:10:59,160 --> 01:11:02,120
Speaker 1: blow your mind. And then I just put a probability

1345
01:11:02,200 --> 01:11:07,000
Speaker 1: on that, and I just say, by all measures, whether

1346
01:11:07,320 --> 01:11:11,280
Speaker 1: it is stock to flow using Plan B, whether it's

1347
01:11:11,680 --> 01:11:15,840
Speaker 1: the current value of bitcoin versus the global credit default

1348
01:11:15,840 --> 01:11:19,519
Speaker 1: swap market, you've got to own some and I'll walk

1349
01:11:19,560 --> 01:11:21,400
Speaker 1: you through if you want where I think it can

1350
01:11:21,439 --> 01:11:24,200
Speaker 1: go to. But that's not important. Just buy some because

1351
01:11:24,240 --> 01:11:26,360
Speaker 1: it is insurance. I mean, if you want to tell

1352
01:11:26,479 --> 01:11:28,639
Speaker 1: us to go ahead and walk us through it. Okay.

1353
01:11:28,720 --> 01:11:32,439
Speaker 1: So my simple one is this UM there's about nine

1354
01:11:32,600 --> 01:11:38,679
Speaker 1: hundred trillion dollars of global financial assets. Okay, nine hundred trillion.

1355
01:11:38,760 --> 01:11:41,879
Speaker 1: That includes real estate, everything includes all that, It includes

1356
01:11:41,920 --> 01:11:46,599
Speaker 1: all equities, it includes gold, and includes everything. Nine trillion dollars. Okay.

1357
01:11:47,240 --> 01:11:53,479
Speaker 1: If bitcoin ever became the global reserve asset, like I

1358
01:11:53,960 --> 01:11:57,120
Speaker 1: think it can, is it crazy to think bitcoin could

1359
01:11:57,360 --> 01:12:03,000
Speaker 1: be worth five of the entire market. I don't think so, right,

1360
01:12:03,040 --> 01:12:07,160
Speaker 1: that's that's ridiculously small. So five of nine trillion dollars

1361
01:12:07,280 --> 01:12:12,160
Speaker 1: is forty five trillion dollars trillion divided by twenty one million,

1362
01:12:12,680 --> 01:12:16,120
Speaker 1: which is the supply of bitcoin. Is what? It's over

1363
01:12:16,200 --> 01:12:19,599
Speaker 1: two million bucks of coin? Okay, but I think that's

1364
01:12:19,640 --> 01:12:25,640
Speaker 1: low certain, But I want I want to own some

1365
01:12:26,280 --> 01:12:30,400
Speaker 1: because if I do a probability distribution, and that probability

1366
01:12:30,439 --> 01:12:35,639
Speaker 1: distribution includes the possibility that it goes to zero, Okay,

1367
01:12:36,120 --> 01:12:38,680
Speaker 1: I can put in a scenario and I'll just give

1368
01:12:38,760 --> 01:12:41,360
Speaker 1: you a scenario that said you're still supposed to buy

1369
01:12:41,439 --> 01:12:47,760
Speaker 1: bitcoin with your eyes closed. Yeah, and I uh, you know,

1370
01:12:47,920 --> 01:12:49,479
Speaker 1: real simple, I'll walk you through that. Let's say I

1371
01:12:49,600 --> 01:12:53,400
Speaker 1: give you how about we we we settle on the

1372
01:12:53,439 --> 01:12:56,519
Speaker 1: fact that bitcoin could be worth two million bucks are

1373
01:12:56,640 --> 01:13:02,240
Speaker 1: higher with a five percent chance. Okay, Well, i'll give

1374
01:13:02,320 --> 01:13:06,680
Speaker 1: you a chance it's word zero. Then, okay, that's a

1375
01:13:06,720 --> 01:13:11,120
Speaker 1: binary distribution. There's only two outcomes. It's worth zero and

1376
01:13:11,200 --> 01:13:15,439
Speaker 1: a five percent chance it's worth two million dollars are higher. Well,

1377
01:13:15,520 --> 01:13:18,160
Speaker 1: as you know, expected value analysis says you take the

1378
01:13:18,240 --> 01:13:22,280
Speaker 1: price times the probability, so times zero is zero and

1379
01:13:22,520 --> 01:13:27,960
Speaker 1: two million bucks times five is a hundred thousand bucks.

1380
01:13:28,560 --> 01:13:33,719
Speaker 1: M okay, hundred thousand bucks today. Interesting, hundred thousand bucks today.

1381
01:13:33,920 --> 01:13:37,240
Speaker 1: And that's also what it's CDs on a conservative valuation

1382
01:13:38,120 --> 01:13:40,240
Speaker 1: is telling you it could be worth Again, you don't

1383
01:13:40,280 --> 01:13:43,240
Speaker 1: have to take either model as being it's just they

1384
01:13:43,400 --> 01:13:46,519
Speaker 1: you have to agree with me. They are potential outcomes. Yeah,

1385
01:13:46,760 --> 01:13:49,040
Speaker 1: so you buy a remembre. There are the probabilities for sure,

1386
01:13:49,400 --> 01:13:52,759
Speaker 1: that's correct. So you know you you started this conversation

1387
01:13:52,800 --> 01:13:55,400
Speaker 1: off pretty neat with your blackjack analogy. And I don't

1388
01:13:55,400 --> 01:13:57,200
Speaker 1: play a lot of cards. I mean, I play enough to,

1389
01:13:57,640 --> 01:14:00,519
Speaker 1: but I'm not good at card counting. And there's ways

1390
01:14:00,560 --> 01:14:03,960
Speaker 1: of but bitcoin, if you were a card counter, it'd

1391
01:14:03,960 --> 01:14:08,160
Speaker 1: be hard for you. And your probability analysis say you

1392
01:14:08,240 --> 01:14:14,240
Speaker 1: should be short bitcoin. And if you own how a boy?

1393
01:14:14,439 --> 01:14:16,920
Speaker 1: You took the words out of my mouth? Yeah, sorry,

1394
01:14:17,160 --> 01:14:19,320
Speaker 1: but yeah, no, no, not sorry, No, this is a

1395
01:14:19,360 --> 01:14:22,519
Speaker 1: good the Moss Boss team. Okay, so it took you

1396
01:14:22,600 --> 01:14:24,120
Speaker 1: took the words out of my mouth. Yeah, and then

1397
01:14:24,200 --> 01:14:26,120
Speaker 1: I mean that that's that's amazing. I haven't haven't been

1398
01:14:26,120 --> 01:14:27,880
Speaker 1: to that map before, so I really appreciate you sharing

1399
01:14:27,920 --> 01:14:30,320
Speaker 1: that with us. That's that's really cool math. I've looked

1400
01:14:30,320 --> 01:14:32,960
Speaker 1: at it from a couple of different ways to kind

1401
01:14:33,000 --> 01:14:35,360
Speaker 1: of back into that. But man, and you look at

1402
01:14:35,400 --> 01:14:37,320
Speaker 1: the bond market. I mean there's I mean, I don't

1403
01:14:37,320 --> 01:14:39,760
Speaker 1: know what it is today with eighteen trillion dollars of

1404
01:14:40,160 --> 01:14:43,000
Speaker 1: negtigutive yield. Yeah, I mean that's that in itself is

1405
01:14:43,080 --> 01:14:46,880
Speaker 1: just another less than zero, right, it actually is. Well,

1406
01:14:46,960 --> 01:14:50,080
Speaker 1: it's not worth less than zero. It's it's you're paying somebody.

1407
01:14:50,560 --> 01:14:53,599
Speaker 1: You're paying somebody to borrow money from you. Wow, that's

1408
01:14:53,640 --> 01:14:55,800
Speaker 1: a pretty cool thing. Yeah, I'm gonna I'm gonna borrow

1409
01:14:55,880 --> 01:14:57,560
Speaker 1: money for you from you if you're paying me for it.

1410
01:14:57,720 --> 01:15:00,080
Speaker 1: So yeah, go ahead. Yeah, So I mean yeah, just

1411
01:15:00,200 --> 01:15:02,679
Speaker 1: look at just look at all that. But this nine trillion,

1412
01:15:02,920 --> 01:15:06,200
Speaker 1: I mean that was that was good. I really appreciate that. Well,

1413
01:15:06,320 --> 01:15:08,280
Speaker 1: you know what it's, it's there's so many different ways.

1414
01:15:08,280 --> 01:15:11,160
Speaker 1: And remember that's it's it's a continuous distribution. You have

1415
01:15:11,320 --> 01:15:13,640
Speaker 1: to like, there's guys that are out there, well, I

1416
01:15:13,720 --> 01:15:17,160
Speaker 1: guess plan Be calls for a hundred trillion dollar valuation, right,

1417
01:15:17,400 --> 01:15:19,639
Speaker 1: and uh, you know I only used a forty five

1418
01:15:19,720 --> 01:15:23,639
Speaker 1: trillion dollar valuation, but a hundred trillion dollar valuation divided

1419
01:15:23,720 --> 01:15:27,160
Speaker 1: by twenty one million, I guess it's over five million

1420
01:15:27,240 --> 01:15:31,599
Speaker 1: dollars a coin. Look, you just need to do some research.

1421
01:15:32,400 --> 01:15:35,000
Speaker 1: Most importantly, you need to understand the beauty of the technology.

1422
01:15:35,040 --> 01:15:37,800
Speaker 1: Anyone who talks down bitcoin that has never sent money

1423
01:15:37,920 --> 01:15:41,519
Speaker 1: on a bitcoin wallet from one point to another, really

1424
01:15:42,000 --> 01:15:44,920
Speaker 1: should not even be in the conversation, okay, because they

1425
01:15:45,000 --> 01:15:46,800
Speaker 1: they'll just say it's a ponzi this. I know. If

1426
01:15:46,840 --> 01:15:50,559
Speaker 1: you're able to transfer value over a distributed a ledger

1427
01:15:50,680 --> 01:15:55,960
Speaker 1: with no intermediary besides the decentralized system, that is the

1428
01:15:56,000 --> 01:15:58,240
Speaker 1: most beautiful thing I've seen as an engineer. I've sent

1429
01:15:58,320 --> 01:16:03,000
Speaker 1: money to New Zealand, uh, not even knowing the counterparty,

1430
01:16:03,920 --> 01:16:06,200
Speaker 1: having met the counterparty. The counterparty I knew was an

1431
01:16:06,240 --> 01:16:09,280
Speaker 1: indigenous tribe in New Zealand. I've sent money to them

1432
01:16:09,560 --> 01:16:12,400
Speaker 1: and it's settled in ten minutes. Try doing that within

1433
01:16:12,479 --> 01:16:17,760
Speaker 1: international money wire it's out a boy, same thing, right,

1434
01:16:17,960 --> 01:16:20,400
Speaker 1: same thing. So you know, we could go on and

1435
01:16:20,560 --> 01:16:23,920
Speaker 1: on and on and and and like there's just I

1436
01:16:24,160 --> 01:16:27,960
Speaker 1: just need people to peel a layer of the onion.

1437
01:16:28,640 --> 01:16:31,120
Speaker 1: Do some math. That is the key, because that's all

1438
01:16:31,200 --> 01:16:34,320
Speaker 1: bitcoin is is math and code, So you need to

1439
01:16:34,439 --> 01:16:37,920
Speaker 1: do some math, you need to understand mathematics, and then

1440
01:16:37,920 --> 01:16:41,160
Speaker 1: you've got to do some probability analysis. Nobody can ever

1441
01:16:41,280 --> 01:16:46,240
Speaker 1: be a certain. Very few things are certain in life, okay,

1442
01:16:46,760 --> 01:16:50,400
Speaker 1: and um only too right, death taxes, well, you know,

1443
01:16:50,520 --> 01:16:52,679
Speaker 1: and maybe now not even taxes. If you could print money,

1444
01:16:52,720 --> 01:16:55,200
Speaker 1: why pay taxes? So anyway, let's just let's leave that

1445
01:16:55,280 --> 01:16:58,040
Speaker 1: one on the side for now. But uh uh, look,

1446
01:16:58,360 --> 01:17:01,679
Speaker 1: you know, Mark, there's just it's getting there, but we're

1447
01:17:01,720 --> 01:17:05,160
Speaker 1: still so early. I've I've been lucky enough to be

1448
01:17:05,280 --> 01:17:09,000
Speaker 1: invited on a number of podcasts, and and with podcasts

1449
01:17:09,040 --> 01:17:11,759
Speaker 1: come hate mail, and and the hate mail is okay

1450
01:17:12,200 --> 01:17:16,200
Speaker 1: until you realize, how you know, really intellectually lazy some

1451
01:17:16,360 --> 01:17:19,800
Speaker 1: of these people are, and the funds out there and everything.

1452
01:17:19,920 --> 01:17:22,280
Speaker 1: If you have children, you owe it to your children

1453
01:17:22,560 --> 01:17:27,920
Speaker 1: to do the work of understanding what bitcoin is. Yeah,

1454
01:17:28,040 --> 01:17:30,880
Speaker 1: that's so good, you absolutely do. And I believe it's

1455
01:17:30,880 --> 01:17:34,519
Speaker 1: sparking the rent, the new renaissance two point oh, because

1456
01:17:34,920 --> 01:17:36,439
Speaker 1: I think it's kind of carrying on from the Internet,

1457
01:17:36,439 --> 01:17:39,439
Speaker 1: and right, the Internet allowed information to be spread and really,

1458
01:17:39,479 --> 01:17:41,479
Speaker 1: what I've seen from people with bitcoin is it it

1459
01:17:41,560 --> 01:17:44,599
Speaker 1: creates all this curiosity and they start digging in these

1460
01:17:44,680 --> 01:17:46,720
Speaker 1: rabbit holes as we call this, and and they start

1461
01:17:46,880 --> 01:17:48,840
Speaker 1: learning all these things. Um, there are a lot of

1462
01:17:48,880 --> 01:17:52,200
Speaker 1: intellectually lazy people as well. But I'm working. I'm more

1463
01:17:52,240 --> 01:17:54,920
Speaker 1: happy about seeing how many people are actually waking up,

1464
01:17:55,240 --> 01:17:57,320
Speaker 1: Like the world feed currency wasn't even never used hard.

1465
01:17:57,479 --> 01:17:59,719
Speaker 1: Isn't that amazing, isn't it? Yeah? I agree, I agree,

1466
01:18:00,120 --> 01:18:02,880
Speaker 1: So it's a it's a renaissance for sure. But man, Greg,

1467
01:18:02,960 --> 01:18:05,320
Speaker 1: that is so much good information. Um, I think we

1468
01:18:05,360 --> 01:18:09,240
Speaker 1: could probably wrap it up the dash that's awesome. Yeah.

1469
01:18:09,360 --> 01:18:11,840
Speaker 1: And by the way, and but the math is easy, uh,

1470
01:18:12,400 --> 01:18:15,200
Speaker 1: not easy, but you just got to get the information. Uh.

1471
01:18:15,640 --> 01:18:20,360
Speaker 1: And uh you also got to remember that you stated

1472
01:18:20,479 --> 01:18:23,719
Speaker 1: it if you own zero bitcoin, you're very short, okay,

1473
01:18:24,120 --> 01:18:28,360
Speaker 1: because what if and markets are truth? And I know

1474
01:18:28,479 --> 01:18:31,080
Speaker 1: it's been the best performing asset over the last ten years.

1475
01:18:31,200 --> 01:18:35,400
Speaker 1: And Goldman Socks today just uh or over the weekend

1476
01:18:35,479 --> 01:18:40,040
Speaker 1: started including it on their portfolio allocation or attribution. Uh summary.

1477
01:18:40,479 --> 01:18:42,400
Speaker 1: If you look on zero hedge, they had a really

1478
01:18:42,479 --> 01:18:44,960
Speaker 1: cool tweet on that. Let me tell you, there's a

1479
01:18:45,040 --> 01:18:47,360
Speaker 1: lot of portfolio managers out there that are going to

1480
01:18:47,400 --> 01:18:50,120
Speaker 1: be like, look, I cannot avoid considering this as an

1481
01:18:50,160 --> 01:18:54,400
Speaker 1: investment alternative anymore, especially when a very respected house like

1482
01:18:54,800 --> 01:18:58,160
Speaker 1: Goldman started putting it on their attribution reports. Okay, so,

1483
01:18:58,439 --> 01:19:01,160
Speaker 1: and what's great. What's crazy is financial advisors and funds

1484
01:19:01,200 --> 01:19:04,360
Speaker 1: still can't even buy it. It's it's moving in the

1485
01:19:04,479 --> 01:19:07,720
Speaker 1: right direction. Look, I told you how early we are

1486
01:19:07,840 --> 01:19:11,200
Speaker 1: right like, they can't don't even legally allowed yet? Uh

1487
01:19:11,720 --> 01:19:15,200
Speaker 1: isn't that unfortunate? Legally allowed? So I don't. It just

1488
01:19:15,280 --> 01:19:19,400
Speaker 1: means that the firm doesn't doesn't facilitate it for you.

1489
01:19:19,560 --> 01:19:23,800
Speaker 1: But uh, you know, being legally allowed to do something

1490
01:19:24,120 --> 01:19:27,160
Speaker 1: that that's a big word, um, because that means that

1491
01:19:27,240 --> 01:19:29,320
Speaker 1: you're not dealing with a counterparty that has your best

1492
01:19:29,360 --> 01:19:32,439
Speaker 1: interest in mind. Anybody who tries to restrict you from

1493
01:19:32,560 --> 01:19:37,320
Speaker 1: doing proper risk management, you should drop that counterparty, okay. Uh.

1494
01:19:37,479 --> 01:19:40,000
Speaker 1: And I'm not sure if we mentioned this at the intro,

1495
01:19:40,160 --> 01:19:42,200
Speaker 1: but I was involved in a company in Canada that

1496
01:19:42,320 --> 01:19:47,680
Speaker 1: brought the first exchange listed closed and bitcoin fund to

1497
01:19:47,840 --> 01:19:50,880
Speaker 1: North America, listed on the Toronto Stock Exchange, and we

1498
01:19:51,160 --> 01:19:55,120
Speaker 1: took the Ontario Securities Commission to court because they initially

1499
01:19:55,200 --> 01:19:58,800
Speaker 1: refused to allow us to to get a closed end fund.

1500
01:19:58,960 --> 01:20:01,840
Speaker 1: We took them to court, you one, and God bless

1501
01:20:02,000 --> 01:20:05,439
Speaker 1: the uh the I'm gonna call it judge, it's not

1502
01:20:05,560 --> 01:20:08,639
Speaker 1: quite a judge who said, look, it's not our job

1503
01:20:08,920 --> 01:20:12,040
Speaker 1: to tell the public what to invest in and what

1504
01:20:12,200 --> 01:20:14,600
Speaker 1: not to invest, and we just have to ensure that

1505
01:20:14,800 --> 01:20:19,840
Speaker 1: it is a market, it can be effectively reproduced on

1506
01:20:20,200 --> 01:20:23,360
Speaker 1: a closed and fun basis. And what happened then is

1507
01:20:23,400 --> 01:20:27,760
Speaker 1: the closed and fund morphed into them having comfort in

1508
01:20:28,200 --> 01:20:30,240
Speaker 1: an e t F and Canada beat the U S

1509
01:20:30,320 --> 01:20:32,800
Speaker 1: to the e t F market for bitcoin again. And

1510
01:20:33,240 --> 01:20:36,519
Speaker 1: you know, you could go and have your brokerage house

1511
01:20:36,760 --> 01:20:39,760
Speaker 1: at in Canada that says no, you're not allowed to

1512
01:20:39,800 --> 01:20:42,160
Speaker 1: buy that e t F, and the smart guy will

1513
01:20:42,240 --> 01:20:45,519
Speaker 1: just say, what, it's my money and I want to

1514
01:20:45,560 --> 01:20:47,680
Speaker 1: buy it, and you're telling me, I'm not pack up

1515
01:20:47,720 --> 01:20:50,200
Speaker 1: my accounts. I'm taking it across the street. That's not

1516
01:20:50,280 --> 01:20:52,960
Speaker 1: always the easiest thing, but it is doable. Uh taking

1517
01:20:52,960 --> 01:20:55,080
Speaker 1: I'm taking across the street because my friend works at

1518
01:20:55,080 --> 01:20:58,040
Speaker 1: another institution that does allow us to buy this, And

1519
01:20:58,120 --> 01:21:00,040
Speaker 1: you're not supposed to tell me what I'm allowed and

1520
01:21:00,120 --> 01:21:04,280
Speaker 1: not allowed to do with my money. Yeah, my my

1521
01:21:04,640 --> 01:21:08,120
Speaker 1: sister in law works for Charles Schwab, okay, And they

1522
01:21:08,160 --> 01:21:11,040
Speaker 1: are not even allowed to mention it. They can't refer

1523
01:21:11,160 --> 01:21:14,320
Speaker 1: clients to anybody else. Um, they're completely prohibited from me

1524
01:21:14,479 --> 01:21:16,960
Speaker 1: talking about I wonder what Mr Charles Schwab would have

1525
01:21:17,000 --> 01:21:19,320
Speaker 1: thought of that. I don't think he's still alive anymore, right,

1526
01:21:19,400 --> 01:21:24,120
Speaker 1: but I'm almost certain that's against his investing principles. Almost certain,

1527
01:21:24,200 --> 01:21:29,160
Speaker 1: because again, it's not the advisor's job. It's the advisor's

1528
01:21:29,280 --> 01:21:32,400
Speaker 1: job to advise. It's not the advisor's job to limit

1529
01:21:32,680 --> 01:21:36,400
Speaker 1: or to restrict. And if it is limiting or restricting,

1530
01:21:36,760 --> 01:21:41,120
Speaker 1: perhaps that advisor failed mathematics and then you should ask

1531
01:21:41,160 --> 01:21:44,000
Speaker 1: the question. So you failed math a and you're advising

1532
01:21:44,040 --> 01:21:49,800
Speaker 1: people how to invest, perhaps you shouldn't be my financial advisor. Yeah,

1533
01:21:49,960 --> 01:21:52,120
Speaker 1: that's a whole rabbit, whole. I don't want it. I

1534
01:21:52,160 --> 01:21:53,720
Speaker 1: don't want it because I get enough hate mail. Now,

1535
01:21:53,760 --> 01:21:56,680
Speaker 1: actually I don't get too much. I'm Canadian, Luckily some

1536
01:21:56,800 --> 01:21:59,599
Speaker 1: people like Canadians and other people don't even can't even

1537
01:21:59,640 --> 01:22:02,080
Speaker 1: find and it on a map, so maybe I'm I'm

1538
01:22:02,160 --> 01:22:04,519
Speaker 1: okay from that. From that, I don't mind the I

1539
01:22:04,600 --> 01:22:08,360
Speaker 1: don't mind the intelligent hate mail. And it's not hate mail.

1540
01:22:08,439 --> 01:22:10,960
Speaker 1: But you know, I probably get five thousand comments a

1541
01:22:10,960 --> 01:22:14,320
Speaker 1: week between all my platforms, and it's such a good

1542
01:22:14,400 --> 01:22:17,880
Speaker 1: way to sharpen your point. But also, I'm open to

1543
01:22:17,960 --> 01:22:20,800
Speaker 1: change my mind. I love I love the discussion. I'm

1544
01:22:20,840 --> 01:22:22,880
Speaker 1: hoping to change my mind. I get a lot of

1545
01:22:22,920 --> 01:22:25,439
Speaker 1: stuff that said, you're an idiot. You're talking about Okay,

1546
01:22:25,560 --> 01:22:28,000
Speaker 1: So here's the truth, right, And that's what you learn

1547
01:22:28,080 --> 01:22:30,120
Speaker 1: in thirty two years in the Market's one thing you

1548
01:22:30,800 --> 01:22:33,080
Speaker 1: need to understand is if you're wrong, you need to

1549
01:22:33,160 --> 01:22:35,840
Speaker 1: switch direction, okay, or else you'll get wheeled off the floor,

1550
01:22:35,920 --> 01:22:38,160
Speaker 1: You'll get your they cart you out. Okay, you're done

1551
01:22:38,439 --> 01:22:41,720
Speaker 1: because you're stupid. Stubbornness to realize you're on the wrong

1552
01:22:41,760 --> 01:22:44,200
Speaker 1: side of a trade just cost you a career. And

1553
01:22:44,600 --> 01:22:48,200
Speaker 1: I'm open to that. I'm open to absolute criticism that

1554
01:22:48,479 --> 01:22:51,720
Speaker 1: is verify or that it is warranted, not stuff like

1555
01:22:52,320 --> 01:22:54,960
Speaker 1: you're boiling the oceans, and not stuff like it's a

1556
01:22:55,040 --> 01:22:57,960
Speaker 1: Ponzi scheme, and not stuff like what's it good for?

1557
01:22:58,680 --> 01:23:01,560
Speaker 1: There's no intrinsic value. Oh that the network itself, the

1558
01:23:01,600 --> 01:23:05,880
Speaker 1: most powerful computer network in the world, has no intrinsic value.

1559
01:23:06,320 --> 01:23:09,280
Speaker 1: And there's Canadians and influential Canadians that are saying that.

1560
01:23:09,640 --> 01:23:13,200
Speaker 1: Now I can I can understand why Jamie Diamonds started

1561
01:23:13,240 --> 01:23:16,120
Speaker 1: saying that because he knows what bitcoin is gonna do

1562
01:23:16,200 --> 01:23:20,240
Speaker 1: to disintermediate or disrupt his company. So he's he's you know,

1563
01:23:20,520 --> 01:23:24,120
Speaker 1: somewhat biased. But uh, for the regular person out there

1564
01:23:24,360 --> 01:23:27,400
Speaker 1: who needs to protect their wealth, uh, you know, we

1565
01:23:27,439 --> 01:23:28,920
Speaker 1: don't go I need to go any farther than this.

1566
01:23:29,439 --> 01:23:34,920
Speaker 1: Do some mathematics. Understand that bitcoin is digital energy and

1567
01:23:35,160 --> 01:23:38,640
Speaker 1: it is a store of value. In my opinion, it

1568
01:23:39,040 --> 01:23:43,760
Speaker 1: offers the best asymmetric return distribution that I've ever seen

1569
01:23:43,800 --> 01:23:46,640
Speaker 1: in thirty two years. Put a probability on that and

1570
01:23:46,680 --> 01:23:50,200
Speaker 1: we'll go forward. WHOA, and with that, we're gonna call

1571
01:23:50,280 --> 01:23:55,280
Speaker 1: it a rat the hang loose because I understood your surfer,

1572
01:23:55,400 --> 01:23:58,280
Speaker 1: and we do the we do all these goofy little things.

1573
01:23:58,320 --> 01:24:01,080
Speaker 1: But yeah, I'm a Kidadian surfer. They it's almost drowned

1574
01:24:01,120 --> 01:24:04,240
Speaker 1: in Hawaii, Costa Rica, Barbados. I'm not sure where else

1575
01:24:04,280 --> 01:24:06,640
Speaker 1: I've almost drowned in. But I'll tell you what I

1576
01:24:06,800 --> 01:24:09,240
Speaker 1: I enjoy getting out in the in the wave. So uh,

1577
01:24:09,800 --> 01:24:13,800
Speaker 1: it really appreciate you offering this opportunity to me and uh,

1578
01:24:13,960 --> 01:24:17,120
Speaker 1: I believe so strongly in this because I believe I've

1579
01:24:17,200 --> 01:24:20,400
Speaker 1: seen a lot of stuff that would make most people's

1580
01:24:20,439 --> 01:24:23,320
Speaker 1: head spin in terms of the reality of the current

1581
01:24:23,439 --> 01:24:26,640
Speaker 1: financial system. Yeah, now, I know you said that you

1582
01:24:26,800 --> 01:24:29,519
Speaker 1: have recently found Twitter. I'm gonna make sure we're gonna

1583
01:24:29,560 --> 01:24:31,200
Speaker 1: link that down below. Is there anywhere else that people

1584
01:24:31,240 --> 01:24:32,799
Speaker 1: should keep up with you? Do you have a newsletter?

1585
01:24:32,960 --> 01:24:35,160
Speaker 1: I do not. I have this research paper that I've

1586
01:24:35,200 --> 01:24:38,960
Speaker 1: written that Plan B was referring to today. It's linked.

1587
01:24:39,040 --> 01:24:40,760
Speaker 1: I think I sent it to you, but I'll send

1588
01:24:40,800 --> 01:24:43,599
Speaker 1: it to you again. Um, but it's uh, I think

1589
01:24:43,640 --> 01:24:45,760
Speaker 1: it's it's important because I put it out there. It's

1590
01:24:45,800 --> 01:24:48,200
Speaker 1: it's not easy reading and you can skip through the stuff.

1591
01:24:48,280 --> 01:24:50,759
Speaker 1: But there's a lot of good stuff in there. Millill,

1592
01:24:50,840 --> 01:24:52,960
Speaker 1: maybe not good, but it's a couple of little good

1593
01:24:53,000 --> 01:24:57,320
Speaker 1: war stories and everything like that. So well, Um, you

1594
01:24:57,439 --> 01:25:01,280
Speaker 1: are coming to Miami. I'm looking forward to getting there.

1595
01:25:01,840 --> 01:25:04,160
Speaker 1: Whether I'm allowed to get there because the border in

1596
01:25:04,280 --> 01:25:06,800
Speaker 1: Ontario is closed or whatever, I might have to ram

1597
01:25:06,920 --> 01:25:09,800
Speaker 1: through it with that's where I am. Yeah, that's not

1598
01:25:09,880 --> 01:25:13,800
Speaker 1: a good place to be in the world. I think

1599
01:25:13,840 --> 01:25:16,719
Speaker 1: that it's maybe worse. The bark is worse than the bite.

1600
01:25:16,840 --> 01:25:22,920
Speaker 1: But uh, there's some there's some incompetent politicians. Unfortunately the Caribbeans. Great,

1601
01:25:23,000 --> 01:25:25,200
Speaker 1: right now, Greg, good time to take a vacation, get out.

1602
01:25:25,200 --> 01:25:27,920
Speaker 1: Why you can. I love Barbados. I haven't spent a

1603
01:25:28,000 --> 01:25:30,040
Speaker 1: lot of time in other parts of the world, but

1604
01:25:30,160 --> 01:25:33,640
Speaker 1: Barbados is a beautiful, beautiful part of the world. So

1605
01:25:33,760 --> 01:25:35,760
Speaker 1: enjoy your time in Puerto Rico, and hopefully I do

1606
01:25:35,920 --> 01:25:38,439
Speaker 1: run into you in Miami. All right, all right, thanks,

1607
01:25:38,520 --> 01:25:40,680
Speaker 1: thank you again, Mark, thank you so much for having me.