Speaker 1: Hey, everyone, Welcome to an episode of the Market Disruptor Show,
Speaker 1: and today I am sitting down with Ralph Paul Um.
Speaker 1: He is the co founder of Real Vision. It probably
Speaker 1: doesn't need much of an introduction here on my show.
Speaker 1: I've been a big fan of work and I'm excited
Speaker 1: to talk to you today, Ralph. I'm alright. Good. So,
Speaker 1: um Man, you put out a ton of content, so
Speaker 1: there's a bunch of different angles that we can go down.
Speaker 1: Um And again, you probably don't need a lot of introduction,
Speaker 1: so we don't need to go deep into that. But um,
Speaker 1: you are a macro investor. That's kind of been your career. UM,
Speaker 1: and that's kind of still what you're doing today. Maybe
Speaker 1: just kind of give us an overview of what that
Speaker 1: is and kind of what you're doing. Yes, So macro
Speaker 1: investing really is looking at major economic trends and dislocations
Speaker 1: and and investing in asset process the UM versus that
Speaker 1: framework of understanding. So you know, if the business cycle
Speaker 1: is going down and go into recession, you're gonna be
Speaker 1: short various things. You're gonna be long one country versus another.
Speaker 1: You're looking to choose the right assets. You're kind of
Speaker 1: asset agnostic, and you're looking across the world to see, Okay,
Speaker 1: how is the global economy moving, is this mispriced, underpriced,
Speaker 1: or what is the trend based on that? So so
Speaker 1: it's a lot of kind of where economics meets markets
Speaker 1: and it's super interesting because it takes you everywhere, whether
Speaker 1: you're investing in Indian equities or cryptocurrencies. Yes, so you're
Speaker 1: kind of taking into account the politics, the economics, I mean,
Speaker 1: all the data, and just kind of what they say
Speaker 1: about Wayne Gretzky trying to skip to where the puck
Speaker 1: is going to be almost that's right. So as a
Speaker 1: macro investor, you're trying to solve the world's most beautiful puzzle.
Speaker 1: It's this endless three D puzzle you can sold for
Speaker 1: seconds then it disappears again. So it's a great intellectual pursuit.
Speaker 1: But the way to do it successfully's to live in
Speaker 1: the future and look back for probable futures. You know,
Speaker 1: what is the potential outcome? How's this price? Is this
Speaker 1: miss price not priced in or correctly priced? So that's
Speaker 1: what you're trying to do all the time. I find
Speaker 1: the further out you go, the more edge you get.
Speaker 1: But the harder it is to get to certainty, so
Speaker 1: then you're really thinking in terms of, well could this that,
Speaker 1: look at that happen, Which is why you know, stuff
Speaker 1: like the crypto wild really interest me because there's a
Speaker 1: ton of possible futures out there and different outcomes that
Speaker 1: we can invest in that all have huge upsides. So that's,
Speaker 1: you know, that's the basis of what we try and do,
Speaker 1: or certainly I try and do. Yeah, So for everybody
Speaker 1: that's tuned in right now, we're gonna dig into some
Speaker 1: really good stuff. We're gonna I'm gonna ask you about
Speaker 1: kind of what you're seeing in the macro picture today.
Speaker 1: I want to dig into some of the work that
Speaker 1: you've done about what you're calling like in the regime
Speaker 1: and this insolvency phase that we're kind of going through.
Speaker 1: What that means for us on a global scale, from
Speaker 1: our money politics, central make digital currencies, cryptocurrencies, and if
Speaker 1: we have time, we might even get into some kind
Speaker 1: of projections and things like that. So if everybody listening,
Speaker 1: just make sure you're sticking around for all that, because
Speaker 1: we're gonna we're gonna really dig into some good stuff.
Speaker 1: We're gonna start at a higher level and then we'll
Speaker 1: kind of push down as I think a good macro
Speaker 1: person would do so. Um. As far as macro, I
Speaker 1: think anybody investing is always trying to guess what the
Speaker 1: future is going to be. I guess it's probably just
Speaker 1: different time frames. If you're a trader, they're very short term.
Speaker 1: Macro is probably long term. Do you think that it's
Speaker 1: easier probably to get the bigger picture right than it
Speaker 1: is the short term picture? Like if somebody says, hey, hey, Rald,
Speaker 1: what's the price of this asset gonna be next month
Speaker 1: or the next week? You're like, I don't know, because
Speaker 1: different people have different skill sets. Um, and I prefer
Speaker 1: the longer term time right, And I'm just better at it.
Speaker 1: I'm a terrible short term trader. Doesn't mean people like
Speaker 1: Stevie Cohen will pulled to the journs to a brilliant
Speaker 1: short term traders. Um. You know, they can be incredibly
Speaker 1: successful at it. So it just depends what suits you, right.
Speaker 1: I'm a very visual person. I say the whole kind
Speaker 1: of macro framework come ahead at all times. I'm always
Speaker 1: kind of adjusting it, and those things I find play
Speaker 1: out better over minimum three months but generally, you know,
Speaker 1: six months to eighteen and sometimes further out as well.
Speaker 1: I just find it. I just get better returns from it. Sure, yeah,
Speaker 1: I kind of feel the same way. Um, it's easier
Speaker 1: for me to see the big picture. Even with my business.
Speaker 1: It's like I can't really dig into the details. I
Speaker 1: still like to look at the big picture. But talking
Speaker 1: about the big picture, maybe why don't you just set
Speaker 1: up for us, I guess what you're seeing in the
Speaker 1: macro economic picture right now. So we'll go back a
Speaker 1: bit very quickly. So we've been in this debt supercycle
Speaker 1: that we all know about. And the answer in two
Speaker 1: thousand after the internet boom was more debt. It's led
Speaker 1: to the housing boom, which led to the banking bus
Speaker 1: and the answer to that was more debt at corporate level,
Speaker 1: now still somewhein the banking system, and then government debt
Speaker 1: because government started trying to monetize this debt. So and
Speaker 1: the central banks have now put it onto their balance sheet.
Speaker 1: So it's not going away. It's just keeps growing, keeps
Speaker 1: getting moved around like a game of Past the parcel.
Speaker 1: So we kind of knew that the next time we
Speaker 1: had a recession, debt was going to be a issue
Speaker 1: again because it hadn't gone away. In fact that I
Speaker 1: got worse. So I've been you know, it's really interesting
Speaker 1: economists never forecast recessions, which is bizarre to me because
Speaker 1: if you show a small child a chart of GDP,
Speaker 1: they said, what, it goes up and down. It's like
Speaker 1: a cycle, right, it's a sign wave. You just don't
Speaker 1: know how deep or how high the peaks and troughs
Speaker 1: are and how far they are apart. But you approximately no,
Speaker 1: which is why it's kind of forecastable. So I've been
Speaker 1: looking for the end of this cycle and a recession
Speaker 1: back from about two thousand and eighteen. By two thousand nineteen,
Speaker 1: I was kind of locked and loaded into bonds where
Speaker 1: the best trade was, and then it was coming. Then
Speaker 1: the pandemic came and I saw it immediately, is okay,
Speaker 1: this is the accelerator, right, this is a huge thing.
Speaker 1: I was very early and got it very very right
Speaker 1: early on and luckily and that phase and looked that said, okay,
Speaker 1: now we've got the situation where we've seen the worst
Speaker 1: ever GDP dropping all history outside of the Great Depression,
Speaker 1: and the market usually goes through certain phases during a recession.
Speaker 1: It's normal. First is the liquidation phase, when everybody goes,
Speaker 1: oh my god, everything's changed. I need to readjust my
Speaker 1: risk right. Then you have the hope phase, which is, well,
Speaker 1: maybe it's not that bad. You know, in the media
Speaker 1: tends play a big role in that because they don't
Speaker 1: want the negative narratives, so it's it's all going to
Speaker 1: be okay. And then usually what happens is you get
Speaker 1: the final reality phase, So the normal reality phases when
Speaker 1: people go, actually, you know, this is pretty bad. Unemployment
Speaker 1: is still sticky, and the economy, consumer confidence, and the
Speaker 1: stock market tend to roll over together. This time around,
Speaker 1: I looked at this and thought, well, we don't know,
Speaker 1: because of central bank actions, how this is going to
Speaker 1: play out in some of these assets, but I know
Speaker 1: that everybody is probably pricing how long this episode goes
Speaker 1: on for wrongly, because every wants to assume it's going
Speaker 1: to be over and done with. And here we are
Speaker 1: now in peak pandemic across Europe, in the US, UM
Speaker 1: and in other countries again, and people starting to understand, okay,
Speaker 1: actually this is gonna last longer. So I termed that
Speaker 1: phase the insolvency phase, because the problem is is GDP
Speaker 1: growth collapsed. It came up a bit, and then it's
Speaker 1: flat blind. If you see all that real time economic data,
Speaker 1: like the Google mobility data, it's flatline. In fact, it's
Speaker 1: rolling over. What's telling us is that GDP growth is
Speaker 1: still about negative five percent year on year, which is
Speaker 1: the worst reception you and I have ever lived through.
Speaker 1: And that's ongoing after the kind of hope phased recovery
Speaker 1: because the first part was so bad. So if you
Speaker 1: think of what does that mean, it means that if
Speaker 1: you're a restaurant or a small business or even a
Speaker 1: large business that's not Internet based, right now, your revenues
Speaker 1: have dropped, but your cost base remains um and that
Speaker 1: makes you insolvent after a while, as you blow through
Speaker 1: your cash and then the government gives you some cash,
Speaker 1: and then they stopped the stimulus, and then you've got
Speaker 1: no cash and you're out of business, and that's insolvency. Now.
Speaker 1: The FED stepped in quickly to stop the insolvency of
Speaker 1: big corporations like General Electric and Forward by buying their bonds,
Speaker 1: but the government stimulus gave that check a while ago.
Speaker 1: Whatever that was like made to people and small businesses.
Speaker 1: It's been nothing since, even Europe struggling to get more
Speaker 1: stimulus through, so kind of it's a bit of a
Speaker 1: wily coyote moment, the insolvency phases where you run off
Speaker 1: the edge of the cliff and it's like it's fine
Speaker 1: out here, and then you're like, oh no, it's not,
Speaker 1: and we're seeing it everywhere. And I worry about what
Speaker 1: that insolvency phase means because in the end, it means
Speaker 1: that central banks have to print more money. You have
Speaker 1: to try and jam it into the banking system and
Speaker 1: try and force the banks to lend it, which they
Speaker 1: don't want to do. And they also have to try
Speaker 1: their ext stimulus for fiscal stimulus by the governments and
Speaker 1: monetize that debt too. So basically we've still got this
Speaker 1: massive transfer of insolvency off that private sector balance sheet
Speaker 1: onto the onto the government and balance shape. Right. The
Speaker 1: whole process is slightly scary, right, And I think, as
Speaker 1: you said, we're in this debt cycle and we're nearing
Speaker 1: the end. But I think a lot of people have
Speaker 1: been calling for the end of the debt cycle for
Speaker 1: a long time, and I think timing is always the
Speaker 1: hard problem, right We we always know what's inevitable, but
Speaker 1: when and so we have this insolvency phase. But it
Speaker 1: looks like we've seen the at least in the United States,
Speaker 1: the FED um be very willing to work. Right In
Speaker 1: two thousand eight it was a trillion dollars pretty quickly too.
Speaker 1: This year was three three trillion pretty quickly, and with
Speaker 1: the government it was six trillion, you know, total. And
Speaker 1: it seems though, like I understand you're saying, like they've
Speaker 1: stalled out on this last round of stimulus and people
Speaker 1: are running out of money, but they've shown how willing
Speaker 1: they are to move fast and hard and heavy. Instead
Speaker 1: of one trillion, it was six trillion. I mean, they
Speaker 1: wouldn't just spend six chillion to let it fall apart now.
Speaker 1: I mean, don't you think they're gonna do whatever it's
Speaker 1: gonna take, or do you think it may be too late?
Speaker 1: Of course, of course they do. And that's the whole
Speaker 1: point is you don't get rid of a debt supercycle
Speaker 1: by letting everybody go bust. You do it by trying
Speaker 1: to support every single part that you can. And what
Speaker 1: you're doing in essence is you're just printing a lot
Speaker 1: of money, so you're devaluing the value of money itself. Yep.
Speaker 1: And that's the real issue here is there is no
Speaker 1: one off reset of debts and everybody goes back to
Speaker 1: the dark ages and you start again. It just doesn't
Speaker 1: work that way because, as you said, governments are highly
Speaker 1: incentivized to protect the people who voted them in, right. Yeah,
Speaker 1: So they're trying to keep all the plates spinning, so
Speaker 1: to speak, and eventually they can't keep mob spinning, and
Speaker 1: they aren't. They are crashed. So it's kind of a
Speaker 1: as I've been seeing. It's kind of a go tell
Speaker 1: your blow tape tape scenario. Yeah. Now, And the problem
Speaker 1: is is people we don't know what that The end
Speaker 1: game of that is. Some people want to price in
Speaker 1: hyper inflation. I don't think that's coming. Some people want
Speaker 1: to apply to a lot of inflation. I don't think
Speaker 1: that's coming either, because of the aging population and the
Speaker 1: debt demographics. Icael, I think it's more deflation, right, Um,
Speaker 1: But whatever it is, this takes a long time to
Speaker 1: play out. And what's what's a long time. I think
Speaker 1: the de leveraging that has to happen in whichever way,
Speaker 1: shape or form, probably twenty years um. And that's that
Speaker 1: means a lot lower economic growth, the less value of
Speaker 1: your own currency, and eventually we might move to a
Speaker 1: different system, which is what we'll come into in a bit. Yeah,
Speaker 1: so I want to move into that conversation, but before
Speaker 1: we do, the the inflation, the the the inflation hyper inflation,
Speaker 1: or the de leveraging the deflation seems to be the debate, right,
Speaker 1: I mean, I've had I've asked that that question many times,
Speaker 1: but it seems like maybe it's actually a very nuanced conversation,
Speaker 1: and there's both because we're seeing I mean, where I'm
Speaker 1: at here in the United States, you can't buy anything.
Speaker 1: You can't buy a bicycle, you can't buy a surfboard,
Speaker 1: you can't buy an r V, you can't buy a car,
Speaker 1: you can't buy a house. I mean, it's inflated so
Speaker 1: fast it makes your head spin. But yet there's deeply
Speaker 1: so it almost seems like we're going to see both. Yes,
Speaker 1: And one of the things I've written a lot about
Speaker 1: is wage deflation. If you look at wages adjusted for
Speaker 1: inflation since nineteen seventy four, that basically remained flat, so
Speaker 1: people because of globalization, the number of people entering the
Speaker 1: workforce from the Baby Boomers and now the millennials, plus
Speaker 1: the globalization and technology have all meant that humans are
Speaker 1: getting replaced either with cheaper workers abroad, or they're competing
Speaker 1: against each other because there's so many of the people
Speaker 1: of the same age, or they're competing against computers. That's
Speaker 1: a terrible situation. And that's not a fault of anybody.
Speaker 1: So if it's a fault of anybody, it's the parents
Speaker 1: of the people who had all these baby boomers, and
Speaker 1: that was World War Two that drove that. Well, that's
Speaker 1: not a terrible thing. I think per per like Jeff
Speaker 1: boosts argument you know about deflation, which I know you
Speaker 1: you know you're familiar with. Um. It seems like human
Speaker 1: nature always wants deflation. Right, instead of making a bunch
Speaker 1: of trips holding stuff with my hands, I'll create a
Speaker 1: whil barrel to make my work easier. And like computers
Speaker 1: and robots, Like I watched the Jetsons when I was
Speaker 1: a kid, and they had a robot that cleaned the house,
Speaker 1: and it's like, oh, how cool would there be of
Speaker 1: a robot cleaned house? So a seems like we naturally
Speaker 1: want that, and it's a good thing to do, but
Speaker 1: we've got this one problem is this to eight these
Speaker 1: two cohorts, the baby boomers and the millennials, too many
Speaker 1: of them. If you're Japan, which didn't have the echo
Speaker 1: millennial boom, this is exactly all you want. You want
Speaker 1: some deflation because you'll say a savings nation. And do
Speaker 1: you want over time because you've got a massive loss
Speaker 1: of workforce to replace them with robots? Of course you do,
Speaker 1: And that's the right answers because of World War Two
Speaker 1: that we end up with these too many groups of
Speaker 1: people because all the baby boomers had kids as well,
Speaker 1: So this kind of demographic mess needs to sort itself through.
Speaker 1: It's not normal. This is a really weird time. That's
Speaker 1: why we store the massive inflation of the seven sis.
Speaker 1: We've seen all of the debt cycle. What I did
Speaker 1: is I took average household earnings in inflation just in terms,
Speaker 1: and adjusted them for the amount of household debt, and
Speaker 1: then exactly mirrors the rise and asset classes. So basically
Speaker 1: what people have done the inflation we've seen in assets
Speaker 1: and wage deflation. The difference is the debt. So people
Speaker 1: could participate in the economy. So it's kind of they
Speaker 1: did a rational thing, but too many people did irrational thing,
Speaker 1: tensively irrational. Well, it seems like we have I I
Speaker 1: do understand the demographics, and you're right. I've been following
Speaker 1: Harry Dent for like over a decade, and he definitely
Speaker 1: has to pioneered a lot on the demographics. But it
Speaker 1: seems like it's maybe because we have incompatible systems where
Speaker 1: we have a def human nature is deflationary, but we
Speaker 1: have an inflationary system. So if we had an inflation
Speaker 1: a deflationary system with a deflationary nature, maybe something would
Speaker 1: be different. I guess we don't know. I think, yeah,
Speaker 1: that maybe it's the argument why we've seen wage deflation
Speaker 1: and asset price inflation. Um, maybe it's exactly that. I
Speaker 1: don't know. It probably makes sense. So, UM, we are
Speaker 1: where we are, as you like to say, right, whether
Speaker 1: we like it or not, Where we are and and
Speaker 1: and things are are moving very very fast. And UM,
Speaker 1: I want to get into um a big topic, which is, UM,
Speaker 1: a few things. There's a few things that seem to
Speaker 1: be kind of converging together. And UM, really, I mean
Speaker 1: you've talked about like the Fourth Turning. And now we
Speaker 1: talk about I mean, we have the Bretton Woods calling
Speaker 1: for or I m F calling for Bretton Woods to
Speaker 1: moment at the same time that the World Economic Forums
Speaker 1: calling for this great reset, and they all seem to
Speaker 1: be kind of converging right here where something big is
Speaker 1: going to happen next year. UM. I know you've talked
Speaker 1: quite a bit about that Bretton Woods Too moment. Maybe
Speaker 1: that means bringing the world back together onto a onto
Speaker 1: a one world currency kind of like Bretton Woods one. Um.
Speaker 1: And then we have the great reset that's coming together.
Speaker 1: I mean, what are you seeing in that whole mess
Speaker 1: kind of converging. It's um, it's a hill bloom. You've
Speaker 1: seen around on Twitter stuff talks about recently about the
Speaker 1: Overtson window, which is a political opportunity, moments of opportunity
Speaker 1: when you can affect great change. Most changes can't happen
Speaker 1: except in extraordinary times, right, And this is what the
Speaker 1: Fourth Turning was about. Is when you get the shift
Speaker 1: in the handover of power from one demographic to the other,
Speaker 1: it changes the end of a system because people in
Speaker 1: different ways of doing things. So this overt and windows
Speaker 1: as wide as it's probably ever been, because everybody knows
Speaker 1: they need something different. Whether you're on the left, whether
Speaker 1: you're on the right, whether a crypto anarchists or a
Speaker 1: gold bug, everybody knows something needs to change. Or you're
Speaker 1: a student, we all know you don't know what the
Speaker 1: answer is. But what it does mean is is that
Speaker 1: there's a hard probability that something big will happen, and
Speaker 1: we're hearing about it. So one of the things that
Speaker 1: these central banks and these government bodies and supernational bodies
Speaker 1: are looking at, they're looking at one of the problems
Speaker 1: that they're seeing is that the fact that the US
Speaker 1: world GDP and of every currency transaction on Earth, and
Speaker 1: this can't work guides we can't, you know, if you're
Speaker 1: South Africa or Brazil or Argentina, you can't live in
Speaker 1: a world where you have to borrow in a currency
Speaker 1: that's not your own, that goes up and down in
Speaker 1: huge cycles, and you're you're having to pander to both
Speaker 1: the swift payment system and and UM and the banking
Speaker 1: system that may or may not have access to dollars.
Speaker 1: So they're all saying, listen, this has to stop. It's
Speaker 1: creating a huge problem part of the big offshore dollar
Speaker 1: lending mark. And when you say they are saying it
Speaker 1: has to stop, who's they? So that is the I
Speaker 1: m F, which is basically the e c B, the
Speaker 1: Bank of England, the Bank of Japan, probably the Royal
Speaker 1: Bank of Canada, I mean the Bank Canada. I mean
Speaker 1: almost all the central banks are saying this cannot go on.
Speaker 1: Obviously the FED wants it to go on because they're
Speaker 1: the reserve currency. Everyone's saying that, right, this has gone
Speaker 1: too far. This is one of the reasons why Bretton
Speaker 1: Woods happened in the first place. It's also the reason
Speaker 1: why the US left Bretton Woods. Is when something goes
Speaker 1: too far and it comes unmanageable for everybody, every he
Speaker 1: seeks a different answer. And what we've seen is the
Speaker 1: rise of populism and anger, whether it's from the left
Speaker 1: or the right, that we want change. And that's classically
Speaker 1: Neil Holl's forth turning as well. So people are now
Speaker 1: realizing that the digital world is going to offer us
Speaker 1: some change. Think of one of the other super narratives
Speaker 1: that we live in, the one verse, right, and we've
Speaker 1: seen that the printing of money and giving it to
Speaker 1: the banks only gives money to people who can get
Speaker 1: access to credit, which is the richer people, right, So
Speaker 1: it doesn't work. So that we're seeing the rise of
Speaker 1: the m m T story, a massive fiscal stimulus, but
Speaker 1: even that normally goes in the hands of the wrong people.
Speaker 1: A few corporates lie in their back pockets. But we're
Speaker 1: seeing the central bank digital currency story rising, which is
Speaker 1: what the IMF for talking about, which is, well, maybe
Speaker 1: maybe we allow programmable money where Mark and rail get
Speaker 1: different rates of interest, or they stimulate your you know,
Speaker 1: your friends surf shack because it's closed down because of
Speaker 1: the pandemic, and they penalize them some savor or somewhere else,
Speaker 1: whatever it may be. You can use behavior economics to
Speaker 1: drive incentive systems to get the economy to function better.
Speaker 1: That's amazing. It's amazing behavior and sensive systems work better
Speaker 1: than anything else. They're also terrifying because they can be
Speaker 1: stronger than everything else. And we've seen that. But Twitter
Speaker 1: and Google, right, and politicization of people who are not
Speaker 1: that political, they got driven down alleyways where they hated
Speaker 1: everybody else because of how behavioral economics works on these
Speaker 1: big data platforms. So that's all that's all coming here now, Um,
Speaker 1: just a sidetrack there a little bit. I mean, we
Speaker 1: talked about this debt based system and we have to
Speaker 1: keep paling more debt and it's almost like, um, it's
Speaker 1: not working, so let's just keep doing more of it.
Speaker 1: Like we've we've you said, we've got this divide between
Speaker 1: then and the one percent. We have this incoming equality.
Speaker 1: Um that's created by this system. But let's just keep
Speaker 1: doing more of it. And now we kind of have
Speaker 1: again we have different political factions and some people are
Speaker 1: calling for everything has to be equal, not just equal opportunity,
Speaker 1: but now it has to be an equal outcome. But
Speaker 1: what you're talking about is the exact opposite. Now we're
Speaker 1: gonna treat everybody not equally. So what again, If we
Speaker 1: think of incentives and game theory, individual governments will always
Speaker 1: choose to maintain the status quo because to do something
Speaker 1: dramatically different is terrifying, and that's all they try and do, really,
Speaker 1: and the status quo is really to protect their power.
Speaker 1: Exactly when you're the I m F. You don't think
Speaker 1: in those terms, Do you think, what is the problem
Speaker 1: that everybody's got and can we find a better way. Now,
Speaker 1: maybe you can argue they're trying to protect their power,
Speaker 1: so sure the whole world works that way. It is
Speaker 1: what it is is. I always say, yeah, But what
Speaker 1: they're trying to do is, look, can we solve the
Speaker 1: whole problem. That's where the b i S, the Bank
Speaker 1: of International Settlements are looking at. It's to the World
Speaker 1: Economic Forum. These are all these supernational governing bodies that
Speaker 1: are basically saying they're prepared to reinvent themselves um to
Speaker 1: affect massive change. Because if we do create change together,
Speaker 1: then we can do it. But if we rely aren't
Speaker 1: individual states to do it, they won't do it. And
Speaker 1: so their idea, which I think is pretty groundbreaking, is
Speaker 1: to go back to kind of some version of Keynes's
Speaker 1: original idea of this bank accrep which is a global currency.
Speaker 1: But Facebook Libra were the guys who changed all of
Speaker 1: this because the bank corps before was thought of a
Speaker 1: will have a basket of currencies and it will be
Speaker 1: denominated in U S. Dollars. No, this idea is the
Speaker 1: dollar is part of the basket. That's what Facebook Libra
Speaker 1: did and all the central banks no, no, no no, no no,
Speaker 1: because this is all powerful because so let's say you're
Speaker 1: a gold exporter in South Africa and I'm a Brazilian
Speaker 1: grain imports. All right, we get screwed by the currencies
Speaker 1: going up and down, even though we're not necessarily trading
Speaker 1: with the US. You might be trading with Russia and
Speaker 1: I might be trading with China, but the US dollar
Speaker 1: is what we're all holding too. But if you have
Speaker 1: a global currency basket with the dollar is part of it.
Speaker 1: The denominator is money supply, right, so it's really stable,
Speaker 1: which we already have. I mean, the the I m
Speaker 1: F already has the SDR, which is a basket of currency.
Speaker 1: So it's just a digital SDR almost, it's sort of,
Speaker 1: but I think it depends how the waiting has done,
Speaker 1: how it works as could it be a digital SDR,
Speaker 1: could it be a different variation of that. I don't
Speaker 1: know whether the SDR has the dollar within the basket
Speaker 1: or the dollar is the denominator. I believe it's the denominator,
Speaker 1: but I'm sure. So there's there's lots of things to
Speaker 1: fear from this, as you've said, I mean, obviously there's
Speaker 1: the there there's the programmable money piece, right like Hey,
Speaker 1: if you don't spend your money this week, you lose it,
Speaker 1: or you know, things like that, or or different interest
Speaker 1: rates or things like that, which again is the opposite
Speaker 1: of inequality, and it's it's it's scary surveillance, totalitarianism. But
Speaker 1: also what scares me a little bit about this is
Speaker 1: moving to that. I mean, then each country loses its
Speaker 1: sovereignty in a sense, is that? I mean, right, they
Speaker 1: lose control to control their own currencies, their own only
Speaker 1: because we've all grown up in a world where currency
Speaker 1: sovereignty is the key issue. Right in the past, it
Speaker 1: wasn't because they were pegged to the to the dollar,
Speaker 1: or the breton Wood system to the to the dollar
Speaker 1: or before that to goals, right, so the breton Wood
Speaker 1: system was pegging it to the dollar, which was picked
Speaker 1: to gold. So it's not currency is not always the answer.
Speaker 1: There's other ways of doing it. It's technology, it's competitiveness,
Speaker 1: is productivity, it's labor costs, stuff like that. So we
Speaker 1: only we just know this world that we've been grown
Speaker 1: up in. So I'm not sure you give up sovereignty.
Speaker 1: You just have to do things in different ways, and
Speaker 1: that's okay. Yeah, I guess maybe you're not giving up sovereignty.
Speaker 1: I mean, and to your point, right, for for hundreds
Speaker 1: of years, the world was kind of working together on
Speaker 1: a single unit of account based off of a gold coin,
Speaker 1: and that led to massive prosperity because free trade could
Speaker 1: work very easily. And it wasn't until we've kind of
Speaker 1: got off of that where now everybody's competing against each
Speaker 1: other and it's turned into a big name. But don't
Speaker 1: forget with the gold standard too. We still had the
Speaker 1: leverage cycle, you know, the credit cycle still happened. People
Speaker 1: borrowed too much money. They all went past. We have
Speaker 1: massive deflation. So it didn't solve anything. It's not pan
Speaker 1: of Sia, but it's different than this world we've got
Speaker 1: now with with it's always your currency, because in the end,
Speaker 1: you keep defining people's money. Right, Yeah, I guess I'm
Speaker 1: looking more like the four eighteen hundred period that that
Speaker 1: range right there. It seemed like we had a big
Speaker 1: streak of prosperity when the whole world kind of had
Speaker 1: that standard unit of account. I would just say it
Speaker 1: was the benefits of British empod. But maybe that's me. Yeah,
Speaker 1: there's there's I'm only wandering you out. I got you,
Speaker 1: I got you. So another thing that that that seems
Speaker 1: a little bit scary though, is when the central banks
Speaker 1: can create their own digital currency, the CBDC, which of
Speaker 1: course has all this programable stuff that that that's a
Speaker 1: whole rabbit hole that could be dug down. But it
Speaker 1: almost seems like they have the ability now to just
Speaker 1: send money out directly to the people, and potentially it
Speaker 1: could be bypassing all the layers of governments and banks
Speaker 1: and really turn it into that one world currency, one
Speaker 1: world government that's really not even a government. Maybe it's
Speaker 1: just the banker's control in the world. And the question is, well,
Speaker 1: I'm not sure that the central banks that get to
Speaker 1: act independently, because when monetary and fiscal policy blend, it
Speaker 1: becomes the government's problem, not the central bank. So I'm
Speaker 1: not sure the central banks maintain their independence in this world.
Speaker 1: The other thing is, and again we don't know what
Speaker 1: the good parts and bad parts. There's going to be
Speaker 1: lauren of unintended consequences, and it gets to be some
Speaker 1: really good parts of this. One part is I don't
Speaker 1: see why you need a banking sector. You can use
Speaker 1: fintech solutions layer for all the bits and pieces that
Speaker 1: we need for the access of the money and where
Speaker 1: we store it and how we transfer it and all
Speaker 1: of that stuff. Some of that's good, right, it's going
Speaker 1: to get rid of all this friction everything else. But
Speaker 1: the other part is the government has direct control over
Speaker 1: your wallet, which is a bad part, but it can
Speaker 1: be used really well because when we've got an economic crisis,
Speaker 1: they can give you money directly instantaneously, and they can say,
Speaker 1: as you say, you need to spend this in the
Speaker 1: next three months, so we massively stimulate the economy. In
Speaker 1: the end, that's a net good thing. The bad thing
Speaker 1: is they can control you and say, well, you've got
Speaker 1: another speeding ticket up, taking the money straight out of
Speaker 1: your wallet without you knowing about it. It's it's it's
Speaker 1: it's a great leap forward and a terrifying leap into
Speaker 1: the abyss as well. At the same time. Yeah, like
Speaker 1: you said, everything has trade ups. Everything is everything's got
Speaker 1: trade us and pros and times, and in the end,
Speaker 1: all of this CBDC stuff, you still fee money, so
Speaker 1: it doesn't get rid of the core issue. Now, can
Speaker 1: you can you do one of the things that I
Speaker 1: left talks about was Okay, let's have these these coins
Speaker 1: and then these digital coins and then let everybody do
Speaker 1: a massive print at the same time to fiscally stimulate
Speaker 1: the world at the same time. So like a big
Speaker 1: new deal. So let's say everybody does GDP, everybody in
Speaker 1: that basket. Then what happens if they said to be
Speaker 1: in the basket you have to restrict money supply growth
Speaker 1: to two sent That's kind of interesting, right, because then
Speaker 1: it starts looking a bit more like gold or like bitcoin.
Speaker 1: Obviously not the same, but governments will always cheat in
Speaker 1: the end, but it might be a huge period of stability,
Speaker 1: massive fiscal similars, and then limited money squad. So who
Speaker 1: knows how this plays out. It's going to be fascinating.
Speaker 1: It too such a massive moment in time. Now, um,
Speaker 1: just real quick, you said it doesn't solve the problem.
Speaker 1: So the problem in my opinion, from my viewpoint, is
Speaker 1: that this always trying to create more money. So I'm
Speaker 1: curious You've mentioned Kinsei and you've mentioned m m T.
Speaker 1: I'm curious kind of your viewpoint on that Kinseian economics
Speaker 1: where we can just print and we stimulate versus like
Speaker 1: an Austrian model where really we have sound money. We
Speaker 1: don't have this never you know supply that constantly expands.
Speaker 1: Where do you see on those two levels. I'm an
Speaker 1: Austrian by belief in the business cycle. I think we've
Speaker 1: just got too far. We had those two that that supercycle,
Speaker 1: and we can't pretend it's not there. You could be
Speaker 1: an Austrian economists all you like right now, and you're
Speaker 1: gonna blow up the world. You're going to drive the
Speaker 1: biggest economic destruction of all recorded history. If you decide
Speaker 1: to become an Austrian and say, fine, we'll just let
Speaker 1: the business cycle do it. We can't. So it is
Speaker 1: what it is right now. How do you deal with it?
Speaker 1: I don't know. I mean there's a lot of people
Speaker 1: will point the fingers and blame everybody. The answer is
Speaker 1: we don't know, and I don't the central banks don't know.
Speaker 1: Everybody is trying to figure something out. But one thing
Speaker 1: we have got, the most powerful thing, is bitcoin just exists.
Speaker 1: We've got something to get us out of this that
Speaker 1: we can side step whatever mess this becomes. It might
Speaker 1: all work. Maybe they create another thirty or forty years
Speaker 1: of prosperity. We don't know, but I'm really uneasy, as
Speaker 1: is everybody else around the world in how this plays out.
Speaker 1: But bitcoin is that gift, right, It's the gift, the
Speaker 1: life raft that can save us from all of this
Speaker 1: because we can side step it. Yeah, so that's how
Speaker 1: I want to jump into that. You you you actually made
Speaker 1: a video or etie about bitcoin being a life raft. Um.
Speaker 1: So we have this ship if you want to call
Speaker 1: it that, that's heading into turbulent water and we don't
Speaker 1: know which way it's going to go, and we can
Speaker 1: decide to stay on for the ride, or we could
Speaker 1: decide to hop on a life raft and just kind
Speaker 1: of sidestep the whole thing. Is that kind of how
Speaker 1: you see it? Yes, I do. Because of the nature
Speaker 1: of the world is going digital. So bitcoin is the
Speaker 1: native digital thing that drove all without change in the
Speaker 1: first place. You know, it's almost perfect. And its construction
Speaker 1: as a store of value, whether it is as a
Speaker 1: means of payment, we can argue about that all day,
Speaker 1: but as a store of value as collateral, it's amazing
Speaker 1: because the world's collateral system right now is US treasuries.
Speaker 1: Probably is the U S can issue as many of
Speaker 1: them as they want, lower and lower rates the more
Speaker 1: the issue, the more the rates go down. Really, and
Speaker 1: the currency itself, once you issue more and more of
Speaker 1: that devalues every time. So it's actually not a great
Speaker 1: reserve asset. And you know what happens in times of
Speaker 1: economic stress is it should be harder. You should be
Speaker 1: at end out your collateral for more money. But look
Speaker 1: at treasury yields that you're lower in the recessions. You
Speaker 1: get less money for lendering out your treasuries in a recession,
Speaker 1: so it kind of doesn't function well. Bitcoin well, that's
Speaker 1: a whole different game because it's a it's a private market,
Speaker 1: not driven by a central bank, and it has the
Speaker 1: limited supply feature, which means that in a recession, when
Speaker 1: money scarce, if I want to borrow your bitcoin, you're
Speaker 1: gonna charge me for it. Now the monetary mechanism works. Okay,
Speaker 1: that's great. Bitcoin doesn't have a yield curve yet, so
Speaker 1: we're nowhere near there. You know, there needs to be
Speaker 1: a time value of money within bitcoin, but it's coming.
Speaker 1: It's this and therefore as a pristine collateral where it
Speaker 1: can't be printed more of it can't be messing around with.
Speaker 1: That is a very very valuable asset for anybody and
Speaker 1: to sidestep that system in something as perfect as this,
Speaker 1: it's amazing. Right now, gold has been that you know,
Speaker 1: five thousand years of history as as as gold you know,
Speaker 1: um whereas money, but the gold market has been completely captured.
Speaker 1: And I mean the price is not set on the market,
Speaker 1: it's set in London, So gold doesn't really offer that
Speaker 1: like like bitcoin does. Do you see future when more
Speaker 1: and more institutions come into bitcoin where maybe that starts
Speaker 1: to change. I mean they're gonna want to try to
Speaker 1: monetize it, right or or financialize that. I should say, yeah,
Speaker 1: that's gonna happen. And that's really sad is humans are humans.
Speaker 1: They create credit, They always did, and they will create
Speaker 1: credit cycle all over again on top of bitcoin. Because
Speaker 1: when you've got a great collateral asset like that, what's
Speaker 1: the best thing to do? Use it for lending? And
Speaker 1: you know, to be a money lender is the oldest
Speaker 1: or second oldest professional on earth. And that's not going
Speaker 1: to go away because we're humans. And I think there
Speaker 1: is a slight misbelief in the bitcoin community that suddenly
Speaker 1: we won't build a fractional system all over again. We've
Speaker 1: always done it. We did with gold, We've done it
Speaker 1: with Cowrie Shells, We've we've done it with fit we
Speaker 1: will do it all over again. Well, there's a nice
Speaker 1: period of perspiracy when you go from zero leverage to
Speaker 1: a lot of leverage all over again. Yeah. Well, you know,
Speaker 1: I think the the the fractional reserve lending on top
Speaker 1: of bitcoin isn't necessarily a bad thing. I mean, obviously
Speaker 1: we can see what happened in the free banking world
Speaker 1: before the central bank came around and banks were going
Speaker 1: boom and bust and people were losing their money. But
Speaker 1: that's a risk that those people were willing to take. Hey,
Speaker 1: I'm willing to potentially lose this to make that potential yield,
Speaker 1: And and that's a decision that each person can individually make,
Speaker 1: and maybe I could be okay with that versus a
Speaker 1: centrally controlled model where we just inflated away forever, which
Speaker 1: kind of like so, you know, I mean, the free
Speaker 1: banking was kind of like a free model where people
Speaker 1: could do that, versus what we had today being a
Speaker 1: controlled model. Don't you see that being different? Yes, I do.
Speaker 1: I don't know if then that results any different, because
Speaker 1: it depends how many people lose money from doing you know,
Speaker 1: we're borrowing money from the wrong lenders or whatever, lending
Speaker 1: money to the wrong borrowers who knows. Right, we're seeing
Speaker 1: that experiment playing out in Defy right now in real time,
Speaker 1: and that these things are blowing up media or even
Speaker 1: with black Fire and Celsius and those companies as well.
Speaker 1: And look, I'm super fascinated by this. Um. You know,
Speaker 1: can private sector can the private sector send m set
Speaker 1: interest rates in a world where central bank still exists?
Speaker 1: I don't know, because the institutional money arbitrages it because
Speaker 1: they can borrow from the central back, they can borrow
Speaker 1: from the banking system. But you know, one and and
Speaker 1: flood the defied market at six and before you know, overtime,
Speaker 1: all the spreads flattened down. So it's a shame. So
Speaker 1: they're not not connected because the money will always flow um.
Speaker 1: And so we'd need to see some whole soul change
Speaker 1: in that before we could really see true independent markets. Yeah,
Speaker 1: so I'm curious at your viewpoint on bitcoin because you
Speaker 1: say it's the life raft. So it's a way for
Speaker 1: us to escape all this whatever we're going into, this totalitarianism,
Speaker 1: this control whatever, it is manipulation and it's a way
Speaker 1: for us to side sidestep it. So I mean there's
Speaker 1: there's some ideology that you see with it, I think,
Speaker 1: But at the same time, you take this this role
Speaker 1: of this macro trader where hey, I'm gonna trade it
Speaker 1: until the yield curve is over right. Um. So I'm
Speaker 1: curious what's your view on bitcoin? I mean, like you
Speaker 1: mentioned kind of the bitcoin community, which I kind of
Speaker 1: fall into, which I see it as like our life
Speaker 1: raft as well, but I don't want to see it
Speaker 1: get corrupted. Do you see it as just another asset
Speaker 1: to trade? Um in the meantime and in a way
Speaker 1: to side step this. In the show again, I always
Speaker 1: got back to my point. Whatever we wanted to be
Speaker 1: is irrelevant. It is a network that is life, living,
Speaker 1: breathing and uncontrollable. So it is what it is. And
Speaker 1: some people wanted to be one thing, some people wanted
Speaker 1: to be another. Where it ends up is I don't know. Um. Now,
Speaker 1: I think it plays a dominant role in the global
Speaker 1: financial system. What does that mean? I'm not yet sure
Speaker 1: what does that future financial system look like? I don't know.
Speaker 1: But as a macro guy, my job is not to
Speaker 1: say I want it to be this, Um it is, okay,
Speaker 1: what is the possibility that it's going to be this?
Speaker 1: You know it does? Does bitcoin maximism have a reasonable probability? Yes?
Speaker 1: Over what time Arizon don't really know, but it kind
Speaker 1: of feels like twenty years. Um, So you know what
Speaker 1: is the what points in the Metcalf's law produces the
Speaker 1: best returns Because in the end, I don't really care
Speaker 1: about the philosophy of what the future financial system looks
Speaker 1: like as long as I'm all right, well, my family
Speaker 1: is all right, or my friends are all right, or
Speaker 1: the people I can help, you know, And that's human need, right.
Speaker 1: Human need is for your own personal security and security
Speaker 1: of your friends and family around you. So that's how
Speaker 1: I look at it. So I'm kind of agnostick as
Speaker 1: long as I can do that. Now, I wants a new,
Speaker 1: different financial future. Um, but I'm not betting my money
Speaker 1: because I want it. I'm betting my money because I
Speaker 1: think this is the most likely helpcome right right right.
Speaker 1: So um, I'm curious though from your viewpoint in this,
Speaker 1: because you're somebody who's kind of an international man, right,
Speaker 1: you're your British I think you lived in Spain for
Speaker 1: a long time. Now you're in Caymans or wherever you're at,
Speaker 1: So you're kind of doing this geo arbitrage if you will. Right,
Speaker 1: you're going to where you're treated best, I guess, or
Speaker 1: your money is treated best. So I'm curious, you know,
Speaker 1: kind of my viewpoint in the world seems like, you know,
Speaker 1: we're going to more globalism obviously, I mean that's obvious, right,
Speaker 1: I mean, they're they're pushing that the World Economic Form
Speaker 1: i m F, etcetera. And it almost seems like it's
Speaker 1: becoming more totalitarianism. And we're gonna have technology that will
Speaker 1: continue to morph with economic as you're talking about CBDCs
Speaker 1: and more control, more surveillance, etcetera. And as you said,
Speaker 1: governments are always going to try to protect what they have,
Speaker 1: and that's power. At the end of the day, it's power.
Speaker 1: And so what breaks that grip of us becoming like
Speaker 1: total slaves. And from my viewpoint, it seems like the
Speaker 1: only thing that maybe could ever break that grip would
Speaker 1: be competition. If they came and say hey, you can
Speaker 1: come live here and we're open and free, and then
Speaker 1: rich people want to go there. But in the past.
Speaker 1: I have friends growing up who who came from Iran
Speaker 1: or Iraq or even from South Africa left that oppressive regimes,
Speaker 1: but they came penniless. They couldn't get any money out
Speaker 1: of the country. And Bitcoin changes that because now I
Speaker 1: could go to that free country and take my wealth
Speaker 1: with me. But that system has always existed, right, because
Speaker 1: you've got it in the US in different states. So
Speaker 1: you're in California and you're like, God, I wish I
Speaker 1: was living in Florida right now. Serfs was good, but
Speaker 1: the but the tax is lower, right, um, And we
Speaker 1: we have it in Europe. You can move to Ailand,
Speaker 1: which has a lower tax rate in Spain, for example,
Speaker 1: lower than France, and that has always been available, so
Speaker 1: I don't think there's any great change. And then this
Speaker 1: whole sovereign man thing. You've always been able to take
Speaker 1: a euro across all of those countries. Now to leave
Speaker 1: Europe and bring it into Cayman, you have to produce
Speaker 1: your k y C and all of that, and you
Speaker 1: have to apply for citizenship or or a work permit.
Speaker 1: It's not it's never been that difficult. Well, it has
Speaker 1: been depending on what country are coming from. If you
Speaker 1: now if you're trying to flee country. So yesterday I
Speaker 1: was walking the dogs on the beach and there's a
Speaker 1: bunch of Cuban refugees growing up in a boat. And
Speaker 1: we see this periodically. Every few months there's a boat
Speaker 1: arrived with twenty Cuban refugees and it's a basic raft, right.
Speaker 1: The economic poverty and the the regime causes people to
Speaker 1: do extreme things to leave, and that drives it home
Speaker 1: to you your exact point, they leave handing less, they
Speaker 1: start again. Uh. And yes, bitcoin does help this, and
Speaker 1: gold traditionally help that, but it's it's difficult because it
Speaker 1: wasn't transportable so easily. Yes, you can deposit in your
Speaker 1: Singapore bolts and then you know access to it. It
Speaker 1: does work, it's a bit clunky. Bitcoin's grateful all of this.
Speaker 1: I mean, it does, it does help. But in the end,
Speaker 1: most people don't get driven by taxes, to get driven
Speaker 1: by quality of life. And my choices have always been
Speaker 1: driven by quality of life, of which taxes is only
Speaker 1: a small equation. Well, my mine is quality of life
Speaker 1: as well. And you before we started recording, you talked
Speaker 1: about how California is starting to lockdown again. And for
Speaker 1: me and my family, I don't want to live in
Speaker 1: a lockdown country. I have money, why wouldn't I go
Speaker 1: somewhere that isn't lockdown, And of course I would want
Speaker 1: to do that. So it is driven by quality of life.
Speaker 1: Taxes is I think part of that equation of qual exactly.
Speaker 1: But it's the quality of life. And if you've gotten
Speaker 1: abuse so more to the point, if you've got abusive
Speaker 1: authoritarian regime. So if China becomes much more restrictive on
Speaker 1: its freedoms by using all this kind of very smart
Speaker 1: behavioral economic techniques on its people, well you're gonna get
Speaker 1: a lot of Chinese leaving. And we've already seen massive
Speaker 1: capital fiers. Bitcoin has been one of the beneficiaries of
Speaker 1: those cover flows, and all these stable coins are really
Speaker 1: basically a lot of it's coming out of China. Um,
Speaker 1: we're saying. If you look at the largest countries by
Speaker 1: usage of per capital use of bitcoin, Venezuela, Columbia, South Africa, China. Yeah,
Speaker 1: all for the same reasons. Right, it's capital flights, um,
Speaker 1: And it's great for that, it's great, but it's hard.
Speaker 1: It's actually hard for people to leave. It's really hard
Speaker 1: for Venezuelan. To leave Venezuela and get a country to
Speaker 1: accept them, that's really hard. You have to have money,
Speaker 1: so it kind of favors the elite. Still, it doesn't
Speaker 1: actually favor the individual, right, But again, having friends that
Speaker 1: have escaped escaped oppressive regimes that were somewhat well off
Speaker 1: in those countries, they had to company less and so
Speaker 1: as your point, you can only really do that if
Speaker 1: you have some means. But if your country doesn't let
Speaker 1: you get any of your wealth out of that country,
Speaker 1: then you're like, I could go to St. St. Bart's,
Speaker 1: but like I need a hunter grand to get there
Speaker 1: on a private jet, and my country doesn't let me
Speaker 1: get my money out, and now if I can take
Speaker 1: my money, it just it just changes things. Yeah, it does,
Speaker 1: it does, but you know that's what it probably does
Speaker 1: is bring it down a bit. So the very elites.
Speaker 1: Right when Argentina had the massive default in the Coralito
Speaker 1: where they stole the money from everybody's bank account, the
Speaker 1: rich were flying out in private jects with stacks of
Speaker 1: gold and money and everything else. They already had it.
Speaker 1: But they've already gotten it, right, But it's the next
Speaker 1: tier down that got completely screwed. They lost all of
Speaker 1: their wealth. Everybody in Venezuela whose middle class or wealthy
Speaker 1: middle class got completely destroyed. The poor in the end,
Speaker 1: they've been poor either way, right, So yes, they further
Speaker 1: abuses of the system, but it was that middle class
Speaker 1: and wealthy middle class got gutted in many of those countries.
Speaker 1: And South Africa they're still bleeding I mean out the door.
Speaker 1: I mean, yes, there's still opportunity in South Africa. It's hard. Yeah. Yeah.
Speaker 1: One of my one of my best friends is is
Speaker 1: from South Africa, and so they're a family left and
Speaker 1: so I'm familiar with that story. But I guess so
Speaker 1: maybe then from that viewpoint, bitcoin is that life raft
Speaker 1: to to um sidestep the system, but are so maybe
Speaker 1: a way to our So maybe put a motor on
Speaker 1: that boat and then go somewhere else. Here's a conversation
Speaker 1: I had. I had a conversation with a big family
Speaker 1: office from Latin America, and they were bitcoin miners in Venezuela.
Speaker 1: They're not Enezuelans because it was free electricity two fourteen
Speaker 1: also doing this. They were making a fortune in this
Speaker 1: and he's now sending up a whole family office network
Speaker 1: for Latin Americans for the wealthy families, and I'm like,
Speaker 1: and it's all around bitcoin, and I'm like, okay, what
Speaker 1: is the thesis here? Said? These guys are all dollar
Speaker 1: and gold people because they have to be, and what
Speaker 1: now they've seen Bitcoin. They're like, oh, finally, I'm not
Speaker 1: holding to the US dollar, which is the US banking
Speaker 1: system and all of the issues of that, and I'm
Speaker 1: not holding to clunky gold that have to fly fly
Speaker 1: around in a private jet if I'm forced to leave
Speaker 1: my country because I've gotten the wrong side of the politics.
Speaker 1: And they all get it in seconds. It's like it's
Speaker 1: very easy for me as a brit Or, you as
Speaker 1: an American to not really worry about it because it
Speaker 1: hasn't really affected us ever, right, But for Latin American
Speaker 1: this is part of their life and they've seen this
Speaker 1: cycle probably three times. If you're forty years old, you've
Speaker 1: seen it three times already in your life. So you
Speaker 1: know that the use cases are alive and well and
Speaker 1: it makes a huge difference and that is only going
Speaker 1: to get bigger. Yeah. Cool, So we're we're running out
Speaker 1: of time here. Um, some great conversations. I appreciate you
Speaker 1: taking the time to do that. But UM, as as
Speaker 1: a macro trader, as a macro investor, obviously you've been uh,
Speaker 1: you know, you're you've been pretty bullish on bitcoin, So
Speaker 1: I just like to talk about that for a second. Um,
Speaker 1: we're starting to see bitcoin go up. I mean, we're
Speaker 1: a big, big right now, a great year. What do
Speaker 1: you see different from seventeen? It really is the story
Speaker 1: of institutional adoption. I mean, it's not driven by the
Speaker 1: little guy, although the guys are still in it, you know,
Speaker 1: I average guy, Which is what I so love about
Speaker 1: this space is people in actual chance. Right people are
Speaker 1: having a chance to make some money, which is amazing
Speaker 1: and empowering, and that's why I'm really attracted to the space.
Speaker 1: But the thing that's going to change every of these
Speaker 1: lives is when the wall of money from the institutions
Speaker 1: comes into it. Um, And that's happening. It's all I
Speaker 1: hear every day from all of the people you're running
Speaker 1: the big exchanges and all the guys I know operating
Speaker 1: this space. That whole kind of on ramping is going
Speaker 1: on every day. Now. That creates its own dynamic, which
Speaker 1: is called reflexivity, because the more something happens the more
Speaker 1: self reinforces. So the more the market cap of bitcoin
Speaker 1: goes up and the more it outperforms other asset classes.
Speaker 1: I've been talking about this bitcoin kind of eating the
Speaker 1: world is. The more it does that, the more it
Speaker 1: forces institutions to look at it. The more the market
Speaker 1: cap goes up, the more they have to get involved.
Speaker 1: The more they're involved, the market cap goes up, the
Speaker 1: more Bitcoin out performs, the more they have to get involved.
Speaker 1: So it creates its massive kind of chasing a der
Speaker 1: tail to get into the space. So that's what I think.
Speaker 1: Lines ahead, and so you mentioned before I asked you
Speaker 1: kind of what you see like long term? What do
Speaker 1: you you know? How far out do you look? So
Speaker 1: maybe you know twelve eighteen minds or one or three years?
Speaker 1: What do you see? What do what? What are you
Speaker 1: kind of seeing over that? It's hard not to be
Speaker 1: it's hard not to be biased because we all look
Speaker 1: at Plan B stock to flow model and we've all
Speaker 1: seen the previous cycles, so we kind of we're all
Speaker 1: kind of anchoring somewhere on that, so we know we
Speaker 1: can't pretend we're not. I use a bunch of technical analysis,
Speaker 1: a bunch of other ways of looking at it, and
Speaker 1: I always came up with a you know, with gold
Speaker 1: here around these kind of price levels, if we look
Speaker 1: at the same sort of thing, I kind of get
Speaker 1: bitcoin worth a million bucks um. Now over what time
Speaker 1: horizon is that? You know, I give it two of
Speaker 1: the another harving cycle. Now, maybe the harving cycle doesn't
Speaker 1: work next time around, because maybe it's a flat harving
Speaker 1: cycle because of the institutional adoption. I don't know. I
Speaker 1: think the space will change. I think also people don't
Speaker 1: understand how institutions act when they're in the space, They're
Speaker 1: going to act very differently. So I don't know, but
Speaker 1: I think a million bucks And I think, you know,
Speaker 1: this year, you know, we've we've gone up a huge
Speaker 1: amount or something. Dan Tapierrison a tweet out, we've been
Speaker 1: up from the low this year. Could you do another
Speaker 1: next year? Yeah, easily. I mean we barely noticed it.
Speaker 1: This year. Didn't feel like a runaway bullmarket year. Yeah.
Speaker 1: I just felt like it was just getting started. So,
Speaker 1: you know, I still maintain I think it goes further
Speaker 1: than most people expect in the next eighteen months because
Speaker 1: of this institutional reflexive loop. So I think I think
Speaker 1: if there's a surprise to be had. I know there's
Speaker 1: a bunch of people saying work, maybe just got a
Speaker 1: fifty grand, fifty doesn't go much higher. There's a bunch
Speaker 1: of people in that kind of hundred to two fifty level.
Speaker 1: I would say I'm more skewed towards the kind of
Speaker 1: two fifty level with an upside. I think everyone's wildly
Speaker 1: under price the upside for this cycle. Yeah, well that's
Speaker 1: good to hear. I I remember back in that bull
Speaker 1: running and they were starting to get all these crazy
Speaker 1: ballers projections and praised mccaffee staid he was going to
Speaker 1: eat his stuff if you know. So I tried to
Speaker 1: kind of temper that because I know when we get
Speaker 1: into these kind of ball markets it starts to kind
Speaker 1: of pushing that. But but but it's but it's great
Speaker 1: to hear. I like it. Well, I know, and I didn't.
Speaker 1: I get it from a number of different ways and
Speaker 1: whether it stopped to flow. And I built a very
Speaker 1: basic stop to flow medal back in two thousand thirteen
Speaker 1: that I came up with offer the same output that
Speaker 1: was with gold at gold was about then, I got
Speaker 1: you know, comparing like for like at about a million.
Speaker 1: If we look at the market cap versus gold, we
Speaker 1: get to say similar kind of things, not the tennant,
Speaker 1: so that twenty x from here or so. If we
Speaker 1: look at a log chart technical analysis, get to the
Speaker 1: same kind of numbers. If you mean, when so many
Speaker 1: things give you roughly a price project, when you look
Speaker 1: at met costs law to price it as well gives
Speaker 1: you roughly the same numbers. It's like, okay, somewhere around
Speaker 1: here unless any wrong, and you look at the markets,
Speaker 1: it's it's taking over which you mentioned gold obviously ten
Speaker 1: eleven trillion dollars, but there's thirty to forty trillion, and
Speaker 1: offshore bank accounts and like it's an offshore bank account, right,
Speaker 1: so it's all these things. So, um yeah, great stuff.
Speaker 1: I appreciate all that. We're gonna go ahead and wrap
Speaker 1: it up right here. I thank you so much for
Speaker 1: your time. Now. I know you're super active on Twitter, um,
Speaker 1: so I'll make sure to link that for everybody down below.
Speaker 1: I don't know how you find time to be on
Speaker 1: Twitter so much, because it it recks my day. It's
Speaker 1: wrecking mine. The other place to find me so at
Speaker 1: Raoul Jim on Twitter. Also, if you like crypto stuff,
Speaker 1: um and um. We build a whole channel in it,
Speaker 1: so Real Vision Crypto dot com. It's free and anybody
Speaker 1: can find a ton of content around all of this,
Speaker 1: whether it's the macro, around the space, through all the
Speaker 1: bitcoin guys, and through to some of the other parts
Speaker 1: in the space too. Yep, and I'll make sure to
Speaker 1: link that down below for everybody as well. And uh again, Ral,
Speaker 1: thanks so much for joining us today. I appreciate it.
Speaker 1: I really enjoyed it. Thanks so much.