WEBVTT - Why Bitcoin is Schmuck Insurance 0:00:04.600 --> 0:00:07.680 So the big question is this, how do investors like 0:00:07.880 --> 0:00:11.800 us get access to the ideas, information, and most importantly, 0:00:12.039 --> 0:00:14.880 the right people that give us the tools and information 0:00:14.960 --> 0:00:19.000 we need to make informed and educated decisions to have success. 0:00:19.600 --> 0:00:22.360 That is the question, and this podcast will give us 0:00:22.360 --> 0:00:25.480 the answers. This is Mark Moss, your host. Let's get 0:00:25.480 --> 0:00:28.000 this started. Hello, and welcome to another episode of the 0:00:28.040 --> 0:00:31.320 Market Disruptors podcast. Today I am sitting down with Mark 0:00:31.440 --> 0:00:36.560 Usko from Morgan Creek and his experience working with institutions 0:00:36.600 --> 0:00:40.960 and endowments through what he calls alternative investments, as well 0:00:41.000 --> 0:00:44.080 as his amazing view of the macro the global economic 0:00:44.120 --> 0:00:47.880 view leed do some very interesting conversations. We talked about 0:00:47.920 --> 0:00:51.640 the evolution of bitcoin growing to mascual adoption. We talked 0:00:51.640 --> 0:00:54.800 about the current state of the global economy, what's going 0:00:54.840 --> 0:00:57.120 on with that. We talked about what he's what he 0:00:57.160 --> 0:01:00.160 calls China playing go, and then we talk about big point, 0:01:00.200 --> 0:01:03.160 where does it fit into all of this? UM, how 0:01:03.200 --> 0:01:06.399 people should be approaching it, risk levels, etcetera. UM. Some 0:01:06.520 --> 0:01:08.680 really good conversations I really enjoyed. Let's go ahead and 0:01:08.680 --> 0:01:10.920 just jump right into it. Hey, everyone, welcome to another 0:01:10.920 --> 0:01:13.919 episode of the Market Disruptors podcast. Today, I am sitting 0:01:13.959 --> 0:01:17.640 down with Mark Usko from Morgan Creek Capital and I 0:01:17.680 --> 0:01:19.360 am super honored to be with him. He's one of 0:01:19.400 --> 0:01:23.280 the hardest working guys in the space and so welcome Mark. Well, 0:01:23.360 --> 0:01:25.480 thanks for having me and great to be with you. 0:01:25.520 --> 0:01:28.440 And uh, I'll try to live up to the hardest 0:01:28.480 --> 0:01:31.520 working title. Uh, it's a big shoes to fill, but 0:01:31.680 --> 0:01:35.040 I appreciate that. Well, you're you're definitely doing your part. 0:01:35.440 --> 0:01:38.479 So Mark, Um, for those that aren't aware, I want 0:01:38.480 --> 0:01:39.760 you to just tell us a little bit about like 0:01:39.800 --> 0:01:41.480 what you've been doing and how you got here and 0:01:41.560 --> 0:01:44.120 what you're doing right now. Yeah. So the short version 0:01:44.120 --> 0:01:47.640 obviously I don't do short well, but the short version is, uh, 0:01:47.760 --> 0:01:49.680 you know, I came out of the investment world that 0:01:49.720 --> 0:01:53.280 we're an insurance company and asset management firm, got into 0:01:53.440 --> 0:01:56.640 endowment management back at my alma moderate Notre Dame, spent 0:01:57.120 --> 0:01:59.400 five years there's the number two. Then it took over 0:01:59.480 --> 0:02:01.920 as the head of University of North Carolina. This is 0:02:01.920 --> 0:02:04.680 a long time ago, back twenty one years ago, but 0:02:05.240 --> 0:02:07.760 fifteen years ago, spun out on my own and form 0:02:07.840 --> 0:02:10.720 Morgan Creek and the whole idea about morgan Creek was 0:02:10.800 --> 0:02:16.520 to bring alternative investments to lots of investors, so, you know, 0:02:16.680 --> 0:02:20.520 build products and services that would allow people to integrate 0:02:20.600 --> 0:02:24.000 this idea of alternative investments into their portfolios. And how 0:02:24.040 --> 0:02:26.040 little did I know that it would come full circle 0:02:26.160 --> 0:02:29.320 here today? Uh, you know, back from hedge funds twenty 0:02:29.400 --> 0:02:32.000 years ago in private equity and venture capital and and 0:02:32.000 --> 0:02:35.400 now we're talking about crypto assets and cryptocurrency so pretty 0:02:35.400 --> 0:02:41.320 exciting stuff. Yeah, yeah, really alternative now. Yeah, And you know, look, 0:02:41.800 --> 0:02:45.519 morgan Creek today is a resure investment advisor. We've got 0:02:46.120 --> 0:02:49.200 just under a couple of billion dollars of assets, a 0:02:49.240 --> 0:02:51.600 lot of that in private investments, and then a year 0:02:51.600 --> 0:02:55.160 ago we launched a new subsidiary called morgan Creek Digital 0:02:55.480 --> 0:02:58.040 and we've raised a venture fund around that to invest 0:02:58.080 --> 0:03:02.679 in infrastructure and crypto it self. And just excited about this, 0:03:02.680 --> 0:03:06.239 this new set of opportunities and how it all fits 0:03:06.280 --> 0:03:09.480 together in the big world in which we all have 0:03:09.600 --> 0:03:13.639 to deploy capital into today. Yeah. So I'm super interested 0:03:13.680 --> 0:03:16.519 to hear your viewpoint on this because of where you sit, 0:03:16.680 --> 0:03:19.400 having previously worked with endowments and now today kind of 0:03:19.400 --> 0:03:23.520 with more incre digital, working with institutions and whatnot. So um, 0:03:23.560 --> 0:03:27.280 I think uh, bitcoin's emergence has been a little bit 0:03:27.280 --> 0:03:30.400 different in a sense where it started retail, but really 0:03:30.480 --> 0:03:32.680 to kind of get to mainstream at some point, if 0:03:32.720 --> 0:03:34.760 we believe it's going to be this store of value, 0:03:34.760 --> 0:03:37.920 there's probably gonna be this this evolution um that it 0:03:37.920 --> 0:03:39.960 has to go from maybe a collectible where it's at today, 0:03:40.040 --> 0:03:43.160 speculative asset into a store of value. And I think 0:03:43.200 --> 0:03:46.360 that it has to probably go through the institution's first 0:03:47.040 --> 0:03:50.360 before it hits mainstream. Would you agree with that? Yeah, look, 0:03:50.360 --> 0:03:54.440 I totally agree it, and I think evolution used exactly 0:03:54.440 --> 0:03:57.160 the right word. I wrote a letter about this a 0:03:57.280 --> 0:04:01.480 few quarters ago on on kind of financial natural selection 0:04:01.600 --> 0:04:09.560 or the evolution of of technology revolutionary. I mean, there's 0:04:09.560 --> 0:04:14.400 nothing really revolutionary about the ideas of distributed ledger technology, 0:04:14.440 --> 0:04:18.520 and in triplentiary accounting. There is some revolution in in 0:04:18.800 --> 0:04:22.160 solving the double spend problem UH and getting getting a 0:04:22.160 --> 0:04:26.160 new technological application a use case for d LT. But 0:04:27.240 --> 0:04:30.160 I do think that the evolution is is more appropriate 0:04:30.160 --> 0:04:33.600 and and to your point, the big money is controlled 0:04:33.640 --> 0:04:36.680 by institutions and the institutions of God. To get comfortable 0:04:36.760 --> 0:04:40.880 with anything for it to become really part of of 0:04:40.920 --> 0:04:43.320 the fabric of of the investment landscape. I mean, go 0:04:43.400 --> 0:04:50.040 back fifty sixty years. Most endowments, institutions, foundations, pensions were 0:04:50.080 --> 0:04:54.200 prohibited by charter in many cases from investing in stocks. 0:04:54.680 --> 0:04:56.599 I mean think about that. They were mostly in fixed 0:04:56.600 --> 0:05:00.200 incomes securities. And then stocks were the new news. There 0:05:00.240 --> 0:05:03.760 were the alternative investment. And then it was international stocks 0:05:03.800 --> 0:05:06.720 with Arissa back in the seventies. Oh my gosh, you're 0:05:06.720 --> 0:05:10.720 gonna invest outside the borders of the United States. How risky? 0:05:11.040 --> 0:05:13.520 Not risk you at all. But uh. And then it 0:05:13.600 --> 0:05:15.760 was you know, twenty plus years ago, when I was 0:05:15.760 --> 0:05:18.880 back at Notre Dame, it was hedge funds and and 0:05:19.040 --> 0:05:22.560 junk bonds. You know, first time we brought distress securities 0:05:22.600 --> 0:05:25.000 to the board. There you can't invest in junk bonds. 0:05:25.000 --> 0:05:27.919 I'm like, wait a second, fifty five per cent of 0:05:28.000 --> 0:05:31.480 the fund is in equity, which is junior to even 0:05:31.520 --> 0:05:34.480 the worst debt. So think about it that way in 0:05:34.640 --> 0:05:38.400 terms of unsecured claims. And then when we tried hedge funds, like, 0:05:38.400 --> 0:05:40.280 oh no, you can't invest in hedge funds because that's 0:05:40.279 --> 0:05:42.240 where all the bad people are. Like what are you 0:05:42.320 --> 0:05:45.720 talking about the right, Well, they charge these high fees, like, well, 0:05:45.760 --> 0:05:47.960 in what business do you know, does the best person 0:05:48.000 --> 0:05:51.719 not charge the highest feet right? Dr lawyer, football coach, 0:05:51.760 --> 0:05:55.680 basketball player. That's the way the world works. So and 0:05:55.720 --> 0:05:58.880 then it was private equity and venture capital and all 0:05:58.960 --> 0:06:02.640 these assets of actually become mainstream because, as you point out, 0:06:03.360 --> 0:06:07.600 the institutions finally become comfortable, and it's not until that 0:06:07.640 --> 0:06:11.719 time when the rest of the investment landscape and particularly 0:06:12.120 --> 0:06:15.200 the firms. Right here's the crazy thing. There are asset 0:06:15.240 --> 0:06:17.719 management firms. I was just having a conversation with my 0:06:17.720 --> 0:06:19.520 wife last night. She's got a little bit of capital 0:06:19.600 --> 0:06:22.760 she's investing, and uh, you know, I was talking about, hey, 0:06:22.760 --> 0:06:26.440 maybe we should put some exposure to to bitcoin in there. 0:06:26.800 --> 0:06:30.320 Let's just buy GBTC because it's easy. Oh yeah, you know, 0:06:30.520 --> 0:06:33.560 the brokerage firm that that we work with for her account, 0:06:33.839 --> 0:06:39.440 they prohibit ownership of GBTC. That's just silly. And it 0:06:39.480 --> 0:06:42.160 goes further. There's one firm out there. Won't name names, 0:06:42.200 --> 0:06:45.039 but it's the biggest one broken jus from not only 0:06:45.040 --> 0:06:47.919 do they not let your own g BTC, they won't 0:06:48.080 --> 0:06:51.440 let a financial advisor take a new client if their 0:06:51.520 --> 0:06:56.040 wealth was created by crypto. Wow, that is absolutely insane 0:06:56.320 --> 0:07:01.760 on every level. Yeah, that's insane. So, uh you've seen this. 0:07:01.960 --> 0:07:04.360 I guess you've seen this where you had to kind 0:07:04.360 --> 0:07:07.160 of go back to these um funds or these endowments 0:07:07.160 --> 0:07:09.040 and tell them over and over, hey you should look 0:07:09.040 --> 0:07:10.680 at this, or so you kind out this history of 0:07:10.680 --> 0:07:14.160 breaking new assets or risk your assets in So I 0:07:14.200 --> 0:07:18.239 guess you've seen this this playout before, and so today 0:07:18.320 --> 0:07:20.680 you're they're kind of pitching these guys now saying, hey, 0:07:20.720 --> 0:07:23.520 this is the new thing that you need to consider. Yeah, Okay, 0:07:25.080 --> 0:07:28.760 I'm a big movie buff, seen this movie before. Uh, 0:07:28.800 --> 0:07:30.560 this is not the first time, it won't be the 0:07:30.640 --> 0:07:36.040 last time. Look, innovation is scary, you know for the 0:07:36.640 --> 0:07:38.800 ok the name of your your pod, right, you know 0:07:38.880 --> 0:07:43.440 market disruptors. Uh, it's all about disruption and disruptive innovation. 0:07:44.040 --> 0:07:49.880 And every incumbent fears disruption, as they should. And you know, 0:07:49.920 --> 0:07:52.680 the street sweepers passed out pamphlets saying that if you've 0:07:52.680 --> 0:07:55.920 got an automobile, you die. And you know, the candle 0:07:55.960 --> 0:07:58.720 makers passed out stuff saying, you know, you go blind 0:07:58.760 --> 0:08:00.800 if you look at that. You know, lowing or that 0:08:00.920 --> 0:08:05.600 Mr Edison created or my, my, my, uh my grandfather 0:08:05.800 --> 0:08:09.800 in laws parents, you know, chastised him from leaving the 0:08:10.000 --> 0:08:13.200 safe job at the railroad to take the risky job 0:08:13.520 --> 0:08:18.360 at that American airlines company. And uh, you know, because 0:08:18.360 --> 0:08:20.560 people really believed that if you got in an airplane 0:08:20.680 --> 0:08:23.160 and you went faster than a certain miles per hour, 0:08:23.240 --> 0:08:26.640 that your body would cave in on itself. So there's 0:08:26.680 --> 0:08:30.080 all this fear, uncertainty, and doubt around disruption, and it 0:08:30.080 --> 0:08:34.679 occurs in every disruptive phase, whether it's technology, whether it's innovation, 0:08:35.240 --> 0:08:38.760 whether it's custom and thinking about Galileo, poor Galileo, right, 0:08:38.800 --> 0:08:42.800 it's like, you know, guys, my data says that the 0:08:42.840 --> 0:08:46.760 earth um actually revolves around the Sun, not vice versa. 0:08:47.440 --> 0:08:49.240 And they labeled on a heretic and you wanted to 0:08:49.240 --> 0:08:53.480 burn him at the State. But it is dangerous to 0:08:53.800 --> 0:08:58.439 have a view different from the masses. But that's where 0:08:58.440 --> 0:09:00.120 all the great wealth is created. That's my pin and 0:09:00.120 --> 0:09:04.400 tweet on Twitter, right, is great wealth is created by 0:09:04.440 --> 0:09:08.360 investing in something that you believe in before everyone else 0:09:08.400 --> 0:09:14.040 even understands. So having seen this movie before, um, if 0:09:14.080 --> 0:09:15.880 you have a perspective there, but you're also on the 0:09:15.880 --> 0:09:18.480 front lines talking to them about it. Where are we 0:09:18.520 --> 0:09:20.959 I mean, I'm guessing over the last year you've seen 0:09:20.960 --> 0:09:22.400 a lot of people are starting to warm up to 0:09:22.400 --> 0:09:25.200 this idea. I mean we've seen, you know, maybe the 0:09:25.280 --> 0:09:27.280 Yell and Diamond Fund dip their toe in the water 0:09:27.320 --> 0:09:30.240 a little bit like so where are we with that? Yeah? Look, 0:09:30.280 --> 0:09:32.640 I mean Yale got a lot of pressed, but they 0:09:32.640 --> 0:09:35.520 barely dip the tip of their toe nail. I mean, 0:09:35.559 --> 0:09:38.160 the amount of assets they put in the fun relative 0:09:38.200 --> 0:09:40.640 of their total access was was teeny tiny. The guys 0:09:40.679 --> 0:09:43.800 actually get credit is Harvard. Harvard put in some real money. 0:09:44.120 --> 0:09:46.720 They went big into the fund, about ten times as 0:09:46.800 --> 0:09:49.240 much as Yale put in, and then they went into 0:09:49.360 --> 0:09:54.080 to a direct deal. Um. So that that's pretty exciting. Uh. 0:09:54.080 --> 0:09:56.800 And ARV is a great ceio over there at Harvard. 0:09:56.880 --> 0:10:00.720 So if you think about what's going on, we're still 0:10:01.440 --> 0:10:04.800 in that you know, early early adopter phase. You know, 0:10:04.840 --> 0:10:08.080 we haven't even gotten into the early majority. And I'll 0:10:08.080 --> 0:10:11.600 say in the individual world, the retail world, we're probably 0:10:11.600 --> 0:10:14.960 in the early majority, but we're just at the very 0:10:15.080 --> 0:10:17.120 knee of the S curve. You know, we're probably going 0:10:17.240 --> 0:10:21.240 from like eight percent to eleven or twelve in terms 0:10:21.280 --> 0:10:24.160 of adoption, and we've got a long way to go 0:10:24.320 --> 0:10:27.520 before we've got got full adoption. And and there's the 0:10:27.960 --> 0:10:31.719 couple of things at work here. One, there's the fear. Right. 0:10:31.760 --> 0:10:34.640 You know, you've got you got people of influence like 0:10:34.720 --> 0:10:37.800 Jamie Diamond or Warren Buffett or Charlie Munger you know, 0:10:37.880 --> 0:10:41.320 calling it bad names, a fraud or you know, Warren 0:10:41.320 --> 0:10:42.920 calls it rat poise and I always say, well, how 0:10:42.920 --> 0:10:45.240 do you know what rap poise? And taste like um? 0:10:45.280 --> 0:10:47.800 And then you got Charlie saying it's like trading, you know, 0:10:48.000 --> 0:10:51.120 harvested baby brains. And my really w t f Charlie 0:10:51.200 --> 0:10:55.160 seriously brains. So why do those guys want you to 0:10:55.360 --> 0:10:59.319 fear it? Well, Fort of Berkshire Hathaway as in financial services. 0:10:59.360 --> 0:11:03.200 Financial services are at risk of being disrupted by this 0:11:03.280 --> 0:11:07.040 new technology and so they're they're gonna say bad things 0:11:07.160 --> 0:11:10.200 about it. And one of the things that's important for 0:11:10.440 --> 0:11:15.320 institutions is to consider the source, right. Don't listen to 0:11:15.559 --> 0:11:19.280 people who are shilling projects that have no you know, 0:11:19.360 --> 0:11:22.439 foundation or basis in in the future. You know, you 0:11:22.480 --> 0:11:24.679 look at I don't I don't like the term, but 0:11:24.720 --> 0:11:27.679 you know, people call them shiit coins, right, and they're 0:11:27.720 --> 0:11:30.800 not even coins right there, their utility tokens. They are. 0:11:31.280 --> 0:11:35.600 They're basically precede and seed stage venture capital projects which 0:11:35.640 --> 0:11:39.439 have a loss ratio, which should not be surprising to anybody. 0:11:39.760 --> 0:11:43.040 Most companies fail. And there's only about a dozen or 0:11:43.080 --> 0:11:47.400 so cryptocurrencies that actually should be called cryptocurrencies. Everything else 0:11:47.440 --> 0:11:50.200 should be called utility token and call it what it is, 0:11:50.840 --> 0:11:54.960 preseed stage venture. So focusing on the differences and not 0:11:55.120 --> 0:11:59.120 conflating terms and getting information right is is going to 0:11:59.200 --> 0:12:02.440 help this thing is. Don't listen to the fomo either. 0:12:02.760 --> 0:12:04.040 You know, you've got the people who are, oh, we're 0:12:04.040 --> 0:12:06.400 gonna miss it, We're gonna miss you gotta get it. No, no, right, 0:12:06.520 --> 0:12:09.440 there's plenty of time, plenty of time to you know, 0:12:09.559 --> 0:12:12.960 have a plan, find good people to work with, find 0:12:14.000 --> 0:12:17.000 a logical step wise progression. You know, you don't have 0:12:17.120 --> 0:12:20.079 to just invest in cryptocurrency. You can invest in venture 0:12:20.120 --> 0:12:23.439 capital and infrastructure. You can invest in lending, you can 0:12:23.480 --> 0:12:27.560 invest in in uh certain forms of cryptocurrency or even 0:12:27.600 --> 0:12:31.200 derivatives related to cryptocurrency. There's lots of things that are 0:12:31.280 --> 0:12:35.120 evolving for institution to look at and the smart ones, 0:12:35.160 --> 0:12:37.320 and we've fortunately found a handful of the smart ones 0:12:37.559 --> 0:12:40.840 are doing just that. So you're talking about and not 0:12:40.960 --> 0:12:44.200 just buying coins, but buying in like infrastructure place so 0:12:44.280 --> 0:12:46.880 like for example Microsoft is has been and probably will 0:12:46.920 --> 0:12:49.079 be a big benefitiary you could look at like in 0:12:49.240 --> 0:12:53.240 video making video cards for mining to stuff like that. Yeah, look, 0:12:53.440 --> 0:12:55.880 there's there's all the way to that extreme that you're 0:12:55.880 --> 0:13:00.360 talking about. Which are the existing companies that support the 0:13:00.360 --> 0:13:03.839 the ongoing development, and you know, the challenges is finding 0:13:03.880 --> 0:13:07.319 the right ones. It's like like IBM, IBM, what they're 0:13:07.360 --> 0:13:09.880 doing in blockchain is really interesting, but it's such a 0:13:09.920 --> 0:13:13.040 tiny piece of their overall dying business that it probably 0:13:13.040 --> 0:13:16.199 wouldn't buy that stock. Microsoft a little bit different, a 0:13:16.200 --> 0:13:19.600 little bit better, something like a m D or in video, 0:13:19.960 --> 0:13:22.120 you know, a m D in particular, where you've got 0:13:22.240 --> 0:13:26.240 so much of the exposure of their business to this 0:13:26.240 --> 0:13:29.480 this evolving technology. I like it a lot. Now it's 0:13:29.480 --> 0:13:31.599 gone up a lot, and I think it's it's a 0:13:31.679 --> 0:13:35.320 little richly priced today. Um, but that's just you know, 0:13:35.360 --> 0:13:37.000 how you do it. You buy the dips and you 0:13:37.160 --> 0:13:40.280 hold for for long periods of time on those those 0:13:40.360 --> 0:13:42.960 companies that are helping to build out the instruction. But 0:13:42.960 --> 0:13:46.760 when I talk about infrastructure, I mean the private investments 0:13:46.840 --> 0:13:51.320 in the private businesses that truly are building out you know, exchanges, 0:13:51.720 --> 0:13:56.560 software tools, um, you know, education and resources. You know, 0:13:56.600 --> 0:14:00.720 somebody is going to create the bloomberg of peptoe. We 0:14:00.760 --> 0:14:04.160 think we've tested in that that firm digital asset data, 0:14:04.240 --> 0:14:08.960 but we'll see yeah great, so um, we're we're in 0:14:09.000 --> 0:14:12.360 that evolution stage. It's happening. Um, But it seems like 0:14:12.400 --> 0:14:15.760 there's stuff going on globally that's seeming like it wants 0:14:15.760 --> 0:14:18.400 to accelerate that. Right. It's like almost like all these 0:14:18.480 --> 0:14:22.360 like global macro policies are like just wanting people to 0:14:22.440 --> 0:14:25.280 buy a bitcoin or adopted alternative system. And I know 0:14:25.360 --> 0:14:27.400 you've talked a lot about You've tweeted a lot about 0:14:27.520 --> 0:14:32.760 like quee um, zombie companies, negative interest rates, right, and 0:14:32.800 --> 0:14:35.480 so these are all things that possibly could be these 0:14:35.520 --> 0:14:37.640 black swan events or really push this is that what 0:14:37.720 --> 0:14:41.520 you think? Look, you know absolutely, you know the macro 0:14:42.320 --> 0:14:44.680 is lining up and has been lining up for a 0:14:44.720 --> 0:14:50.160 decade now. It's not a coincidence that bitcoin in particular 0:14:50.880 --> 0:14:54.520 as a use case for blockchain technology and specifically about 0:14:54.680 --> 0:14:59.280 monetization of value or money or stores of value. Uh 0:14:59.440 --> 0:15:02.200 came a out in two thousand nine. Right, that that's 0:15:02.240 --> 0:15:08.200 not a surprise, A trough of the goal financial crisis, 0:15:08.480 --> 0:15:11.280 you know, the genesis block refers to the chancellor second 0:15:11.280 --> 0:15:14.320 bail out of the banks. Uh. And and everything that's 0:15:14.360 --> 0:15:17.920 gone on in the last decade from central banks becoming 0:15:18.640 --> 0:15:23.040 very very kind of omniscient godlike uh people. You know, 0:15:23.160 --> 0:15:24.760 a friend of mine says the best, Right, I remember 0:15:24.760 --> 0:15:26.520 a time. I'm old enough, I remember a time when 0:15:26.520 --> 0:15:29.520 I didn't know the names of central bankers. I long 0:15:29.600 --> 0:15:33.600 for those days to to return, and you know they aren't. 0:15:33.720 --> 0:15:37.160 The The idea that if if it was easy to 0:15:37.200 --> 0:15:41.280 create wealth by printing money literally by pushing a button 0:15:41.280 --> 0:15:44.520 and printing money literally physically printing printing press kind of 0:15:44.560 --> 0:15:47.960 physical notes and coins or you know, ones and zeros 0:15:48.000 --> 0:15:50.440 in a bank account, if it were that easy, then 0:15:50.480 --> 0:15:54.200 wouldn't everybody do it? Wouldn't every country just print as 0:15:54.240 --> 0:15:57.800 much currency as they possibly could. They'll try, and they 0:15:57.880 --> 0:15:59.840 do try, right, and we've seen the outcome. Right, We've 0:15:59.840 --> 0:16:02.760 seen in the hyper inflationary outcome in places like Zimbabwe 0:16:02.920 --> 0:16:06.120 or Venezuela. You know, a cup of coffee a year 0:16:06.160 --> 0:16:09.040 ago cost you know, nine cents. Today it costs you 0:16:09.080 --> 0:16:12.200 know what is the fourteen thousand dollars or something um 0:16:12.880 --> 0:16:18.080 four thousand percent um monthly inflation. So now that's the 0:16:18.120 --> 0:16:20.840 hyper inflation side. The thing that I'm more worried about 0:16:20.880 --> 0:16:25.200 is the deflationary side, which is you've got bad demographics. Right, 0:16:25.200 --> 0:16:28.160 You've got too many old people, meaning sixty day five 0:16:28.200 --> 0:16:31.000 and sixty five year old people don't spend as much 0:16:31.040 --> 0:16:34.920 as five year old people. They're not as productive. Then 0:16:34.920 --> 0:16:39.120 you've got too much debt. You've got all the developed world, Japan, US, Europe, 0:16:39.440 --> 0:16:43.960 you know, most developed world drowning in debt and overspending. 0:16:44.000 --> 0:16:45.880 And we were a trillion dollar deaths in the United 0:16:45.880 --> 0:16:48.400 States because of the silly Tax to Formact that we 0:16:48.480 --> 0:16:50.720 passed a year and a half ago. And then on 0:16:50.760 --> 0:16:55.680 top of that, you've got deflation. So deflation is essentially 0:16:55.720 --> 0:16:58.680 put us in this place where we feel compelled as 0:16:58.760 --> 0:17:02.720 governments to print more currency and devalue our currency in 0:17:02.760 --> 0:17:06.280 a race to the bottom to try to inflate our 0:17:06.320 --> 0:17:08.720 way out of the debt. But it's not working. And 0:17:08.840 --> 0:17:11.280 so what the problem is that we have is you 0:17:11.320 --> 0:17:15.680 have this you said, the perfect storm for a fixed 0:17:15.680 --> 0:17:21.440 supply hard currency or sound money like bitcoin to come 0:17:21.480 --> 0:17:23.959 in and say, wait a second, if I want to 0:17:24.280 --> 0:17:28.400 opt out of the fiat currency system, or the Fiat 0:17:28.440 --> 0:17:31.240 fiasco as I like to call it, uh, if you 0:17:31.240 --> 0:17:33.080 want to opt out of that and have a little 0:17:33.080 --> 0:17:35.560 bit of chaos heads or a little you know, schmuck 0:17:35.760 --> 0:17:38.320 insurance as somebody called it, I should be in kredit. 0:17:38.359 --> 0:17:41.119 I can't remember who said it, but the schmuck insurance. 0:17:41.480 --> 0:17:43.679 You know, we got scho leaders all around the world 0:17:43.720 --> 0:17:47.919 doing stupid stuff. Whether it's bad policies like trade wars, 0:17:48.040 --> 0:17:52.040 whether it's bad decisions like you know, trade dept or 0:17:52.640 --> 0:17:57.480 budget deficits spending, whether it's bad things like que all 0:17:57.520 --> 0:18:01.880 of that is leading to this devavaluation and this depreciation 0:18:02.560 --> 0:18:06.159 of the value of these assets. And look, if I 0:18:06.200 --> 0:18:08.639 were them, and I were the dictator, I would do 0:18:08.680 --> 0:18:11.359 the same thing. Well, actually I wouldn't because I have conscience. 0:18:11.640 --> 0:18:15.320 But dictators go by the dictator playbook, right. They amass 0:18:15.400 --> 0:18:18.240 the assets, then they devalue the currency. That's the way 0:18:18.280 --> 0:18:21.399 it works, and that's exactly what's happening today. And the 0:18:21.400 --> 0:18:25.280 problem is the average person, right everage person in America 0:18:25.600 --> 0:18:29.760 doesn't hold a stock. People in this country have no stock, 0:18:30.240 --> 0:18:32.840 not one not They're four when Caplin, they're a pension fund. 0:18:32.840 --> 0:18:36.560 They don't own stock directly. They are not benefiting by 0:18:36.600 --> 0:18:42.680 the increase of real assets, financial assets. They would benefit 0:18:42.960 --> 0:18:49.280 from holding a sound monetary um aggregate like like yeah, 0:18:49.320 --> 0:18:51.440 and that's why we have this growing divide between the 0:18:51.520 --> 0:18:54.159 rich and the poor. The richer inflating their assets. The 0:18:54.200 --> 0:18:58.200 poor don't have assets. And because there because their money 0:18:58.280 --> 0:19:01.400 is becoming less value, it's there. Their wages have gone down, 0:19:01.400 --> 0:19:03.480 their producing power has gone down at the same time. 0:19:03.520 --> 0:19:06.399 So it's like this this growing gap. Well, it's the 0:19:06.440 --> 0:19:09.480 worst since the nineteen thirties. It's the worst income and 0:19:09.520 --> 0:19:12.360 wealth inequality in the history of the United States. We 0:19:12.359 --> 0:19:15.480 were doing better from kind of nineteen thirty through the 0:19:15.880 --> 0:19:20.320 late sixties, and really since nineteen seventy one when we 0:19:20.359 --> 0:19:22.320 did you know, the Fiat fiasco. We went off the 0:19:22.320 --> 0:19:25.840 gold standard, and and some would say, well, you know, 0:19:25.960 --> 0:19:28.840 all of this isn't working. You know, the QUEI is 0:19:28.840 --> 0:19:32.040 not working, the change of the goals. No, it's working 0:19:32.080 --> 0:19:35.080 exactly as they planned. If if you actually stopped for 0:19:35.119 --> 0:19:38.320 a second and say, wait, the haves like being haves 0:19:38.480 --> 0:19:40.600 and they would like to have a greater percentage of 0:19:40.800 --> 0:19:43.959 what they have, then it makes perfect sense. And they 0:19:44.000 --> 0:19:47.560 have not don't seem to. But I don't understand is 0:19:47.600 --> 0:19:52.280 they have not seemingly vote for the policies that are 0:19:52.320 --> 0:19:56.400 making them less rich. Well, I think it's not. We're 0:19:56.400 --> 0:19:59.120 an election cycle, so it's not. Uh, I don't think 0:19:59.160 --> 0:20:01.280 it's it's hard to understand why. And if you look 0:20:01.280 --> 0:20:05.840 at the debates that are going on, someone's promising freeification, 0:20:06.000 --> 0:20:10.720 someone's been promising free reparations, promising free thousand dollars a month. 0:20:10.800 --> 0:20:14.600 Someone's promising I mean and so q E pays for that, right, Like, 0:20:14.880 --> 0:20:17.000 that's that that pays for that. So it's it's not 0:20:17.040 --> 0:20:19.399 a big it's not a big stretch to see how 0:20:19.440 --> 0:20:21.200 that gets in. But we don't want to jump into 0:20:21.359 --> 0:20:24.280 politics because we could go crazy there. But um, we 0:20:24.359 --> 0:20:26.919 do have these narratives in bitcoin, right, and so we're 0:20:26.920 --> 0:20:30.000 always talking about uh it seems like it drives this. 0:20:30.160 --> 0:20:32.960 And so one narrative I see is like and people 0:20:32.960 --> 0:20:35.200 have last onto this is we talked about the economy 0:20:35.280 --> 0:20:37.040 is good. The economy is good. The economy is good 0:20:37.160 --> 0:20:40.480 because the stock market is high. But the stock market 0:20:40.560 --> 0:20:43.760 being high doesn't mean the economy is good, especially for 0:20:43.760 --> 0:20:45.800 the little guy, right, that's what you're saying, not at all. Now. 0:20:45.880 --> 0:20:49.160 In fact, you bring up one of the most important 0:20:49.200 --> 0:20:51.159 points is the economy is not the stock market. The 0:20:51.200 --> 0:20:53.800 stock market is not the economy, and there are lots 0:20:53.800 --> 0:20:57.360 of examples. Right. The fastest growing economies in the world 0:20:57.600 --> 0:20:59.600 over the last two decades have not had the best 0:20:59.600 --> 0:21:02.560 performing stock markets. Right. The best performing stock market in 0:21:02.600 --> 0:21:06.480 the world the last two years is Venezuela. Their economy 0:21:06.520 --> 0:21:09.119 is in the hitner. I mean, I hate to use 0:21:09.160 --> 0:21:11.040 that word, but that that's where it is. But it's 0:21:11.040 --> 0:21:14.520 the best performing stock market because on a nominal value, uh, 0:21:14.560 --> 0:21:17.439 you know, the price of of things goes up and 0:21:17.480 --> 0:21:19.439 the dictators takes all the assets because they own all 0:21:19.440 --> 0:21:22.960 the assets. So to your to your point, everyone points to, oh, 0:21:23.000 --> 0:21:25.240 the economy is great, Well, the economy is actually not good. 0:21:25.600 --> 0:21:28.800 The economy is good on some measures. You can say, well, 0:21:28.960 --> 0:21:32.479 a lot of people are working. Well how are they working? 0:21:32.880 --> 0:21:35.840 Are they underemployed or they fully employed? You know, if 0:21:35.880 --> 0:21:38.800 you lose your job as a manager at a T 0:21:38.960 --> 0:21:41.360 and T and you take a job as a barista, 0:21:41.600 --> 0:21:44.160 you still show up as employed. Now, I would argue 0:21:44.200 --> 0:21:47.280 your life is less good unless maybe you want more 0:21:47.359 --> 0:21:49.800 free time. But then the other problem you have is 0:21:49.800 --> 0:21:52.119 every day someone turns sixty five, they get taken out 0:21:52.119 --> 0:21:55.280 of the workforce or workforce participation rate drops. Then you 0:21:55.400 --> 0:21:59.000 got this other crazy thing called the birth death ratio 0:21:59.440 --> 0:22:02.359 that occur is when the BLS, the Bureau of Labor 0:22:02.359 --> 0:22:06.119 and Statistics, makes up data based on where we are 0:22:06.160 --> 0:22:08.880 in the length of the economics cycle, and they said 0:22:09.000 --> 0:22:10.960 this many companies should be born, this many should die, 0:22:10.960 --> 0:22:12.600 so we have this many new jobs. Well did you 0:22:12.640 --> 0:22:15.600 actually count the jobs? Oh? Well no, Well you do 0:22:15.680 --> 0:22:19.600 realize that this risk recovery is half as strong as 0:22:19.600 --> 0:22:23.240 previous recovery. Sure you're justing for that, right, Well no, okay, 0:22:23.280 --> 0:22:27.639