Chat_144 - Accelerating into the Dollar Endgame with Peruvian Bull

[00:00:00] Speaker A: It's that old saying, right? It's a, it's that meme. It's like however bad you think it is, it's going to get worse, right? Like, but at the same time it's also going to get better. So be very bearish on fiat, be very bullish on Bitcoin. This system, it's going to get worse. The collateral problem and the failure to deliver problems are going to get worse. Your shares that you own, your brokerage aren't really yours. They're held by the broker, they're held at the dtcc. They can freeze them whenever they want, they can create fake shares whenever they want. They can fail to deliver, they can make it short, they can manipulate with derivatives, all these sorts of things and the really the only financial asset that you can truly own is bitcoin. [00:00:56] Speaker B: Welcome back to the show. This is Bitcoin Audible and I am Guy Swan, the guy who has read more about bitcoin than anybody else. You know, we are getting into the dollar end game today. We're talking about the macro situation around the world and then specifically with the situation in the US the bonds, the debt and what kind of parallels we can use to see where things are headed because there are other countries who have gone down this route and, and kind of giving us a preview of where we're headed and where we are in the cycle. I think it's easy to confuse and believe that the economy is fine because we're just kind of chugging along without much fanfare between the, the tremors as we get to the end here. But we have Peruvian Bull on the show today and I'm sure a lot of you guys know Peruvian Bull. He does amazing writing, has some fantastic threads on all of this. I've been following him on Twitter for a long time. But we're breaking down what's really going on underneath the surface and why we're actually in the third inning of this, even though it might not feel like it. And we get into really the major indicators that he is watching for to understand where things are headed in the future then what it all means for the dollar, for gold, for bonds and of course for bitcoin. And as bitcoiners, what we should do about it. Real quick, I want to thank our sponsor, Leden. They offer bitcoin backed loans in a simple and secure way. In fact, you don't have to sell your bitcoin, you don't have to pay capital gains and best of all is this setup. They, they not only have proof of Reserves and they do open books or whatever. So they're. And they've made it through a bear market. They made it through hellish markets in bitcoin without a wink of trouble. And of course I am a customer myself, so I would never tell you to take on a risk that I'm not willing to take. But the craziest thing about a bitcoin backed loan and why I think this is going to be a huge market is there's no headache, there's no credit check, there's no massive amount of paperwork. It's a very simple structure, very simple process and you get fiat within a matter of hours. You don't even have to pay ongoing interest. You can just pay the interest at the end. Like I said, they do proof of reserves. They have all the details and everything laid out. And obviously this doesn't come without risk. You know, be careful, make sure it's right for your situation and you have plenty of collateral. This is an amazing tool to have in your toolkit and you get a little bit of a discount with the link right down in the show notes for bitcoin audible listeners. Plus our partners at Gitchroma Code so they have tons in red light therapy, circadian rhythm, getting your light health right, your hormone levels right, your energy levels right. And they are based bitcoiners. They actually have a based Getchroma co website just for bitcoiners. And there's just been tons of evidence. I've been going down this rabbit hole and the benefits of red light therapy one actually, which I didn't even know this is where red light therapy started or the why research has kind of blown up. But it's about hair growth, like regrowing hair. True story, didn't know that until like two days ago. But you can get a 10% discount with code, Bitcoin, audible, all one word. And the link is right down in the show notes. Check out Pub Key P U B K Y app. They are building tools to create the semantic web, to build a web of trust, to make the web experience one that you control. You are in control of your networks, you are in control of your connections. And their Pub key ring app, the login experience. I want you to. I want you to experience this. It's. It's like butter. It's how the web should work. Check that out. If nothing else, link in the show notes and then lastly, the center for the World's Fight for Freedom at the Oslo Freedom Forum you will meet activists, real journalists, not fake journalists. Storytellers heroes, bitcoiners. Learn everything you need to know the stories, the tales, the experience and the mission to bring basic freedom and human rights to everyone in the world and the people who matter in that fight. That's June 1st to 3rd, 2026 link if you want to get your tickets for that right down in the show notes. All right, I don't want to lead this too much. We had a fantastic conversation. Peruvian Bull was wildly entertaining and we hadn't really gone down the dollar rabbit hole in quite a while. And he had just. He was just listening to the great taking on the show, which actually I'll have the audio for that one as well in the show notes. If you haven't listened to it, it's highly recommended. But we covered a ton of stuff here, so I say let's just dive straight in. This is chat 1:44 accelerating into the dollar end game with Peruvian Bull. Dude, welcome to the show. This is the first time. Have we, have we ever gotten together, talked? [00:06:03] Speaker A: I don't think so. I've. I've, I've listened to podcast. Yeah, I don't think we've met in person though, but I've been to some of the conferences and hopefully I'll see you at another one. [00:06:13] Speaker B: Yeah, I was about to say, I'll, I'll let you know which ones I'm. I'm headed to this coming year. We should definitely get together. This is going to be one of those things where, you know, we'll go for an hour and a half and we'll have to stop. But this is like a inevitable 12 hour conversation because it never ends. But welcome to the show, man. I have to say I'm probably going to go ahead and just get it, but I'm kind of stoked about your book. I haven't read it yet. One of the few pieces that I feel like is like a bitcoiner wrote it and I haven't actually dug into it, the dollar end game. But I follow you. I've been following you for a long time. I really love some of the threads you post, some of the breakdowns. I believe I've read something by you on the show. Didn't I read a Twitter thread or something? Did I? [00:06:57] Speaker A: You might have. You might have. I don't know. [00:07:00] Speaker B: Either that or if it's saved in my list or something. I know I've gone through a ton of them. But officially. Officially. Welcome to Bitcoin Audible, man. How's it going? [00:07:08] Speaker A: Good, thank you. Thank you for having me. I appreciate It. [00:07:12] Speaker B: Yeah, dude. So real quick, what's your background for the people who don't follow Peruvian bull and don't know all the stuff that you write about? Give us, give us kind of a TLDR on why I got you here. [00:07:27] Speaker A: Sure, sure. So, you know, I grew up up here in the Pacific Northwest. I went to Gonzaga University and studied finance and entrepreneurship. And right after, you know, when I was in, in University in like 2016, 2017, I was studying macro, going really deep down this rabbit hole. And I have actually kind of got footed out of Bitcoin in like 2017 due to some books I read that were basically making the argument that like the transaction speed wasn't enough. And so I kind of avoided bitcoin. But I was a major gold bug. Major gold bug. And I was obsessed with macro. I was just reading and, you know, watching videos and listening to podcasts and talking to professors and just going as hard as I could down the economics rabbit hole. And then in 2021 I got a job working at a fintech and I was, you know, making decent money. But I just still had this inkling like there's still like there's something wrong with our financial system. There's some big changes coming. I don't know exactly how it's going to play out. And I basically gotten, got involved with the Reddit community after the Gamestop, you know, fiasco, the stock just exploded and then they shut off the buy button and then I started getting in debates with people about macro. And so I post, I started writing this series called $Endgame. So it was originally like a Reddit series and then so many people loved it, they wanted to make it into a book and so I made it into a book. Um, but the, the Reddit threads all or the Reddit posts went viral, then the Twitter threads went viral and people just love that work about like just setting the stage for late stage fiat collapse essentially and you know, what could happen next. And you know, yeah, that's where I kind of blew up and I quit my job a few years ago and I've been doing this macro content creator thing full time now for about two years. [00:09:12] Speaker B: No kidding, dude, that's awesome. Dude. I'd love to hear when that like works when you just like quit and go like all in on that itch that, that you just been. Because, because that was bitcoin for me, right? Is that I just had this for a decade and I was just like, I have to do something. Oh my God, dude, that's a, that's a risk, you know, for. What was that? Like, what was that moment? Where were you financially? Where were you in your life when you decided, like, okay, this is. Because, like, that's not an easy. You know, we, we say that, you know, I, I say it's like, yeah, so I just decided to go all in on POD on the podcast and do a show. But that was not, it wasn't as easy as that. You know, what was kind of the hurdle in your mindset then? And did you also. Second question is, did you ever have a. Why the. Why the F. Am I doing this? I need to go. I need to go get a staple job, like, moment and. Or how many of those moments did you have? [00:10:12] Speaker A: That's. That's a good question. So for the first, for the first section, right. Like, I would say again, I was always interested in entrepreneurship and doing my own thing, but the problem was I never knew what I wanted to do. And I was so passionate about macro, but I was like, how is this a business? Like, just being interested in a subject, you can't really make that into a business necessarily. And so again, in 2021 and 2022, I was posting on Reddit that sort of posted on Twitter. My Twitter starts blow. And in 2023, I was working at, at a fintech company and I was in the valuations team. We're doing basically like software evaluations for early stage startups. And so it was technical work. You know, I was paid really well, but it was just really unfulfilling, you know, it was. It felt like golden handcuffs. And I looked around and saw everyone around me and I just saw people starting to stagnate in life and they might have only just been a few years older than me, but at the time I started feeling like if I continue down this path of just like, get a cfa, get a promotion, try to become a manager, try to do this. No, like, maybe switch to evaluations advisor. Like, it just, it just would take me down this predetermined path and force me to make all these choices I didn't want to make. And so I wanted the freedom and the flexibility. And I started becoming more and more passionate about content creation. I was getting better and better at it. And I essentially, like, reached my breaking point in 2023 where the job just wanted me to do more and more work. And I was like, I am not doing more work for people who are paying me with devaluating currency and, like, not giving me raises even in real terms. Right? Because they were giving, like, a 1% raise, 2% raise, and the currency is deflating at 5, 7% a year. I'm like. So I'm actually losing by trying 7% year over year. [00:11:57] Speaker B: Couple of those years, it's like 9, 10%, you know, just hurts. [00:12:04] Speaker A: So, yeah, so I waited till I had my three year bonus and I saved up cash in the bank. So I had about like $30,000 or so of cash in the bank, which at the time I was like, this is so much money. I'm. There's no way I'm going to burn through. This is going to last me five years. Right? Yeah, well, I know. Like a year and a half later, I was, it was all gone less than a year and a half later. Yeah. Yeah. [00:12:31] Speaker B: Oh my God, that's crazy there. Kudos. Kudos, man. That's a, that's a tough one. And it sucks too, because like our education system, the culture, like we and I, and I don't say this like lightly, like the US still has like a incredible entrepreneurial culture and I think that's the only thing that's like, kind of kept it from the end of its lifespan, so to speak. And probably the only reason we'll come back from the potential ashes here or maybe even save ourselves from some of the worst of it. But Jesus Christ, we are not set up to teach anybody about being an entrepreneur. Like, it is like going in blind like, like an infant at, you know, 28, you know, being 30 years old and really feeling like you're starting from zero because you have no groundwork. Nobody has even taught you the idea. The always, the idea was like, what job do you get? What's your career, who you're going to work for? And this framing is just so, it's like, okay, what value are you going to produce? Like, what are you going to do that's useful to the economy? And like that framing. If you just ask that to some people, they'll be like, oh, that's an interesting way to think about it. It's like, are you kidding me? Like, this is the simplest way to think about it. But it literally doesn't occur to people like how, like, how things actually work. In my kind of fumbling mess of, you know, seven or eight years of trying to be an entrepreneur and trying to do investments and all of this stuff, Dude, I have so much more respect for everybody who makes that decision because. Holy. It is definitely something else. Oh, speaking of, let's get into your thread because, well, your many threads, because I think it's really Easy to get lost in the. Things are just kind of moseying along and everything's great, you know, everything's been great. It's like, okay, we made, we made it, you know, for another four years. Everything, everything's cool, there's no big problem. Like, and we'll just, we'll just mosey through the next one and they'll print another few trillion dollars and we'll be good. But like, what's the step back big picture? Like, how bad is this really? And when does the normal person feel it? [00:14:55] Speaker A: I guess. [00:14:56] Speaker B: And I know when's a difficult question, but just in your thinking, I would. [00:15:02] Speaker A: Say again, when people ask me, where are we in to use the phrase the dollar endgame, what stage are we? I would say we're already the third inning. And most people are shocked when I say that because again, you look around and yes, inflation's bad and yes, like unemployment, especially the real unemployment rate that they don't, you know, technically report is, is higher than they expect. But things aren't like falling completely apart. And they're like, hey, like, you know, my sandwich isn't $500. I'm not like, you know, banging on the street for gas money. Like, it, this seems like you're being so bombastic. And this doesn't seem like it's, it's where, it's where you're saying it's heading. And again, I would say what you have to do is you go back and study history and you understand that this is all part of a process that plays out when reserve currencies switch. Right? And the fundamental problem is that the US Right, as the issuer of the reserve currency, is facing something called Strifen's Dilemma, which means basically the rest of the world needs dollars. They need, you know, dollar liquidity. They need it for trade invoices, for settlement, for central bank foreign exchange reserves, for lending and borrowing, for international trade, all these reasons. And they can't print dollars, so they have to get them from us. The issue is we only have so many dollars to give around unless we start inflating our supply, you know, artificially. And so for the last 70 or, you know, 60 odd years, since 1971, when we broke from the gold standard, we've been printing as much dollars as we can and some of them sending them to the rest of the world. And historically what the rest of the world was doing is they were taking those dollars, they were recycling them back into US assets, mainly US treasury bonds, because US treasury bonds represented the gold standard for Security and safety. It represented a, you know, three, four or five or even, you know, during the Volcker days, like an 18% coupon rate. And that those Treasuries could also use as collateral to borrow against, to lend against. Right. Like they were the perfect intermediary for the global financial system for all those decades. The problem is now the US treasury is starting to face the end of the road. So this last year we saw interest expense hit over $1 trillion a year. As of late May, interest expense officially surpassed defense as the second largest line item in the U.S. treasury's budget. Now the only thing it passed is Social Security. You know, we're facing $37 trillion overall debt. We have a 3.3% average interest on that debt. And if so, if that gets revaluated to like let's say 5%, that means interest expense goes to 1.6 trillion a year. And if the debt keeps growing at this rate, right, you will, within 10 years you'll see interest expense over, over come net tax receipts as a percent. So that means basically like all the money the government makes wouldn't even be able to pay the interest on the debt. And that is obviously a sign of late game, you know, late stage capitalism. And that means that in order to finance the debt, the, the only option there is to print because you literally cannot tax your way even to pay the interest. And so, you know, we're in this process. But the problem is that most people don't understand is that's a slower process than they think. And the first things to fall are these like auxiliary dominoes that they're not paying attention to. So they're not seeing it. Right, they're not seeing that foreign central banks, for example, are buying more gold and their official gold holdings are surpassing treasury holdings for the first time in 45 years. They're not seeing that on net. Foreign central banks have essentially stopped buying treasuries since 2015. [00:18:48] Speaker B: I was about to say 2014. 2015. Really? Right, yeah, yeah. [00:18:53] Speaker A: And again you think, well why does this matter? Well these are the people who are funding our government and if they're not funding it, then the Fed has to step up and that just means more inflation is coming down the road. And so again it means that we. [00:19:05] Speaker B: Fund it with our lifestyles, our standard of living, starts paying for it. [00:19:09] Speaker A: Yeah, exactly, yeah. So it's a process, but we're already in the third inning and there's key like signposts along the way that we can look for, for, you know, things getting worse. For sure. [00:19:19] Speaker B: So what are the major things? Is, is the, is the big thing that in your mind that gold is become like a major reserve asset again and that countries are shifting to gold and have shifted entirely away from bonds? Is that like, that's the signal of the end of the bond era and the end of like this debt machine just has to, has to start eating itself kind of thing? [00:19:44] Speaker A: Yeah, that's one of the big signs. You know the, the failure of the U.S. treasury bond, especially the long bonds to uphold their value is also a major sign. Right. If you look at TLT and you look at a five year chart, TLT is a long bond ETF. It's on 50% in five years. So what does that tell you? That tells you that anyone who owned those bonds, they, you know, got their shirts taken in that trade. They got absolutely obliterated. [00:20:08] Speaker B: Can't even sell them. They getting demolished? [00:20:11] Speaker A: Yeah, no, they're, they're completely demolished. And again you, you extrapolate that across all central banks and you understand now why they're buying gold in record amounts. And this is also notable, right, because gold is a non yield bearing asset. Treasuries are historically yield bearing. And so all of economic theory that we were indoctrinated in from you know, 1930 to now, Keynesian economics all tells you like, no, the, the treasury bond has a yield, that must be the demanded asset. Like the gold is an ancient, it's a barbarous relic as Keynes called it. It's useless, it's a pet rock, no one wants it. Well if no one wants it, then why is everyone buying it hand over fist? And why are gold prices breaking out to new all time highs like literally every single week? Like it's clear that there's demand and there's, clear there's still a use case. But again the world just hasn't fully. And this is where the bitcoin argument comes in, right? The w. The world hasn't fully grasped the severity of the situation and the actual potential solutions like bitcoin and how they can fix the problems that we're in. So gold is an intermediary step that I see. But I think obviously I hope that the world wakes up and bitcoin is the final solution. [00:21:15] Speaker B: Yeah, I honestly think it's kind of to some degree inevitable because the economics are so circular, you know, like as soon as somebody realizes it, like it's just really on the nature of production and like where I think like I've, I'm doing a video right now about like What I think the first like kind of hundred trillion dollar market in bitcoin is going to be, and I think it's collateralized loans because like the debt, debt is the problem. It's the problem. There is no problem bigger than debt. And that means that what people want is a secure way to lend and get yield and, or to borrow and know that they're not going to get rug pulled. And that means you need perfect collateral. That means you need the best collateral possible. And it's the only way you're ever going to get a yield that actually is meaningful. You know, investing in like lead in unchained firefish, like these, these various like systems or whatever, Is it like somebody can literally just go up and be like, here's $300,000. I'm gonna get 12%, I'm gonna get 15 off of this. And I have something that is collateralized that I know can be redeemed, that I know can be, can be pushed my way in order to cover the value of the loan, or can easily be redeemed by the person who, you know, got the loan at the beginning. And in the end, what ends up happening is all you have to do is have that liquid enough and have enough people scared that the bond yields are not going to be enough and that they need something that is like gold has one big question mark. Do they really have it? You know, who really, who really has the gold? Where's the gold? Do you sure you got, you know, is that paper or is that gold? And what can you actually verify from a distance? Bitcoin. And I think that just feeds back on itself. And the people who make that decision, they're just going to outproduce. And it doesn't matter how small that economy is on a long enough timeline, if It's a net 5% increase, just because that economy knows what the real price of debt is and the other one is a net 1% loss, doesn't matter how big or how small they are at the beginning. You give it enough time and the small one's the big one. It just is. So it in my mind, long rant to get to a simple question, but in my mind it's just, it's literally just a matter of time. And does bitcoin survive? And so that's always been my position is that bitcoin's just the superior money, but it confuses people because I think bitcoiners are so focused on the retail problem and the payments problem that they forget that the debt is the Problem. The debt is the problem we will solve retail. But that's not the first thing. There's a reason why quote unquote, bitcoiners aren't using Bitcoin. It's because there's a far bigger problem that just needs, that just needs an asset right now, a reliable, verifiable asset. But so is that, is that in line with your thesis? Is your full bet on Bitcoin or are you unsure about like how governments like adopt this? Like right now it's easy to get ahead of ourselves because we see it. How do you see bitcoin playing into like where we are right now? [00:24:36] Speaker A: You know, there's a lot of good questions there. So I think bitcoin is, I do agree it's inevitable in the sense that like compared to the failing fiat system, which by nature is an exponential system and always collapses in on itself because of the weight of its own debt. Right? Like, yeah, if you're increasing the money supply by 3% a year in perpetuity, that compounding over time will just destroy your currency and destroy the ability of your economy to save and compete and produced capital goods without, you know, government intervention or without state control. Right. And so and those economies, obviously, those socialist run ones, are always decimated in the long run by capitalism, by pure free market economics. The question is again, how do we get there on the road to adoption? What players enter the scene on our side, what players enter the scene on the other side? What players are neutral and just taking advantage of the technology and don't really care about the broader philosophy. Like the best way to think about it is Bitcoin presents one of the fundamental problems in monetary economics, which is Gresham's law. So because bitcoin is superior money, ironically it is more valuable and it gains value every year, so people actually don't want to spend it. And because fiat, because your US dollars are losing several percent every year, and if you're in a developing country, it's much, much worse, you want to spend that money. So, so the monetary velocity of a fiat currency is just by nature much, much higher than a solid like state. You know, a solid state like hard money currency like gold or bitcoin. And so in the early stages, the adoption process looks extremely slow. So even if you're a bitcoin company, like getting people to pay bitcoin for stuff, bitcoiners is a hard sell because unless they're totally bought into the circular economy idea, they might tell you, yo, why would I send my spend my SATs. I just want to save my SATs and just, you know, they're going to go up in value next year. I'll wait to buy your shirts next year and they'll be 30% less in SATs, so why would I buy now? But as time goes on, right, that dynamic will flip because as the fiat currency starts to die and as the inflation gets worse and as the saving power of that currency gets worse and worse and worse, the ability to even transact it will start to deteriorate because again, it's like the point of holding a currency and it's losing 50% of its value every single month starts to become a moot point. Right. That's the Venezuelan hyperinflation, the Weimar. And that's when people start moving into gold and, you know, bitcoin potentially. So that's like the pure, pure, like hardcore adoption play. But I think again, if, if you think about on the nation state level, there's nation states that would want to take this as a, as a competitive edge. Right? Right. If you adopt bitcoin and your competitor doesn't, in 20 years, you're going to be a light year ahead of them in terms of economic development and they'll be behind. And you don't even need to fight a war over that. You just beat them in terms of economics. [00:27:35] Speaker B: Yeah, yeah. And the, the power of exiting in place. Like, you think about the barrier and like, just the historical significance of that is so wild because it's just not been. That capacity has just never. If you go back in history and you just swap out that one thing that, you know, somebody can hold, you know, a million dollars with 12 words in their head, you've, you've rewritten history if that one thing just exists, you know, and I wanted to ask you something because I go back and forth between malicious and ignorance with like, how a lot of our world is set up today. And one thing that just gets me is that I find it hard to believe that nobody did the math when we decided that all new money was going to be issued as debt. That if you issue a hundred thousand dollars into existence and you already owe 110,000, you have a perpetual problem. You, you have a problem with one end because you literally don't have enough money to pay back the debt like you, you always have. You have to issue another $10,000 at least to pay back the $100,000 loan. And now you owe 111,000 because you issued another 10,000. And like, and I've always wondered why the quote unquote money printing didn't show up as just printing that the treasury didn't just say, all right, here's $3 trillion to knock down the debt a little bit this year. But instead it was issued as loans. And we're like, well, we're going to force the interest rate. Is, is it all a facade? Like, is it, is it to give the appearance that this is working in the market and there's like a real interest rate, even though, like, this is definitely price controls with companies that aren't really buying it? Like, this is a, this is a sham, but we want it to look like it's not a sham. Or is it like absolute maliciousness did? Like when they set up the Federal Reserve, do you think, oh, no, if we issue it all as debt, everyone will owe us. At the end of this, we'll own everything. [00:29:54] Speaker A: I think on the part of the people who support the system, the, the, you know, the 99%, the blue collar, the professors, I think it's just ignorance. [00:30:03] Speaker B: The. [00:30:03] Speaker A: But I agree on the, on the highest level, on the highest level, the people who actually run the system and understand how it works, it's malicious because again, you, it, it's, this is what I would call like first principles thinking, right? It's the simplest form of logical reasoning that you're taught in any sort of argumentation or debate class, Right? What you just said is, I actually have a section about, in my, in my rebuttal section of my book where I talk about people's arguments. And I said, like, look, inflation is actually necessary under a fiat debt enslavement system, right? Like when you have a hundred dollars in a town's money supply, but that money was lent into existence at 5%, you need to scrounge up an extra $5 at the end of the loan term. And how do you do that? The bank loans more money into existence and people say, no, well, they need collateral. Oh, then there's a reserve multiplier. Like, there's all these theories and I point them to this essay written by the, actually the bank of England in 2014, where they go through and they're like, no, like, you don't need. The bank doesn't even need reserves and the bank doesn't even need deposits. They create them out of thin air. Yeah, they don't need anything. [00:31:09] Speaker B: I think I know the one you're talking about because I clipped, I chunked out that piece is like, we don't need. We literally issue it in out of thin air. And I Was like, I, I saved that. I've got a screenshot of that somewhere. [00:31:20] Speaker A: Yeah, it's, it's a great piece. And you know, so funny is there's finance bros on Twitter who I've debated with and I'm like, they loan money into existence. And they're like, no they don't. I'm like, yes they do. And they're like, yeah, yeah, you're, you're, you're neo Austrian conspiracy theory. That's a cool story, bro. I'm like, no, this is the bank of England. This is central bankers admitting this. They, they say this out loud, right? They say the quiet pot out loud. So yeah, they absolutely understand how it works at the very highest level. I think that everyone else below them, you know, if you're talking like a mid level bank manager or bank tellers, like, they just kind of are ignorant and say, no, this is how the system works. It's good they have all these rationalizations, right? Because their entire argument is, look, we used to be on a gold standard and the gold was in the vault and it was, you know, we lent out two or three times more fiat than was, than the gold and there'd be bank runs. And so now we have a, a central bank to lend us money in times of crisis to save the banking system. Because look how bad it was when they were bank runs and look how, look how horrible it was for the economy. And they don't mention that, you know, any, any negative part of a system, even though it's uncomfortable, is usually actually a good thing, right? Like a recession is a good thing. It comes after the boom and it's meant to wipe out the speculators and the excess debt and the bad capital investments so that a new system can rise to take its place, right? The same is true with forests. You need a forest fire every 50 years to burn down all the dead wood and to, to lay the, the groundwork for new seedlings to hatch, right? And so in this vain attempt to kill the credit cycle, the Fed has just created this, this debt monster that just continually grows. And if you look at M2 money supply, you'll see what I'm talking about. There are huge jumps during wartime spending when the Fed prints a bunch of money and hands to the treasury for their bonds and then the treasury spends it into M2 money supply. But between those years is a slow and steady gradual increase and that is the debt creation. That's the 2% inflation target that they're doing. That's the average amount of new Money they're creating every single year, regardless whether there's a recession, a war, a pandemic, no matter what, they're going to make 2% more money every single year in perpetuity. That's just how the system has to work. [00:33:32] Speaker B: You brought up Japan before this and I'm really curious. It's so hard to get people to understand, especially with the Keynesian, the normie perspective, however you want to call it, like how economic thought is when their foundation is completely different and you try to explain to them that the contraction is the, is actually the healthy part. It's the, it's, it's actually critical to make sure that the economy is actually not fat and wasteful and like just an utter mess. We're not growing a cancer. You know, you cut it out. And then when you talk about deflation, deflation's always like the enemy of all enemies. And it's like, well, no, no deflation if all of your money is credit is a terrible, terrible thing. But deflation, if all of your money is money and savings is a great thing and specifically bad for net destroyers of resources. And that's it. And how do you. Inevitably somebody brings up Japan and I'm like, oh God, here comes another hour of like trying to lay the groundwork to make you understand why the hell Japan proves my argument and not yours. But I want to hear yours because you probably know it a hell of a lot better than I do. And I'm curious, your journey down that rabbit hole. [00:34:55] Speaker A: Yeah, absolutely. Japan is one of the most interesting macro case studies because it is the, at least purported to be by the Keynesians. Like they're, they're exception to all the fiat monetary madness. Right? [00:35:09] Speaker B: Yeah. [00:35:09] Speaker A: They go out and claim they're like, look, QE doesn't cause inflation, it didn't do it in Japan. 0% interest rates isn't financial repression because it wasn't in Japan. Oh, you know, doing yield curve control isn't damaging to the bond market because we did it in Japan. And again, that cudgel is used to beat economists and you know, maybe more like libertarian minded philosophers over and over and over again. And the irony is that the, the actual inverse of their point is being proven in Japan, but they just don't understand it because they don't understand how to actually look at the real fundamentals of what's going on there. You know, Japan suffered a major, major bubble pop in the early 1990s after the credit boom of the 1980s. And that credit boom had actually been engineered by the bank of Japan, because at the time they were still functioning under the control of the Ministry of Finance. And they were using things like window guidance, which is essentially a loan, like a loan credit requirement and quote quota system. So they would tell banks like you have to lend 900 billion yen this, this week. And then they eventually got it so specialized that they would tell them which industries to lend into. So the banks were like called by the central bank and told, no, you have to do 800 billion yen into, you know, real estate, and Then next week 300 billion yen into autos, and next week 40 billion yen into healthcare. And so they would just play this Russian roulette game of let's try to stimulate different parts of the economy, right? And of course this led to a massive, massive asset price boom. You know, at one point the Grand Imperial palace of Tokyo was worth more than all the real estate in California. Golf club memberships were valued at, you know, millions of dollars. And they, they invented a futures trading system for golf club memberships because people were speculating on the value of those golf club memberships. Beer prices shot to eight or nine dollars and eight or nine dollars for a pint of beer in 1980s is insane. [00:37:12] Speaker B: Dude, that's crazy. That's crazy. [00:37:15] Speaker A: That's like $35 today for a beer. Yeah, so it really, it reached astronomical levels and then the bubble popped. And in the aftermath, the bank of Japan tried all these different ways to combat the deflation that they themselves have had created. But the one thing that they never fully allowed was an actual default of all the bad debts that had been created during the bubble. And so you get to now and they're at 263% debt to GDP, 125% private debt to GDP. [00:37:47] Speaker B: 263. Damn. [00:37:50] Speaker A: No, it's truly an astronomical level. And the private consumer in Japan is essentially over indebted and overinvested in cash and basically scared away from ever investing in bonds or stocks because those assets have fallen substantially in value and the productivity and the real economic growth of the economy has basically come to a standstill for almost 30 years now. And of course there's a demographic story in play here, but the economic story worsens the demographic story and then the demographic story worsens the economic story. It's just a self perpetuating cycle, It's a feedback loop. The generation that was born in the wake of the 90s asset bubble was the smallest generation ever in Japan. And right now Japan is losing about 800,000 people a year, because their excess deaths, you know, dwarf their, their birth rate. [00:38:40] Speaker B: Nobody wants to have kids. Nobody feels like they have any stable future. This all goes back to the Austrian theory, or I guess it's like Hayek, who really like hits this home of like, money is the ultimate hedge against uncertainty. And if you have no idea what your future is going to look like, you will not plan for it. All of it is focused immediate on the immediate future. And if you just feel like there's no hope, you're not going to start a family. You're going to feel like, like, what a waste, what a, what a ridiculous proposition it would be when I don't even know when it's been five years and my situation is worse than it was five years ago. What the hell's going to happen in the next five years is that it just demoralizes an entire generation. And, and you see it, it does, it does everything. Svetsky has a great line in, in the Bushido of Bitcoin, where he like kind of gets into this and talks about like all the various ways in which it affects people, but that it also creates this managerial state where everything like, just like talking about central banks, like, you're definitely going to do it. You're going to do it in this industry and you're going to do it in this industry. And, and the banks are controlled and everything is controlled. So it feels like nobody has any choice, you know, like there's, there's no decision to do anything. It's just like what somebody else's decision, how it affects them, and so they just become like, numb to it. And, and he calls it like, it, it's the. It creates this like condom of society to like make everything safe and planned. And it literally has the same effect. You actually see it in the birth rates. It actually behaves like a condom on all people's plans, on the Hope for the Future, on having kids or whatever. And it's a great little section I like, saved out of that book. But it's crazy how it's all tied together. Like, it is all tied together. [00:40:33] Speaker A: It is all tied together. It's just, again, this is a different, you could say like a different symptom or a different realization of the same disease, right? So instead of people being destroyed by inflation, they zombified their economy. And you know, that as we made that documentary in March with, you know, Julian and Isabella and you know, Meta Planet, and we were like, you know, talking to economists, talking to everyday people in Japan, that word kept Coming up over and over again, zombified. The economy is frozen. It hasn't moved, it hasn't changed. There's been no innovation, there's no growth. Right. Western Nakamura, one of the keystone people that we interviewed, who's a. A Bank of Japan expert, one of the best analysts on Japanese monetary policy, he said it really succinctly. He said, can you name a Japanese Mark Zuckerberg? Is there a Japanese Elon Musk? He's like, where's the Japanese Silicon Valley? He's like, anyone with any creativity in Japan has to leave because there's no capital investment, there's no startup culture, there's no entrepreneurship because there's no growth. And the economy is still stuck with all these bad debts. All these corporations, right, took on debts two to three times what they could service, and they all got the banks to give them 0% loans in the wake of the crisis because they said, oh, man, we have 300 billion yen debt. We're only making 50 million yen net income a year. We can't pay even the interest on this. Give us a 0% debt, and we'll just keep pushing it forward into the future. We'll keep refinancing, keep borrowing again, and we'll just kick the can forever. Well, then the company never gets out of the debt, and they never get out of their bad investments, and they never change. And so. [00:42:21] Speaker B: And they stay this giant, this giant corporate blob that just consumes resources that everybody else needs. You never actually get to something where there are institutions that are running net production of resources and you never get rid of them. They're just. They just become permanent. Oh, God, such a mess. [00:42:43] Speaker A: And the zombie metaphor again there is really great, right? They're functionally dead, but they're still, like, hobbling along. And the estimate that we found was 29% of companies on the Tokyo Stock Exchange are functionally dead. 29. [00:42:55] Speaker B: Holy shit. [00:42:56] Speaker A: Yeah, basically a third. Holy shit. [00:43:00] Speaker B: That's crazy. [00:43:04] Speaker A: Wow. [00:43:07] Speaker B: God, that's wild. Does that happen to the U.S. what's our story? [00:43:12] Speaker A: It is happening in the U.S. and that. But it's obviously where this would be farther out. But this is another bleak future that we would look forward to if we follow down this path of 0% interest rates, QE monetization of financial assets, and complete zombification of the economy. The difference is, in the US There's a high enough, you know, immigration and birth rate that this would probably actually result in inflation. Right? And the US consumer has a much lower savings rate. And propensity to save than the Japanese. And so that means that any additional money that the Fed prints will circulate much faster and will cause much more inflation than, than Japan. So Japan's been a special case for a while, but right now, I mean they're going through a historic, I would say breaking of their currency and bond markets right in 2022. This started with the Yen breaking 150 and the interventions beginning, which is when I really started following it and writing about it and making YouTube videos about it. And this process has continued and has moved, the contagion has now moved to their bond market. And so their 30 year bond is now at 3.3%, their 40 years at like 3.5% almost. Which is again, if you, it might not sound like a lot, but for Japan, which was pinned at 0% interest rates since 1999, it's massive. It's absolutely massive. For context, at 260% debt to GDP. If you refinance the debt at the current interest rate, not even projecting like, oh, let's normalize with where the Fed is at 4.5%, let's go to 3.3%, let's have all the debt be refinanced at 3.3, Japan would be paying 7% of their GDP every year in interest expense. 7%. And that's more than, that's like double what they spend on their military. So they'd be paying two military's worth just on interest because that's how big their debt is. That's at 3%. Imagine seven, imagine 10. You know. [00:45:21] Speaker B: My hope is that bitcoin is kind of the foot out the door, at least lets part of the economy survive. Like, of course there will be a massive shift and maybe, and maybe the problem is that they quote unquote won't allow it and it will just get pushed out of the economy. But right now it seems like it's actually a relevant piece of the puzzle because this, at least this regime is very in favor of it. And there's a massive push. Like when a lot of people in the US want something very openly and you can't suppress the conversation about tends to be very politically difficult to push against it. And only the most extreme things, like look how long this Epstein didn't kill himself thing has lasted. You know, like they can't make it go away. And so that gives me hope, that gives me a lot of hope. But I'm curious, what do I need to be more sober about it? What do you, what do you Think. [00:46:32] Speaker A: No, I think it, I think that that is a good take. You should be white pilled about the bitcoin future and black pilled about the Fiat future. That's absolutely the correct take because, you know, you look at Japan, you look at countries like Greece, you look at countries like Italy, you see the inflation they deal with, you know, Venezuela, you see the corruption, you see the absolute state of, of, of the market and people's opportunities. And then you turn the page and you look at historically what happened when the US had a sound money system. Right. From 1800 to 1900, the general poverty rate in the, or like the people who qualified under the, the UN's worldwide poverty rate, which is less than a dollar a day, fell from 90% of the population in 1800 to almost 10%. It was like 11 or 11 and a half percent of the population in 1900. So it flipped completely. And you know, real wages rose 8% year over year for the last 30 years of the 1800s. Railroads were built, telegram, telegraph. Right. We had eventually like the, the combustion engine invented. We had, you know, obviously the motorized vehicle in the early 1900s, the planes, you know, like all these inventions came to bear just within a short time. We went from horse and buggy to trains, telegraphs, radios and vehicles. And all this was done under a relatively sound money system. Right. There was still some inflation, there were still bank panics. [00:47:59] Speaker B: It was about, it was about the closest we've had to like genuine sound money in the modern world. Yeah, 100%. [00:48:04] Speaker A: Yeah, yeah, exactly. You know, people will say, oh well, it wasn't a true gold standard because they still had fiat printed on the banks. I'm. Yes, they did. That's true. You know, and they still used banknotes. Yes. And it was only backed at 30% of, you know, total bank assets were in gold. But now the reserve ratio is zero. So I would rather go back to that 30% if I had to compare, you know, between those two. [00:48:27] Speaker B: So yeah, like even if you, if you, even if you call it 1%, 30 times more sound is definitely, is definitely a far better situation to be in. Right. And the results of 30 times more sound pretty damn clear. Did. It was better. It's so funny that like the Keynesian economic thing, they literally, they literally point out periods of price deflation during that era and they just kind of like arbitrarily say this was an economic crisis. You know, there was, there was one like towards the, I think it's the late 1870s, I believe 1873. [00:49:01] Speaker A: There's one. 1873. [00:49:03] Speaker B: 1873, yeah. But I remember when I first learned or had or heard anything about it, it was talked about as this, this was like this terrible period. And only to come to find out that like this whole period from 1870 to kind of like 1900 actually saw the greatest like percent standard of living increase in American history. Like even to this day, nothing compares to the overwhelming amount of free time, general well being, general health and everything of the American people than that period. [00:49:38] Speaker A: It's even more than that. It's in world history. So from 1776 to right before the First World War, 1914, the US created more wealth than all other empires in history combined up to that point in just 120, 130 years. Insane. [00:49:57] Speaker B: He's absolutely bonkers. [00:50:00] Speaker A: Again, all under English civil law system, tiny government, right? Absolutely tiny. We're talking so small that like if they, if the founders and the, and the presidents of that time came here, you know, there were presidents who took the train after they, I think it was Grover Cleland or one of the prisons after he ended his term, he walked out of the White House with his wife and got onto a train and took the normal train back and was just like, ah, I'm gonna go back to living in Ohio. You know, it's time to go back. I'm, I'm done. I'm just going to go live on my ranch and you know, hang out with my kids and you know, watch the sunset. [00:50:37] Speaker B: Like, two weeks is up, guys. All right. [00:50:39] Speaker A: Yeah, two weeks is up. You know, and, and most presidents actually, like, you know, Andrew Jackson and you know, others like him, all fought against central banking and fought against the encroachment of, of, you know, things on civil liberties. Right. There were a concerted effort even from the Senate and the House at the time to increase government spending. And the majority of presidents of that time vetoed any spending bill that was deemed too wasteful or too exorbitant. And so that meant that again, the government stayed tiny, the taxes that they needed to sustain themselves were tiny, and their borrowing rate was essentially nothing, equivalent to literally a few billion, maybe tens of billions of total debt today. So they were essentially like a debt free, tiny enterprise that only functioned with like a courts, military and like other key functions of government and nothing else. And that was when we had the most and, you know, most effective economic, financial and overall cultural boom in the United States or world history. [00:51:46] Speaker B: Yeah, I'm curious your thoughts on. You say we're in the third inning. Did that start with the Global financial crisis or do you, do you actually think that started later? Like, is that, did that open the door on Covid or something? Like, when would you say the third inning started? [00:52:03] Speaker A: I would say the third ending started with COVID The second inning started with 2008 and the first inning started. You could. I would probably say it's 1971. [00:52:12] Speaker B: Okay. [00:52:12] Speaker A: You know. [00:52:13] Speaker B: Okay, that makes sense. [00:52:14] Speaker A: Yeah. And so the tremors in the system are starting to compress. They're getting closer and closer together and they're getting bigger too. Right. Because the wave of QE that's needed with each crisis, the amount of inflation, the things they have to do to keep the system running increases non linearly with each crisis. Because the problem is getting exponentially bigger. Right. When it's the small savings in loan banks in the 1980s that need to be bailed out. Well, you can just get JP Morgan to bail them out, or you can get, you know, State street and Vanguard or, or whoever else you know at the time was willing to come in and buy those banks. Okay, well, now it's 1997 and LTCM, a major hedge fund, is failing and they have, you know, they've levered their assets 30 to 1 and they have about a trillion dollars of derivative exposure. Well, you can still get the 16 large prime banks at Wall street coordinated by the Fed to bail them out without any Federal Reserve money. Great. Now the prime banks need to be bailed out in 2008. Who bails them out? Who's bigger than them? TARP the Treasury. Okay. The treasury bails them out. Now the treasury needs to be built out. Who, who can do that? The only answer is the Fed. That's the only one with enough balance sheet. [00:53:23] Speaker B: It's just cascaded up to more and more fundamental. Yeah, until, until you just get back. [00:53:31] Speaker A: Yeah. One phrase I like to say is 2008 didn't kick the can down the road, it kicked it up the stairs. Because not only did it delay it, it made the problem much worse. And that's been on monetary history for the last 60 years, is kicking the can up the stairs every single time. [00:53:46] Speaker B: So the can has been kicked to literally the bonds and it seems like nobody else is buying them and has, you know, on net stopped for basically a decade now. And this is what gets me is like one of the things that, like I felt if you just look at the simple exponential, like the debt goes through a simple doubling every 10 years. And so, you know, 2015, it was like 17 trillion, something like that. And today 36 37, you know, it just, it's like freaking clockwork. It's basically double every 10 years. However, we're getting to a point where I think one of those things that limits it or keeps it able to only double every 10 years is the fact that you had this underlying bull market in bonds and you had everybody buying up the debt. And if nobody is doing that, the ability to price control, the interest rate starts to fall apart again. The Federal Reserve has to print their own money or issue their own debt and in order to buy the bonds. And they're not going to not buy the bonds. They're not going to, they're not going to just be like, oh, we'll start. Well, okay, let me tell you about this 60 year systemic problem that we have. And you know, they're just going to do it. But that specifically means that the debt problem has to accelerate like on an exponential level, not just on the linear acceleration. It has to curve at the acceleration, um, which means that a 75, 80 trillion dollar debt in 2035 is probably optimistic. And so I'm kind of curious your thoughts on that is are we in the curve of the acceleration? You know, even though the trimmers have gotten closer, they're still four or five years at least. You know, last one was 2021 and we haven't hit another one, another very serious one yet. Like what is, what does 10 years look like in your mind? [00:55:55] Speaker A: I think so. Again, if you had asked me in 2016, 2017, when I was starting out the bitcoin rabbit hole and the, and the macro rabbit hole, really first, I would have told you, you know, there's no way that they're going to be able to keep the wheels on this bus if global central banks are already starting to slow down their purchases, if on that they're not funding, if, you know, basically people just want to buy front end bonds and the long bonds aren't being bid. And to be fair, at the time I didn't have respect for the cunning and intelligence of the people at the helm because you got to remember like as bitcoiners, right, we kind of tend to demonize the people at the top or maybe minimize like who they are and what they are. Oh, they're just plain stupid and evil or they're just dumb and ignorant. Well, they are, you know, maybe you could argue that things that they're fighting for are, are negative for society. They are evil, but they're not stupid. If it's their money on the line and their wealth, they're going to do everything in their power to maintain that. And that means that, you know, in the last what like seven, 10 years really, they've started this program of what I call stealth qe. So you know, as you go down the macro rabbit hole, especially the monetary mechanics rabbit hole of understanding like how the functioning of the plumbing actually works, you start to find that there's all these secret levels, levers they can pull to increase liquidity to put money in the system without increasing their balance sheet. So that will bid up spy, that will bid up bonds, that will bid up, you know, other like real estate. MBS securities keep driving real estate prices higher even though there's no fundamental reason for them to go higher. But it won't show up as an overt easing by the Fed. And so if the stock market is creating inflation in the real world, they can just say this is your fault, this isn't us. You guys are being excessive. Look at the Fed's balance sheet, it's perfect. It's not going up. This is all your fault. So they can gaslight you. And the stealth easing really started in 2014 with SEC changes to the money market funds. They forced a large section of the money market funds to become what is called government MMS, which meant that they had to help hold 99.5% of their assets in government bonds, especially short end treasury bills. And that put in about $4 trillion of extra liquidity into the government bond market. And then they had further requirements with Basel 3 and they forced all banks globally to adopt a framework which stated that U.S. treasury bonds are what is called HQLA, high quality liquid asset. And as an HQLA asset it receives no haircut, it receives pristine collateral ratings. And so it's like favored on bank balance sheets. And that means you can load banks up with a ton of US Treasuries and not have any capital requirement changes versus if you do that with corporate bonds or with stocks or with other things, they'll apply all these haircuts and you'll have to hold all this extra money and you'll be, you know, subject to all these regulatory requirements. So that basically pushed all the banks into buying more and more treasury debt. If you look at bank holdings of U.S. treasuries, Commercial bank holdings, they've like quintupled in the last 10 years. And so that tells you that the banks have become more and more closely tied in with U.S. treasury and the Fed as part of this like quasi easing system, right? And then that doesn't even mention that's so much worse. [00:59:19] Speaker B: So much worse. [00:59:21] Speaker A: Yeah. [00:59:22] Speaker B: Oh, how much of our retirements as a country are dependent on that? And maybe, maybe this is actually a good segue into the whole great taking thing. Since you've been, you said you've been listening to that recently. [00:59:38] Speaker A: I mean I, as a percent, I don't know, but way more than people think. Right. Like again, I wrote a piece called Stuffing the Coffers in January of 2024 where I basically made the point that again, the this was the regulatory stealth QE that they were doing back in the 2000 and tens to stuff the coffers to make all the banks filled to the brim with US Treasuries. And then that provides even more justification for them to bail out the banks. Because now the Fed can say, hey, look, if this bank fails, they're going to dump 400 billion of US treasuries on the market. That's going to collapse the treasury market. We can't allow that. Therefore we need to do a bailout of them and we need to make sure that their treasury holdings are secure and that they don't dump them. So you know, that process has been playing out and that's meant that again this stealth liquidity has been easing into the system and allowing stocks and bonds to continue to rise even without over easing from the Fed. And that doesn't even mention, like I said earlier, the reverse repo, the tga, the btfp, all these other programs that they've made that are more overt in the sense that they're actually adding liquidity, but they're still not on the balance sheet officially. And so they've been finding all these secret tricks and things to kick the can up the stairs continually and to keep adding liquidity without signaling to everyone that they are. But again, the ultimate end result is whether you call it QE or not, it's qe. And more liquidity is being put in the system. And this just means in the end more debt, more inflation and a quickening of the dollar endgame. [01:01:15] Speaker B: You don't actually have to sell your Bitcoin to access its value. You can actually borrow against it very easily without selling it. But when you do this, you need to be careful. You need to do this with a company that is trusted, one that has survived a bear market and one that will literally show you that they have the coins, that they have proof of reserves or some mechanism where you can look at your balance and know that it is safe. This is why I've been a huge fan And a customer of Leaden for a few years now. So one of the bitcoin backed loans that I got a few years ago to finish renovations and the basement and studio in my house, I would have paid three times as much bitcoin had I just sold it as it now takes me to just pay off the loan. And that's if I sell the bitcoin to pay it off, which I think I'm going to be able to get equity out of the house and pay off the loan and get all of my bitcoin back. This especially makes sense if you're making an investment, if you're doing something that is going to pay you income in the future, or if you're investing in bitcoin mining, it's a whole lot easier to beat the interest rate if you loan against the bitcoin and keep the bitcoin. Leden also makes this like crazy easy. Like if you went to do this right now, you could probably get the money by tomorrow. They do proof of reserves twice a year and I check it's a very easy process. And you don't have to do monthly payments if you don't want to. You can just accrue the interest and pay off in chunks whenever it makes sense. And best of all, they just recently got rid of all the noise. They had some other features. They had Ethereum loans. They're like, nope, chop it. They had a yield product. Nope, chop it. They had loans where you could get a lower interest rate and they didn't have it on their books. They lent it out. Nope, chop that. Now it's just custodied, fully backed bitcoin loans. It doesn't work for every single situation or every person. But there are some times where this is an incredibly valuable tool to have. Don't overextend. Remember bitcoin is volatile and read the details. But if you need access to your bitcoin's value and you just don't want to sell, LEDN is a brilliant and simple tool for doing exactly that. And I've been a happy customer for a couple of years now. You can check out the links right down in the show notes. It's LED in Ledden IO. There's so much capital tied up in the stock market like that's literally trapped there. I mean by design this is, this is to prevent the system from collapsing as if, as if we all collectively own, you know, $30 trillion in stock markets and equities that can't go anywhere but be in stock markets and equities well, then we get to be their collateral. And that seems to be what has happened both structurally and legally, according to what Rogers, David Rogers Webb uncovered in the great taking. So. And I think again, we as bitcoiners, even as bitcoiners, just kind of get placated by the. Things are. Things are just kind of chugging along and they're fine, but we don't, especially with this push towards bitcoin treasuries, we don't own anything. We don't and can't own anything in the stock market. And I don't think people respect exactly how serious that is. And can you unpack that a little bit? [01:04:48] Speaker A: Absolutely. And I'll just take you down the rabbit hole that, that I went down, right, which was January 28, 2021. And I'm working in my finance job. I'm in downtown Seattle. I'm following the Gamestop fiasco. The stock is ripping into the three hundreds and then the four hundreds. That morning, I'm barely able to get any work done because I'm just like, Reddit is ablaze. Twitter is ablaze. Everyone's going crazy. And for once in, you know, financial history, the underdog, the plebs, right, the common people had the elites by the balls, right? They, they had them where they wanted them. The, the Melvin Capital, Loop Capital, Gay Plotkin's firm, and Citadel were all underwater deeply on all these shorts. Even I think it's 0.72, Stephen Cohen's firm. And they were all screaming bloody murder that this was, you know, financial terrorism that they couldn't believe. Redditors were ganging up on them. It's so unfair. Blah, blah, blah, when they had made this, you know, very, very irresponsible short sell on this company. And this talk rises, rises, rises. And in the wee hours of, you know, the morning of my time, 6:30, 7:30 in the morning, which was like, you know, 9:30, 10 est time, the stock starts to go completely parabolic. And within the space of a few minutes, there are multiple fractional sales executed at thousands of dollars per share. And right as that begins to happen, the stock gets frozen. They've halt the stock and the buy button is shut off. And right after the buy button is shut off, the stock plummets from like $480 all the way down to $300 and trades down there for the rest of the day. And then the next day on Friday, it trades there as well. And there's this outrage, obviously on Twitter. How can they shut off the buy Button. How can they stop people from buying a security? I thought this was a free market. I thought we lived in a free system. I thought this is capitalism, you know, no one should be able to restrict you, even if it means other people lose money. Okay, so the hedge funds lose money. Too bad, so sad. That's part of the game of investing. You lose your money, you're not able to shut things off. And again, that, that event was so shocking and jarring to me because again, I've been this libertarian follower of free markets, and I had incorrectly, naively assumed, well, the money's broken, the bank's broken, the Fed's corrupt, but there's no way that the stock market wouldn't actually be be complicit in something like this. And that was the first slap in the face. And as we continue down this path, all of Reddit essentially, you know, converged on how could this have happened? Let's do the research, let's find out. And they very quickly found this researcher named Dr. Suzanne Trimbath, who had been a former senior director at the dtcc, which is the Depository Trust and Clearing Corporation, which is the central clearinghouse and storage custodian for all US stocks. We're talking something like 90, 98% of US stock trades are settled through them. They do over a hundred quadrillion dollars worth of settlement value every single year. Whoa. Yeah, okay, because again, imagine high frequency trading, right? They're trading 5 billion, 5 billion, 10 billion, 10 billion. Just over and over again. They do, you know, they hold around $100 trillion in total assets. And Suzanne Trim Bath had written in this book back in like the early 2000s, basically, about how Wall street, it was called naked, Short and greedy, and how Wall street was complicit. But the DTCC was the main culprit in this game of creating fake shares, fake bond certificates, lending them out, loaning them out, and then failing to deliver and not actually giving the real certificates. And that raises question. It's like, how is that possible? How systemically, how can the whole system work to I buy a stock, I buy Apple shares, and then when I ask for delivery, it's been 10 days and they're not in my account. And they'll show them in your brokerage account like you, as if you actually have the real shares, but even the broker doesn't have your real shares. They're out there floating the ether. Someone has them. And again, if this is happening to Apple and Amazon and other companies in the 2010s or the US treasury market, like Suzanne Trimbath pointed out, US treasury bonds were naked, shorted as well and rehypothecated. Then how could it not happen to small companies like Gamestop? How could not happen to everything? And we quickly went down this rabbit hole and realized that the fundamental problem is that ever since the 1970s when the stock market switched from a purely paper based system to an electronic based, what you call a digital ledger based system, in order to make that transition legally, they wanted to change the definition of ownership from of stock certificates from what is called the title, the registered owner, to the beneficial owner. So all US Stocks or almost all US Stocks are now held under what is called beneficial ownership. So you own the benefits and like basically like the pros of owning a stock. So you get the dividends, you get, you know, the capital appreciation, you can buy and sell that beneficial interest. You don't own the actual title. The title is held with the broker who holds it in what's called street name@the DTCC. So that means again our interpretation and Wes Christian and other lawyers have argued this, that that basically means you don't own your stocks because if you're not, if you don't hold the title, I mean if I held, had a car and I could use the car and the dealership said you can use the car, you can drive it, you can, you know, get, take it for repairs, you can wash, you can do whatever you want, but we're going to hold on to the title. We'll give you the beneficial title so you can hold the benefits of the title, but we're going to hold the real one. Do you really own it? [01:10:45] Speaker B: You could drive it around and you can like, you know, get the benefits of a car. But you know, if either one of us goes bankrupt, it's mine. [01:10:53] Speaker A: Exactly, exactly. [01:10:55] Speaker B: Yeah. [01:10:55] Speaker A: And that. Think of a geni ingenious that is. [01:10:58] Speaker B: Yeah. [01:10:59] Speaker A: That means if I go bankrupt, I lose. If you go bankrupt, I lose. [01:11:02] Speaker B: Yep. [01:11:03] Speaker A: Either way I lose. In the worst case scenario. [01:11:09] Speaker B: That's a mess, man. The most shocking part of this to me is that this has scaled larger than it ever has in history. And I don't mean that in just like a purely nominal sense, I mean that in a structural sense because the economy is more global than it's ever been. And because of that, like nobody, you can talk about the US and the Japan, like Japan and Germany and you can talk about them differently, but they're just all doing the same thing at different speeds and at different states of maturation. But if you Take them all together. It's all happening everywhere, all at once. And that's what's like, like seriously frightening. Part of it is horrifying. But then there's also this element of there's also going to be solutions that occur in many different places in many different ways. And the solutions can also propagate as much quicker and much more widely or broadly for the same reason that the problem has become so broad and become so inescapable, so to speak. I'm curious how you think kind of the state of technology and the kind of global economy, do you see this, like, breaking down, or do you see it as the solution when it comes to, like, the globalization of everything? [01:12:55] Speaker A: You mean the solution in the sense that, like, how, how would that be a solution? Like, to, to streamline settlement and collateral? [01:13:03] Speaker B: No, the sense that if, if a solution is found, it will be shared in the sense that, like, it will propagate very quickly and it won't be something that can only be trapped in one country. Bitcoin being a prime example of, like, if, if Bitcoin becomes any sort of a standard, it will probably be picked up by every country very, very quickly, with or without government approval. So essentially, the globalization of our information systems and the economy, a lot of people say or think that it's going to collapse and it's going to go back and we're going to be very, very isolationist. And I believe that there will be some degree of that, but I also believe that that's not really possible anymore, is that we can't, we cannot sustain the world if we're not globalized anymore, if we don't have trade, which means that we will be desperate for anything that enables that trade. And it won't just be the powers that be, because the powers that be, their, their wealth will be threatened all the same. It will just be threatened at a different tier or in a different state of the unfolding, so to speak. So I'm curious, how does that factor in your. Into your thinking? Or is that just kind of irrelevant? Just because the macros. The macro is the macro and it's, that's all kind of in the wash. [01:14:22] Speaker A: Of how it unfolds, I think. Again, I think, you know, Bitcoin really presents not only obviously a solution to the fiat debasement problem, but it presents a solution to the, to the Triffin's dilemma, fundamental issue of reserve currencies, right? It is by definition not centrally issued. And Triven's dilemma, one of the preconditions, one of the precepts for the dilemma is a centrally issued reserve currency. And so for the first time in history, we found a digitally transactable reserve currency that doesn't rely on a centralized custodian or centralized intermediary. And the decentralized issuance of the mining, how the mining pools work. Now, mining distributes coins randomly. That essentially allows anyone in the world to enter the game. And you know, on that playing field, things are very, very even. And so that allows every country to enter the bitcoin standard game when they want. Now, as to your question, like will every single country enter at the same time, absolutely not. I think some countries are going to be laggards. Some countries can be the, you know, the first ones. Some countries might be so stubborn, they might stay in the fiat monetary game for decades or two decades or three decades after the rest of the world starts joining bitcoin standard. But I suspect it will very much go the way of the Soviet Union in the 1970s and 80s where, you know, just like with the Berlin Wall, they have to build walls and restrictions to keep people in rather than keep other, other people out. So you'll see migration from any country that's a non bitcoin standard country into bitcoin standard countries just because of the wealth and the prosperity that's going to be created. And so that that nation state, right, like level game theory, which is kind of similar a little bit to Jason Lowry's thesis, I think that's going to start to play out. And especially if the US when people ask me that question, like how fast can it happen? I think the central node of the system is the United States. And so we adopt Bitcoin as a global reserve currency. And let's just say we start phasing it in. So we just say we're going to start off with just bitcoin gold and our US Treasuries and we're going to start phasing towards up the monetary ladder and back into gold and back into bitcoin eventually. And just have in 30 years we're going to be only bitcoin as a reserve asset. Every other country will have a target put on their back because now their US Dollars that they're earning are depreciating. Their US Treasuries that they're earning are going to be phased out and no longer going to be used. And the one thing that they need is going to get more expensive every single day. And so the rush and the scramble to get bitcoin on the nation state level Will, will commence. And I think that's very, very beneficial for the bitcoin hyper bitcoinization argument and very beneficial for the world as a whole. But again, it depends on the, on the moves these players make because the, the US it's too late for them to become overtly, you know, opposite, like in opposition to, to Bitcoin because Bitcoin's already infiltrated the infrastructure overtly. [01:17:27] Speaker B: It's, it's illegal. You can't use it. Like, like it would be such a swing for like just doing business. Like it would, it would do more damage to just the reputation of having a business even slightly located in the U.S. you know, like it would just be, it would be a horror show. So I, I agree there. [01:17:44] Speaker A: BlackRock has an ETF, right. Fidelity offers custody services. Like there are huge players now on the pro side. And you may, again, you may think that these players have, have problems, have ulterior motives, sure, but they're still in the same boat as us. [01:17:58] Speaker B: But ultimately they want their, they're greedy. They, they want to, they want, they want to have their cake and eat it too. And if exactly their lobbying has any say in it, they're going to have the, Nobody's going to take their cake, you know, and that, that's good, that's the whole idea is that it incentivizes us to work towards Bitcoin's defense. [01:18:17] Speaker A: Exactly, exactly. So I think we've already passed that threshold. So you know, the US will no longer be overtly like tyrannically against bitcoin, like in that same way. But if they just refuse to adopt it and refuse to encourage it globally, adoption will be slower. But if the US is and especially other Western European countries or other countries with a rich capital base or like for example, Japan goes and moves towards the bitcoin standard aggressively, I think that will start to put pressure on all other countries to start to make the same choice. But I think the US is the keynote here because we are the reserve currency issuer and everyone owns, owns our assets. There's about $20 trillion more of foreigners owning our assets than us owning foreigners assets. So we're at about Almost a negative 100% of GDP net and international investment position. So wow, the world owns a bunch of US assets. So if we move to a bitcoin standard by default, they're going to start to move to a bitcoin standard too. Because right now they own dollars because not only can they trade and transact in them and settle debt in them, but the Dollar is the intermediary for them to own assets and to get capital appreciation in, in that native currency in the dollar or greenback based system. So if we're a bitcoin standard, then now there's a huge new argument for everyone to own Bitcoin because all of our assets will be denominated in SATs. [01:19:40] Speaker B: Mm, that's crazy to think about. And this is why it was such a big deal to, I still think, to lobby in the short term or to, to basically take some degree of political action just to slow it down because the previous regime was so unbelievably opposed, even though they couldn't make much headway because of how popular it already was in the US which is kind of crazy that, you know, bitcoin doesn't. You would think that the US Kind of has the leap, being the one with the world reserve currency, kind of has the least need, so to speak, for bitcoin. And yet it still ends up like there's more Americans own bitcoin than anybody else in the world. And, and then our government also was one of the ones that just embraced it because it was, and I think purely, purely the only reason Trump embraced is because it was politically useful. Like, I don't think it was anything. It was no special, like, oh, he's got some great plan to save us. I mean, like, listen to a speech at the end of the bitcoin conference, right? And all the other things you're playing with. He just did it because people cheered at him and, and said, we love you, Trump, when he said, go bitcoin. You know, which is another really interesting piece of the game theory because he may have inevitably tied the US Government situation to bitcoin's fate for, for better or worse there. But I'm, I'm curious the short term because like, you know, 10, 15 years is like, okay, this, this is absolutely going to get worse. We know we're on an exponential trend. What are your short term signals for? Okay, be, be way more cautious right now. And also, how do you think it relates to. It's easy to talk about like bitcoin and the, the hold a wave and the pattern of like, you know, retail, like mental adoption, like the psychology of the wave. But how's the ma. How's the current macro and what decisions you think the Federal Reserve and the President and all of this are going to make in the next two years relate to bitcoin right now? [01:21:50] Speaker A: Yeah. So I think, again, so what we've covered earlier, the stealth QE and the COVID liquidity injections are going to continue, but eventually they're going to be forced to do overt qe. Right. And really the end game for QE is something called yield curve control, which was actually pioneered by the Japanese. And this is again why Japan is. [01:22:11] Speaker B: So great example that we learned from really. [01:22:15] Speaker A: No, it's, I call it the monetary experiment lab. Like every single form of monetary experimentalism you can think of in the last 30 years that has plagued our markets started in Japan. Japan was the first country to go to the Zero Bound in 1999. In March 2001, they started Quantitative easing. And you know that word quantitative easing, it sounds so technical, so weird. Well, because it's a translation of a Japanese word. So there was like no other way to think. Yeah, like, because that word quantitative ease, like, what the hell does that mean? It's just a, it's a translation of Japanese word that doesn't have a pure translation in the US because it was, it was invented by the, by the BOJ in March of 2001. And then in 2010, in the aftermath of the financial crisis, they started doing something called qqe, which was qualitative quantitative easing. And that's. Yeah, I'm serious, that's, that's quantitative easing for certain assets. So they did QE for real estate bonds and real estate trusts and QE for equities and QE for ETFs and QES for corporate bonds. And let's just start stimulating different parts of the market just by choosing to do QE in different, different areas. And of course, like, eventually the bond market gets to the point where the, the rate that you need to, you know, finance the debt at becomes so low that you need to do more and more qe. And eventually you just throw in the towel and say, we're going to do what's called yield curve control. So we're going to do QE infinity. We're going to bring all the rates down and we're, we're not going to give you a target of how much money we're going to print. Instead we're going to do the inverse and we're going to say we're going to tell you how much the rate's going to be and we're going to print infinity money to buy all as many bonds as needed, literally their words, to bring the rate down to that level. So starting in 2016, in March of that year, the BOJ did negative interest rate policy. And then starting in September, they started yield curve control. And actually just two months before, in July of 2024 of 2016, excuse me, Bernanke flew to Tokyo and stayed there for a month with the head of the BOJ and the head of the MOF in order to design yield curve control and help them figure out how to implement this monetary policy. So long term, that's where I think the west, the rest of the western democracies are going to be headed. And it doesn't even necessarily have to be the zero bound. It can be at like 1% or point like was it Bessant was saying 0.75%, you know, could be good rate. And he said Powell should be trying to. Aiming to get there. You know, that's. And that's not technically zero, but it's so low that it might as well be. And in order to get there, they'd have to do trillions of dollars worth of QE again and probably maintain that at the pace of billions of dollars a month in perpetuity, just like Japan did. [01:25:10] Speaker B: Jesus. It's, it's funny because like in, in a sense we're doing that. It's just like it has to be. Again, I like the idea of kicking the can up the stairs is that like it just has to get more and more explicit because the. All you do is actually create. You move the problem more systemic. Obviously you don't actually fix anything. You cook one layer of the books and then the, the layer underneath no longer satisfies the, satisfies the fraud and you have to cook the books layer like a fault one another layer down. So does that make you, does that make you bullish on bitcoin treasuries or scared to death of holding anything in the stock market in the short term, especially bitcoin Treasury? [01:26:02] Speaker A: You mean the, the QE infinity and that kind of. Or do you mean the collateral? [01:26:07] Speaker B: Yeah, yeah, just the. Well, in combination. In combination. Is that like. So everything we've laid out. What's your take on bitcoin treasuries? Because there's like a lot of different pieces to this, but it seems to be like this popular thing that, you know, people are pushing really hard right now. [01:26:23] Speaker A: So I'll say I have a middle road take which will probably piss off the extremists on both sides. [01:26:28] Speaker B: Right, good, good. Let's get into it. [01:26:31] Speaker A: Yeah, I love pissing people off. It's so much fun. Bitcoin treasuries aren't the new, you know, gold or oil or, you know, brilliant, you know, infinity motion machine that can Create infinite money for no cost, forever. That's just not how they work. Because what they're doing is they're taking advantage of a loophole in the system of, you know, institutional players and, you know, bond investors and other people who are regulatory restricted from investing in Bitcoin directly and giving them an avenue to invest. Right. So microstrategies, you know, they're convertible debt bonds. Those are able to get subscribed at 0% because all the bond funds have been taken to the woodshed for the last five years and now suddenly they have a convert that actually has a price appreciation potential that's much, much greater than any treasury bond that they could ever buy. Right. So it makes sense for those investors to pile in. But the convertible bond market is only so large and they can only support so many convertible debt. So much convertible debt. And as the, the trend becomes more and more ubiquitous, as more and more companies start to do it, the uniqueness of that strategy starts to fall. Right. Because if I'm microstrategy and I'm doing convertible bonds, and then here comes Semler Scientific and here comes Metaplatin and here comes, you know, let's say you have 30 competitors now or 40 or 50, does the, you know, premium to M nav stay at 2 or 3 forever? I don't think so. I think with that competition, investors who buy those convertible bonds or who invest in those companies as a bet on their ability to raise more and more capital start to realize that there's so much competition that that premium starts to get compressed and compressed. But all the way back to one. Now, I don't think, I don't think that all the big, all the bitcoin treasure companies are going to collapse tomorrow. I don't think that, you know, MSTR is going to go to zero. I think in actually, in actuality, it's pretty genius play because they're taking advantage of a temporary, you know, glitch in the system. [01:28:31] Speaker B: Transitional arbitrage. [01:28:33] Speaker A: Yeah, exactly. And when all said and done, and let's say every, you know, 90% of the companies in the S and P have bitcoin on the balance sheet and the premium, premium to nav is zero. Well, when all is said and done, they still have hundreds of thousands of bitcoin. So that's a pretty good play to me. [01:28:48] Speaker B: They let that arbitrage, they let themselves stack Bitcoin until they just return to their ultimate price to earnings in combo with how much bitcoin they have price. Which kills the M Nav. [01:29:00] Speaker A: Exactly. So Their M Nav gets killed. Okay, Find their stock goes back to 100 bucks a share. All the, you know, all the exuberance is taken out. But at the end of the day, they have, you know, Hundreds of what, 400,000, 500,000 Bitcoin. I actually know that they have recent purchases. I think it's north of 600,000 now. But that's a lot of bitcoin. [01:29:19] Speaker B: It seems like they didn't do some. That's the outcome. I don't think they did so terrible, you know? [01:29:24] Speaker A: No, they didn't do so terrible. And then again, this is a question you ask Bitcoiners is they say, this is bad for bitcoin. This is so horrible. You know, this is going to destroy the ecosystem. And, well, if bitcoin is going to stand up to a global Central Intelligence Agency and global nation states who are going to coordinate against it, yeah, I hope that, you know, it's strong enough to withstand MSTR and just, you know, people being stupid and sending useless transactions or filling up the block space with dumb stuff like, if bitcoin is killed because of that, then it kind of deserves to die. Because this thing was supposed to defend against nation state. And again, that's why I think it will. Like, obviously this won't kill bitcoin. Even if MSTR collapses tomorrow and fire sells all other bitcoin, bitcoin goes down to 30,000 a coin. Great. I'm going to be freaking taken out alone on everything I have and buying as much as I can. I'm going to be happy. Like, I don't know why people would be mad. I had a tweet on Twitter the other day that popped off a little bit. I said, oh, no, my favorite asset is on sale. Like, it's just trying to illustrate to people how stupid it is to be mad about the price going down. It's like, we know the end game here. We know that the debt is exponential. We know the inflation is going to get worse. We know that in the end, bitcoin is going to be worth millions of dollars because you're measuring in a depreciating currency. Why would you care if MSTR blows up? Even if it, you know, even if it temporarily impacts the bitcoin price. That's a good thing. And again, if you want to speculate on mstr, you want to speculate on any of these companies, go for it. Have fun. Just know that you're not buying bitcoin. Like, these are two different plays. Bitcoin is an actual, you know, Monetary system, you know, completely segregated from the traditional monetary system. You can have self custody, actually own your, your asset versus a share of something that's held in custody in a beneficial, you know, street owner name@the DTCC. So those are two different things. And now if you want to speculate and play games in the fiat, in the fiat game, go for it. Just like I, I don't think it's wrong if you want to go play blackjack and bet some money. But just don't call that the same thing as buying bitcoin. Like, that's, buying bitcoin is saving. What you're doing is speculating and that's fine. There's a place for speculation in free markets. But they're not the same thing. [01:31:37] Speaker B: Yeah, yeah. If you had to advise somebody on how to be safe and how to think about like, let's say there's a lot of people who have gotten into bitcoin recently. They're still in their job, they still have a traditional retirement and they're starting to buy bitcoin. Like what is the next three, two to three years? You know, what's the, what's the strategy? How should they think about it? How should they think about their side gig versus you know, getting eaten by inflation with their wage? Like what's the, what's the picture that you can paint for them to just kind of give them a, a way to think about what to do? [01:32:15] Speaker A: Sure. So I think what you need to do is find ways to minimize your exposure to, you know, highly inflationary prices. So like thinking if you can move out of the city, if you can move away from places with higher gas prices, higher energy costs, if you can get a better job that pays more and, and it's paying more, doesn't have to be even in, in nominal terms, it's like, think about it in real terms. Like if you, if you had a 10% pay cut but you moved to a city that's 30% less expensive, that's a, that's a raise. So move to the city in the Midwest that has, you know, a lower overall salary but a much higher standard of living and lower cost of living comparatively and just try and stack as much bitcoin as you can. Because right now we're in this weird area where there's a lot of long term Hodlers selling and there's still buy pressure obviously because we're, we're above 100,000. But it's kind of muted because of the amount of, of offloading of og you know, Coin holders. And once that dries up, we're going to be seeing some major moves up. And especially once the Fed starts easing, right. We're still on this like higher for longer mentality by Powell and the, the you know, the governors at the Fed. And so once we start an easing cycle and especially once Powell is replaced and if we bring rates down to 0.75% or whatever they end the target rate at and do more QE Bitcoin is going to go to $200,000, $250,000 in very short order. So your, your window opportunity is, is small. So I would just say be frugal, be very careful about, about spending and try to buy as much bitcoin as you can and move it to self custody. Right. Like don't, don't hold your bitcoin on the exchange, don't do coinbase, don't leave it there, move it to self custody, learn about a wallet. Right. There's tons of resources to learn about that stuff. And so yeah, just own your own keys and hold your own coins. [01:34:16] Speaker B: Nice. That's basically my exact advice. I'm curious, is bitcoin's like, I don't know, like 110 or 12 or something today? I don't know but I keep hearing that it crashed. Is bitcoin cheap or expensive? At A hundred and whatever, 110ish? [01:34:38] Speaker A: It's very cheap. You know one of my favorite phrases is, is, is. It's every day is. You know, you're buying, you're buying the new top until the next one, right? The che. The bitcoin is as cheap as it'll ever be. Like that's, this is actually reality, right. And people just are too emotional and trade on day to day news. Oh no, is that 117 and now it's at 112, right. I, I bought like a month ago at 115 I bought a big clip of Bitcoin. It's at 112. And I don't consider it, you know, a loss because I think of it. [01:35:13] Speaker B: In the end I bought a pretty big clip at the top. Like when it, when it broke all time high again I was like screw it and I just like borrow like 123. But I've like doesn't even, I don't even think about it, you know. [01:35:26] Speaker A: Yeah. Again once you, once you start to shift your thinking towards the bitcoin standard, you now think of how many dollars is my bitcoin worth? You think how much bitcoin are my dollars worth? Right. So you inverse everything. So now I don't think of, oh, I bought at 115. I think I got X amount of bitcoin at, you know, this many dollar price. So therefore I need to get more bitcoin as, you know, as, as soon as possible. And so whatever I can do, whether that's doing more YouTube videos, doing more content, you know, working harder, taking on a side gig, saving money, you know, whatever I can do to buy more, I do it because I know it's going to be worth it in the long run. [01:36:06] Speaker B: You know, I actually, I'm actually curious about that. If you don't, if you don't mind me asking, how do you monetize? Do you, do you have sponsors? Do you have, you just have a paid for, you have a premium to your like newsletter stuff, right? [01:36:20] Speaker A: Yeah, I have a, I have a paid substack and that brings in like 40% of my income each month. I obviously have Twitter monetized, YouTube monetized for just ads. And I have the book, the book obviously like most books, it sold really well for the first few months and then the first year and now the sales are down to like, you know, a handful of copies a month. But that's fine. I never wanted to be a huge thing, but the, the biggest thing is yeah, I have a sponsor, I block stream and we sell the, the Jade wallet on my YouTube channel and that converts pretty well. And so that's where I offer like obviously like a discount and people sign up to do that. So I'm hoping to add another sponsor here also in the, in the near future. But yeah, it's just sponsor and my loyal substack subscribers who love macro research and just want to like learn more and that's just like $12 a month or like, I think it's like $120 a year. If people want to sign up and have a bunch of premium podcasts, there discussions with, you know, high, high net worth investors, bitcoiners, other people and people who want to invest in specific areas that are like more bespoke, like Japan or Korea or China, there's content for them. There's. [01:37:34] Speaker B: That's actually a good question. You know, like you look at something like Japan and like all you see is like, Jesus, like how imbalanced, like what a huge problem. But then in some ways this, this also means there's some sort of an opportunity there because of how imbalanced things are. And in your mind, when, when you think about something like that, is it. Does Japan have some other investment or some other perspective on like, its opportunity? Or is it literally just buy bitcoin to hedge against, like what Japan is doing because everybody else is doing it? Is it just kind of a cautionary tale or is there something specific that you think about as far as like an opportunity there? [01:38:14] Speaker A: Well, the biggest thing is obviously, well, there's two things. The jurisdictional arbitrage because Japan, in Japan, it's very difficult to own bitcoin outright. The legal system has been set up in such a way that owning cryptocurrency and other like, bespoke assets is difficult. You have to set up a tax structure. You have to set up an offshore llc. It's expensive. But owning an equity like Meta Planet is totally doable and much easier. And so if you live in Japan, buying Meta Planet is much better, much better than just buying the Japanese bonds, obviously, because the Japanese bonds are crap. They've been losing value for decades. So that's one trade you can make if you live in Japan or if you just have exposure to Japanese equity markets. But the biggest trade is the carry trade is borrowing in Japanese yen at very low rates, 1, 2, 3% and lending in other currencies at 5, 6, 7, 8% and capturing the spread. And if you properly hedge the trade, you can essentially, you know, make free money. Because what you're doing is you're taking, you're exporting Japan's monetary policy to your own economy by taking their liquidity and bringing it to your market and then profiting off the difference in interest rates. And so I actually have a paid piece on my subsec I released in August explaining how to do a carry trade and how to pull it off. And again, this is just a feature of the fiat monetary system. Under a normal bitcoin standard, a difference in interest rates between countries would just be remedied with capital moving. Right? Like, okay, Turkey has a 30 loan rate on their bitcoin collateral. I'm going to go lend some bitcoin in Turkey because, great, I'm going to get 30% and I'm going to make more money. And then that way there's a free market in rates. But now obviously we have this kind of like different system that's quasi free market, quasi status. So you have to go through the, all the loopholes to do everything. Right. [01:40:17] Speaker B: Interesting. I might actually have to check that one out. I'm really curious about that because I've been thinking, I mean, they can real very structurally different about like how I set up investments and like, what basically is available to me these days because it's not been a focus and I'm trying to drop some of these other side things that I'm doing so I can both focus on, like, the development project that I'm doing, obviously stay focused on the show, but I just, I want to set myself up so I don't have to think about income. And I know there's multiple ways to do that, and I've just not devoted the time to really think about it. And like, the carry trade is actually like a great example, is that, like, if, if you could get a position and in order to get credit or, you know, a loan in a jap, the Japanese market, like, Jesus. Something like turning right around and doing this with like a bitcoin collateralized loan where you then lend it to someone who's trying to get a bitcoin collateralized loan, which you can actually do with. There's a system that I haven't used yet, but it's called Firefish. But I know you can also just talk to Leden or talk to Unchained or whatever, and you can be a capital provider. You're looking at 12%, 15%, you know, like, if you can get three and pull 10 out of it, you know, like, and you've got a collateralized loan where you know that if anything goes wrong, you get the bitcoin, you just get bitcoin on sale, you know, like, holy crap. Holy crap. This is exactly why I think the bitcoin collateralized market is going to be just massive when people are figuring this out. And this is gonna, this is gonna keep growing and those opportunities are going to slowly move away. And I mean, they'll, they'll remain there probably for five years or whatever, just because everything's still going to be chaos and arbitrage is going to be golden all over the place. But yeah, it's interesting. It's interesting. [01:42:19] Speaker A: And think about this. Like, I brought this up, I think, on my first podcast with Marty Bent. But using the Carry trademark to get collateralized loan exposure with bitcoin is a great example of using the fiat system parasitism against itself, right? Because you're taking out loans, you're taking liquidity from the Japanese. You're like, okay, you want to give infinite money at 0%, great, I'll take your infinite money at 0%. Love it. I'll buy some bitcoin with it and I'll pay off the minimum payment of the loan and every month I'll just take out more and Buy more Bitcoin. And when this whole system comes crumbling down and all the debts are erased, then I'll be at the end of the road with a bunch of Bitcoin and I'll be happy. You know, you can, you can come after me with, you know, no assets and, and all this debt and I'll just have my bitcoin and I won't care. So I think it's like the perfect, it's literally the perfect solution. And so, I mean, I know a lot of investors who've made a lot of money for the carry trade. The carry trade is worth trillions of dollars a year, literally. Because again, obviously it's not only just retail hedge funds. Institutions have been doing this for years. And with the recent Japanese bond market blowout, there's more and more talk of them restarting 0% interest because they paused 0% interest rate policy for a few years because of the currency blowing out. Essentially they were worried that they've been, they've been too accommodative in terms of monetary policy, which is like, yeah, no, duh, I think you guys have, I think you guys have printed a lot of money and no wonder. Your currency devalued by 30% in two years. I'm not shocked. But they, you know, to, to stop that. They've been letting the bond market kind of blow out, but now it's starting to reach critical levels and there's a huge amount of political turmoil with the LDP losing their first election in like, you know, 25 years and the, the Prime Minister is being called to resign and like all this stuff is going on and if this continues right, like they're going to, the BOJ is going to have to step in again, especially with the bond because of the erratic trading nature of the, the long end JGBs, they're going to step in and again, again and do more QE and do more yield curve control. And when they do that and insurance go back down, then all bets are off for the carry trade because you'll be making money in multiple ways. You'll be borrowing money at zero, so you won't be paying, you'll be taking into US dollars and then the yen will be depreciating against those dollars. So when you go pay back the loan a year later, it'll be worth 15% less. So you essentially get a negative interest rate loan in dollar terms because you're borrowing and appreciating yet. So, and then, and then if you use that to buy Bitcoin, which goes up 50% CAGR like, it's just, it's such a genius trade, which is why so many people ask me. I'd already had so many investors being like, hey, how do I do this? I'd already helped some people do it. So I'm like, you know what, I'll just make a subset piece. Like, you guys can go ham. Here's, here's the. Step by step. I don't want to do it. [01:45:14] Speaker B: Hell yeah. Hell yeah. Well, is there anything else you want to cover? Because I think this is probably a good, good place to, to lop it off. I know we could keep going down the rabbit hole of the great taking and everything, but I'll just, I'll just throw it to you. Is any, any last words and, or point people to, you know, where they can follow you and that sort of stuff? [01:45:35] Speaker A: Absolutely, yeah. No last words is again, just remember, like, it's that, it's that old saying, right? It's a, it's that meme. It's like, however bad you think it is, it's going to get worse, right? Like, but at the same time it's also going to get better. So be very bearish on Fiat, be very bullish on Bitcoin. This system, it's going to get worse. The collateral problem and the failure to deliver problems are going to get worse. Your shares that you own, your brokerage aren't really yours. They're held by the broker. They're held at the dtcc. They can freeze them whenever they want. They can create funds, fake shares whenever they want. They can fail to deliver. They can naked short, they can manipulate with derivatives, all these sorts of things. And the, really, the only financial asset that you can truly own is Bitcoin. So, you know, buy Bitcoin, stack sats, stay humble. That's my message. [01:46:28] Speaker B: Hell yeah. All right, dude. [01:46:30] Speaker A: You can find me on Twitter at Peruvian Bull. I changed my real name on Twitter Roberto. But if you look Roberto Rios or Peruvian bowl on Twitter, you'll find me also have a YouTube and then I have the substack, which is dollar and game substack.com so I have both free and paid articles there and you can sign up for a free trial for like seven days. If you just want to read some of the articles, you can go for that. And if you want to support me, you can sign up for the substack. [01:46:55] Speaker B: Is that, is, is all of that in the, the link tree so I can just grab those links from there? [01:46:59] Speaker A: Yeah, it's all in the link Tree. Yeah, on my Twitter bio. So do that. And I also have Noster. That's my extended bio. I have the Noster. And so if you want to follow me on Noster, go do that. [01:47:08] Speaker B: Of course you do your bitcoin. [01:47:09] Speaker A: Of course you do. Of course. [01:47:10] Speaker B: Yeah, dude, thanks for joining me. This was a great one. I really appreciate it, man. And if you don't mind hanging out for just a minute after close this out. [01:47:19] Speaker A: Absolutely. Thank you so much. [01:47:25] Speaker B: All right, and that wraps us up. That was Peruvian Bull. I will give links to his substack if you want to. I'm probably going to be spending some time over there as well as YouTube and Twitter and all that stuff. I'm literally just going to go to the link tree. I'll post the link tree too. But I'll also link to just kind of a few things that some of the pieces by him that I really like as well as I will link to the. Great. Taking the audio of that which we did on the show since we mentioned that one as well. But definitely this is not something to ignore. This is something to stay up on. So just following him to keep up on what's going on in the macro situation is probably not a half bad idea. And don't forget to check out Ledenledn IO for Bitcoin backed loans. I have a special link for you with a discount. And speaking of discounts, we got one for get chroma who do light health, red light therapy. Getting your Circadian rhythm right 10% off with code, Bitcoin audible and then the HRF they have the Oslo Freedom Forum June 1st to 3rd next year tickets are on sale now. Also their Financial Freedom Report, fantastic newsletter. I get news there that I would never be getting in any other context and I highly, highly appreciate them for that service. And then lastly PubKey app, this is synonym has built a set of protocol tools for re decentralizing the web. And PubKey app is p u b k y dot app. It's really kind of to showcase the beginnings of this and they've got a really big update coming. They laid out tons of different details. You can find it all at the link in the show notes. So check it all out. Great products, great services, all things that I've been interested in and used personally. Let's close it out. I got some really fun stuff coming. Really great read by Svetsky. In fact I may have already, that may already be published. But if you haven't seen the one on unpopular opinions for Noster, you got to check that out if you haven't. It's a fantastic article and I think it's a little bit of sobriety for a lot of us who are just in love with some of the tools we use because of how great they are and how much potential we see in them. I really like that piece. I highly recommend that episode. For perspective. With that, I'll catch you on the next episode of Bitcoin Audible. Don't forget to subscribe. Share this out. Press the like button. Leave a review. All of those are free things that help this show out a ton. And of course all of your friends need to know about bitcoin. They need to know about what the hell how dangerous the stock market is and how dangerous the dollar is so that they're not blindsided by all of this. Send them this episode. You never know, it might just do some good. And with that, I am Guy Swan and I'll catch you on the next episode of Bitcoin Audible. Until then, that's my two cents. Sam.