[00:00:00] Stablecoin issuers have suddenly become a major buyer of us bonds, of us debt. While the political environment and Trump specifically appear to be embracing the bitcoin dollar theory that Mark Goodwin and Whitney Webb have broken down in detail, which could lead to the dollar actually succeeding alongside the success and growth of bitcoin and allow the us government to continue to expand and become even more reckless and irresponsible with the us debt.
[00:00:39] Does this mean bitcoin turned out to be nothing at all but just another way to reinforce the dominance of the dollar?
[00:00:48] Or is this actually just one side of the coin?
[00:00:53] Will bitcoin destroy or save the dollar?
[00:00:59] It's time for a guy's take episode, the best in bitcoin made audible. I am Guy Swan, and this is bitcoin audible.
[00:01:26] What is up, guys? Welcome back to Bitcoin Audible. I am Guy Swan, your host, the guy who has read more about bitcoin than anybody else you know. This show is brought to you by coinkite and not losing your coins because the exchange decided to screw you or because binance froze your funds, which you shouldn't be using binance anyway. If you've listened to this show, you know that uncle guy would be very, very upset with you. But regardless, if you bought it on Swan or River or strike or cash app, you name it, whatever, withdraw it, get it off. Like, they are all, they're great companies and they're probably going to be around, but you don't know. Nobody knows what's going to happen with any of them. Withdraw it to your cold card. Get a cold card. Get my discount bitcoin code. Bitcoin audible gets you 5% off. It is right down there in the show notes with a link. Then withdraw your coins to it. Then you will own it. And when you hear about something, if something bad happens and you hear about it in a news article, you can go, oh, man, that really sucks. But luckily, I listened to guy and I got a cold card and I withdrew my coins. You'll feel better about it, I promise.
[00:02:39] All right, so today we have a guy's take that I promised you guys. And this one is actually before, before we get into it, we have a show coming, and we're going to push this for Friday. This is when we want to publish this. So this will be published probably today. This is Wednesday, and we've got something new. This is a series that we've talked about behind the scenes for quite some time, and I've been slowly trying to pull together the people that I thought would be best for it. And I think I have assembled quite the team. We have, we have the bitcoin Avengers together, and we have a show where we are going to be going through all of the major news and events to recap the month. And I want this to kind of be a foundational episode or foundational show to basically reference all of the other things. Like I want to cover as many topics and as many pieces so that if there's one thing that you listen to in bitcoin audible, it's this one, then if you want to dive deeper into anything specific or into any of the tech or anything like that, well, that's what all the other shows are for. That's what the reads are for, that's what the guys takes are for. So it's part a summary of all of the things that have happened, part a news report and breakdown of the events and major stories, and part just a bunch of bitcoin ogs dropping straight knowledge. So stay tuned. Don't forget to subscribe. We've actually already recorded the first one, so it will have a little bit of miss. It was actually right before all the Telegram stuff dropped. So that's the only topic that we won't hit that I think is actually relevant. So that'll be in the next one. But it was way more fun than I had even anticipated. And I am so stoked that we finally, we finally kicked it off because this has been brewing for a good little while now. Now, today's episode is in reference to everything that's been talked about and written about with Whitney Webb and Mark Goodwin and the research that they have gone into and the bitcoin dollar thesis and where I think they are right, where I think there is concern to be had and where I think they have really glossed over or misunderstood the two way implications of a world of stablecoins. Because I'm a big fan of Whitney Webb and Mark Goodwin. I love their writing. I love their research, but I also have never read anything from them that isn't just profoundly defeatist. And I do not mean that to be insulting or I do not mean that to be accusatory either. But this is without a doubt a double edged sword. And at least when we're talking about the bitcoin dollar theory and the idea that this is exactly the same as the petrodollar, I think also misses, like, huge differences in exactly how this is set up and the degree of control that they actually have. And there's actually a piece in this, you know, bitcoin never got rid of the idea of political control or social power in any way. Like, that was never what bitcoin was going to do. And I think it's a, there's a fundamental misunderstanding between, is the state still going to be the state versus, does the state have systemic monetary cheat code? And what degree can they get away with essentially corrupting the entire foundation of society?
[00:06:29] And I think they've kind of glossed over that. That avenue is still not available to them, or at least they, in their writing, they have not acknowledged the vast differences. And to exactly what degree there is, there's changes and dynamics of power that have shifted here. And I want to make one thing very clear. I want to preface this discussion and kind of the framework of the bitcoin dollar theory and what kind of Trump embracing stablecoins and the political winds blowing in this direction suggest is just recognized that the government basically had two options.
[00:07:18] They were either going to fight and try to kill bitcoin, or they were going to join it and try to benefit from it. This is the latter course of action.
[00:07:30] Consider how profound of a shift in the battlefield has occurred, that this is the route that they have to take, that now they have to embrace stable coins, because stablecoins may be the only major buyers, in very short order, maybe the major buyers of us government debt, that in order to keep the dollar even alive, to keep it from just completely imploding, it may have to embrace all of the bitcoin and stablecoin technology.
[00:08:03] And I want to talk about the risks of stable coins. Like, what are all the bad things about stablecoins? But I also want to make sure that there's a very clear distinction that that's not a CBDC. And some of the main reasons we should be concerned about CBDCs are not something that are inherent to any particular stable coin. And one thing they bring up a lot, and a lot of people talk about this. They say, you know, stable coins, tether is just a new CBDC. And this where if we embrace stable coins, we'll just have a bunch of cBDCs. But I think that's to completely misunderstand. What the court like, the big critical problem of CBDC is, is that a CBDC is a veritable global monopoly on the entire foundation of the entire system's payment network. Such that if the Fed wanted to do something to their stablecoin, to their CBDC, literally no one could escape it. Like, there's, there's no, like, bowing out of that degree of central control. Now, if we're talking about stable coins where every bank can issue their stablecoin, or every credit union or every financial institution, that's a very different prospect because nobody's stuck in any one thing. And if one country enacts some terrible or stupid, like, expiration on the accounts or, you know, force people to actually pay, pay the funds out in some period of time or they're going to get a haircut or something like that, people will just not use it. And this is a world where they will have options. And this is why in the episode I was explaining, or the analogy that I use is that this is a lot more like the euro dollar than it is the petrodollar. Because the euro dollar is something that was specifically outside of the purview of the Federal Reserve and the US economy. They don't know exactly how many euro dollars there are. They don't exactly have like a window into all of it. And talking about like, stable coins as being like, oh, you can see everything. And it's the surveillance panopticon. If you're using a stable coin, it's like, guys, what do you think? What do we think banks are right now? Like, how functionally different is it than a bank right now? Like, does anybody suppose that they have any privacy in their bank account? Does anybody think that if you're part of the trucker convoy, there's going to, you're just going to be able to not have to worry about frozen accounts? You know, sure, it doesn't fix very much, but it also doesn't really change anything. Like a world with stable coins where banks can issue their own stable coins and users can actually directly exchange stable coins or even crazier spend these at Walmart. Like use them as if it's a debit card. Like, use them in retail payments is actually a good bit better than what we have right now because it means global ability to actually transfer funds. It means competition among banks in how their stable coins actually work and what technology they actually put in them. And it basically means the end of wire transfers and ach and overnight swaps and borders and all of this stuff. It actually makes the dollar better. It actually just makes the normal financial system better. Like, that's such a huge concession. Like, that's like a shift from cable tv to streaming. Like, sure, it didn't make copyright go away, but it's certainly a whole lot better for the consumer and the user to be able to watch stuff whenever we're on demand. Isn't some sort of like special function that you have to pay for on top of the service that you already pay for. It's just kind of what's expected. Now I can watch what I want to watch, when I want to watch it. And it's also important to recognize that stablecoins run on their own infrastructure. Like, these are things that the bank can run and operate by themselves or whatever financial institution. And this might actually be a boon to like, credit unions and alternative banking and specifically overseas stuff, because tether isn't in the US.
[00:12:48] And I can easily use tether right now. Now whatever affiliations or whatever, you know, tethers working with the FBI or the us government or whatever, that's irrelevant. What I'm talking about is the fact that I can log in, I can use. You're not even logging in that I can have access. I can receive tether openly and independently, regardless of whether wherever that sable coin is in the world. Again, there's no borders. The reason I don't want any tether and the reason USD us dollar stablecoins are useless to me is because I can't use them anywhere. I can't deposit them in my bank. But when I use dollars, if I could use something like a stablecoin instead of some. Instead of a bank account, that would be better. Like, it wouldn't fix a ton of the systemic problems, like the fundamental problems. Yes, I still have the surveillance system still pretty much complete. That institution knows everything that I'm doing. Yes, they can freeze my account. Of course they can. Yes, they could limit what I can do with my account. They do that already.
[00:13:59] They do that already. Like, what is. How is that different from what we have? Like, I can't move. I can't zelle somebody. And this is like, with like two third parties in order to just move some money. I can't zelle my contractor, more than $2,500 a day to do the deposit for the framing. I had to do three different payments. Then I hit my monthly limit. Because my monthly limit is.
[00:14:23] It just makes no sense at all that not only do I have a daily limit, I have a weekly limit and a monthly limit. And so I had to do it in three payments and then pay the rest of it with a check. I had to write it down on a check and hand it to him. Holy crap. If I could just send him some tether because he could deposit it in his bank or literally just go to his supplier and buy wood and PVC and all of this stuff with it, that would be way better. Way better. And of course they could put in a limit and probably our bonkers, stupid regulatory system will try to put in limits, but it's not inherent to it. And literally none of those things, none of those things that they can do with a stablecoin are things that they can't do with a bank account. Now. None of, none of them. I don't, I don't. What does it enable? The problem with the CBDC, the problem with a central bank digital currency, is that it completely destroys the facade that there's any competition that anybody could push back, that anybody could decide differently. It means that the political center is the only thing that makes decisions about anything and about what's going on in the money and what you can do with it. That is what, it's the overwhelming totality of centralization of the entire dollar system. That is what makes a CBDC a terrible, terrible idea. But a thousand different stablecoins from a thousand different institutions that can be quickly and easily swapped. Yeah, sure it's the same. It's going to end up with a whole bunch of the same crap that we've had to deal with for a really long time. It's still going to work like banks for the most part, but there are probably a lot of things in which it will do better. And in fact, if they want to embrace the bitcoin dollar theory and embrace stable coins on a global level, in order to attack or expand the market into the 2 billion unbanked people in the world, they have to let up. They have to drop a ton of these regulatory limits. And the fact, like it doesn't even work, like they have, they will have zero expansion whatsoever if they still have to KYC everybody to use a stable coin. This specifically means that they expect billions of people to come onto dollar stablecoins without explicit KYC, without a direct line into the us banking system, because it doesn't expand if it requires that. This would be a suggestion. The only way that this plan even works is if the stablecoin is open in the same way that I could send you tether right now. And I don't, there's no like, KYc between us and there's, there's no like four step third parties confirming and doing credits and, you know, making permission relationships with the next guy in line in order to get it there. I just transfer it from me to you. And the infrastructure of the bank, the stablecoin issuer is just signing off and it's just watch. The transactions are arbitrary. What if, you know, OFac comes in and says that this guy's an evil bitcoin er, and he shouldn't have his coins. Yeah, they're going to freeze it. It's the dollar. Like of course they're going to treat it that way. Of course anything inherently centralized, the system is still centralized. Like the third party will still control those transactions and those payments. But I really think some perspective is needed here. Like that's not new.
[00:18:05] Like that's not.
[00:18:07] In fact, it's never been anything other than that. But they will not expand the dollar market if they are trying to do, if they were trying to make the system as it is designed now with all of the KYC, with all of the limits, with all of the direct connection and direct use, like explicit. I'm going to set up a bank account with some us bank. If they still attempt to put the regulatory apparatus as it stands today onto stable coins and disallow any and all use of stable coins without it, then it doesn't help the dollar, it doesn't help them at all because it means it won't. It can only expand as far as their permissioned network, which the only reason the network isn't already expanding is because of how permissioned it is.
[00:18:59] And then just to use tether since they, you know, they'd want to point out all the negatives of tether which obviously like point out all the negatives. Like it's a, it's a centralized dollar token. I mean it's a shitcoin among shitcoins. But I think a little nuance is warranted is that now they are the 18th largest buyer of US treasury bonds. The US didn't create tether.
[00:19:24] The US hasn't forced Kyc on tether. The US has not licensed tether. Somebody just like Paulo and Bitfinex just made it and people started using it and then it became like a hundred billion dollar market.
[00:19:49] And now the US has to figure out what to do with it.
[00:19:55] So remember this is the opposite of the US having like central bank level control and running the infrastructure. Like they don't actually have anything to do with it. This is their attempt to try to get some control over it. And this is why I say this is far more like the euro dollar because other people are just going to be able to create stable coins. There'd be a, there will be a bank in the Middle east that creates a dollar stable coin. And the US might not even know, like might not even be able to pinpoint to what bonds this is backed by or what it's related to it might result in the inflation of the dollar. Like, it might even be something that isn't even backed or it's backed in a completely different way. And they're not going to give a, they're not going to care at all whether the us regulatory boards say they're doing the right thing or not. And there will be dollar stable coins that are actually built on independent bitcoin contracts, like bitcoin options and futures contracts. Stable sats is already, is already a thing. All you need is a liquid market. And if we go to a stable coin world where tons and tons of dollars, like a huge portion of the dollar flow, is actually in stable coins, and stable coins can actually be used and transferred directly, this is going to make all of those secondary and tertiary markets easier.
[00:21:22] This is going to make it easier to do futures contracts and stable dollars that are actually backed by a bitcoin futures contract and merely has whatever the fee for the spread is. So you don't have to have treasury bond backed stablecoins. You can have bitcoin option or bitcoin futures contract, which could be atomic swapped with stable coins. And if I can use. Do you have any idea how much easier it would be to buy and sell bitcoin if I could use stablecoins?
[00:21:58] There have been multiple times where myself, I was trying to get a hold of some bitcoin or trying to sell some bitcoin for something with the house or somebody I know was trying to get rid of some bitcoin and they wanted to.
[00:22:14] Where we reached out to the bitcoin meetup and everybody in my peer to peer space, like, all right, what's up, bitcoiners?
[00:22:22] Who's got dry powder and wants to get some bitcoin. And at least three times, four times somebody said, will you take stable coin? Will you take tether? Or one person was USDC, I think. And on all occasions I, and, well, I just responded because I was doing, I was the go between, between the other people who were trying to sell.
[00:22:46] I said no, because it's just as hard to get rid of tether as it is bitcoin. You know, like I don't want to. Like I could just sell it on cash app if I, if I just wanted to take 2% fee and, you know, move it to my bank account. But, you know, let's say I hit my limit this month or I just don't want to, I just don't want to. I don't want to use a centralized service that I'm Kyc to I just want to get a little bit of money and pay the guy who's working in the front of my house, whatever it is. Like, I don't need permission to do that. That's my right as my basic, my basic, most fundamental right as a human that's in charge and responsible for my own damn life. No, today I don't want to involve a third party. Now, I can't do that with stablecoins. I couldn't do that with Tether or USDC because then it's actually harder to get rid of that than like, I can't deposit that to cash app and send it to my bank account. So it was completely useless to me. But realize that if I could use that, if I could go to builders first source and buy with tether or my credit union's stablecoin, which, you know, they just directly swap with the bank of America that the first builder's first source wants to use because that's their bank, suddenly I can easily just do that peer to peer.
[00:24:17] Suddenly I can just atomic swap the my bitcoin with. I don't have to go meet them. Like, we could do a trustless swap between those two. I get the stable coin and then I just go spend it.
[00:24:34] In a world where we move to stablecoins as the norm, the liquidity, the peer to peer liquidity, specifically between bitcoin and the dollar skyrockets, it absolutely explodes.
[00:24:55] And this is another great example of how the US won't have all of the insight and purview over all of the different markets and all of the corners and all of the, you know, bisque trades and I local bitcoins and everything like that, and again, if they want to lock down, if they want to have that level of purview where they can see everything, they can control everything, they can kyC, everybody, and they make it entirely permissioned so that you have to be directly working with a us bank and that you can't even accept it if you don't have KYC proof of where it came from. It hurts them. It just means that the bitcoin dollar system, like trying to attach these two things, doesn't work. It just means that they just, the dollar just dies as stable coins instead of as bank account tokens. Because all of this depends on the success of this entire plan, depends entirely upon the expansion of the network outside of the permissioned banking explicit system, which also means letting go of an insane amount of direct visibility and control over how people are using it. What businesses are using it, what markets are using it, and how people directly, peer to peer, are using it.
[00:26:33] That is not a hyper bitcoinized world.
[00:26:36] That's just a world with stable coins.
[00:26:39] But that is a massive win in our direction, not theirs.
[00:26:46] That's a concession that they desperately don't want to make. They want a CBDC.
[00:26:54] This world, a world where everybody is making their own stablecoins and there's actually open competition. Looks a lot more like free banking.
[00:27:04] The free banking system of kind of the 1890s, late 18 hundreds than it does a CBDC top down. One decision rules everything world.
[00:27:16] And importantly, if they try, I want to reiterate this again. If they try to take it back to the, to the top down central control, one decision rules all, and there can be no alternative and no way out system. If they try to put that on top of the stable coin world, it won't work.
[00:27:39] Like we're not going back to worse than we have now, because it is merely unsustainable. It is functionally unsustainable.
[00:27:50] And it means that the dollar network expands to what it is right now and just keeps shrinking. It will not, it will not go anywhere else. If they tried to put all of these levels of this staggering level of control and direct insight into all of it, it is explicitly because of the lack of that, that this plan has any hope of working at all. And also remember that if they're talking about, because this is something that they bring up that I thought was a really, really important point, is that they would require banks to hold.
[00:28:25] They can make a rule for an even greater amount of bonds and stuff that they have to hold in order to issue stablecoins. So they embrace the stablecoin, and then they use it as a means to force them to buy more government debt than they otherwise would. And the regulatory apparatus is specifically set up to force even more to, like, you gotta buy ten year bonds or you gotta have this proportion, whatever it is.
[00:28:53] And I also wanna understand, I wanna explain how, how this changes the market, the dynamic of the market, the edges. Like fundamentally, who can participate in a market where its center of control is, and the degree of competition and liquidity changes so drastically that in the long term, I don't think that works either. And I'll explain why in just a second. This episode is brought to you by holding your own keys with the cold card hardware wallet. And if you've never done multisig, you've got to try it on the nunchuck wallet. That is my favorite. It's both on desktop and mobile. And when you add the cold card or your tap signer or even just a mobile key, it's such a simple setup, and you can get such a degree of even additional security without what, while still having it so accessible and so unbelievably easy to use, like, convenient and secure. That is a very, very thin and difficult line to walk. And nunchuck, combined with the cold card and the tap signer, it really does it. It is my favorite setup. And I only really found out today that my brother did not know how to do this or had not done this yet. And he says, is it really that good? Like, how easy is it? Like, it's. It's literally that easy. You import your keys as devices, so you see them down at the bottom of the app. So you will just see, this is my tap signer. This is my tap signer with the honey badger on it. This is my tap signer with the dick one audible logo on it. I don't have one of those yet, but I should get one. And this is my cold card. And then I can just select. I make a wallet, and I say, which keys do you want to use? And I just select them out of my list. It's like, this is my list of keys. This is the wallet that I want to make. I want to do a two of three with two tab signers and a cold card. I name it. I say, create wallet. Done. I've got a multisig coinkite devices make it so easy to do this, and then nunchuck on top of that. I'm just saying, if you haven't tried it out yet, you got to explore it. But otherwise, just getting a cold card and just withdrawing your coins, you don't have to play around with anything complicated. You don't have to test stuff out. You don't have to use any of these crazy edge case features like the brickme pin, and, you know, try to put it on super lockdown and do air gap from the beginning for the entire life of the device, you can, and by default, it is. But you can just use it simply and easily to keep your bitcoin safe. And that's what you should do. Grab yourself a cold card. And don't forget my discount code. Bitcoin, audible, all one word. The link and details will be right in the show notes for anybody who wants to hold their own coins, which should be all of you.
[00:31:45] All right, so here's a couple of quotes. I want to go through a couple of quotes. That I saved from this piece. And I think some of these are from chain of custody as well. Um, both. Again, really great examinations of basically the one step back of how the government is. Or it's not just the government in general, um, or specifically, it's. It's really a series of institutions that are vying for control in this new environment that has blown up and I think essentially taken on a life of their own, to the point that whatever plans they thought they had now don't work. Now they have to. Okay, how do we control stable coins? How do we own as much bitcoin as we can? And how do we use this to expand our market, expand our power as bitcoin grows, as opposed to essentially fighting it? And I want to explain towards the end of this, after I hit these main pieces, that I think will lay the groundwork for this, I want to explain why this gives us a win in the most important, in the most important way and in the most important market that we need to win in. And I'll explain how. So, first, this is a quote from the article. It says, the idea of the bitcoin dollar is a parallel to the petrodollar system, which was upheld from the gold window closing via Nixon shock in 1971 until only somewhat recently. By creating a de facto monopoly on the ins and outs of oil to us dollars, the US was essentially able to repeg their inflating dollar to an ever demanded energy commodity and create a mass buyer of dollars. Every country that wanted to industrialize needed oil to do so. And thus every country that wanted to compete on the world stage first needed to buy some dollars. Bitcoin, too, is an energy commodity. And the US dollar system has once again established a de facto monopoly on the volume of bitcoin sales across the globe. Not to mention that the country also holds more bitcoin on its balance sheet than any other nation in the world. The US could easily print $35 trillion in freshly issued treasuries and pay off its debt, especially now that has found a buyer with an insatiable demand in the aforementioned stablecoin issuers. But the inflationary effects would be catastrophic on the purchasing power of the dollar, and thus the net purchasing power of the us economy.
[00:34:14] Now, I take a rather.
[00:34:19] My big issue with this statement is, quote, bitcoin two is an energy commodity, and the US dollar system has once again established a de facto monopoly on the volume of bitcoin sales across the globe. End quote. Now, there's some really important caveats to that sentence. First, this is not the government taking over all of the sources of where bitcoin exists and then making a military trade with them, forcing them to accept only dollars for the trade of the oil because they had a geographic monopoly over the production of oil in the system because oil is a consumptive or a consumption resource.
[00:35:14] None of that, like, like the equating of those two monopolies I think completely misses the fundamentals of both. There's no.
[00:35:25] The US doesn't have any monopoly on the ownership or movement into and out of bitcoin.
[00:35:32] They have the most volume because the dollar is the biggest currency.
[00:35:39] Like it's not a monopoly. And it doesn't mean that they control every single thing and every single trade that anybody makes in the dollar. It's got the most volume because it's the one that most people use. Like the currency that most people use. But they can't say that somebody in Argentina can't use the dollar or that, excuse me, can't use bitcoin because the ETF's have a lot of volume that doesn't give them control over anything that happens in Nigeria, South Africa, Argentina, Venezuela, Lebanon, Yemen, Palestine.
[00:36:26] But if none of these produce enough of their own oil to keep their cars gassed and they have to go to the Middle east and the US government has gone and taken over, basically militarily controlled the Middle east, they do have that relationship because of the petrodollar. But it wasn't a monopoly just because most people traded volume of oil in dollars. It was a monopoly because of the geographic control that they had. Like the volume was a result, their control.
[00:37:01] In other words. The problem with their monopoly wasn't that most oil was traded in dollars. The problem with the monopoly was that most of the oil you could get a hold of was behind us tanks.
[00:37:15] Thus they could say you have to use the dollar. And then of course it's also just kind of happenstance that the us economy is still the wealthiest or one of the wealthiest economies in the world. Certainly the wealthiest and largest economy in the world in the sense that for capital and trades that are happening versus population. So like nations that might be wealthier per capita, like Liechtenstein or just, I don't know, whatever, like Switzerland maybe, I don't know. But these are ultimately small nations. So for just the overwhelming breadth of capital expenditure and the average wealth of the nation itself, us is still top dog. And a lot of that's because of the dollar. The breadth of the dollar market, because the dollar is the world reserve currency. So this is really just kind of a statement about the size of that market more than anything. So it would be like saying that Facebook has a de facto monopoly over the social environment of bitcoin, or maybe Twitter, but, well, no, let's just say Facebook, because Facebook's a bigger network, but that Facebook has a de facto monopoly over the social aspect of bitcoin and what people socially believe about it because they have the most conversation about it, but that's because they have a billion users or 2 billion users or something like that. Like, of course there's just more conversations happening on Facebook. That doesn't mean Facebook controls what people say about bitcoin.
[00:38:59] You need very different pieces of the puzzle in order for those two things to mean each other. And going back to just a comparison of the oil is, oil is a limited access resource.
[00:39:11] You don't have. There's no, like, special place that you go to get bitcoin. You don't have to, like, it's like, oh, I got to get into Yemen because Yemen has a huge reserve of bitcoin, or I got to get in the US because us, the us government holds more bitcoin. And, you know, the fact that the us government holds more bitcoin than anybody else is also just happenstance of the fact that the Silk Road was a us person, was Ross Ulbricht was in the US, and the very first market to ever blow up in bitcoin was in the US, and it was, and it was for drugs. And all of the US, all that the us government owns in bitcoin is just confiscated bitcoin, right? It's not like they've been going out and stacking like crazy. They just confiscated a bunch and they still have it, but they've also been selling a ton of it. Like, when it goes up, they're like, ha, ha, ha. We're going to make money on our confiscated coins. I mean, frankly, they've been pretty stupid about it so far. They've, they had an unbelievable amount of coins and they've been dumping them. This would be the first shift in that if, you know, Trump gets. Trump becomes president and actually does what he says, I mean, who knows what a politician's promise is worth just in general? But let's say. Let's say he does do that. Well, he only promised to just not sell it anymore. And then almost immediately, the, the Biden, the Biden administration started dumping it. As far as I was reading the other day that they're, they're trying to, like, call his bluff or make him look stupid by just doing the opposite of what he says. I can't remember exactly how much that was or when it was, but I was seeing something about that not too long ago. Um, that'd be something I actually want to look into. Maybe that was just a rumor. There was like, coins moved and people thought that's what it was.
[00:41:07] I'm gonna say I just saw that on social media somewhere. But regardless, the simple act of just like, we're not going to sell the coins, it's just like, well, okay, like, I don't know. The whole reason the incentive structure and the game theory of bitcoin work, it works is because we assume everyone would rather be invested in the growth of bitcoin rather than attempt to fight it and use that capital to destroy bitcoin. Like, the idea of the government simply holding onto their coins, I mean, it just means that they're, this means that they're inside the game theory play of bitcoin and now they're trying to figure out how they can keep the dollar growing, how they can actually support the dollar in a world where they can't get rid of bitcoin. Like, that's not a.
[00:42:01] I mean, I want to. I'm gonna take everything in this article very serious. I take everything that Mark and Whitney write very seriously. I like it. But I also have a really hard time seeing this as a purely pessimistic outcome. Like, I see, like, I can't, I can't possibly only look at what, what's bad because I feel like I have to stretch really, really hard to make it only bad. Like, there's a lot of stuff that has to shift in order for this world to happen. And there's a lot of de facto monopoly that they've already had that they have to explicitly give up and let go of for any of this to actually work.
[00:42:47] And that feels like a concession in our direction. But I never thought that the state was just going to up just like, just disappear one day. That bitcoin, we were going to go to a hyper bitcoinized world in like three years and then there was just not going to be any state money. There's too many boobs in the world. There's too many just morons and NPC's for that to happen. It will take generations for that to happen. This is why I've talked about so many. A number of people have asked me what I thought was going to happen to the government. Like, I think the government will still be there, but they will increasingly have less and less power, and they will be less and less relevant. And the analogy that I've used in the past is thinking about the church. The church used to be the ultimate power, because they had the last and final say over what God's word was, largely because they were the only ones who were literate. They controlled all of the scribes. They taught the scribes, and the scribes worked for the church, a tiny percent of the population. I think this was the 15th century, just before the printing press and everything exploded. We had.
[00:43:57] There was one century there, and this was in a piece we. I think it was the bitcoin reformation piece by Turdem Easter, if I'm not mistaken. I will put a link to that in the show notes and maybe go back and explore it, but if you want to listen to that one, because there was a statistic in that that just freaking blew my mind. Like, how wild it was about that over the century, over that huge shift in literacy and the printing press and the birth going into kind of the enlightenment and the industrial revolution, everything that happened in the few centuries following this, the scientific revolution, in the 16 hundreds, I believe I constantly mix up the 15th century and the 15 hundreds and the 16th century and the 16 hundreds. So I could be getting those wrong. I can't remember which one it was that I remember. But regardless, during that period, whatever that main century was, that we went from a.
[00:44:57] I think this was somewhere in Europe. It wasn't, obviously, it wasn't everywhere, but some specific country went from a 5% literacy rate to a 90% literacy rate over the course of that single century, which is just wild.
[00:45:15] Like, that is.
[00:45:17] That is incredible shift in the dynamic of power over who can say what and who is now a source of, quote, unquote, truth of what the Bible says.
[00:45:29] And so that's what happened. That's what happened is the ability to have a de facto monopoly on God's word shifted. And then you have Luther, then you have, like, all of these basically rebels, these religious rebels that just break down the monopoly and the ultimate political power of the church. Now, the church is and has remained incredibly powerful. It took centuries for that to basically unravel and for religious freedom to be the norm, or at least in the western world.
[00:46:04] But what is the church today?
[00:46:07] The church is a powerful institution.
[00:46:11] The church has a lot of wealth. A lot of people listen to the church.
[00:46:17] But if the church comes out and says, you're not allowed to send more than $1,000 out of your bank account a day or a $1,000 worth of bitcoin every single day. You have a limit because the church says, you know, God's word is that this is. This is the only safe way to do business. And otherwise, you need to file a full report with the church and explain what it is that you're doing so that God can put his approval and holy sanction on those funds that you are moving and why you need to move them. Nothing would change in the morning.
[00:46:59] Nothing would change. Like, there might be a couple of idiots who were like, oh, no, I can't do more than $1,000. And everybody wants. Everybody else will post their tweet on Twitter. They screenshot it, and they'll be like, look at this retard. And then we'll tell a bunch of jokes about it on Noster, and we'll zap each other a whole bunch of money. Somebody will zap a $1,000 worth of bitcoin just for fun. So the church is still powerful. People still believe in the church, but the church is not some giant, centralized end all, be all political king like totalitarian authority over the political systems of the world it once was.
[00:47:43] That is how I think the government will be probably in 50 years. It'll happen a whole lot quicker this time just because of the spread of the networks. A couple of generations, the mind shift will change so drastically. And I think there's a massive waking up that is occurring. And I largely think this is entirely a consequence of networks becoming the major.
[00:48:07] The. And I don't mean networks like Facebook, and I mean literally like networks, like electronic networks, like communication networks becoming the means of establishing narrative about reality.
[00:48:24] Like the worldview culture. Like, these things are dominated by communication networks more than nation states.
[00:48:35] And I think there's deep evidence of this in the simple fact that nation states are doing everything that they can to control all of the networks. It's because they know this is where it's going. And I think this is also why they're making their play for bitcoin and stable coins is because the, you know, the communication network and the narrative and the perspective that you were allowed to share and the ability to speak freely about your position in the world or what your view of reality is. It is the idea. It is the spark that ignites the fire, the actual teeth, the fire itself, that would burn down a civilization and replace it and build it up with something new. Is the money.
[00:49:23] It's the. There's a reason you put your money where your mouth is is because the money is the hammer to the nail. What you say is merely what we ought to do with the hammer. And so this is why they want to make a play, because it is clear that this new monetary world, these new monetary networks, are the direction to where everything is going. They are the new control. They are the new economy. This is the thing that is exploding and growing in an uncontrollable and unforeseen way that they now have to try to get a handle on. But going back to that quote, like mere volume somewhere, or in the dollar system too, just like there's more volume in the dollar, like you can't put, they're never going to be able to put the genie back in the bottle and have a veritable central, like totalitarian, centralized monopoly on just the exchange of dollars. Like that's been, that's been out of pandora's box for a long time. They don't even have control over the euro dollar right now. What they can do is make the dollar more accessible with stablecoin technology, and that will benefit them, and thus they will likely do this. This is exactly what the dollar bitcoin theory or the bitcoin dollar theory is. And I think this is both a kind of a maniacal and brilliant strategy from governments and banks to try to attach themselves to this. And the fact that both of them, that Mark Goodwin has been writing about this and that Whitney Webb, like the research and the stuff that they have done in digging, uncovering all of this I think is awesome. Like, like there's so many great details in this, but I just, I don't think the, the simple fact that the government is making a play like the government was still always going to be the government. Of course they're going to have regulatory control and they're going to tell the us markets what they can do, I don't know. None of this is wildly surprising to me, or even wildly different from kind of the course of the future that I suspected. This is another reason why I've talked about it on the show so many times, why the first thing that will happen is not that everybody will switch over to the dollar, but that the dollar will suck less because it will start working on bitcoin infrastructure. And that's basically what it means to have stable coins, is that we start treating like the movement of dollars starts to become a cryptographic network tool rather than explicitly a permissions credit on top of credit, just a permission. As long as I have a relationship with this bank, then okay, well, then we can establish credit and we'll settle with the bank of international Settlements or nothing. Not the Bis inside a country, but all of the different. Like the first, our regional fed, and then if we're going across the border, the bank of international settlements, and each one will have a day wait time. Like, no, you can just swap stable coins in a world of bitcoin infrastructure. Okay, so let me just go to the next quote says, quote, tether isn't simply tethering the dollar to bitcoin, but permanently linking the new global permissionless energy market to the United States monetary policy. We have recreated the petrodollar mechanisms that allow a retention of net purchasing power for the US economy despite monetary base expansion. Now, I've already had a bunch of different elements that I think applied to this. Just talking about the infrastructure, this is not infrastructure that they run. That this does really screw with their ability to enforce capital controls because tether works. Like, I don't even remember, like, I can't even tell you right now which country tether is in. I've forgotten, but I have held tether before.
[00:53:25] I also have liquid Ust, which is which I just did. I was just test, I was just like, oh, I should get some of this. Like, I don't know what. I don't have a relationship with a bank that uses liquid tether or liquid dollars, whatever the hell it is, but I just swap, I just, I just swapped it. There was just a certain, like, coin os just like lets you do it in the thing. And I think bolts likes, lets you swap too.
[00:53:55] It's just kind of like all those, you know, old for anybody who did all the crypto crap in 2017, you just went to those, like, swap services and you moved a bunch of tokens between shit token and doo doo token.
[00:54:11] All of this just means that the liquidity between the dollar and bitcoin grows substantially and becomes far less, far more frictionless.
[00:54:23] And this means less control, less direct control over the flow of funds. So one thing that we've noticed in the last, like, anybody who's paying attention, and I think Lynn Alden is a pretty good resource on this, and I think James Lavish has written some stuff about this. I don't know, we've read a number of different pieces about this in the past about how, why the banking crises seem to cascade so quickly now, and failing to realize that we have kind of moved into this world of APIs without the banks quite realizing how big of a problem this is and that they can actually go bankrupt, that people can actually withdraw, you know, $10 billion out of a bank at midnight because of all of these APIs and integrations and third party apps and withdrawals and ach calls, like money has become.
[00:55:27] You paint this picture like you just look at where we are from ten years ago or 15 years ago. The amount of money that can move very quickly in and out of these institutions has changed drastically. And this is still in the permissioned. You have a daily limit, capital controlled, like permissioned market.
[00:55:50] When you introduce stable coins, you add another layer of like, holy crap, money can move very, very quickly, like extremely quickly. And that is good for the US and the us debt market for as long as they provide a good service. Because otherwise, think of me. Think about if you have a 20, $30 trillion stablecoin market with like an m two, that means that $10 trillion can go out. If there's like a shock or if there is like serious fear that the US is about to print like another $3 trillion or $5 trillion out of thin air or a whole bunch is going to get issued and we're going to have a whole bunch of new stable coins issued. This means that the flow out could happen so quickly, like it could happen before that money even hits the market.
[00:56:47] Because everybody can just immediately swap to bitcoin. And if we are being serious about talking about a bitcoin dollar, they can't get away with not pumping up the importance of bitcoin in the global market here, and they don't get any benefit. If bitcoin doesn't skyrocket in value along with it, like it's not going to backstop the dollar if it doesn't mean bitcoin success, which means that bitcoin will end up being the de facto base, it will still be the underlying base to move to based on the decisions of any individual monetary policy. And if the US market, because of regulatory chokeholds, are the only ones who can't move out of stable coins or bonds into bitcoin, well then it's just suicide.
[00:57:44] Then they're just gonna, they're just gonna commit suicide because they're gonna be trying to scrape together 4% or 3% on a ten year bond while everybody, all foreign entities are just gonna put all of their excess, all of their profit into bitcoin. And they're gonna laugh at the US trapped because of regulations at only getting 4% when inflation is 6%, 10% or 25%, like it's been year over year for the last four years.
[00:58:19] Don't come at me with that CPI shit. If you still believe that fairy tale. I can't, I can't help you right now. That's. We're not going into that on this show. I'll make a two sats video about it.
[00:58:30] Oh, man. And you know, I've still got.
[00:58:33] God, I got so many things.
[00:58:37] There's so many other quotes here that I wanted to get to, but I'm already so over time.
[00:58:44] But this actually gives me a segue into what I think the big thing is. So let's go back to kind of one of the foundational theories of the idea is tether is a net buyer, 18th largest in the world now of us treasuries.
[00:59:04] And this means stable coins.
[00:59:08] If we use this as a template for stable coins, then we just copy paste it onto all the other stable coins.
[00:59:14] This means they have, by allowing the dollar market to expand to everyone who can use tether. But again, specifically, I gotta go back to this point, specifically, because so many people can use tether who can't access a bank account.
[00:59:32] We're talking about 2 billion unbanked people being able to get to the dollar, that this would expand the dollar network. Well, it means, also means a significant demand for us government debt. But there's a very important distinction and a very important caveat about what kind of debt tether buys and what their pricing structure, what their thoughts about the value of those bonds are.
[01:00:05] And comparing that to banks and to, you know, Saudi Arabia buying 30 year bonds for oil and all of this stuff, this is not at all the deep long term market that the us government has had. This does not revive tether and stablecoins. Simply buying us government debt does not revive the us government infinite bond bull market.
[01:00:38] And that's because tether buys like three month bonds.
[01:00:43] They don't want to buy any time at all because they want their profit, they want their interest payment, and they want to sink it into bitcoin. And when Paolo was on Preston Pisch's show and he asked him what would it take for him to buy longer term bonds, he really kind of almost giggled like he had this look like, I'm not gonna. I would, I'm not gonna do that.
[01:01:12] In other words, he's only buying bonds to back the dollars in the stablecoin. That's it. He's not buying it because he wants the long term debt. He wants the highest interest rate he can get with the shortest term turnover that he can possibly find because he's holding bitcoin. And again, if we are talking about a bitcoin dollar system where people want to buy and hold bitcoin, or where the only reason the us dollar is succeeding is because of its tether, because of its attachment to the success of bitcoin. All interest rate and long term bond decisions will be based off of the opportunity cost of not holding bitcoin.
[01:02:06] And this, this is the thing that is not being calculated for in all of this theory, they do not get to control the interest rate.
[01:02:22] The massive systemic problem of the dollar market right now is that dollar debt, all debt, because it's all basically stems from the Federal Reserve, ultimately has no real market price.
[01:02:39] There is not enough liquidity, and there is not a big enough market to basically release the pressure valve of their price controls. And because the, the debt, excuse me, the market for the debt itself was artificial. It was enforced either through military control and direct political and nation state agreements, because basically they're the ones who buy bonds, them, and then the regulatory control with commercial banks. But look at what this has done to commercial banks.
[01:03:14] Like there's tons of these commercial banks are underwater because of their marked market. The value of like we had cascading like a couple of different banking crises because they were holding long term debt. And then interest rates skyrocketed. Like some of these were worth like $0.60 on the dollar and they had to bail them out like multiple times and basically let them cook the books to say, no, you can just say these bonds are actually worth what you paid for them, even though they've literally lost half of their value.
[01:03:45] They royally screwed the banks who were holding massive amount of bonds because they had to jack up interest rates, because their regulatory requirement was dependent on the success of the us economy and the solvents bankruptcy of us banks to keep putting money into those bonds in long term, to sell long term bonds so that the, the government doesn't want to buy three months worth of Runway, they want to buy 30 years worth of Runway. But tether and stablecoins in general are going to have no interest in doing that. They want short maturity bonds, they want 90 day bonds. And the only reason, actually, another thing that he said, and that makes perfect sense, if you're only getting 20 basis points, it's not even profitable. Like they're going to put it in something else unless it's paying them an interest rate. That makes sense.
[01:04:42] He said specifically that they have some in gold, they keep excess, like above the 100% reserves in bitcoin. They also have more short term t bills, like short like 90 day maturity stuff. But they want an incredibly liquid market that they can turn over very, very quickly for anyone wanting to exit that, their dollar stable coin specifically, which is why they go for the shortest term yield, the shortest term maturity. And that's a. I just want to point out that that's a very, very different dynamic. That is a very, very different amount of market power that is being given to the us government for extremely short term maturity bills. Then having Saudi Arabia for 30 years put all of the money that they make selling oil with a military monopoly into long term 20 and 30 year bonds, like, nobody would, nobody would take that as like a one to one. It's like, yeah, I'll make that trade. We'll just, we'll just get rid of all of these things and then we'll go to like a hyper defensive, like crazy short term, high turnaround maturity dates for only short term market t bills with very high liquidity, with a company that compares all of that turnover, compares all of the trade off of holding those t bills with the amount of money they're going to get off of bitcoin, and that they will not do it, or they would change, change what they are doing and how they are backing those reserves if that's not actually paying them any substantial interest rate. And again, if we're talking about a regulatory apparatus where the US specifically says all us banks have to back it with bonds, again, that's not really, if they go to stable coins, how, how is that so different than what we have right now?
[01:06:39] Like banks have to buy bonds to meet the, the LCR to hit their liquidity ratio, they're forced to buy bonds from the us government. And if those banks then issue stable coins, and then the bank says it has to be 100% backed by bonds, well, they could just say that now to the banks.
[01:07:03] They could just say to have a bank account, you have to 100% back it with bonds. Like if we think they're going to do that with stable coins and we think banks are going to, like, that's actually a standard that nobody is being held to right now. Banks don't have 100% reserve on anything. It's literally only tether that actually has 100% reserve. In this scenario, Wells Fargo is like 40 to one. So if the government requires Wells Fargo and Bank of America and Citibank and all of these institutions to hold 100% bonds to dollars that they issue because they went to stablecoins, they can't, they can't afford that.
[01:07:50] They, they all, they're, they all blow up instantly.
[01:07:55] That can't possibly happen.
[01:07:58] The only reason tether is doing it, they've not been regulatory restricted, they've not been like forced by the us government to do this. The reason they're doing it is because their liabilities are dollars, which means that in a stable coin world where we're on bitcoin infrastructure, essentially we're on cryptographic open protocol tools and that stablecoin technology, that whether it's, you know, on liquid or their own tether blockchain or what they're actually building, which is pair credit, which we haven't really talked about at length, but I've heard a lot of rumors and kind of back conversations about what they're building. And they're going to be able to do this without a blockchain or a token at all. I mean token, like obviously they'll have a dollar token, they'll have tether, but they're building their own system that actually works completely differently. Then it's not going to need Tron or Ethereum or anything or liquid in order to run on it will be its own infrastructure. And I suspect what they're trying to do, they're trying to build it on top of the technology stack that they've put out there and open sourced and
[email protected] dot they're trying to do it on that technology stack and I think it's going to work. It actually, there's something very, very real there that is very interesting. But regardless, I want to point out that the need for bonds, their demand for bonds, is directly tied to the demand for the us dollar as a currency, not the other way around.
[01:09:41] And what do I mean by that? I mean that only while, and if they let the dollar market expand by relinquishing control over it so that it can out compete fiat during the transition. So that during the collapse of the argentine peso, people can easily move to dollars and use dollars because they can use tether, because they can use stable coins. And when the Russian or. Yeah, ruble, the russian ruble or the japanese yen, that by introducing stable coins into all of these other fiat markets, that bitcoin can grow as liquidity flows out of these other fiats. And you basically have this endgame of fiats consolidating because all of the boundaries have shifted away, all of the borders have fallen away, and now the infrastructure of the dollar can expand drastically because of its basically the new environment that we live in. Understand, the selling point of the dollar is simply the larger network that it has, not that it has better monetary policy it's just that there's a larger network to absorb the bad monetary policy. And if it leads to the us government even being more reckless and more money printing and more issuing of bonds, because they can do it for another five or ten years during this winner take all in the fiat fight with consolidation of all financial and monetary networks around the world, all of it still ultimately gets priced against bitcoin.
[01:11:25] That's a transition, that is a transitionary phase between the collapse and consolidation of the fiat world as barriers, network barriers fall away. But understand, if they can't keep the fiat network barriers up, if we're actually worried that everybody, that more people in Japan will use dollar stablecoins than the yen, and more people in Russia will use dollar stablecoins than the ruble, understand this means that all nation states are losing control over the flow of funds. It means that the infrastructure and the network edges are falling away. The walls are dying, and you can reach across borders and you can start to interact with and you can start to steal market from within other nation states. That goes both ways. That goes both ways. The us government will not be able to, on one hand, relinquish control and watch all of the network and capital walls collapse in the fiat world and then somehow reinstall them all onto bitcoin when their entire system, when their entire structure of gaining this control and this expansion of the network is using neutered shitcoin, copies of bitcoin transaction systems. The walls around all of these fiat markets, by using the stablecoin strategy to expand the dollar, will also necessarily mean the collapsing of all of the capital controls and all of the walls and all of the network barriers around bitcoin. In fact, far, far more completely because bitcoin doesn't have, isn't being run by those third parties. Bitcoin doesn't have those banking restrictions to begin with. It already exists in all of of the borders. So if you want fiat to flow more freely, you will never be able to do that. You will never be able to let down all of, open up all of those cages and break down all of those walls in every nation state in the world, which is the goal of actually getting dollar, the dollar market to spread without simultaneously breaking down twice as many walls and opening up way like ten times the liquidity in the, the bitcoin market. It's like saying, like, you think about fiat like it's a bunch of third parties, right? It's a bunch of permissioned banks. If you want to open up and everybody's in cages. Every government is a big cage, all the like. Imagine all this country borderlines are all cages. And you're only allowed to hand so much through the grate, right? Like, if you want to, you're standing there and there's a guard looking at what you're doing, and you know, okay, well, you're only allowed to hand over this much. It has to fit between the bars, et cetera, et cetera. And you're only allowed to go to certain meeting. It's a solid wall in all of these other places. So there's all of these restrictions and all of these walls. The idea of the bitcoin dollar theory and of embracing stable coins and attaching their success, the dollar's success to bitcoin's success makes bitcoin the ultimate pricing mechanism. It will hedge, everything will be framed against the trade off, against the opportunity cost of not holding bitcoin for this span of time. And yes, the temporary, the transitionary phase of that dollar market expanding into all of those markets, because why? Stable coins build tunnels. They build tunnels underneath all of those walls. They, they break down some of those cages. They unlock some of those cages. They allow the people to move in and out. So the people are the fiat. They're the different third parties. They're the different money exchanging hands. Bitcoin, in this example, or in this analogy, is like water. It's like pouring a torrent of water and thinking that right now the cages already don't stop the water.
[01:15:32] It's just going to flood right through it. The water does not care. And they can put up this big, giant, expensive wall, and a flood is just going to come through. It's just going to break down. You put enough water behind it, it's going to fall. It cannot hold the water. And now we're saying that just from, like, a conceptual standpoint, we're going to use stablecoins to get around all of these walls, to open up all of these gates, and to make it so that the dominant money today spreads aggressively during the cascading collapse of all of these other fiat countries. And all of this is going to open up, and the dollar is going to be available everywhere. But somehow, bitcoin won't be able to move.
[01:16:18] Somehow, bitcoin will have all of these restrictions back on it. Like, like how, if you've opened up and let people go through, how do you stop the water? The water's gonna go up in the clouds. It's gonna be underneath in the water table. It's gonna be in the ocean. Like you can't, you don't control the water. You live in and around the water. The water is.
[01:16:38] And if the us government wants to ride the bitcoin wave, literally wants the dollar to benefit and attach, make a regulatory attachment to it such that more and more people have to hold bonds in order to make accessible and make capital flow freely like it does in a, like it would in a bitcoin world. Bitcoin is still just going to go up and they will never, ever, ever get away with saying, will give you 3% interest on a bond if bitcoin goes up 30% year over year.
[01:17:17] Like, I don't care. They can't control the price of bread, they can't price control oil, they can't price control Covid masks. It fails every time. And we're talking about going into a world in which it will fail even more spectacularly. What this means, what a stable coin world means, it does mean just kind of banking 2.0. It's a super neutered down bullshit. It's going to have lots of frozen accounts. It's going to have lots of unnecessary and stupid regulatory restrictions. It's going to have a ton of the same problems as the system that we have today. Because that's what we have. That's what we have. That's what we are in today. It's not going to suddenly unravel and just be, everybody's just going to be replaced and running around using bitcoin at Walmart in two years. But for the bitcoin dollar idea, for the stable embrace of stable coins to be meaningful to, for it to actually help them is for them to let it become a 5 trillion, a $10 trillion market, a $20 trillion market that can actually expand to places that they do not have boots on the ground, that they do not have control, they do not have tendrils into. This allows a extremely broad and multifaceted stablecoin industry to basically be the tentacles of the dollar, desperately trying to find new markets by explicitly and importantly breaking down the walls around capital controls, around currency farms, about currency plantations in which people are trapped within those systems and opening up the flow of capital. That is the only way this plan actually helps the dollar. And if they do that, they also make the bitcoin market the most liquid market in the world. Because all of that friction around getting into and out of bitcoin and regulatory traps and like, oh, you have to sign over your left nut and you know, write out like, post all of your journals from kindergarten through middle school in order to get approved for an account that goes away. If you got that for dollars, you never had that on the bitcoin side. It was just the places that you convert to and from dollars that had those restrictions. Like bitcoin doesn't. Nobody knows, nobody like, calls me or takes longer for me to move $20,000 because I'm over a limit if I'm moving from a bitcoin wallet to a bitcoin wallethead. But if they want fiat markets to open up, they necessarily open up bitcoin markets even more completely because it's just easier.
[01:20:08] And if they intend to ride the success of bitcoin and actually hold bitcoin, or maybe even print money and buy bitcoin, the world shifts their pricing standard like it will. Everything will be weighed against the opportunity cost of holding bitcoin. That will be the pricing mechanism of the world, and it will be profoundly liquid, specifically because of what the US did by shifting everything, sending the entire global market into a stablecoin battle and trying to dominate in that way. It will specifically be because of that that we enabled liquidity so great in the bitcoin market and so diverse and in so many different countries, that the movement of capital in and two out of the dollar will actually be based on the reliability, the actual price of their debt, the actual use of the currency. If they make a terrible policy decision. Yes, the network will grow during this transitionary phase, but it will still respond to policy decisions. In fact, it will respond more completely and more quickly than it ever has before, simply because of the flow of capital.
[01:21:23] Like we've seen, you know, banking collapses happen in a matter of hours and days over a weekend because of the API world, because everybody can just remote ach all of their crap, like all of their money out of a bank.
[01:21:38] We will see banknote collapses, we will see stablecoin collapses extremely quickly. And just like we're watching, I think we see good examples of this already, is you see the stock market shoot up, you see bitcoin shoot up in response to the Fed making, making their decision. It's like, okay, we're going to ease back rates. The consequences of those things are not going to get smaller. Like when the market starts to shift, it's going to get more and more exaggerated and more and more volatile based on the movement of the underlying currency, of the other underlying dollar and the government monetary policy itself, and ultimately the actual credit worthiness of the us government, based on and bolstered by its hugely expanded, potentially dollar network, will actually be priced accordingly.
[01:22:39] Like if the government ends up, the us government ends up with $10 trillion worth of bitcoin and they have an $80 trillion debt, there's still going to be massive inflation. They're still going to pay, you know, $7 trillion in interest every year, and they're still going to have to jack up the interest rates to 6% to make sure that they actually can pay for anything that they are trying to pay or they're going to have to print outright. But their monetary, their decisions are still going to be drastically limited and for their own fault, for the flow of capital, for their decisions that they have made to open it up and expand the market and the liquidity between the dollar and bitcoin. So I'm starting to repeat myself. But what I see, if I want to just sum it up as easily as possible, is I see the us political environment and the government seeing a play, seeing that this new market has come out of nowhere is clearly the thing to now have a play in, to have a hand in. And it's completely changed the environment.
[01:23:50] And again, the game theory of bitcoin suggests people will fight to vie for control over it, that people will fight to be incentivized into, like with bitcoin. And this, this I think makes perfect sense. This is, this is what the US ought to do. If the game theory, if the incentives are playing out properly, they will be able to, by doing this embracing of stable coins and potentially embracing of the dollar and the quote unquote crypto world and all of that crap, they can massively expand their network, they can enable their ability, they can push, they can kick the can one more good time down the road as they eat up all of the other fiat markets and they create very lopsided, very short term demand for their t bills. And on this point, I think they're totally right. Like Whitney Webb, Mark Goodwin, like all of this, all this theory, I think is completely correct. There at least that this is what I suspect is going to happen. That stable coins will end up being stable coin issuers will end up being the largest buyers of treasuries. I don't think that's out of the question. And it's specifically because they're actually going to be 100% reserved. They're going to have to be, or they're going to collapse and they're going to have a stable coin run. And banks have never had to be 100% reserved before. Like this. This is, this would be completely new for Wells Fargo and Citigroup so they are able, the us government with this play, will be able to backstop the market for its bonds, for its debt, and in doing so expand the dollar market probably in a really, really fantastic way, like in a really incredible way. It will likely be very wild to watch all of these currency competitions as essentially stablecoin and electronic payment technology and tokens and whatever, basically infiltrate their way into all of these currencies and also all of these countries. And also remember that they're going to react. It's not as if there will not be a second, the flip side of this coin. And we'll get to that in just a second, actually, to close this out. But as the us government and the dollar expands and they infiltrate more of the fiat market and the unbanked market with a new technology, they will also lose the control over dictating what the price of debt is.
[01:26:34] They will bolster temporary demand for their bonds, for their debt, but they will lose the ability to control its pricing.
[01:26:45] And that, I think, is a far bigger trade off. Like that is a win massively in our direction. That is a far, far. The pricing of all capital to be used today against its use in the future. That price is the fundamental price of the entire economy. That is the most important price to fix. The. The killer app of bitcoin, of sound money, is repricing the capital of the world. This gets us exactly there through the dollar. The dollar will end up being a proxy for bitcoin opportunity cost pricing. The dollar will be the unit account of a, will be the unit of account for the world, and the bitcoin will be the unit of account for the dollar. And that ends up looking a lot more like a mutilated and very messy and difficult to control gold standard. Like a weird return to that, except that it's not an explicit standard, it's an, it's an implicit market standard where the liquidity for, you know, if you could actually buy into and out of gold at trillions of dollars within the day and you could actually quote, unquote, settle it, well, then the gold standard would be far more interesting. It would have done way more to actually rein in the government. Now, if the government was able to buy gold at $2 before it soared to $2,000, yes, there would be a massive transition and shift where the US actually, just simply because of the amount of gold that they had, that they could extend their debt, they could, they could make their market look 100 times as important and as trustworthy as a market as it actually was simply because they made a play to gold when gold was being monetized. But if they expect to benefit from that, then gold becomes the pricing mechanism. Gold becomes the thing that makes the dollar worth something, because their monetary policy is crap. And I think this is kind of what's happening with bitcoin in the electronic age, is we're kind of going back to. This could push us back toward an implicit bitcoin standard, purely because the amount of money and the speed that it can move in global markets will simply have the price of debt, of capital, of the dollar itself, fluctuate wildly and very, very quickly against the actions and the inflows of the actions of the Federal Reserve and the us government and the inflows of new money. And then you give that two generations of just being normalized and you just end up on a bitcoin standard. I don't think this transition stops. I think it continues on until the hardest money wins. And the problem, the only reason that the dollar will win the transitionary phase for the first three innings is simply because it's the biggest of the fiat world. So what will happen? In my estimation, what I see happening here is the cascading collapse of all fiat into the dollar. While the dollar increasingly gets tied to the liquidity of the bitcoin market, then slowly the mind shift starts to change of what's the actual price of capital? Well, what's the, what's the cost of not having bitcoin for these next three years or for these next five years? And then when the government has to issue, when the us government is having to issue like $10 trillion in bonds because of the, maybe even because of the demand of the dollar itself as a currency, the issuing of $10 trillion in bonds that it can't possibly pay back is going to reflect the amount of currency that they actually want to hold. And anybody that's actually holding it for any sort of actual savings in long term investment perspective will see that 10 trillion new dollars in bonds because of the temporary demand in the new, in the dollar stable coins, and they'll be like, well, I would just stick this into bitcoin. And all of, as all of those fiat cast like domino back into the dollar, the dollar will just be getting bigger and bigger and it will tilt over and it will fall into bitcoin. I think this still ends us up on a bitcoin standard. You still can't print any more bitcoin. They're not going to have a monopoly on being able to move it because there just isn't one. It's not like you can only get bitcoin from Saudi Arabia. And the only reason any of this plan would even help them is because of the explosion and the release of capital flow of all currencies all over the world, which is just going to make bitcoin that much stronger. And then you also taught everybody how to use bitcoin infrastructure. Everybody's using keys and people are putting tether on their cold card and coinkite won't even ever support it. It will just be that you can use those keys exactly the same because you can derive keys from stuff and there's not really anything anybody can do about it. And when bitcoins, a $20 trillion market, a $30 trillion market, and just because of stablecoin demand, we're watching the us government issue $15 trillion in bonds. That will instantly be reflected in the number of people who actually want to use dollar stablecoins. That's not a, that's not a good monetary policy to be attached to, especially after their local currency just died because of their government's last monetary policy. And then they say, well, bitcoin's just been around for 30 years now and it seems to always go up. And every single time they issue more dollars and more bonds, it goes up. And it's been great for the US because look at all of this big. The bitcoin that they have. You think other people won't figure out that maybe they should have held some bitcoin? You think the us government is going to be able to adopt and attach their, their sales to the bitcoin ecosystem in the world? And every other country that's now being undermined, that's having stable coins get in like, creep into their country to expand the dollar network. You think they're not going to do something about that? They. Smaller countries may end up adopting bitcoin just because they're, they don't think their fiat has any chance. And because bitcoin's the only thing that might actually prevent the dollar stable coin from dominating their market. Like, that's the, that's the I drink your milkshake game theory. Everybody's going to rush to bitcoin. If the US government does it, it's just going to be a huge signal that, crap, we have two. Two or we're screwed. It does mean that the US gets a massive advantage if they actually make this play first. And they utilize, they rather intelligently utilize the breadth of their currency network already to, to double down, essentially, and reinforce demand by opening up into this new battlefield, this new market, and having as much control, owning as large of a piece of that pie as they can. This will be very, very good for them, but they will not suddenly become responsible.
[01:34:15] They will continue to just issue bonds. The debt will skyrocket more and more. They will have to issue them with, they won't get away with going, we're not going back to 0% interest rates. It's not sustainable. I don't think we ever go back to that market. I think that was a one time thing. It failed miserably. Now prices are going to be different. I mean, they've had to jack it up to four, five, 6% specifically because of this. They had to jack up interest rates faster than they ever have in the history of the country.
[01:34:48] I think all of this still just means we end up on a bitcoin standard. Like the hardest money wins like this. This could very well be the way that we get there.
[01:34:59] But I think it still goes there and it still probably just takes a couple of generations.
[01:35:04] But who knows? I don't know. Shit moves so fast these days. It's unbelievable. And there are so many wild cards. Like, so many wild cards like this could fall apart quickly. This could not even work slightly for just a short amount of time. And the whole situation, the whole playing field could change again. And that's one of the big things is to realize they're reacting.
[01:35:30] They're reacting to changes that have occurred. Like bitcoin has just existed and it has landed on the playing field and there's nothing they can do about it. So they have to react, they have to change their plans, change their course, figure out, okay, well, what's a stable coin? This thing? That was nothing. It was like $20,000,000.05 years ago. Now it's the 18th largest buyer of our bonds. What the hell just happened? How? Somebody please explain to me what a blockchain is. And I just think it's obvious they were going to react and it was going to be awful. Like they were going to do something devious and they were going to vie for as much control as they could. They were going to try to own as much as they could. Like this, of course. I don't know, of course this was going to happen. Like, yeah, it's shitty. There's always like, government's just going to always do shitty stuff, but this doesn't mean they control bitcoin. Like, I love knowing about all of these plays and these things that are happening, but I just don't. I can't. I can't see it as nothing, nothing has worked in our favor here that we just have, like, that we're just.
[01:36:45] I don't know. And maybe this. God, I'm trying not to, like, really shit on them or the article or anything. I loved it. I love the article. I love reading about this theory. It's fascinating and it's incredibly well put together. I wouldn't be talking about this theory if it weren't for it. But I think they're right. Like, this is where things are going. But I also am just not, like, unbelievably pessimistic about it. Like, I don't think this just, just means that now the us government can do whatever the hell they want and there's still nothing we can do in there. Omnipotent and screw it, give up. I don't know. And maybe that's not even the intent of any of this, but it just kind of feels that way. Like, I just, I get sad when I read it all. And it's not even because of, like, the details, obviously, and the facts are in fact, like, okay, yeah, that sucks. Like, this is, this is bad. This is obviously not opportune. We, we don't want the dollar to be able to expand its network, but it's going to be able to very, very likely. It kind of is already. They're going to have ridiculous regulatory controls. They are going to try to lock down exchanges. They're going to do what they can, especially within their borders, to try to prevent capital flight. But I just don't, I don't think it's really going to work. They've, I mean, it will partially work like, all their stuff has partially worked. And they've got a lot of dumb liquidity. Right. They've got dumb money from normies in a really big way. But I just think this is the result of bitcoin being permissionless. There's nothing we can do to stop them from making an intelligent decision to ride the waves, to basically ride on bitcoin's success. And this kicks in the game theory of political, all the political nation states and political entities making their move to try to do the same thing, because they all have plays in this game, too. It's about the fact that the battlefield has shifted. It's that we're playing on different grass now.
[01:38:48] And I just can't really bring myself to be depressed about the fact that bitcoin has changed the field.
[01:38:55] There's still an ungodly amount of work to do. We still haven't solved peer to peer electronic cash for the world. We, that problem is still in the running. It's still on the list to solve. If you want to get me to. If you want to hear my elaboration on that, you can listen to the last guys take, which was the hard truth, because that's. I open it on that one. But we have more tools and a broader, more open market to now work with these, work for these things than we've had in a long time. And that's why they're cracking down. That's why they're trying to get more control. That's why they're trying to arrest people. That's what nation states do. They attack violently when they are being undermined. But bitcoin is still permissionless. It is, it's a game of whack a mole. Bitcoin is still 21 million. Bitcoin is still permissionless, is still an open cryptographic platform for anybody to build any app, any monetary system, any monetary payment network. It's just going to take a long time. It's going to take a long time to shift it all in the exact same way that it's taken forever. It's taken a long ass time for the Internet. The networks have taken over the world as the narrative builders, as the centers for social control they have. But we also have not sufficiently decentralized those networks. And that's what we're doing now. That's why we have noster. That's why we have pairs. That's why we have all of these things that we're going into. The next step. It's one, it's two steps forward, one step back. And that's just what I think it's going to keep being. I think this is the one step back. This is the reaction from the political sphere. But this isn't about individual actors. This isn't about, like, what, one institution or one, one dude at a group or a CEO. It's not about what they do. This is about how the whole systems are changing and whether or not it's Russia that gets the upper hand, or the US or China or whatever it is, the underlying system is still different. The battlefield has shifted. It will not be able to go back to what it was because of the technological landscape. And I think that I see, I guess I hope, because it appears to me that we are moving still fundamentally in a more decentralized technology stack and more decentralized communication and networking world. And there's an unbelievable amount of pressure. More people are aware of it, more people are thinking about it, more people are actually concerned. More people are being censored, more people are being arrested for social media posts than ever before. It is more prevalent. Like, the fact that we're here talking about this is proof that more people care about it than they ever have, that nobody gave a crap about any of this, nobody thought about any of this, even as a problem in 2005. Awareness of the problem is a huge win. It was invisible for a really long time. It's not hard. I can talk to every single blue collar worker that has come to my house to work on my stuff. I can talk about how the banks have too much control. They're, they're spying us. There's a stupid surveillance apparatus. They printed trillions of dollars, and prices are going up to every single one of them. They're all like, yeah, man, it's for ridiculous.
[01:42:19] That's a huge win. Like, you don't solve problems if you don't recognize them. Recognizing that there is a problem means that there's, we're building up pressure. Like, this is a, this is a pot, this is a tea kettle, right? Like, we're building up pressure. And everybody is beginning to care and understand and be aware of problems that were never problems before in their mind that we're not front of mind that they didn't care about. And because every, everything is stressing, everything is like, people are aware of monetary policy, everybody's talking about inflation, and they do not have control and are not fully regaining control over the narrative machine. They are, the networks are the things that are more prominent in the development of the social psyche, of what people think about what's happening. Joe Rogan has single handedly had this crazy, weird effect of this, this global sub like undercurrent of movement, of just people realizing that we live in clown world. And now we have all of these tools and we have more investment in building more of these tools and more people fighting that there's outrage over the CEO of telegram being arrested like that. Wouldn't you would just assume that if there was no pressure against it, people wouldn't be hating and being like, the french government is a bunch of corrupt bastards who just arrested him because he wouldn't censor his platform. But people know that. People are outraged. They had to make a statement and say it's like, no, it's because he's a baddie, bad boy and he does bad things. I mean, they had to kind of fold the hand on Assange. They couldn't get away with calling him simply a terrorist.
[01:43:57] The curtains are falling for a lot of people. They're looking. And we have more tools at our disposal than we have ever had. We have more powerful decentralized networks specifically because of bitcoin. Bitcoin is an insanely powerful decentralized network that we have at our disposal. We can build on top of it. You don't have to get a banking license to make a payment out. I get payments. I just, I got zapped today. I got zapped today a whole bunch of times. I'm pretty sure I zapped this article somehow or the post that somebody shared it out with.
[01:44:32] I don't know. I just don't want people to be defeatist. Like, I just don't want anybody who listening to that is like my dad, he had listened to something about all this and I think he listened to my episode as well. And he was like, you know, is this all just like a trojan horse? Have we, is there just nothing we can do? And I'm just like, no, no. Like, we're having huge wins. Like, look at the big picture. Like, so much has already changed. And I genuinely think the areas of control in which they are trying to take and the way they are trying to spread the access or the breadth and demand for the us dollar market is actually a concession.
[01:45:14] It's them having to fold a hand and change their tactic because otherwise they are screwed.
[01:45:24] So I guess the whole point of this big, long, ranty, stupid episode is count the wins.
[01:45:34] I don't know. That's just my two cent.
[01:45:37] Thank you, guys. And I want to get, I highly doubt Whitney and or Mark will listen to this and I hope they did not take any offense. And I would love to get a ranting tirade about how I'm completely wrong because I certainly could be this. That's just, this is the big picture that I see and that's the context that I put their research into when I'm thinking about this. I think capital pricing is the biggest, most important and deepest concern in the world right now. And I don't think this causes a problem for that. I think this just bolsters a transitionary phase where the dollar is able to expand and the government is able to continue to be reckless, reckless and stupid. But they start getting priced as the reckless and stupid that they are, simply in a bigger market. But I love both of their work and will continue reading it on the show because I, it's incredibly valuable. I'm constant. I learned stuff like details like specific details and relationships and stuff that I had no idea about in their articles every single time. And so I really appreciate them and I hope they don't take it personally because I don't mean it personally at all. So anyway, with that, I'm out. I've rambled for a very, very long time today and I will catch you on the next episode. Stay tuned. We got something really, really fun coming up and I am excited. Stay tuned. Stay subscribed. Don't forget to check out AI unchained, my other show. If you want to know how to use AI and hear about the state of open source and sovereign and self hosting and all of the tools, I go into so much stuff. I use it for so many things. I will be using it to pull out all of the notes and links and things that I have suggested in this episode. It's really fascinating and I get a lot of great feedback and I love to explore it because I think AI is a freedom technology. That's why I started AI unchained. So if you want to check that out, I will have the link in the show notes follow me on Noster, a shout out to coinkite and the cold card hardware wallet for keeping my bitcoin safe for this guy right here in my drawer in front of me. I love this thing. Oh, that's actually, I have two of those right there. You want to get a 5% off discount for your cold card, bitcoin, audible link and details right in the show notes and it helps support this show. Shout out to everybody on Fountain who supports the show, who does value for value, who boosts and, you know, sends me sats.
[01:48:00] You are. You're the reason I do the show and it is appreciated more than you know. All right, I'm out of here. Why did you let me keep talking? I am guy Swan and I will catch you on the next episode. And until then, everybody take it easy. Guys, we are all in the gutter, but some of us are looking at the stars.
[01:48:39] Oscar Wilde.
