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Greg Foss | When will the FED Pivot? | Simply Bitcoin IRL · Simply Bitcoin

0:00
Hello everybody. Welcome to another episode of
0:03
Simply Bitcoin IRL. I'm with the man, the myth, the
0:08
legend Greg Faust. He is one of the macro,
0:12
heavyweights on on Twitter. I'm always looking at James Greg
0:18
Lawrence and they're always in the know, with the macro stuff
0:23
and I asked them was, like, you gotta come on the show and we're
0:26
going to talk a little bit about it.
0:27
I'm going to use the same Type of strategy that I did with
0:32
Lawrence and it looked like a lot of you guys appreciated it,
0:36
I'm going to take it from, you know, from from a bit Corners
0:40
perspective. And I'm going to ask Greg to
0:42
explain a lot of things that you know perhaps us that are just
0:47
bitcoiners, don't quite understand.
0:49
A lot of the how a lot of the Legacy system works and I think
0:53
Greg is perfect to have a conversation about that.
0:57
So Greg welcome to the show. How you doing?
1:00
It's a pleasure to be here. Thanks for having me.
1:02
I'm doing all right. Everything considered this world
1:06
is a little scary right now so I'm happy to try and share some.
1:12
Viewpoints from a guy that's made 35 years of mistakes.
1:16
All right? That's all I bring to the table.
1:17
Let's be clear about that. 35 years of mistakes, but I've
1:21
never let a mistake kill me. And then what you do is you let
1:24
your winners Rawhide and the winners makeup for controlling
1:29
your losers, right? If anyone thinks they make 100%
1:33
decisions correctly, that's not how life works.
1:38
It's all about, controlling your mistakes and Anyway looking
1:43
forward to trying to impart some experience if that'd helps us do
1:49
it. Yeah, one of the, one of the
1:51
things I like about mistakes, right?
1:52
Is that they at least, they, they show you what not to do.
1:56
So like after a long period of time you start to I guess you
2:01
get the wisdom of if you find yourself in a particular
2:03
situation you're like let me not do that because I know what the
2:07
outcome of doing that decision is and I guess that's for my
2:12
Active. But Greg I'm going to jump right
2:14
into it. This is one of the tweets that
2:17
you posted today. It's very similar to what what
2:21
Lawrence was saying last week, right?
2:24
I'm going to read it and I think you know it gives great context
2:27
to what the questions I want to ask you about.
2:30
Does we are no longer we no longer have an inflation crisis
2:33
that cat is out of the bag. Markets are working through
2:36
forward expectations. We are now in the first Innings
2:39
of a credit credit crisis countries.
2:41
Don't default. Alt and please see, Argentina
2:44
G20. So, a couple things to unpack
2:46
there, right? How could we not be an inflation
2:51
crisis? If you still have eight percent
2:54
inflation in the United States and you have ten percent
2:57
inflation in Germany and in the UK and they just announced that
3:00
they're just going to print more money.
3:02
That doesn't worry you at all. Well here's the thing, right?
3:07
It's all about the know you're knowns, your known knowns versus
3:13
your known unknowns. So markets, need to anticipate
3:19
if they have Clarity on future expectations markets tend to be
3:24
able to work through that. And it's my opinion.
3:28
It's only an opinion that the inflation bogey is out of the
3:33
bag. It's, you know, it's not good
3:35
numbers. But the reality is, the truth
3:39
has been exposed and the markets are trying to deal with it.
3:44
I will say that 8% CPI. Inflation is not a good number,
3:49
but at least it's been divulged and do I think that number goes
3:54
to, let's say, 12%, And I got to be clear here.
3:59
Using the same metrics that got it to 8%.
4:03
I don't believe that inflation goes to 12 percent.
4:06
Before it goes to six percent which means they will be a
4:10
correction to the downside of inflation posted inflation.
4:16
And therefore in expectations can rationalize the information
4:23
that's been delivered. So it's all about forward.
4:27
Applications Nico, that is the key, it's not about the numbers.
4:31
They are posting right now. It's about the number of hours
4:35
that they post versus forward expectations.
4:38
And as simply as I can say it, I think it yields are lower than
4:44
they should be relative to current inflation, but there is
4:49
an argument that there's still a deflationary environment to come
4:54
forward. One of the most important things
4:57
that people People are overlooking is really the growth
5:02
of humans on the planet and how are declining growth or birth
5:09
rate will impact inflation expectations and actual
5:14
deflation going forward. So there's a Confluence of
5:19
short-term impacts versus reality of long-term trends.
5:27
Like the one baby per family in China.
5:31
This takes a long time to work itself through the system so
5:36
that Global growth, which is could be measured by human
5:40
population is actually on a decline, which will lead to long
5:46
term D or disinflation. Don't want to get too confusing
5:51
for everybody. Remember, we are at eight
5:54
percent. That is a posted number, okay?
5:57
Not a good number, but at least it's posted and the market is
6:01
trying to figure out how to deal with that.
6:04
What hasn't been posted? The second part of my tweet is
6:08
the concerns over the credit contagion.
6:12
We haven't had that blow-up of a big bank yet.
6:16
That's what I'm concerned about. So I think the the word on the
6:21
street is Credit, Suisse so it is that rumors.
6:26
Do you believe it? I think you mentioned.
6:27
Something about your wife asking you over the weekend or
6:30
something. So, I get a lot of Good Feet.
6:36
I said, you know, I shitpost a little bit, let's be alright.
6:40
Like, I try and poke the lion. It's my, it's my tits.
6:44
Now, the way I operate like so let's be clear.
6:47
My wife doesn't worry about contagion.
6:52
So we saw be very that, but the truth is, there is Contagion
6:56
impact data. Of an eventual, Patek fault of a
7:02
systematically important financial institution.
7:05
That's what Sif I stands for systemically important,
7:10
financial institution as deep into by the bank national
7:14
settlements. So, I don't know if one is going
7:18
to hit the wall or hit your windshield like a bug, hitting
7:21
your windshield. It happens all the time.
7:25
It is the Catalyst that causes Credit contagion that
7:30
reverberates through the financial system and eventually
7:34
opted to the sovereign debt level.
7:38
I'm not forecasting, the eventual demise of Credit,
7:44
Suisse, but I will tell you the market is because all I need to
7:49
do is look at a credit default swap obligation on, see Credit.
7:57
Suisse, okay, lots of acronyms here.
8:00
A CD asks contract on Credit Suisse and the cost of insurance
8:05
has risen to levels. Never-before-seen higher levels
8:10
than during the great financial crisis.
8:13
And if you just take what that means in layman's, terms means
8:19
that the cost to credits which to raise money to bring money
8:24
into the banking system has the u.s. five-year rate.
8:29
Let's take 4% and add on another almost 4% for credit risk for Or
8:39
the bank called Credit, Suisse four percent plus 4%.
8:43
Their cost of funds is 8% before.
8:47
They've even made alone. How many loans you think are
8:51
profitable that they can add an incremental loan spread on top
8:58
of their cost of funds? Without taking excessive amounts
9:03
of risk. IE lending to zombie companies
9:06
and then it becomes circular. So when your cost funds is 8%
9:11
and the really good loans out there are at six percent, you're
9:16
not making those loans. Why?
9:19
Because you can't borrow at 8% and land at 6%, you're going to
9:24
lose two percent on your money. That's what is a bank takes
9:29
money in at a cost of funds and real owns it and takes out the
9:33
vague, the spread, okay? Understand if their cost of
9:38
funds is excessive, they have to forego a very important part of
9:46
the lending Market, the low Part, which means they're
9:49
lending to higher-risk companies, which just causes the
9:54
circularity. I know you say you weren't
9:57
involved in this business in school, but just imagine that
10:02
when you deposit money into a bank, you're really lending your
10:06
money to a bank and they turn around and take your loan and
10:10
real end it at a higher rate and make that thread and that's how
10:16
the bank's money. Pretty cool.
10:19
Isn't it until it goes Kaboom because people say guess what
10:25
the loans you've made are silly risk-adjusted loans they're
10:31
going to go D they're going to default and therefore it's going
10:35
to cause the whole system to collapse over to you.
10:39
I know I've given you a lot to think about but just think of a
10:42
bank is taking money in. Real ending it out of spread and
10:47
trying to capture that, spread with no default losses work so
10:53
well on paper until there's default losses, very simply so,
10:58
you know, correct me if I'm wrong.
10:59
But that sounds like a Ponzi number one and number two.
11:03
Greg what, what happens? What happens again?
11:09
Theoretical, we don't know the future, right, but what happens
11:12
if Credit Suisse goes down. Or is it going to be a similar?
11:15
Because I do know this is it going to be similar to 2008
11:20
where it's a contagion, right? It starts spreading and it
11:23
starts happening to other financial institutions.
11:26
And if that is the case, if that's the case, why is it a
11:30
contagion? Why does what happened to
11:32
Credit? Suisse affect other, bigger
11:35
financial institutions, Well like you nailed it.
11:40
It's because all these financial institutions are intertwined,
11:44
right? They have swap agreements with
11:47
one another they have. And when I say swap agreements
11:51
interest rate swaps where they swap fixed for floating interest
11:54
rate obligations, they have foreign exchange obligations
11:59
with each other. They have interbank, lending
12:01
obligations some of. These are four very short terms
12:04
and some of them are in for longer terms that you can't just
12:07
say, oh, We're going to we're going to take these off the
12:11
books, it's a contract, you can't take them off the books at
12:14
your own volition. So given that the banking system
12:18
is so intertwined where you have counterparty risk exposure over
12:23
derivatives over interbank funding or the cash funding over
12:29
all sorts of repo agreements, and all of these intricate
12:34
Financial products When one of the counterparties in the
12:38
system, imagine a system, like a bunch of gears.
12:41
When one of these gears collapses, all of the other
12:45
gears stopped working, because they're counterparty risk.
12:50
Now reverse back to them. Imagine if you in the great
12:55
financial crisis, you were Goldman Sachs.
12:58
This actually happened, Goldman Sachs laid off.
13:02
A bunch of the risk from Goldman Sachs clients.
13:06
They laid off a bunch of risks with this company called AIG
13:10
now. AIG was a AAA rated insurance
13:14
company that got way too far over their skis in selling
13:20
Insurance to the Goldman Sachs of the world to the point where
13:24
AIG was absolutely insolvent. And the FED had to bail out AIG
13:31
not cuz they really liked AIG that much.
13:35
But really, because they liked Goldman Sachs that much, that
13:39
they knew that if they let AIG fail, Goldman Sachs would fail
13:44
as well, because of the counterparty risk exposure back
13:48
to Goldman Sachs. It's not really that crazy to
13:51
understand how this works given that Hank Paulson used to work
13:58
at Goldman Sachs Hank Paulson was the treasury guy in the
14:02
great financial crisis. All right, All of this is the
14:06
Wall Street. Internal workings of the machine
14:10
and when one of the gears of the machine cracks up all the other
14:15
gears stopped working, I hope that explains it in terms of a
14:19
contagion impact. Absolutely it.
14:23
Thank you, great. I appreciate that.
14:24
And a jock was actually and I'm going to pull up a comment Jack
14:27
is actually thinking what I'm thinking, right?
14:28
As Greg, what if a pivot comes and does not work?
14:31
Okay, that is precisely what happens with drug addicts.
14:34
Tell us about. About that world.
14:35
So and then I'm going to add to my kind of trans guy with this
14:39
right about the FED bailout specifically and that's what you
14:42
mentioned, right? And I think Jack kind of hit the
14:44
nail on the head, right? So let's say we find us a like
14:48
Jack Jack, he's a great guy. I think I think Jack's on smart
14:54
man. All right.
14:55
And well yes, sir because he's got experience, okay?
14:59
Like we didn't win just fall off the turnip truck, right?
15:02
Like this is the problem with the situation is A lot of the
15:09
young guys Young Guns, don't understand the experience that
15:12
happens within financial markets.
15:15
So if I am concerned with the feds actions right now, I
15:20
understand their desire to fight inflation but I don't think they
15:25
are looking into the financial markets astutely enough to see
15:29
the damage, they're causing to the plumbing of the financial
15:33
markets. So they want to raise rates to
15:37
fight inflation. I get it but are they looking
15:40
correctly? At the stability of the
15:42
financial system and are they pushing too hard on the brakes
15:47
over here? Such that the stability of the
15:50
financial system over here is going to be a train wreck,
15:53
right? They hit the brakes, the engine
15:55
hits and all the cars. Crash crash, crash crash, the
15:59
train cars. This is what happens when you
16:03
have a Fed. That is managed by a chairman
16:06
that has never sat in a risk chair.
16:08
So the question from jock was what if the pivot comes and it
16:13
does not work. Wow, I don't really know what to
16:17
say about that. Except it, I would prefer to see
16:20
the pivot come and I'm going to define the pivot.
16:24
Is this very simply, I don't need them to start lowering
16:27
interest rates, I just need them to stop accelerating or
16:33
increasing the rate of fed funds at Pace that they have never
16:39
experienced in the world in the history of a central bank.
16:43
We have never experienced this degree of acceleration of fed
16:49
funds. I would prefer that they just
16:52
steak and say, okay we're at three and a quarter percent.
16:55
We brought it from point two five percent, we brought it very
17:00
quickly to three and a quarter percent I hope that they stop
17:05
take a breath and evaluate the damage and destruction.
17:08
They've done in the market rather than continue to their
17:12
target, which is four and a half to five percent.
17:16
Well, look, the world is already breaking in my opinion at three
17:21
and a quarter percent. I would prefer them not to do
17:25
another 75 basis points. And then say well we'll
17:29
re-evaluate the situation guys. You got to see what's Happening
17:33
in their financial Plumbing of the system and realize that it's
17:37
getting blocked up. So my advice would be if they
17:42
pivot. How do they Define the pivot?
17:45
I would Define the pivot is saying, let's take our foot off
17:48
the brake. Okay, let's just see what
17:51
happens at three and a quarter and if it doesn't work Meaning
17:57
we've taken our foot off the break, we're going to let the
18:00
drug addict have a little bit more of its heroin, but still
18:04
the drug addict is like suffering from withdrawal.
18:09
My preferred path for the stability of civilization is to
18:14
live with a greater degree of inflation.
18:20
And the drug addict is still functioning rather than saying
18:25
mr. Drug addict.
18:26
We're see you into rehab and the whole world economy if
18:31
disintegrates that it's the two outcomes that we have a form of
18:36
a pivot. A or absolute Global depression.
18:44
B, I don't care as a Bitcoin. ER, what the result is because
18:49
all paths lead to bitcoin. What I do care about is the
18:53
stability of the world in both scenarios and my personal
18:58
opinion is the world can live with some enhanced inflation.
19:04
What we can't live with is global depression, and Anarchy
19:08
and absolute disintegration of social order.
19:12
Those are the two choices. Has I prefer the former not the
19:15
latter, so a lot to unpack there.
19:20
But Greg I kind of understand, you know, and what you said
19:23
about Powell's is fascinating because I believe he's a lawyer.
19:27
I don't need. I don't even think he was in
19:28
finance. I think that's his background,
19:31
but I know, I know this right? Inflation is one of the most
19:36
damaging things politically who's ever in power tends to be
19:40
voted out, you know, very quickly.
19:43
If inflation is high, the example that I'm going to give
19:46
last time this happened, United States was during the Carter
19:49
Administration and then that's what led to the, you know, the
19:53
so-called Reagan Revolution, Ronald Reagan getting elected,
19:56
right? But Ronald Reagan, still had to
19:59
kind of endure something very similar and I think volcker was
20:02
the head of the FED at that time and he actually took a lot of
20:07
punishment politically. What is the difference here
20:10
Greg? And and again like fine let's
20:12
say we Door inflation. But isn't that just going to
20:16
exacerbate the problem, right? Because at the end of the day,
20:19
who benefits from inflation's? Anyone who holds assets, it's
20:22
the government of course, right? But anyone in the middle and
20:25
lower classes, that save and earn in and Fiat, they get
20:29
absolutely crushed. So, isn't that just going to
20:32
exacerbate the problem that you find the United States today?
20:35
Which is the huge gaps and wealth inequality?
20:39
What is your response to that? Do you think that Powell has the
20:43
My language cojones to follow volcker what he did.
20:52
SI great question Niko. This is the this is a question
20:56
from somebody who's you know, you said you hadn't studied it
21:00
in school and perhaps that's a great thing because people who
21:03
do study it tend to be brainwashed by the Keynesian,
21:08
the Keynesian. Well, let's call it Keynesian
21:12
brainwashing. Okay.
21:13
So they get brainwashed by the Keynesian policies.
21:17
Here's what you know. I don't know the outcome in
21:24
either scenario, it's just my belief that the outcome in an
21:28
inflation scenario is more drawn out and less disturbing than the
21:34
outcome. In a global depression scenario
21:39
which could be followed by global war.
21:41
Okay, I don't believe the first one leads to Global War.
21:46
I do believe the second one Global depression could lead to
21:50
Global Global war. And there are the risks that I
21:53
tend to evaluate between the two.
21:55
And why cannot Jerome Powell be chairman Paul, volcker of the
22:01
1980s and incidentally, that's when I started my career trading
22:05
was in the 1980s with Paul volcker, very simply.
22:10
And I see this note here from bunny, very simply because the
22:14
u.s. debt situation today is about four times worse.
22:21
Than it was when Paul volcker was chairman of the FED, which
22:26
is to say when volcker, was chairman of the FED trying to
22:29
fight the inflation Boogeyman total Global total debt to GDP
22:37
was 30%. Now, today, Jerome Powell is
22:43
trying to fight the same battle when debt to GDP is four times
22:48
as high, which is to say it's at You're too and 20%.
22:53
It's a diametrically different challenge for Powell versus
22:58
Volker. In fact, all invoke my grade 11,
23:01
math example here, it's impossible for Powell to do it,
23:07
given the debt spiral situation that the USA is in.
23:12
He can pretend he wants to be like vulgar and I'll just pull
23:15
out my math and say, hey stupid listen to me.
23:19
You cannot fight the Same battle because you've accumulated a
23:23
debt burden that is vastly different from your predecessor.
23:27
So, give your head a shake you fucking moron, okay?
23:31
And listen, you cannot do it with the same tools.
23:35
You will only cause global depression.
23:40
It's called a death. Spiral.
23:42
Wake the fuck up. You stupid lawyer?
23:46
Sorry. No, I think you said it
23:49
perfectly. I think we're all very
23:52
frustrated by the actions of our so-called betters or leaders.
23:58
They're acting like clowns like that's for sure.
24:00
So you said something very interesting Greg I'm going to
24:03
ask you, right? You said Global depression could
24:06
potentially to global war. Why does it end in global war?
24:10
And wouldn't you say, this time is different due to the Advent
24:13
of nuclear weapons, right? When you know, the whole theory
24:15
of mutually assured destruction, so does it have to leave to
24:19
Global War and why does a Double War happen in the first place.
24:25
Okay, so I'll add to your second question.
24:28
First is a global war happen? Because the only way you can
24:33
conquer your own poverty, is to take over and not another nation
24:38
and plunder them to the benefit of your own citizens, okay?
24:45
And the second part of your question is the nuclearization.
24:49
Well, you know, you started with weapons that move from A machine
24:55
gun to the Gatling gun to some other extremely powerful guns.
25:00
This is just another augmentation of the Arsenal.
25:05
I don't believe it means. They don't do it.
25:07
Even if it means our shirt mutually assured destruction, I
25:11
don't want to get in there. I am not a military strategist.
25:15
And I don't even want to think that the possibility of that
25:19
Nico purely because it's just such an god-awful outcome.
25:24
I would Hope that the chairman of the Federal Reserve sits back
25:28
and said, I'm going to change my inflation Target from two
25:33
percent annualized. Just throwing a number out there
25:36
for you people. How about if we live with four
25:38
percent annualized versus nuclear destruction?
25:42
Tell me which one you'd rather have.
25:44
That's simple. Yeah.
25:47
Do you think that Do you think this was avoidable?
25:51
Do you think that they you know from my perspective as a Bitcoin
25:55
ER they printed an ungodly amount of money due to the you
26:00
know, the thing that we can't be said on YouTube the pandemic,
26:02
I'll say that and another component right is this they
26:08
they bought into the modern monetary Kool-Aid, which I think
26:10
is an absurd idea. So do you think that this whole
26:14
crisis that we find ourselves in today, could have been avoided,
26:17
if governments, just did nothing.
26:19
As a reaction to the pandemic. I will say that the mmt people
26:28
are god-awful method mathematicians and Stephanie
26:31
Kelton should be fired first W. First of all, she should be
26:37
fired for incompetence. Then I would could take it to a
26:41
next step and say you know there's a there's a level of
26:47
absolute Dang, there's a level of concern that I could not live
27:00
with myself if I given that advice to a nation and if she is
27:06
able to live with herself with the advice she gave to a nation
27:10
flippantly and so be it. She's a selfish individual.
27:15
I don't have the same DNA makeup as she does and she did it so
27:20
she could get a title of a book, the book.
27:23
Was based on false facts. It was based on Elementary
27:27
thinking it was absolutely disgraceful.
27:31
From an economics analysis perspective.
27:34
She's destroying the life of our children and I just have to call
27:40
her out on that. And all, um, tears out there
27:43
that believe she had the Hopi. Mm, well, fuck you, stupid
27:47
fucks, okay. She was wrong.
27:49
She was wrong from day one. If you want to Listen to
27:54
ill-advised armchair academic who has never sat in a true risk
27:59
chair so that she can advise where the world should go.
28:04
Well, I guess we get what we deserve listening to that.
28:07
Drivel it was an absolute academic exercise with zero
28:16
experience sitting in a risk chair.
28:18
That's all I can say. It's the difference between
28:21
something that should work on a form.
28:23
Lot on a Blackboard versus the reality of living, in a risk
28:27
chair, where the Dynamics, the pricing of Market change
28:32
instantaneously not over the life of oh and chapter 4.
28:37
We're going to deal with this too many armchair academics in
28:42
positions of power right now. Sorry, you know, it's
28:48
unfortunate, you know and you see this a lot in Academia and
28:52
you know, I feel like Like I personally missed that whole
28:55
garbage because I just skipped it all together and I I find
28:58
myself a lot thinking I'm like, just pure Common Sense from, you
29:02
know, just learning things on the ground.
29:04
I think puts me in a bit Neva. I think has one of the best
29:07
quotes, right? Is, like, if you get into higher
29:10
education, you lose your mind or something like that, you know?
29:12
Like you you get the, you get the Academia, but you lose the
29:15
common sense or something. Is that a price that that's
29:18
people should be willing to pay. Anyways, how about I think
29:21
there's Yeah, but it can I just say this in defense of a lot of
29:25
really good prefer? Sure, there are a lot of there,
29:29
a shout out to my alma mater and David column at Cornell
29:33
University. Okay, he is the example of a
29:36
professor that tries to examine a situation and adjust his
29:42
thesis, as the information changes versus some knucklehead,
29:46
like, Kelton again that wrote a book and then it's going to
29:49
stick to that thesis, sort of like Shifty Pete sticks to his
29:54
thesis and Paul Krugman sticks to his He says that, you know,
29:59
the impact of the internet is going to be somewhere around the
30:02
level of a fax machine. What an absolute embarrassment
30:05
like Paul Krugman, seriously, for the benefit of the future
30:09
children of this world, just go away and hide in some little
30:13
closet. You fucking failed academic.
30:16
Okay. You are an embarrassment to risk
30:18
management globally and just because you can write in the New
30:22
York Times, which I wouldn't wrap fish in the New York Times
30:26
as a Publication has there so conflicted but going, right?
30:30
You little shit in the New York Times because you see a world
30:33
that you've never actually managed, you only do it on a
30:36
Blackboard in front of a bunch of students.
30:39
If I was from Princeton University, I had a degree from
30:43
Princeton University and Krugman was still an endowed professor
30:46
at Princeton. I would rip that piece of shit
30:49
up because it's an embarrassment, his analysis.
30:55
We've made fun of Krugman plenty and he's also a Bitcoin
30:58
detractor speaking of Bitcoin. So Greg it sounds like history
31:02
is repeating itself and you look at history it sounds like the
31:06
same mistakes were just forgotten over time and it looks
31:09
like, you know, Humanity believes in this case.
31:13
Once again we could just print money out of nothing and
31:15
everything will be alright. And then the consequences of
31:18
that, whether you know, it's the moral decay of society, you
31:21
know, everyone says the, you know, the The the hidden tax of
31:25
inflation things get cheaper, they don't last as long.
31:28
There's the famous example of the refrigerator that if you
31:30
bought in 1950, that thing still working today and if you buy
31:33
like a brand new, Samsung refrigerator, the thing won't
31:36
last two years. So that being said, we're
31:39
clearly going through a cycle. Some people buy into the fourth
31:42
turning Theory, where does Bitcoin fit in all this does?
31:47
This is Bitcoin position. Is it?
31:49
Did it? Did it come in a time where we
31:52
could finally break that? Michael and humanity.
31:56
And we could just go onto a sound money standard.
31:59
And the problem is that every time humanity, goes on to sound
32:02
money standard, they start cutting Corners a little bit
32:04
right there, we get on a gold standard, you know, the founding
32:07
the, the early, the, the founding fathers learned this
32:11
the hard way and the United States, and there's a lot of
32:14
famous quotes by, you know, George Washington, talking about
32:17
how terrible Fiat money is, it's because they experienced it
32:21
themselves, right? So, Do you believe it's a
32:26
two-pronged question? Is Bitcoin going to break that
32:29
cycle and our governments going to allow that cycle to be broken
32:33
because as Lawrence. So beautifully said about last
32:36
week. He said that the the that they
32:39
would love to keep on the they would love to keep the privilege
32:43
of being able to create a money that creative money for free
32:47
that everybody else has to work for in the tremendous amount of
32:50
power from having that privilege as well.
32:53
So I'd love to get your thoughts on that.
32:57
Well, firstly, a shout out to my friend Larry Lepard.
33:01
You know, he is a great, great thinker, he liked me, we had the
33:10
benefit, I will still not trade in my education at Cornell
33:15
University because I actually thought I got my money's worth
33:20
and I probably think I can't speak for him.
33:23
But Lawrence got his money's worth at Harvard.
33:27
In the time that we schooled ourselves, when I say schooled
33:31
ourselves, chose to go to the school's the question about
33:35
Bitcoin breaking the cycle. Here's what I've said before,
33:42
and I hope that you will appreciate this.
33:45
When I graduated from Cornell, I was lucky enough to get a job
33:51
back in, in Canada, I could have worked on Wall Street.
33:56
I I decided to stay in or return to Canada or to Canada's largest
34:03
financial institution and it the Royal Bank of Canada was
34:08
actually technically insolvent at that time because of its
34:13
Latin American debt exposure, okay?
34:17
And very simply in the late 1980s because all Global Banks
34:23
had lent too much money in u.s. First, they'd let too much money
34:29
to third world, or developing nations.
34:35
And those US dollar loans, could not be paid back because I US
34:41
dollar strengthening US dollar cause those loan obligations to
34:45
be so excessive that they couldn't pay them back.
34:49
I EQ up the same situation that we have today. 35 years later in
34:55
1988, my first job a bright out of Cornell.
34:58
I went to the CFO and I said, oh my God, we have a problem here.
35:03
The Royal Bank of Canada. Canada's largest bank is
35:07
insolvent, which is to say, if we had marked down the value of
35:12
the loans, we'd made to these countries to the trading price
35:15
of the loans, in the secondary Market, the loan losses, which
35:19
would have come out of our book, value of equity would have
35:22
caused the book value of equity to go below 0.
35:26
Holy, Only Nico, I had spent six years going to school studying
35:32
the Fiat system and they never told me they have never told me
35:38
that financial institutions are regularly and solvent as a
35:43
function of the economic cycle. Why?
35:46
Because they use so much leverage.
35:48
So we'll Bitcoin coming back to your first question.
35:53
Will Bitcoin break the cycle? Bitcoin can help level the
36:00
cycle. Okay, so the cycle goes like
36:03
this can Bitcoin level the highs and the lows.
36:08
Yes, in my opinion, will it fix it?
36:12
That is to be determined So I hope you appreciate.
36:17
I don't have 100% Clarity on this, but I do know that Bitcoin
36:23
can help the stupidity of the Fiat cycle that causes Banks to
36:30
be regularly insolvent. Okay, so that's a good thing.
36:35
Yes, Bitcoin can help, will it fix it hard to say, but it's our
36:40
best chance. I don't see any other tool that
36:46
will help fix the system, like Bitcoin can fix then the second
36:52
part of your question. So Bitcoins, the only solution
36:55
that I see right now, is it going to fix it?
36:59
Dang, I don't know, but it's where all my hope goes because
37:02
there's nothing. Left.
37:04
There's no other part of the system that can fix the Fiat
37:07
Ponzi. The second part of your
37:09
question, will governments allow Bitcoin to succeed and I'm going
37:15
to come out very clearly and say there will be governments that
37:20
are Embrace Bitcoin and governments that resist Bitcoin
37:26
and the government's that Embrace Bitcoin.
37:29
In my opinion, will be the winners and the government's
37:33
that resists Bitcoin will play their paths to destruction.
37:39
So, very smart, young man out of Boston.
37:44
Jason Lowry Friend of mine, Madame, and person who's working
37:48
for the u.s. space force. I think he could be the smartest
37:52
guy I've met in the Bitcoin community so far.
37:56
And that's not to say, or to detract from the likes of a Jeff
38:00
Booth, or James, lavish, or Larry Lepard.
38:04
All of these guys are brilliant and I will say, if I'm the
38:07
smartest guy in the room ever, go find another room.
38:12
Okay, I'm going to look for another room because I better
38:14
not be. The smartest guy in the room, if
38:16
I'm the smartest guy in the room, we're in big trouble.
38:20
All I do is try and tell the truth and take the information
38:24
that I lucky enough to decipher from these very smart other
38:29
people. So Jason Lowry thinks that
38:33
there's governments that will Embrace Bitcoin.
38:36
They will be the winners and if we can't convince the most
38:40
freedom-loving government of the world, which still is the United
38:44
States, Of America, if we can't convince them, that Bitcoin is
38:49
freedom and Bitcoin is hope. Well, the other countries that
38:53
do and Brace Bitcoin will flip in the world or order and the
38:58
days of the USA as being, you know, The Guiding Light for
39:04
everyone else in the world. Well sorry, you lost your, you
39:08
lost your status. And unfortunately, that
39:11
typically happens around every 100 years.
39:14
And it's been about 100 years since the USA has been, you
39:18
know, the global Reserve currency.
39:20
So if you go by Static statistics, there should be a
39:25
flipping. I don't want that to be the
39:26
case. And by the way, you guys know I
39:28
live in Canada, right? So I live in Canada and I'm
39:33
Pitching for the USA because Canada surrounding are like just
39:36
sweep. Canada off the edge of the desk.
39:38
We do not matter. Even though we are a G7 country,
39:43
which is means we are in the top seven economies of the world.
39:47
We're still not bigger than California.
39:49
California's, a bigger economy than Canada.
39:53
So I want the USA to succeed. Okay, I've gone to school there.
39:58
You guys know that I love freedom.
40:00
You guys know that I believe the Say is still the last remaining
40:04
Bastion of freedom in the world. I want the USA to adopt Bitcoin.
40:12
Is it possible that they'll? Yeah, I'd say it's even more
40:15
likely that they don't and they do.
40:17
But the people that think they should is growing all the time,
40:21
you have DeSantis, you have Cynthia lummis.
40:23
You have all these politicians in the u.s.a.
40:26
That understand the advantages of sound money.
40:29
Not to mention smart. Money managers Like Larry
40:33
Lepard, who's pitching it to his clients and even if it's like,
40:38
you know, you got to chip away at this overtime.
40:40
So I want you guys to understand that, even though I'm Canadian,
40:45
I'm absolutely rooting for the United States because if the USA
40:50
fails Canada, doesn't have a chance.
40:52
That's absolutely true. And if Canada fails, well, the
40:57
USA still has a chance, but the chance is lessened because
41:02
Canada is the USA's first or second largest trading partner
41:07
Define. You know, it used to be easily
41:10
that number one. Trading partner.
41:12
Now there's different ways of measuring at the point is Canada
41:16
lives. Rent-free in your attic.
41:18
Okay we're a beautiful Nation, you know, 5,000 kilometers long
41:23
and a couple of hundred kilometers wide like a ribbon.
41:25
We're living in your attic rent-free but we still are your
41:29
most important trading partner and if we fuck up well it's
41:33
going to have trickle-down effects to you, guys.
41:35
There's going to be blood coming down.
41:37
The Walls from your attic. You guys may not care.
41:40
You can brush Off the blood off the walls, it's still will leave
41:45
a stain. Okay, we want to do this
41:47
together, we absolutely need to do this together, but it got, it
41:52
has to be led out of the United States of America.
41:56
So that's why I want to do everything, I can to help
41:59
educate people to understand the beauty of this solution.
42:04
Fiat money is a disease and you got a cleanse the system of this
42:09
disease but you can't do it overnight.
42:12
It's a process. It's a process where Jeff booths
42:16
of the world get out there and educate, the Larry leopards.
42:20
Get out there and educate the the scientists in.
42:24
Cynthia lummis, they get up into the upper echelons of government
42:29
and they educate so please educate, educate, educate.
42:33
Eight, it is the only solution so I hope I answered both your
42:38
questions their Bitcoins. The only solution I see.
42:42
Does it mean that it will succeed know?
42:45
But we better damn well, try it because there's no other
42:49
alternative and then secondly is can government's put their thumb
42:52
in the eye? Yeah, governments.
42:55
Do that shit all the time, that's why we need to ensure
42:59
that there are smart people on you know, cap Well, he'll that
43:05
will fight for freedom and hope IE Bitcoin.
43:10
Yeah, and I completely agree, you know, in being an immigrant
43:13
myself first generation American, you know, you get
43:17
pitched that idea, you know, the American dream, it's very
43:21
beautiful. And I think a lot of people
43:22
don't have really appreciate that, you know, if they've been
43:26
an American citizen for a long time, they don't really
43:28
understand that 99% of the world doesn't have the freedoms we
43:33
have. Here.
43:34
So, I agree with that. Now, Ray dalio, which recently
43:38
stepped down, from from Bridgewater.
43:41
He had the hit a very interest. He had a very interesting
43:45
Theory, actually wrote a book about it called the changing
43:47
World Order and he was basically making the case that exactly
43:50
what you mentioned earlier, right, that the u.s. potentially
43:53
could be an addict line and the rising world powers China,
43:58
right? And we all know what China
43:59
wants. China wants the Central Bank,
44:01
digital currency model. And I think it's a terrible
44:06
mistake by the US government pursuing, that rather than
44:11
pursuing Bitcoin. But in the process of pursuing
44:13
Bitcoin, the government's going to have to give up power that it
44:17
normally would enjoy having, you know, the having being the head
44:21
honcho of the money. So what are your thoughts on
44:24
that theory? Do you believe Ray dalio is
44:26
correct? Or do you think that Bitcoin
44:29
changes that completely? Because his theory is based on
44:33
the The world leader, the world, the country, the country that
44:36
leads the world issues or is the head of the world Reserve
44:41
currency at the time. So I went from Great Britain,
44:43
they lost a due to World War 1 or well we're to then it went to
44:47
United States and now he's making the theory that it's
44:49
China. Stepping up the plate from my
44:52
perspective, I believe that. Yes the us could potentially
44:56
lose power of global Reserve currency but through the dollar
45:00
but it could still remain in in in the lead.
45:03
If it Embraces Bitcoin, but in the process of embracing
45:07
Bitcoin, it loses that privilege specifically the United States
45:11
government loses that privilege of creating money out of thin
45:14
air. So what are your thoughts on
45:16
that theory? Do you agree with it?
45:17
What are your thoughts on Ray Dahlia in the first place?
45:21
Well, firstly for Ray dalio congratulations, on an
45:23
incredible career sir you successfully melt the Fiat
45:29
system to its absolute and you're going out on top.
45:33
Up. You had a flus 30% year last
45:37
year and you just fuck the system perfectly?
45:39
Okay. So great job Ray dalio you fuck
45:43
the system better than any of us.
45:44
Be a traitor's of ever fuck the system.
45:46
So congrats. Now if you don't see the lunacy
45:51
of your projections, it means you and I hate to say it, Ryan,
45:58
he's wife want the, the Chinese model business model to succeed.
46:08
I'm going to take the other side of that trade, okay?
46:11
Ray Valeo understands the debt spiral that the USA is in its
46:14
only grade 11 mathematics. He laid it out very clearly in
46:18
his, in his book, in his writings.
46:22
Yeah, it's not that difficult. So, but I will tip my cap to
46:26
you, sir, because you and I see the debt spiral the same way and
46:30
he actually believes in Bitcoin But he hasn't allocated
46:35
Bridgewater to bitcoin because Bitcoin is too small of an asset
46:40
class as it is right now. Okay?
46:42
So at the end of the day, there will be people who are smaller
46:47
than Bridgewater that can take a position in Bitcoin to be a
46:51
meaningful position with respect to their portfolio, that same
46:56
math and realize this spiral DBT.
46:59
Spiral is only grade 11 math and there's ways.
47:03
Solving that there is a way of solving that debt spiral where
47:09
Bitcoin becomes your savings account.
47:12
And your fiat currency account, Fiat currencies in the end in
47:18
and of themselves are not a bad thing.
47:20
They facilitate global trade, they're not good as a savings
47:24
mechanism, but they are good as a mechanism to avoid barter,
47:29
okay? Andrei lays this out beautifully
47:32
in his book and it's like he knows the solution is Bitcoin.
47:35
He just can't put it on paper because he'd probably get, I
47:40
don't know, eliminated. Say eliminated by the US system
47:45
because the biggest hedge fund in the world is seen as
47:49
endorsing Bitcoin. The only solution.
47:51
So there's lots of little, you know, mashing Nations that come
47:55
in here, but the fact of the matter is he played the Fiat
48:00
Ponzi perfectly, he played it like a fiddle, he played
48:05
interest rates. When they went from 14% to down
48:08
to under 1% in the u.s. tenure, then he reversed.
48:12
Course. And he started shorting the same
48:14
bonds, that he was buying all the way down when the rest of
48:18
the world was too silly, to understand what a negative yield
48:22
on bonds means. And he just said, well, the rest
48:25
of the world's a knucklehead, and I'm going to fill their
48:28
boots and that's when you get a plus 30% up here.
48:32
So, once again sir yet played it like a fiddle, I could not have
48:36
even come close to succeeding to the level you have succeeded.
48:41
But if you can sleep at night, Because of your ability to sit
48:46
back and absolutely destroy people's savings because of your
48:51
force, your ability to use leverage to fleece the system.
48:58
All right, sleep at night. You're conflicted.
49:01
Fucking fool. Okay.
49:03
If you have children, you should be ashamed of your performance.
49:08
I have three kids. I care about my children's
49:11
future. This is why I want Bitcoin to
49:16
succeed because fat white guys like me and you Ray dalio fat
49:21
white old guys. Like you have pulled forward
49:25
gains at the expense of our children, you should be ashamed
49:29
of yourself. Taking the benefits of your
49:33
children for self-fulfillment in the Here.
49:37
And Now I'm speaking out against this.
49:41
Do you have the backbone to do the same?
49:44
If you don't, you're a fucking loser.
49:47
Sir. Please send this directly to Ray
49:50
dalio z mail, you are a shameful fucking loser.
49:56
Sorry, I can't say it any other way.
49:59
Thank you, Greg. I feel the same way.
50:02
But and then. So another thing you mention it
50:09
and you know you mentioned it earlier right, there is no other
50:12
tool that can fix the Fiat Ponzi.
50:14
Why is Bitcoin the solution to this if Bitcoin was you know the
50:19
global Reserve currency of Bitcoin was being used, right?
50:22
Why couldn't people like Ray dalio?
50:24
Do what he he did in the Fiat system.
50:31
Okay, we have to be careful because Ray dalio you'll started
50:36
his which called risk parity way before Bitcoin was conceived,
50:43
okay? And Ray dalio strategy worked
50:48
very well with all the available tools that were you know that
50:55
lived at the time Bitcoin was invented or not even invented.
50:59
I believe it was. Discovered 13 years ago and it's
51:04
grown to an asset size right now, of slightly more than 350
51:09
billion dollars but to understand how insignificant
51:13
that asset size is to a levered hedge fund.
51:17
Like Bridgewater, it's not surprising that he can't use
51:21
that tool, it's just too small, if he got into Bitcoin in any
51:26
sort of size, he would dominate Nate the market and he can't
51:32
manage his risk that way. So I'm not blaming mr.
51:35
Dally 04. Not embracing Bitcoin over the
51:39
history of his hedge fund. What I am blaming mr.
51:42
Dahle 04 is not coming out and saying that Bitcoin is the
51:46
solution to the Ponzi that he made all his money on between
51:51
1990 and 2020. He knows the answer, he wrote a
51:56
book on it, But there's certain people that are pulling his
52:01
strings that say, well Ray come on, the Fiat system is your
52:06
life, blood. You can't stop us in the heart
52:09
after you've made a career on the Fiat system and perhaps that
52:13
sinking in. I'm just Voicing my opinion,
52:17
that if he had a backbone, he would tell the truth.
52:20
And I guess maybe, as a naive Canadian, I would assume that
52:25
there's a lot of people hop here in Canada.
52:28
That would actually tell the truth.
52:29
I would hope that there's that many in the United States.
52:32
They would tell the truth. I don't know if a lot of them
52:35
live on Wall Street, but there's guys like Larry Lepard who lives
52:39
in Boston, that would tell the truth, Okay?
52:42
So, Man. Oh man, this is not easy for me
52:46
to say this because I was in a somewhat similar position to mr.
52:49
Dahle. Why I never was nearly as
52:51
successful as he was but, you know, I didn't, okay.
52:54
I'm trying to make amends, I want this system to succeed
52:58
because I believe it will ensure the continuity of the freedom of
53:03
the United States for the generations of my children and
53:07
my grandchildren. I don't hear him talking that
53:11
way. That often he's looking in the
53:13
rearview mirror. I prefer to look out the
53:16
windshield and try and plan for a future for my kids.
53:21
Jeff Booth is exactly the same way.
53:24
Okay, we're trying to design a system that is beneficial
53:29
regardless of class that cantillon effect whatever you
53:34
want to call it, it allows everybody in the world and equal
53:38
shot at A store a value that is colorblind.
53:44
It's, you know, it is beautiful. It's agnostic to some of the
53:49
real problems that we have in our, in our, in our social
53:54
Society right now. So it's not easy.
53:57
Nico, you know it. Right.
53:59
I mean, I'm just very happy to be part of this community.
54:03
That's a bunch of do-gooders. Okay, we're doing good by doing
54:07
well and wall Street's not That at all.
54:11
I worked on Wall Street, for 30 years of my life.
54:13
Wall Street is 99% takers. The Bitcoin Community is 85%
54:20
givers, that's a diametrically opposed Community.
54:25
I'm going with the givers, okay, I want the givers to win because
54:30
hope over evil. I want people to be given a fair
54:37
shot regardless of where they started their lives.
54:41
You don't have to be a silver Spooner to succeed.
54:43
You can succeed at the bottom of the privilege level and that's
54:48
an efficient market. And Bitcoin is my best measuring
54:52
stick on an efficient market like that a fair market.
54:58
Thank you for that. I'm trying to speak the truth.
55:00
Again, I have three kids people. Like, I'm fine.
55:04
I don't need people to, you know, I'm I've done what I need
55:07
to do, but I need to do this for my children.
55:10
And I need to do it for your children.
55:13
I need to uh, the selfish Wall Street Fox that are doing it for
55:17
themselves. I need to call them out and
55:20
start thinking about the children for the kids.
55:23
That's my tag line. Thank you.
55:26
I appreciate that. You know, this one of the one of
55:29
the main motivations, one of the main messages from Simply, it's
55:33
people don't understand, but I think you hit the nail on the
55:35
head, My Generation specifically, the millennial
55:37
generation, the Zoomer generation, we don't own
55:40
anything. Nothing or no more than Russian
55:42
Surfside, it's completely different than the generations
55:44
that came before us. I don't have another option,
55:48
like Bitcoin is, my way is Bitcoins.
55:51
My only hope for a better future without Bitcoin personally, I
55:56
would not be where I am today and I've seen that story play
56:00
out so many times. I opt, he's, you know, being so
56:04
kind sitting on the floor right now producing and same thing.
56:07
I've heard that story happen over and over again.
56:09
We're That story played out on a national level with the country
56:13
of El Salvador. Look at the Wonders, it's done
56:15
there. It's only been legal tender for
56:17
a year and a half. So I agree and you know people
56:22
like yourself Greg like it's what you said and then Jeff is
56:24
the same, right? You don't need to be here.
56:27
You don't need to do this. I need to be here, I don't have
56:30
a choice. There is no choice for me.
56:32
It's either Bitcoin or slavery. We've said that many times on
56:35
the show but I want to end the show because we're coming up on
56:38
the outer our marks. We got like, 15 minutes Left or
56:40
so. I want to I want to turn it a
56:42
little bit bullish and I want to confirm one of your tweets and I
56:47
want you guys to pay attention to the date, right?
56:50
Sorry. In this view, it doesn't show
56:51
the dates. Let me zoom out.
56:52
So the date it says here, it's May 19, 20 21 and you say, hey
56:56
World investors. Global debt is a u.s. four
56:59
hundred trillion dollar asset. That is programmed to debase
57:02
bitcoin is a sub 1 trillion dollar asset, that is programmed
57:06
as the most secure store value ever created.
57:08
Now, this was before, This crazy and use that a lot of people
57:12
weren't paying attention to, but Black Rock, which either either
57:16
has 18 trillion or eleven trillion dollars under assets.
57:18
I forget which one announced that 11 offer, there we go,
57:22
announce it is going to offer Bitcoin to its institutional
57:26
clients. So Greg is was you're pretty
57:29
this your prediction playing out and I just want to add you said
57:32
this a year before, Black Rock even said anything and on top of
57:36
BlackRock, it's also Fidelity that is jumping in as well,
57:39
right? So, is this happening?
57:42
Is this what you're talking about?
57:44
It, are you seeing? Are you finally, seeing the
57:47
institutional interest? It's also very curious to is
57:50
because they waited for a 70% downturn before they threw their
57:54
gloves in the ring. Well, that's okay.
57:57
So thank you for pointing at that tweet.
58:00
Yes, in a nutshell happening. And I need to reverse the order
58:05
that you laid it out black rocks, not doing it of their own
58:09
volition. Black, rock is doing it as
58:12
number one, asset allocator in the world, BlackRock is doing it
58:17
because the number five asset allocator in the world Fidelity
58:20
has been studying Bitcoin for over five years, okay, Actually
58:26
Fidelity started mining Bitcoin in something like 2015 as an
58:33
experiment to understand this beautiful technology.
58:36
So, if you're number one, and remember, Larry think the CEO of
58:43
BlackRock number one was against Bitcoin categorically but
58:48
Fidelity didn't care. And they kept studying it, and
58:51
they kept offering it to their clients or started offering it
58:55
to their clients. To the point, where Black Rock,
58:57
which competes against number five said, oh boy, we're going
59:01
to lose clients to the number to the competition.
59:04
If we don't offer Bitcoin as well.
59:07
So I don't believe BlackRock embraced it, like Fidelity.
59:10
I believe black rock had to Out of fear of competitive
59:16
disadvantage, if they weren't in, if they weren't offering it,
59:19
that their clients would go to Fidelity because they wanted to
59:22
get exposure to bitcoin. So yes, my thesis is playing out
59:27
now just one year ago doesn't make a Victory lap.
59:30
Okay I'm playing this over the long run and I noticed a couple
59:34
of I love your comments here in the side.
59:39
You've heard me talk more because someone said, nine
59:42
hundred trillion is the Accessible market and I agree
59:45
with that. So if Bitcoin is less than 1
59:49
trillion, thank you, Delta one. The total addressable market for
59:55
Bitcoin is nine hundred trillion u.s. dollars that includes four
59:59
hundred trillion of debt, which I mentioned in that tweet below,
1:00:04
that is 300 trillion of Real Estate.
1:00:08
Below that hundred trillion of global equities.
1:00:12
So we're up to eight hundred trillion and below that is 100
1:00:16
trillion of other assets including gold.
1:00:19
Yeah, you know that little thing that Shifty Pete is so excited
1:00:22
about but it's never worked properly.
1:00:25
All right, you got 10 trillion of gold, you got currencies
1:00:29
Commodities, everything else. Is another hundred trillion in
1:00:32
total four hundred, plus 300 plus 100.
1:00:35
Plus 100 is nine hundred trillion u.s. dollars?
1:00:38
There's total addressable Market beautiful.
1:00:42
If Bitcoin gets 5% of that, let's run some quick math, five
1:00:47
percent of nine hundred trillion in today's dollars, 45 trillion,
1:00:53
45 trillion /, 21 million Whoa, we're over two million bucks us
1:01:01
per Bitcoin in today's dollars. I don't know, I've never seen a
1:01:05
better asymmetric trade in my life, then the opportunity to
1:01:10
own Bitcoin. I got involved in Bitcoin in
1:01:13
2016. I will tell you from a risk
1:01:16
manager with 30-plus years of experience, Bitcoin is a better
1:01:21
risk, adjusted trade today than it was in 2016.
1:01:26
And the question would be why And I would say, simply it's
1:01:29
operated flawlessly for the last five years from 2016 or six
1:01:34
years. Now, 2016 to 2020 two.
1:01:38
More importantly though, it was the government response to covid
1:01:41
where they printed another 30 trillion dollars.
1:01:47
Of money, out of thin air. All right.
1:01:50
Like people do the math. This is so simple.
1:01:55
If you own 0 Bitcoin, you are exposing yourself to far more
1:02:00
portfolio risk than if you own and there's where I come to 25
1:02:05
percent of your portfolio. That's all I'm asking everybody
1:02:08
in the world to own to 25 percent of their portfolios net
1:02:12
worth in Bitcoin. Why?
1:02:14
Because it's insurance on the Fiat Ponzi.
1:02:17
And the reality is, there's a lot of people that we interact
1:02:21
with. It's a Foss, you're such a bear.
1:02:23
Why wouldn't you own more know? I do own more.
1:02:25
I'm just telling people that don't own any.
1:02:28
You gotta get to 25 percent to protect your future wealth for
1:02:32
your children. That's all I'm saying.
1:02:35
And on the other side of the spectrum, if you have people
1:02:38
that say, they have to be 100% allocated to bitcoin.
1:02:42
Look, I don't manage risk the same way, but the point is my
1:02:47
Datian or even a five percent allocation, if it goes up a
1:02:51
hundredfold, which I think it could again training at 20,000.
1:02:57
I think it could go over 2 million.
1:02:59
That's 100 times. Okay, 100 times upside.
1:03:04
If you own 5% of your portfolio in something that goes 100 times
1:03:09
higher than you're talking real money, you're talking real
1:03:14
wealth generation. The problem is most people will
1:03:19
not take the advice now because they're going to say, oh, I'm
1:03:22
going to wait for it to trade down to 14,000 because I'm so
1:03:25
smart. And then, if it does hit 14,000,
1:03:28
they'll be like, oh boy. I better not buy it now because
1:03:30
the prices going down, people understand, this is a 20-year
1:03:36
trade and investment. This is your insurance on your
1:03:40
future. If you don't get it, I don't
1:03:42
have any more time to spend with.
1:03:44
You don't manage. Your own money, you're too
1:03:47
fucking stupid to do it. Give it to a professional, like
1:03:50
black drock black. Rocket least understands the
1:03:53
benefits of diversification and portfolio diversification bonds
1:03:59
have lost their spot in the sun, very simply, is it surprising
1:04:04
that Ray dalio is riding off into the sunset right now.
1:04:08
In my opinion, not at all. Good on you, sir, you milk the
1:04:12
system. Now, what are you going to do?
1:04:16
Why don't you do something worthwhile for your life?
1:04:18
Right? Why don't you get involved in
1:04:20
Bitcoin for the benefit of the future of the children of the
1:04:24
United States? You lazy, fuck signed, Greg
1:04:28
Faust, xox from Canada. Thanks.
1:04:34
So I think you're absolutely right.
1:04:37
I think five percent even one percent.
1:04:39
If it hundred X is like, you say like I believe also I'm even
1:04:42
more bullish than that. Of course I'm Nico.
1:04:46
Okay, so Greg Even one percent. If it does hundred X that will
1:04:52
outperform the 99% other of your portfolio.
1:04:55
It will just annihilate it even if the 99% goes to 0 that 1%
1:05:01
will make up for all the losses. No problem.
1:05:04
Let's be careful as here's the funny thing, you go because he
1:05:06
get people to own 5% and I've seen it and they own 5% and then
1:05:11
they forget about the other 95% that they own and they're just
1:05:14
focused on this 5% and I'm like, dude guys come on I told you to
1:05:18
own this and we'll talk in. Two years, I'm not asking you to
1:05:22
own it for the next 20 days, because you're going to flip it
1:05:25
back into this worthless Fiat stuff.
1:05:27
I want you to own it as your insurance, policy over the next
1:05:31
20 years and so I'm pretty. I'm pretty good at shutting off
1:05:35
these people. I'm like, guys, if you're
1:05:36
focused on this five percent of your portfolio, but the 95
1:05:40
percent of your portfolio is down 60% and you're worried
1:05:43
about this Bitcoin thing that's down a little bit from the
1:05:46
all-time highs. Your family math.
1:05:49
You're failing risk analysis. So sometimes you just got to
1:05:52
tune them out, right? You go.
1:05:53
You gotta say, look, you're too stupid to manage your own money.
1:05:56
You've proven it to me. So, God has a way of dealing
1:05:59
with people like you. Like, you just, you know, you
1:06:02
just it's the Survivor rival of the fifth going to make it.
1:06:06
So, I hate to be that trash because I want all people to be
1:06:10
able to survive, obviously. But emotions are the worst enemy
1:06:15
to proper risk. A location.
1:06:19
We should all be very thankful that the price of Bitcoin has
1:06:22
come down so that more people who don't have the ability to
1:06:25
acquire it or significant amounts at least investment
1:06:31
dollars, right more Bitcoin than they could.
1:06:34
When the price was say three and a half prior, it's not that
1:06:38
difficult. I just hate people and The
1:06:41
Narrative of people like the stalwart, you know that fucking
1:06:44
dink. Joe wiesenthal out there.
1:06:47
Who was bitching on bitcoin when it was to 320 dollars US.
1:06:54
Per Bitcoin and he was gloating over.
1:06:57
It's over no man those poor people that listen to that flick
1:07:01
the donkey. Okay Joe wiesenthal is too
1:07:04
conflicted key. Yeah, block me again Joe I sent
1:07:08
him, my research paper, we had a conversation, he didn't even
1:07:12
have the dignity to respond to the paper that I sent him about
1:07:17
managing risk, okay? Donkeys like Joe, wise and fall
1:07:22
on Wall. Street are the reason we are the
1:07:26
problems we are in Xox Joe wife, all if you had half a spine get
1:07:32
me on your show. Talk truth rather than talking
1:07:37
bullshit I sell Bitcoin at 320 320, do you never hear about
1:07:44
that? It's all taking on is that
1:07:47
seventy thousand dollars in its come back to twenty thousand
1:07:50
dollars running a victory. The guy is a loser.
1:07:54
He had a backbone. Let's talk about this like
1:07:57
gentlemen, I won't Won't call you a loser, to your face face
1:08:00
until you prove me that you're a loser.
1:08:02
Let's take, let's take on these Wall.
1:08:04
Street conflicted people. Okay, thanks.
1:08:08
Amen. To that.
1:08:08
So final question and I think you know this is a perfect segue
1:08:14
I have a buddy that works at Goldman you know we're very
1:08:17
similar age and I see the same thing.
1:08:20
The hostility you mentioned Bitcoin.
1:08:24
One of the things that I'll never forget this this like
1:08:27
burned in my head. Mind you, this was 2017.
1:08:30
Okay. And I told them like listen, we
1:08:34
Bitcoin has figured out how to separate the monetary policy out
1:08:37
of the hands of humans. Right?
1:08:38
There was a having every four years.
1:08:40
It's set in stone. No one could touch it.
1:08:42
It's a great thing. And he looks, I mean, he's like,
1:08:44
Nico people need monetary policy and I was just looking perplexed
1:08:49
and I've been telling him, you know, 2017.
1:08:52
So it's been five years, you know, Bitcoin what went from, it
1:08:57
was 2017. Gimme 20, scissors, 1000, right?
1:09:00
Had all the way 69,000. That's a 69 x + 5 years.
1:09:04
Nothing, he offered his. Why the hostility?
1:09:08
Why are they acting this way? Greg, you were in the belly of
1:09:10
the Beast. What's going on?
1:09:12
Hopefully, yeah, well, police still a friend of yours.
1:09:16
No, I really don't ever want to lose friendships over over
1:09:20
Bitcoin because all I'm trying to do is help, educate people,
1:09:23
I'm not trying to, you know, dominate their lives or
1:09:26
whatever. But Employees have Goldman Sachs
1:09:30
are paid. I repeat, they are paid, not to
1:09:34
understand Bitcoin which is another way of saying they are
1:09:39
paid to be a bloodsucker on the Fiat system as it exists.
1:09:45
So as a bloodsucker they don't want the Fiat system too.
1:09:51
Decompose because their lifeblood is being a bloodsucker
1:09:57
on that Fiat system. They can't be a bloodsucker on
1:10:01
the Bitcoin ecosystem. He may not even realize it
1:10:05
because he's pretty young Eco. I don't know how old you are but
1:10:08
I'll I would say is when I graduated from my school.
1:10:13
I was 25 years ago. Did not know shit about fuck.
1:10:17
Okay. I knew zero even though I had
1:10:19
this pristine Ivy League Three. And I had four years of McGill,
1:10:23
engineering behind it. I news nothing about how the
1:10:27
world really worked. To the defense of your young
1:10:32
friend. I understand he wants to be a
1:10:36
bloodsucker, that's fine, but he knows nothing about how the real
1:10:40
world really works over time. He will learn how the world
1:10:44
really works and maybe he'll look back on his experience and
1:10:48
say, Amen. I had this opportunity to make a
1:10:51
difference to participate in an ecosystem that was hope and
1:10:56
freedom for the world, but I decided to stay in my white
1:11:00
shoes, Goldman Sachs glass towered office and be a
1:11:04
bloodsucker on the Fiat system. I don't know.
1:11:08
There's people that break away from that.
1:11:11
We have a lot of them in the Bitcoin community that being
1:11:14
said, Bitcoin doesn't care, Bitcoin Will Survive by the
1:11:18
people that embrace He said the people that understand the
1:11:21
beauty of the technology and more importantly like where I
1:11:26
came from, someone asked me this Foss, run a note, you know, the
1:11:29
crazy thing we actually do Faust.
1:11:32
Doesn't run it though. Foss is not smart enough to run
1:11:35
a no, but the companies that I'm involved with 100%, we run
1:11:39
nodes, okay? But I get smart people to work
1:11:43
with me. I'm not smart enough.
1:11:45
I guys say it's real simple, though.
1:11:47
Operate a note, I can barely Eight, my iPhone people.
1:11:50
Okay. Can you please understand?
1:11:52
I grew up with a rotary dial phone.
1:11:54
Like, for me, this iPhone thing is like, the most incredible
1:11:57
beautiful technology I've ever seen, But at the end of the day,
1:12:01
yes I do. Run a node.
1:12:03
I am trying to educate myself to the future.
1:12:08
I grew up without a personal computer, why they didn't
1:12:13
fucking exist. Okay.
1:12:15
Do you guys understand that when I graduated in 1986 from Gil,
1:12:20
there is no such thing as a personal computer for every
1:12:22
student. They did exist, but they were
1:12:25
too expensive to put in the lapse of every purse of every
1:12:28
student. So, just at the end of the day,
1:12:31
understand I've come from a different generation, I'm trying
1:12:34
to figure this shit out. What I do know is the Fiat
1:12:38
system system doesn't work. Hope I can impart that upon you
1:12:43
guys. I'm certain that the Fiat system
1:12:46
is doomed to fail. I do believe Bitcoin is the
1:12:51
solution. I need the hell.
1:12:52
The Young Smart plebs who've grown up with an iPhone in their
1:12:58
hand since they've been a kid because why?
1:13:00
Well, it s, you know, nature for them.
1:13:04
I love you guys. All right.
1:13:06
I love you guys understand that. I just, I, you know, I was
1:13:10
around with a rotary dial phone, literally.
1:13:14
I know you guys probably don't even know what that is, but that
1:13:17
was on our coffee. Table in my dining room.
1:13:22
When I was eating dinner with my family, when I was like in the
1:13:25
1980s, okay? Just the way it is.
1:13:29
Fight the good fight Nico. I really love your audience.
1:13:35
You know I look at a lot of these.
1:13:37
Thank you for some Renault dousset merci.
1:13:41
Beaucoup Mon Ami respect for us. Look I just will say I'm
1:13:47
fighting this fight for me because I care.
1:13:52
I'm not real you, all right. I don't write out in the sunset
1:13:55
with all this Fiat, money packed my bags, and be a really proud
1:13:59
guy because I raped the system. I'm trying to do it a little
1:14:03
differently, Ray Still a chance for you stir.
1:14:08
Make a legacy that matters for the children.
1:14:10
Not for your selfish, little fucking Bridgewater record.
1:14:17
Okay, well done. It was flawed from the do
1:14:22
something different. Different difference for the
1:14:25
world. Thank you so much.
1:14:28
Wow, I had a great time. Greg.
1:14:31
That was that was quite a. That was quite a rip.
1:14:34
I really enjoyed that. At.
1:14:36
Thank you so much for coming on simply Bitcoin IRL.
1:14:39
I will see you in the flesh at Pacific Bitcoin and yeah, man,
1:14:43
awesome, really enjoyed that. Thank you for coming on.
1:14:47
Okay, my pleasure. Thanks for having me, brother.
1:14:49
We'll see you in Pacific Bitcoin.
1:14:52
Wrap it up, guys. See you tomorrow.