BTFD? Understanding Bonds, Debt, Markets & Bitcoin

[0:03] Yo, welcome back to another episode of
[0:07] the Jack Malers Show. I am your host,
[0:10] Jack, and you are listening to another
[0:12] episode of Mailbag Monday, episode 103.
[0:18] A lot going on, so much to talk about.
[0:22] Let's get right into it, shall we?
[0:24] Ladies and gentlemen, I'm talking to you
[0:26] all at a Bitcoin price of $78,700.
[0:31] Bitcoin's market cap has fallen all the
[0:34] way down to 1.57 trillion US. Our
[0:39] all-time high remains $126,160.
[0:44] That all-time high was made on October
[0:46] 6th, 2025.
[0:49] We're 119 days out from that all-time
[0:51] high. We are 37 and a half% away or not
[0:56] away more than that down from our
[0:59] all-time high. Uh but don't fear uh
[1:04] because we're going to talk about why it
[1:05] happened and uh and what's next. We're
[1:09] going to really break it down today. Um
[1:11] I'm looking at my internet. I am in an
[1:14] undisclosed location. The sun, look at
[1:16] me in the sun. The sun is just beaming
[1:19] on my face.
[1:21] Is that a sign?
[1:24] I don't know. But what I'm worried about
[1:27] is not the sun beaming on my luscious
[1:30] blue eyes. What I'm worried about is my
[1:32] internet connection. So, we're going to
[1:35] hold Dylan accountable for letting me
[1:36] know how my internet is. I see some red
[1:38] bars down there. I really hope the
[1:42] internet here can pull it off. Um,
[1:47] yeah. Well, anyway, I mean, just to cut
[1:50] it to the point, I'm in Costa Rica and
[1:52] there's a wind storm where I am. I'm I'm
[1:54] at a uh human human rights event and uh
[1:59] trying to preach uh the freedom aspects
[2:01] of Bitcoin and I'm in the middle of a
[2:03] windstorm in the jungle. So, anyways, uh
[2:08] before we move on and get this show on
[2:10] the road, really hope the internet
[2:11] persists here for all of you tuning in
[2:13] live. Um, for those of you that are
[2:16] plugging in afterwards or you got me in
[2:18] the podcast apps, you're at the gym,
[2:20] you're driving, what up? What up? Shout
[2:22] out your earbuds. Um,
[2:25] we are at Bitcoin block height. I don't
[2:28] want to forget that.
[2:31] 934,774.
[2:34] All right, Dylan, you haven't pinged me
[2:36] yet, so I assume the internet's working
[2:38] and we're going to get this show on the
[2:39] road. Um the title of today
[2:43] buy the [ __ ] dip question mark
[2:46] understanding bonds debt markets and
[2:49] Bitcoin markets are signal and Bitcoin
[2:52] is truth. What is it all saying? So
[2:55] Bitcoin obviously continues its slide.
[2:58] This feels like a bare market. It feels
[3:00] like we're in the depth of sorrow and
[3:02] pain. risk markets also started to slide
[3:06] as Trump announced his new Fed chair
[3:08] nominee in Warren.
[3:10] And for this episode, what I really
[3:13] wanted to do, listen, this is a show by
[3:15] the common man for the common man, if
[3:19] you want really complex macro, if you
[3:21] want a PhD in macroeconomics,
[3:25] >> you're not necessarily going to get it
[3:26] on this show. This show is about truth,
[3:29] transparency, and education for the
[3:32] people. And so what I thought we would
[3:34] do today is break down some of these
[3:37] fundamental con concepts, really pull on
[3:40] the thread. You've probably heard yields
[3:42] are rising, the bond market is in
[3:44] trouble, Bitcoin is sliding, risk off.
[3:47] What the hell does all of that mean? How
[3:49] does it tie all together? What's going
[3:52] on? What events are leading to Bitcoin
[3:55] selling off? And then what could it mean
[3:57] for Bitcoin in the future? Obviously, we
[3:59] don't know the future, but what could it
[4:01] mean for its future? So, let's move on.
[4:05] The first section of today is titled
[4:07] Japan, the biggest story in finance. Why
[4:11] something happening in Tokyo shows up in
[4:14] your portfolio. So, it's true. This
[4:17] section speaks for itself. The biggest
[4:19] story in macroeconomics right now is
[4:22] Japan. I move on to the next slide. You
[4:25] see this article from Bloomberg. Japan
[4:27] in close contact with the United States
[4:30] on the yen as needed. FX chief says.
[4:34] Next article. Japan's bond market has a
[4:38] warning for America. Sounds intense.
[4:42] Next article. Apollo says risk of yen
[4:46] carry unwind as speculators cut their
[4:50] bets. Apollo Management's Torsten Sllock
[4:53] said there's a risk of the yen carry
[4:55] trade unwinding, citing recent sharp
[4:58] moves in speculative futures
[4:59] positioning. Speculative futures
[5:01] positioning has swung sharply,
[5:03] highlighting that carry trades can
[5:05] unwind quickly even as the broader yen
[5:07] funded footprint remains in place. Okay,
[5:11] these were all recent articles from
[5:13] Bloomberg with a focus on Japan. What's
[5:16] happening Japan is the most important
[5:19] thing going on in markets. It is the
[5:22] most important thing going on in
[5:24] macroeconomics
[5:25] and we need to understand it if we want
[5:28] to understand why prices are doing what
[5:30] they are and arguably why Bitcoin is
[5:33] doing what it is. However, before we do
[5:36] that, I figured we'd best understand the
[5:39] basics. A show by the common man for the
[5:42] common man. So, we're going to take a
[5:44] step back quickly. This section is
[5:46] titled back to basics how the system
[5:49] actually works. Bonds, yields, debt, and
[5:53] understanding the fundamentals. Okay.
[5:56] So, first what I need all you guys to
[5:58] understand is what a government bond is.
[6:02] Simply put, a government bond is a
[6:04] government loan. A bond is just a loan.
[6:07] Okay? Now, they talk about it like
[6:09] you're purchasing bonds and the yields
[6:11] and the curve and then this and then
[6:13] that. It's all a bunch of financial
[6:15] gibberish to make it sound more
[6:17] complicated than it actually is. It's
[6:19] very straightforward. Governments need
[6:22] to borrow money to sustain themselves.
[6:24] Well, not all governments, but almost
[6:27] all governments and especially
[6:29] governments like the United States and
[6:31] Japan. Okay, the the debt to GDP in
[6:34] these countries is immense. We know the
[6:36] United States runs a deficit in the
[6:39] trillions annually. And so the only way
[6:41] that they can pay their bills is by
[6:43] borrowing money. How do they borrow
[6:45] money? Well, they sell bonds. Okay? So a
[6:48] government bond is a government loan.
[6:52] Now, the really critical piece, and we
[6:55] call it bond math, okay? The really
[6:58] critical bond math piece to understand
[7:01] is how they're priced. And I'm not
[7:04] telling you guys to take out your
[7:05] calculator. I'm not telling you guys
[7:08] that you need to go to Stanford and get
[7:09] a PhD. It's really simple. When the
[7:12] yields, which is also the interest rate.
[7:15] So, if you're the buyer of the bond,
[7:17] it's the yield. How much yield am I
[7:19] getting by owning this bond? If you are
[7:21] the seller of the bond, the issuer of
[7:23] the bond, mean meaning the money is
[7:25] being lent to you, it's the interest
[7:27] rate. It's how much do I have to pay to
[7:30] borrow money, right? So, when that
[7:32] number goes up, the yield and the
[7:34] interest rate, same thing. the bond
[7:36] price goes down.
[7:39] Okay, that's the most critical thing you
[7:41] need to understand. Show by the common
[7:43] man, for the common man. That's it.
[7:45] Government bonds are government loans.
[7:47] When yields go up, bond prices go down.
[7:51] Why? Well, I put an example here on this
[7:53] slide. Let's say you bought a bond
[7:55] paying 2%.
[7:57] Let's say the issuer has yields go up to
[7:59] 4%.
[8:01] Who the hell would want to buy your bond
[8:04] yielding 2%?
[8:06] Nobody. Unless I sell you the bond at a
[8:09] discount, I'm not going to pay the same
[8:12] price as a 4% yielding bond as a 2%
[8:15] yielding bond. So, the bond price is
[8:19] discounted because it yields less. So,
[8:22] every time yields go up or the interest
[8:24] rate goes up, bond prices come down.
[8:29] Now, I'm not talking about the Fed
[8:31] interest rates. We'll get into this in a
[8:32] second. The Fed setting rates and bond
[8:35] rates are not the same. Okay, bond rates
[8:38] are set by the market. How much is the
[8:41] market willing to pay for a bond? Like
[8:43] what do they need to get compensated
[8:44] for? Okay, so now just I made this
[8:47] visual just to make it crystal clear.
[8:50] Picture it like a little What are these?
[8:53] Uh is this a seessaw? I think so.
[8:56] Whatever. Picture it like these little
[8:58] seesaw things. When the bond price goes
[9:00] up, that means the bond yields are
[9:03] coming down. Think about it logically.
[9:06] If I list a bond that's yielding 10%.
[9:11] And everybody wants one and there's so
[9:14] much demand, in fact, there's more
[9:16] demand for supply, then the yields will
[9:19] start to come down. I'll say, okay, is
[9:20] there this much demand for 9%, 8%, until
[9:23] the market finds an equilibrium. Now,
[9:26] the inverse is true. If I list a bond
[9:29] for 0%, people say, "I'm not lending you
[9:32] money for no compensation. Why would I
[9:35] give you money without getting paid for
[9:36] it?" Well, then I say, "Okay, fair
[9:39] enough. What about 1%? What about 2%."
[9:41] So, if the demand for bonds goes down,
[9:44] the yields have to go up. Make sense so
[9:48] far? As always, guys, I do Q&A at the
[9:50] end of the show. So, if any of this
[9:53] doesn't make sense, feel free to ask
[9:55] questions in the live chat. Dylan is in
[9:57] there recording it and we can talk about
[9:59] it later. So, we move on. Now, why do
[10:02] bond yields traditionally go up? A lot
[10:05] of this is high level. I'm
[10:07] oversimplifying. Not by a lot. Really,
[10:09] not by a lot, but maybe a little bit.
[10:11] There's going to be someone in the
[10:12] YouTube comments like, "I have a PhD in
[10:14] government bonds and you forgot this
[10:16] point." Yeah, yeah, yeah. I know,
[10:18] smartass. I know I did. But for the
[10:20] common man, this show exists. Okay.
[10:23] There's primarily two reasons, guys,
[10:25] that yields go up. One is fear of
[10:28] inflation. Why would that make sense?
[10:30] Why would yields go up if the market is
[10:32] fearing inflation? Well, I don't want to
[10:35] be paid back in fiat that buys me less
[10:38] stuff. That's why, oh, my eggs, my
[10:42] vacation, my education, my house, my
[10:46] kids' tuition, my car, my life is going
[10:49] to be inflated next year by 2% a year or
[10:54] 5% or 20% if it's nice housing. Well,
[10:57] you're going to need to raise the yield
[10:59] on the bond because I'm lending you
[11:01] money over time and you need to
[11:03] compensate me for the expectation of
[11:06] inflation. So, one of the reasons bond
[11:08] yields go up is an expectation of
[11:10] inflation. The other reason bond yields
[11:13] go up is credit fear, which is very
[11:17] simply put, can the person I'm lending
[11:19] money to actually pay me back.
[11:24] Now, that sounds pretty logical if
[11:27] you're lending to your sketchy uncle.
[11:30] Let's let's take the example that you're
[11:32] lending to Uncle Joe. Uncle Joe wants
[11:35] money because he's gonna start a
[11:36] lemonade stand. But Uncle Joe's kind of
[11:38] a sketchball. He's always showing up to
[11:40] Thanksgiving drunk. Nobody really knows
[11:42] how he covers rent because he's been
[11:43] been unemployed forever. And you say,
[11:45] "Okay, Uncle Joe, listen. I'm happy to
[11:47] lend you the money to start a lemonade
[11:49] stand, but you got to yield me 25% for
[11:53] every month that you're holding on to my
[11:54] money because I just don't really trust
[11:56] the fact that you're going to make me
[11:57] whole, honestly." Now that is the demand
[12:02] to lend Uncle Joe money is not a lot
[12:06] which means the yield has to be a lot to
[12:09] compensate for that. Now going to
[12:11] governments you typically see this in
[12:14] emerging markets in governments that are
[12:18] struggling growth is struggling. debt to
[12:20] GDP is struggling meaning yields are
[12:22] going up even though inflation is down
[12:25] because the people lending money to the
[12:29] government whether they are banks
[12:30] whether they are sovereigns whether they
[12:32] are endowments where whether they are
[12:34] everyday individuals it doesn't matter
[12:36] people lending money to that government
[12:38] is unsure how they are going to get paid
[12:41] back without the government printing
[12:43] money to do so. Okay, these are the two
[12:46] primary reasons yields go up. Okay. Now,
[12:52] how do high yields result in a crisis?
[12:55] Well, this image is pretty
[12:58] straightforward. If you have a high
[13:00] level of debt and the cost for you to
[13:03] have that debt is increasing,
[13:06] then that means you need to increase
[13:08] your budget deficits, which means you
[13:10] have to increase more borrowing, which
[13:12] means you're adding more to your debt,
[13:14] which is going to induce higher yields.
[13:16] Because people are like, "Whoa, the
[13:18] debt's growing. This is spinning out of
[13:20] control. If you expect me to continue to
[13:22] lend to you, I need higher yields. The
[13:25] higher yields cause more increased
[13:27] budget deficits, which cause more
[13:28] borrowing, which cause more debt, which
[13:30] cause higher yields. And we call this a
[13:33] death spiral." A debt death spiral.
[13:36] Okay? And this was always the fear for
[13:39] such an indebted nation like the United
[13:42] States is that we would induce a debt
[13:44] spiral. meaning we have so much debt.
[13:48] One day the markets would be like,
[13:49] "Whoa, this is starting to get risky. I
[13:52] don't know how you're going to pay me
[13:53] back without printing a bunch of money.
[13:56] So, I need higher yields." But the
[13:58] higher yields make it more expensive for
[14:00] the US to borrow. So, in order to pay
[14:02] the higher interest rate, which are the
[14:04] yields, they borrow more, which causes
[14:07] the debt to go up, which causes the
[14:08] yields to go up. And it's cyclical, and
[14:10] it goes and it goes and goes until it
[14:12] all falls apart. So, real quick, this is
[14:16] a really important distinction of just
[14:19] typical market behavior. Now, as a
[14:22] Bitcoiner, all of this is really stupid.
[14:25] I disagree with pretty much all of it. I
[14:28] don't think governments should be able
[14:30] to borrow money that they can print,
[14:32] that is as close to time travel as we've
[14:35] ever seen because they are effectively
[14:37] pulling forward human time, energy, and
[14:40] labor from the future and spending it
[14:42] now without our consent. That is
[14:46] [ __ ] None of this should be
[14:48] financed in my opinion. However, just to
[14:52] understand how the world works, the
[14:53] world doesn't work how Bitcoiners think
[14:55] it should. We're getting there. We're
[14:57] working on it, right? We're actively
[14:59] trying hard and and hey, making a [ __ ]
[15:02] ton of process, a $ 1.5 trillion dollars
[15:04] worth of process uh for a $1.5 trillion
[15:07] or excuse me, for a 17-year-old open
[15:09] source project. We're doing a damn good
[15:11] job. But the world doesn't work
[15:15] logically right now in large part to
[15:17] fiat. So, we need to understand it.
[15:21] Here's what you guys need to know. In
[15:23] developed markets, I'm talking about the
[15:26] US, I'm talking about Japan, I'm talking
[15:28] about Europe, the UK, what we consider
[15:30] the developing world. Traditionally,
[15:33] this is what happens when yields go up,
[15:36] capital flows into the market. That
[15:39] strengthens the currency. It induces
[15:42] confidence in the country. Why? Well, if
[15:46] you believe that the United States is
[15:48] strong, its economy is good, innovation,
[15:51] strong military, etc., etc., etc., if
[15:55] they're willing to pay you five, six,
[15:57] seven, 8% to lend it money, that
[15:59] attracts a lot of investment. The
[16:01] investment comes in, that strengthens
[16:03] the currency, which is the dollar, and
[16:05] it induces confidence in the market in
[16:08] the United States. Now let's take an
[16:10] emerging market, third world country,
[16:12] the developing world, not the developed
[16:15] world, the developing world, you know,
[16:17] maybe markets throughout Latin America
[16:18] like in Argentina. Okay. When yields go
[16:22] up, capital flows out. It doesn't come
[16:26] rushing in. It leaves the market, which
[16:29] actually makes the currency worth less.
[16:32] And that induces more fear, and it
[16:35] becomes this very dangerous spiral.
[16:40] What's really important, guys, is notice
[16:42] yields going up could result in two
[16:45] different things depending on how the
[16:48] market
[16:49] values
[16:51] who they're lending the money to.
[16:54] Now, call it 10 years ago. Oh, yields go
[16:57] up in America. That's a sweet deal. I'm
[16:59] going to buy a [ __ ] ton of bonds. That's
[17:01] the whole point of the 6040 portfolio.
[17:04] I'll take a little bit of equity, which
[17:06] is give me some Amazon, give me some
[17:07] Apple, give me some Facebook, give me
[17:09] some, etc., give me some US technology,
[17:12] and give me some bonds because America
[17:14] is the best country in the world. They
[17:16] solve every problem. They're world
[17:18] reserve currency, and I'll take some of
[17:21] those fresh yields. Now, if yields go up
[17:24] in Argentina, that actually means that
[17:27] Argent that the market fears Argentina
[17:30] isn't going to be able to pay them back.
[17:31] They're going to need to print money.
[17:32] they're going to have a lot of
[17:33] inflation. It actually makes the
[17:35] currency go down which then strengthens
[17:37] all the problems they're trying to
[17:38] overcome and it incites this cyclical
[17:40] fear. Okay, is that well understood?
[17:44] I hope so. So now let's take a look at
[17:48] Japan. Now that we understand what's a
[17:50] bond,
[17:52] what do yields going up mean? How are
[17:54] bonds priced? What's the difference
[17:56] between a bond that's sold from a market
[17:59] that is instilling confidence? Bond
[18:01] yields up, investors come in, currency
[18:04] strengthens, confidence instilled.
[18:06] Versus a market that's shaky. Bond
[18:09] yields up, investors start to panic and
[18:12] leave.
[18:13] Uhoh. which cause the currency which
[18:16] causes the currency to go down which
[18:18] instills more feel fear causes the
[18:20] yields to keep climbing causes money to
[18:23] keep leaving causes the currency to keep
[18:25] crashing
[18:27] okay now let's take a look at Japan this
[18:30] section is titled Japan the straw that's
[18:33] breaking the United States examining
[18:35] what's really going on in Tokyo
[18:38] so first you guys need to understand
[18:40] something kind of foundational to global
[18:42] markets Japan is known known as the
[18:45] foundation of cheap global money. The
[18:48] reason for that is they have had
[18:51] persisted rates at zero or sometimes
[18:54] negative for a very very very long time.
[18:57] Okay? So you could borrow money for free
[19:00] or sometimes you could have borrowed
[19:03] money and gotten paid for it which is
[19:05] insane. It is an insane concept that
[19:07] human beings were being asked to get up
[19:09] and go to work and contribute their
[19:11] time, their energy, their effort, and
[19:13] their labor and be compensated in
[19:15] something that other people were able to
[19:17] borrow for free. It doesn't make any
[19:20] sense. Okay? We're going to ignore the
[19:22] absolutely criminal, malicious, and
[19:25] illogical function of fiat money and
[19:29] just understand that for this very
[19:31] reason that you can get access to lots
[19:33] of money cheaply, Japan became the
[19:36] foundation of cheap global money. And
[19:38] for that reason, they're now facing
[19:40] inflation because there's been so much
[19:42] monetary creation and stimulus in Japan
[19:46] where the people are starting to face
[19:47] inflation that's crushing them and that
[19:49] they can't stand anymore. Okay. Now,
[19:53] this is the shot around the world. It's
[19:55] the rate check. So, this slide is titled
[19:58] rate check dot dot dot. Is this thing
[20:00] on? The Wall Street Journal article that
[20:02] I have screenshotted here reads,
[20:04] "Treasury rate check boosts the yen and
[20:06] weakens the dollar." "US and Japanese
[20:09] authorities are increasingly worried
[20:11] about the yen and could be signaling
[20:13] intervention around the corner." And my
[20:15] subtitle is why is the US watching the
[20:18] yen? It's a good question. I live in
[20:21] Chicago. I'm American. Why does my
[20:23] country care about what's happening in
[20:25] Tokyo? Why does the United States care
[20:28] about the yen? Well,
[20:32] quickly just for definition purposes, a
[20:34] rate check is when the government, so
[20:37] the US Treasury specifically, I'm
[20:39] talking about Scotty B. Scotty Besson in
[20:41] particular, he calls his major banks, in
[20:43] this instance, he called the New York
[20:45] Fed and he asked about currency levels.
[20:48] What he effectively asked for and hit
[20:51] the press wire is if I wanted to buy a
[20:55] bunch of yen to protect it from
[20:57] continuing to fall,
[20:59] what price would I get for my dollars?
[21:02] And it was the shot heard around the
[21:04] world because what he's saying is this
[21:07] is very close to a crisis and I might
[21:10] need to bail Japan out. in a rate check
[21:14] is the technical financial term to tell
[21:18] the market that that's what's going on.
[21:20] Okay. Now, why does the US care about
[21:23] the yen? I live in Chicago. I don't
[21:26] necessarily care what's going on in
[21:27] Tokyo. Not to be a dick. I'm not saying
[21:30] I don't care about everybody. I hope
[21:32] everything's well in Tokyo. But why is
[21:33] my country in particular worried about
[21:36] the yen? Well, now that we understand
[21:38] bonds, yields, and currencies, and how
[21:42] they're directionally traded based on
[21:44] confidence and an ability to pay back
[21:46] what is ultimately a loan. Let's look at
[21:50] this. What you guys are looking at is in
[21:54] blue, you're looking at the US 10-year
[21:57] over the Japanese 10-year, and in red,
[22:00] you're looking at USD over JPY.
[22:04] What am I talking about, guys? They're
[22:07] not supposed to be running in opposite
[22:09] directions.
[22:12] Remember, this is the whole point. If
[22:16] yields go up
[22:18] and the market is confident in you and
[22:20] your country and your debt situation,
[22:22] then capital will rush in, it will
[22:25] strengthen the currency and you will
[22:27] have confidence in your bond market.
[22:30] If the opposite is true and yields go up
[22:34] but the yen starts crashing,
[22:38] that's not good.
[22:41] Okay, this is bad. This smells trouble.
[22:46] And so what I have at the bottom is when
[22:48] developed markets start acting like
[22:50] emergent markets, the streets smell
[22:53] blood. This is behavior that's typical
[22:56] in an emerging market like Argentina,
[22:59] not Japan. This is really bad. Now, why
[23:04] is the market acting like this? Well,
[23:06] for those of you guys that don't know,
[23:08] Japan has the highest debt to GDP in the
[23:12] world. Again, it is a very unique
[23:14] market. Its debt to GDP is 250%.
[23:19] Now, there's some nuance as to why that
[23:22] is. It shouldn't be directly compared to
[23:24] the US because the Bank of Japan
[23:27] actually owns a lot of its debt and they
[23:30] also own a lot of assets. Okay, so we go
[23:34] on. But here's what I need you guys to
[23:36] fundamentally understand for a what I'm
[23:39] calling a normal country that I have in
[23:41] green here on the left. When interest
[23:44] rates go up, money flows in, the
[23:47] currency gets stronger. That means
[23:49] investors trust it. Okay, on the right
[23:53] in red is what I call a fragile country
[23:56] on this slide. When interest rates go up
[23:58] and investors get scared and the
[24:01] currency gets weaker, that means the
[24:03] market is saying, "Oh god, they can't
[24:06] actually pay this back."
[24:09] And what why Japan is the largest story
[24:13] in macro right now and the largest story
[24:15] in finance period is because they are
[24:19] the third largest economy in the world
[24:21] and they're trading like a fragile
[24:23] country.
[24:25] These are the signs and the signals that
[24:27] we are approaching the end of the fiat
[24:30] regime as we know it. I'm not telling
[24:33] you guys that it's necessarily the end
[24:35] of the dollar as we know it. I'm not
[24:37] necessarily telling you guys, you know,
[24:38] people will get all upset. Dude, you're
[24:40] saying Bitcoin is going to be the world
[24:42] reserve currency tomorrow. No, I'm not.
[24:44] Come on. I'm telling you we're living
[24:46] through a monetary regime change. The
[24:50] gig is up. The market is calling bluff.
[24:53] There's too much debt. There's too much
[24:56] money printing. Okay, so we go on. Japan
[25:00] is trapped. Okay, if rates rise, their
[25:05] debt will explode, right? Think about
[25:07] it. Yields rising is rates rising.
[25:12] Banks holding these bonds take massive
[25:14] losses and everything crashes. Like,
[25:18] don't screw a recession. Think extreme
[25:21] depression. Like, bigger than the Great
[25:24] Depression could have even fathomemed.
[25:27] Okay. Now if they print money to cap the
[25:31] yields. So remember investors are
[25:33] demanding higher yields because they
[25:36] don't believe they could pay back
[25:37] without printing. So what Japan can do
[25:39] and we call this yield curve control is
[25:42] when the central bank prints money to
[25:45] buy the bonds which is printing money to
[25:48] lend money to the government. It's the
[25:50] highest form of stimulus obviously and
[25:54] printing money to lend money. Okay, it's
[25:58] highly inflationary. And what will
[26:00] happen then? The yen weakens even
[26:02] further. It ruins their import exports.
[26:06] Inflation goes through the roof and
[26:08] their cred credibility as a country
[26:10] entirely erodess. And so this, you know,
[26:14] we've seen this from Ray Dalio. We've
[26:16] seen this now from every expert in
[26:17] financial markets. It's pretty
[26:19] straightforward.
[26:21] Another way to say this slide is you
[26:22] either print the money. So, you do
[26:25] something like yield curve control where
[26:26] you print a bunch of money where the
[26:28] central bank is the last lender to the
[26:30] US government or the Japanese
[26:33] government. Sorry, I'm front running
[26:34] myself here. They the the Bank of Japan
[26:37] prints the money, lends to the
[26:39] government, extraordinarily inflation,
[26:42] extraordinary levels of inflation, and
[26:43] the debt to GDP and the indebtedness of
[26:45] the country is solved via massive,
[26:48] massive, massive inflation. Gold goes to
[26:50] $20,000 an ounce. Bitcoin goes to a
[26:52] million dollars a coin. and we move on
[26:54] to a new monetary order where fiat
[26:56] currencies are effectively worthless.
[26:59] Or the other is the debt explodes and we
[27:03] live through austerity and everything
[27:05] crashes. Those are the two options.
[27:07] There are no further options anymore.
[27:10] Period. Like I'm like I'm showing you
[27:13] guys breaking it down as simple as I
[27:15] can. We're at the end of the road. Okay.
[27:18] So we go on.
[27:22] Here's an interesting wrinkle to this
[27:25] and how it ties back to the US. So,
[27:27] right now, we understand bonds, we
[27:29] understand yields, we understand how
[27:31] they move and how they're priced. We
[27:32] understand that higher yields means less
[27:34] bond price. A rise in bond price means
[27:37] lower yields. We get all that. We get
[27:39] that Japan is acting like an emerging
[27:40] market. It's acting like a market that's
[27:42] in trouble. It's acting like there's a
[27:45] serious issue in the world's third
[27:46] largest economy. But still, what does
[27:50] this have to do with the United States?
[27:52] Why is Scott Bessent issuing rate checks
[27:55] and ready to bail out another country? I
[27:58] thought it was America first. I thought
[28:00] it was MAGA. Whatever. Whatever idioms
[28:02] you believe in. What's going on? Well,
[28:05] here's what's going on. Japan owns
[28:08] everyone else's stuff. Okay. What this
[28:12] image shows is that Japan has about $5
[28:14] trillion of overseas holdings. Okay. Now
[28:18] again, we've talked about this on the
[28:19] show, but just to reiterate, the reason
[28:22] for this is when the United States is
[28:25] the world reserve currency, they have to
[28:28] run a deficit, a a twin deficit to be
[28:31] clear, meaning they export dollars to
[28:34] everyone else and import everyone else's
[28:36] stuff. And so the United States exports
[28:39] more fiat than they bring in. Okay? Now,
[28:43] what does everyone do with the fiat that
[28:45] they get? China, Japan, like everybody.
[28:49] Well, they buy assets. And again, I'm
[28:51] oversimplifying, not by a lot, but bear
[28:54] with me here. So, Japan, everyone, to be
[28:59] clear, owns a lot of US assets because
[29:02] the way the flow of funds works is the
[29:04] United States prints the dollars. They
[29:05] export them all over the world. The
[29:07] world uses those dollars to buy things.
[29:10] It's like going shopping in the dollar
[29:12] store. What can I buy with these
[29:13] dollars? Well, you can buy US stocks.
[29:16] You can buy land, you can buy US
[29:18] treasuries, and what people have bought
[29:21] is a lot of US assets over time. Since
[29:24] the dollar has been the world reserve
[29:25] currency for a long time and it severed
[29:27] itself from gold in 1971, we've printed
[29:30] a lot of money and all of that gets
[29:34] reinvested primarily back into the US
[29:36] assets. This guys is what leads to
[29:39] traditionally an artificially strong
[29:41] dollar and artificially inflated asset
[29:43] prices in the United States of America.
[29:45] So, if we take a look at how many of
[29:47] Japan's assets are the United States,
[29:50] this is my case in point. It's the
[29:53] overwhelming majority. It's not like,
[29:55] well, Jack, you're exaggerating a little
[29:56] bit. Now, I'm not really exaggerating at
[29:58] all. In fact, I might be underelling it.
[30:01] Japan like is de facto backed by US
[30:05] assets. Think about it that way. If
[30:08] Japan has this giant margin
[30:09] collateralized loan that's getting in
[30:11] trouble, well, the collateral is the
[30:13] United States assets. is the US stock
[30:16] market, is the US housing market, etc.,
[30:18] etc., etc. So, how does this tie to the
[30:22] United States? Well, if Japan starts to
[30:25] repatriate capital back into the
[30:27] country, the US will feel it first. So,
[30:30] I create this slide and we'll reference
[30:32] this and we'll keep building blocks on
[30:34] top of this as we go through the
[30:35] episode. Contagion follow the money. So,
[30:39] first we see JGB stress. That means that
[30:42] there's volatility in the yen. That
[30:44] means that the markets need to delever
[30:47] and that means US stocks and just think
[30:49] about it as risk generally like you've
[30:51] heard this term risk on risk off that
[30:54] means the US stock market risk starts to
[30:57] sell and that's how what happens in
[30:59] Tokyo ends up impacting Wall Street and
[31:02] ends up impacting Washington DC. That's
[31:05] the flow of funds. That's the contagion
[31:08] that's following the money. That's this
[31:10] fiat stack pyramid scheme of cards all
[31:15] collapsing down. That's how it impacts.
[31:17] Okay. So now let's double click into the
[31:21] United States and take a look at what's
[31:22] going on in US markets. So this section
[31:25] is titled the US problem. The US can't
[31:28] stop borrowing. Again guys, the US has
[31:32] to run deficits because it is the world
[31:34] reserve currency. I've said many of
[31:36] times on this show, if I wanted to solve
[31:38] the US's problem, I could solve it in 10
[31:40] seconds. Don't be the world reserve
[31:42] currency. It's because the US is the
[31:45] world reserve currency that they have to
[31:47] run a deficit and export more dollars
[31:49] than they import.
[31:51] You see, a lot of this is the result of
[31:53] explicit decision-making of policy.
[31:56] These politicians will try and tell you
[31:59] that, oh, this is happening because
[32:01] Biden inflation. This is happening
[32:03] because Trump's war on China. They'll
[32:05] blame it on each other to get votes. The
[32:07] reality is this is a policy decision
[32:11] to export the dollar, export our middle
[32:13] class, export manual labor jobs,
[32:17] manufacturing base, a hollowedout
[32:20] United States. That was all a policy
[32:23] decision. It is structural. It is how it
[32:26] works.
[32:28] And so this section, the US problem, the
[32:31] US can't stop borrowing. It's the only
[32:33] way they can pay for themselves. So
[32:35] higher yields don't restore confidence.
[32:38] Higher yields imply crisis. Now, okay,
[32:42] let's take a look. What am I talking
[32:43] about? First, I show this slide. It
[32:46] feels like almost every episode.
[32:48] This is the US spending reality. This is
[32:51] how the United States spends money.
[32:53] Let's go through it quickly. Far left
[32:55] you have healthcare. Health and human
[32:58] services. Okay.
[33:00] Then next you have social security. Then
[33:02] next you have treasury expense. This is
[33:05] the expense of the debt. So the expense
[33:08] of the debt has exceeded a trillion
[33:10] dollars a year guys annualized.
[33:14] So we have so much debt almost $40
[33:16] trillion of debt and the 10-year bond is
[33:21] near 5%. That's really expensive.
[33:24] interest rates are still above 3%.
[33:27] That's really expensive. Okay. Then you
[33:30] have defense, which Trump said is about
[33:32] a trillion dollars, and he wants to
[33:34] spend $1.5 trillion a year in the
[33:37] future. Okay. The point is, none of this
[33:41] is easy to get rid of. None of this is
[33:43] easy to turn off. If Trump says, "I'm
[33:46] eliminating health care and human
[33:48] services. I'm eliminating social
[33:49] security and I'm eliminating defense. He
[33:52] can go a long way in instilling
[33:53] confidence in the US bond market, but
[33:56] the US will riot in the streets and
[33:58] implode and he'll lose the election. Oh,
[34:01] Dylan just DM' me. Hold on.
[34:09] Oh, I'm gonna keep going.
[34:12] Um, it sounds like I'm having internet
[34:15] issues potentially, but we but we keep
[34:17] going. we ride. Um, so the point is this
[34:20] is how we're spending our money. You can
[34:22] see the treasury expense, which is the
[34:24] expense paid to manage all this debt,
[34:27] the interest expense, the yields on the
[34:29] bonds, the interest rate the Fed is
[34:30] setting is super super high now. And by
[34:34] the way, we're spending we're we're we
[34:37] have a uh deficit of about $2 trillion a
[34:39] year. Okay, immense immense deficit. How
[34:44] do we pay for all this? The answer is
[34:48] issuance of bonds.
[34:52] So now we're bringing it all the way
[34:54] back. What is a bond? A bond is just a
[34:56] government loan.
[34:58] When the US is issuing treasuries,
[35:02] they're basically just borrowing money
[35:03] from people to pay all these expenses
[35:05] that I just reviewed to pay the $ 1.5
[35:08] trillion of defense Trump wants, to pay
[35:11] the $1 trillion of interest expense on
[35:12] all this debt, to pay everyone's social
[35:14] security out, to pay everyone's
[35:16] healthare,
[35:18] etc., etc., etc., etc. Right
[35:21] now, gross issuance of treasuries is up
[35:24] to 8 trillion. So the US treasury
[35:27] issuance keeps climbing. Think about all
[35:30] this supply. Think about it. Back to
[35:32] supply and demand, guys. All of this
[35:35] supply needs demand. If supply is
[35:38] growing, demand needs to grow, right?
[35:41] Well, we go on.
[35:44] Now, let's take a look at some really
[35:46] not great things for the United States.
[35:50] I made this chart. The blue is
[35:53] inflation. Okay, this is the Bureau of
[35:56] Labor Statistics inflation. The white is
[36:00] the government 10-year yield.
[36:04] Why is this not a good look for the
[36:07] United States? Well, think about it.
[36:10] When we go back to our slide before, why
[36:13] do yields go up and stay elevated? Well,
[36:15] one of the reasons is fear of inflation,
[36:18] right?
[36:20] But in this what I'm viewing here, so
[36:22] for those listening, inflation has has
[36:25] crashed and it's now back towards the
[36:27] Fed target and there's seemingly no
[36:30] inflation according to people on the
[36:31] internet, right? Inflation's extremely
[36:33] low and Trump is saying inflation has
[36:35] been solved. Inflation hasn't been
[36:36] solved. Cut the rates. Cut the rates.
[36:39] However, if there's no inflation, then
[36:42] why are the bond yields on the 10-year
[36:46] still so high?
[36:49] The thing that's very concerning for the
[36:51] United States is despite inflation going
[36:54] down, yields haven't come down with it.
[36:59] What you guys are looking at is bond
[37:01] yields climbed with inflation, but then
[37:04] when inflation fell, bond yields stayed
[37:06] up. What does this mean about the US
[37:10] bond market? either
[37:13] the market is fearing future inflation,
[37:16] which is highly questionable because
[37:18] when you look at inflation data, there's
[37:20] really not that much inflation at all
[37:22] technically. Now, don't get me started
[37:24] on CPI and what inflation actually is. I
[37:26] know, I know, I know I'm a Bitcoiner,
[37:27] but bear with me. The other option is
[37:30] creditworthiness. Can the US pay me back
[37:33] without printing money, without some
[37:35] form of yield curve control? So, the US
[37:38] is starting to look and feel emerging
[37:42] marketlike, guys.
[37:45] It's starting to get spooky in the
[37:48] United States, bond market specifically,
[37:50] and I guess in the streets in Minnesota,
[37:53] too. Okay, more charts that should make
[37:57] your eyes pop. So, this is titled, "The
[37:59] Fed is cutting, but the market isn't
[38:01] listening. The Fed is bringing down
[38:03] rates which traditionally would bring
[38:05] down the 10-year yields. The 10-year
[38:08] yields are not moving while rates are
[38:11] coming down. Guys, this is unusual.
[38:16] In 2001,
[38:18] we saw Fed funds rate and 10 years year
[38:21] yields correlated. In 2007, in 2019,
[38:24] only in 2024, 25 and now 26 has this
[38:29] pattern changed.
[38:31] Why debt?
[38:34] Too much debt. A lack of confidence in
[38:38] the amount of indebtedness and ability
[38:40] to pay it back. Either there has to be
[38:42] inflation, there has to be yield curve
[38:44] control, there has to be something. The
[38:47] bond market is starting to fall apart.
[38:49] And again, remember the bond debt
[38:52] spiral, the the the debt uh spiral that
[38:55] we talked about where if the yields go
[38:57] up, that increases the expense to borrow
[38:59] money, which means you need to borrow
[39:00] more money to pay off that increased
[39:02] expense, which means your debts
[39:03] increased, which means the yields go up,
[39:05] which means you borrow more money, and
[39:07] it goes on and on and on until it
[39:09] collapses. And we're getting to the
[39:11] point where the US is starting to look a
[39:13] lot like Argentina when you pull up
[39:14] these charts. Okay, so I'm updating my
[39:18] contagion follow the money slide. Okay,
[39:22] step one, JGB stress, which causes yen
[39:27] volatility, which causes a deleveraging,
[39:30] which causes the US stock market to sell
[39:32] off, which causes the US bond market to
[39:34] sell off, which like we know when bonds
[39:38] sell and go down, yields rise, which
[39:42] causes risk off. Okay, that is how Tokyo
[39:47] gets to Wall Street gets to Bitcoin.
[39:50] Okay, that is how we tie it all
[39:52] together. And when you hear people say
[39:55] Bitcoin's risk off, it's leading the
[39:58] stock market. For those of you that want
[40:01] to understand what exactly that means,
[40:04] well, this is exactly what it means.
[40:06] When the market gets risk off like this,
[40:10] Bitcoin sells off first. And so we've
[40:12] talked about this on this show.
[40:15] Listen, as Bitcoiners, we know it's the
[40:18] best money of all time. We know it is
[40:21] the ultimate hedge against currency
[40:23] decline. We know it is a better version
[40:25] of gold. However, I've talked about this
[40:28] a bunch and as this tweet shows, this
[40:30] image shows, it's not priced like that
[40:33] yet. Today, Bitcoin is some combination
[40:37] of fiat liquidity plus technology. It's
[40:40] like half gold, half tech stock. Okay?
[40:43] So, it does often trade like the NASDAQ,
[40:47] like technology. And if you think about
[40:49] it, $1 and a half trillion dollars, it's
[40:51] about the size of Tesla. It's just not
[40:54] big enough and not well understood
[40:56] enough by the market to trade like gold.
[40:59] This is why gold has traditionally, and
[41:01] you'll see in a few slides, gold has
[41:03] frontrun liquidity
[41:06] and Bitcoin has responded to the
[41:08] liquidity. This is why their correlation
[41:10] with each other is so low and they never
[41:12] move at the same time. The market
[41:14] doesn't treat them as a solution to the
[41:17] same problem yet. Us Bitcoiners, we all
[41:20] know where the world is going and that
[41:22] Bitcoin is severely underpriced and
[41:24] misunderstood. But why is it trading the
[41:26] way it is? Why did it fall into the
[41:28] 70,000s? It's because the market's
[41:29] getting a little risk off. Bitcoin is
[41:31] trying to tell us something. It's
[41:33] telling us that the strain in Japan is
[41:36] posing very serious issues to the United
[41:38] States. These countries that are
[41:40] developed are starting to act like
[41:42] developing and even Scott Bessant
[41:45] issuing a rate check is like, "Yeah,
[41:48] it's almost time to start printing the
[41:50] money and protecting ourselves." Okay,
[41:53] so the tweet I'm screen sharing here
[41:55] reads, "Bitcoin holders have long viewed
[41:57] it as a hedge against currency decline,
[41:59] but this is not a widespread perception
[42:02] among the general investing public where
[42:04] gold has always been seen as the asset
[42:07] for that and where Bitcoin has been
[42:09] viewed from more than an emerging mark
[42:12] emerging technology angle. Watch this
[42:14] closely. If Bitcoin starts to react to
[42:16] specific dollar moves and the media and
[42:19] public perception of it as protection
[42:21] starts to spread, it would be very
[42:23] important. So I agree with this and
[42:26] basically what he is saying is Bitcoin
[42:28] is not treated like gold is today. We're
[42:32] early. If this starts to change during
[42:35] this really crazy time we're living
[42:38] through, just keep an eye out for it.
[42:40] And the next slide I wanted to show you
[42:42] guys is just Arthur posting about his
[42:45] dollar liquidity chart. So he writes,
[42:48] "Roughly $300 billion fall in dollar
[42:50] liquidity over the past few weeks,
[42:52] driven mostly by a $200 billion rise in
[42:54] the Treasury General account. Government
[42:56] could be raising cash to fund spending
[42:58] in case it shuts down. Bitcoin is
[43:01] falling, not a surprise, given to the
[43:03] fall in dollar liquidity. So again,
[43:05] Bitcoin is an expression of currency
[43:08] debasement. It reacts very sensitively
[43:10] to dollar liquidity and it isn't yet
[43:12] frontr running liquidity because it
[43:14] isn't yet treated like gold. And so in
[43:17] my opinion, what is happening in the
[43:20] Bitcoin price is markets are getting a
[43:22] little nervous. They're getting a little
[43:23] risk off. They're getting a little
[43:24] panicky because of what's happening in
[43:26] Japan, because of what's happening in
[43:28] America. And when you take into account
[43:30] that Bitcoin is not treated like a safe
[43:32] haven like gold yet and dollar liquidity
[43:34] is getting hammered,
[43:36] this explains the price action in
[43:38] Bitcoin. And more importantly, guys, we
[43:41] we are not high time preference people.
[43:43] We are not day traders on this show. And
[43:45] at least I'm not. I don't trade. I don't
[43:47] speculate on short term. I'm here for
[43:49] the long term. More importantly for you
[43:51] guys is hopefully it gives you a better
[43:53] understanding of how this macroeconomic
[43:55] setup is unfolding. Okay, so let's talk
[44:01] about Trump's new nominee for the Fed
[44:03] chair. Um, Worsh the Hawk, Trump's new
[44:06] Fed chair nominee. So Trump made his uh
[44:10] Fed nominee, Kevin Worsh goes on to
[44:13] whatever, talk about him. Who gives a
[44:14] [ __ ] This Bloomberg article
[44:18] was interesting and the way the markets
[44:20] reacted was interesting. Gold sold off,
[44:21] Bitcoin sold off, tech stocks sold off
[44:23] on the announcement of this guy becoming
[44:26] the next Fed chair. So this Bloomberg
[44:28] article reads, "Markets are reacting to
[44:30] the prospect of Kevin Walsh as Fed chair
[44:32] by selling stocks and US treasuries
[44:34] while buying the dollar." Okay. Now what
[44:38] this is typically called is hawkish. So
[44:42] they use these terms hawkish and
[44:44] doubbish. Okay. Again, by the common
[44:47] man, for the common man. That's what
[44:49] this show is all about.
[44:51] Hawkish means tightening of policy,
[44:54] tightening of monetary um liquidity,
[44:58] meaning bad for assets, bad for risk,
[45:00] pushing forward a potential austerity.
[45:03] Okay. Now, doubbish means printing a lot
[45:07] of money, uh good for assets, but causes
[45:11] things like inflation. There's no good
[45:13] or bad side really, but the market read
[45:15] this guy as hawkish and started selling
[45:18] everything because he was nominated. So
[45:20] the question is, is he going to tighten
[45:22] monetary policy? Is he going to raise
[45:24] rates? Is he going to shrink the Fed's
[45:26] balance sheet? Is this really bad for
[45:28] assets? Is what Bitcoin is telling us
[45:30] that this is really bad for liquidity,
[45:32] for Bitcoin, for stocks, and that we're
[45:34] going to go into some form of
[45:36] recessionary austerity, Great
[45:37] Depression? I'm here to tell you, no.
[45:41] Like the math is the math, guys. I don't
[45:44] give a [ __ ] what this guy said 10 years
[45:47] ago.
[45:50] What we just walked through is the math.
[45:53] Numbers don't lie. Energy doesn't lie.
[45:55] You can't cheat mother nature forever.
[46:00] So Stanley Ducken Miller, which is this
[46:02] guy's mentor. Okay. Stanley Ducken
[46:05] Miller says Kevin Worsh is not a
[46:07] permanent policy hawk. Fed chair nominee
[46:09] believes you can have growth without
[46:11] inflation according to his longtime
[46:13] mentor. So really interesting that
[46:16] Stanley Ducken Miller probably by the
[46:18] direction of the United States of
[46:19] America issued a press release saying
[46:22] hey I taught this guy for the record
[46:25] he's not necessarily a hawk.
[46:29] Next
[46:30] Mark Andre from A16Z. This is a
[46:34] fantastically good choice. I've known
[46:35] Kevin for 30 years. He combines great
[46:37] insight in economics and finance with
[46:39] keen understanding of technology and
[46:41] business. There's nobody more qualified
[46:43] for this job at this moment of profound
[46:44] technological and economic change. Okay,
[46:47] the reason I included Marker Andre's
[46:48] opinion is he is like the king of AI. AI
[46:51] needs a lot of money printing. AI needs
[46:53] government subsidy and government backs
[46:55] stop. AI is considered a national
[46:57] security threat and cannot survive with
[47:00] a Fed chair that will restrict monetary
[47:04] policy. So again, is this guy going to
[47:07] be a hawk? Absolutely not. Next, Trump
[47:12] jokes about suing Kevin Walsh if he
[47:15] doesn't lower interest rates. This is
[47:16] from the Wall Street Journal. Okay.
[47:18] Trump is already threatening this guy
[47:21] before his first day on the job. Next
[47:24] from Luke Groman. Japan has already been
[47:26] trading like an emerging market for
[47:28] months. JGB yields up, but the JPY is
[47:31] down. So, all of that that we just went
[47:33] over, their yields are up, their
[47:34] currency is down. and you want to sell
[47:36] your gold because the new Fed chairman
[47:38] was hawkish in 2011,
[47:41] 15 years ago. And he attaches the meme
[47:44] that reads, "It's a bold strategy,
[47:46] cotton. Let's see if it pays off for
[47:47] him." I agree with Luke.
[47:50] You're telling me after everything we
[47:53] just reviewed, guys, the state of Japan,
[47:55] how bonds work, how yields work, how
[47:57] indebted these countries are, what the
[47:59] markets are telling us, again, markets
[48:00] are signal. Bitcoin is a truth machine,
[48:03] guys. It's telling us the truth. It's
[48:05] telling us the deep embedded stress
[48:08] that's in the global financial system
[48:10] right now.
[48:12] It's the only free market we have left
[48:14] that's can talk to us and tell us
[48:16] something. By the way, gold is telling
[48:18] us something, too. Just the opposite
[48:19] direction. And eventually they'll
[48:20] invert. I know it's it's frustrating.
[48:23] It's okay. Lower your time preference.
[48:25] They'll invert.
[48:27] But you think that this guy's h you guys
[48:30] have got to be kidding me. So, Bill
[48:32] Miller, love this guy by the way, great
[48:35] follow and investor for what it's worth.
[48:38] Um, he tweets, "All the press about
[48:40] Kevin Worsh looking to shrink the
[48:42] Federal Reserve's balance sheet is a
[48:44] misguided pipe dream unless he wants to
[48:46] crash the economy. It's not a
[48:48] coincidence that the Fed's balance sheet
[48:50] has grown over the long term at the same
[48:52] rate as nominal GDP. Duh. Again, it is
[48:57] just math. You cannot cheat the
[49:00] universe.
[49:03] Period. Period. And so it all comes back
[49:07] to what Ray I I just love this Ray Dalio
[49:10] quote because, you know, when I say it,
[49:12] people go, "Oh, the kid in a hoodie in
[49:15] the closet." But when Ray Dalio says it,
[49:17] people are like, "Holy [ __ ] we're
[49:18] living through a monary regime change."
[49:20] So whatever. I'll just quote Rayalio
[49:21] instead. Rayalio warns that the monetary
[49:24] order is breaking down, leaving us with
[49:26] a terrible choice. Do you print money or
[49:29] let a debt crisis happen?
[49:33] Now, after going through this entire
[49:35] episode so far, do you guys understand
[49:37] hopefully very clearly the choice?
[49:41] The debt crisis is upon us. We can see
[49:43] it in the bond market. We can see the
[49:45] JGB yields go up and the currency JPY go
[49:49] down. We can see US attack inflation,
[49:53] solve for inflation, but the 10-year is
[49:55] still high. And the tenure being high is
[49:58] what causes things like the housing
[50:00] market to be unaffordable. Mortgage
[50:01] rates are too high because the tenure is
[50:03] too high. These are structural issues
[50:06] that scream we are on the brinks of
[50:09] crisis of a debt crisis unless we print
[50:13] the money. And the reason Bitcoin sells
[50:16] off again, it's telling you something.
[50:19] The crisis is upon us. The situation is
[50:22] bad. If only you knew how bad it really
[50:25] was. I don't know how bad it actually
[50:27] is. I'm not a politician. I'm not in the
[50:29] White House. I'm not on Wall Street. But
[50:31] I'm a Bitcoiner and I can pull up a
[50:33] chart, look at Bitcoin's price action,
[50:35] and know how bad it really is. This is
[50:39] why Bitcoin So, let me actually just get
[50:43] to this slide. Um, I don't want to front
[50:45] run myself. So, I have these two uh
[50:48] slides pulled up. So Kathy Wood on the
[50:50] left, she tweeted, "As measured by true
[50:52] inflation, consumer in price inflation
[50:54] has dropped to 086% on a year-over-year
[50:57] basis, breaking significantly below the
[50:59] 2 to 3% range in place for the past two
[51:02] years. In our view, inflation could turn
[51:04] negative, contrary to Black Rockck and
[51:06] PIMCO forecasts." And then Pomp, my good
[51:10] buddy, shout out Pomp, I mean investor,
[51:12] early investor in strike. We just don't
[51:14] agree on all the things. I saw him in El
[51:16] Salvador. he was at the El Salvador
[51:18] conference. Um, but you know, Pomp knows
[51:23] he's shitcoined from time to time. We
[51:26] don't always agree on the same things. I
[51:28] give him plenty of [ __ ] for for his [ __ ]
[51:30] coinery.
[51:32] And uh, he tweeted, "I will pay $1,000
[51:34] in Bitcoin to whoever creates the best
[51:36] montage of the economic experts
[51:38] predicting high inflation and economic
[51:40] crisis due to tariffs. The video must be
[51:42] a minute long, yada yada yada." But
[51:44] anyways, the point is you have these
[51:48] large profiles online that are claiming
[51:51] that there's no inflation. Everything's
[51:54] fine. Well, uh, let me show you guys
[51:57] this. Amazon CEO Jasse says Trump's
[52:00] tariffs have started to creep into
[52:02] prices. Amazon CEO Andy Jasse said
[52:04] President Trump's tariffs has started to
[52:06] creep into prices of some of their
[52:07] items. The sellers tried to absorb the
[52:10] the shock of the tariffs by stocking up
[52:12] ahead of time. Okay. So, let me read you
[52:14] guys this piece from the article. Amazon
[52:17] CEO Andy Jasse said, "President Trump's
[52:20] sweeping tariffs are starting to be
[52:21] reflected in the price of some of their
[52:23] items as sellers weigh how to absorb the
[52:25] shock of the added costs. Amazon, many
[52:28] of its third party merchants
[52:29] prepurchased inventory to try and get
[52:31] ahead of the tariffs and keep prices low
[52:33] for customers, but most of that supply
[52:36] ran out last fall," Jasse said in a
[52:38] Tuesday interview.
[52:40] quote. So, you start to see some of the
[52:42] tariffs creep into some of the prices,
[52:45] some of the items, and you see some of
[52:47] the sellers are deciding that they're
[52:49] passing on these higher costs to
[52:51] consumers in the form of higher prices.
[52:53] Some are are deciding that they'll
[52:55] absorb it to drive demand, and some are
[52:57] doing something in between.
[53:00] But he ends his quote by saying, I think
[53:02] you're starting to see some more of that
[53:04] impact.
[53:05] So for the financial experts online like
[53:08] Pomp is saying make a video saying you
[53:10] know there is no inflation tariffs don't
[53:12] cause inflation. Well to be clear
[53:14] tariffs haven't caused inflation because
[53:16] the US government told large retailers
[53:18] to stockpile a bunch of stuff to protect
[53:21] against what is naturally inflationary.
[53:23] And it sounds like the CEO of Amazon is
[53:26] saying in inflation is upon us. In fact
[53:28] we know inflation is upon us because we
[53:31] can look at commodities markets. We can
[53:32] look at gold. We can look at silver. We
[53:33] can look at copper. We know they front
[53:36] run inflation and inflation is indeed
[53:38] upon us in consumer goods as well. Okay.
[53:41] And so here's my message to you guys and
[53:44] to make sense of all this where we are.
[53:46] Okay. What you're looking at is silver,
[53:49] Bitcoin, and gold during the COVID era.
[53:53] You see this red mark here where it says
[53:55] Bitcoin is dead and gold and silver were
[53:58] kicking Bitcoin's ass. Okay, guys, for
[54:01] those that weren't around, when COVID
[54:03] hit and it was extremely deflationary,
[54:07] was like, "This is going to be a great
[54:08] depression, extreme austerity, we're
[54:10] going to have a debt crisis,
[54:11] everything's going to fail." Bitcoin
[54:13] collapsed all the way to $3,000.
[54:16] Okay, it collapsed 5050, not 15, 50%
[54:21] in one day. You guys think this is bad?
[54:24] Imagine the thing going down by half,
[54:27] cutting in half in one day.
[54:30] That's what happened March 2020.
[54:33] Dead ass serious. Okay. And then as
[54:36] Bitcoiners, we watched gold and silver
[54:39] run and outperform Bitcoin in the coming
[54:42] months. And it guys, it the reason I'm
[54:45] not panicked. I'm not worried. I tell
[54:47] you guys like, guys, just stay focused.
[54:49] Like this is how these markets work.
[54:51] It's because I've lived through this
[54:53] already. This is the exact same thing
[54:55] that I have already lived through this.
[54:59] Gold and silver kicked Bitcoin's ass
[55:02] when liquidity got tight. They front ran
[55:04] the liquidity. Okay. And then the
[55:07] printing came because again, you either
[55:09] collapse the world or you print the
[55:11] money. And when the printing came,
[55:13] Bitcoin whipped everyone's ass. It went
[55:17] from $3,000 a coin to $70,000 a coin.
[55:22] That's over a 20x.
[55:25] over a 20x.
[55:28] Okay,
[55:31] so it depends on where you're counting.
[55:33] Let's say you're taking, you know, the
[55:35] the bottom of this last cycle was around
[55:38] $20,000 and you want to 20x that. That
[55:40] would put us at 400K, 400 to 500K,
[55:44] right? You want to 20x from where we are
[55:45] now. That'll put you at a million
[55:46] dollars a coin. I don't know. I don't
[55:48] know where the top's going to be. I
[55:50] can't predict the future. All I can tell
[55:52] you guys is how markets work and how we
[55:54] can use the past to understand where we
[55:56] are now. You see,
[56:02] so I wanted to show you guys this chart.
[56:05] This is cross asset volatility. So you
[56:08] see equities in red, rates in blue, oil
[56:11] in black, gold in yellow, the FX in
[56:13] light blue, and credit in green. Gold is
[56:18] the volatile asset right now. Now
[56:20] eventually this volatility seeps into
[56:23] the other assets. Again, gold is front
[56:26] running the situation.
[56:29] Once the liquidity comes, gold's
[56:31] volatility goes back down and the rest
[56:33] of these assets volatility goes back up.
[56:36] So my prediction, I'll go back a slide,
[56:38] is Bitcoin will outperform everything by
[56:41] a mile. But it frontuns a crisis in a
[56:44] different way. And I get it. It's
[56:46] frustrating. The world should be piling
[56:48] into Bitcoin because everyone can see
[56:50] what's coming. But the world doesn't
[56:53] understand that Bitcoin is not a
[56:55] monetary tech stock. It's the better
[56:58] version of gold. It's the ultimate
[57:00] money. It's time and energy stored
[57:03] forever. They don't get it like we get
[57:05] it.
[57:07] That's why. So the way the one of the
[57:10] reasons I know what's ahead of us
[57:12] outside of looking at you know the bond
[57:14] market and doing my own analysis one of
[57:16] the reasons I know all these things is
[57:18] because Bitcoin is going down which is
[57:23] front running some type of crisis some
[57:26] type of tech collapse some type of
[57:28] NASDAQ correction
[57:31] and gold is making smashing highs which
[57:34] is front running a lot of money printing
[57:36] from developed nations.
[57:38] Okay,
[57:40] so the last thing I'll end with is
[57:42] gold's volatility is starting to remind
[57:44] me of this chart. This is the Weimar
[57:46] mark. Remember this. People are very
[57:50] familiar with the Weimar and the death
[57:53] of that currency due to hyperinflation,
[57:55] but they forget how volatile it was.
[57:58] Look at the far left. This is from 1914
[58:01] to 1923.
[58:04] Look at how volatile this was. Up and
[58:07] down and up and down and up and down.
[58:09] Guys, this is what it looks like for
[58:11] currencies to collapse. They don't just
[58:13] shut off one day. You're not going to
[58:15] wake up one day, Bitcoin's at a million
[58:17] dollars a coin and the dollar is like
[58:20] not really accepted. That's not how it's
[58:22] going to go. It's going to be extremely
[58:23] volatile. It's going to be extremely
[58:25] painful. This is why you have to be
[58:27] careful. You cannot outlive your means.
[58:31] You have to have a low time preference.
[58:32] You have to think long term. You have to
[58:35] be sovereign. You have to stay humble.
[58:37] This is why if you pull up a gold chart,
[58:40] people are saying, "Oh, gold's the new
[58:41] shitcoin. Uh, it's down 41% in the last
[58:44] three days. How could it be a store of
[58:46] value?" And like, I love making fun of
[58:48] gold bugs like the next guy, right? I um
[58:50] gold is a shitcoin compared to Bitcoin
[58:52] and and I'm down to rag on gold bugs,
[58:54] but I think we're, you know, people that
[58:56] are doing that are missing the forest
[58:58] for the trees here.
[59:00] Gold's price chart is starting to look
[59:02] like the gold Weimar marks chart, which
[59:06] again is telling me that the current
[59:09] fiat regime is coming to an end. Now,
[59:12] this took 10 years to unfold. We're
[59:14] probably on the far left of this. In 10
[59:17] years, what's going to be an ounce of
[59:19] gold in dollar terms? What's going to be
[59:20] a Bitcoin in dollar terms?
[59:23] I mean, look at this chart. It went from
[59:25] one to like a trillion
[59:28] in 10 years.
[59:30] But you have to be prepared for the
[59:32] volatility. This is what currency
[59:34] collapse looks like. We know this from
[59:37] history.
[59:39] Okay, quick company updates before we
[59:41] hop into some Q&A and then I am in Costa
[59:43] Rica for an event and uh I do need to
[59:46] go. So we'll we'll keep it briefish.
[59:48] Although today's definitely not the day
[59:50] to not do Q&A. I'm sure you guys have a
[59:52] lot of questions. Um, so we'll do uh
[59:55] some Q&A after this strike updates. So
[59:58] just real quick,
[60:00] um, shout out George. George onboarded
[60:02] his business and did some business with
[60:04] us at Strike. This tweet, it says,
[60:06] "Well, the good people at Strike Strike
[60:08] again. Jack M, you're the man." George,
[60:10] I I'm I'm showing this because George
[60:12] was looking for his family office, uh,
[60:15] his family's family office. Um, they
[60:17] needed to on board to a Bitcoin company
[60:19] and do some business. And I I've been
[60:22] following George for a while. He's a
[60:24] journalist in the Bitcoin space. And I
[60:25] DM'd him and I said, "Hey dude, if you
[60:27] need help, like you know, Strike serves
[60:30] all these products." And he, long story
[60:32] short, he didn't know because when I
[60:36] started Strike a very long time ago, it
[60:38] had more of a focus on payments and
[60:40] lightning. And now what we've evolved to
[60:42] is we're like becoming the Bitcoin bank
[60:46] for the world. We serve everyone. We
[60:49] serve, you know, small DCA orders, but
[60:52] we serve massive institutions. I mean,
[60:54] today I started working on potentially a
[60:56] hundred million dollar Bitcoin backed
[60:58] loan. So, we serve family offices,
[61:01] institutions, businesses of all shapes
[61:04] and sizes. In fact, we're probably the
[61:06] best to serve when it comes to pricing
[61:09] and our ability to serve globally. So,
[61:11] all the licenses we have and the fiat on
[61:14] and offramps we have, we're probably the
[61:16] best in the world when it comes to
[61:17] Bitcoin. But it's just weird because
[61:20] people don't necessarily know that
[61:21] because they assume we're the same
[61:24] company we were five years ago when I
[61:25] was in my room hacking on what has what
[61:28] is now Strike. So I guess I don't know
[61:32] if this is a product announcement but
[61:33] it's just a reminder like Strike is a
[61:37] Bitcoin institution. We serve
[61:40] businesses, high netw worth individuals,
[61:43] family offices, endowments, etc., etc.,
[61:46] etc. We've onboarded
[61:48] every type of entity you can probably
[61:50] imagine and uh we do massive volume. So
[61:55] just a heads up. I don't know. I was
[61:57] scrolling on Twitter. I was actually at
[61:58] the El Salvador conference and I was
[62:00] like, "What the hell? Why is George not
[62:01] doing business at Strike?" And then he
[62:03] was like, "Oh, I didn't even know you
[62:05] guys support businesses and large
[62:06] volume." I'm like, "Oh my gosh, dude. We
[62:08] have no limits, some of the cheapest
[62:10] pricing. We serve massive institutions."
[62:13] And I thought to myself, "Shit, do
[62:14] people not know? Like, do I have a brand
[62:16] problem? Like, people think we're like a
[62:18] payments company. Meanwhile, we're like
[62:21] a global big institution. So, anyway,
[62:25] hit us up at Strike Private if you're
[62:27] business or large institution. Uh, you
[62:30] want a loan, you want to buy a lot of
[62:31] Bitcoin, you want to sell a lot of
[62:32] Bitcoin. Someone came to us, they need
[62:34] to acquire $50 million worth of Bitcoin
[62:36] over the next six months. We're helping
[62:38] them with that. So, any size, any scale,
[62:41] any entity, doesn't really matter. And
[62:44] uh we're pretty much in every single
[62:46] market all over the world. So definitely
[62:48] reach out, let us know. Um
[62:52] for announcements, today we announced
[62:53] early direct deposits. So if you are
[62:56] eligible in the United States and you do
[62:59] direct deposit with Strike, it now will
[63:00] show up to two days early. So as a
[63:04] reminder, we have no fees and no spread
[63:06] for our direct deposit conversion. So,
[63:08] if you want to buy some Bitcoin with
[63:10] your paycheck, you can get your direct
[63:11] deposit to Strike and convert none of it
[63:13] to Bitcoin. Use Strike to pay your
[63:14] bills, then DCA with that cash. No fees,
[63:18] no spread on your DCA. You can also get
[63:20] your direct deposit and buy some
[63:21] Bitcoin. You could say, "Hey, half my
[63:24] paycheck will go to Strike, half my
[63:25] paycheck will go to Chase." You can say
[63:27] 100% of my paycheck will go to Strike
[63:28] and half of it will turn into Bitcoin.
[63:30] Your paycheck will now show up if you're
[63:32] eligible two days early and you get no
[63:35] fee and no spread on those conversions.
[63:39] So, we're becoming again the Bitcoin
[63:42] bank, guys. Like, you can get your
[63:44] direct deposit, convert some of it to
[63:45] Bitcoin. Eventually, you get a line of
[63:47] credit. We have bill pay already. Start
[63:49] to live your life with fiat in Bitcoin
[63:52] in Bitcoin to as much as you want. I
[63:54] Everyone knows I'm all in on Bitcoin.
[63:56] You don't necessarily have to be. You
[63:57] can be 50% in, 10% in, 5% in, 90% in,
[64:01] but you can pay bills, get your paycheck
[64:03] in. It's becoming like really
[64:05] unbelievable experience. Proud of the
[64:06] team. Okay, these two announcements I'm
[64:09] front running, but this is what's coming
[64:11] up this week. So, for those that don't
[64:12] know, I tell you guys the top secrets
[64:15] about the company that we're about to
[64:16] announce because you guys are loyal and
[64:18] you're tuning in live and I deeply
[64:20] appreciate all the support. So, here are
[64:22] some announcements we're hopeful to
[64:23] announce this week. We're not always
[64:25] perfect, but I have some pretty high
[64:27] confidence in these. One is Alabama. We
[64:30] got our consumer lending license in
[64:32] Alabama. I know Alabama's a state people
[64:34] have been pinging me non-stop. I need a
[64:36] loan. I need a loan. I need a loan.
[64:38] Well, you got it now. Uh well, hold on.
[64:40] I'll probably tweet this out tomorrow.
[64:42] It's not live as I'm talking. It's not.
[64:45] So, bear with me. Um but like any hour
[64:49] now after this, I got to go to a dinner
[64:50] in Costa Rica, but we will launch it.
[64:52] Consumer lending in Alabama. you can
[64:54] borrow against your Bitcoin. The minimum
[64:56] will be $10,000.
[64:58] And then this one, this is just a sneak
[65:01] peek. So, uh, we have been told by New
[65:04] York some very, very good news. Um, and
[65:07] we have started to prepare internally
[65:09] for some very, very good news. And so, a
[65:12] fun way for me to communicate with you
[65:14] guys what this is all about is uh some
[65:16] t-shirt designs Dylan and I have been
[65:18] doing. I told you guys, um, when things
[65:20] actually go live in New York, uh, I'm
[65:22] going to throw a party at Pub Key in New
[65:24] York, we're going to hand out a bunch of
[65:26] free merch that'll be exclusive. Like,
[65:29] you just had to be there when Strike got
[65:31] its bit license. And, uh, we've got
[65:33] these I Love New Yorks, uh, coming out
[65:35] soon. And so, um, there is a very real
[65:38] chance that, uh, that is this week.
[65:41] Could be this week, as soon as this
[65:43] week, if not, you know, next week, but
[65:45] we're right around the corner. So,
[65:48] Strike continues to just crush it. I
[65:50] mean, two-day early direct deposit, got
[65:53] our Alabama license, rolling that out, a
[65:56] bit licensed. It's taken us four years.
[65:58] I mean, it's how you know we're growing
[66:01] into just a extremely credible Bitcoin
[66:04] institution to be able to acquire one of
[66:07] those.
[66:08] So, anyway, just across the board,
[66:11] Strike never stops. Our heads are down.
[66:14] um all the volatility over the weekend.
[66:16] You know, we serve products globally and
[66:18] we serve a lot of Bitcoin products
[66:21] online 247 247 customer support.
[66:23] Software didn't flinch. I mean, we're
[66:25] just here for you guys. And you guys
[66:26] know, you can always DM me, too. And in
[66:29] regards to 21, heads down working. All
[66:33] my focus is on the operating company for
[66:35] 21. And uh yeah, I get it. I get, you
[66:39] know, I I take a lot of [ __ ] on the
[66:41] internet. Like I said, I love it. I love
[66:42] it. I get it. Um, your feedback uh is
[66:45] heard loud and clear and uh we're heads
[66:48] down building
[66:50] uh what we think is going to be
[66:52] incredible business uh that uh we'll
[66:54] share with you guys shortly. So, with
[66:57] that, you got questions and hopefully I
[66:59] got answers. Um I guess I should have
[67:01] put in here with an asterisk. It it
[67:03] depends on what you ask, but um you got
[67:06] questions, I got answers. And uh let's
[67:10] uh blow up my face here, pull up your
[67:13] questions, and uh try and get through
[67:16] them in a timely manner. I must admit,
[67:18] like I said, um I am in Costa Rica, as
[67:22] much as I love the country, I am here to
[67:26] like
[67:27] attend an event. Um
[67:32] so I I I should do that. Uh okay, let's
[67:36] see. Still no pings from Oh jeez. Still
[67:39] no pings from Dylan. So supposedly uh
[67:48] supposedly my internet hung in there, I
[67:50] guess.
[67:52] All right, let's see.
[67:58] Okay, questions.
[68:05] Okay, first question. Yo, what's your
[68:07] opinion on the Fed chair appointment?
[68:09] People seem to be worried he's not going
[68:11] to be keen to print and doesn't like QE.
[68:14] Yeah, we kind of addressed that towards
[68:15] the end of the presentation. I call
[68:17] [ __ ] I think the market is totally
[68:21] misunderstanding the math and the
[68:23] reality. It doesn't really matter what
[68:25] he thinks. And we've talked a lot about
[68:27] this show, things like fiscal dominance.
[68:29] It just doesn't really matter. Listen,
[68:32] uh Trump could think what he wants to
[68:33] think. Besson can think what he wants to
[68:35] think. The reality is there's almost $40
[68:36] trillion worth of debt. The bond market
[68:38] refuses to come down because there's
[68:40] both risks of inflation and risks of
[68:43] getting paid back without printing money
[68:45] to pay bond holders back. You know,
[68:47] there's real rates have to be negative.
[68:49] There's probably yield curve control
[68:50] coming. Japan is on the brink of needing
[68:52] a bailout. Gold is remonetizing in our
[68:56] face. The US is unwind is very forward
[68:59] like screw globalism, we don't care
[69:01] anymore. So, it just doesn't really
[69:04] matter what this guy thinks. Uh, it
[69:08] really doesn't matter. [laughter]
[69:12] So, that's my opinion on this guy. Cool.
[69:14] He he didn't like uh how much money they
[69:17] printed 15 years ago. Well, guess what?
[69:20] Uh, math in the universe don't don't
[69:22] matter. Doesn't care. So, I think he has
[69:26] to print the money. I expect the money
[69:29] will be printed in all sorts of fancy
[69:31] ways. You know, these guys, if you read
[69:33] these articles that I'm linking to, they
[69:36] talk a lot about AI is super
[69:37] deflationary. That level of deflationary
[69:40] impact is going to need a lot of money
[69:41] printing and subsidy and blah blah blah.
[69:44] So, they're justifying it that way.
[69:46] Whatever. It doesn't matter how they
[69:47] justify and how they think about it. All
[69:49] that matters is the math or we go
[69:52] through. Here's the other thing. Bitcoin
[69:54] doesn't necessarily need them to print
[69:56] the money. It's the safest path in my
[69:58] opinion for humanity to cross the
[70:00] bridge. Not that everyone's going to get
[70:02] across safely, but it is the safest of
[70:04] all the bad options. But the other
[70:07] option is just extreme austerity where
[70:10] we go through an extreme extreme extreme
[70:12] extreme depression. But Bitcoin will
[70:15] also end up doing really well there too
[70:17] because money will be worthless, people
[70:19] will be rioting, and you're going to
[70:21] need a physical bare instrument. Imagine
[70:23] needing to travel with your family and
[70:25] seek shelter. What are you going to lug
[70:26] around a bunch of gold? No. Bitcoin will
[70:29] do well there, too. The point is,
[70:31] Bitcoin is the best money. Period. None
[70:33] of this matters if you have a low enough
[70:35] time preference. But what do I think
[70:38] will happen? I do not think the United
[70:39] States will allow a rioting depression
[70:42] that collapses the world. I think they
[70:45] will print the money.
[70:47] So, doesn't really matter what this guy
[70:49] thinks. Uh, Bitcoin seems to be aligning
[70:52] with the four-year cycle versus the
[70:54] inevitable money printing. New Fed chair
[70:55] signals resistance to inflation and
[70:57] balance sheet expansion. What's the
[70:59] market getting wrong? Uh, a little bit
[71:01] of a redundant question. Yeah, the
[71:04] four-year cycle stuff. I just don't buy
[71:06] that uh that a market that's worth
[71:10] trillions of dollars works because of a
[71:12] calendar. Like, Bitcoin doesn't give a
[71:14] [ __ ] about us or how we keep track of
[71:16] time. And so, I just don't buy that. I I
[71:20] made I think I made my case hopefully
[71:22] pretty clear as to what I think's going
[71:24] on in the market. There's some pretty
[71:26] serious stress in government debt
[71:28] markets and they're starting to act like
[71:30] emerging markets and it's only a matter
[71:33] of time before they need a substantial
[71:35] amount of money printing.
[71:37] And now we're also starting to see signs
[71:40] of inflation coming back. The CEO of
[71:42] Amazon said, "Don't look at inflation
[71:44] numbers and be proud. Look at inflation
[71:46] numbers and thank all the large
[71:47] retailers for buying wholesale supplies
[71:50] when Trump announced tariffs." But we're
[71:52] out of that. And now consumers are going
[71:55] to have to start facing the wrath of
[71:57] inflation again. And so it's like I
[72:02] yeah, they're going to have to run it
[72:03] super hot. They're going to have to
[72:06] print a lot of money. Inflation, if they
[72:08] run inflation really high for a
[72:10] consecutive amount of years, then being
[72:13] $40 trillion in debt doesn't really
[72:15] matter anymore if inflation's like 20%
[72:17] for five straight years. But Bitcoin is
[72:20] going to be worth millions of dollars by
[72:23] that point.
[72:24] Um, okay.
[72:28] Oh, yes. I've been tagged in this one a
[72:30] lot. I'm glad you put this one in here,
[72:31] Dylan. Does Howard Lutnik and Kevin
[72:34] Worsh being mentioned in the Epstein
[72:36] files affect the outlook of Bitcoin? Um,
[72:39] no, of course not. Um, listen,
[72:44] Bitcoin is an open source project,
[72:46] meaning we get to see and audit
[72:49] everything.
[72:52] We can look at the code. If they
[72:56] implemented a backdoor, if they
[72:59] implemented something that was nefarious
[73:02] and malicious and destructive, we'd be
[73:05] able to see it. Bitcoin is a public
[73:09] utility. It's open to the world and so
[73:12] we can all see it. Bitcoin is well
[73:15] engineered and functioning and it
[73:18] doesn't matter what emails get leaked.
[73:20] The open source code doesn't change. And
[73:23] then to build on top of that, if you
[73:26] were to say, well, some bad people were
[73:28] involved in Bitcoin in the early days.
[73:30] First of all, I'd question their quote
[73:32] unquote involvement. I don't know what I
[73:34] I actually don't I haven't read the
[73:36] specific
[73:38] um like Epstein funded some Bitcoin
[73:41] developers. I saw that Epstein was an
[73:43] early investor in Blockstream. I guess
[73:45] again I don't want to spread FUD. I
[73:48] didn't really I don't have the time or
[73:51] at least I haven't yet. Maybe on my
[73:53] flight home I'll have the time to like
[73:54] actually read the emails. I've just you
[73:56] know have a coffee in the morning,
[73:58] scroll through Twitter, see what
[73:59] everyone's um rage baiting about. So, I
[74:02] don't really know their involvement in
[74:03] Bitcoin. But also, like, were bad people
[74:07] involved when fire was being invented?
[74:10] Were bad people involved when steel was
[74:12] being invented? Were bad people
[74:14] involved? Like, how good of a person was
[74:17] the person that founded gold? It's like,
[74:22] does it matter? And to be clear, I'm not
[74:26] in any way defending
[74:29] Epstein or any of these people.
[74:31] Actually, let me be super [ __ ] clear.
[74:35] What has transpired with these uh email
[74:39] leaks and all of this data leak?
[74:43] Guys, it's very simple. The current
[74:46] system is disgusting. And for the future
[74:50] of our species and the future of our
[74:53] children, we have to fix it. Period.
[74:57] We are battling the battle for human
[75:00] prosperity in the future for our kids.
[75:05] You have disgusting pedophilic monsters
[75:09] running institutions, governments,
[75:12] countries making extremely important
[75:14] decisions.
[75:16] We have to burn this existing system to
[75:20] the ground.
[75:24] We should not leave in ash left of this
[75:28] pathetic, disgusting system. These
[75:31] people are disgusting.
[75:38] And it is our job. Listen, we did not
[75:41] have a say in what we inherited. I'm
[75:44] young. I did not have a say in the world
[75:47] I inherited. But I'll be damned if I
[75:50] don't have a say in the world that I
[75:53] build, in the world that my kids
[75:55] inherit.
[75:59] This current system of elites, of
[76:02] government,
[76:04] the financial system, all of it,
[76:07] disgusting, pathetic.
[76:11] We have to burn it to the ground and
[76:14] leave not in ash and build back better.
[76:19] Period.
[76:21] That's how I feel about the whole topic.
[76:24] It's that simple. Bitcoin will work.
[76:28] Open source software and distributed
[76:29] systems will prosper. I will be damned.
[76:33] Not that I didn't feel any differently
[76:35] before, but now
[76:38] burn it all to the ground for the future
[76:41] of our kids.
[76:48] But anyways, back to my initial point.
[76:52] Was a bad person involved when fire was
[76:54] invented? It doesn't matter. Fire is a
[76:57] utility. People can benefit from fire.
[77:01] How good of a person were the, you know,
[77:04] early internet pioneers? Does anyone
[77:06] know?
[77:08] I guess the point is Bitcoin is an
[77:10] open-source utility. It's a neutral
[77:12] thing. It doesn't have feelings,
[77:15] emotions, intents. It's just a bunch of
[77:18] code that delivers a very useful utility
[77:21] like water, like fire, like steel.
[77:25] And so, okay, some really awful, like
[77:29] the worst version of us humans
[77:33] took an interest in it a long time ago.
[77:35] Who gives a [ __ ] [ __ ] these people. By
[77:38] the way, the last thing I will let
[77:41] happen to humanity is Jeffrey Epstein
[77:44] rob us humans of the invention that is
[77:47] Bitcoin. That's the last thing I will
[77:50] do. [ __ ] these people. If I have to go
[77:52] on CNBC every single day
[77:56] to ensure that the public knows that
[78:00] that guy has nothing to do with the
[78:04] credibility of this invention and how
[78:07] monumental it is for all of us to be
[78:09] living in this time and making use of
[78:11] this technology. I will do that. I will
[78:14] be damned if this guy's emails from a
[78:17] decade ago get in the way of Bitcoin.
[78:20] Bitcoin doesn't give a [ __ ] and neither
[78:22] should anybody else.
[78:30] Um,
[78:32] question. Bitcoin is a peaceful anarchy.
[78:35] So, what happens to debt when there's no
[78:37] central bank to hide mistakes? I I mean,
[78:40] my prediction is they just inflated
[78:42] away.
[78:45] It's either austerity or they inflated
[78:48] away. So, you know, again, the simple
[78:51] way to think about it is owing someone
[78:52] $40 trillion doesn't that's not really a
[78:55] lot of money if the dollar is pretty
[78:57] much worthless. How do you make it
[78:58] worthless? You continue to debase it.
[79:01] So, it'll be a very soft and slow
[79:03] default via inflation over time. We saw
[79:06] the Weimar mark that took a decade,
[79:08] right? So, I think that there will be
[79:11] default via
[79:14] debasement.
[79:17] That's my prediction. I don't know the
[79:19] future. That's my prediction. Question.
[79:21] I'm debating the ethics of borrowing
[79:23] against my Bitcoin. I'm torn between the
[79:25] Jeff Booth stance where he says, "The
[79:27] more you engage with a broken system,
[79:29] the more energy you give it."
[79:32] Um,
[79:34] yeah. I mean, listen, uh, I've I've been
[79:38] pretty clear and forward on this one.
[79:41] You do whatever you want. Um, above all
[79:43] else, I'm a free market proponent. You
[79:46] know, it's not my job to tell anyone
[79:48] what to do. My company's job is not to
[79:51] tell you guys how to behave, how to
[79:54] finance your life. You know, I believe
[79:56] it's my job to build tools. And it's my
[79:58] company's job to build products. And if
[80:02] our products are good and people like
[80:04] our products and make use of our
[80:05] products, then we will make money. We'll
[80:08] be able to invest in more ideas and we
[80:10] will hopefully change the world in what
[80:12] we believe is the right direction. If
[80:14] our products are bad, then we will lose
[80:16] money. We will go under. My business
[80:17] will collapse and fall apart and I'll
[80:19] need a job. I'll need to apply
[80:21] somewhere.
[80:23] And so that's what I believe. I believe
[80:26] that we are living in this like dual
[80:30] money era where we I was born into fiat
[80:35] and as a teenager I watched the creation
[80:39] of Bitcoin and the world is
[80:41] transitioning from the old system to the
[80:43] new system and my company's job in large
[80:46] part is to give you tools to escape fiat
[80:50] and benefit from Bitcoin but coexist in
[80:52] the time that is right now. That's just
[80:54] my job.
[80:57] At least that's my like that's what my
[80:59] company does, one of my companies does
[81:02] in strike for now.
[81:05] So,
[81:08] um, does that mean that Jeff Booth needs
[81:11] to use my products? No. Jeff Booth can
[81:14] do whatever Jeff Booth wants to do. I
[81:17] don't think
[81:19] um
[81:21] borrowing against your assets is giving
[81:26] energy to the old system. In fact, I
[81:28] actually think the opposite. So, if we
[81:31] have like really reliable and durable
[81:33] credit markets on top of Bitcoin, which
[81:35] allows people to borrow against their
[81:37] Bitcoin in a responsible way, it
[81:39] prevents Bitcoin from being sold in the
[81:41] market. It actually should strengthen
[81:42] the market. Right now, if you need to
[81:45] monetize your Bitcoin to do something,
[81:47] live, buy a house, pay off debt,
[81:49] whatever, pay your taxes, then you have
[81:52] to sell it. And then you also have to
[81:54] pay huge cap gains on it. So, I find it
[81:57] beneficial. I think it strengthens the
[81:59] network. If there's a healthy credit
[82:00] market,
[82:02] obviously, you need to use it
[82:03] responsibly.
[82:06] I'm not telling you to exceed your means
[82:07] and take irresponsible leverage, but
[82:09] that's my opinion.
[82:12] My bud Jawad. I recognize that name. Are
[82:15] these questions real? We've already come
[82:17] after Jawad.
[82:22] Housekeeping's knocking on my door.
[82:25] >> Hi.
[82:28] >> No, it's okay. You want to come on the
[82:29] live stream?
[82:31] >> No, she wasn't interested in the live
[82:34] stream. She was interested in giving me
[82:36] towels.
[82:38] Um, all right. Let's just get to the
[82:40] question. My buddy Jawad says, "Bitcoin
[82:42] just a digital fad for people who can't
[82:44] lift weights.
[82:47] When the grid fails, your magic internet
[82:49] money is worth nothing. Central banks
[82:51] buy gold, not code. Physical is apex.
[82:54] What's your response?"
[82:57] Um, got a ping from a colleague. Okay.
[83:01] Uh, my response to Jawad is, uh, I don't
[83:07] give a [ __ ] what central banks buy. For
[83:10] one, why would I care what central banks
[83:12] are buying? Um, listen, Jawad, which is,
[83:17] by the way, a totally madeup person.
[83:19] There's no way that this person's real
[83:20] at this point. Um, but anyway, to the
[83:24] fake Jawad, here's uh what I would say.
[83:30] Gold already failed
[83:32] and it will fail again. How do I know
[83:34] that? Well, since gold last failed, us
[83:38] in 1971 to be specific, we haven't made
[83:40] it any more decentralized, we haven't
[83:42] made it any faster, we haven't made it
[83:44] any easier to custody, we haven't made
[83:46] it any easier to verify. I cannot submit
[83:49] a pull request, a code change to the
[83:51] GitHub repository of gold on the
[83:54] internet.
[83:56] That's why I don't give a [ __ ] what
[83:59] central banks and large corporations are
[84:01] doing with gold. Because gold failed for
[84:03] the very reasons that it failed last
[84:05] time and will fail again. It is
[84:07] concentrated with government, with
[84:10] central banks and with large
[84:11] corporations.
[84:13] Gold is a monetary asset. It is not also
[84:16] a monetary network. In order to move the
[84:18] gold in today's society where you have
[84:21] mediums and communication channels like
[84:23] the internet, you need to deposit to
[84:24] someone else so that they can give you
[84:26] some balance, some tokenized version,
[84:28] some some digital version so that you
[84:31] can actually move it. I can't transact
[84:34] gold in today's economy with Apple Pay,
[84:36] with tap to pay. I can't hold my net
[84:39] worth in gold because I don't have a
[84:41] vault with armed guards.
[84:44] If I if I tried to take my whole net
[84:46] worth and put it in gold, I had nowhere
[84:47] to put it. I can't travel across borders
[84:49] with it. I can't do anything with it in
[84:51] today's world. And that's why it failed
[84:53] because all the gold got deposited and
[84:54] one day the people that have all the
[84:56] gold said it's not your gold anymore.
[84:59] And so the fact that we're reliving
[85:01] through that mistake again, I I won't
[85:04] fall for it. I'll tell you that much.
[85:06] Bitcoin solves for this exact problem.
[85:10] The core innovation relative to gold
[85:12] that Bitcoin has is very simple. Bitcoin
[85:14] is both a monetary asset and a monetary
[85:18] network. Both. Meaning, Bitcoin is a
[85:22] physical bare instrument just like gold
[85:24] except it's lighter. It's easier to
[85:25] verify. It's easier to store. I can
[85:27] literally store it in my brain as
[85:29] information.
[85:31] Now, it's also a monetary network,
[85:33] meaning I can transact over the inter
[85:35] internet, transact with my phone, move
[85:37] it across borders without having to give
[85:40] it to someone else. It is both. The gold
[85:43] monetary network is humans
[85:47] sailing boats, flying planes, storing it
[85:50] in banks. The Bitcoin monetary network
[85:52] is the software itself.
[85:55] That is the core innovation that is
[85:57] Bitcoin relative to gold. So, I don't
[86:00] care that central banks and a bunch of
[86:03] boomers are remonetizing gold. Gold
[86:05] already failed and it's a rock. It's not
[86:07] software. We can't make it better. I'm
[86:09] not falling for that.
[86:13] Time will tell if I'm right or wrong,
[86:16] but I've been right for the last 17
[86:18] years.
[86:20] Uh, Bitcoin does seven transactions per
[86:23] second and cost $20 per transaction. How
[86:25] is this the future of money? I can't
[86:28] tell if you guys troll me or not. Um,
[86:31] there are like very very principled
[86:35] engineering reasons that Bitcoin cannot
[86:38] do unlimited amounts of transactions at
[86:40] the base layer. If I need to go into
[86:41] this in more detail in the next episode,
[86:43] I will. And so, the way to scale a
[86:46] system like this is to build layers on
[86:49] top of it. The lightning network
[86:51] actually can process far more
[86:53] transactions than something like Visa,
[86:54] believe it or not. So, Bitcoin can scale
[86:58] infinitely better than any other
[87:00] technology that you can think of. And
[87:03] there's many other ways there. There's
[87:05] many second layers, third layers, all
[87:08] sorts of ways to scale Bitcoin.
[87:10] Measuring it at the base layer is either
[87:13] stupid or malicious. But, as I've said
[87:15] in prior episodes, both are not okay. I
[87:18] don't necessarily give people the
[87:20] benefit of the doubt for being stupid
[87:22] when we're talking about engineering
[87:24] critical critical critical technology
[87:26] like Bitcoin. Engineering Bitcoin is
[87:28] like engineering a plane. Would you give
[87:31] someone the benefit of the doubt that
[87:33] made a mistake building your plane if it
[87:35] was going to crash? I think you wouldn't
[87:37] care whether they were stupid or
[87:38] malicious. It needs to work. Being
[87:41] stupid isn't an excuse.
[87:43] So all these people that don't
[87:45] understand critical levels of
[87:47] engineering like Bitcoin might crash and
[87:50] fail and kill us all if I'm using the
[87:53] plane analogy not physically maybe uh if
[87:57] we don't implement very critical and
[88:01] sound engineering constraints. It's that
[88:03] simple. So at this level of critical
[88:06] engineering being stupid is not okay. So
[88:10] people that think like that and advocate
[88:12] for [ __ ] like that, you're either stupid
[88:14] or you're malicious or you just don't
[88:16] know. But then you shouldn't be, you
[88:19] know, contributing and uh and part of
[88:23] technical discussion. But again, I can't
[88:25] tell if you guys trolling me or not.
[88:27] Jack, should I buy Bitcoin now or later?
[88:29] Both. You should work hard, earn more
[88:33] than you consume so that you have money
[88:35] to save, and you should stack sats.
[88:38] Dylan, question for Jack. It feels like
[88:40] you never talk about Bitcoin and the
[88:42] Lightning Network as a payments network
[88:43] these days. Why? We could talk about it.
[88:48] I'm happy to talk about it. I think um
[88:50] the Lightning Network's growth and how
[88:53] it will change the world um I thought it
[88:55] was going to happen far sooner than it
[88:57] is and I was wrong. So, you know, it
[89:01] it's just taking longer than I thought,
[89:03] which is totally okay and uh I'm wrong
[89:05] all the time. It's just really important
[89:07] that you're humble and you admit it. And
[89:09] so I was wrong. And uh the reality of
[89:12] the situation is um there are other
[89:14] things changing the world right now that
[89:16] are pressing my time that my customers
[89:18] want to talk about that you guys want to
[89:20] talk about, but if you want to talk
[89:22] about Lightning, we can talk about it.
[89:24] It's not like I have anything against it
[89:25] or anything. Huge, huge supporter. Okay.
[89:28] Strike questions. How long are the job
[89:30] positions open for on the careers page?
[89:32] I'm in the process of making an
[89:33] application and I don't want to miss it.
[89:35] Uh, each one's different. We're
[89:37] typically able to hire pretty quick. We
[89:38] attract a decent amount of talent. Um,
[89:40] so definitely sooner rather than later
[89:42] if you're looking to apply, but I don't
[89:43] know. There's no real answer there. Um,
[89:46] who are the eligible customers of the
[89:47] early direct deposit that was announced.
[89:50] Um, if you want to see if you're
[89:52] eligible, you can ask your pay payroll
[89:55] provider. Uh, I have here in my notes,
[89:58] um, and ask if they support early direct
[90:00] deposit. I know a decent amount of them
[90:03] do, but uh you can ask your payroll pro
[90:06] payroll provider. Um when loans in
[90:10] Nevada, no timeline. Their license
[90:13] process sucks. Um but we are working on
[90:15] it. We are working on it. Uh why do I
[90:18] have to sign into my bank every time I
[90:19] want to transfer money on Strike? Is
[90:22] this normal? Definitely not. DM us on
[90:24] Twitter or create a support ticket.
[90:26] We'll take a look. We'll fix it. Sorry
[90:28] about that.
[90:30] Uh, how much longer for Strike to get
[90:32] yield on cash going? I'm ready to
[90:33] outperform Bitcoin.
[90:36] That will not outperform Bitcoin. Maybe
[90:38] this little chapter, but lower your time
[90:40] preference, brethren. Lower your time
[90:42] preference. Um,
[90:44] we're working on it. Uh, I would say
[90:48] probably
[90:50] few few months if I had to guess. You
[90:53] know, few months ambitiously.
[90:55] We're months away. It's not not like
[90:57] quarters away, not like years away. Um,
[90:59] it's a it's a extreme top priority for
[91:01] us. So, we're working on it for sure,
[91:03] but it's not like tomorrow. Got to be
[91:06] honest about that. Uh, Strike only works
[91:09] because of Lightning. What happens when
[91:10] Lightning can't scale?
[91:13] I was talking about this earlier. We're
[91:15] not a payments company.
[91:17] Just to give you guys context, we did
[91:21] over 10 billion dollars of volume
[91:23] through our system last year in 2025.
[91:27] That's not payments. Like businesses,
[91:31] institutions, family offices, a lot of
[91:33] Bitcoiners all over the world buying,
[91:36] selling, borrowing. Like we operate at
[91:39] an immense scale. We're not a payments
[91:41] company. Lightning can take as long as
[91:43] it needs to to succeed. We're very
[91:46] profitable. We have a huge balance
[91:47] sheet. Uh we're good. I need to fix that
[91:51] brand that everyone thinks we're a
[91:52] payments company. It's part of our
[91:54] business. It's a very very small part of
[91:56] the you know well over 10 billion
[91:59] dollars that we process. I actually
[92:01] don't know the exact number whether it
[92:03] was 11 or 12 or 13 or 20 billion. I know
[92:05] that we crossed that threshold which is
[92:07] very exciting. Um lightning and payments
[92:10] were like a tiny rounding error. If you
[92:12] deleted it from our volume I wouldn't
[92:14] have even noticed. Uh Jack, I love
[92:17] Strike. Any plans for pricebased DCA
[92:21] tiers? Uh, I want to autostack more uh,
[92:24] Bitcoin when it's lower. It would make
[92:26] Strike the ultimate smart savings
[92:28] account. Um, we'll take a look at this.
[92:32] I know that the product team uh, is in
[92:35] the chat and listening to these and
[92:37] stuff, so I don't think we have an
[92:38] active plan, but we'll take a look. Uh,
[92:41] hey Jack. Personal user since 2021,
[92:44] business user since 2025. Any plans for
[92:46] referral rewards for businesses
[92:48] referring other businesses?
[92:50] I'd be Do we not have that?
[92:55] I would say this, bro.
[92:57] Or uh not bro, whoever you are,
[93:02] DM me on Twitter
[93:05] saying that you asked this question. And
[93:07] if we don't have this feature, I will
[93:10] personally give you a referral bonus for
[93:12] referring the businesses that you have
[93:13] in mind. No problem. Because we should
[93:15] definitely have that if we don't
[93:17] already. So, I will I will do that.
[93:19] Shoot me a DM if we don't. Uh, will
[93:22] Strike have a virtual card that can be
[93:24] added to Apple Wallet to use at any
[93:26] retailer to spend the line of credit?
[93:28] How else would we use the line of
[93:29] credit? We're thinking about building a
[93:32] card. We're continuing to ask you guys
[93:35] for feedback if we should or not.
[93:37] Continuing to explore it. But how would
[93:39] you use it? you would just spend your
[93:40] credit card normally like you do like
[93:42] let's say you have an MX or a Chase
[93:44] credit card or Capital One or whatever
[93:45] you have and then you would pay off that
[93:48] bill
[93:49] um with your Strike line of credit. So
[93:52] Strike has bill pay. Strike can pay
[93:54] bills. So right now all my bills are
[93:56] hooked up to my Strike account, my HOA,
[93:59] my electricity bill, my credit card
[94:00] bills, and the line of credit is a
[94:03] payment option to pay your bills. So
[94:04] when a bill comes in, instead of selling
[94:06] Bitcoin to pay it or using the cash you
[94:08] have on the platform to pay it, Strike
[94:10] will extend the line of credit against
[94:11] the Bitcoin you have and pay the bill
[94:13] for you. That's how.
[94:17] Okay. Oh, more Epstein stuff. I was
[94:19] tagged in this, too, so I'm glad uh
[94:21] Dylan included this. Jack, are you at
[94:23] all concerned about Howard Lutnik's
[94:25] presence in the Epstein files, seeing as
[94:26] how Brandon Lutnick is your close
[94:28] business partner? Um, yeah. I so here
[94:33] let me uh let me pull this in so that
[94:35] this can get clipped on Twitter because
[94:37] I saw people saying like oh you know
[94:40] malers well there's all sorts of people
[94:42] that create conspiracy theories about me
[94:43] I'm co-opted by the deep state um I'm in
[94:48] bed with the devil and now recently it's
[94:51] that you know I'm swimming proximity to
[94:55] Epstein um because Howard Lutnik was in
[94:59] the uh in the files Um, listen, here's
[95:03] my official response to everyone that
[95:06] is, um, tweeting all that stuff. I just
[95:09] want to, um, start by being super
[95:11] factual.
[95:13] So, uh, Brandon Lutnik is not my
[95:15] business partner. Um, I think that the
[95:18] media, the very first article that came
[95:21] out about 21 was very unfortunate
[95:23] because it was a Financial Times article
[95:26] that said Brandon Lutnik leading this
[95:29] new Bitcoin company with Tether and then
[95:32] it came out later that I was the CEO and
[95:36] it made it look like Caner and and
[95:39] Brandon was a co-founder of the business
[95:43] and was a partner of the business and
[95:45] that I was just the CEO, but the FT
[95:49] article was a leak of information, which
[95:52] I have still to this day have no idea
[95:55] how they got set information, but the
[95:57] information that they got was wrong. Uh,
[96:00] Brandon is not a partner on the
[96:02] business. Caner is not a partner to 21.
[96:06] So, I just want to open with facts
[96:08] before I I uh give more more personal
[96:11] nuance.
[96:13] Caner was our spa partner in our banking
[96:16] partner. So what do I mean by that?
[96:18] Caner a spa is we 21 took over an
[96:23] existing public company and you work
[96:25] with a bank for that. So we could have
[96:26] worked with Goldman Sachs or JP Morgan
[96:29] or whatever, right? Like bank, you know,
[96:32] um uh private banking to do this. Now,
[96:36] back in the day and probably still
[96:37] today, these bigger banks weren't
[96:40] interested in working with us. Caner was
[96:43] one of the only they're they're the
[96:44] biggest spa issuer, the biggest crypto,
[96:47] you know, uh, institutional private
[96:49] bank. And so, that's why we worked with
[96:52] them, but they're not a partner. Um,
[96:55] like for example, the board does not
[96:59] involve Brandon Caner, none of that. uh
[97:03] they're not employed, they're not in
[97:05] operations, they're not in our internal
[97:07] communications, they don't have a 21
[97:09] email, they like so and that's just the
[97:12] facts. So whenever I see people say
[97:14] like, "Oh, Jack's business partner is
[97:16] not my business partner." Uh
[97:20] it's just the truth. I It's I think it's
[97:23] just an unfortunate reality of how the
[97:24] media has portrayed it and how you know
[97:28] people on the internet have carried out
[97:30] the story. But it's a super important
[97:32] point like he's not my business partner.
[97:35] Um they were our bank and like I don't
[97:41] talk to Caner on an ongoing basis. You
[97:44] know see him at conferences like have
[97:47] conversations about stuff but uh just to
[97:49] be clear. Okay. Um,
[97:52] so secondly, another thing is if people
[97:55] say like, "Oh, Jack regrets his
[97:58] relationship with Howard, which is
[98:00] Brandon's dad." I've never met Howard
[98:03] Lutnik.
[98:07] Just another fact that the internet
[98:09] should have somewhere in its archives.
[98:11] Um, by the time I was co-founding 21
[98:14] with Tether,
[98:16] Brandon was the chairman of Caner. And
[98:20] so I I went to the Caner offices. I
[98:23] spent some time in New York both with
[98:24] Caner and with other folks on Wall
[98:26] Street doing meetings, raising money,
[98:28] filing for all the [ __ ] that I had to do
[98:31] to build the business up from scratch.
[98:33] And uh Howard wasn't there. So in case
[98:37] it is relevant to the internet, I've
[98:39] never met Howard.
[98:41] So there's another straightup fact. So
[98:45] uh Caner is not my business partner. Um
[98:48] they were our spack partner. We worked
[98:50] with them to stand the business up.
[98:52] They're not on the board. I don't talk
[98:54] to them very often. Um, and I've never
[98:57] met Howard. With all of that being said,
[99:00] I also need to be clear.
[99:03] Brandon has been a nice guy to me.
[99:08] Like, every time that we've needed a
[99:11] favor from the bank, like, "Hey, can you
[99:13] help us meet this filing deadline? Hey,
[99:15] can you tell me, you know, what the
[99:17] convertible bond market looks like?
[99:20] Brandon's picked up the phone. He's been
[99:21] great. Super standup. He's super young.
[99:24] We're very similar in age.
[99:26] So, you know, we I think there's a lot
[99:29] to relate on. So, it's weird. Like, I
[99:32] also this shouldn't be an opportunity
[99:34] for me to be an [ __ ] to a guy who's
[99:38] actually a little younger than me who's
[99:42] I don't know, guys. Like here's another
[99:44] example. I also consider Adam back like
[99:48] a friend. We've been in Bitcoin for
[99:50] about the same amount of time. Adam got
[99:52] into Bitcoin around 2013. I know Satoshi
[99:54] emailed him. He didn't really get in to
[99:57] Bitcoin and take it seriously until much
[99:59] later. Um, and we got into Bitcoin
[100:02] around the same time. We've been to
[100:04] conferences together. I see him here and
[100:05] there. Every time I have a question I
[100:08] want to get his opinion on, I have it I
[100:10] have him on Signal. Sometimes he'll
[100:12] reach out to me. I don't talk to Adam
[100:14] that much, but I would consider the
[100:16] relationship over the years friendly,
[100:18] but like because Adam had a I and I
[100:21] don't even know Adam's extent because
[100:24] Adam had a correspondence with um or or
[100:27] Epstein invested in Adam's company,
[100:29] should I [ __ ] all over Adam?
[100:31] I don't believe so. I don't I'm not I'm
[100:35] not defending Epstein and I'm not I have
[100:37] no idea to extent Adam was involved or
[100:40] not involved and it's not my place to
[100:42] spread FUD. But I guess my overall point
[100:44] is I've never met Hard Lutnik. I have no
[100:48] bad experience with Howard Lutnik
[100:50] because I have no experience with Howard
[100:51] Lutnik. Let the internet tell it. Howard
[100:53] Lutnik is like pulling strings. uh like
[100:56] as I go walk out after this um to go to
[100:59] the event, it's really Howard Lutnik
[101:01] controlling me from like a room. Like
[101:03] I've never met the guy. That's none of
[101:05] that's true. And by the way, Caner and
[101:07] Brandon aren't our business partners.
[101:09] They're not co-founders of the company.
[101:11] They're not on the board. They're not
[101:12] internal to the business. They don't
[101:14] have access to anything. We partnered
[101:16] with them to do a thing a long time ago.
[101:18] And every now and then, we'll run into
[101:20] each other at conferences, say, "What's
[101:22] up? We're similar in age. If I have a
[101:23] question about the bond market, it's one
[101:25] of the people I give a call to sometimes
[101:27] if he wants to know something about
[101:28] Bitcoin, he knows he can shoot me a
[101:30] text. He's been pretty normal. I have no
[101:34] I So
[101:36] that's my stance on it. And you know,
[101:40] the last thing I'll say before I move
[101:42] on, I would say like I I get it. Like I
[101:45] don't take uh like I I've said time and
[101:48] time again, I'm very open to the fact
[101:50] that the Bitcoin community's job is to
[101:53] protect this invention at all costs. It
[101:55] doesn't give a [ __ ] about anyone's
[101:57] feelings about any individual. It
[102:00] doesn't. It just cares about undeniable
[102:02] truth and it needs to be ruthless in
[102:04] protecting it. And I get that. So you
[102:08] guys can ask me whatever questions and
[102:09] it's never offensive. But this one I
[102:12] don't really know what to tell you. Like
[102:14] when people say, "Oh, are you co-opted
[102:16] by like larger people?" And my answer is
[102:21] no. I run 21. I've never met these
[102:25] people you guys have claimed that I've
[102:26] met. And I've these people aren't my
[102:28] business partners. My business partners
[102:31] are Tether are Junk Carlo and Paulo. Jim
[102:34] Carlo's the founder and chairman of
[102:35] Tether. That's my friend. Paulo's the
[102:38] CEO of Tether. That's my friend. Those
[102:41] are my business partners. If you guys
[102:43] have a problem with them, we could talk
[102:46] about that. They're great, brilliant
[102:48] people, and I'm very excited to work
[102:50] with them.
[102:53] Everyone else, there's all these rumors
[102:54] about all this stuff and all all this
[102:56] other crazy [ __ ] And none of it is I I
[103:00] can't I don't even know what to say
[103:02] about it. It's none of it's true. Um, so
[103:06] I guess clip that. That's my response to
[103:09] everyone that thinks I'm like co-opted
[103:10] or whatever. My dad uh has in our
[103:14] kitchen at his house in California,
[103:17] my dad has a thing that's framed that
[103:20] says it's it's basically like all these
[103:22] crazy tweets that us as a family just
[103:24] can't believe. You know, I I was a
[103:28] normal kid, grew up in a suburb from
[103:31] Chicago. People say, "Oh, my, you know,
[103:33] your grandfather was this crazy powerful
[103:36] CME person." My grandfather died broke.
[103:39] My grandfather was the chairman of the
[103:40] Chicago Board of Trade, but he was the
[103:42] chairman before the exchange was big. It
[103:45] wasn't like a crazy like powerful thing.
[103:48] And he died with no money. By the way,
[103:50] what he was the chairman of doesn't even
[103:53] exist anymore.
[103:58] the SIBO, CBOT, CME, like he it doesn't
[104:02] even exist anymore. What he is the
[104:03] chairman of. My dad started a futures
[104:05] brokerage
[104:08] and he doesn't even live in Chicago.
[104:10] People say like, "Oh, that guy's pulling
[104:13] strings in the Chicago financial
[104:15] markets." My dad lives in California.
[104:17] And so in in the kitchen, he collects
[104:19] all these crazy tweets. Like there's one
[104:20] tweet like, "The Morers family is one of
[104:22] the most powerful banking families in
[104:24] the world." And it's just crazy because
[104:27] I was just like a normal suburban kid
[104:31] and my dad just gets a chuckle out of
[104:32] it. You got to laugh at it or else it'd
[104:34] bother you. It's just like this is nuts.
[104:36] No one in my family's ever worked for a
[104:38] bank. My grandfather ran the the Chicago
[104:41] exchange before it was what it is today.
[104:44] Died without any money. Um we just got
[104:48] early into Bitcoin.
[104:50] and I'm a super ambitious person and uh
[104:54] I want to build companies and be a part
[104:57] of this revolution and hopefully
[104:59] contribute in a positive way.
[105:01] So
[105:04] yeah, that's my answer. I don't know.
[105:07] I'll open the chat to see if there's
[105:09] like any follow-ups. That's a sensitive
[105:12] one because I'm I'm like reading the
[105:14] stuff on the internet and I'm like
[105:17] I don't know
[105:19] how to say like everything that is in
[105:22] these emails is disgusting and wrong and
[105:24] we need to burn it all to the ground.
[105:27] But like I can't sit here and [ __ ] on
[105:30] Brandon. Brandon Brandon's been super
[105:32] nice to me. Like help me stand up my
[105:35] business.
[105:37] Uh,
[105:40] anyway, I'll move on. Uh, yo, Dylan,
[105:44] pick me doggy. [laughter] It's weird.
[105:47] Uh, what is Jack's favorite music?
[105:49] Hip-hop, country, house, folk,
[105:51] bluegrass.
[105:53] Um,
[105:55] I would say if I had to pick a genre,
[105:57] it'd be hip-hop
[105:58] if I had to pick. But I listen to a
[106:00] decent amount of stuff nowadays. I
[106:03] listen to uh I've been listening to a
[106:04] lot of flawed mangoes while I've been
[106:07] working. It's a nice vibe. I don't even
[106:09] know what genre that is. Uh I like Fred
[106:12] again, too. So, what would that be?
[106:15] That's not necessarily house, is it?
[106:16] Electronic. But I would say, you know,
[106:19] like brass tax. I got to pick one genre
[106:21] for the rest of my life. It's hip-hop.
[106:23] Not even close.
[106:25] Um, hi Jack. How did you become a
[106:27] professional podcaster?
[106:30] Trick question. I'm not a professional
[106:31] podcaster. Uh, all right, guys. With
[106:34] that, I'm out of here.
[106:37] >> Um,
[106:39] let me check the
[106:42] chat. I'm not going to engage with any
[106:45] of you guys being rude
[106:47] because uh we're not I don't have time
[106:51] for a tough boy moment.
[106:53] Um,
[106:59] let's see what you guys are saying.
[107:10] Yeah.
[107:12] I don't know. Some people don't believe
[107:15] anything I'm saying. I've always
[107:18] struggled with what to do about that. I
[107:20] don't know. It's beyond me. You know, at
[107:22] a certain point,
[107:26] I can only spend my time on so many
[107:28] things. I can't spend all my days trying
[107:29] to convince someone that's convinced
[107:32] that I'm a bad person. It is really
[107:34] weird going from growing up in the
[107:36] suburbs to random people thinking they
[107:38] know who I am and what my life is like
[107:40] and stuff.
[107:43] But whatever, you know, my effort is
[107:46] transparency, truth, honesty, hopping on
[107:48] here every Monday, giving you guys a
[107:50] chance to ask me questions. It's all a
[107:53] brother can do. You know what I mean?
[107:54] And by the way, the last thing I'll say,
[107:56] and I'll end with, it's all about proof
[107:58] of work. Like, it's the same thing with
[108:00] Bitcoin. Like, this is why you you make
[108:02] a Bitcoin transaction, wait six blocks
[108:04] to be mined, is because you let the
[108:07] proof of work build on top of it so that
[108:10] you know it's true and real. And it's
[108:12] the same thing if you guys judge anyone,
[108:14] including myself. Just like let my work
[108:17] speak for itself.
[108:19] Like
[108:22] I like I've got a long resume of
[108:24] Bitcoin. I'm going to continue to doing
[108:26] what I think is right. I'll be wrong
[108:28] about [ __ ] all the time. You guys will
[108:29] call me out on it. I'll fix it. We'll
[108:31] innovate. We'll keep building products.
[108:33] But yeah, I would say if you are in the
[108:38] chat saying you don't believe me and I'm
[108:40] a liar,
[108:42] well, let's just see. Let's just wait
[108:44] and see what email leaks I'm in or not
[108:47] in, or whether I actually build products
[108:49] and help the world or not. Words can't
[108:52] convince you, my work will convince you.
[108:55] Um, all right, with that, I'm out of
[108:58] here. uh off to do some cool [ __ ] uh at
[109:01] this human rights event in Costa Rica.
[109:03] Hopefully orange pill some people. Thank
[109:05] you guys for all the support. This was a
[109:07] fun one. Highly educational, a little
[109:09] long, but hopefully people understood
[109:12] fundamentally bonds and yields and kind
[109:14] of what's going on in Japan and the US.
[109:17] And uh I'll talk to you guys later.