Why Bitcoin Is Ripping Again

[0:02] Yo, welcome back to another episode of
[0:05] the Jack Mer Show. I am your host, Jack,
[0:07] and you are listening to yet another
[0:09] edition of Mail Bag Monday. Ladies and
[0:12] gentlemen,
[0:14] it's got to be a macro week. What a
[0:16] week. What a time. What a time to be
[0:18] alive. Lad,
[0:21] let's get this show on the road. Let me
[0:23] timestamp it because we have a lot to
[0:25] talk about. Ladies and gentlemen, I'm
[0:28] talking to you all at a Bitcoin price of
[0:30] 78,000.
[0:32] Yeah, you heard that right. $78,930
[0:35] per Bitcoin. Bitcoin's market cap back
[0:38] above 1.5 trillion at 1.85
[0:41] trillion US. All-time high remains at
[0:45] $126,160,
[0:47] but we are now only 37.4%
[0:50] off that high. Don't look now. Here
[0:53] comes the coin. Objects in the mirror
[0:56] may be closer than they appear. We made
[0:59] that all-time high on October 6, 2025.
[1:01] It's now been 322 days since Bitcoin hit
[1:05] its all-time high. The last Bitcoin
[1:08] block height since I hit stream was
[1:11] block height 963,911.
[1:14] Tik Tok next block on our way to 1
[1:17] million. Okay, boys and girls, this is
[1:20] episode 132 of Mailbag Monday. All
[1:23] signal, no noise. every Monday, 6 pm
[1:26] Eastern. And today's title is, as such,
[1:29] why Bitcoin is ripping again.
[1:33] What is going on? Over the last few
[1:35] weeks, we've been doing Bitcoin 101,
[1:37] some fundamental stuff, and a lot of the
[1:39] comments, dude, we love you. We like the
[1:42] education,
[1:44] but it's got to be macro. We got to get
[1:46] back to big swinging.
[1:50] Hey, kid show. Kid show. We got to get
[1:52] back to uh what are we the the chief
[1:55] volatility officer Scott Bessant uh the
[1:58] CFO of the United States of America
[2:00] making moves. Uh bond market is a mess.
[2:03] We're living through uh sovereign debt
[2:06] crisis. I've been saying it for months.
[2:08] So much of what we've been talking about
[2:10] on this show for months, for months is
[2:13] now coming to fruition. It's coming to
[2:15] reality. Uh this is the type of of time
[2:19] of era of chapter I can feel it in my
[2:21] bones where we look like geniuses when
[2:23] all we've been doing is stand humble and
[2:25] stacking sats. So if you've been looking
[2:28] for a deep dive into the macro really
[2:31] understanding what the hell is a buyback
[2:33] program? What is the treasury actually
[2:36] buying? Why are they doing this thing
[2:37] these things? What the hell does this
[2:39] have to do with Japan? Somehow it's
[2:41] related to AI and why did Bitcoin go up
[2:45] at the very second that it did? It
[2:47] seemed gold went up at that same second,
[2:49] but Bitcoin kicked gold's butt this time
[2:51] around. I'm going to do all of it. We're
[2:54] going to get into all of it. I would
[2:56] never let you guys down. So, without
[2:57] further ado, let's go. Why Bitcoin is
[3:01] ripping the bond market may have forced
[3:02] Washington's hand. Okay, here we go.
[3:06] What the US Treasury just did. So this
[3:09] on the left is Treasury announces
[3:12] increased sizes of nominal long-end
[3:14] liquidity support buybacks beginning
[3:16] September 9th. Okay. So to be clear, the
[3:20] Treasury actually hasn't purchased
[3:21] anything yet. They announced that
[3:23] they've doubled the program and their
[3:26] next opportunity would be September 9th,
[3:28] which is still some weeks away. However,
[3:31] on the right, what you guys are looking
[3:32] at is in the white, that's Bitcoin's
[3:35] price. In the blue is gold's price and
[3:39] in the green is the dollar index. Okay?
[3:42] And you can tell the performance that I
[3:45] put on the bottom left of the screen at
[3:48] this one very moment when the US
[3:50] Treasury made this announcement on
[3:52] August 19th, 2026. Bitcoin ripped 25.2%,
[3:58] gold ripped 6.1%
[4:01] and the dollar index fell 60 basis
[4:04] points. All at the same second. Let me
[4:07] zoom in so you guys can see. Oh, shoot.
[4:10] Here we go. Not a professional
[4:11] podcaster. Let me zoom in. You guys see
[4:14] literally at the same second. This is
[4:16] not a coincidence. Why did Bitcoin rip?
[4:19] I mean, it's you cannot
[4:22] really justify anything else. Now, it's
[4:24] never as simple as just one thing.
[4:26] There's all sorts of stuff going on.
[4:27] Markets are complicated. We'll get into
[4:29] all of it. But when you look at this
[4:31] chart, you see gold and Bitcoin move at
[4:34] the same time and the dollar fall. The
[4:36] dollar weakened immediately after this
[4:38] announcement. So it is very obvious that
[4:41] hard assets repriced on this
[4:44] announcement and the dollar weakened on
[4:47] this announcement. So what the hell
[4:50] happened? Um I call it number go up
[4:53] yields edition. Here's what we're
[4:55] looking at on this slide. This is the
[4:58] 10-year US Treasury yield in white and
[5:03] the 30-year US Treasury yield in blue.
[5:07] To make a very long story short, and I'm
[5:10] going to try and keep this episode as
[5:11] simple as I possibly can because if you
[5:14] guys want to learn like with the Harvard
[5:16] economist, you guys can go sign up for a
[5:19] university course. This is a show by the
[5:22] common man for the common man. Okay? So,
[5:25] when we look at the 10-year yield and
[5:27] the 30-year yield, this is how simple
[5:30] I'll keep it. The US government does not
[5:33] want those numbers to go up. Okay, those
[5:36] numbers going up means it's more
[5:38] expensive for them to borrow money. And
[5:40] we know that the US government has to
[5:42] borrow money because it runs deficits,
[5:45] meaning it spends more money than it
[5:47] earns and it accumulates more debt with
[5:50] time. That is a structural decision that
[5:53] has come with being the world reserve
[5:55] currency that is the US dollar in this
[5:58] postworld war I2 post 1971 monetary
[6:01] policy uh this latest iteration of of
[6:05] the dollar so on and so forth so on and
[6:08] so forth um and so this is the problem
[6:10] that they're reacting to so first the
[6:13] initial announcement and this is a
[6:15] screenshot from CNBC is the Treasury
[6:17] doubled their debt buyback as Besset
[6:20] moves moves to steady the bond market.
[6:22] So clearly the US government was worried
[6:25] about the bond market. And again, they
[6:26] were worried about the rising yields.
[6:29] And I'll explain all of this. If you
[6:30] don't know what I'm talking about, I'll
[6:32] explain it in a second. So just bear
[6:34] with me. But when the yield goes up,
[6:36] that's bad for the government. It's more
[6:38] expensive for the government to finance
[6:40] itself. And they were panicking and
[6:42] reacting to a dysfunctional bond market.
[6:45] Those yields kept going higher. And so
[6:48] what was the actual announcement? The
[6:50] previous max of purchase buybacks were
[6:53] $2 billion.
[6:55] Now it is doubled to at least $4
[6:58] billion. And this is very specifically
[7:00] for what is called long duration. What
[7:04] is long duration? Specifically in this
[7:06] announcement, it's 10 to 20year and 20
[7:09] to 30year treasuries. Okay, now bear
[7:12] with me. This is as of this morning.
[7:16] If it wasn't clear that they are
[7:18] panicking, that they are feeling
[7:20] pressure, that they are worried, and
[7:23] that they are trying to send a message.
[7:25] As of this morning, CNBC hit the wire.
[7:29] Bessent could tap nearly $1 trillion of
[7:33] the Treasury General account to fund
[7:35] bond buybacks, sources said. I wonder
[7:37] what source leaked that right before
[7:39] markets opened on Monday morning. It
[7:42] couldn't have been Scott Bessant
[7:43] himself. Maybe he put on like a what,
[7:45] you know, one of those uh fool me once
[7:47] masks. He walked into CNBC's office with
[7:50] a Halloween costume on and said, "Hey,
[7:52] sources told me I could spend up to a
[7:54] trillion dollars on bonds." But, uh,
[7:57] this is obviously
[7:59] orders of magnitude larger of a threat.
[8:02] He's putting a trillion dollars on the
[8:04] table and saying, "I will erase the long
[8:07] end off the market if I have to." Now,
[8:11] why is he keep hitting the market with
[8:15] headlines and with again he hasn't
[8:17] bought anything yet? Markets are
[8:20] forward-looking. Okay? Right? Markets
[8:22] are once these announcements hit the
[8:25] wire and the government and Scott
[8:27] Bessant, which by the way, just to
[8:28] remind everyone, you can think of Scott
[8:30] Bessant. So, when I say this Bessant
[8:31] name, he's like the CFO of the United
[8:34] States of America. Technically, he's the
[8:36] Treasury Secretary, but you can think of
[8:38] him, he manages the United States
[8:40] finances. So, when it comes to we need
[8:42] to finance all these wars, we need to
[8:44] finance all these deficits. We need to
[8:46] find ways to borrow more money despite
[8:49] all of the geopolitical drama and the
[8:51] macroeconomic backdrop and the this and
[8:53] the that and what's going on in
[8:55] Congress. It's his job to pay the bills
[8:58] and manage the finances. So, the reason
[9:01] he's panicking and he continues to issue
[9:03] these statements is because if you look,
[9:06] I took these screenshots right before
[9:07] the show. So, this is the 10-year yield.
[9:10] Yeah, it's down, but barely. That's down
[9:14] four basis points since his
[9:16] announcement. So, it was at 4.7
[9:19] and now it's at 4.69
[9:22] or Yeah. I mean, okay. And same with the
[9:25] 30-year. The 30-year went from 5.2 26 to
[9:30] 5.22.
[9:33] So the point is the markets didn't
[9:35] really the the yield number is still
[9:38] going up. We've got ourselves, ladies
[9:40] and gentlemen, a sovereign debt crisis a
[9:43] brewing a brewing. And Scott Bessant
[9:47] knows it. The US government knows it.
[9:49] The market knows it. This is why gold
[9:52] has been on a tear. Not over the last
[9:55] week, but not only over the last year.
[9:57] Over the last five years, gold has been
[9:59] repriced. Bitcoin as well. We've talked
[10:03] about this on this show over and over
[10:04] and over. And let me preface this. I'm
[10:06] going to, you know, because I know what
[10:08] you guys want and I'm a man of the
[10:10] people. That's what they say. I didn't
[10:12] say that. That's what they said.
[10:14] [laughter]
[10:15] But it could really be as simple as
[10:18] this, guys.
[10:20] These governments have borrowed way too
[10:23] much money and they have no way of
[10:26] paying it back.
[10:28] It's that simple.
[10:30] The these guys only have so many
[10:32] options. You could default.
[10:37] Okay? And the whole system collapses.
[10:39] Fine. That's an option. We enter some
[10:41] form of austerity, a great great great
[10:44] depression, right? Not just a great
[10:45] depression 2.0. like a great great super
[10:48] great the greatest you have ever seen
[10:49] depression.
[10:51] The other option is you can just print
[10:54] what you owe, print the difference, buy
[10:58] back your own debt and the currency is
[11:02] the escape valve where the the loser is
[11:05] the currency. You're just going to
[11:06] devalue the [ __ ] out of the dollar and
[11:09] that is just very inflationary. So the
[11:11] losers are those that use the dollar
[11:14] saving in the dollar and that's going to
[11:15] repric everything else. That's all
[11:17] that's happening. That's it. If if you
[11:19] you could you could end this episode
[11:21] turn on a music playlist if you're in
[11:23] the gym lifting after hearing that.
[11:25] These guys just it's that simple. Okay.
[11:29] So let's get into it though. If you do
[11:31] want to understand what's going on,
[11:33] chapter 2 is treasury 101. Let's break
[11:35] all this down. So here's what's going
[11:37] on. First and foremost, this is basic
[11:40] 101 stuff.
[11:42] When taxes aren't enough, when taxes
[11:45] can't fund the bills, the government has
[11:48] to sell IUS. Okay, I'm calling uh
[11:51] Treasury security an IOU. So, you start
[11:55] from this premise that the US government
[11:57] needs cash, which starts from the
[11:59] premise that the US government exceeds
[12:01] its means. It spends more than it earns.
[12:04] So I I mean I already think tax is
[12:07] property theft. I already think it's an
[12:10] outrageous level of tax that I pay as an
[12:12] American citizen. I pay federal tax and
[12:14] I pay state tax and I pay city tax.
[12:17] Everyone around me in this country is in
[12:20] debt and exceeds their means and borrows
[12:22] from my future and wastes it on dumb
[12:25] [ __ ] Crime has gone up. Quality of life
[12:29] has gone down. Life expectancy has gone
[12:31] down. Disease has gone up. the quality
[12:33] of my food has gone down. What the [ __ ]
[12:36] am I paying you guys all this money for?
[12:38] And how are you still in debt? Time over
[12:40] time and time. You're still in debt. I
[12:42] digress. But we start from this premise
[12:44] that the US government needs cash. Okay.
[12:47] Now, the US government sells Treasury
[12:50] securities to raise that cash and an
[12:53] investor lends the US government dollars
[12:57] in this transaction. Does this make
[12:59] sense so far? So all these things and
[13:01] we've talked about this. All these
[13:03] things are is a way for the US
[13:04] government to raise dollars. This is it.
[13:07] It's a very very very and I don't want
[13:10] to oversimplify it, but it's a very very
[13:12] very fancy way of taking out a loan.
[13:15] Okay? Whoever's buying these is
[13:17] effectively lending the US government
[13:20] money. Okay? Now you can lend the US
[13:22] government money over a certain
[13:24] duration. You can lend them money all
[13:26] the way from three months to 30 years.
[13:30] Now, the price of what you get in return
[13:34] for lending them money is different
[13:36] because a lot less can go wrong in three
[13:39] months versus 30 years, right? And so
[13:43] when the Treasury says they are buying
[13:45] back its own long-term debt, let's say
[13:49] an investor owns a old 20 to 30year
[13:53] Treasury security, these things, these
[13:55] IUs,
[13:57] the US government is paying that
[14:00] investor that owns that security cash,
[14:03] and they're removing that longduration
[14:06] bond from the market. They're taking it
[14:08] off of the market. Okay?
[14:12] So, as I mentioned, you can lend the
[14:15] government money from three months to 30
[14:18] years. So, let's take a look at the
[14:20] different types of instruments. I I'm
[14:22] using all these terms. Let's define
[14:24] them. Cash, everyone knows what that is.
[14:27] There's no maturity to cash. Cash is
[14:29] already money. Cash is good. You walk in
[14:31] the store, you could use cash.
[14:33] A threemonth T bill. Okay. Now, this is
[14:38] all for this is for illustrative
[14:39] purposes only. I'm not this is I'm not
[14:42] using actual math here, but you give the
[14:44] treasury, let's say you give them 99
[14:46] bucks today and in three months you get
[14:49] back $100. That's very short maturity
[14:52] and that's very cashlike. It's
[14:55] effectively cash. Okay? It's, you know,
[14:59] sometimes you'll hear people talk about
[15:00] balance sheets and it's cash and cash
[15:03] equivalents. You ever heard that? Well,
[15:05] this is this cash and cash equivalence.
[15:07] These securities are very very cashlike.
[15:11] Now let's take the direct opposite of
[15:13] that. Let's take the 30-year Treasury.
[15:15] You're lending the Treasury money for 30
[15:18] years. For context, I'm 32 years old.
[15:22] You would have lent the US government
[15:25] money when I was two. I don't even
[15:27] remember being two. You collect interest
[15:30] and then you get the principal back at
[15:32] maturity of the security. You get the
[15:34] principal back when I turned 32 in
[15:37] April. Okay, that's decades of rate and
[15:40] inflation exposure. A lot can go wrong
[15:43] in 30 years.
[15:45] Okay, that's lending the US government
[15:47] money in 1996
[15:51] before all the internet companies were
[15:52] invented, before the iPhone, before
[15:55] Bitcoin, before AI. I mean, that's
[15:57] crazy, right? And so what you'd see, and
[16:01] we call this a yield curve, is that it's
[16:05] more lucrative. You get paid more money
[16:08] to lend the government money over a
[16:11] longer duration than you would to lend
[16:14] them money for 90 days. And if you own
[16:16] cash, you don't you're not lending to
[16:19] them at all. That cash is there's no
[16:21] maturity on it. It's money and it's
[16:23] yours. It's in your pocket. It's bearer.
[16:25] It's a bearer instrument. It is not an
[16:26] IOU. Make sense? so far. So the yield,
[16:31] when I say this word yield, the yield is
[16:33] the price that the government pays to
[16:35] borrow from you. Okay? Now, if there's
[16:38] lots of buyers of these IUs, that's a
[16:42] very fancy way. It really bothers me how
[16:45] complicated these guys have made these
[16:47] concepts. Now, you can make an argument
[16:49] that they've made it egregiously complex
[16:52] on purpose. Um, I'll never be able to
[16:54] prove that, so it doesn't really matter.
[16:57] But it is frustrating because to say
[16:59] that there's a lot of buyers of Treasury
[17:01] securities,
[17:03] all that means is there's a lot of
[17:04] people willing to lend to the US
[17:07] government. That's it. Okay. Now, when
[17:11] there's not enough buyers of these
[17:13] Treasury securities or bonds, that means
[17:17] that there's not enough people willing
[17:19] to lend to the US government. That's it.
[17:22] So if there's lots of people willing to
[17:25] lend to the US government, the
[17:26] government can play pay less. It's very
[17:29] simple. It's just supply demand. Hey, I
[17:32] need to borrow $100. Well, if I have a
[17:36] trillion dollar willing to lend me a
[17:38] hundred, I can drive the price down and
[17:42] see what $100 is willing to lend to me
[17:46] at the cheapest terms and I can find
[17:49] that lowest price point in a market.
[17:53] Now, if I need to borrow a trillion
[17:55] dollars and I only have $100 interested,
[18:00] well, I got to raise the price I'm
[18:02] willing to pay because I'm not able to
[18:04] recruit enough capital that's interested
[18:07] in financing my needs. Makes sense. So,
[18:11] a higher yield just means the government
[18:13] has to pay more. But a higher yield also
[18:17] means that there are less people
[18:19] interested in lending to the US
[18:22] government, meaning they need
[18:24] extraordinary amounts of money lent to
[18:27] them for them to continue to operate.
[18:30] And there's not that many people willing
[18:33] to lend to them at current prices. So
[18:36] you could say, "Hey, is everyone willing
[18:37] to finance the US government losing or
[18:40] whatever, not losing deficit, their
[18:42] deficits of $2 trillion a year? We'll
[18:45] pay you uh 4% of the 10year, 5% of the
[18:50] 30-year to lend." And the market says,
[18:53] "No, price has to go up." Okay, 4.1%
[18:56] 5.1%. No, price has to go up. And that's
[19:00] what it means for higher yields. Higher
[19:02] yields means the market is saying, "No,
[19:05] I need the price higher." So that's what
[19:07] this slide walks through. Bond prices
[19:09] and yields move in opposite directions.
[19:12] We've talked about this on this show.
[19:14] When there are more buyers, that means
[19:16] the bond price goes up. Bonds are in
[19:19] more demand. The yield comes down. When
[19:21] there's less demand, that means the bond
[19:24] price is coming down because people
[19:25] aren't as interested and the yields are
[19:27] going up. So this is what we call bond
[19:29] math. It's inverse, okay? price and
[19:32] yield. So when the Treasury, the literal
[19:35] government itself becomes a buyer of
[19:38] long-term bonds, it is leaning toward
[19:40] higher bond prices and lower long-term
[19:43] yields.
[19:45] Okay? So, and and we'll get into this,
[19:48] but basically what's happening is the
[19:51] market is saying, "Yo, we do not want to
[19:54] lend you guys money. You're reckless
[19:56] spenders. You're constantly at war. The
[19:59] way you're allocating capital is totally
[20:02] outrageous and stupendous and egregious.
[20:06] It's unclear if this AI thing is going
[20:08] to take everyone's jobs. Inflation is
[20:09] now all of a sudden back. I don't want
[20:11] to lend you money. And the US government
[20:14] is saying, "Well, we can't afford for
[20:17] the yields to go any higher."
[20:19] So, if you're not going to buy them at
[20:22] this level, then we're going to
[20:24] effectively print money and buy them
[20:26] because we can't afford to pay 10 year
[20:29] at 5%. That's not an option for us.
[20:32] We're too broke. We have too much debt.
[20:36] [laughter]
[20:37] Sorry. I mean, if you don't laugh at it,
[20:40] I mean, the other emotions are just far
[20:42] less enjoyable. That's that's it, guys.
[20:46] Don't let these economists with all
[20:48] their fancy degrees and their long
[20:51] essays confuse you.
[20:55] It's that simple. And that's a huge
[20:58] problem. And I'll get into it, but it's
[21:00] a huge problem because think about it.
[21:02] Why in the Lord's name would I own an
[21:07] asset that the US government won't let
[21:09] go up in price?
[21:12] Why would I be interested in this thing?
[21:14] This is the US government intervening in
[21:17] a market and saying, "No, no, we can't
[21:20] afford the price to go any higher."
[21:22] Imagine if someone could step into the
[21:25] Bitcoin market and say, "Sorry guys, the
[21:27] highest I can afford Bitcoin to go is
[21:29] 60,000. That's it." So, if you were
[21:32] hoping for a $61,000 Bitcoin, you're
[21:35] going to have to get lost. And that's
[21:37] that. That's what just happened to these
[21:41] instruments. And I'll get into it.
[21:43] They're saying 4.7% on the 10ear is as
[21:46] high as we're willing to let it go. And
[21:49] if you guys aren't interested to lend to
[21:51] us at that rate, then we're going to
[21:54] have to lend to ourselves. What do you
[21:57] And you you must think, what do you mean
[21:58] lend to yourselves? Yeah, they're
[22:01] effectively printing money and giving it
[22:02] to themselves. So again, this is kind of
[22:06] what we call whatever the the curve, the
[22:09] spectrum. These are the different
[22:11] instruments, right? So on the far left
[22:13] where you've got money and money like
[22:15] there's cash the threemon tea bills and
[22:18] then you get to the 2-year the 10year
[22:21] the 30-year and that's more duration and
[22:23] so now you guys can visually see from
[22:25] left to right short duration long
[22:28] duration short duration long duration
[22:30] and so let's talk about the actual
[22:33] buyback. So how are they actually able
[22:36] to basically lend themselves money? And
[22:39] if you're sitting there thinking to
[22:41] yourself like, "Wait, oh, my brain
[22:43] hurts. This is so confusing. I can't
[22:46] follow this. This just sounds like a
[22:48] like a Ponzi scheme architected by a
[22:51] five-year-old."
[22:53] That's it's not you, it's them. That's
[22:55] what it is. That's what this is.
[22:59] I'm sorry. I'm sorry. Because sometimes
[23:02] people be like, "Dude, how did you get
[23:04] into Bitcoin so early? You're a genius.
[23:07] How'd you have the foresight? Guys, I'm
[23:10] not a genius. I'm not a genius. It's
[23:14] really simple what I do. Nothing these
[23:17] guys do makes any sense. Any sense. All
[23:22] I do is I work hard and I say, "Okay,
[23:25] the value that I produce for the world
[23:28] and the income I generate from that
[23:30] value, as long as that's more than the
[23:34] money I spend on my lifestyle and I have
[23:36] an ability to save in something that is
[23:39] not susceptible to these guys doing
[23:43] these ridiculous gibberish tricks, then
[23:46] I should be good." And that's all I've
[23:48] [laughter] been doing for the last 14
[23:50] years. And and it I guess to some people
[23:53] it's like wow you genius. It's that
[23:56] simple guys. It's not your fault. These
[23:58] guys are this is kindergarten Ponzi.
[24:04] Okay. So here's how they're lending
[24:06] money to themselves.
[24:08] The Treasury is issuing short-term
[24:11] bills. So they're issuing these T bills.
[24:14] investors are handing over cash for
[24:16] these T bills because you know really T
[24:18] bills are
[24:21] they're they're cashlike. You're taking
[24:23] virtually no risk because you're lending
[24:25] to the US government for three months.
[24:27] Okay? And what they owe you they can
[24:30] print. So it's virtually no risk. If
[24:34] you're going to own cash, you might as
[24:36] well own a T bill or you know and
[24:38] there's derivatives of these types of
[24:39] there's money market funds. We're not
[24:41] we're not going to get into all of it,
[24:42] but you're getting a yield, right? like
[24:43] like Strike's going to start giving at
[24:45] least 3 and 12% yield on cash. Like you
[24:48] might as well get a yield if you're
[24:51] going to hold cash. Yes, fair enough. So
[24:54] the US government starts issuing these T
[24:56] bills. Investors buy them. Okay. And
[25:00] then the US government takes the money
[25:03] that they get in return for issuing the
[25:06] short-term bills, these T bills, these
[25:07] 90-day three-month papers, and then they
[25:10] use that money to buy the longer
[25:13] duration bonds. So, they're issuing
[25:16] three-month paper. People buy them, they
[25:19] take the cash proceeds from the
[25:20] three-month paper to buy the 10-year and
[25:23] the 30-year or the 20 year. So this is
[25:26] what we call and and you'll see this
[25:28] term when you go read about this stuff.
[25:30] This is what we call taking duration out
[25:32] of the market. So technically it's not
[25:36] money printing because the Fed is not
[25:40] creating new currency yet. We'll get
[25:43] into this in a second yet. But it is
[25:47] certainly easing monetary conditions.
[25:50] And the reason that hard assets were so
[25:54] violent in the way they were, like
[25:56] Bitcoin and gold, is because the
[25:59] government showed their hand. We've
[26:02] talked all the time, well, this system
[26:04] is collapsing. What are they going to
[26:06] do? Are they going to let it fail? And
[26:09] they basically said, no, we're not.
[26:12] Worse comes to worse, when you guys hit
[26:14] our price level and we can't afford a
[26:18] higher yield, we're just going to start
[26:20] printing the money and debasing the
[26:23] currency. And the market was like, okay,
[26:26] well, in that case, which is fine.
[26:28] Listen, let me say let me say this. Is
[26:31] this Trump's fault? No. Is this Besson's
[26:33] fault? No. This is the fault of weak
[26:36] politicians over almost a century.
[26:42] This is this is the hard times create
[26:45] strong men. Strong men create good
[26:47] times. Good times create weak men. Weak
[26:50] men create hard times.
[26:53] Hard times. The great depression.
[26:56] A long time ago there were very
[26:58] difficult times in this country. Our
[27:01] founding fathers, you know, our founding
[27:03] fathers wrote about the dangers of
[27:05] central banking,
[27:08] of fractional reserve banking, of
[27:10] printing currency. Our founding fathers
[27:13] wrote to avoid that.
[27:16] It's destructive to society. It's
[27:18] distortive to wealth.
[27:24] So those were hard times that created
[27:26] very strong men. And those strong men
[27:28] built the America that is the the house
[27:32] on the hill that the world adors, the
[27:35] leader of the free world. But those good
[27:38] times, those strong men created great
[27:39] times.
[27:41] And those good times created incredibly
[27:43] weak leadership. People that borrowed
[27:46] and exceeded their means, left debt for
[27:49] generations to come. Borrowed and spent
[27:52] capital before generations were even
[27:55] born, like mine.
[27:57] How do you think I feel about the
[27:59] leadership over the last 90 years?
[28:04] Great. I'm glad all the boomers have all
[28:07] the assets in the world that have
[28:08] greatly benefited and appreciated from
[28:10] monetary monetary policy over the la
[28:12] last 90 years. I'm glad you guys have
[28:14] all social security payments set up
[28:17] while my peers are to their eyeballs in
[28:20] debt getting an engineering degree only
[28:23] to realize that Elon's robots are taking
[28:25] their job. So, they're jobless. Rent is
[28:29] through the roof. They can't afford a
[28:30] home. Nobody's fertile enough to have
[28:33] kids with them.
[28:37] So, it's weak leadership.
[28:42] I digress. So we go on. So basically how
[28:48] Bessant and the US government could lend
[28:50] money to themselves is they raise money
[28:52] from bills and then they buy these long
[28:55] bonds. So they're they're raising money
[28:56] short-term to buy the long-term debt off
[29:01] off the public's hands. Okay. Now, if
[29:04] you guys want to Google something, I
[29:05] didn't have enough time. I I I mean this
[29:08] episode's already gonna be who knows how
[29:10] long this is gonna be. So I had to cut
[29:12] there's if you want to look up operation
[29:13] twist I think it was in 2011 where the
[29:16] Fed did this basically where the Federal
[29:18] Reserve said we're going to I think they
[29:22] sold short-term paper to buy long
[29:27] duration. But look up Operation TR
[29:29] Twist. This is basically the US Treasury
[29:32] doing something that the Fed has already
[29:34] done. But it's you're you're you're
[29:37] creating more cashlike debt. Okay.
[29:41] Another way that this can be financed,
[29:43] and this is what Bessant came out this
[29:45] morning, and he told CNBC or or I guess
[29:48] a source close to him told CNBC, Scott
[29:50] Bessant in a Halloween costume told CNBC
[29:52] that so the Treasury has a bank account
[29:56] at the Fed just like everyone else.
[29:59] Okay. Their balance is about a trillion
[30:02] dollars. I looked it up. It's about 950
[30:04] billion. Okay, this is called the TGA,
[30:07] the Treasury General's account. Now,
[30:10] what he's saying is I can use that money
[30:13] to buy these long duration, which is
[30:15] basically saying, well, I might not have
[30:17] to issue a bunch of three months to buy
[30:20] 30 years. Sorry, I apologize. This is so
[30:22] confusing. It's really unnecessary. But
[30:25] he's saying, I I have a trillion dollars
[30:27] in the bank. I could spend that. Now,
[30:30] the problem, and this is all this is all
[30:32] this is why it's not really if you're a
[30:34] Bitcoiner, it's really not worth your
[30:35] time because it's all such a giant joke
[30:38] and nonsense.
[30:40] If he the the Treasury of the US
[30:43] government cannot have a low bank
[30:45] balance. Um, they need money to like
[30:48] roll over debt to finance things. I
[30:50] mean, remember when the government shut
[30:52] down last October? Like if the if the
[30:55] Treasury didn't have any money in its
[30:57] bank account, then like payments would
[30:59] have just stopped. So the you cannot
[31:02] like this is it's all a bluff. It's all
[31:04] a bluff. Okay, fine, Scott. You can
[31:06] spend down your TGA. Fine. But then you
[31:09] have to refill it. So if you So if you
[31:12] spend the $900 billion from the TGA and
[31:15] look me in the eye and say, I didn't
[31:17] issue any T bills to finance that, but
[31:19] then you refill the TGA by raising money
[31:22] with three-month bills. then you just
[31:24] you did the same thing just in a
[31:26] sneakier way. And that's really that's
[31:28] really all this is is it's it's
[31:31] political warfare. It's it's deceptive
[31:33] tactics. Because here's the thing, guys.
[31:35] At the end of the day, they have to make
[31:37] I've been saying it I I was going to say
[31:39] for months, but this is for a decade
[31:41] plus now. They have to make the currency
[31:44] weaker. They have to print the money. So
[31:47] things like Bitcoin have to go up. Have
[31:49] to. I'm sorry. I'm sorry to speak in
[31:52] definitives. I know that pisses people
[31:53] off. Sue me. I've been right for almost
[31:56] 14 years and I plan to be right for the
[31:58] next 40 years. Okay? Until I'm wrong,
[32:00] I'm going to be as confident as I've
[32:02] always been. That's just the way it is.
[32:04] Now, the detail is all about making it
[32:07] confusing and tricking. It's this is all
[32:12] some variant of quantitative easing.
[32:14] This is all some variant of money
[32:16] printing. This is all easier monetary
[32:18] policy. This is all weaker dollar. I
[32:20] pulled up the chart. As soon as Bitcoin
[32:22] exploded is when the dollar started to
[32:24] get weaker. It's just so simple. But if
[32:27] you want to follow the ins and outs and
[32:29] stuff, that's where you confuse
[32:30] yourself. So, the details don't matter.
[32:32] If you want to know, yes, he can use his
[32:35] bank account. He could issue three-month
[32:37] paper, raise cash that way to to pay off
[32:40] 30-year paper. Sure, he could also spend
[32:42] down his bank account, and then when his
[32:44] bank account hits zero, he could refill
[32:45] it by issuing three-month paper. What's
[32:47] the difference? There is no difference.
[32:48] Okay. Um, so,
[32:52] oh shoot, did I just screw this up?
[32:55] There we go. Um, so anyway, this slide
[33:00] basically just says as much. The the
[33:02] Treasury general account balance will go
[33:04] down. Private sector deposits and
[33:05] reserves will go up. Um, it's it's all
[33:09] it's all a waste of time. Um, okay.
[33:12] Again, I just want to be clear.
[33:14] Technically, technically this is not QE.
[33:19] They're not calling it QE. I'd be
[33:22] shocked if they ever call it QE. QE
[33:24] stands for quantitative easing. It's
[33:26] effectively money printing. And
[33:29] quantitative easing is when the Federal
[33:31] Reserve, the central bank themselves
[33:33] creates reserves and the central banks
[33:36] themselves buys bonds. And that would be
[33:38] quite literally printing money out of
[33:41] thin air and lending it to the US
[33:43] government. Okay, this is not quite that
[33:46] because it is the US government itself
[33:49] financing or using existing cash to buy
[33:51] bonds, but it's a very similar
[33:54] direction. And the point that was made
[33:58] to the market is abundantly clear. And
[34:02] let me say, why is Scott Besson doing
[34:04] this now? Well, there's a lot of
[34:06] reasons. You know, there's first of all,
[34:09] the this war in Iran, like I mean, just
[34:11] couldn't have been poorer timed, bigger
[34:14] miscalculation. It just was a bad
[34:17] strategic move. I mean, all of this was
[34:20] playing out kind of slowly until I mean,
[34:22] if I go back, hold on, let me go back.
[34:26] If you guys see here on the screen, let
[34:28] me zoom in to the 10-year here. Do you
[34:30] see the low here on the screen? So, this
[34:32] is the 10-year yield year to date. The
[34:34] low was the end of February. When was
[34:37] that? Right when the Iran conflict
[34:40] started. And since then, yields have
[34:42] been on a tear. So, you can't sit here
[34:44] and tell me that that was like a great
[34:46] idea. And I know I I hate getting into
[34:48] politics. I know we can't let them get
[34:50] nuclear weapons. And I'm not in the
[34:52] decision rooms. So, I I just I have no
[34:55] place to comment and tell people what to
[34:58] do. But what I can tell you definitively
[35:01] just looking at charts is the yields
[35:04] have been on a tear. Like so whatever
[35:07] slow painful process of the United
[35:11] States facing a debt spiral which I've
[35:14] been talking about for years now I mean
[35:16] clearly this conflict was exaggerated it
[35:20] greatly greatly. Um, so anyways, uh,
[35:27] so this tweet from, uh, Peter Schiff, I
[35:30] jokingly crossed out the end, but let me
[35:32] read it because before he arrives at the
[35:34] conclusion that you need to own gold,
[35:37] um, he makes very good points. It's my
[35:40] boy Peter Schiff. Um, he writes,
[35:43] "Besson's plan to use the TGA, so as we
[35:45] said, Treasury general account to fund
[35:47] Treasury buybacks makes possible exactly
[35:49] what I warned would happen. This
[35:51] reckless plan will substantially shorten
[35:53] the average maturity of the national
[35:55] debt, increasing our exposure to rising
[35:58] short-term rates and making it even
[35:59] harder for the Fed to hike rates without
[36:02] exploding federal interest expense and
[36:04] budget deficits. It's a it's a recipe
[36:06] for massive QE and runaway inflation. He
[36:09] wrote, "Got gold." I crossed it out and
[36:11] I said, "Got Bitcoin." Now, his points
[36:15] though, and now we have a difference of
[36:17] opinion on what you should own, but his
[36:19] points are very good. Okay, he's saying
[36:23] the average maturity of the national
[36:25] debt is now going to be greatly
[36:27] shortened because we're effectively
[36:28] financing the US government on these
[36:31] like 90-day rolling loans as opposed to
[36:34] 10 year, 30-year. Let me tell you guys,
[36:36] if I could give you a more if I can give
[36:38] you a 90-day mortgage or a 30-year
[36:40] mortgage, which one would you prefer?
[36:42] [laughter]
[36:44] Hey, hell, if I instead of a 30-year
[36:46] mortgage, what if I offered you a
[36:47] 300-year mortgage? Of course you want
[36:50] the longer duration. Of course. Of
[36:53] course. And if people were willing to
[36:55] finance you longer duration, that speaks
[36:57] to your creditworthiness. If no one's
[36:59] willing to finance you over a longer
[37:01] duration, they're like, "Dude, you got
[37:03] 90 days before like I I don't trust you
[37:06] that much." Well, that speaks to how
[37:08] creditworthy you are. Okay, so that's
[37:10] his first point. His second point is the
[37:13] sensitivity to rates. So the T these T
[37:18] bills, they don't use the Fed funds
[37:20] rate, but think of it this way. Let's
[37:22] say uh T bill rate is I'm just picking
[37:25] numbers out of my butt, but just bear
[37:27] with me for this the sake of example.
[37:29] Let's say the T bill rate is three and a
[37:31] half percent. Okay? And let's say the
[37:32] Fed is, man, there's inflation out the
[37:35] wazoo. We need to raise rates to 4%. But
[37:40] by raising rates to 4%, why would
[37:42] anybody buy T bills if they can get
[37:47] higher rate at the overnight window?
[37:49] Right? The Fed's giving you 4%. Why
[37:52] would I buy a T bill at three and a
[37:53] half%. So then the US government has no
[37:56] ability to raise money using T bills
[37:59] because the Fed is paying more. You see?
[38:02] And so what he's saying is now the Fed
[38:06] is going to have a lot harder time
[38:07] raising rates to fight inflation in the
[38:09] future because the US government is
[38:13] increasingly reliant on the what we call
[38:15] the short end on these moneylike 90day
[38:19] flash loans almost you know you know
[38:22] like in Cash App where they're like
[38:23] we'll loan you money for two weeks.
[38:25] That's like almost how the US government
[38:27] is financing itself with this new plan.
[38:30] Um and so then he he mentions now this
[38:33] is a recipe for massive Kiwi and runaway
[38:36] inflation. So basically this is all
[38:39] highly highly inflationary meaning
[38:41] weaker dollar debasing the currency real
[38:44] rates negative uh hard assets go up. You
[38:48] know we can I I can pull up a chart. It
[38:51] was Bitcoin gold oil. By the way you
[38:54] know what did not have a sharp upwards
[38:57] reaction? The NASDAQ. So again, Bitcoin
[39:00] to me is technology plus fiat liquidity.
[39:03] It's got properties of technology. It's
[39:05] got properties of hard money. And people
[39:07] try and bucket it. And I can point to
[39:10] numerous examples where sometimes it
[39:12] acts like gold on steroids. Sometimes it
[39:14] acts like a tech stock on steroids. And
[39:16] people try and bucket it as one or the
[39:18] other. And they're going to perpetually
[39:19] be frustrated. That's the innovation.
[39:21] It's both. But NASDAQ didn't flinch on
[39:24] this. NASDAQ's been flat to down since
[39:27] this announcement. And Bitcoin's torn
[39:29] the face off markets.
[39:31] So you're Yeah. Anywh who hoot we go on.
[39:36] So the more debt refinances at the short
[39:38] end, the harder it becomes to keep short
[39:41] rates high. So again, this kind of sets
[39:44] an expectation. Now, why why is Bessant
[39:48] doing this? And I ended up getting into
[39:49] a rant about how, you know, uh hard
[39:52] times create strong men. I'm I'm out of
[39:54] control. Okay, I'm fired up today.
[39:57] But another thing to keep in mind, this
[39:59] is just me speculating. I I have no
[40:01] proof, but I don't know. Why not? We're
[40:03] all hanging out every Monday. Why not?
[40:05] Just me and my homies. Uh
[40:08] what about Wars?
[40:11] You know, to me, it could be. I We all
[40:13] know that Worshant buddies. We all know
[40:15] that they're uh disciples of Drunken
[40:18] Miller and that whole macro hedge fund
[40:21] crowd. And I mean you the the Fed and
[40:24] the Treasury are going to need to act in
[40:26] tandem together uh to to pull a lot of
[40:29] this off. I mean basically you know the
[40:32] like we're building the plane while it's
[40:33] flying. The plane is on fire
[40:37] and they need to like tame the fire a
[40:41] little bit um and make sure that it
[40:44] doesn't burn in the air and find a way
[40:47] to land it. But the plane is like the
[40:49] like a wing of the plane is on fire.
[40:52] Okay. And it's going to take the Fed and
[40:54] the Treasury acting together in this
[40:56] kind of era of fiscal dominance. And to
[40:58] me, I just found it peculiar and
[41:00] interesting that Besson decided to
[41:02] really just like start going nuts. Like,
[41:04] yo, I got a trillion dollars in my bank.
[41:07] I'm ready to buy all the long end. He's
[41:10] telling all these reporters, writing
[41:11] opeds on them to go [ __ ] themselves. I
[41:13] mean, he's losing his mind. And it
[41:15] [snorts] might be because he finally got
[41:17] a counterpart in the Fed that knows the
[41:20] plan and is willing to play ball, which
[41:23] is basically rates are not going to go
[41:26] up. Inflation is going to have to be
[41:28] persistent. And and remember, we've
[41:29] talked about Worsh who's been talking
[41:31] about inflation, but he's coming up with
[41:34] a new definition of it. I forget what
[41:35] it's called, but it's like his version
[41:37] of inflation. Not actually, but it's
[41:39] like some like weird variant of
[41:43] inflation, which is like, wait, you're
[41:45] just redefining inflation. You you're
[41:47] the chair of the Fed. You cannot just
[41:49] like come up, you can't use this like
[41:51] dormant at the bottom of the drawer
[41:54] definition of inflation. But my another
[41:57] I my Spidey senses, let me put it that
[41:59] to you that way. My Spidey senses are as
[42:01] such where I'm like, wait a minute.
[42:05] So Bessant got his buddy as the Fed
[42:07] chair and shortly after he's been sworn
[42:11] in, Besson's going full-blown nuclear,
[42:14] basically implying we're not going to be
[42:16] able to hike rates. Inflation is
[42:18] basically baked in. We're going to have
[42:19] to grow our way out of this, run it
[42:21] extremely hot. This is very, very weak
[42:24] dollar. This I mean real rates are going
[42:26] to have to be negative. They're going to
[42:29] full send this thing. And is it because
[42:32] him and his buddy have a plan? And then
[42:34] you think, well, where's Bitcoin in that
[42:36] plan? Um, it's interesting. Food for
[42:40] thought. Food for thought. Um, so
[42:42] anyway, back to the point of this isn't
[42:44] yield curve control. It's not because
[42:47] technically it's not like according to
[42:49] the definition. But this chart from
[42:51] Luke, it effectively is because so yield
[42:53] curve control would be hey the number is
[42:57] 4.9%
[43:00] and like that's it and that's where
[43:02] we're that's that's not what is
[43:05] happening. But if you look at this chart
[43:08] every so the black line is at 4.7%.
[43:11] Every single time the 10-year yield gets
[43:13] to 4.7% they do something. And all these
[43:16] green arrows the red is the dollar. So
[43:19] every single time the 10-year gets to
[43:22] 4.7% they whack the dollar down.
[43:26] And so yes, it's not yield curve control
[43:29] technically, but it's basically because
[43:32] they're effectively saying the level is
[43:34] 4.7 to 4.8%.
[43:38] So like like I said, if I'm an investor
[43:43] and and this is what's happening around
[43:45] the world, who's buying Bitcoin? Who's
[43:47] buying gold? If I'm an investor and the
[43:50] US government is saying, "I'm not going
[43:52] to let the price of the thing go up past
[43:55] this level, then you guys, why the [ __ ]
[43:58] would I buy that?
[44:01] Why would I buy that?" This is the power
[44:05] of something like Bitcoin or something
[44:06] like gold is it is a floating free
[44:09] price. Think of think of Bitcoin as a
[44:13] zeroyielding bond that can go up
[44:15] forever.
[44:18] Think of it that way. So, what's Bitcoin
[44:20] pay you in yield? Zero. But what's the
[44:23] cap on Bitcoin's price? Infinity. I'd
[44:26] rather own that. Okay, fine. You're
[44:29] paying me 4.7%. But inflation is a lot
[44:32] higher than that in all the things that
[44:33] I need in my life. And you're not going
[44:35] to let the thing go up to the price of
[44:36] inflation. Let's say inflation's 6 7 8 9
[44:40] 20% if I want housing. Okay, great. So,
[44:43] I own something stuck at 4.7% while the
[44:46] rest of my life's getting 20% more
[44:47] expensive. Meanwhile, Bitcoin's paying
[44:50] me 0%, but it's up 25% over the last
[44:53] week. It's a zeroyielding bond that
[44:57] can't be price controlled. That's what
[44:59] people want to own. [ __ ] your yield.
[45:05] So again from Bessant, Treasury
[45:08] Secretary Bessant will do whatever it
[45:10] takes to quote put the fear of God end
[45:14] quote into the bond vigilantes, shorting
[45:18] the long end of the curve in an attempt
[45:20] to drive the 10-year yield to 5%. Wall
[45:23] Street executives with direct knowledge
[45:24] of his thinking say that would include
[45:27] buybacks, short-term uh selling
[45:30] short-term debt, possible elimination of
[45:33] longdated bonds like the 20-year. It's a
[45:36] short-term solution to keep yields from
[45:38] soaring further, strangling growth as
[45:41] the midterms approach, they say, and
[45:43] doesn't address the real problem. The
[45:45] US's debt is now at $40 trillion
[45:49] and competition for capital from the AI
[45:52] buildout. Longer term, don't look for
[45:55] austerity coming out of the Trump White
[45:57] House in its remaining years. They say
[45:59] the plan remains top possibility to grow
[46:03] our way out of the debt level through
[46:05] increased tax revenues because the cure
[46:07] for such high debt levels would be
[46:09] recession inducing taxes or austerity.
[46:13] Again, Bessant is saying what I've been
[46:15] saying. Are they going to go through
[46:17] austerity? Which, by the way, you want
[46:18] to own gold and Bitcoin in that version,
[46:20] too. No, they're not. What are they
[46:22] going to do? Grow is another way of
[46:24] print. There grow is infl
[46:28] Let me put you this way. Let's say the
[46:30] US economy is growing at 10% a year. Why
[46:34] would I own something that's paying me
[46:36] 4.7%.
[46:38] Why don't I just own the stock market?
[46:40] the stock they're all these the economy
[46:43] is growing at 10%. That means the S&P
[46:45] 500 is going to be growing at something
[46:47] probably marginally higher than 10%. Why
[46:49] would I own something at 4.7%.
[46:53] This is what we call real rates
[46:54] negative. You you pay people less than
[46:57] the growth you're producing. And guess
[46:59] what? Nobody's that stupid. At least not
[47:02] to the tune of lending them $2 trillion
[47:05] a year.$2 $2 trillion of time, energy,
[47:07] effort, and labor is not that stupid.
[47:10] So, they're going to go own something
[47:12] else. And by selling bonds and owning
[47:15] something else, that drives the yields
[47:17] up. And that's when these guys have to
[47:18] start printing money themselves to lend
[47:20] to themselves because no one's willing
[47:21] to lend to them.
[47:23] So,
[47:26] let's get into specifically why yields
[47:28] are rising. Like, who traditionally has
[47:30] been lending money to the US government?
[47:32] like is it just Joe's and schmos and
[47:34] plebs like you and I or is it sovereigns
[47:37] who's been traditionally lending to the
[47:39] United States? Why are yields rising?
[47:42] Where's the money going? So really just
[47:44] before I get started um the government
[47:46] is spending more and more and more money
[47:48] which is a huge problem. I mean they're
[47:50] exceeding their means and but this is
[47:52] the problem. The problem is if any
[47:56] politician campaigned on you guys are
[47:59] going to have to tighten tighten up, we
[48:02] all have to spend less. We all have to
[48:03] reduce the quality of our life.
[48:05] Everyone's quality of life. People think
[48:08] that they're just entitled to housing,
[48:10] entitled to Medicare, entitled to all
[48:12] this stuff. The reality is we've been
[48:14] affording it with money we don't have,
[48:15] and we all have to like give up a lot of
[48:17] this stuff. And that's just what it's
[48:19] going to mean to be American as we kind
[48:20] of reset. then someone else is going to
[48:23] run for president and just say the
[48:24] opposite and be like, "Fuck that guy.
[48:26] I'm just gonna give you a bunch of free
[48:27] shit." And guess who's going to win the
[48:29] election? So, we can blame politicians
[48:31] all we want, but guess who puts these
[48:33] politicians in office? We do. So, that's
[48:36] why I don't vote. I'm not participating
[48:38] in this. It's a humiliation ritual. I'm
[48:41] not like, "Yes, please, Daddy, give me
[48:44] free stuff. I could never afford a home
[48:46] without you. [ __ ] you. I'm gonna work
[48:49] hard, earn more than I spend, save it in
[48:52] Bitcoin, and have the life that me and
[48:54] my family want. I'm not participating in
[48:56] your humiliation ritual and getting on
[48:59] my hands and knees while you guys
[49:01] promise me a bunch of free [ __ ] that we
[49:03] can't afford. But that's the reality of
[49:05] the situation is that governments keep
[49:06] spending and they keep spending because
[49:08] we keep voting in people that promise
[49:10] free [ __ ] The guy in New York saying,
[49:12] "You're going to walk into a grocery
[49:13] store and walk out without having to pay
[49:14] for anything." Have you guys lost your
[49:16] [ __ ] minds? Have you lost your mind?
[49:20] So that's one. The other is that we
[49:24] actually have a productive use of tons
[49:26] of money, which is AI. AI needs tons of
[49:30] money, but it's productive and it's
[49:32] working and it's making the world a
[49:33] cooler and better place. I mean, I
[49:35] didn't put this in today's episode, but
[49:37] AI is on the brink of or have has
[49:39] arguably solved some variance of cancer.
[49:44] And so a lot of the money that would
[49:46] lend longer duration to the government
[49:48] is like I'm Google is issuing Google,
[49:51] Amazon, they're issuing hundred-year
[49:52] bonds. People are like I'd rather own
[49:55] that. These guys are like curing cancer.
[49:57] What are what's the government doing?
[50:00] Fi financing Medicare, Social Security,
[50:03] and uh Iran conflict. [ __ ] that. So this
[50:08] is the government's I mean this chart
[50:10] says a million words. The government is
[50:12] borrowing at crisis size levels. It's
[50:14] outrageous the amount of spend and AI is
[50:17] competing with the treasury. So I mean
[50:19] this is from Bloomberg. AI is driving up
[50:22] treasury yields. It just touches
[50:23] everything. So these hyperscalers are
[50:26] issuing debt to finance data centers,
[50:28] power, chips, infrastructure. And the
[50:31] same investors that would lend to the
[50:33] government would rather lend to Elon
[50:35] Musk, to Google, to Zuckerberg, to
[50:37] Amazon. Like it's just a no-brainer. And
[50:40] so it's becoming a lot more competitive.
[50:42] So this slide is the treasury wants
[50:44] money, AI companies want money,
[50:46] infrastructure buildouts want money, and
[50:48] they're all competing against the same
[50:49] capital. So the market is saying,
[50:52] listen, this is again guys, it's just
[50:53] supply and demand. There's a lot of
[50:55] demand, and there's not a lot a lot of
[50:57] long-term capital. And so the long-term
[50:59] capital is saying, I'm going to raise
[51:00] the price. Hey, hey, US government and
[51:04] Elon and Google, how much are you
[51:06] willing to pay me for my money? or how
[51:08] much duration are you willing to give
[51:10] me? And these AI companies are giving a
[51:14] better deal. And so people are like, why
[51:16] would I own again, why would I own a
[51:19] government security where they're
[51:22] interfering with the free market on how
[51:24] much it's going to be worth and how much
[51:25] they're willing to pay me. I don't want
[51:27] to own that. You'd have. Again, that's
[51:29] why this is such a big deal. What
[51:32] Bessent is saying is he's like, we're
[51:34] going to step in and we're going to
[51:35] start intervening. It's like, okay, well
[51:37] then I don't want to own any of that.
[51:39] Why would I ever own that? I'd rather
[51:42] lend to Elon. I'd rather own a T- bill
[51:45] than a 30-year
[51:46] or I'd rather own Bitcoin.
[51:50] That's it. So, the market is very
[51:53] explicitly saying, "Pay me more.
[51:56] Pay me more. There are more people that
[51:58] need a loan. I'm the long-term capital.
[52:02] Pay me more." and AI businesses and
[52:05] others are willing to pay more. And the
[52:08] US government is not. The US government
[52:10] is saying, "Shit, I got I got 4.7% on
[52:14] the 10-year max.
[52:17] Anything more than that, you got me
[52:19] [ __ ] up. Okay, I'm just going to start
[52:21] printing money and giving it to myself."
[52:24] Well, then never mind. Let's all own
[52:27] gold. Let's all own Bitcoin. Let's all
[52:29] build AI. Unless these guys are
[52:32] insolvent. These guys are insolvent.
[52:35] Another thing, so who is the marginal?
[52:38] And I put buyer, but really it's lender.
[52:40] Who is lending to the US government? And
[52:43] we've talked about this on this show.
[52:44] Hedge funds. So this tweet, hedge funds
[52:47] now own 8.5% of the entire Treasury
[52:51] market. That's more than China, Japan,
[52:53] and Saudi Arabia's official holdings
[52:55] combined.
[52:57] This is dangerous given how important
[52:59] the US government bond market is to the
[53:01] entire global financial system. Yikes
[53:04] guys. And you can see around COVID this
[53:08] number was between four and 5%. Now it's
[53:10] between 8 and 9%. That's a lot of
[53:12] growth.
[53:13] So I mean a lot of this market that's
[53:16] actively lending to the government is
[53:18] leverage. So the other thing that
[53:19] Besson, I call him the chief volatility
[53:21] officer because not only is he trying to
[53:23] intervene and get the right prices, but
[53:26] he also can't have too much volatility
[53:28] because when these guys are on leverage,
[53:30] volatility makes them delever. You know,
[53:32] if you're on if you are collateralizing
[53:35] alone and your collateral is extremely
[53:38] volatile, then you're like, "Ah, shoot.
[53:40] I I got to unwind this a little bit."
[53:44] You see? So I put on the screen here,
[53:47] volatility rises, leverage funds may
[53:50] delever. And that means that stocks and
[53:52] treasuries both get sold. So if you need
[53:54] to raise cash and delever, well then you
[53:57] got to sell what you can, not what you
[53:59] want. And what do people own? People own
[54:01] stocks. People own treasuries.
[54:04] And so again,
[54:06] okay, now how is Japan related to all
[54:08] this? You guys have probably heard a lot
[54:09] about Japan. So, Japan historically has
[54:13] been one of the biggest buyers of US
[54:15] debt. Period. Um, Japan as a country,
[54:19] enormous excess savings, extremely low
[54:23] domestic yields. So, the yields we're
[54:25] talking about theirs have historically
[54:27] been extremely low. So, they've been
[54:29] buying US treasuries because it's
[54:32] obvious. Okay, Japan now has a problem.
[54:36] Okay, this on the right, this chart, I
[54:38] know you guys can't see the literal
[54:39] numbers, but it doesn't really matter.
[54:41] That's the Japan 10-year government bond
[54:43] yield. Okay, that's not good. So, they
[54:47] have had rising yields because inflation
[54:49] has crept into their lives. So, these
[54:53] yields are repricing because investors
[54:55] are saying, "Why would I lend you money
[54:57] and get paid nothing when everything
[54:59] around me is getting more expensive?"
[55:02] Okay, so Japanese rates are rising. With
[55:05] that, currency hedging becomes a lot
[55:07] more expensive
[55:09] and that makes US treasuries far less
[55:12] attractive to a Japanese investor. So
[55:15] the question is, why wouldn't a Japanese
[55:17] investor just buy a 4.7%
[55:19] yielding 10-year Treasury? And what we
[55:23] have to keep in mind about Japan is
[55:25] Japan, you know, their currency isn't
[55:28] the dollar. Ultimately, they need yen,
[55:29] not dollars. And so when they do
[55:31] something like this, and this is what,
[55:33] and I I didn't want to get into it too
[55:34] much, but this is what we call the carry
[55:36] trade is where, you know, let's say you
[55:39] borrow yen cheaply, and then you use
[55:42] that yen to buy a US treasury and you're
[55:46] you're you're taking advantage, you're
[55:49] carrying over the weak borrowing cost in
[55:52] Japan to buy high yielding assets in
[55:55] America. And you can do that by borrow
[55:57] cheap yen, buy stocks, borrow cheap yen,
[56:01] buy bitcoin. And we saw this in 2020,
[56:03] summer of 2024. If you guys remember the
[56:05] carry trade unwind
[56:08] is when this trade started to unwind and
[56:11] people had to start selling stocks and
[56:13] selling Bitcoin and everything fell off
[56:15] because this trade started to walk
[56:17] itself back in reverse because the the
[56:20] yen started to get expensive and and uh
[56:23] and rates started to rise. So, this
[56:26] chart from Luke is awesome because what
[56:29] it's showing is a 4.7 US Treasury can
[56:33] become a negative yielding investment
[56:34] for a Japanese buyer because the US
[56:37] 10ear at 4.65%
[56:39] if it's JPY hedged. So, if you're
[56:41] hedging out the currency risk because
[56:43] again, they need yen at the end of the
[56:45] day. They don't need dollars. They can't
[56:48] spend and live on dollars. It's that
[56:50] it's not their currency. So, right now
[56:53] that's negative1.2 2% return. So
[56:56] basically 10-year US Treasury unhedged
[57:00] versus hedged. I mean this is negative
[57:03] yielding for Japanese investor. So all
[57:05] of a sudden Japanese investors don't
[57:07] want these things anymore. And this is
[57:11] where you've seen Bessant has had to
[57:13] intervene and give Japan dollar swap
[57:16] lines or give Japan like basically
[57:19] intervene in the Japanese market because
[57:21] he does not want Japan selling a bunch
[57:24] of bonds because like we've talked about
[57:26] they sell these things yields go up
[57:29] right demand down yield up and he's
[57:33] trying you know yield number go up and
[57:35] he's been trying to get number go down
[57:37] for the yield.
[57:39] And so Japan can be summarized. What's
[57:42] fascinating about the Japan stuff is the
[57:46] yen can't get too far up or down against
[57:50] the dollar. Basically this, if the yen
[57:53] goes up too much, I think I have it in
[57:54] the slide here. Yeah. Okay. If the yen
[57:57] gets too strong, then the carry trade
[58:00] breaks down. Meaning what was really
[58:03] valuable is that the yen was incredibly
[58:06] weak and it was easy to borrow. So, I
[58:08] could borrow all this dog [ __ ] money,
[58:10] and then I just can puke it all into
[58:12] Bitcoin or stocks or US treasuries,
[58:14] whatever my flavor of tea was, and it's
[58:16] like printing money out of thin air with
[58:17] like virtually no risk. But as soon as
[58:19] the yen isn't super super cheap and dog
[58:22] [ __ ] and it starts to strengthen a
[58:24] little bit, well, then that trade has to
[58:26] unwind and I have to sell the Bitcoin or
[58:28] sell the thing I bought and return the
[58:29] capital home. And so if the yen gets too
[58:32] strong, so I have here on the screen,
[58:34] you borrow cheap yen, you buy global
[58:36] assets, the yen suddenly rises, then the
[58:38] debt becomes more expensive. So then you
[58:40] have to sell stocks, sell bonds, sell
[58:42] treasuries, and buy the yen back. That's
[58:44] a forced deleveraging. And that's what
[58:46] we saw in the summer of 2024.
[58:49] And so, you know, the US has to help
[58:52] make sure the yen doesn't get too strong
[58:55] because now you have all these
[58:56] foreigners that own all these US assets.
[58:58] And Bessant doesn't want all these
[58:59] foreigners dumping stocks, dumping
[59:02] treasuries, sending yields to the moon.
[59:05] And obviously, as you know, Austrian
[59:08] free market, you don't want any
[59:09] intervening. If people can't afford to
[59:11] own these assets, let them sell them.
[59:13] [ __ ] it. It'll drive the price of
[59:15] housing and stocks down. They'll become
[59:17] more affordable. But obviously, the
[59:19] amount of leverage and the way this the
[59:21] monetary system works, it's hardly a
[59:23] free market, if at all. Now the yen also
[59:27] can't get too weak. A weak yen
[59:30] implies inflation.
[59:32] So if their currency becomes too dog
[59:34] [ __ ] Japan has been facing inflationary
[59:37] tendencies. So a weak yen, energy and
[59:40] imports now cost more. Inflation rises
[59:44] and then Japan has to defend the yen or
[59:47] tighten their currency or or their
[59:49] monetary policy and then treasury demand
[59:52] becomes vulnerable, which is what we're
[59:54] seeing. You're seeing Japan yields rise
[59:57] and all of a sudden Japanese investors
[59:59] after you do the math and you hedge
[60:01] yourself out against currency risk,
[60:02] you're like, "Oh, I don't want to own
[60:03] this thing as at all. It's negative
[60:05] yielding." So you're like, "Well, shoot,
[60:08] there's like there's like two two I
[60:10] wrote here two live wires." So the yen
[60:14] too strong means the carry trade unwinds
[60:16] and US assets gets get dumped. And the
[60:20] yen too weak means [ __ ] Japan's importing
[60:22] inflation and they've had their own
[60:25] domestic issues currently right now. And
[60:27] so when you see Bessant say, you know,
[60:30] he's intervening swap lines, he's
[60:32] helping out Japan, it takes very very
[60:35] careful crafting to make sure that the
[60:38] yen is between two levels that don't
[60:41] blow anything up.
[60:43] Now, why does Bessant care so much? Just
[60:46] to keep in mind, guys, the long end runs
[60:48] the economy. So, your mortgage, your
[60:51] corporate borrowing, AI's financing,
[60:53] government interest expense, asset
[60:55] valuations, this is all dependent on
[60:58] things like the 10-year Treasury. So, if
[61:00] the 10-year goes up a lot, yes, the US
[61:02] government can't afford it, but you're
[61:03] not going to be able to afford a house
[61:04] either because the bank that's lending
[61:07] you your mortgage is all based on the
[61:10] 10-year. So, higher rates hit the
[61:13] borrower with the most debt. And who has
[61:15] the most debt? The United States of
[61:17] America. [laughter]
[61:19] So here's I I've shown this before. This
[61:21] is the US outlays, largest outlays. So
[61:24] on the left you have health and human
[61:25] services. Blue is full year 2025. Uh or
[61:30] excuse me, green is 2026.
[61:33] So you can see we're spending more
[61:36] year-over-year. So the US government
[61:38] continues to spend spend spend debt debt
[61:41] debt. Health and Human Services, then
[61:45] Social Security, and then Treasury,
[61:47] that's interest expense, and then after
[61:49] that, defense. So, when they say like,
[61:51] "Oh, yeah, we've we've uh cut down on
[61:54] our education spending," that's such a
[61:56] rounding air, you can't even see it.
[62:01] Um, now another reason Bessant is like
[62:04] truly panicking and the US government is
[62:06] in, in my opinion, like an official debt
[62:09] spiral that's only going to get worse.
[62:10] and I tweeted, you know, I think
[62:12] Bitcoin's gonna like totally rip uh over
[62:15] the coming years. So Luke Groman, I love
[62:20] uh he calls this true interest expense,
[62:24] that's his own term really, but he's
[62:27] basically accounting for what are the
[62:30] fixed expenses of the United States. So
[62:32] he's got health and human services,
[62:34] social security, gross interest,
[62:38] okay, and VA.
[62:40] Now
[62:42] our federal receipts, so like the
[62:44] revenue that the US is bringing in is
[62:47] $4.15
[62:49] trillion roundabouts. All of our fixed
[62:52] expenses are $4.375
[62:55] trillion. So that's 105% of federal
[62:59] receipts. just our fixed expenses as a
[63:02] country we can't afford with revenue
[63:05] with tax revenue. So just to get by we
[63:09] basically have to print money
[63:11] and then of course there's all sorts of
[63:13] other expenses that will be layered on
[63:14] on top of that. But that this is a debt
[63:17] spiral when like you can't afford your
[63:22] own bills just based on your revenue. So
[63:24] just to get by you have to print money
[63:26] to get by. That's a debt spiral.
[63:31] That's crazy. So, this is another reason
[63:33] why in my opinion and and so like when
[63:36] did this change? Well, the US keeps
[63:38] increasing the amount of money it wants
[63:40] to spend. So, one way to solve this is
[63:43] cut spending, but clearly they're not
[63:44] willing to do that. Instead, they want
[63:46] to stop uh and intervene in yields and
[63:51] intervene in the bond market. Fine. I
[63:54] mean, listen, here's the thing because
[63:56] another thing that I want to say about
[63:58] Bitcoin that I'm very grateful for is
[63:59] that Bitcoin
[64:02] allows me to just stay humble, stack
[64:04] sats, and chill. I don't have to fly to
[64:07] Washington and protest. I don't have to
[64:08] convince Scott Besson to not do this or
[64:11] do that. He could do whatever he wants,
[64:13] and I'm cool with it. You want to
[64:15] intervene in the bond market? Fine. I
[64:17] know what to do with that information. I
[64:19] know what to do. Own some goddamn
[64:21] Bitcoin. That's what I need to do. But
[64:24] go for it, dude. Whatever. You know,
[64:27] Bitcoin a and my neighbors may say, "Oh,
[64:30] Bitcoin burns the oceans. Oh, Bitcoin
[64:33] stupid. How could you how could you
[64:35] believe in that? I can't even hold it."
[64:37] That's fine. You guys don't have to
[64:38] believe in it. That's chill. Guess what?
[64:41] I've got a great life. For the last
[64:44] almost 14 years, Bitcoin's been
[64:45] unbelievable. It'll continue to be
[64:47] unbelievable. You can't. There's nothing
[64:49] you can do about the fact that there's
[64:51] going to be another block in about 10
[64:53] minutes on average. There's nothing you
[64:55] can do about its supply. You cannot
[64:56] censor my transactions. I don't have to
[64:59] protest. I don't have to convince you of
[65:00] anything. So, these guys want to keep
[65:04] spending money and they're not willing
[65:05] to cut back and they want to win
[65:07] midterms. They want to win more
[65:08] elections and they know that cutting
[65:10] back and not promising free [ __ ] will
[65:13] they'll lose to the Democrats and and
[65:15] they'll they'll lo they'll lose
[65:16] midterms. they'll lose everything. And
[65:18] so they need to find ways to finance
[65:20] this and they're going to intervene in
[65:21] markets and scare everybody out of
[65:23] bonds. Okay, fine. By all means,
[65:27] brother.
[65:28] I'm going to stay humble and stack sats,
[65:30] keep my sats on ice. Um, so another
[65:35] thing to keep in mind these obligations
[65:37] that these guys have. So keep in mind
[65:40] social security, you have to keep in
[65:42] mind you have to adjust to the cost of
[65:45] living. healthcare, you have to pay like
[65:47] real medical services. Like these people
[65:49] are getting old that you have made all
[65:51] these promises to. They're going to need
[65:52] new hips, new knees, wheelchairs,
[65:55] surgeries, okay? Like veterans interest
[65:59] like these are real expenses that rise
[66:01] with inflation as well. So when the cost
[66:05] of medical surgery goes up in inflation,
[66:07] like that is painful to the government
[66:10] too. So you can inflate a fixed bond
[66:13] away, but it's much harder to inflate
[66:15] away promises for real goods and
[66:17] services. So keep in mind that the US
[66:19] government has those as well. So when I
[66:22] say that this is going to be like
[66:24] serious inflation, I'm talking like
[66:26] smoking hot, piping hot, fresh out the
[66:28] oven. Is that smoke that's coming off
[66:31] those cookies? Inflation. They're going
[66:33] to run this thing hot, which is great. I
[66:36] mean, like I said, fine. I mean, I don't
[66:38] blame you. If I was in the in your seat,
[66:41] I don't know. Like I I I would basically
[66:44] just not try and get reelected and I
[66:46] would say screw this. Like we're going
[66:48] on a Bitcoin standard. This is all
[66:50] pointless. Um
[66:53] so anywhoot
[66:56] uh that's pretty much it guys. Uh I
[66:59] wrote here default question mark
[67:01] austerity question mark or financial
[67:03] repression. Now you can nominally
[67:05] default. Um, you can cut spending or
[67:09] what they're doing. You could hold
[67:10] yields below inflation and that's what
[67:12] they're doing. Real rates negative.
[67:15] Financial repression, currency
[67:17] debasement,
[67:19] destroying the currency.
[67:22] That's it. That's it. So, what is real
[67:26] rates negative? Figured I'd put a slide
[67:28] in here for it. Let's say a bond is
[67:30] yielding 4% and inflation 7%. Your real
[67:33] return is negative. Yes, you're getting
[67:35] paid 4%, but everything around you is
[67:37] getting 7% more expensive. So, your life
[67:39] is getting -3% every single year.
[67:45] So, yes, they're paying every dollar
[67:47] back, but also, yes, they're making each
[67:49] dollar worth less, even less. You see?
[67:54] So, anyways, what's going to happen if
[67:58] investors don't want to store wealth in
[68:00] a managed longduration debt? Where does
[68:02] their money go? Well, you only have so
[68:04] many options. You've got gold, you've
[68:07] got equities, you've got real assets,
[68:09] and now you've got Bitcoin. And this is
[68:12] where Bitcoin becomes the fastest horse.
[68:14] This is where Bitcoin goes up 25% in a
[68:16] week and gold's only up 7%. This is
[68:19] where the show, this is, hey, now I'm
[68:21] speaking from experience, okay? Can only
[68:24] warn you so many times. I don't want to
[68:26] look back in two years. You got to say,
[68:27] "Oh, Jack, you should have told me so."
[68:29] No, no, no, no, no. I'm telling you now.
[68:31] I'm telling you now. Okay? Now, it's
[68:33] going to be volatile. Hold on to your
[68:35] buttocks. It's going to be volatile.
[68:37] Bitcoin's not only going to go up. Don't
[68:39] take on too much leverage. Don't exceed
[68:41] your mean. Stay humble. Stack SAS. It's
[68:43] critically important. Okay? But I'm
[68:46] telling you now, okay? And so, if we go
[68:48] back to this asset I showed earlier, I
[68:51] mean, look at this thing. Tell me what
[68:52] the fastest horse is. You've got the
[68:54] dollar, gold, and Bitcoin all on the
[68:56] screen.
[68:58] And right when Scott Bessant basically
[69:00] said out loud, "The time has come."
[69:05] I, my friend, am in a sovereign debt
[69:07] crisis.
[69:09] So, I mean, when guys like Ray Dalio
[69:13] are, you know, running to the media and
[69:16] saying, "Sell your bonds, buy gold, and
[69:18] buy Bitcoin." Yeah. Okay.
[69:22] Okay. I mean, what else do you want to
[69:24] know? Paul Tudtor Jones disclosing uh in
[69:26] the 13A I think that uh he materially
[69:30] added to his Bitcoin position.
[69:33] Okay, so when it comes to Bitcoin, I
[69:37] tweeted about this, but I want to make
[69:38] something clear. Trying to do a little
[69:40] Bitcoin 101 in each episode. So
[69:44] something I've explained before, I
[69:46] wanted to spend a little bit of time
[69:47] today.
[69:50] The unique thing about Bitcoin is
[69:52] there's no amount and this is only
[69:54] unique to Bitcoin in regards to monetary
[69:57] assets. Gold doesn't have this, oil
[69:59] doesn't have this, stocks don't have
[70:00] this, more demand cannot find more
[70:06] supply
[70:08] for something like gold. If there's
[70:10] enough demand for gold,
[70:12] it will be economical for miners to spin
[70:15] up new mines and find more in the
[70:17] ground.
[70:18] If there's enough demand for oil, it'll
[70:20] be economical for people to spin up new
[70:22] drills and find more oil in the ground.
[70:24] There's enough demand for bonds. If
[70:26] there's enough demand for Tesla stock,
[70:28] let's take strategy stock for example.
[70:31] If there's enough demand for MSTR,
[70:32] Sailor will print that [ __ ]
[70:37] Let's take your own life. If there's
[70:39] enough demand for McDonald's
[70:40] cheeseburgers, McDonald's will make
[70:42] more. If there's enough demand for vodka
[70:44] sodas, the bartender will pour you
[70:46] another. If there's enough demand for
[70:48] housing, they will build you another
[70:50] one. Ken Griffin said, "You know what? I
[70:53] like this building in New York, but I
[70:56] want a floor on top of the highest
[70:58] floor." And they said, "Mr. Griffin, we
[71:00] can't do that. That would ruin the
[71:01] existing penthouse owner." Yeah, but
[71:03] I'll pay you $250 million for it. Oh,
[71:07] you got yourself a deal. With enough
[71:10] demand, you find supply. The only thing
[71:14] I know of where that's not true is
[71:16] Bitcoin.
[71:19] It doesn't matter who you are, what you
[71:21] are, where you are. No amount of demand
[71:25] can create more bitcoins. Period.
[71:29] So where does the supply come from when
[71:33] there's more demand? Guys, it comes from
[71:36] a higher price.
[71:38] Okay?
[71:40] Demand always finds supply. And if it
[71:43] can't find it in the ground, if it can't
[71:45] find it in a factory, if it can't find
[71:47] it behind the bar, if it can't find it
[71:50] in a penthouse, it finds it in the
[71:52] market at a higher price. Meaning this,
[71:55] all of a sudden, when Scott Bessant
[71:57] said, "Yeah, sorry. You guys were all
[71:59] right. It is a sovereign debt crisis.
[72:01] We're going to start printing money to
[72:03] lend to ourselves. Buckle up. We're
[72:04] growing our way out of this thing." And
[72:06] everyone said, "Shit, I need some
[72:08] Bitcoin.
[72:10] We couldn't make any more in a factory.
[72:12] We couldn't make any more out of the
[72:13] ground. We couldn't get any any behind
[72:15] the bar in the basement. There wasn't
[72:18] any in an oil rig. So, the market says
[72:20] this, how many are available at 60,000?
[72:23] And they're asking all of us, all of you
[72:25] listeners that have Bitcoin, did how
[72:27] many of you guys grabbed your coins from
[72:29] cold storage and threw them on an
[72:30] exchange because Bitcoin hit 60,000? And
[72:33] they said, "Well, [ __ ] there's not
[72:34] enough there. How about at 61,000? How
[72:37] about at 62, 63, 64, 65? And when I say
[72:40] prices are set at the margin, that's all
[72:42] I mean because one buyer can drive the
[72:45] price from 60,000 to 80,000. How?
[72:48] Because none of us are willing to sell.
[72:51] And it doesn't no one can go mine more,
[72:54] no one can go make more, no one can go
[72:55] print more. It's got to come from us.
[72:58] And eventually what you see in these
[73:00] bitcoin adoption cycles where the price
[73:01] goes up up up up it's entering what we
[73:03] call price discovery where it's
[73:05] basically the market saying we want more
[73:07] bitcoins. What price is it going to take
[73:10] for you guys to go into cold storage
[73:12] deposit on an exchange and give it to
[73:13] us? And eventually it finds some
[73:16] equilibrium. Like let me tell you guys
[73:19] when I got into Bitcoin the price was
[73:21] under a hundred bucks. Then I watched
[73:23] the price go to $1,200
[73:26] and then Mount Gaus and Silk Road and
[73:28] all of that. And the price went from
[73:29] $1,200 all the way to like 250, a little
[73:32] lower.
[73:34] And so the price was going up from $50
[73:36] to $100, $200, $300, $400. Like at what
[73:40] price is someone going to say, "Fine,
[73:42] I'll take a new car. I'll take a new
[73:44] house. I'll pay off my old debt. I'll
[73:46] put my kid through college. Fine, I'll
[73:48] sell you some bitcoins at $1,200." And
[73:50] then that's the part in the market where
[73:52] you saw more sellers than buyers.
[73:55] And then the price falls to 250.
[73:59] And then it goes from 250 to 20,000. And
[74:01] during that run, it's like demand,
[74:03] demand, demand, demand.
[74:06] Largely, Bitcoin is priced on
[74:07] expectations of new fiat currency.
[74:09] There's more units of fiat that are
[74:12] competing for a fixed amount of
[74:14] bitcoins. Every single time these guys
[74:16] print money, Bitcoin goes on a run.
[74:18] Okay? goes from 250.
[74:21] What price is it going to take for you
[74:23] guys to go put Bitcoin on exchange and
[74:25] meet the demand? Supply meeting demand.
[74:28] Is it $250? $500, $1,000, $5,000,
[74:32] $10,000. It took Bitcoin to get to
[74:34] 20,000. Okay. Then I watched Bitcoin
[74:36] fall to 3,000, then 3,000 to $69,000.
[74:39] Then it fell to whatever 17,000. 17,000
[74:42] to$126,000. Now down to 60,000. We're
[74:45] doing it again. This is okay. They're
[74:47] about to print a bunch of money.
[74:49] Everyone wants Bitcoin. What price is it
[74:51] going to take for the market to give
[74:54] enough supply to meet the demand?
[74:56] Well, it wasn't 61,000. It wasn't
[74:58] 65,000. It wasn't 70,000.
[75:01] Right? So, look at this. $2 billion of
[75:05] flows from the ETFs last week. Their
[75:08] best week since October 2025.
[75:16] That's a lot of demand.
[75:20] People are like, "I don't want to own
[75:21] bonds anymore. I don't even know in this
[75:24] in this era of money printing. I don't
[75:25] even know how much gold I want to own
[75:27] compared to this Bitcoin thing. You're
[75:29] telling me that you can't mine anymore?
[75:31] Elon can't go what what Elon say? He's
[75:33] going to get a bunch of gold out of an
[75:35] asteroid in space. There's no Bitcoin in
[75:38] space, brother.
[75:41] It's it. If you want more bitcoins,
[75:43] you're going to have to pry it out of my
[75:45] cold dead hands. That's why the price is
[75:49] going up because I'm not [ __ ]
[75:51] selling. That's why. Because you got a
[75:54] bunch of guys. And let me tell you
[75:55] something. Because there's a lot of
[75:57] egoomaniacs out there that think they're
[75:59] the Bitcoin market. They set the price.
[76:01] Bitcoin wouldn't be [ __ ] without them.
[76:03] Guess who sets the price? You and I
[76:05] listening to this.
[76:08] We do. because we earn more than we
[76:11] spend.
[76:12] So, we're not levered. We're not in
[76:14] debt. We don't have to sell for [ __ ]
[76:17] You guys can drive the price as high as
[76:19] you want. And there's no price that's
[76:21] going to get rid of all my bitcoins. I'm
[76:23] going to die with these bitcoins.
[76:26] And you can't mine any out of the
[76:28] ground. You can't get any out of space.
[76:30] Tough luck. You can't tell Donald Trump
[76:33] and Scott Bessett and the US military to
[76:35] get you more bitcoins. Tough luck.
[76:41] So, I I love this. I love explaining
[76:44] this because it's a like, oh, duh. So,
[76:46] Bitcoin doesn't need trillions of more
[76:48] dollars plowed into the market for it to
[76:51] gain trillions in market cap. The
[76:53] trillions in market cap go from marginal
[76:55] amount of demand, but there's no supply.
[76:58] Oh, you want 10 bitcoins? You might have
[77:00] to push the price up to 100k to get 10
[77:02] bitcoins. Now, I I'm exaggerating, but
[77:04] not by a lot,
[77:07] right? So, I'll tell you guys this. If
[77:10] Bitcoin hits 250K, 500K, a million
[77:13] dollars, I will start asking like, wait,
[77:15] how much are the Chicago Bulls?
[77:18] Yeah, why not? I mean, it's not going to
[77:20] be my whole stack, but the Chicago
[77:22] Bulls. But everybody's got something.
[77:24] And and this is really to me this is
[77:27] really the world evening out
[77:31] because because you've got all these
[77:33] people with all these legacy assets like
[77:36] all the young folks like like my
[77:38] generation. They can't afford a house.
[77:41] They can't afford to put themselves
[77:42] through school. They can't afford their
[77:44] debt. They can't afford their credit
[77:45] card. But they've got bitcoins. We've
[77:47] been staying humble. We've been stacking
[77:48] sats. And then eventually we swap some
[77:51] of our sats for a house to pay off that
[77:54] debt. And it's the way it's a way of the
[77:56] world evening things out a little bit.
[77:58] Like, okay, all these all these people
[78:00] were born into asset inflation and and
[78:03] and they get their social security and
[78:05] stuff, but they're going to have to wire
[78:07] me 500 grand for one Bitcoin. [laughter]
[78:12] Okay, call it even, [ __ ]
[78:15] You know, but anyway, this is what
[78:18] monetization is. This is what it looks
[78:19] like. This is what adoption looks like.
[78:21] When I say Bitcoin is technology plus
[78:23] fiat liquidity, the fiat liquidity piece
[78:25] is right now everyone's scrambling to
[78:28] get their hands on something that the
[78:30] government can't print.
[78:32] And that's why Bitcoin went up 25%. Why
[78:35] did Bitcoin outperform gold so much?
[78:37] Well, guys, it's pretty simple. There
[78:39] was a lot of demand and not enough
[78:41] supply.
[78:44] And and clearly the price didn't get
[78:47] high enough for all of us to go into
[78:49] cold storage and dig it out. Now, did
[78:51] it? How high is this thing going to go?
[78:55] And every single cycle strengthens
[78:57] Bitcoin because you're getting weak
[78:59] hands. Get rid of it in strong hands.
[79:01] So, think about all the people that are
[79:03] kicking themselves like, damn, I bought
[79:05] the top at 126. They're not selling
[79:08] there. There are long-termers now. This
[79:11] asset's been in existence for over 15
[79:13] years.
[79:14] This asset class is made of long-term
[79:17] hodlers.
[79:20] So, another thing I want to mention,
[79:23] Strike tweeted this. I actually made
[79:25] this asset myself.
[79:27] Bitcoin's performance on average comes
[79:30] from 10 days a year. meaning this
[79:34] Bitcoin the the stay humble stack sats
[79:38] and huddle meaning you just own it for
[79:40] 365 days a year on average since 2014
[79:45] it's 157% returns
[79:48] if you just owned Bitcoin its 10 best
[79:51] days a year so you only own Bitcoin 10
[79:53] days a year but it was the 10 days where
[79:56] it had its best performance
[79:58] 162% a year so you marginally
[80:00] outperformed med just holding it every
[80:02] day. Now, if you own Bitcoin 355 days a
[80:07] year and you don't own it the 10 best
[80:10] days, so you own it every day except its
[80:13] 10 best days a year, negative 14% a
[80:17] year. So, Bitcoin's performance comes
[80:20] from these moments, guys, these
[80:21] repricings like this, a snap, a blink.
[80:25] And this is why I can't stress enough to
[80:27] stay humble, stack sats, and huddle,
[80:30] guys. You're not going to be able to
[80:31] guess the 10 days a year, every year.
[80:35] This is the humble part. Bitcoin's
[80:36] humility money. You're not smarter than
[80:39] the market. You're not smarter than your
[80:41] neighbor. Just work hard. Be kind. Be
[80:44] patient. Stay humble. Stack sats.
[80:47] Huddle. That's it.
[80:50] There's You can own Bitcoin 355 days out
[80:53] of the 365 days in a year and lose 14% a
[80:57] year.
[81:00] This is why I'm say and I know the bare
[81:02] market's hurt and I know the volatility
[81:04] is hard. That's the price of admission.
[81:06] That's the price that you pay. I'm
[81:08] telling you. I'm telling you. I'm
[81:09] telling you. You don't have to listen to
[81:10] me. Obviously, do whatever you want.
[81:13] Just just take it take it from from
[81:15] someone who's who's been around the
[81:17] block once or twice. Okay.
[81:20] So, like I said, you know, Jordy tweeted
[81:23] this. He he said BTC is a
[81:26] community-based energy asset that
[81:28] historically accelerates out of bare
[81:29] markets when VA has compressed and it is
[81:32] ignored. This is measured best in sigma
[81:34] moves. The pattern of the last two major
[81:36] shifts coming out of the 2018 and 2022
[81:39] bare market. The pattern was seen by a
[81:42] large weekly sigma move where Bitcoin
[81:44] crossed the 200 day moving average the
[81:46] week of the sigma move. So far this week
[81:48] is exactly that same pattern. Okay. So
[81:53] basically the market tried to raise the
[81:55] price of money saying you guys want us
[81:58] to loan you money over a long duration
[82:00] whether you're AI infrastructure
[82:01] buildout military equipment building uh
[82:05] government spending we're going to need
[82:07] a higher price in Washington DC in the
[82:09] White House said we can't afford that.
[82:10] Sorry we're going to start intervening
[82:12] and weakening the dollar. Uh, and so if
[82:16] the price of capital can't fully clear,
[82:18] can't fully be priced freely, then
[82:21] something else has to adjust. And that's
[82:22] what you're seeing in hard assets. Hard
[82:24] assets are repricing this reality.
[82:26] That's it. So scarcity is king, guys.
[82:30] That's my macro breakdown. We got it in
[82:32] in slightly under 90 minutes. I'm out of
[82:34] breath a little bit. I need some water.
[82:36] But in a world where governments
[82:38] increasingly manage the price and supply
[82:40] of financial assets, an asset whose
[82:43] supply they cannot manage is the whole
[82:46] game. And that's what it means to be a
[82:49] Bitcoiner. For 90% of our lives, we're
[82:53] weird. We're stupid. We're egregious.
[82:56] We're obnoxious. And then very rarely,
[82:59] in the snap of an instant,
[83:02] wait a second. Are they right? I'm
[83:04] telling you. I'm telling you. I'm
[83:06] telling you. I'm telling you. Okay,
[83:08] let's do some Q&A and then I'll get out
[83:11] of here.
[83:12] Ow, my chest hurts. That was so much
[83:15] talking.
[83:19] Water.
[83:31] We're so back though. I mean, how back
[83:34] are we? So, back. That's the right
[83:36] answer.
[83:38] Uh, okay.
[83:41] Q and A,
[83:44] let's go.
[83:47] Question for Jack. Is it possible that
[83:49] Fiat's easy credit actually accelerated
[83:51] our tech boom? Without cheap capital
[83:54] funding, would we even have the internet
[83:56] or AI today under a hard money system?
[84:00] Um, yeah, I think we would. I mean, a
[84:03] lot of the US's growth
[84:06] has just been inflation, and that can be
[84:09] demonstrated by the fact that the stock
[84:11] market has not outperformed
[84:14] uh gold, but it's been up in dollar
[84:17] terms. So I mean assume if you assume
[84:22] that gold is generally an inflation
[84:24] hedge and has been maybe more the re
[84:28] real price of quote unquote money. Um
[84:31] but yeah I think these things would have
[84:33] been built of course I
[84:36] listen this is all about misallocating
[84:39] capital. You know, without a free market
[84:42] and consequences to your decisions,
[84:44] you're allowed to make mistakes, print
[84:45] more money than you need, borrow more
[84:47] than you can afford, and not have
[84:49] consequences and just bail yourself out.
[84:52] Doesn't mean that proper smart
[84:54] allocation of capital would go away as
[84:56] well. I mean, if there's innovation,
[84:58] then people fund it. People finance
[85:00] productive things. That's what's
[85:01] happening with AI. One of the reasons
[85:02] that the US government yields are going
[85:04] up so much is everyone's like, I'm not
[85:06] giving my money to one of the greater
[85:08] misallocators of capital in human
[85:10] history in the government. I'd rather
[85:11] give it to the some of the most
[85:13] productive people ever, Google, Meta,
[85:15] Amazon, like what? So, yeah, of course.
[85:19] I I think that I mean, think think about
[85:22] like venture capital like so people
[85:25] looking for productive entrepreneurs.
[85:27] So, I don't think that innovation is a
[85:31] function of just this hush slash pile of
[85:34] fiat. I mean, the Wright brothers
[85:36] invented the airplane on the gold
[85:37] standard. How'd they do that? They like
[85:41] someone was willing to help them fly and
[85:45] finance that. I mean, you I I think that
[85:48] there's just they're not No, my my I I
[85:52] reject the premise. Reject the premise.
[85:55] Uh, okay. Question for Jack. Prediction
[85:58] markets are a hot thing right now, but
[86:00] what are your thoughts on coordination
[86:02] markets?
[86:04] I don't know what coordination markets
[86:06] are. Um, yeah, prediction markets are
[86:10] cool. Listen, I just my problem with
[86:12] prediction markets, I have two. one is I
[86:15] just don't think that they uh
[86:19] I I don't think that they need a
[86:24] shitcoin associated with them.
[86:27] Like we could do prediction markets just
[86:29] on like a MySQL database. We don't need
[86:32] a blockchain for them at all. It's all a
[86:35] regulatory arbitrage. The reason is like
[86:38] DraftKings uses a MySQL database and
[86:40] they're not allowed to do what
[86:41] prediction markets are doing because
[86:43] technically prediction markets are quote
[86:44] unquote decentralized according to
[86:46] regulators, although practically not
[86:48] really. So, it's all a regulatory
[86:49] arbitrage. It's a way to pull off
[86:51] something that was previously illegal,
[86:53] which is all shitcoins are good for.
[86:55] Like, how do you you want to print your
[86:56] own money and be your own central bank?
[86:58] Well, if you did that on a MySQL
[87:00] database, you go to jail. But if you do
[87:01] it on Ethereum, then you're an innovator
[87:03] and you are on Forbes magazine until you
[87:05] eventually go to jail. So, it's all a
[87:07] giant regulatory arbitrage. That's my
[87:08] one problem with prediction markets. My
[87:10] second problem with prediction markets
[87:11] is it just it further
[87:15] I I love the idea of like free markets.
[87:17] I think it's cool like insider trading.
[87:20] It it should be available to all if
[87:22] people are going to do it. I would love
[87:23] to see what the insiders are doing when
[87:25] it comes to live events. So, that part's
[87:28] definitely cool. uh the
[87:31] more like as a businessman the issue I
[87:34] have is just the gambling I like if you
[87:38] look at I think it's Kshi 80% of their
[87:41] volume is sports gambling with these
[87:43] prediction markets. So again, it's just
[87:44] a regulatory arbitrage to compete with
[87:47] DraftKings and FanDuel and have products
[87:49] they don't have because technically
[87:50] they're on a shitcoin instead of my SQL
[87:53] and the government hasn't gotten around
[87:54] to like truly regulating these things in
[87:56] an equal way.
[87:58] So, I just think that all these
[88:01] companies are going after the fact that
[88:03] everyone's a speculator in this era of
[88:05] currency debasement, which is very
[88:06] unfortunate because your your customers
[88:08] are just rapidly losing money betting on
[88:10] sports and they think the only way they
[88:12] can ever afford a home or get out of
[88:13] debt or have a higher quality of life is
[88:15] just gambling on [ __ ] And I would never
[88:18] offer that product. I think it's like
[88:21] feeding drug addicts drugs. And
[88:23] obviously it's a good business until
[88:25] they go to rehab and um fix themselves
[88:28] and eventually stop gambling and find a
[88:31] way to save money. So I just it's just
[88:34] you know you got all these apps that are
[88:36] crypto trading, equities trading,
[88:39] prediction markets like Robin Hood,
[88:41] Coinbase, Poly Market, all of these is
[88:44] just like degenerate gambling. People
[88:46] just gambling. Um and uh yeah, I don't
[88:49] know. I mean, I'm sure they're going to
[88:50] be good businesses in the short term,
[88:52] and I get it. Like, if you know, you're
[88:54] just optimizing for shareholder value
[88:56] and just trying to meet next quarterly
[88:58] earning expectations. Yeah. I mean,
[89:00] there's a lot of degenerate gamblers out
[89:02] there because the currency is being
[89:03] destroyed. But eventually, you know,
[89:06] you're going to lose customers because
[89:07] your customers are getting increasingly
[89:08] poorer using your products, buying
[89:11] Trumpcoin and Melaniacoin and betting on
[89:13] NFL through your app. House always wins.
[89:17] Um, and I just don't find that
[89:19] constructive to building a better world.
[89:20] I would rather, you know, take a
[89:23] longerterm view and build a business
[89:24] just based on Bitcoin. And I know I
[89:26] don't make as much money as all these
[89:28] other guys, but, you know, I think one
[89:30] day I will. Just got to stay the course.
[89:33] So, that's my prediction market opinion.
[89:36] Um, I don't know what a coordination
[89:37] market is. Uh, question for Jack. Is
[89:40] Larry Leard's the big print playing out
[89:42] in real time? is the beginning of the
[89:44] end of the forth turning hyper
[89:46] bitcoinization.
[89:47] Yeah, it could be. You know, listen, I'm
[89:49] sensitive to
[89:51] saying like this is it, this is it. You
[89:54] know, because markets can remain
[89:56] irrational far longer than you can
[89:58] remain solvent. And so you you you
[90:00] overestimate how quick like, oh my god,
[90:02] it's all about to go down. And you know
[90:06] what? What defines the big print? What
[90:08] does that mean? But yeah, no clearly the
[90:12] US government and the Treasury is
[90:14] intervening in markets and you know what
[90:18] it's usually overestimated
[90:20] like these buybacks like going from two
[90:22] billion to four billion doesn't matter
[90:24] guys like we're talking about$2 trillion
[90:27] of debt 4 billion what that's
[90:30] meaningless but it's the point that he's
[90:33] coming out and saying there's no
[90:34] austerity we're going to intervene and
[90:37] that's when when the market was cute
[90:39] little four billion and then he comes
[90:41] back on Monday and says, "No, I got a
[90:42] trillion in the bank, motherfucker."
[90:44] Everyone's like, "Okay, okay, here we
[90:46] go. Now we're good." Right? So, you can
[90:50] just see it escalating. But how long is
[90:52] it going to take and what's the path to
[90:54] get there? Who knows? I have no idea.
[90:56] But what's ve what's abundantly clear is
[91:00] the yields they can't afford the yields
[91:02] to be any higher. and and the sovereign
[91:04] debt crisis thesis has legs and that
[91:07] means Bitcoin does. And you know, my
[91:09] time preference is so low. Who cares?
[91:11] Like I'm it feels I feel really good
[91:15] with my worldview, with my savings, with
[91:19] how I'm spending my time, with building
[91:21] a family. Like on a relative basis,
[91:25] um I feel confident in not owning bonds.
[91:29] That's all though. I I have no I have no
[91:31] time based prediction. But yeah, I think
[91:32] Larry's book is great and I think
[91:34] Larry's opinion he we share the same
[91:37] worldview 100%.
[91:39] A question is the pressure for the
[91:41] clarity act to pass a tell for the US
[91:43] government to a get dollars via tether
[91:46] into other countries and b create more
[91:48] demand for US bonds to be bought up by
[91:50] tether. Yeah. Yeah, I mean there's a
[91:52] thesis that what Besson is trying to do
[91:55] listen so I I'm talking about these
[91:56] short duration instruments
[91:59] and this is what Tether owns this is
[92:02] what stable coins own. So in theory if
[92:04] Bessant can get stable coins to pr
[92:07] proliferate throughout the world then he
[92:10] can help finance a lot of this basically
[92:12] via stable coins. In practice though, I
[92:16] just don't think they I mean, they're
[92:19] just not big enough.
[92:22] They're not big enough. So, I just Yeah,
[92:25] the math doesn't work out that way. I
[92:28] mean, I don't know the pressure for
[92:30] Clarity Act to pass. Clarity Act really
[92:32] has nothing to do with Bitcoin if we're
[92:34] being honest. I don't really care if it
[92:35] passes. In fact, I'd rather it not at
[92:37] this point. Let's just get back to I
[92:39] think there's a a good thing or two in
[92:41] there for us. Um, and I really
[92:42] appreciate the work that's being done in
[92:44] DC by the Bitcoin Policy Institute, BPI,
[92:46] and those guys. And I know that there's
[92:48] a few good things I I think that protect
[92:50] developers. And so I I don't want to be
[92:54] uh obnoxious to those. But broadly
[92:56] speaking, it's a bunch of shitcoiners
[92:58] fighting over regulatory moes and
[93:01] shitcoin privilege. And I just find it
[93:03] off-putting and kind of disgusting. And
[93:06] it just doesn't really matter. like if
[93:08] clarity passes or not strikes business
[93:10] like we don't give a [ __ ] like a [ __ ] at
[93:13] all. So I don't really care. Um and why
[93:18] there's pressure, there's all sorts of
[93:19] pressure. There's pressure because the
[93:21] biggest donors to the admin um are the
[93:24] ones pushing this and you know
[93:26] theoretically going to continue donating
[93:29] um to Republicans going forward if
[93:31] they're if the admin's able to make
[93:33] whole on their promises. Um, so you
[93:36] know, there's all sorts of political
[93:38] capital probably up for grabs right now.
[93:41] Clearly, the Democrats are trying to
[93:45] shove their nose in the face of the
[93:46] whole crypto movement and all all of
[93:49] that money that donated to the admin
[93:51] that are trying to get their way. So, I
[93:54] don't know. But yeah, I mean, one thesis
[93:55] is stable coins can help finance all
[93:57] this, but you know, when you do the
[93:58] math, that's a I would call it a hail
[94:01] mary if I were to do sports analogy.
[94:03] It's totally possible. I mean, every now
[94:05] and then you see Aaron Rogers complete a
[94:08] few throughout his career, you know, but
[94:11] what's the math on them? You know, it's
[94:14] it's uh very unlikely.
[94:19] Question for Jack. Does the US
[94:20] government actually have an incentive to
[94:22] trigger a stock market crash, forcing a
[94:24] flight to safety into treasuries? The
[94:27] problem is, it's a good question. So the
[94:29] question is
[94:30] can the government basically cause panic
[94:33] in the market where everyone goes oh
[94:36] crap I might as well just go into US
[94:39] treasuries so I feel safe. The problem
[94:41] is
[94:44] recently and recently meaning the last
[94:46] like some odd years I don't know exactly
[94:48] call it four five six years treasuries
[94:51] have not been a flight to safety it's
[94:53] been the opposite where stocks down
[94:56] yields up
[94:59] and this is emerging market behavior.
[95:01] This is behavior of a sovereign debt
[95:05] crisis of an indebted nation. This is
[95:07] like the behavior of like a third world
[95:10] country.
[95:12] But when when assets down and yields up,
[95:15] that means everyone's dumping the
[95:17] treasuries too. And so I would say like
[95:21] the way you're thinking about it is
[95:22] correct. And historically, treasuries
[95:25] have been a safe haven. But as of
[95:28] recent, they haven't. People don't want
[95:30] to lend to the US government anymore,
[95:33] which is the crux of the problem. to
[95:35] oversimplify it but get my point across.
[95:39] Jack question. Do you think Bitcoin
[95:41] actually can be a medium of exchange
[95:42] without the US wanting that?
[95:45] Um,
[95:48] yes. Over what time frame? I'm not sure.
[95:52] Like I said, I I you know, I really
[95:55] don't find it too productive to
[95:59] make timebased predictions. Who cares?
[96:03] Because I tell you what, tomorrow I'm
[96:04] gonna wake up and I'm gonna work on
[96:06] Bitcoin. And my work on Bitcoin, the
[96:08] hardest thing is to figure out what to
[96:11] do today to make progress because
[96:14] there's so much going on. There's so
[96:15] much noise. There's so much possibility.
[96:17] There's so much you can do, but what
[96:19] should you do? And it's organizing your
[96:22] resources and just creating a to-do list
[96:24] that has the right priority and just
[96:26] staying focused and just one at a time
[96:28] because great things are the result of
[96:32] day after day after day after day and
[96:36] just getting better, just getting
[96:37] better, just getting better, just
[96:39] getting better. And then you look back a
[96:41] month, a year, a decade and you say,
[96:45] "Wow, I did it." But I did it just by
[96:49] winning the day. And so I try not to I
[96:53] don't know.
[96:55] I think that Bitcoin is better money. It
[96:58] It's physical settlement. There's no
[97:00] fraud. It moves faster. It's cheaper.
[97:03] It's just better. And so I think people
[97:06] will use it inevitably because it's
[97:08] better. Now, are we going to use Bitcoin
[97:10] as techn technological infrastructure
[97:12] first to move fiat currencies over it
[97:15] and then eventually we're like, why do
[97:17] we want to swap into these? I might as
[97:18] well just take the Bitcoin I'm receiving
[97:20] and go to Whole Foods, maybe. Totally
[97:24] possible while I'm alive. I don't know.
[97:27] I have no idea. I don't even know when
[97:28] I'm going to die. So, uh,
[97:32] yes, but I don't know the timeline.
[97:35] And as fun as it is, I mean, listen, I'm
[97:37] happy to have fun with you guys on
[97:39] podcasts and just guess for the fun of
[97:41] it, but practically speaking, I try and
[97:43] hold myself to, you know, I have
[97:46] long-term thesis and I vision, but then
[97:50] executing is what separates boys from
[97:53] men is executing, discipline, work ethic
[97:58] every single day. Win that day and don't
[98:02] don't celebrate. Enjoy the day. win the
[98:05] day. Once you go to bed, you wake up in
[98:06] the morning, it's a new day. You got to
[98:08] win. You got to earn that day. You got
[98:10] to wake up the next day and earn that
[98:12] day. Prior day doesn't give you any
[98:15] any right to to the next day. And you
[98:19] just got to stack days. I'm telling you.
[98:23] So,
[98:24] you know what's going to happen 10 years
[98:26] from now? I don't know. But I know what
[98:30] to do tomorrow. And I'm a stack that
[98:32] day. You know what I mean? Eat good,
[98:35] lift heavy things, see the sun, love my
[98:38] fiance, bust my ass at strike,
[98:41] work for you guys. You know what I mean?
[98:43] [sighs]
[98:45] Uh, if one has saved in Bitcoin and has
[98:49] credit loans available at a bank, would
[98:51] you consider those loans a form of
[98:53] savings, too? Don't want to suggest
[98:55] taking out loans, rather get liquidity
[98:57] from other places.
[98:59] I'm not sure the question, but listen, I
[99:02] mean, borrowing in fiat is the name of
[99:05] the game as long as you do it
[99:08] responsibly. You want your liabilities
[99:10] in fiat, just like the US government.
[99:13] The US government is making the dollar
[99:15] worth less so it's easier to pay back
[99:17] their debt. Let's say this. You know how
[99:21] like in some of these crazy highly
[99:24] inflated currencies like Venezuela, you
[99:27] have to like wheel Venezuelan boulevards
[99:30] just to get a cheeseburger. You got to
[99:32] like wheel a pile of them. Well, imagine
[99:35] you had debt that was 10 Venezuelan
[99:38] boulevards. And now it, you know, you
[99:40] earn 10 Venezuelan boulevards for doing
[99:42] 30 seconds of work because it's such dog
[99:46] [ __ ] currency. Well, how easy is it to
[99:48] then pay the debt back that you created
[99:49] from years and years and years and years
[99:51] in the past? And so I would say [sighs]
[99:55] like if you can create fiat liabilities
[99:58] as debt, I mean that's the sailor game
[100:00] plan, the US government. Um that's what
[100:04] wealth pe wealthy people do is they
[100:06] borrow the thing that's only going down
[100:09] and they hoard the thing that's only
[100:11] going up. But you obviously have to do
[100:13] it responsibly. That's also what we call
[100:15] leverage. So, you know, it's like
[100:18] playing with fire. Fire can heat a home,
[100:20] can change civilization, right? Can also
[100:23] burn the house down and kill you. So,
[100:26] you know, you're playing with an adult
[100:28] toy. You got to be careful. But that is
[100:30] the name of the game. Fiat liabilities.
[100:32] You want Bitcoin on the asset side of
[100:34] the balance sheet and you want fiat on
[100:36] the liability side of the balance sheet.
[100:39] That's how you retire your bloodline
[100:41] right there. tell you that much. Uh,
[100:44] okay. Strike question. Qu question for
[100:46] Jack. Any update or estimated timeline
[100:49] on bringing loan consolidation to
[100:50] California? Is it actively in progress?
[100:53] And what regulatory approvals is still
[100:54] needed?
[100:56] Yeah, guys, unfortunately, and I'm sorry
[100:59] about this, um, doing stuff in America
[101:01] is regulated by each state, and
[101:04] California is unbelievably difficult
[101:07] when it comes to our products. So, yes,
[101:10] it is being worked on. Um, we're slowly
[101:12] bringing more and more products uh to
[101:14] California. Um, I will check with the
[101:16] product team and I will get back to you.
[101:19] Speaking of, I forgot to give you guys
[101:21] just strike updates in general. So, let
[101:23] me do that actually.
[101:26] Uh,
[101:30] cuz we launched, hold on,
[101:35] we launched a new activity. Um, hold on.
[101:39] I'll just show it to you because
[101:42] I'm gonna try and explain it and you
[101:44] guys will still have questions which
[101:45] makes it pointless for me to try and
[101:47] explain. So, basically, everyone's
[101:49] familiar in a finance app, your
[101:53] activity. So in strikes activity, you
[101:56] can see payments you've received or
[101:58] made, the Bitcoin you've purchased,
[102:01] direct deposit, bills you've paid, loans
[102:03] you've taken out, loans you've closed,
[102:05] line of credit usage, everything. Now,
[102:08] the activity used to be very simple.
[102:10] It's just like
[102:12] uh here here's your cash activity,
[102:15] here's your Bitcoin activity, and here's
[102:16] the activity feed if you wanted to see
[102:18] both at the same time. It's like, okay,
[102:20] whatever. Pretty pretty boring. And you
[102:23] guys were like, "Yo, dude. I need to
[102:26] create certain feeds of my own. I need
[102:29] to filter by certain dates. I need to be
[102:30] able to at any point export this like
[102:33] custom activity feed for myself." And so
[102:36] we How do I Oh, shoot. How do I do this?
[102:40] Uh, we made like an activity feed on
[102:44] steroids. It's really, really cool. Can
[102:47] I open this in Chrome?
[102:52] Crap.
[102:56] Hold on.
[103:06] Sorry. I'm trying to figure out how I
[103:08] can share my screen
[103:10] that's not on a browser and I might not
[103:13] be able to.
[103:21] Uh,
[103:24] so we did that. While while I try and
[103:27] figure this out, I'll keep talking to
[103:28] you guys of what we launched. So, we
[103:30] launched this new activity feed. So,
[103:31] check your activity. You'll see things
[103:34] like
[103:35] I'll show it to you in a second. Uh, we
[103:38] also
[103:41] uh launched flexible refinancing and
[103:45] consolidation. So for standard loans, we
[103:47] raised the LTV requirement and are now
[103:49] excluding interest from the LTV
[103:51] calculation so more customers can access
[103:53] these flows. So I think that's
[103:56] unbelievably cool and important. And
[103:58] then BIMI, so all emails from Strike now
[104:01] have a blue verification check mark. So
[104:04] it's a huge win for trust to protect you
[104:07] guys against fishing. So Strike, we now
[104:09] have anti-ishing codes. So, inside your
[104:13] strike app, if you go to security, you
[104:15] have a unique code that we give you, and
[104:17] if you ever want to refresh it and get a
[104:18] new one, you can inside the app. So, if
[104:20] we ever email you, we prove to you that
[104:24] it's us by in the email having the code
[104:28] that is unique to your account that you
[104:31] can find in your app. So, if you ever be
[104:33] like, "Oh, Strike emailed me and they
[104:34] want me to send all my Bitcoin here."
[104:36] You can be like, "Wait a second. Is this
[104:38] actually Jack and Strike?" and you can
[104:40] check for that code and map the code to
[104:42] your app. And then on top of that, we
[104:45] now have this blue verification check
[104:47] mark, which is another stamp of
[104:49] approval. So, we're just trying to do
[104:50] everything we can to protect our
[104:52] customers and protect you guys from
[104:54] fishing and all the scams out there. Um,
[104:57] the flexible refinancing consolidations
[104:59] is really exciting. Let me try and get
[105:02] this video.
[105:05] Oh, supposedly
[105:07] according to a colleague of mine, I can
[105:11] just drag the video into Chrome and he's
[105:14] right. Wow. Legend, Jonathan, designer
[105:18] at Strike. Absolute legend. Okay, here's
[105:20] the video. So,
[105:23] uh, let's see. So, on the activity, look
[105:26] at this. So, you can now there's type,
[105:30] balance, date, availability. You can
[105:32] create your own filters and then at any
[105:34] point you can download and export in the
[105:37] top right. So this is obviously a power
[105:39] user feature but it's unbelievable and
[105:42] you can create any version of your
[105:44] activity you want and always export it
[105:47] and we basically send the CSV to your
[105:49] email and you can create custom filters.
[105:53] Look at that. So you can create any
[105:54] filter that you want. And so for those
[105:56] of you whether it's tax interest,
[105:59] exporting certain data there, we now
[106:02] have look at the search that we have.
[106:06] You can search for all your interest
[106:07] payments, all your bills paid, all your
[106:09] direct deposits. You can filter to to a
[106:11] certain date and then search. So I think
[106:13] we have like the best activity tab in
[106:17] the history of FinTech ever and it just
[106:20] you guys asked for it. So, I'm actually
[106:22] incredibly proud of that feature. Um, so
[106:24] that's what we got from Strike. And
[106:26] then, hold on, hold on, hold on, hold
[106:28] on. Shout out Jonathan again for that
[106:30] hot tip. I really appreciate that. I
[106:31] would not have figured that out. Um,
[106:33] coming soon, interest on cash. So, we're
[106:36] just about done finish testing that.
[106:37] We'll launch with at least three and a
[106:38] half% interest on your cash payable in
[106:41] Bitcoin. Um, we're launching a new
[106:43] website.
[106:45] Uh we've got a few lending enhancements
[106:48] that are coming which are going to be
[106:50] really really really cool and our stacks
[106:52] feature. So all of that coming in
[106:54] hopefully the weeks ahead which is
[106:56] really really exciting. Oh and Dylan's
[106:58] got a few more questions for me that are
[107:01] categorized as other which is usually
[107:04] now Dylan last time was ask me about
[107:06] religion. Caught me off guard.
[107:10] Let's see.
[107:13] Uh question, thoughts on your time
[107:16] visiting Madera. I'm lucky enough to
[107:18] have spent time there. It was an amazing
[107:19] place. I loved Madera and there's some
[107:21] of my favorite Bitcoiners ever in
[107:23] Madera. I'm not going to dox them, but I
[107:25] thought Madera was great. Really scary
[107:27] place to fly to. I would recommend
[107:29] taking a boat. It's so windy that pretty
[107:32] much every flight into Madera, your
[107:35] planes like flipping over and over and
[107:36] over. I didn't enjoy my flight there,
[107:39] but I enjoyed my time there.
[107:42] Jack, please make the slide decks
[107:43] available on your website again. You
[107:44] used to do it a few months ago. Uh, I
[107:48] can try. I keep iterating on my AI
[107:52] tooling and my decks and stuff. And uh,
[107:56] it would be harder for me to do that,
[107:58] but I will try and find a way to upload
[108:00] these. Um, there's got to be a way. If
[108:02] there's a will, there's a way. Um,
[108:06] but this is not Ah, whatever. I'm not
[108:08] even explain to you. Hey, brother. Love
[108:10] Bitcoin, freedom, sovereignty, love the
[108:12] movement. How can I support the mission
[108:14] more as an individual? Dude, you guys
[108:17] support me enough, man. I don't have any
[108:20] advertisers on this and I get to do what
[108:23] I think is best for the world because
[108:24] you guys use my [ __ ] products and you
[108:27] guys support me. Even when you are mean
[108:30] to me, it's out of love and it's
[108:32] feedback that I need to hear. Sometimes
[108:34] the truth is necessary. So even in those
[108:37] times, like I really appreciate it. So
[108:39] you guys support me enough. I think just
[108:42] to be a Bitcoiner, you know, listen, the
[108:45] price is the metric that matters. It's
[108:48] really a reflection of how many of us
[108:49] are using Bitcoin to store our effort
[108:51] and our value and our savings. And so
[108:53] just by taking the work you've done in
[108:55] the world that you want to save in
[108:57] choosing Bitcoin as all the other things
[108:59] you can choose and be like, you know
[109:01] what, I believe that what this thing
[109:03] stands for is good for the world and
[109:04] good for the future and good for my
[109:06] kids. Like that's enough. That's enough.
[109:08] And the fact that you listen to this
[109:09] show and hopefully are a customer of
[109:11] Strike, like that's enough, dude.
[109:13] Plenty, if you ask me. Plenty. Mo more
[109:16] than 99.9% of of the population. That's
[109:20] for sure.
[109:21] All right, guys. Almost two hours. I'm
[109:24] out of here. Feedback. Okay, I looked at
[109:27] all the comments and you guys were like,
[109:28] "We love the education. You're such a
[109:30] sweetheart. Thank you, Jack. But give us
[109:32] the macro goods." So, I gave you the
[109:35] macro goods. I got no ego in this game.
[109:37] I'm here for the vibes. I'm here for the
[109:39] fun. I'm here because hopefully it's
[109:41] it's useful to you. Okay? So, keep
[109:43] telling me what's working, what isn't,
[109:45] how I can make the show better. You like
[109:47] them longer episodes, you like them
[109:49] shorter, you like them more macro, you
[109:51] like educational stuff, maybe we switch
[109:52] it up, maybe we try and do two at the
[109:54] same time. You guys let me know, okay? I
[109:57] work for I work for the people. They
[109:59] said it, not me. Love you guys. Take