Lynn, I have so much to talk to you about. There's so much going on in the world, and I have some interesting things that I want to take us into. But anyway, thanks for joining me today.
Happy to be here, Thanks for having me again.
Yeah, So, a lot of stuff going on in the world, and you've been tweeting about a lot of different things, and I think you've been sort of recognized in the industry as thinking a little bit differently about things. It's probably your engineering background that you have. But I want to start on some big macro topics and then we'll take this down into a couple of different rabbit holes
that people maybe haven't really heard us discussed before. But let's sort of start with like this big broad macro picture. I like to think of things in politics, finance, and technology and really where these three things converge because it gives better context. So I want to get into some of those topics, more of the technology stuff. But if
we start with just like this macro picture. I've seen you talking about quite a bit how we're sort of going into this period of fiscal dominance, and so I recently did a video talking about how really the central bank interaction in the market have really changed since two thousand and eight. They've been much more involved and really been more proactive instead of as reactive as they were.
And so we can talk about this fiscal dominance, but what I kind of want to talk about is a lot of assumptions that it seems like we've had about the markets have really been challenged in the last year or two since the Fed's gone on this tightening cycle, and so a lot of things maybe biases or just historical assumptions that people make, such as well, when the risk free rate goes up, the stocks have to be
repriced down, but they haven't been. When rates, when mortgage rates go up so high, home prices have to come down, but they haven't been. So it seems like a lot of assumptions have been challenged here, and so I guess the bigger question is if we're in this period where the FED is fiscal dominance, they're really driving markets, we're seeing assumptions being challenged, then the big challenges do the markets have to crash?
So it's a good question. My base case has been range bound for a lot of different assets, which which points towards not very good real returns over say a five plus year period, but not necessarily expecting a crash either. So I've neither been a kind of a you know, melts up bowl or a deflationary crash bear. I've been more in that range bound camp, which so far has been working out both in the housing market in aggregate
and the stock market in aggregate. Obviously, there are very different industries that can be up or down, there are very different geographies that can be up or down. But overall that's kind of the general path we've been on. And if we look back historically, I kind of classify the long term debt cycle Ray Dalio's work, for example, and then additional work I put into it to kind of really flesh out and explore this concept. I know
you've covered it quite a bit as well. It's basically the observation that you go through a number of normal business cycles, but you build up instability in the system a couple of different ways, including on the public debt side.
And so if we characterize the past forty years, we had ever rising public debts, so whenever we had a recession, we would have you know, industries get cut that allows higher debt levels and you get you know, lower lows and lower highs in indust rates and higher highs and higher lows in both private sector and public sector debts is a percentage of GDP and that coincided with basically
the peace dividend, the opening up of the world. You know, China opened up to the world in the nineteen eighties, Soviet Union fell in the early nineties, and so we kind of entered this more connected world for a period of time, and we basically brought Western capital together with Eastern labor and resources, and that was a very kind
of productive, disinflationary time. Some people were hurt by it, but a lot of people were helped by it, and that's kind of been the era we've been and that allowed for lower indust rates and when you look at the government expenditure, if you have hired higher debt to GDP but lower and lower indust rates, your overall interest expense remains manageable. And when we had the global financial crisis,
a lot of things changed there. We had a bank recapitalization, We hit the peak in terms of private debt relative the GDP, but we push a lot of that debt onto the public sector in multiple countries, especially the United States, and so when we look back at prior long term debt cycles, they do tend to come in a one two punt. First you have the private debt bubble kind
of break apart, which is disinflationary. But then the second stage is when all that gets pushed up to the public sector and then that becomes more of an inflationary type of crisis. So kind of ever since the past call it three four years, we've been in that second phase of the bubble, and so I think that's one of the best ways to look at it from a
historical lens. But then of course I have to think, okay, what is different now in terms of culture, in terms of technology, in terms of just the way the world looks,
you know, what is different? Even though that's a useful baseline, and it's you know, these types of periods are all weird, and so there's going to be challenging things to navigate that you didn't necessarily expect, which is why it's useful to have a framework, but to also be very flexible with your thinking to see what sort of curveballs might or may not come, and then you know, adjust that over time based on what's happening.
So then if to recap, so your base case isn't a big crash, it's sort of just chopping along sideways. This crab market, if you will, I think is kind of what you said two very similar. You've been talking about a lot, and I think it's very helpful to kind of look at sort of what we saw in the thirties and forties as a better sort of proxy or representation of what we're where we're at today as opposed to like the seventies era. However, what you're saying
is that we need to remain flexible. So it's good to have some sort of like models that we can view the world through, but be flexible because who knows right if I frame that up right?
Yeah, And as an example, you know, back in early twenty twenty two, when it became clear that the FED was going to be quite hawkish, that was you know, my expectation was we'd have a recession by kind of later in the year and that it'd be tough to get in straights over three percent before you'd have kind of those types of problems. And for the most of twenty twenty two that was correct. We had slowing economic indicators.
We had two quarters of negative real GDP growth, even though they weren't technically a recession because they didn't have like an unemployment spike and stuff. But we had a period of softness as the price has had a pretty
bad time across the board. But then by early twenty twenty three, I started to see signs that it was playing out differently that basically the fiscal deficits, ironically from part of that, the monetary tightening, so the higher interest expense from the federal deficits were starting to actually kind of balance themselves out. They were becoming kind of inflationary
and stimulatory. And then when you had the kind of the minibanking crisis and the FEDS willingness to reinject some liquidity in there to stop contagion, these things really kind of added up to a shift in how I viewed things. So you know, that's that's an example being flexible, where you have a view it starts playing out, but then after a certain point it kind of starts being a little different. It's almost like if you're very tired and you stay up all night and you just kind of
force yourself through it. Eventually you almost get like another burst of being awake. Again right, that that's and that's kind of what we saw in markets where they got so tight on the on the fiscal side and the and the monetary side, they kind of went past the
looking glass towards actually being so much stimulatory. Because a lot of the private sector debt is low and fixed rate, especially in the in the household sector and in the investment grade corporate sector, so those industries have held up pretty well, whereas a lot of the US federal debt is short term and so that's been refinanced at at much higher rates. And so this the we have like
two very powerful competing forces here. One is that the industrates are putting downward pressure on a number of industrate sensitive industries, you know, commercial real estate and small businesses and junk rated companies and the like. But the other hand, that interest expense is just completely blowing out the deficit, which is on its own, and it's a stimulatory inflationary force. And in the past year so they've been roughly balanced.
Yeah. I think maybe it was Joseph Waang or somebody said this was something like I'm so bearish on bullish kind of a thing, right, So it's like things are so bad. It's actually sort of bullish. It's stimulatory, to your point. And so we're starting to see more and more of the spending being from the government and this deficit spending, and so you've talked about extensively, how as things continue to get worse, that deficit spending goes up, and that's really the sort of main driver of a
lot of this inflation that we have. I guess it is sort of the point that you're sort of making. Now you have what I was kind of saying earlier in the intro sort of like I charted out sort of the change in central bank policy sort of from two thousand and eight and so like, for example, in two thousand and six, the housing market had started to crash. The housing starts went down by twenty six percent, but yet it took thirty months before the Fed did anything
in the markets. From the time bear Stearns went bankrupt, it was seven months before they even got a package. It was one hundred billion dollars or one hundred million dollars that they had ready to go or no, it's sorry, one hundred million dollars. But in twenty twenty three, when the banks went bankrupt, it was six days, so we
kind of see the difference. In twenty twenty, the FED set up I think it was thirteen different special funding facilities, three four letter agencies, and again you know, the BTFP was set up in like six days. So it shows at least it looks like to me that they're much more proactive now they've gone around and set up all these swap lines, not just with friendly countries, but now even you know what maybe Tier two central banks, et cetera. So it seems like their fingers on the trigger and
they're ready to go. And so, you know, if you understand that we're in this debt based monetary system and the debt is the asset, it's the collateral on more debt, they have to keep that system from unraveling. But then you might have somebody like a Jeff Snyder who says, well, but really the Fed has no control because it's really
the euro dollar market overall. So are they able to sort of have this dominance where they can continue to keep these things elevated with these special funding facilities and these swap lines and the fiscal side can continue to spend or are we sort of like in this period where maybe there's this out of control beasts that we can't control.
So there's been this narrative for several years that they can't create inflation, that the markets are too deflationary to them to do it. And I wrote an article back in twenty nineteen where I said, are bonds in a
bubble or is this a new normal? And the conclusion of the article was it is a bubble, and I talked about how I was like, look, a lot of things look disinflationary, but if in the next downturn, central banks, you know, they can completely change the rules and they can work with physical authorities and just have massive monetized
physical deficits. There's almost eerie. You know, I didn't talk about a pandemic in that article, but it's almost eerie what happened less than a year after that article came out. It was just completely, you know, completely the rules were changed. And that's what we've seen. And the reason I had that view is because that's when you get towards a sovereign debt kind of cycle nearing its its sort of completion, and a completion can take a decade. It doesn't mean
a completion like this six months. I mean like this era, the rules change, the cycles get tighter. Similarly, during March twenty twenty, I wrote an article called why this isn't like the Great Depression, And that was like just an early sign of seeing somebody stimulus. And so my view is, no, no, this is not going to be disinflationary. This is likely going to be inflationary because the cavalies response time is quicker, and because it's more like the forties, not like the thirties.
So I would consider the two thousand and eight crisis to be very similar to the nineteen twenty nine crisis. That was all the hallmarks of a private debt bubble unwinding. But I think we're past that now. I think now we're towards the sovereign debt bubble. And the closer you get to the sovereign, the quicker the trigger finger is to come in with any sort of thing, because it
starts to potentially make the treasure market get illiquid. So if you looked last year during the twenty twenty two guilt market blow up, right, so it's September of last year, the UK guilt market blew up and the Bank of England had to come in and do emergency QE for a number of weeks, even though they had ten percent inflation at the time, and they had to cancel a speech about bounce sheet reduction they were going to have the next day, because you literally had a vicious cycle
of more bond selling and at the same time, the US treasure market was like one step behind. It was like very I liquid bond auctions were not going well. It was looking very wildly and he started to see the treasury offset the Fed, so you know, the Fed was still being somewhat tight. The treasure started drawing down it's treasurey generally count and taking other measures. That was
kind of the part of the reversal. So basically my view is that when push comes a shove, and when it gets closer to the sovereign, inflationary forces can always be used to override the various debt driven disinflationary driven forces in the economy, and so I will generally always air towards that inflationary outcome while risk managing it along the way and basically having a realistic timeframe and diversification.
Yeah, yes, you know, something that I was thinking about in regards to that too, is like sure, so maybe the FED doesn't have total control, but sure to your point, the fiscal the government could do that spending or increase that,
and so a couple things. So, like you mentioned some of these things that are more interest rate sensitive, sort of like the commercial real estate market, specifically the mortgage bond market in the real estate sector is two point nine trillion dollars of debt that could potentially blow up, and people look at that as like this big you know, maybe not a black swan but a gray squand that could sing things. But like the FED could just take
all that under their books. They've done that before, Like why wouldn't they. So when you go through a lot of these things, at least for me, I'm like, okay, sure that's bad, but like we've seen before that they could just take that on their books and just sort of put that over on the side. So when you
start look at these things. Also we saw I think some of the banks in Europe were guaranteeing banks loans, So banks don't want to loan money out because they're afraid that you know, the market's you know, shaky, there's a recession there, so the banks don't want to loan the money out, but the government just says, hey, we'll just backstop your loans like go ahead, and so then the banks well of course will loan if there's no risk.
So there's lots of things. I guess when I look at some of these people that I've been studying for a long time, like Harry Dent Junior, I've probably read five of his books. I love his research. I think his research is correct. But trying to continue to time when this crash is going to happen is obviously failed for him, and I think a lot of it is we just continue to fail. How many more tricks they have up their sleeve? Would you say that.
When they change they unit up account, it's like changing the rule. It's a kobyashi maru, right, You just change the rules of the test is basically what they do. And so you know, a country that controls its own unit of account is when a push comes to shove, they print. And I'd be careful that doesn't mean fully risk on because for example, you know the FED right now under Drone Pale, his legacy is on the line.
He is serious about tightening and it's one of those things where he doesn't you know, if the stock market drops twenty percent. He's not going to care if credit markets have problems, if there's a big cycle of commercial real estate bankruptcy, he's not going to care. If anything, they're good that he that thinks he'd probably like to
see the markets where they jump in quickly. Are bank contagion anything adjacent to that, like ripo spikes like they did in twenty nineteen, or the tragy market itself, right, those are those are the cores of the system that I You know that they're very unlikely to let struggle for long periods of time, whereas almost anything else you do it be quite careful of. That's part of why I don't expect and for a while I have not expected good stock or or broad real estate returns, especially
on a real basis. You know, when you're comparing that to CPI, or when you're comparing that's what you can get on a T bill and things like that. The the overall risk of those markets remains pretty high. But you know, another way of looking at as you mentioned two point nine trillion in debt, but it's like we have one point seven trillion annual physical deficits, right, It's like there's a fire hose of depthits going to the market. So you can have trillion dollar bankruptcies that are kind
of offset by trillion dollars just ongoing physcal injections. And so even if the FED doesn't come to the rescue there, it's just that one industry is suffering, you know, arguably right sizing, I mean, commercial real estate does have to go through a repurposing, and you know it's a change because we've changed, our technologies changed, our locations have changed.
But the other hand, you know, I don't think you're gonna see like restaurants sales go bust because the people that go to restaurants a lot of them are on the receiving side of these very large physical deficits. And so it's a very kind of industry by industry market and I think the overall aggregate is this is kind of stagflationary, range bound type of thing where it's a
very some people feel like what recession. I don't see recession, and other people are racking up credit card debt to get by because for them it already is a recession. And it's just very industry specific, individual specific, and the overall range is that kind of murky sideways action.
Yeah, in two thousand and eight, I was in southern California developing real estate. Orange Scanty, California was like the epicenter of the mortgage industry, and we got hit really, really hard. But there was plenty of other industries that didn't really feel that recession as much, Right, So that's
sort of an example. And to your point about the restaurants, you know, we also have, like, for example, the baby boomers sitting on tens of trillions of dollars worth of wealth and they're like they're gonna die, so like I might as just go to spend my money. So they're not really a sense of tip to those things. And so there's a lot of plays here, or a lot of things in play. I guess to kind of wrap this up back to so one, the market doesn't have
to crash. It doesn't have to Potentially the maybe shorter term, maybe the next twelve months, is more uncertain. It seems to me the longer term is more certain. Because of the debt based montary system that we have, we need more inflation and most likely asset prices will be higher over the next three to five years. Maybe we don't know, the next six to twelve months. That's sort of my base case. Would you agree with that or no?
Yeah, generally, and I think, you know, crash, it helps to define it specifically, right, So I mean the fact that we had like a twenty percent draw down and then a partial retrace and then we're having like another draw down, now you know that's to be expected. I mean, you could have a ten to twenty percent move with not much of a problem, especially over a multi month period or over the course for you.
And you might even consider that a healthy pullback after the run.
That I wouldn't consider that a crash. I think, I think a useful models to look at emerging markets when they go through recessions or just in general, when they're kind of in a malaise. Often the stock market's not going down big in nominal currency terms. It's kind of it's doing bad in dollar terms, but it's usually doing
fine in nominal local currency terms. And I think that basically when when developed countries go through sovereign debt crises or things like we're having now, it's basically like a developed market with emerging market characteristics. And so either, like you know, I use the nineteen forties analog a lot,
but potentially more accessible analog for people. Just look at emerging markets, you know, not I'm not saying the absolute basket case ones, but just like the standard quintessential merging market, what do their recessions look like? What are their stock markets doing in nominal terms versus say, compared to dollars or gold or whatever. And I think that there's there's
some comparisons there that are instructive. So I would expect a range bound and that range could be pretty big and then not great real returns probably, you know, we've had negative real returns since you know, like early twenty twenty one, mid twenty twenty one, and I would expect that to continue for a number of years because I think that some of the more defensive assets like literally you know, T bills, tips, you know that at their
positive real rates are interesting. Now I prefer gold and bitcoin, I you know, I think there's some emerging markets that are attractive if you choose them selectively. There are a mix of assets out there that are interesting, but I think the ones that have been expensive and crowded into are just unlikely to do good returns, and that you know, things can correct in price, or they can correct in time. They can just be in a arrange for a long time, and that is eventually a correction.
Right now, and we have to sort of zoom out of just the macro and look at the bigger picture to sort of understand things as well. And so now it seems like when things, when all things fail, high inflation, whatever, like let's just go to war, and here we are. Janet Ellen comes out and says we can fight two wars, we might have a third war shaping up China, sending
warships over to the Middle East as well. Right now in light of that, in light of looks like potential massive military spending is in the cards for us in the near future, at least probably for the next year. How does that change things? I mean, that's going to be massive inflation or does that give them a cover potentially a cover of letting things run hot, getting that inflation they need to get that GDP up to bring the debt to GDP down or how do you see that plane out?
Yeah, I think it potentially does. And a common thing you see during the sovereign debt crisis is financial oppression. So various ways to kind of keep financing to the government affordable while trying to restrict private sector lending too much and trying to restrict private sector capital flow. So you know, basically various capital controls. That was a place
across the developed world in the nineteen forties. And when you see emerging markets like today there are multiple merging markets that all various frictions on purpose for people that want to get their capital elsewhere. They basically add various hurdles to them. And so that's that's something we should expect, and but part of that has to be done with narrative, right. It's like, you know, in order to be successful, they have to have something your plausibility with it, which gets
a lot of the public on board. And so you know, right now we've seen, for example, there's been a lot of misinformation in the in the financial media around how much terrorists receive financing from crypto right. That's that's been a big thing, and it's been it's been pretty soundly debunked. Now even the sources that some of those media articles
used themselves said no, no, this is completely misconstrued. The numbers like less than one percent of what you said it was most of the financing comes from traditional existing financial rails. This is like a rounding error. But that doesn't change the fact that there are certain senators and certain politicians that are like, look, look, we have to go after this. Now, this, this crypto is all terrorist financing. And if you can drill that enough people's heads, people
get scared. They think, yeah, no, we have to block this. Like it's just people are not very quantitative on average, and politicians will use that and just shape the narrative over and over again. And so I think that that's an ongoing thing now. Luckily, the combination of social media and things like bitcoin or stable coins do allow for more peer to peer transfer information and value, which makes it a lot harder for them to do the types
of financial oppression that they've done in prior cycles. But that's not guaranteed. That's something that has to be protected. Fault for people educated on lies kind of called out a well evidenced and I think that that's kind of there. Basically, there is a kind of cultural battle behind the scenes.
And the reason I talked about that is because having studied the nineteen forties a lot and studying emerging markets today, this is actually a very common occurrence during these cycles to use kind of these temporary crisses for permanent restrictions or to kind of shift narratives around to help get people more on board with the financial oppression that they kind of mathematically get stuck into.
Yeah, I mean it's yeah, don't let a crisis go away sort of sort of thing. And so it wasn't just the forties. We continue to see that being in the playbook, but sort of going back to what you're talking about, this financial repression, and so in order to get the debt to GDP down, they can either bring the debt down unrealistic or get the GDP up. So there's this financial repression where you let inflation run really hot.
So GDP goes up because of the inflation. But the problem is then they have to kind of restrict the capital within that and so it's not politically pattable at this point to let inflation run hot. But if they could blame it on a war, Oh, it's Putin's fault, it's Israel, it's just Homasice fault, whatever it may be, then we could potentially get that inflation that they want, that they need and blame it on the war. That's the narrative part that you're talking about.
Yeah, the same exactly. Yeah, they can't just say, look, our decade of you know, kind of just broad based spending and tax policies have contributed to a destabilizing situation, and therefore it's going to just kind of inflate on its own. They definitely need an external reason, right, and so that anything that they can use, they're they're willing to jump on. And you know, in the prior kind of a couple of years, I think the Federal Reserve intended to be slower to raise rates and respond to
the inflation. They kind of signed that pretty strongly, but the public reaction to that inflation was pretty you know, negative, pretty quickly, and so they change course pretty quickly, and so that was not enough cover for them to do what they want to do. But potentially a war is and so I think that, you know, we'll see how
this plays out. But basically, the more that they can blame inflation on an external source and then therefore also blame the need for capital controls and things like that on an external source, and to drive up the fear of security, you know, that's that's really what kind of captures a lot of people.
So war is like this perfect double whammy so to speak. Not only can they get an excuse to get inflation up, but they also get an excuse to get capital controls in place at the same time, which they need both, and yeah, that's perfect. You put out a tweet and you said technology changes how humans have to interact with things, and unfortunately it takes time and experience. And you were talking about the fall of publisher media gatekeepers is good, but it means we have to pick our media if
we don't want to be uninformed. And then you also said the fall of money security gatekeepers also mean we have to pick our money. So it's technology, as I say the same thing. It always changes the way the world works because of how we communicate and we organize, changes the way we organize as well. And so sort of what you're saying is this the way that we're communicating now is much faster. We don't need a gatekeeper to get information out there anymore, and that's good for us.
So it's creating this sort of like ground level decentralized movement, but it's sort of the opposite of what the gatekeepers want. And so now there's multiple battles being fought, and so now sort of and you put another tweet sort of
referencing the Patriot Act. And so now they see maybe this disruption in these open monetary or open let's say communication networks and in this you know, just in this war scenario, they are using that as a way to clamp down on Is that what you're seeing with the Patriot Act reference.
Yeah, we've been seeing that, and the Patriot Act was specifically there was a recent Finsend proposal to basically dramatically increase the reporting requirements on various private types of crypto transactions to the point where it's so broadly and vaguely worded that it applies to almost everything. And so it's
basically a pretty draconian thing. And they cite Section three one one of the Patriot Act as part of their justification for it, so that parts of the patriarch are alive and well all these you know, a couple of decades later, and so I think that's that's kind of
a challenge. And going back to the gatekeeper point. Basically in the old model, and this was largely just technology driven, the limitations we had is that if you wanted to publish a book, or if you wanted to have a radio show or have a TV show, these were kind of gate kept. There's publishers, there were broadcasters, and there's a lot of cons that come with that, especially in a less free society. A couple pros or that they you know, they filter out some of the you know,
there's some quality filter to it. In a healthy market. You know, it's if the whole world's watching Walter Cronkite, they are at least on the kind of the same set of facts they're working with as they debate each other. But as that devolves into either more propaganda type of media or just more captured corporate captured media, that that kind of disintegrates. And so the fact that we've the technology has made it easier to self publish a book or easier to start your own radio show or start
your own TV show. That's literally what we're doing right now.
These more peer to peer interactions bring down the importance of the gatekeepers, which is a net good, but then it takes adjustment to that because you also a lot of low quality stuff enters the market and people get can get silent into their own echo chambers, right, so where they they have a bubble and they only follow people that are kind of just like them, and then they end up getting shocked and certain outcomes because they forget that they're in a small bubble and that most
of the world doesn't think like them. But most of the world's in their own bubbles too, and so increasingly there's people in their own little bubbles. And so I think that as we have this more peer to peer world, it does take some adjustment and more responsibilit in our part to go out and make sure we have a higher level of view, like what is this silo of thinking?
Now?
What is this silo of thinking? What soiloce am I unconsciously in that I might not be questioning enough? Right, So I think it takes more effort on the part of the person and self awareness on the part of the person to go out and actually, you know, it's kind of like eating right, you have to go out and eat healthy things on purpose, and you have to go and your information diet has to be somewhat diversified
and somewhat you know, just a healthy, healthy thing. And when it comes to financial gatekeepers, that's the latest one that's being brought down because you.
Know, let's talk about the media. Let's talk about the media gate keepers for a minute before you get into the financial side, because there's a whole lot to jump into on that. You referenced Walter Kronkite, and to your point, he was sort of like the main newscaster for a long time, and really before internet, we had like three TV channels and like a couple of newspapers, and I remember growing up as a kid, like we all listened to the same music, and we all watched the same movies,
like just what it was. But Walter Cronkite got into trouble and there was like Kronkite Gate, where he was caught sort of lying or bringing false facts about some stories. And so then that brought down the trust that he had. And so you know, while I guess I would I certainly would agree with you, like it's going to be way better if we all agree, and so if we only get one source of information, then I guess we
could all agree. It's sort of the premise at that book Fahrenheit four fifty one was written on I don't know if you've seen that book or read that book, but where they destroyed all the books. There was a for the listeners, there was a massive civil war, world war, and so they said it was because people had different information, and so they just destroyed all the books. And then the government became the central source of truth. And then they said, hey, we'll have peace if everybody reads the
same thing. And so certainly the world would work better that way. But at the same time, we need to decide what is truth and not decide truth by a gatekeeper. But I think that truth is found through open, honest dialogue, right, so like it should be. It seems like we're in
this maybe transition period. It's very difficult. But if we could get to a point where information is more decentralized and going to be openly discussed, then we could find truth through discussion that then maybe people could tap into as opposed to trying to have it delivered to us by a trusted party.
We agree with it, I agreed. I think that takes a while. Is my point that basically, as we enter this more decentralized world, which is which is just objectively it's a it's a much better thing, but we have to learn, Okay, there's gonna be a lot of lower quality stuff coming to market, and so there's a lot of higher quality stuff that would otherwise have been blocked, but there's also a lot of a long tail of
low quality stuff. And then there's our responsibility to make sure that we don't get trapped into silos because what happens is a lot of the old style kind of propaganda media gets recreated in this more decentralized world. Basically, people either get audience captured, so they're telling their audience what they want to know. Like if they if they challenge their audience and they get pushed back from it, uh, they that's like a pain point. They said, no, no, I'm
just gonna feed the audience what they want. Then I know what my audience wants and they're gonna So that that's one method. The other one is obviously, like you know, donor capture or or advertiser capture, where you know they have to kind of parrot pair it of financing source to their people and that they always have to take a side, and they become more like actors in a similar way that that state you know, kind of state
media or corporate media. In many ways they're acting right and so you can see, unfortunately, see the same thing emerge in some of these peer to peer communication channels, and so I think that partly that's a transition phase that we over time, years and generations of this, we get better at filtering, hopefully and hopefully that the markets
kind of take care of themselves. I think that the market analogy is a good one because basically it's a market for information, and if people are always kind of on the same line whether it's right or wrong, eventually that should filter itself out and that there become trusted sources that are more reliably useful and pieces of information. So it's more it's trust in a sense, but it's more decentralized trust. It's basically trying to filter out signal
from the noise. And you know, in order for a society to get through this, it's just we have to have more self reflection, more seeking out alternative views, which is hard because when you go through these big debt cycles and big macro cycles, they tend to be very polarized environments. You know, both of us are familiar with
the fourth herning. I think that's what we're going through, and so one of the dangers that are fourth herding is that everybody's polarized, and now they're polarized in their own bubbles, and then they didn't even know what's with AI or with kind of state propaganda. You don't even know it's true like Russia. Russia can go and say, Okay, here's this like woke group and here's this like patriot group, and they can make these little fake groups that are
arguing with each other. But they're both not real. They're both just an illusion. They're purposely for destabilization. And the United States can go do the same thing to Russia, do the same thing to another country where we kind of stir up, you know, social things like kind of real sticking points that are there. But then you just
add fuel to the fire. And there's really the only way to handle it is for people to be aware of that and then try to cross silo and start more proactively filtering for truth.
I think I want to dig into that, but before it sort of seems, as you're talking about it and I was listening, sort of seems like it's a problem that we have in this current system, but in a new system, we wouldn't have that same problem. And what do I mean by that, you know, Jeff Booth always talks about, you know, it's hard to see the new system when we're in an existing system. And so we're in this existing system today where we have massive government,
central massive central planning. Something I think I've thought about again, if technology always changes the way that we organize. One of technology is both. It can be centralizing, it can be decentralizing. So you could argue the Stirrup allowed for the feudal system to grow, right, and I could do that, and then you had a gunpowder revolution, and now that sort of decentralized the government. The Industrial Revolution brought us
back into cities, and it got mass manufacturing. You had Henry Ford created the assembly line, right, So we had these mass corporations, you had mass manufacturing. In order to manage the masses. You had smart people and dumber people work even on an assembly line. So then we had to manage them like cogs and a wheel, so to speak. So we got created a new management structure, and then we sort of had this new government structure to manage that.
But we're not in that world anymore. That was like the Industrial age, and so now we're in like this information world. And so we're with in this big government structure, in this Fiat money system that we have, like these endless wars, and you know, a lot of what we're seeing, so you say, like rally the Russians against the Ukrainians or against the US, and so using these deep fakes
to get people on team USA or Team Russia. But that's a symptom of the world we're in where we have these big nations on this Viat money system that want to go to war, and potentially maybe in a new structure, on a sound money system like a Bitcoin standard, where we don't have these big governments going to endless war all the time, maybe them creating these deep fakes to get me on team USA and someone else on Team Russia. Maybe that's not even a problem anymore.
I think, well, first of all, I think that'd be a it's a while away. You know that we have to go through a period to get to that future. Too. Is that I think that even in that world, you still have to navigate the issue. It's just different issues. So instead of country to country, it can be more.
Like tribe to tribe or tribe to tribe, or.
Corporate corporate to corporate, like corporate disinformation, you know, kind of like that, you know, like a dystopian tech novel where you have like just kind of corporations that are just kind of cynically doing whatever they're going to do. That that becomes more of the risk in that world. So I think that that's something that's always with us, that we always have to be aware of, and it's.
Problems still there, just at a different level.
Yeah, different level.
So then the answer to that, then you had said in your tweet is we need a more intelligent society. One of my old favorite punk rock bands, No Effects, they have a song that's like, what's the point of democracy when ignorance is celebrated? Right, And so like we need people to be smarter otherwise this sort of information society. So if we've if we've left the industrial age and we're now in this information age, then we need people to be smarter to decipher this information.
Yeah, And I think, I mean, obviously it's it's something that it's like every generation wants the next generation. They always complain about the next generation. Uh, It's like a classic thing throughout history. And I think part of the fourth turning concept is that society kind of goes through these trends for multiple decades and then some sort of crisis happens or some sort of pushback happens, and you go in another direction. So I think we're seeing, you know,
we're seeing early signs. People are questioning the nutrition advice they've been given, they're questioning the medical advice they're given, they're questioning the military industrial complex, they're they're questioning the money system.
Right, And so do you think that's because of the rise of decentralized information.
I do, yeah, because you so before, you know, you'd have to like advertise your little group in like a magazine and by mail, and like, you know, it's like a very small niche thing. Uh, And now it's people people with with divergent views can find each other and then even travel for like conferences. You know, they can go to conferences together and meet each other in person in addition to being online. And and that's that's that's one of the things. That's why I call this a
very positive thing. So there's a lot of good that comes from it, and so just but like most new technologies, you have to just manage the downsides. Like you know, video games are great, but if you get kind of just always playing video games or if you know, computers are great, but if you're on the computer all the time and you're straining your eyes and your back, you know,
there's downsides to this powerful technology. And I think the same is generally true for this where there's so much power unlocked by decentralized media in all of its forms. But we do have to adjust to that and be able to filter out some of the downsides that come with any any new technology.
So I want to ask you how you do that, because you're such a I love the way you think, so I want to get into that. But before we do the other thing though, that we have and so we can look back to, you know, the Protestant Reformation as a really good sort of model for that, where you had sort of this this and state combined that
had to keep this narrative. But previously we had a new technology called the printing press that decentralized information, and it created heresy and heretics, and they would you know, anyone who would read the Bible and speak out against the church was put to death, etc. Didn't matter because the information was out there, and today is something similar, right, So now instead of having Walter Cronkite tell us what
to eat. Instead of the FDA telling us what to eat, now we have independent people saying, oh, seed oils is bad and you should try carnivore dide or whatever it may be. And now we're starting to see sort of like this ideas being discussed and we're starting to see which ones work. We can try different things for ourselves
as opposed to just getting this one narrative. However, the problem seems to be if we sort of break things down to a first principles level, in order for a central power to stay in power, they have to be able to control the narrative somewhat. And it seems like when you look, you know, study the history of empires or democracies, they tend towards and maybe some of this
fourth turning, but they tend towards corruption. And as they get more corrupt, and especially as the people see this more, they get more unhappy, and so the government has to control this narrative. And so it seems like we're in this collision course where if central powers want to stay in power, they have to control the narrative. But we have technology over here that's taking away their ability to control the narrative, and so like we're heading on this
collision course that I think we're already starting to see. Now. We've seen this, yes, in the United States nineteen seventeen, we saw the Sedition Act, we saw the Smith Act, we saw you know, different things like that where they've regulated speech based off of wartime. But do you see this collision course, I guess, and I think you maybe alluded to this earlier. We're gonna have to fight for this because because of these two imposable forces that are
coming together. The government needed to control the narrative, but at the same time technology taking away their ability to.
Do so absolutely, And I think that's happening globally. You know, some countries more than others, but I think in the United States, in Europe, this already happens a lot in developing countries, you know, throughout the world. I think we're seeing increasing restrictions on you know, basically, they want to control the final system. They don't want to let these new technologies kind of break out of the silo. So they're trying to push back there. And I think we're
gonna see more control. You know, we're already seeing a lot of control over social media. For example, you know, certain things on YouTube have a tough time staying up rather than letting the audience, you know, if they don't like it, they can just not look at it, and instead they either put weird disclaimers on them and point them to some kind of old school like authority that was like has a bad track record anyway, or they take it down outright. And so I think that's that's
an ongoing challenge. It's going to exist, and it's a lot of it comes down to making sure people are aware of that narrative were And for me, the biggest one I like to focus on is that financial freedom aspect. Because social media is already largely won. There's there's various kind of attempts at cloging some of that back. But I also like there's new technologies like Noster for example,
that make even more decentralized social media. So instead of just relying on these centralized silos of media, there's various things you can go to if you're deplatformed if you don't want you know, kind of various either corporations or governments kind of enticing corporations to censor them so one is that I like the more decentralized social media model. And then two, when it comes to the transfer of value,
that's the one that's newer. It's kind of like a say, a decade or more behind the you know, the decentralization of information, uh, and that one's still in its earlier stage. It's still a little bit more easily disruptible. And so that's that's the one I tried to protect a little bit more with my words, my writing, my actions, trying to my best to make sure the public's aware of that.
And I think that the good news is that with this decentralized media, and because the status quo is kind of having struggling under its own weight, this is doable. I mean, for example, the other day I ratioed Bloomberg like seven thousand likes to like one hundred light It was like an insane ratio, wow, because it was just
a really bad article. And I actually like most Bloomberg articles, but this particular one, I was like, it was like basically about how like it was kind of a negative article about bitcoin transactions from someone who likely never sent a bitcoin transaction based on what he wrote, and was like if you're sending a bitcoin traction, you're probably doing
something illegal. And it was like it it feels like it's written in like silk road days, Like it feels so out of date, and so I called them out on it, and there was a huge reaction because you know, in these types of environments when there's just more pushback against kind of yes in the media or in you know what we see in like political theater.
But that's exactly the point is, like good ideas winning in open and open debates. So they put their narrative out. You put their narrative out, and then the audience the people sort of chimed in. You got seven thousand likes, they got one hundred, and so then those good ideas were challenged and people were able to kind of choose. So, you know, I look at censorship and really, like I said, really the central powers needing to hang on to power, and so then in order to do that they have
to censor. So one censor our speech, right, which also sensors what we can read in our ideas, our thoughts, but also our money. To your point that you're talking about the financial piece, and so what we've seen for example, just recently with like Russell Brand, they went after his ability to earn money. They wanted to take his monetization
off of his YouTube channel. I'm sure you saw the letter that the UK Parliament i think wrote to Parlor saying, hey, we're troubled that he can still make money like what you have. Like Alex Jones, he was probably the first person that was deplatformed, right wiped off the face of the earths. But he's probably bigger today than ever, still on the Internet. But it's the money that they go after. And so we have these open monetary networks. The Internet
is somewhat decentralized already. And now, like to your point, Noster, which I'll just say, I've been still locked out of my Twitter account for almost three months now. It's for devastated, going on three months. Elon, if you're listening, please turn me back on. George Gammon's also locked out of his account the same thing, and both of us are the same problem. They reset our two FA and we just
filled out like twenty support reguys. Just reset my TWFA and the rub is they're still charging me monthly for my blue subscription. Anyway, maybe I should have just started posting on a noster. But anyway, so we have these decentralized platforms and really, now this money piece is this is this next piece. So they need to censor that, They need to control that, if you will, not just the speech, but our money, our value transfer as well.
This is sort of what we've seen throughout history creative destruction. Right the lud Heites, they went and destroyed the looms. They didn't like the looms, putting them out of jobs. Right, the candlemakers didn't electricity, the buggy makers didn't like the cars. But this is different. You know, the movie companies and the movie industry and the music industry didn't like streaming.
But maybe this is different because it's government. But it seems to me that when the technology is so much better, when it's one hundred times, when it's a thousand times better, it just wins out. It's a rough transition, but at the end, it just wins out. Would you agree?
I agree? This is the hardest battle. You know, when you when you.
Go it's the final boss, it's the big boss.
This is the final boss, like you know when you we kind of went through gatekeeper after gatekeeper after gatekeeper, and the biggest one left is the state and their money and and so that like that's not gonna be that's it's not gonna be left.
But it's bread is broken and it has to be fixed.
So I agree, I agree, and I think And it's also different countries have different levels of pushback. And so for example, simple there's there's nothing that Argentina can do about the fact that stable coins and bitcoin keep penetrating into their country, right because there's nothing they can do about it. They can they've already tried to cut off the bank and the fintech uh friction points going in there.
But the more ubiquitous and widely known liquid these assets get, uh, it's it's just you're you're trying to like build a sand wall against the rising tide. It's just it's just gonna you can hold it back, you can hold it back, but you're you're fighting something that's almost inevitable. Now. Obviously, entities like the United States and China and the European Union have more ammo uh to go at this, and so that's that's more of a longer term battle, I think.
So I don't think that people should just assume that they win because with these things. I mean, things can get set back a generation, right, So if you want, like yourself and your kids to enjoy that, you know, it's it's like, you know, you don't want to you don't want to take it for granted and have the whole thing happen fifty years late and fear that's yeah,
that's the risk. And so this technology exists now even if it's somehow killed, it can reform itself, but it's you know, ideally you want it to win on the first try. You don't want to have to have to go into the dark ages for a period of time and then come back. And WikiLeaks was a great example. One of the first use cases of bitcoin was WikiLeaks was deplatformed monetarily and they turned a bitcoin. And now in recent months we've seen wiki leaks has put some
of the information itself in the bitcoin blockchain. So, in addition to bitcoin being decentralized money, kind of a lesser use case for it is it's the most decentralized database that we know how to build for small amounts of information, and so important documents or information can be put in there and that doesn't necessarily mean that they're true, but it means that they've not been changed since they're put in.
And so you know, someone wants to put in the book nineteen eighty four or Animal Farm or you know, fair Knight for Bible or the Bible, or these wikilies cables, you know, whatever the case may be. You can put in information that you you want to exist in the future and say, okay, well regards whatever happens, as long as this decentralized network, which is you know, stored in tens of thousands of nodes, it's something that is provably unchanged since that was put in. And so that's that's
one of the non monetary use cases for it. But you know, the money wants the bigger one overall, but I think that second one shouldn't be overlooked.
Yeah, and I also like, you know, sort of like what Jack has done with what Blue Sky and using the Bitcoin blockchain to hash the d i ds in there, so a decentralized identifier and so you know, potentially in a world hopefully not too far away, instead of having Facebook and Google have our sso or login IDs, we could own our IDs. I think it's pretty cool. Maybe it's a noster using a private key. We don't know
how that will win out. But as of right now, those de ideas, I guess are recognized by the World Wide Web Consortium or whatever it is. But it's used, it's it's being hashed in the bitcoin blockchain. So we sort of have the bitcoin network and then we have the bitcoin as an asset. So there's sort of like two things going on. I guess is that sort of how you see it?
Yeah, I And you know, we'll see what layers went out. I think Noster has a little bit more organic. It's a little bit kind of simpler, you know, like basically sometimes simple protocols uh just kind of went out and and Jack himself spends quite a bit of time on Noster. Uh. But you know, we'll see it. And there doesn't necessarily to be one. You can have. You can have different layers for different purposes or different use cases or just different choices. Uh. And they make they make use of
bitcoin in their own ways. Uh. And so I think that these technologies, as long as there's a spark a live somewhere in the world, you know, some some jurisdictions will push back on other jurisdictions will open up to it and say if you want to build this stuff come to us. And as long as there are people advancing this, which there currently are, I think both information and money are on track to get more and more decentralized.
Yeah, and that's that game theory piece. I read this book. You might have heard it before. It's The Revolt of the Public. It was written by Martin Gurry. He's a CIA analyst, and he talks about how basically the Internet has given us so much information that the center, the central planning, the Center could never hold because the public
is too broad. But anyway, he talks about how this Internet is and he kind of goes through history and talks about how in the Arab Spring, how the Facebook was used to kind of overthrow the government in Egypt, and he talks about Israel, etc. But the point that he makes is that the governments are sort of caught between this rock and a hard place where if they allow this freedom of the Internet, this freedom of ideas and communication, if they allow it, their country is going
to flourish. It's going to create all these new jobs and businesses and people will be smart, etc. But then they'll probably lose power. They could choose to not allow it, but then they hold themselves back in the dark ages, and so they kind of have like they're trying to kind of ride this line. You can be North Korea and like sense or everything, but then your North Korea. Right. So that's where this kind of game theory plays out, hopefully in a shorter period of time and not a
longer period of time. But to your point about you know, hopefully this doesn't leap frog a decade or generation. You know, it scares me seeing these seventy eighty year olds in office making laws against things that they just don't understand. I mean, the average age of a fortune five hundred CEO is in their fifties, like fifty five, certainly not eighty, and certainly not passing laws to your point that could
impact generations. I know we're kind of starting to run down on time here, so I want to get to one last thing I want to ask you about, because, like I said a couple times in this interview, like the way that you think and process information is amazing. I haven't gotten through this whole book yet, I have to just say that, but it's a great book. Everyone should check out this book. I'm also a paid subscriber to your newsletter. It's amazing. We'll link to that in
the notes down below. But like, the way that you process information is very analytical. I guess maybe it's your engineering background. So you put on a tweet talking about like deciphering information, and you were talking about that, and it's something that I've kind of said as well. But it's that in the past, maybe the problem was getting information, and today we have too much. You said, we have too much info? What can we filter out? On social media?
We resort to patterns, but patterns breed tribalism. It takes effort, extra effort to have a global view and ask how can people of all types flourish. So in this world that you framed up for us, and this tweet talks about where we have too much information, what do you do? What are practical steps that you do or that other people could do to sort of decipher this and find some truth there.
I think one step is to be aware of the tribes that exist or or the echo chambers that naturally form. They used to be formed largely due to geography, and now now it's more digital, right, So it's not a physical tribe, it's a digital tribe. And so the one is to say, okay, which echo chambers are forming, which ones am I maybe finding myself in. So those things start seeming increasingly obvious because all the people I follow
are kind of saying the same thing. And then they're you know, and I'm attracting followers that think that too, and we're kind of feeding on each other. How can we challenge ourselves? So you identify what tribes you might be in, identify the other tribes that exist, and then say, okay, they're they're the other tribes are not all dummies, they have they have smart people in there too, at least most, I mean some some you know, some ideas are just
really bad. But like most other tribes, there's this is a complex world. So it's okay, what can identify some of the most high signal intelligent people from those other tribes and make sure I'm aware of what they're saying, what their argument are. Can I can I recite their argument back to them in a way that they would be pleased with even if I disagree with it. It's the process of steel manning an argument. So instead of straw meaning an argument by saying this other tribe thinks this,
and it's like, you know, you're mischaracterizing their views. You're giving a simplistic view. You're saying, Okay, here is this person I disagree with. They're saying this argument, and if anything, you're trying to make their argument sound even better, and then you're saying, okay, here's why I disagree with it.
So I think basically that that intentionality of purposely keeping your finger on the pulls of multiple different silos, echo chambers, tribes, what every want to call them, the more at least, the more intelligent side of each of them, because each one's going to have a spectrum of thought leaders versus just pure tribalists. So you identify the highest you people, and that that just gives you a more global perspective.
It helps you. It helps you see errors where you might be wrong or where you might be maybe you're right, but you realize that you're in a small minority than you think. Uh, and then therefore you have to just probable outcomes for certain things, even if you prefer your outcome. There's multiple kind of reasons why that ends up being useful.
In addition, it helps you if you wanted to have your ideas spread to them the more effective you're going to be is if you understand their ideas more thoroughly, if you can recite their ideas back to them in a way that they actually can tell you actually understand what they're thinking, and then you say, well, here's why I disagree. You can make inroads into there in a way that most people can't, and.
So I open honest dialogue.
It works exactly, And so both for both challenging your own ideas and making sure you're in the right echo chambers or just ideally not an echo chamber, but basically both stress testing yourself and figure out how to spread
your ideas to others. It really takes that intentionality, to that open mindness and that intentionality to go out and say, look, there are people that are smart, but they disagree with me, and I want to make sure I know what they're saying and what they're thinking and what they're focused on, so that I don't get too caught up in a small thing that I assume is bigger than it really is.
So then one you need to find the signal, the highest signal people you can follow, but making sure you're following people on both sides of the aisle. So you're not just getting feedback from your own echo chamber, you're also getting the opposite side of the argument as well. Trying to take time to understand the argument and then engage in honest dialogue so that you can understand that better. I mean, that's sort of like the high.
Level of it. Yeah, and approach it, and a lot of times approach it like a questioner. So don't approach it like you're already one hundred percent correct, because nonither of us, none of us are gonna be a hundredercent correct and everything. So approach it as though, like, Okay,
you've thought certain things out. There could be areas that you've thought about less than other areas, and that you could learn something from a person you otherwise disagree with, just as you would hope that they would learn something from you. And so it's not just seeking out to challenge them, but it's seeking out to understand them more,
to fully stress test your own ideas. And like, for example, Broken Money, the book, you know, I purposely wrote it in such a way to try to reach a pretty wide audience to say, Okay, if you don't care at all about bitcoin, it's like, let's explore the history of money and some of these future technologies for where we're going.
And then if you are to bitcoin, it basically says, Okay, here's some ideas that you might not have explored as thoroughly from other bitcoin books, and then therefore you might be caught off guard by certain arguments that they can make. So it kind of like seeks out intelligent people from
multiple camps as it explores the history of money. And I just think basically that kind of technique applied to multiple different subjects is important, and especially when we're you know, we sovereign debt crisis can lead to war, and work
can lead to sovereign debt crisis. These things tend to feed on each other, and so in this world, and then especially when we add things like AI and purposeful misinformation either from state actors or corporate actors or tribes or whatever the case is, it just takes a lot of responsibility. It's really on us how well we get through this era. You know, it's like it come down to individual people making better decisions. Why do some cultures
flourish and others fail. It's because a critical mass of the people kind of just cut through the noise and say, look, these are the virtues I'm going to stick with. Uh, these are I'm going to be educated. I'm going to seek out multiple views since I can fill to the right ones. I'm gonna try to empathize the people I disagree with and say, what would what would the smartest version of this alternative argument look like? And what what does my argument look like to them?
Right?
So, what is a smart version of my argument sound like to someone who disagrees with it? What point do they specifically think I'm not thinking through? Because there's there's a lot of problems in the world. There's a lot of emotions. Uh, it comes down to political views, religious views, control versus subjects. There's so many vectors here and the stakes are pretty high, and I think we just all have to challenge ourselves.
Yeah, I love that. I think of it. I know you're into martial arts and you do. I think about it like verbal sparring, Like I love to just talk to someone with the opposing views and if we can have a good dialogue, it's kind of fun. Just like I would go a spar against an opponent and we get to try each other's technique against each other. It's one of the reason why I love sitting down with
Peter McCormick. We see we're kind of set on opposite sides, but we can have a good honest dialogue about it. My show producer Q he's also on a different political ideology than I am a little bit for the most part, but we have good honest dialogue and it helps both of us to kind of explore these ideas if we can talk about it. It's when they throw out the nuclear bomb arguments that it kind of goes sideways. But
I have time for maybe one more question. And so you mentioned the bitcoin piece, and so I just want to maybe ask one more question there. A lot of people are starting to kind of hang their hopes on this Bitcoin ETF being this like big catalyst that we need. I have this view that we talk about, you know, bitcoin is money for your enemy, so to speak. Right, So like bitcoin is aid for peer to peer transactions, So it's sort of like anti establishment. You know, we
don't need gatekeepers, We don't need that anymore. But a lot of times people say in the United States don't really understand why we need that, because our money works pretty good in third world countries. They do understand it, especially when their money is really really bad. To your point, do you think that Wall Street could be the catalyst
that gets it going? Or I'm starting to think that maybe what we really need is a more adversarial lens against bitcoin for it to prove its real value and worth, to prove its utility. So like in North Korea or in Afghanistan, you could understand why you need a money that moves peer to peer and it's not censors, but maybe in the US we don't. So what do you think it could be both? Or do you think one is better catalyst than the other.
I think we're gonna get both together because I think Wall Street is likely going to help in price, which is good for the network. But meanwhile, the government, through Finsen and various Patriot Act kind of references, are going to really after the privacy side and the self custodial side potentially, And so I think that there's there's two fronts, you know, kind of on this war here. I think it's inevitable.
That, but that's also a US centric view, right, So what about globally?
Well, So what I was gonna get to is that ironically the reason it's so interlinked, right, So as an asset monetizes, it achieves certain liquidity. Like, for example, when it traded a few thousand dollars a day, someone couldn't just ape into it a million dollars. When it trades a few million dollars a day, someone couldn't just ape into it the billion dollars. When it trades a few billion dollars a day. There's even bigger pools of capital that still have they can move the price if they
get too bullish or bearish in a day. The larger and more widespread and more kind of ubiquitous it is, the more types of pools of capital that own non zero amounts of it, the bigger and more liquid it gets, the harder it becomes for any one entity to move it. I think that's healthy for the network. If you go to and this is where I tie it ties in the rest of the world. If you go to some in Argentina and you say, why aren't you like all
in bitcoin, they're like, well, it's super volatile. You know. I like bitcoin, but I have to hold mostly stable coins because I have to know what my value is going to be worse than two months, right, bitcoin I can hold for five years, but I have to I have to have something more stable in the shorter term. But bitcoin only achieves that lower volatility if it becomes more big, ubiquitous liquid, And it's also just its inevitability.
Basicallyf we hit higher levels of monetization, eventually larger pools of capital want to join. Maybe a central bank somewhere adds it to their balance sheet, maybe black Rock apes into it. Right, there's certain empties that start going after it, and not only do they become relevant for their own countries. Like so, for example, it is good for people in there are various four to one k's if they can have a non zero bitcoin position in there, you know,
for their own kind of protection. If we if some of the things we talked about play out, like a stagflationary stock market and a housing market and a bond market. You know, if they have a non zier amount of bitcoin and their four wing k it's one, and if that capital is kind of stuck there anyway, and if they're you know, age sixty and maybe they don't want to get a cold card, you know, and there are sixty year olds that love cold cards, but maybe not
everyone that's an access point for them. But then in addition, even if Americans then are not using bitcoin in the way that we would maybe prefer, they would use it like I recommend self custody, I recommend swan or any of the other kind of bitcoin focused on ramps. But for people that are not using it that way, they still strengthen the network for people in other countries. If bitcoin is five x bigger or ten x bigger and it's somewhat less volatile, still gonna be volatile for a
while until it's like ubiquitous. But if it's less volatile and it's more known and it's had another cycle of growth, that can bring it to more awareness for people in all these other countries that can use it in hopefully the more cipherpunk way.
And so then the US centric sort of financialization of bitcoin is maybe a shorter term catalyst in a sense where it brings more money to it, which then makes the market caap bigger, which then makes it more stable, and then the other nations might recognize that as more
stable and they could adopt it better. So you think the sort of I guess money argument is a better catalyst than the near term than the sort of adversarial lens even though we're seeing you know, because I guess maybe those transactions in other countries where the demand is higher from the adversarial lens, the transaction volumes are too low, so it doesn't really bring the stabilization that's needed to it.
Yeah, And I think the way I would describe it is that there's just kind of some to give inevitability to it. But that I view it both. It's adversarial at the same time as it's advantageous because on one hand, like America as a government does kind of want a walled garden this thing. And so for example, I don't view the bitcoin et apps the best way to hold it, but I do think that ironically that adds stability to the market. It's just another it's not like a unique
level of stability. It's just another level of stability. If Japan's central bank decides to have a five percent Bitcoin position, that's another you know, it's a completely different example. There are all these big pools of capital that for a while bitcoin's been too small for them or unclear if it's going to work out, and it reaches a certain critical mass though, you know, sovereign wealth funds, central banks,
and the black rock. You know, just large pools of capital suddenly get interested in having it as a reserve as a product. Uh, and maybe it's not great, but that's just it's part of a monetization of an asset. But I, you know, I proactively then go out and invest in say privacy technologies or self custodial technologies. Uh, focusing more on these other countries or other markets or you know, ways that I think is preferable to hold bitcoin.
I think that it has been stress tested, like for example, during the Canadian trucker protest when they try to then you know, black this bitcoin address to the grafter them. That was kind of a stress test to say, okay, what can we have done better next time? Mount Gox was a stress test. It helped us bring you know,
like hardware, wallets and things like that. Every time there's like you know, when China banned bitcoin mining, you know, they had multiple failed bands and one of them finally kind of stuck and it actually helped decentralize mining a little bit more than it already was, and some mining re emerged in China. Anyway, So bitcoin does go through these challenges over time. So far, it's been successful at being anti fragile when it faces them, and I think
this is yet another one. This one comes with both pros and cons. It's good for price and liquidity, which can be good for eventually for volatility, but it also comes with you know a lot of people just kind of get trapped into walled gardens. And I think that this is just it's another phase that bitcoin was destined to go through should it ever reach this level, which
is what it reached now. And to be clear, I don't think that bitcoin needs a spotty TF and I think that if a spotty theft never comes, I still think there's going to be a bitcoin bull cycle. I think it's going to be heavily tied to global liquidity, and its tied to like the Hoddler wave. So basically during bear markets, the strong hands keep accumulating coins and then you get a having and then just you know,
the supplies like gets very tight. So it only takes this tiny spark of new demand to really kind of lift the price neck. So I think that regardless to whether a spot bitcoin ETF comes, I think we're going
eventually have another cycle. The spot ETF can just potentially accelerate or magnify that cycle, and that has some pros and cons, but I think it's mostly pros in the sense that one it's inevitable, and two, any higher level of liquidity and size is good for the overall network, especially for people that ironically not in those walled gardens, that are still benefiting from the stability and liquidity and market size and price action that those walled gardens are giving the whole network.
Yeah. Wow, there's a there's a lot there, but we'll end it. We'll end it with that. I know we've gone a long time. It was pretty interesting to see Larry Fink come out and say that people are using it to fly to safety. So we're starting to see that shift for sure for everyone listening. You talked about investing into some of these privacy companies and stuff. I know with EGO Death Capital, which is investing in that. I of course have the big one Opportunity Fund. We're
investing into that. So we're both trying to build the world that we want in a way for everyone listening, check out Broken Money. We'll make sure we link to that in the show notes down below. And Lynn Alden I subscribed to our newsletter, will link to that down below as well. Anything else that you want to let people know about.
Now, that's it. Check out Broken Money and hopefully we can do our little part to kind of push back on the financial oppression and the misinformation that's out there and just kind of help shape the world in some tiny way, hopefully in a better direction.
All right, Thanks, Lynn, appreciate it.