The Mark Moss Show - CPI? More Like CP Lie!

to get a lot more clear. And it's pretty evident right now the financial system that we have today is failing. It cannot go on much longer. Now I say that, but I've been saying that for a long time. It can't go on much longer. How much is much longer, Well, we don't really know. Um. A smart person told me that I can tell you what's going to happen, or I can tell you when, but I can't tell you both together. And so that's kind of that's kind of

where we're at. We can see what's inevitably happening, and we can see that we're getting closer and closer and closer to that. What that final event is we don't know, but most analysts would have you believe that we are getting very close to that, and we can see the signs all around us. So, for example, this week we got the latest numbers from the United States government of the inflation numbers or what they call inflation, which is the consumer price index UM. It's called c p I.

I like to call it cp LIE. And the reason why I call it cp LIE is because the way they use this number, they use this number for manipulation. And so the CPI, the price index, is a basket of goods. If I went to the grocery store and I bought milk, cheese, steak, bread, and then every year I go back to the same store and I buy the same basket, and they would track the progress of that price. The problem is a couple of things. One, they continue to change the basket, so we're not buying

the same basket of goods over and over. So their substituting things in the basket. Hey, you used to buy steak, um, Now let's put hamburger meat. Hey used to buy hamger meat, Now let's put spam or whatever. And so they change what's in my basket. And then they even just start room moving things. And then they go into straight out lies. So for example, they tell you that the shelter went up by five percent, but in reality, nation wide it went up by and of course that makes up about

of the basket. So when they change the number that big, it changed the numbers. Okay, that being said, the second reason, the second problem we have a CPI is that CPI UM it tries to measure the prices, but we deal with prices, we interact with prices differently. So for example, if you're renting a home and I think Glendale, Arizona, the rent went up by about a hundred and eight percent. If you're renting a home in like Philadelphia, rents went down,

so for somebody there the CPI went down. Somewhere else the CPI went um. If you're buying a home in Lake and Lake Travis and outside of Austin, Texas, it went up a hundred and fifty percent. Some markets, I don't know which ones, I'm sure probably went up almost none at all. So inflation affects us differently. But inflation is what they're calling inflation, Really the price inflation, the price is going up of goods and services and assets.

Really the inflation is the money supply going up. The money supply goes up, and what happens with the prices is the result of that money supply going up, and so the money supply goes up. The last two years went up, and real estate went up on average, used cars went up on average. A couple of things. Now back to the actual report, we saw that the CPI rises eight point three percent year on year, and it's

the first growth slowdown since August. So we've been seeing cp I go faster faster, faster faster, and now it's slowing down. So we went from eight percent to eight point five to eight point three. So it came back down from eight to eight point five day point three, and everybody's celebrating. A couple of things about that that are pretty crazy. Um. First of all, they have cp I and then they have core cp I. Course, CPI it takes out things that you and I need to live,

like food and energy. Actually the two most important things that we need to live our food and energy, and they take those out of the basket for some reason. That's pretty crazy. UM. But what I want, what I want to point to is that um, as this inflation has slowed down from eight to eight point five to eight point three, what that means is the price of everything has gone up. You know this. It's twice as much to fill up your gas tank, it's twice as much to get food for your house, it's twice as

much to buy airline tickets, et cetera. When inflation goes from eight point five all the way down to eight point three, it doesn't mean prices are coming back down. What that means is that they're still going up, just at a slower rate. So they were going up by eight point five percent. Now they're still going up, but only at eight So, Um, it's not a reversal. It's not like things will get cheaper. It's not like things will get easier. It's not like you're purchasing power will

get better. It's just that you're losing your purchasing power a little bit slower today than you were yesterday. That's what that means. It's crazy now because of this. Now, Um, the economists are like, well, uh, maybe maybe it's getting a little bit better. Um, maybe we don't need to be as harsh and as drastic on our cutbacks. So the to the Federal Reserve has been trying to slow down inflation by one raising interest rates. When they raise

interest rates, less people borrow money. If you're not aware, we talk about money printing all the time. The FED, the government printed money. It's not really how it works. Over of transactions are digital. Nobody is using really paper money. It's not really printing anything. And the Federal reserved by itself doesn't even create money. All they do is give reserves to the banks, and then the banks with those

reserves can create money into existence by issuing debt. So when you go to borrow money for a house, a car on r V, a boat, etcetera, that money is being created into existence by debt. So when the interest rates go up, you borrow less, which means less money is being created into existence. Um. So the FED has been pretty aggressive on raising rates, some of the most aggressive we've seen them be in several years. And they raised half a basis point, um another half a basis point,

and many still believe they're going to continue raising rates. Um. But the markets are completely melting down and they may have to be reversing course here pretty quickly. Of course, might talk about the markets melting down. Everything is melting down. We've seen, um, the Nasdaq is down, the Dow Jones is down, the SMP five is down, UM the big Darlen's are you know, Tesla's down, um coin bases down, UM, you name it. Everything has come down. The crypto markets

are not immune to this either. There's a complete blood bath. A lot of it's due to this uh failing UM stable coin protocol U s T, which I've been talking about quite a bit. I'm sure you caught that, and that's bringing the entire market cap down. Considering how bad things are. Dare I say that maybe Bitcoin is holding on? Okay, I know it's hard to say that at a time like this, when we have this complete melt down happening,

but maybe it's not doing UM so bad. So we can see like Tera Lunas down in seven days, eight coins down, sixty UM thor it's a big one avalanche, UM decentral and you know so so Lana, the big Darly and um so a lot of these are really really really down uh forty fifty even sixty percent just in the last seven days, which is pretty insane. But we can see, you know, Bitcoin seems to be somewhat holding on in light of that, UM, you know, considering

it's not a stable coin. It's down about so while the entire or some of the biggest cryptocurrencies are down by fifty sixty and even sevent bitcoins holding on at about drop, which, um, you know, doesn't make it the best, but it's still dropping down. We can see ethereums down, overt x, rps down, over cardanos down forty five percent, Salona is down fifty five percent, Elon must's favorite, dodge coins down, and so Bitcoin holding on not doing too

bad all in all. And even while all this carnage is happening, there's still some bright spots on the horizon. We can see another nation is announcing that they're going to start buying it. Not another nation, but we saw news that Latin America's largest digital bank is going to allocate one percent to bitcoin and offer crypto investment services. And so here we have the largest digital bank in Latin America that's going to start putting their reserves into bitcoin.

And we've seen through the stable coins melting down that bitcoin is a big beneficiary. A lot of people are buying bitcoin, and I think now it's still a pretty good time to get into bitcoin. Um, you buy when there's blood in the street, and that's basically where we're at right now. You're listening to the markma Show. We're talking about bitcoin and so much more. I got a lot more. Don't go away, all right, Welcome back. You're listening to the Mark mo Show. We're talking about bitcoin

and cryptocurrencies and the decentralized revolution. Before the break, we were talking about the latest government numbers on inflation cp I, what the Central Bank and the federal probably continue to do. We're talking about some of the blood bath happening in the DeFi protocols because of the terror Luna. I went super deep into that in the early segments, so I'm not gonna go back deep into that again, Unlesten, if you want to go back and check out that archive, um,

but it's a blood bath in that. And I talked about how bitcoin is actually holding up pretty good considering what's going on the rest of the market. Most of the market is down fifty sixty even sent Bitcoin is kind of holding in there about we can see here's as terror contagion leads to an eighty percent decline in the DeFi protocols associated um with this, and so it's just starting to drag everything down. Like I said, I'm not gonna go super deep into this. Already a deep

dive on this. You can go listen to the podcast version of this something I Heart Network to search Mark Moss podcast or Mark Moss I Heart and you can

check that out where I really dug in deep to that. UM. But what we can see is that there's a lot of contagion happening, and I'm afraid that what could happen, what's happened with us T could then lead to us d T, which is tether, and it could even spread to some of the c FI coins like Celsius, because I see Selfius Celsius trying to backstop um these and it makes me think they have some sort of invested interest that so be very very careful of this contagion

that's that's happening right now. UM. And of course a lot of people losing a lot of money, which then leads the uh, you know, the government's the regulators to do what they do, which is regulate, and we have the SEC Security Exchange Commission, and their role is to protect customers. Their role is to protect people from this very thing. Now I'm not a fan of the SEC. I don't think I need protection or you need protection.

We should all be in a free market that allows me to freely choose what I want to decide, what risks I want to take, etcetera. UM, And really I'm a little bit mad at the SEC because they don't do anything to protect you. UM. A lot of times what they're doing is actually hurting you. So for example, UM, the rich get really rich because they get access to

really good deals before their public. So for example, UM, some famous VC investors UM put like dollars or fifty thousand dollars or a hundred thousand dollars into early upstarts like Uber and turns into twenty million dollars, fifty million dollars, a hundred million dollars, little bits of money. But you, well maybe you, maybe not you. But the average person isn't able to get in these types of deals because

you're not an accredited investor. So the SEC is trying to protect you, so they're keeping you out of these types of deals. Meanwhile, the rich keep getting richer because they get access to these deals. And what happens is they get into all these early round deals and they make a bunch of money and then finally they go public, which means the average person that's non accredited, kid credited

can buy them. And so what happens. All those venture capitalists, all those are credit investors by early and as soon as they get onto the market, the regular people, non acredit investors have been waiting and waiting, waiting to get in. They can finally get in, and what happens, Well, those early investors dump on them. Sure, I already made ten x fifty x on my investment. Here you go buy it. And usually right after that happens, the price plummets down, and so the SEC they say, I was trying to

protect the average person. The reality is more people end up getting a hurt by this. However, I can't fault them from trying. I suppose here they are again, back at it again, meeting at an I S d A meeting and they're um, they're addressing the audience. It's an annual meeting and of the International Swaps and Derivatives Association

in Madrid, Spain. And Gary Ginsler, he's the head of the SEC, and the head of the U S Commodity Futures Trading Committee UH Chairman Roston Benham were both features keynote speakers at the event. UM, basically saying what they plan to do. Ben him spoke at length about a quote request for an amended Order of Registration as a derivatives clearing organization by an entity seeking to offer non intermediated clearing of margin products to retail participants. It's a lot,

it's a big mouthful. What does that mean? That means they want to create more red tape and UM, you know, more gates that people have to get through before they can give these UH securities and UM derivatives for you to invest into, which is good. UM. I think most people probably shouldn't be investing in these at all. UM, but never like like I said, they're gonna try to continue to regulate it. They're gonna try to you continue to protect us. And notably UM, Sam Bankman Freed was

there UM talking Sam Bankman Freed. You might recognize that name. He is the UM. I think he's under thirty. I want to say he's like one of the richest men under thirty. He's the founder of ft X Exchange so ft X Exchange I believe they sponsored is at the Miami heat Stadium possibly UM huge crypto exchange. He's a billionaire. He's there speaking about regulations, and here he isn't another article talking about the scams that he sales. M hm. So he's there with the SEC and the CFTC talking

about regulations and protecting people. But just a few weeks ago he was talking about how the scams he perpetuates. So let me let me break this down. There's this Bloomberg article. You can find it just search. Sam Bankman Freed described yield farming. If you just look at that, so he says, uh so uh, he says, uh. Anyway, this article is like, what do you find some of the most creative money making seems to take place in yield farming. You might be asking yourself right now, what

the heck is yield farming? Well, a lot of people are so. In this article, um ft X chief executive officer and crypto billionaire Stan Bankman Freed with Bloomberg opinion columnist Matt Levine sat down and Matt asked Sam exactly what filled yield farming actually is. And here's what he said. You're gonna love this. Matt Levin says, can you give me an intuitive understanding of farming? I mean, like, to me, farming is like you sell some structured puts or whatever.

So Sam Frank Sam Bankman Freed what's called SPF for short. Remember he's the billionaire that runs f t X who was with the SEC talking about regulating. He says, um, let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? He says, you start with a company that builds a box and then practice this box.

They probably dress it up to look like a life changing you know, kind of like world altering protocol that's kind of replace all the big banks in thirty eight days or whatever. Um, maybe for now, actually ignore what it does or pretend it does literally nothing. It's just a box that does that make sense? So right now, he says, it's sort of like a box that they promise is going to change the whole world in thirty eight days, but it literally does nothing. It's just a box,

that's his words. So you start with nothing and they pretend it's going to be something, but in his own words, it actually does nothing. He says, so what this protocol is, It's called Protocol xits the box and you're a token. You can take ethereum or whatever and you put it in the box and you take it out of the box. All right, So you can put tokens in and you

can take boat tokens out. So you put in the box and you get like, you know, an IOU for having put it in the box, and then later you can redeem that i o U back to get the token back. That makes sense here with me. So far, you have this worth lipp worthless box. You can put it token in, they'll give an IOU for it, and

later you can redeem that for the token. He says, so far, this is Sam Bakeman freesteal, what we've described as the world's dumbest e t F. It doesn't do anything, but it lets you puts things in if you choose. And then this protocol issues a token, we'll call it whatever ex token, and x X token promises that anything cool that happens because of this box is going to ultimately be usable by you know, governance votes of holders of the X token. So basically it's a bunch of

smoke and mirrors. They created box that literally does nothing that you can put tokens into with a with an I O U, and they promise you that whatever this box ends up doing, you'll be able to have a claim on whatever that box ends up doing because you have that IOU. However, he already told you that the box does nothing. Sounds sort of like a fraud or

a scam, doesn't it. I want to explain what he says here and more in some of the questions that were asked back of him, so you can understand, what's more, what they're talking about here are You're listening to the Mark Moa Show talking about bitcoin and cryptocurrencies and a whole lot more. I'm gonna come back with this story and more in a second. Don't go away, all right, welcome back. You are listening to the markmas Show. We're

talking about bitcoin, We're talking about cryptocurrency. We're talking about the decentralized revolution. I was talking about right before the break, I was talking about this Defy protocol thing. I was talking about how it's blown up, it's blowing up the markets, how the SEC, the CFTC, they're having this meeting to figure out how they're going to regulate things and how they're going to protect us from investing into a bunch of scams and frauds, and at the event was Sam

Bankman Freed. He's the billionaire founder of f t x, one of the largest cryptocurrency trading platforms, and he was in an article just a few weeks ago on Bloomberg and he was interviewed by Matt Levine asking him what the heck is this defy yield farming about anyway? The yield farming, Uh, defy that's like blowing up the entire financial markets right now. Yeah, So we asked him about it, and Sam Bankman Freed said, it's basically like a box.

The box does nothing, it's worth nothing, but you can put a token in it, and then you get an IOU for that token, and then, um, you know, they make you think that this box is going to do something cool and if it does, then your token then your claim on that token allows you to participate. Um. He went on to say, of course, so far we haven't exactly given a compelling reason for why there ever would be any proceeds from this box, but I don't know,

you know, maybe there will be. So sort of where you start and then you say, all right, well you've got this box and you've got a token, and the box declares or votes on governance. UM. And what we're gonna do is gonna take half of all the tokens, maybe two thirds, and we're gonna offer those tokens. We're gonna give him away for free whoever uses the box. So anyone who goes and takes some money and puts it in this box, remember the box that he said

is worthless and does nothing. Whoever takes money and puts it in this box each day, they're gonna get back, you know, one percent of this new box token UM for everyone who put money in the box. Now for now, what EX token does? It gets given away to box people. So this box that does absolutely nothing creates its own token. And if I put real money in there, they're going to give me back this box token. But what's the box?

The box does nothing and box token does nothing. UM. For now, he says, in his own words, what X token does? It gets given away to the box people. And now what happens, Well, the token has some market cap, right, it's probably not zero, let's say it's you know, it's a twenty million market So this box token that does nothing and gets given away to people who put their money in the box gets given away and it's worth

twenty million. And so the interviewee Matt Levine says, wait, wait, wait, wait, wait, from like first principles, it should be zero. And Sam's answer is, uh, sure, okay, yeah, it's completely reasonable, should be zero. So so Matt says, wait, but like, when you describe it in this totalical, cynical way, it sounds like it should be zero, but go ahead and go on.

So Sam says, okay, describe it this way. You might think, for instance, that in like five minutes with an Internet connection, you could create a box and such a token and that it should reflect like, you know, it should be worth like a highty bucks or something market cap for that um because of the amount of time and effort

that it went um. And he says that in the world that we're in, though, in this world today that he operates in, if you do this, everyone's gonna be like, oh, box token, maybe it's cool if you buy in box token. You know, that's gonna appear on Twitter and it's gonna have a twenty million market cap. Of course, one thing that you could do is you could like maybe make the float very low and whatever and you know, there

wouldn't there. There haven't been twenty million dollars that have been flowed in yet, so that's sort of like it. So what they do, what does you mean by that? So, um, let's say that I have a million tokens in this box, so I create this worthless box, and I create a million box tokens, and people put token their real money in the box, and I gave him this worthless box token back. I know, it sounds insane, this is what's happening.

What they do is then they say, well, we have these million tokens, but that's how many are total total supply. We're only going to put a hundred thousand into the market. That's the float. That's what he's talking about. Why would they do that, Well, supply and demand. If they make the tokens seem more scarce, then people want it more.

And so you take the entire market cap of the token, and then you reduced the amount of tokens by what's available in the market to float, and you artificially increase it. So so the interviewer goes on to say, it shouldn't have any market cap in theory, but in practice they always do Okay, so it should be worth nothing that saying, and so Sam baby Free says, that's right. So and obviously already we sort of hiding some of the magic impact, right, So like some of the magic is like how do

you get that market cap to start with? But you know, whatever we're gonna move on from for that second. You know, we have ex tokens being given out to all the sophisticated firms. So all these Wall Street firms and here's where the real scam comes in. So all these Wall Street firms are in on this. So you take this worthless box and these worthless box toke box tokens, but

you give them out to these sophisticated firms. Like, if the total amount of money in the box is a hundred million dollars, then it's going to yield sixteen million this year in box tokens that are being given out for it. That's a sixtent return. That's pretty good. We'll put a little bit more in, right, and maybe that happens until there's two hundred million dollars in the box.

So you know, sophisticated traders or people on crypto Twitter or other sort of similar parties go and put two hundred million in the box collectively, they start getting these ex tokens for it. So what he's saying, you create a completely worthless box and a completely worthless token or box token. People then put real money or other tokens, bitcoin, etherorum into this box and they get this worthless box

token back. They manipulate the markets to seem like there's value and I'm getting fifteen percent back on my tokens or my money in this box token, and then I can take this box token and I can go exchange it back for a U. S dollar stable coin or a bitcoin or a theoryum or whatever. Are you falling along here? Does it sound ridiculous, It's because it is.

That's exactly what's happened with us Tara Luna. So they've created this box Tera Luna, and if I give them a dollar, they go and create Tara Luna coin, which is a worthless coin for a worthless box. They use their market makers and their Wall Street sophisticated traders to look like it has value, pump it up on Twitter and pay back artificially fift Now. Remember if you on Terra Luna, they offer you tw so a lot of pop are gonna take that. How do they pay you back?

They pay you back with a worthless box token. Look, this is what Sam Bankman Freed is saying. All right, this isn't my words, this is his. Now, who's Sam Bankman Freed. He is the founder of the ft Exchange, was the largest cryptocurrency exchange. He's the same person at the meeting with the SEC and the CFTC that's trying to protect you from this exact scam. He's not trying to hide it. He's not trying to say like, um, um no, this really has value. He's not saying that.

He's saying it's a scam. Um he said. The interviewer says, uh, I think of myself like a fairly cynical person. And that was so much more cynical than how I would have described it. You're just like, well, uh, I'm in the ponzi business and it's pretty good. That's the interview asked him. Uh. And and they said, at no point did any of this require any sort of like economic case. It's just like other people putting money in the box, and so I'm going to you too, and then and

then it's more valuable. So they're gonna put more money in, and at no point in the cycle did seem to like describe any sort of like economic purpose. Uh yeah, so you're getting the point that's exactly what this DeFi is. Um. I know a lot of you may not like to hear this, and I apologize because it's maybe the first

time you're hearing something like this. But you've created a worthless box, and you've created a broken economic incentive system to get more people to put their real valuable tokens or money in a worthless box. And then they're creating a worthless box token to pay you back a percentage of your real money in Personambankment Freed in his own words, I read it for your word by word. It's a scam.

Anything backed or packed as a scam. I'm gonna come back and I'm explain this a little bit more, and I wanna explain ways we can look at other tokens that and more. You're listening to the Markma Show. We're talking about bitcoin, We're talking about cryptocurrencies. We're talking about the decentralized revolution. We're talking about this defy decentralized finance that is blowing up right now and taking the entire

cryptocurrency space with it, and the larger financial markets with it. Now, Christine the Guard and Yelling have warned us this could create financial instability and their right, and we're seeing it firsthand. But it's not what it appears. So I'm gonna explain that anymore when I come back. All right, welcome back.

You were listening to the Markmas Show. We're talking about bitcoin, We're talking about cryptocurrencies, We're talking about the decentralized revolution, and before the break, well, we've been talking about defy, decentralized finance. We're talking about stable coins. We're talking about the world blowing up, the crypto, the defied world, the cryptocurrency world, and even traditional financial markets melting down because

of what's happening with this Terra Luna token. I was talking about how the regulators getting together to regulate do what they do, the SEC, the CFTC, and how Sam bankman Fried was there as well, and then I read an interview with him from a few weeks ago on blue Berg where he basically said all of DeFi is a big Ponzi scheme. He admitted that if you missed out on that, you can go back and listen to it. Check out Mark moss Um podcast or Mark mosson hired

podcast app. Now, Um, going on from that, what I was saying is that, Um, that's basically the way this is. They create a worthless box, a worthless token, and people buy it. Anytime you hear something being backed, what does that mean? So what is bitcoin backed by? What is the dollar backed by? What is gold backed by? And what does backed even mean? So let's think about this for a minute. So for five thousand years, gold was money.

Gold fits most of the attributes of money portable, divisible, durable, recognizable, salable, um, fungible, et cetera. But it's not very portable, so it lacks that it's it's not very good there. And so we put gold in the banks because it's too big and heavy and clunky to move over for far space. We put in the banks and they gave us layer to a paper gold certificate. Paper certificates are easier to transport. It speeds up the velocity of money. But it's not money.

It's a claim on the money. So what it is is an I owe you. If I were to give you that paper claim, that means you can go to the bank and claim that gold. So that gold back certificate was backed by the gold in the bank. That makes sense, it was backed by the Golden bank, But what was gold backed by golds backed by nothing? Gold just is gold is money. Gold has value because everybody says it does. But I need to be backed by anything. So then the dollar was backed by gold, and then

eventually the dollar became backed by nothing. It kind of went to the petro dollars, so goal so dollars were kind of backed by oil. At least oil helped keep the price of the dollar propped up. They say today that the dollars backed by the full faith and credit of the government, whatever that means. Um, So, really the dollars not backed by any think just this kind of collective illusion or trust that somebody else will accept it

later for goods and services. And so the reason why I bring that up is because the very fact that something has to be backed by something else tells you there's a problem, tells you what you have is not the real thing, but rather a claim to it. Anytime you don't have the real thing, but rather a claim to it, It introduces risk, It introduces counterparty risks. So if I have the gold. I have the gold. If

I give you the goldie of the gold. If I put the gold in the bank and I give you a paper gold certificate, there's a chance that you may not actually get the gold. Remember the days of getting checks. You probably do if you're old enough, you'd get a check and sometimes you'd wonder, like, well this check actually be good if I cash it? And typically it would always be good. Um, but you know, people would bounce checks. I remember bouncing plenty of checks in my day learning

how to manage a checkbook. And so sometimes that check would not be worth it. Sometimes claim that IOU would not be worth it, and so wouldn't you rather have the gold? And so whenever you hear this about these um de fi protocols, um, there it's a box. It's a worthless box at sam Bank, Benfried says. And then you put these tokens in it, you put this money in it, and they give you back an iou. They're

backing that IOU with the assets in that box. But what if those assets in the box aren't any good or you don't get them back, then that that that IOU that you have, that claim is worthless. And then it starts just cascading from there, and that's exactly what we're starting to see happen throughout the entire DeFi decentralized finance market. And I think there's a lot of a contagion there and it's it's starting to pull down other assets like bitcoin. So, for example, Tera Luna um didn't

hold those dollars. Instead, they created this box token. They're Tera Luna token. They also took some of those tokens they bought over a billion dollars of bitcoin with it,

thought oh, we'll also back our token with bitcoin. The problem is, as more and more people started coming to redeem that, they were forced to liquidate their box token, and their box token went from a twenty five billion dollar valuation hold wait for it, wait for it, from a billion dollar valuation to a one billion dollar valuation.

We lost four billion dollars off the valuation, just like that um and because it was backed by something else and then what it was backed by this bitcoin, they were forced to liquidate the bitcoin and it pushed all this downwards selling pressure on the market. And the problem is that we have so much leverage in the system. I'm afraid it could get worse. So, for example, UM, this contagion spread into all types of hedge funds, Wall Street chaders. UM. Potentially you know, I've talked quite a

bit a lot about Michael Sailor micro Strategy UM. They've used leverage, They've used debt debt is leverage UM to buy an enorm this amount of bitcoin. And some people are speculating that these large Wall Street firms, these Wall Street traders could potentially be trying to break that leverage. And so what happens is, I think he has about four billion dollars worth of bitcoin. You look at some of these giant hedge funds. They got four billion dollars

in their back pocket. They could easily to take that four billion dollars bet against him, start sprinkling a little bit of bad news, and bring that price down low enough to a point that it forces an liquidation event, which means he'd be forced to sell to cover the debt or post up more collateral. UM. I'm not saying that's going to happen. I certainly hope it does not happen. But this is the problem that we get into from

two reasons. We get into this problem from one reason is that this leverage in the system massive amounts of debt. So debt unfortunately had a very adverse effect on me in two thousand and eight. I've told my story many times about that when the entire real estate market collapsed, I had too much leverage and I couldn't manage my portfolio properly. Um. I like to think of leverage as like fire. Fire can cook my food and keep my house warm, but it could also burn my house down.

It works that way, and so leverage would allow me to scale my business really quickly. I go get a bunch of new accounts, I go buy ten new service trucks, I hire a bunch of new people. I scale my business really quickly. But now if something were to happen I lose some of those accounts, business drops now all of a sudden. That leverage works in reverse, because now I have ten new trucks I have to pay for. I have all those employees have to pay for, And

so leverage allows me to scale up really fast. But then if I don't handle it properly and I don't know everything that could happen, it would also cause an unwind that I may not be able to handle, and that's what we're starting to see. We can see coin Base Global, the public trade company. Their founder, Brian Armstrong, had a personal fortune of thirteen point seven billion as recently as a few months ago, and now that's just two point two billion. Now, don't feel too bad for him.

He's he's just only worth two point two billion, but down from thirteen point eight to two point two that quickly. Now that still sounds like a lot. But you don't know how much leverage he may have on those assets. So he had thirteen billion, let's say that he levered him by seven billion, which seemed like maybe a pretty reasonable number. But now he's down to two point two. If he can't cover the leverage on the seven billion or the five billion, let's let's let's use it a

smaller number. I mean, let's say that he levered it by you know, three billion, um a three out of four almost fourteen billion. That's a small number. That seems pretty reasonable. I think he should be able to handle that. But then it shrinks down to only two point two How can he handle that? Now? I'm not saying that that Brian Armstrong from coin Base has leverage. I'm not saying that at all, because I don't know him, nor

do I know if that's true. But you can see how quickly UM, you can get yourself into trouble as that leverage and wines Mike now Novograts, the CEO of Galaxy Digital m had a fortune of eight and a half billion in early November. Let's say that he levered it by three billion dollars to go into Terra Luna, which he got the tattoo of UM and now it's worth two billions as as today. So again that's how quickly you can get yourself into trouble, particularly in these markets,

like these these crypto markets. But like I said, there's all this contagion that then it starts to pull down other markets as well. I learned the hard way, and hopefully you're learning from these lessons that I'm sharing with you. It makes sense, But let me know. Hit me up on social media. You can find me at number one Mark Moss on Instagram and on Twitter. I'd love to hear from you that you're listening to the show. UM,

send me a question. I try to answer every single message I get on social media, So let me know on there if you're just tuning in and you're listening to the Market Mo Show. We're talking about bitcoin, we're talking about cryptocurrencies, we're talking about the decentralized revolution. We're talking about the intersection of politics, finance, and technology. Don't go away, I'll be right back.