The Mark Moss Show Jan 05, 2022

I'm joining the studio today with Lawrence Lepard. You can find him on Twitter at Lawrence Lepard l E P A R D. And Uh. Lawrence is uh, he's still kind of part way in the old way and a little bit in the new way, but he's he's got a very interesting take on some of this monetary history. So Lawrence, thanks so much for jumping in. Oh, thanks for having me on Market Lover's show. Nice to join you.

Thanks man. Thanks. Uh you know, uh, my, my my story not that I'm going here to tell my story, but my story is that I made a bunch of money. I was really good at business. I had sold a couple of businesses I invested through the dot com boom. In two thousand and one, I started e commerce business at the at the bottom of the crash. People laughed at me, told me that nobody would buy stuff online. Um, had some exits, did really good, invested in real estate.

Two thousand and eight got wiped out and I had to dig out of I had to dig out of a hole. And so I was like, dang, like, what the heck. I'm good at making money, but um, what the heck is this whole financial casino thing going on that I don't know anything about. And so I started I started digging in, and uh, I learned about you know, via currency. And let's just say that I became a gold bug. So you know, Mike Maloney and Peter Schiff and those guys, and I jumped in that it became

a gold bug. Was like, well, the problem is that you have money system and we need to sound money, like like gold that you know, keeps the government on a budget and so forth. And so I kind of became this gold bug. Um. Where I realized today is that I'm just a sound money advocate, Right, That's really what I'm for. I'm for sound money. Um, but I think you're still kind of uh, you're a sound money advocate. I'm guessing right, and I'm definitely sound money advocate for sure. Yeah,

so tell me about that. Yeah, well so, I you know, look, I'm dragging around some gold baggage, some some boomer bars. They say a lot of something that guys are going bitcoin, and I can certainly have appreciate that. I mean, I you know, I think bitcoin will become a better form of sound money than golder already is in some respects, but they're slightly different. I mean, I I view, you know, gold is analog sound money. Bitcoin is digital sound money,

and with positive and negatives to both. Um and you know, yeah, I've been in the sound money came for a while. My story is similar to yours. I participated in the dot com boom did great. I was a venture of capitals before that, all the technology stuff, and it all worked out great. And I was like you I was kind of in a uh GF done okay, and I'm kind of with semi retiring or just investing my money and coaching my kids sports teams. And then two thousand

eight hit. I didn't get wiped out, but I was like, oh my goodness, this is a big deal. You know, they're gonna print until the cows come home. And I've got all these savings that I thought would keep me, you know, in good shape for the rest of my life, and they may not because if they if they inflated enough, you know, maybe the money I have won't be enough.

And so I did a deep I was a gold bud before that, but I really went deep into it, and oh it started picking up the miners and the gold and silver miners because my view was it was the way to protect oneself again monetary debasement, which was really you know, a huge, huge issue and manifest post two thousand eight. And so I've I've run this fund that I've got that's gold, gold and silver mining company since I wait. Um, I believe very strongly in sound money.

UM I saw a bitcoin coming along. I never bought it. Before coin Base got opened up. I was and the process opening monk Ox account when they failed. Think goodness, that didn't happen. And uh and uh, I've slowly but surely come to see all the benefits of bitcoin. And now it's a big part of my personal account and it's a big part of what we do with the fund.

But I haven't a band of the gold. Um. You know, the sailors of the world are like, well, gold is just dead, you know, get out of it, sell it now. It's going down. And I don't think that's true. I mean it's it's Um, it's older, it's it's probably not as dynamic as bitcoin because it doesn't have an adoption curve going on, but it's not going away anytime soon. And uh, if you want sound money, you know, they both serve a purpose. Gold is less volatible. Um. You know,

gold is off the grid. Um. You know, there is a bitcoin record of what you've done in bitcoin, and um, gold doesn't recur, doesn't require recurring electrical energy to keep it going. It's just is what it is. The money was spent up front. So um, which is not to say that, you know, bitcoin is not a better choice if you want optionality and if you want asymmetry, which I think it is. So so I got a foot in both camps. You're right, yeah, Um, so we have

in the bitcoin space. One of the biggest gold gold bulls will call it that Peter shift. He's he seemed to make and and and it's it's a shame because like I think I said, you know, Peter Schiff was very instrumental in my kind of development becoming a sound money advocate. Um. And I mean he's he's a he's a great Austrian economist. I mean, he gets the markets. Um. You know, he's he's going to be the broken clock

that's going to be eventually right one day. I guess you know, he's been pounding the same table for a for a decade. Um. But he's almost I think he's kind of made this career out of just banging on bitcoin now and that's kind of like his possible but it's a marketing ploy mark from how I see it. I think the other possibility that's going on is he just making And I have friends who are gold bugs

that that are making the same error. They really have a hard time getting around the physicality of it all. You know. They're like, if you can't touch it, it's not real, you know. Um. And you know, money throughout history has typically been most moneys have been physically touchable, you know, gold, silver, you know when it was cattle or grain. Um. But you know, if you go up one layer, what I think you see is that money is really a ledger. The money is just keeping score.

And so even before we had gold or beads or whatever they used for money. You know, guys who were living in groups, you know, would say, okay, look I killed two bites in this week. You killed one, you owe me one. You know, we all eight of them together, and it's just money is a way to keep score. Who's got what, who knows what, who knows who what?

And so it's a ledger. And the problem with the reason there was no you know, sound money ledger before bitcoin is nobody had solved the you know the problem of double spending and you know, making it immutable, and so you know, the cetoce and I think Setocia is a bunch of people. The guy's opining and those guys who came along and developed it. It makes all the

problem and it's a huge innovation in my opinion. That's a good point that I hadn't really thought of specifically the way that you laid that out, which is, um, yeah, we we've always had physical money, which of course because we've always lived in a physical world. I mean, the digital world is is something new obviously, right, Um, And so obviously before the digital world everything was physical. We had to listen to music, and there was a there was a there was a vinyl LB or whatever, and

then it was a cassette and etcetera. But today money is digital. I'm sorry, music is digital, and so of course everything was physical. But I like that that point that you had said right there, which is though even in a physical world, it wasn't physical because it was on ledgers. And that was exactly right. So even at that point, people were still trading invisible digital money credits. I guess, well, your bank account is uh is a ledger?

You know, they don't. You're back to essentially have the dollars. But you open up your bank account online, you can see how many dollars are there, and that just represents the underlying dollars behind it, you know, And so it's it's it's not that far a leap, but some people just can't make it. They don't they don't quite get it, and uh, you know, I mean, look, there's there's a lot of other noise that's hurt Bitcoin. I think all the coins and the you know, the promotion or you know,

around them. I mean, you know, how I have friends who said, how can I take this seriously? When dose coin comes out and goes up a million percent. You know what I mean, it's a joke. These things are a joke. They're complete fraud. And I understand that. I mean, there are frauds around the area, but that's not to say, you know, that's all the noise. The signal is bitcoin, which is an immutable ledger, right, yeah, And and and

the same is true in any industry. So obviously there's an entire sector of penny stocks, which are there's an entire sector of penny stocks that are companies that will probably never amount to anything, and they're all pump on dumps as well. Um, you know, in the in the gold mining space, for example, a lot of a lot of those junior those explorers there there, they have good

promoters and they'll probably never be anything. But it doesn't take away from the big you know, uh legit miners either, right, And so I think there's always going to be that. Um. So you know, I get that as well. I think, um one thing that he said was he said that actually we'll come back to that in a minute, but I think I think that's a good point. And a lot of people think that you have this ever expanding market and then there's fraud or their scams in there,

and that somehow takes away from it. Almost like if you have all these counterfeit Mona Lisa's and that somehow takes away from the legit Mona Lisa. I guess, um, yeah, which doesn't make any sense. Um, you're listening to the Mark Mos Show. We're talking about bitcoin. We're talking about the Decentralized Revolution, cryptocurrencies. I'm in the studio with Lawrence Lapard. You can find him on Twitter at Lawrence Lapard L E. P A R D. Of course I'm one Mark Moss

on Twitter. If you if you're on there, give us a question, to give us shout out and say you heard us on the radio. We'd love to hear that. We're talking about bitcoin and we're comparing it to really sound money, and um, how both of us have been kind of been in the sound money camp, which was originally um bitcoin I'm sorry, was originally gold, but now

bitcoin is kind of filling that. Um. But I think if you can understand a little bit of monetary history and understand the reason why we need sound money in the first place, I think that can open it up for you. So a lot of times people don't understand bitcoin because they don't understand the need for sound money. So I want to dig into that some of this

monetary history with Lawrence. When we come back, we're gonna talk about some of these comments that Peter Schiff made about UM maybe bitcoin kind of being this ponzi and why we need sound money. So don't go away when we are back. All right, welcome back. You're listening to the Mark Moa Show. We're talking about bitcoin, We're talking about the decentralized Revolution, and right now we are talking

about sound money. One of the things that I like talking about with bitcoin is why why do we need bitcoin? And the reason why we need bitcoin is because we need sound money. And we're in the studio today with Lawrence Lepard he is talking about that with us UM. So, Lawrence UM going back to UM the need for sound money kind of give us a little bit of this overall kind of monetary history you talked about UM in

in two thousand eight. You realize that they're going to debase or devalue the currency by printing more that you were you had concern or cause or scare because of the money that you had saved up um, and it was being debased. Explain how that works and kind of what your challenge was there, Sure, Mark, I mean it's you know, so I don't think a lot of people know the monetary history of the world, of the monitory

history of the FED in the United States. I mean, the United States was found in seventeen eighty nine, and it was written into the Constitution that olden gold and

silver could be sound money. Um. And the reason for that is that the Continental which they had used to finance the war failed and they had we had hyper inflation here in this country before we had the Constitution passed, and that pretty much you know, cemented gold and silver is really the only forms of money that we're used in this country from seventeen eighty nine into the early nineteen hundreds, um. And and you know, the banking was

unregulated as well. Um. And then we kind of began to drift away from that in nineteen thirteen when the Federal Reserve got created, and um, the a reserve. You know, we stayed on the gold standard, but the Federal Reserve had the ability to create additional claims against the money in the form of leverage. I mean, they became a bank of last resort. And you know, there are two forms of sound money. There's gold, but there's also credit

and paper money issued against the gold. And the Fed had the power, got the power to be the banker of less resort to prevent panics and crashes. And so that began the monetary expansion in the United States, and

of course it started at a modest level. They were only supposed to lend money against good credit for short periods of time at high interest rates to kind of prevent bank collapses, because they've had a few of those in and of course they immediately broke the charter right and they went out in finance World War One and then and then after that it kind of slowly devolved from there where you know, Roosevelt confiscated the gold in thirty three, and then he repriced it in thirty four,

and uh, you know, we slowly but surely, but but Breton Woods came along. We reset the dollar to be kind of the standard, but the dollar was based upon a fixed rate of goal. So so we more or less had semi sound money, albeit with a big credit overlay from the Federal Reserve. Up until nine nine seventy one was just a cataclysmic event, you know, Nixon temporarily interesting that you should use that word. Of course, it

has never changed. In nineteen seventy one took the United States off the gold standard, as we all know, in August fifteen, and and that was really the beginning of the money printing error. So at that point in time, gold was valued at thirty five thou dollars nouns thirty five dollars mounts. Yeah, that was a Freudian slip. It should be at thirty five to that um. And so they gained the ability to print money when we went off the gold standard because dollars could be created that

we're not backed by gold. And that ability has only increased as time has gone by. And you can see this in the growth of the Federals are balance Sheetcause the Federals are balance sheet. The liabilities reflect the money that's in circulation. And you see the Federals are balance sheet has grown from you know, pre uh you know, pre the crisis, it was huddered billion dollars, you know, and now it's approaching what eight nine trillion dollars, so

it's eight trilling to assume be nine. Uh So the point is that they have printed enormous amounts of money. And you know, the go to solution of politicians is to say, when they've got a crisis, they've got a hold, they've got to fill some financial institution is failing, or the economy is not doing well. They print money. They literally print money. And you know this is not a hidden fact. I mean, Bernakey tried to hide it, but were recently J Paul in a sixty minutes every said, yes,

we print the money. We do what is necessary to add to the money supply. And of course the notion they've been able to get away with it because you know, we've been in a deflationary period, interest rates haven't gone high, and the economy has been growing. But they're now at the point where they've really, in our opinion, in my opinion, they were kind of reached the endgame, and people see what they're doing. The amount they have to print is getting so large and so excessive that you know, as

anyone would know that. You know, like when you're playing monopoly, if you create a lot of money, you know, sure the value of all the properties goes up, but no real value has been created in that printing and that's what I mean when I talk about monetary debasement. And so it's been a hundred years of monetary debasement, but with a real acceleration since oh eight. Yeah. Yeah, you're listening to the Mark Moa show. We're talking about bitcoin

and the decentralized revolution. In the studio with Lawrence Lepard. We're talking about um, the FED and creating all this money in this monetary debasement. I think one key piece that you said there. I mean a lot of good stuff obviously, but the piece that people are starting to pay attention. And so a couple of years ago, nobody used the word fiat, nobody knew it right, and today

it's just like being thrown around everywhere. Right now we're seeing, you know, um Tucker Carlson, you know, the most watching show on TV now talking about these issues, right, and so people are waking up to it. And actually he was Meets has talked about in the in the Crack Up Boom. He said, whenever you have a credit montery expansion that leads to an expansion of the economy, um, it's gonna start to lead to all types of distortion

in the market, labor, etcetera. And he said, suddenly the people wake up, they realize that inflation is both persistent and intentional. And that's exactly what happening. People are waking up to it. They realize it. Well, you know the yeah, they just have to mark. I mean, you know, look at the cost of healthcare, look at the cost of college education, look at the cost of gasoline, look at the cost of everything. It's just going up so rapidly.

I mean, I've got people who have zero interest in monetary things asking me questions now because they know that's my area that you know, why are the prices going up so quickly? And everything? It just becomes very obvious. It's very painful. I mean, imagine living on a fixed income and suddenly you can't buy as much. Your money just doesn't go as far. And so, yes, you're right,

I mean, it's the awareness is there. And this is the beginning of what we call Gresham's law, which says that once people begin to realize that the money is losing value their savings, they try to put their savings into things which will maintain their value. And the traditional one, of course, would be golden or silver, but the earlier one is bitcoin and One of the things I think is beautiful about bitcoin is that you Know, Safety in book, which I think is one of the best books written

in the last fifteen years. You know, the Bitcoin Standard has basically educated an entire generational millennials in Austrian economics. Right. I mean I used to say Austrian economics ten fifteen years ago. People look at me like, what the hell are you talking about? You know, and I mean here you are quoting about mesas, right, I mean, this is just it's it's just a c change for us in the sound money world, right, things are really changing. Yeah. Yeah,

that's a great book. Thanks for bringing that up. So everybody, if you're listening, you should check out that book, The Bitcoin Standard by Safety. Um. What I love about that book is that it really takes you all the way through all of monetary history. So you go through monetary history to understand what money is, the history of money, then you understand the gold standard. Um, so it catches you up on all that history, which you're a big fan of. I'm a big fan of as well. I

think it's important to know that. And then they transition into Okay, now that you have that educational foundation, now it's transition into bitcoin. Um, and so it's a it's an amazing book. Uh. I think it's it's definitely a must read. Uh to the point, to the point the world. In my opinion, Yes, it's changed the world. And it's like, on one hand, I'm like encouraged by the amount of

people that are waking up and reading it. To your point, all these millials that I've read it, and and the the overwhelming demand for podcasts and YouTube and videos and stuff where people are waking up, and then and then it's half the world seems to still be sleepwalking. So it's like, uh, we're kind of getting divided there. Um, you're listening to the Mark Moa show. We're talking about bitcoin. We're talking about the decentralized revolution that is happening right now.

We're talking about specifically in the studio today with Lawrence Lepard, we're talking about why why bitcoin? I like to I like to focus on that, not what the price of bitcoin is. The price is the least important part in my opinion, But why why do we need it? Why is it important? Why can it fix things? Why can it change things? And that's what we're talking about. We're talking about um gold, we're talking about sound money, UM,

and we're talking a little bit about history. If you haven't read the Bitcoin Standard, go get that book right now. Make put it on your reading list for sure. And then of course he's just going with the Fiat Standard, which I haven't read yet, but I know it's gonna be amazing as well. We are going to come back and talk about more about sound money and gold and bitcoin where it's going. Don't go away, all right, welcome back. You are listening to the Mark Mo Show. We're talking

about bitcoin. We're talking about the decentralized revolution that's happening right now. I'm in the studio today with Lawrence Lepard and we are talking about why bitcoin. We're talking about sound money, we're talking about the need for that now. Um, Lawrence, I want to I want to pull up something that I saw today, UM, and it was it was going back to Peter Shift. We we talked about that earlier and he made a comment on because Michael Sailor micro Strategy,

they've been buying up all the bitcoin. As a matter of fact, I saw a stat that said, um, since he started buying, since Michael Strategy started buying they've taken twenty five cent of all bitcoin that's been created through mining since then, which is amazing. And today he posted that they did another big acquisition of the big the big purchase, which I tell people. People ask me all the time, should I buy an hour? Should I wait? And I'm like, well, if you think you're smarter than

Michael Sailor, then I guess you can figure that out. Otherwise, just follow his lead. But Peter Shift commented on that, and he said that he said, quote, imagine how much lower the price of bitcoin would be without your buying so many And so he's he's he's setting it up like it's a Ponzi scheme. But wouldn't the same be true about gold? Absolutely? I mean, that's or any asset, right, yeah,

that's an asset. That's an unfair comment. I mean, first of all, I don't think Sailors purchases as a percentage of total volume, you know, I mean Bitcoin's trading five thousand coins a day, you know, I don't do you know the balance that Sailor's company owns. I don't think

it's that large. Well, it's like a hundred and twenty five thousand, know what I'm saying is he's taking taking of the new supply, but apply a small compared to the base, and it's only growing up one point sent a year, and when the next halving comes, that will be cut in half. I mean yeah, no. And you can say the same thing about gold. Yeah. I mean that's the gold mining supplies about one seven. They're they're actually at a stock to flow ratio. They're about the

same right now. Um, but that's gonna change. Um yeah, I know it's that's kind of a specious criticism in my view. I mean, the you know, the price of it going goes up and down. It to me, it doesn't really matter. I'm like you, I mean, I'm in this because it's changing the world. Um, I do believe the price will be multiples higher than it is today, you know in five years. I mean I think you know, people, a lot of people I talk to a loot get today and say sixty old, I can't pay that you

paid five or six. I mean, you know, I'm paying too much. And I think people are missing a bigger picture, which is in five or ten years will be six hundred thousand or six million. I mean, who knows, But um, you know, there'll people saying you bought one at sixty thousand and be like us the way you and I talk about people who bought them at you know, twelve or or forty or fifty. You know, I mean, it's it's it's going to you know, we're at that stage

of rapid adoption. We've we've hit that ten percent tipping point. In my view, about ten percent of the world knows and knows about bitclan owns it. And if you look at history, you know, adoption of any new technology, that's

where it really starts to get interesting. I mean, I figured this is like a couple of years after Netscape came out with the Internet browser, and we're about to really catch a wave here in terms of this thing being widely adopted in the next five years in my view, and in ten years it will be almost universally adopted in if you look at like es curve, so they have this kind of the diffusion of innovation, right and so you have this this Bell curve um and I

think we're just kind of crossing the chasm right now. I think the E T F and L. Salvador is helping to cross that chasm and then if you overlay an S curve chart to that ES curve tells us that the time it takes to go from zero to ten percent adoption is this time I should take to go from ten tooption. And so we're we're in we're just past that ten percent, as you just kind of said globally, I think we're about in the US, and so we're really going to start going into this this

parabolic run. And if S curve, you know, oscar works pretty well. Um, and and that says that we should be at about eighty to adoption by the end of the decade. I think that's right. I think that's a definitely right. I mean it's it's been around for thirteen years, right, and so add another thirteen hundred almost in the end of the decade, is you know nine away or something

like that. So yeah, yeah, exactly. Now, Um, one thing, um, you know, as I kind of started the first section with kind of giving my real quick story of in two thousand and eight getting wiped out. You know, I had sold my business as I sold my rentals, and I was all in and developing real estate in south of California and got wiped out. And so because of that, I learned don't ever go all in. And so I've been you know, I'm I'm I'm as bullish on bitcoin

as anybody here. Um. But even even that, uh, I still don't put a hundred percent of every penny I have into bitcoin. I know a lot of you know, you see on Twitter, a lot of these people are like, you know, selling their selling everything to buy it. Um. I guess because I've been burned, I don't do that. Um. And and so I think there's still a need to have other people hold other assets. UM. And you said you still hold gold as well. UM. Jumping back to

golden I'm curious. Um, you said you have a fund that manages like gold miners, so you're kind of more focused on the gold miners because they have more of a kind of asymmetric return versus just the physical gold itself. Well, that's right. I mean, the typical role of thumb is if gold goes up ten percent, the mining stocks I mean, gold miners really are kind of private central banks. I mean they can create what I think is the best form of money, you know, pre bitcoin, um, by pulling

it out of the ground. And some of the minds I'm involved with have twenty thirty year lives, so they're gonna be pulling this metal out of the ground for the next thirty years. And that's you know, that's a stream. That's I mean, you know Buffett's knock on gold is it's a goose that doesn't lay eggs. It's just a vault. You know, at least the companies are able to produce the underlying you know entity. You know. So that's why which he did he did by Barrick or you know,

it's actually lieutenants did. I don't think he did it, Berkshire did or whatever. Right, So, um, I'm serious then on what you think the outlook is for gold, because it seems like gold has been this inflation hedge and if there was and maybe a time you know, chaos hedge as well, right, and if there was ever a time that there was chaos, and there was every time

that was inflation. I mean the last two years have been that, and we we saw a little bump from like fifteen to eighteen, but for the most part, gold just hasn't responded. I mean, what do you talk about that? Yeah, I mean, so this is a you know, we're all all the gold world is kind of sitting and we're frustrated. Right, So, you know, literally every commodity in the world is up enormously in the last twelve months, and gold has been

flatted slightly down. So keeping my gold gold as a leading indicator, it's out there in front of all these other commodities. Gold smelled it and people forget that two years ago too and a half years ago goals at hundred. So gold took a tear from thirteen hundred up to which is pretty damn good for a market that's you know, a five trillion dollar traded market um in the period from you to the top in August. And now we're consolid dating, right. We came off the we came down

to um. You know, we're at the level right now. And I think that's you know, what it's done, is that that reflects kind of the pullback in the printing, you know, the Joe Mansion trying to shut down the spending, you know, the pretend taper and the pretend interest rate increase, which none of which I think will occur. And so gold has kind of gotten a little bit wheasy and

it's it's corrected a bit. But but markets breathe, and my senses when it becomes clear that their only choice is to continue printing, that they're not going to be able to raise interest rates, that they are trapped and can't get out of it, that we're gonna catch the next wind up, and gold's gonna smell the next level of monetary debasement. It actually started running long before the COVID thing. It was running, you know, on the monetary

debasement that was occurring pre COVID. And so as the next chapter in monetary debasement starts to unfold, and I'm pretty sure it will quite soon, Gold's gonna go up. It's gonna go through, and it's not gonna look back. It's gonna be a d before people know it. I mean, people have to remember that gold tends to stall at these peaks. Mean, the old peak was eight hundred, eight hundred from two thousand seven two thousand eight, installed at eight hundred. Then it broke through it, it it went to

nineteen hundred without looking back. Then it came from nineteen hundred down to a thousand. Then it went from a thousand all the way up to fifty. It's correct a little off of that. When we take out nineteen hundred or two thousand again, and it's not a double top lookout.

It'll be at three thousand within the next two years in my view, two or three thousand in the next year, the next two years, next two year, thousand probably next year, two thousand definitely next year, and three thousand probably within two years. That's my opinion, okay. And then if that happens, then I mean, then then gold miners can go up, you know, multiple, multiple gold miners will be up to

three four x where they are today. And by the way, bitcoin will probably be a two hundred fifty three hund thousand. I mean, I think bitcoin will outperform gold. But the thing to keep in mind up between the two is that they're not competing with each other, as Sailor says. I think he's wrong about that. What they're competing with his Fiat. And I always like to cite the big picture numbers. They're four hundred fifty trillion dollars of Fiat

assets in the world. That's stocks, bonds, in cash, all spread around the world. There's five trillion of tradeable gold, not the stuff that's in museums and banks, and there's one trillion of tradable gold stocks and there's one trillion of bitcoin. So that's seven trillion dollars of sound money stuff financial assets, four hundred and fifty trillion dollars of stocks, bonds in cash. So so when the four fifty says, hey, we got inflation, where are they going to go? They're

going after the seven Yeah, good point. Um. You listen to the Mark Ma Show. We're talking about bitcoin, We're talking about the decentralized revolution. I'm in the studio with Lawrence Lepard. We're talking about gold. Now, I want to talk about what happens to gold or bitcoin in the event of the next market crash. Looking back in the lens of history at the last two crashes that we've had, I want to get your take on it. I put mine out there before. We'll be right back with that.

Don't go away. Hey, everyone, welcome back. You're listening to the Markma Show. We're talking about bitcoin. We're talking about the decentralized revolution um and today we're in the studio with Lawrence Leppard. We're talking about bitcoin, we're talking about sound money, and we're talking about gold. Has been you know, sound money for five thousand years. Now, Lawrence, UM, one thing that I'd like to ask you about. UM. I have my opinions on this, but UM, seeing as you know,

gold is that inflation hedge, that cast hedge, et cetera. UM, and now Bitcoin is kind of assuming that role. A lot of people want to know what would happen to Bitcoin in the event of a market crash. Now, of course we don't have you know, bitcoin hasn't been around long enough to have survived some of these ones previously. UM. But what I noticed is, UM, we we obviously we

did have marches, we have that. But if we go back to UM two thousand eight, which obviously bitcoin wasn't around, But we look at the way gold responded in two thousand eight, UM, and then it behaved similarly I think in March, and also Bitcoin sort of behaved very similar in a sense where UM gold dropped about half in two thousand eight, Gold dropped about half of what the stock market did and then recovered in seven months. It

took stock seven years to recover. UM. In in March, we saw the stock market drop with gold dropped right and then went on to take take new eyes UM and bitcoin kind of did the same. It dropped as well, but then rebounded really quickly, but in two thousand eight. So anyway, what do you say about that? What do you think do you think bitcoin and gold are kind of working the same in those types of environments? Um does? Does is gold somewhat invalidated because it seems to drop

with the overall market as well? No, I don't think golds invalided. I mean, I think what what you're describing in all these events is is um You know, we

have credit and liquidity unwines, and of course correlation. Everything goes to correlation of one and so you know, margin calls hit, people need to sell, they sell what they can sell, not what they want to sell, and so it's not at all uncommon you know, in any of these assets that they're going to plunge immediately, but they also recover first, and then they recover strongly because the response, we know, the coming policy response. I mean, I remember

March very clearly in gold, and it was brutal. I mean it was you know, there was a crisis, it was COVID, everything got shut down, the market plunge, everything plunged, and then j Pyle came out and said, you know, he pulled a Merrio drug. He said, we're gonna do whatever it takes to solve this, to solve this problem, to print money. We've got all these programs, et cetera. Gold went up a hundred dollars a day, two days back to back. It's never done that before. And bitcoin

actually was a little slower responding. It hadn't gone down quite as far either, I think, as I recall, but and it responded robustly as well. And so people understand that. You know, the government's number one job is to keep these markets functioning and to keep things functioning. And they may not want to print the money, but when push comes to shove and the economy is cratering for lack of money in the system, they have to print the money.

They will print the money, and they promised to print the money, and that creates a rush into assets which protect you from the printing of the money, which is bitcoin and gold. So so people need to be slightly aware and concerned about a draw down, a sharp drawn down on a market crunch. And this is why one of the things I make a point to all my clients, and I'm trying to be active on it. On Twitter

leverage kills. Leverage is a very bad thing, and I think a lot of bitcoin players have gotten pretty heavily leveraged, thinking this is inevitable, It's gonna be worth a ton of money, you know, So what if I borrow some money to buy it, Well, that's fine, as long as you can handle the drawdown. And so, like everybody needs to kind of game theory out and math out how much draw down can you handle so that you don't

get blown out. You don't want to get blown out of your position if there's a short term bump in the price or drop in the price. Yeah, for sure. I mean going back to you know, my my tragic story of two thousand eight in real estate, that was exactly what did me in was the leverage on that right. So one of one of the one of the big

projects that was scrubbed, the final dagger. I was doing this at twelve million dollar mixed use building and UH, I had an offer at eleven million, and I turned it down, and uh within less than twelve months that building the bank. I went back to the bank to sold it for four million. I had an offer at eleven I turned down the bank end up selling it for four Now today that building is probably worth twenty right, but I couldn't carry it. I couldn't carry that. I

think that. I think the pain was like five thousand at the time or per month or something like that, and I couldn't do it right. So I had all this leverage, um and I couldn't afford to carry. So that's that's the number one thing I pay attended to do these days. I mean, look, what we're watching here is really historic, Mark, I mean, we're watching a monetary system fail, in my opinion, and this is for the

history books. Our kids will read about this, you know, and and it's gonna be It's amazing what's going on. It is historic, as you pointed out, and bitcoin is it's just a wonderful invention. And but there's a price to watching a monetary system fail, and that is volatility.

You know, there's a great chart if you get on Twitter and you go through you get on Twitter, look at my feed and goo Google merma can M y R I M I K and you'll see them and everyone you've seen this mark the chart, the Memrmican gold volatility chart. And Weimar I posted at the other day what was going to happen. The y Mar Warker was going to become worth zero, but in the interim there were some wild, wild price wings, and I think people

should be very aware of that. And that's why with respect to bitcoin, I really strongly believe the right way to approach this is the dollar crossed average. You know, to buy some and then buy more, and then buy more, and then buy more, and if it goes down, to buy more. And I think the right you know, they have the right habit on bitcoin is buying the dip and and and not carrying leverage so that you have capital with which to buy the dip, not getting pushed

out of your position. Now, in two thousand eight, when the stock market dropped, it dropped like six As I said, gold dropped about half of that, and then stock market took seven years, or coover gold took seven months. But gold went on to go up about from its previous high the floor the market it crashed um and today it's only gone up by six percent, whereas bit whereas bitcoin from the previous high before the is up, whereas gold only up six So it seemed like gold really

responded well after two eight. This time is not responding is good. Do you think some of that is because bitcoin, that the retail market has really stolen a lot of its thundering. There's absolutely no doubt about it. I mean, bitcoin is a it's Bitcoin is gonna outperform gold. There's just no doubt about that. And and well there's some doubt. There's some doubt. Otherwise you wouldn't know any gold. Well, yeah, no, that's that's not true. They serve they serve a different

they serve a different purpose. Really, I mean it's um because I you know, it's it's not all just about performance, right, it's about it's about volatility adjusted performance. When you're managing professional money. Yeah, of course draw if your money manager and you're only managing bitcoin and you have I mean, try being a money manager having draw down and going to your clients and saying, hey, client, I know we're down, but hang on, we're gonna be right. It's just not

gonna happen, right, it's a problem. But what was the question again, I Mean the question was, well, if if the recovery of gold hasn't been a strong two eight, and if you think bitcoin has stole some of that, it is also somewhat suppressed I mean, we don't have to go into that, but it trust me, it is and and I think that you know, look, golds owned by central banks. Part of the reason your own gold

we haven't talked about this. Part of the reason your old gold is because eventually there could be a serious reset would expect to gold if we're there's a number that I think everyone should be aware of. If we were on the gold standard today, if we were on the gold and you did the math the way you did it back when we were on the gold standard, gold would be atty owns. Okay. So let's say Russia, China, and the United States decide our financial system is broken,

we need to go back to the gold standard. They would need to reprice gold at thirty dollars ounces. It's an The reason, my opinion is one of the reasons you hold gold today is the optionality of the paper gold market breaking and that repricing occurring. Right, It's still it always there, Yeah, it's always there. I'm not saying it's you can't guarantee it, you can't count on it, but you know it's it's a it's a hell mary

kind of a thing. But but to your point, I mean, China and Russia are still major, majorly accumulating gold, and so the reason why they're doing that is because they must also think the same thing. Well, and the other thing.

The other thing is, you know, all of us know that the right thing to do would be to go to a bitcoin standard, but there aren't any central banks that own bitcoin, and so as long as the central banks exist, there's a very high, in my opinion, there's a pretty high probability they're going to try a gold standard before they figure out that the right thing is the bitcoin standard. When that happens, gold is gonna perform

extremely well during that period. Yeah, yeah, I mean, and to the point that you you have been making before, you know, back to the two thousand eight example, is that we know that they're going to have to print. They have no choice. We know it's going to be extreme debasement eventually, and and probably sooner than later at the point we're app it's going to as you said, the history books were written about this, we're watching this

implode on them right now. So the only choice they would have if they want to try to say things, that's a big if, If they want to try to save things, then the only chance they may have is to try to get confidence back by backing it with gold. Um, that's why China and Russia are accumulating so much. And if that happens, then it gets revalued and could be exactly And that's why you know they say gold may

only reset once in your lifetime, but once might be enough. Yeah, so you listen to the Mark Moa Show in the Studio with Lawrence Laparde. Thank you so much for listening.