How to Prepare for the 2025 Bull Market | Arthur Hayes
01:15:53 Share

How do you have a reception when the government is like three percent of GDP? It's almost mathematically impossible at which this is right now.

Welcomes of bank las, where today we explore how notable crypto to trade. Arthur hayes is positioning his cypher to portfolio at the end of this twenty four going into twenty twenty five. This is ryan chon atoms.

I'm here, David hoff, and we are here to help you become more bangles. At first we ve got to get the sound of the way we've recorded this on election day. So literally the day amErica showing up to vote the polls, we don't know who won the election at the time of recording. Neither is he's like literally getting ready to go to bed.

He's in a different times. But the good thing is Arthur doesn't care. Yeah, it's kind of it's not actually really me. He says the election are exact.

IT doesn't matter according to him. We talk about that in the first part of IT. To him, the outcome is really the same no matter what.

In addition to the election, we also talk about the chinese property bubble and the coming money can in which are of the things will be bigger than the covered stimulus. We also talk about the fed next move and why treasury sucking all the oxygen of the room. He has some choice words in labels for jero power.

Altha has a lot of choice words. So some viewer discussion might be, I don't listen .

to the David out tells us, positioning for the prospect of reception and war and then we get into his crib portfolio, what he's holding and why when my favorite parts of the episode is about why he's bullish, ease, but not for the same reason that David ire bullish east. So we get to some debate on the topic of whether eat is money, whether can be money. And I want to think, David, we got a little bit of concession from him.

But like not much, we identify the gap between us and our thr, which I think is a very overcome able gap. Just need time. Having our three on the show is always useful.

Just had to get a delude on a pretty zoom out perspective for somebody who sums out very, very far into the ultra maco. But then also like plays in D G M coin trenches, he's a guy that can trade IT all. So let's go here to get right to that conversion with the artha haze. But first measures to talk about some of these fantastic c sponsors that make the show possible, especially cricket, are preferred exchange for bike cyp to assets in twenty twenty four. If you do not, how account, consider clicking the link.

In the short of being started with cracking today, if you want a cypher trading experience bact by world class security and award winning support teams, then head over the cracking when the longest standing in most secure crypto platforms in the world, cracking is on a journey to build a more inclusive and fair financial system, making a simple and secure for everyone everywhere to trade. Cypher, a crackings intuitive trading tools are designed to grow with you, empowers you to make your first or your friends trade, and just a few clicks. And there's an award winning client support team available twenty four seven to help you along the way, along with a whole range of educational guides, articles and videos with products and features like cracking pro and crack in N F T marketplace and a seamless APP to bring all together.

It's really the perfect place to get your complete cyp du experience. So check out the secure and powerful way for everyone to trade crypt. Or whether you're a complete beginner or a and pro, go to crack down com flash bank to see the that's why cartelli did the hard work of putting linux on chain so that building depth can be radically simple by using python, N, R job, a script and their sweet libraries.

Simple like, not rebuilding the basics from scratch. Simple like dedicated, scalable compute for your debt. Simple, like building debt however you want. Web three should be simple.

Two, like bread and butter, cartesian brings radically simple solutions to the, to developers can do what they do best, build, go head and discover a flexible modeler stack on cartels I and build you are most powerful, ambitious project yet. Visit cartelli dot IOS flash, simple and simplify your block train journey and start building. Today, new projects are coming online, the metal layer, to every single week.

Why is this happening? Maybe because mental has been on the frontier of layer to design. R, since I first started building mental. D, A, powered by technology from egon. Da, maybe because users are coming onto the mental layer two to captures from the highest eels available and defy, and to automatically receive the points and tokens being accrued by the three billion dollar mental treasury in the mental reward station, maybe is because the mental team is one of those helpful teams to build with, giving you grants, liquidity support and venture partners to help boots drop your mental application. Maybe is all of these reasons all put together? So if you're a dev and you want to build on the best foundations in crypto or your user looking to claim some ownership on mental s defi apps, click the link in the started with mental bag station.

Very excited to introduce you once you can get to artha haste. He is a trader. He is a macro commentator. He is the cofounder bit max, also the C I O of the mouse ROM fund.

We want to talk about how he's positioned is at the end of twenty twenty four, we're going into twenty twenty five. A lot of things happened in the world. Arthur, welcome back to bank less.

Hi, hi you guys. Good man. Okay, so it's the election day over here in the us. Where David I are located. So was going crazy.

A lot of I was drop my kids off to school, big trump flags and some down the side, the road wave and flags like it's look crazy over here. What's your plan? I don't think you're located in the U.

S. Right now. But like what do you doing today? What do you watching? What do you pay in .

attention to um I mean, i'm doing nothing i'm about to after you, after them with this I be going to bed and we go tomorrow morning and I play tennis. And at some point, you know I check my bloomberg and see if either haras or trump conceded and if not, then you strike yourself in for weeks or months of a contentious battle of you know who want right that means somewhere what what happened in two thousand with bush and gore yeah when they we're debating with hanging chats and also to for the bullshit even you know paper ballots and on now it's nonsense, right? Like do you think getting this really matters?

Let's talk about four investors or for cypher. I do you think IT matters who wins?

No, I IT matters at I think the regulatory update will be when IT is I think it's kind of relevant. The reason why bitcoin is one point two, one point five and our asset class is not because of regulations, either pro or against. no. The reason why the thing to centralize computer is the second largest crip currently has nothing to do. regulations.

Reason why there's all these in the new coins and all these things happening is nothing to do about, you know, this was that politician, and what those stands of crept s, it's a fundamental, a Better technology of moving, communicating what value is among humanity and then money. Pretty right. And so we know me, I talked about about the technology because it's not really relevant for most people.

It's all about, okay. Well, I could see that my paycheck buys me less every day, every year. I can see that the risk rich in the park get poor. I can see that no, nothing has changed.

But oh, look at this new thing called crypto and look at all these individuals who've achieve generational wealth and a very period time because there's a thing is new technology is a new way of networking and communicating, which is allowed a certain portion of a managed to escape the inflation in the basement and no financial pressure. And all this is up. And so I don't see any that changing in the united states, in china and japan.

European union in the countries is right. Everyone's doing the same stuff. Everybody has a fractional fiat banking system.

Everyone is expanding a lot of credit to build stuff, a lot of that stuff at this point isn't worth the money that was put in. But no one's Willy recognize as a loss and improvers some rich people. So they just going inflated away and hope the people, people will don't revolt.

And so that's what we are. It's of the downtown m common hairs, two sides of the same coin. IT doesn't really matter who wins. It's fun, a theater.

I'm sure all the networks in the amErica love all the campaign finance dollars that are going to buy ads and what not in the zuker berg and sergey brin and all know all the social media grows. They love the billion of dollars of spent by each campaign to try swap in. Maybe there's outside countries trying influence opinion as well. So everybody is spending money on media.

Does Better does that mean that you're not positioned in any particular way? As I relates to the election.

I think I was long before I didn't reduce my exposure.

You have not changed your positions.

Maybe I have to ask on the sidelines. You are not delving IT because I think it's going to. But you know this questions about how they said treasury react to coming on, who wins and how that sort of place out. But you know, let's say, by the end of january, all that would be solved, I think, and would be very clear. Know the path that learn, go on and no on the horse.

That's so funny because I think a lot of people in cypher to agree with you in large strokes, but like they do still tend to think that politicians have the ability to at least slow things down. So they might say, yeah, broad strokes are through you, right? You know, nothing stops this train if the money principes burn, crypto is gonna like a sand.

And it's just like a Better communication at ork. And that's true. And like if you measure that in decades, but like there's gary gangs, illness of the world, for instance, who could just like throw a monkey ranch in, like you know western finance clarity around like crypto u and just like slow IT down, put the brakes on, do you think that that's the case?

At least in the short run, like some of these politicians and administration choices might have some impact. Like I mean, trump p has come out and said he's very proper pto. I mean, you would think that would be bullish ed if he won the election on the crypto side. That and then like more bullish ed maybe than calmo Harris, do you see that there's like at least a short term play here?

cool. I think even if that say that the regulator is actually matter, but I don't think they do in the microsoft, the long term direction of cypher. The specific ways in which amErica is governed means that even though president trump or Harris can say procreate to things or anticipate to things, they don't write bills.

So bills are written by congress people in senators, and, you know, in the wake of what is the chair and case for this being four basis, said congress makes laws, not the unelected deodar ATS. It's the only season, more so on the rule making body, to create a war, whatever is good, bad. And they put that bill on the president's desk for him or her side IT.

right? And so if you're talking about the most polarized elector in modern history for the next last hundred years, how the fuck of these guys gonna create a bill that's gona get on the death, regardless of what either kind that says for or against. So there's absolutely no chance that is going to be any sort of bypassing thing that they can agree on of what gypt regulation should be. And so even if you believe from but even if you believe that if there is one person in charge of whatever regulatory agency, they can somehow weigh the magic one and all the in all these institutional investors going to go and they going to market low back coin, and you're going to be going from my seventy thousand and million dollars as this on how works. And so I on a micromegas later levels s and so I think people just don't everyone also done american understand what why you would understand this.

Is there anything about the election that you're paying attention to because there's more than just the president, right? We have the presidential election. We have the senate. We have the house there. Anything about the election that is signal .

to use I to the come, what's to make up? And then that determines like who gets the money. So which particular part of the american economy your electorate gets the free money? How quickly that happens, right? And so if it's one party controls all three braves, the government that the money gets printed faster.

But if it's a divided situation, then you need a financial crisis or some sort of war that says, oh, OK. Now we're all together in the printing of the money. And so we will put outside our differences and we'll do the same thing would have done if we were in chartered th Epace o f w hat h appens. So it's really .

IT all comes back to the money printer. That's the bigger signal to .

you do the man. We look at the i've done the math. I looked at the recent presentation to the treaty borrower's advisory committee by the treasure was released last week, late last week and have a nice chart and shows the largest five expenditures of federal government, which are half, are so security, defense and veterans benefits and interest on the debt.

And so all five of those combine grow fast with the number of GDP. So you're spending is growing faster. The ability attacks to fund IT, this is just mathematically no other way but printing money.

And so I don't care for this put in office both from t Harris s are gonna omb somebody. They might not bomb the one, the other one gna bomb, but the more than somebody. So the first is going up.

And nobody cut benefits for all people because they vote. And so if you want to be the congress person that cut the benefits of the bombers in the second generation, then you will be in office in two years. And so it's a very simply calculation that spending, we can only go on one direction because it's in the politics and interests to continue to spend.

okay? We're going to come back to that. And I want to come back to that in the context of what china is doing to written articles about this, and we'll pay IT back to the fed, too, is like the high level for Arthur.

It's just like they're going to print money is just how fast, right? Who's going to print IT doesn't matter. Is just how fast, okay. But like before we get there, let's talk about the cycle that we're in because a lot of people encrypt our little bit confused, like even David, i've been talking like weight.

Is this a bull run? I mean, that kind of feels like IT because big coins close to all time highs and yet institutional demand driven IT doesn't feel like there's a new crop of crp du investors. So are we really enable run? Are we like so what's your sense of the crypto market cycle right now? Is a bear bull as as something else? Do you even think about IT like that?

We had a very good bullrush from call IT late two thousand and twenty two rup until early two thousand and twenty four or the April time period. And a few, you know, want to be a very good student of money market. You can take a look at the reverse rip of facility at the fed.

And september two thousand and twenty two was when to hit the highway point, five trillion. And he was drawn down to what? And I was now china, billion over the next eighteen and twenty four months.

And that corresponds perfectly to the rise and encrypt so that there was a bull market. Jennie yelland said, fuckyou, j pal. Were fucked in pretty money.

And he did IT pumped in two point five trillion dollars. And to the economy, every action when not work, S, N, P, S. At all time high, and S, X at all time high, cripe.

To that, all time eyes and certain other classes. There has been a bull market. IT hasn't been as broad based as traditional ones where every single piece should outgoing next, right?

I was like, what the fuck I thought, I guess, how to like, you know, buy bitcoin. Then the next week I saw my bitcoin. Then I buy in the worst on critical twitter that go up telex.

And I saw that for a bit, and I go back in a bit coin and then I A repeat, but then happened. I got this time. But in a macro, since there has been a bull market, is this that very few people have participated in. And so you have a lot of people who said, oh, IT worked like this in the past cycle. Therefore, the most work like this in this cycle and they got, host.

sorry, David, you looked like you .

had something to say I was contemplating okay.

all the door in portfolio, they .

exact, yeah, there is like you thinking about his life choices and my god, alright. So what's your base case here are then like four years cycle that someone .

else ask me this? So it's going to be the like, why try to be prescriptive this adapt to what is I think if you try to put these prescriptive or it's a four years cycle, therefore in the second thirty, whatever is, I must do this. Well, okay, everyone does that. Then you'll get the result in the past. So I don't know with the how many years this .

cycle is going IT didn't matter.

I doesn't matter. yeah. Look at the liquidity cycle. The coin, I think for the first time is very clearly directly related to liquidity.

And china was in the past that was the dollar of this time. And IT goes back to china and with the global aggregate. But the tech is solid, the tech changes less than less obvious, becoming get over and over.

And the thing that really matters is how much fear is being debase, how fast from where? What's the pipe understand that. And I think you get a Better, Better sense where bitcoin and cyp to goes.

Is IT a four year cycle? I don't know, could be four to five, could be six, three time out? No, doesn't. Ter.

let's come back to your little a little bit later and see how kind of you're position for this because like I think a lot of people are still wondering if we're onna have this play out, like we're going to get all coin kind of like trade going on, but we'll get to that later to talk about liquidity because you think that's key. Understanding all this are IT. So a lot of crypto to investors don't understand china.

I mean, I think a lot of us like barely understand to like kind of like mro and the fed, you seem to have a take on china, which is basically this is a quote from the recent article, the twenty eight, given that the chinese property bubble was the largest in human history, so what you said, the largest in human history, the amount of one credit creator will rival the sum of dollars printed in the U. S. In response to covet twenty, twenty, twenty one.

wow. So you're talking about a chinese property bubble and you're talking about like a big money can injection of fiat liquidity into these markets as a result give us the context here. So like how did we get here? What is that what you call like monetary chemo therapy? Why is china heading in that direction? But why is there property bubble in .

the first place? Well, at the of the day, the chinese government should be one industrialized very quickly. And they said, okay, well, industrializing happens.

cities. They were very agree in economy coming into thousand nine hundred and fifty after the disaster, a civil war between shanghai chicken mother on. And so the coming is part of we're going to urban ize and so every five year plan is an urban ization target.

Now my fuck things that pretty bad while he was in power to one thousand and seventy six, and then things to deliberate zed on the dung shopping, who was basically like, i'll do whatever IT takes, just a create prosperity and channel. And if that goes again out of marois m or traditional marches were, in theory, whatever that is, gross. And so let's get these people into the cities.

And so again, all credit is determined by state preferences, because the markest banks, their own by the state, the largest companies and any sector are all state owed. And so if the government we want at path people, cities, then what we do, we build stuff. So if you're going to move, I don't know how many hundreds of people have moved from farms into the city in about thirty years, right?

That this is going to create a epic boom in land Prices, which I think the figure that I have was there up like A D X. Over the past twenty years. It's going to create an epic boom.

And all the other manufacturing and industrial goods you have to use to build apartments, cement, air conditioners, you know, cheap furniture, right? All the stuff. All these companies did very, very well from the latest until two thousand and twenty.

And so the problem was that at a certain point, you reach saturation and how much property you need for particular amount of people and they reach that saturation. And then they said, well, government policy says we need to build housing. The only thing that banks are gona lunch for is not the only thing, but one of the main thing is property.

Therefore, I shall buy property. I should build property. And if some of chinese. No investor I can invest abroad, the currencies restricted.

Of course, the super wealthy are able to get their money up, but the average chinese savor dos have access to foregone investments. And so when you're getting two to three percent in your back account, economic y is growing at ten percent year. Fuck, that's not gonna that I need something else.

Property was the only thing that they really could invest in that had a track of always going up, was supported by the government, was supported by the banks and the credit. And so everybody believe property can only go up. And IT was true for the past.

That is the best thing you could do with see your money, borrow money by a property. And so that's what happen and he can pay yeah gets in the power. And you know he said the first one to recognize this.

But as a, well, we're misallocate credit, right? If we want china to be this manufacturing no country, we want people have a harmonious society if we have the most expensive real state in the world. He talking about a poor median income.

I had to chart mi says like beijing, shanghai, shanghai rental, yld is the lowest in the world, mean the Price of super high, and if you look at the Price, the median income apartments in the major tear on training cities and the most expensive in the world. And so obviously that creates a lot of social x, right, the old zone of the ship and the Younger, like with the fuck I can get on the D A. And so you get sort of a birth three decline, which, you know, in the country that needs Young workers in manufacturing, that's also bad.

So he said, okay, well, we're missed in printed. I need to stop IT. Now it's hard to stop IT when literally every ARM of the government is made money on this. All the major banks have learned against this. All the major industries, the majority of their business is property.

And you number one to ask, held by everybody in china is properly, how do you pop the bubble without causing massive social unrest? And so I guess by two thousand and twenty, after the cover lockdowns of what now he thought he had enough control politically and economically to pop the bubble. And so they started doing what every country does when they pop.

Real city people seem with the fed did. In two thousand and seven eight, they started raising the Price of credit, or restricting developers from get there and predictive ly the market collapse. And so for two or three years into the situation, and deflation is sitting called in china.

You know, the median sort of time that IT takes to clear a property bubble, as know, five to ten years, you think about the united states, japan, and took a much twenty to thirty years to get of IT. So that's what she's n down the bubble like. Okay, with the fuck we're going to do to get out of this situation.

And at the same time, you know the due political situation heading up, those proxy words are wear between china, the U. S, the trade war and all these things, right? And he's trying to write, write this economy in this property bubble.

So these two options, one is you do the argentine situation where you do liquidation of credit, okay? You buy a property, you learn against thing. I went down in Price, sorry, that's cal capitalism.

You lost money. And so going to go to business, you going to go bank up, you're going to fire some workers. That's the one option that gets rid of all the debt. Very, quite extremely painful, could cause revolution, you never know. Or you do monitor chemotherapy, which is wanted.

Take these thing over the Price of pride zero, make the banks solving again and feel out money terms, and then do bank directly credit to get the economy back going, which is what japan has done with the european has done and what the united states has done after their respective property boss. And I call a team of therapy because, yes, well, that's cure the economy. The financial sector makes them whole.

The banks, or whole, they can lend again. You, you know, destroy the lower middle classes with inflation because have to financially represent to make sure the couple that doesn't leave. And given the amount of money that china had to decorate this property problem over the last thirty years of just amount of credit, and you in china is enormous, the amount of team of theory are going to have to put on their economy.

Is this going to be the next level? And so I know a lot of people think, oh, it's not enough. There's a lot of economists that oh, trying not doing enough stimulus.

Well, everyone says the same thing about the fed in two thousand and eight. What tarp wasn't enough. We need more. By march of two thousand nine, you were doing quantity T T V one s apeda bombom until march two thousand and nine.

And then over the next, you know, twelve years, massive bull market, and they kept pretty trillion and trillions and trillions of dollars. The european union wasn't doing enough in two thousand and eleven. The you gonna crack maro drive against the speech, while do whatever he takes these on whatever IT takes.

They've been pretty since two thousand eleven. I started in the two thousands and I came in as i'm going to print the most money ever eal trip f control quantitate tive easing. And again, IT wasn't enough at the start.

But what you do if for twenty five years, it's enough. And so it's this way now they don't have to come out with the bull full of zocor on day one. IT takes well. And so I think there's a structural bit under sort of you know fix supply assets like bitcoin and gold that i'm going to go up because it's just so much chinese fia entering the system to reflect their system.

Yeah, it's crazy here because we've seen this movie play out in the west like almost like to it's like you are thousand and thousand eight and you actually mentioned the earlier in your essay that there's like an underlying reason I had included into this, but I found this really interesting. There's an underlying reason that governments want citizens to own property. And it's actually impartially, you say, for regime stability.

Because when citizens, a large percent of citizens, own property, they have a shelter, they have a place over their head and they have something that they need government protection for. As like you think about the basel use case of government, is to like secure your property, right? To make sure that somebody with you know more guns can't just like comment, take your home and your property away from you.

So government sort of want citizens to own property so that they will prop up regimes because they need that security overshadow wing. So this is just a function of governments. And this is why we see, you know, property bubbles basically in any sophisticated, complicated economy.

Is that right? That's my idea on the theory of a why disperse ownership of property in the place of like no organized religion or some other no cookies of rule of why you should respect the authority of the state.

So arr I don't want to kind of compare contrast that o seven united states housing crisis to the one that you are looking to in china. The difference that i'm kind of getting is that there is like a little bit more of like a controlled demolition rather than like an uncontrolled explosion that I think happened in two thousand times because we seemingly had no control over in the united IT was a complete surprise.

The fed rates, rates starting in two thousand and thousand, six hundred thousand and seven, know the first canny to forward the two B N. P. Paribas credit hedge funds.

They gated, they gated investment in the summer of two thousand and seven bear sterns went bust within seven months when bought an J. P. Morgan had the force shotgun marriage.

The feed was raising rates. They stopped at that point. But it's always caused by a restriction of credit because they thread that always have gone too far.

They recognize gone too far. But they think that in their infinite wisdom that what they can prop up, they can also take down very, very silly and not cause any services. And it's the same hubris in every single central banker or efficient.

They think that they can build that and they can take IT down in a slow and control fashion. And IT never is the case. Until then, they always get to the situation where they have to take the chemotherapy and they don't want to take IT.

Can you kind of compare contrast the sizes of these two things? Because I already to listeners are going to be a bit more familiar with two thousand and eight and the size of that whole thing versus whatever is going on in china. We're totally uninformed about trying how big is this unravelling? Would you say?

The interesting thing about china is that in the chinese system as opposed the U. S. System, most people buy an apartment.

So like you get some money and you say I wanted hang in the moving in like two few years time, so you buy an apartment off plan. You don't buy used, you buy new because the bank is going to land against new, then not gonna agains use. That's how works in asia.

So you go get along for the bank, put your downy's down for this property developer, and you put down and think ten, twenty percent immediately. And then within a short period of time, you get your mortgage and then you pay the full baLance to the developer before you get the property. You wait years before you get your unit, which you fully pay for IT.

And so you're trusting that the developer is going to make good on that promise to the developer is shorter house or an apartment, long cash. And so what is any person who runs a scheme of this? They engaged poxy nomics where they say, okay, well, i'm going to promise to build more apartments and I have cash to to build.

But as long as I have a good new sales final, long as growth, then I can get leverage from the bank on the cash getting in from newmark, and I can build the houses that I promise to build in my prior years. And so that's the game that they ran. And so once the developers started lost access or credit, then confidence from the the buyers at all.

Fuck, well, is this person actually to complete this house? And because they didn't have any new sales and no bank credit, they couldn't complete the old apartment. So there is something like and how over many millions of units promised to be delivered.

And the question is what these developers get enough government financing to do IT. So it's a different problem. It's not exactly to straight money. They want, they need a partner.

So I would to see the chinese government doesn't want to get in the business of building apartments, because if you build t IT like shit, then they could plain you, right? Not to the without. So there, they've been trying to push the photo around the situation.

Let's give some money here and there. Let's try to incentivize learning. But at the end of the day, it's the market shock. Millions of units of apartments who's going to build a right? It's a different slaver of the situation in china based on how the developers are funded.

okay. So in the united states, we need to make our banks solved. So we kind of just injected liquidity state into the banks.

What you're saying is that we need to still create like liquidity for these real set manufacturer. But liquidity being created either way is just like where is that going? Is maybe kind of the big difference. But like I do kind of want to hang on the point of just like trying to measure how big this is at the end of the day, like if liquidity is all about injecting liquidity, can we measure the size of these two things, like, again, like just how big the united states two thousand eight housing crisis was versus how potentially large this looming ing housing crisis is?

I'm trying to think I come off the top my head, they remember how many trillions of roman b value of apartments are basically uncompleted. But it's you know it's probably in the half of train we are trained dollars with the just like uncompleted apartments OK. They need to be okay built, right? And so that's the one problem. Obviously, the snowball, right? Because if i'm a customer and my savings is in the apartment, i'm not going to get IT then not buying other stuff.

There are second order effects.

I'm not going up traveling and my consumer confidence is low, the money mule player drops. And so I don't go to the back of borrow of money anymore that that the big wants to learn IT to me because fuck, I guess lost my apartment. I know I butted my S A safe and this thing and now the developers on bus and i'm gonna get IT, so i'm not spending. So it's a multiple effect on that. We have these millions of people who just they don't have units that they were promised to get.

okay. So massive liquidity injection then by the chinese government. So like for people, though, they aren't connecting the dots here, are there in terms of like why is good for cypher, right? Your base cases, you know, more liquidity equals good for crypto is somebody might be hearing this and say, but Arthur isn't like bitcoin.

Isn't cypher illegal in china? Isn't IT hard to get wrong OK. So tell us about that for someone who thinks that how does that actually work in?

So dick in is not banned in china. Certain financial institutions are banned from using that as a payment. The national currency of china is the remain b.

And so certain things you cannot pay with any other currency besides the woman be, but individuals can own bitcoin. They can trade bitcoin. Certain institutions that allowed to hold IT as well. What china did in two thousand seven and finished up in a few years later, as they basically said, they were all the major changes, the big three of the time, a hob and B, C.

China said, you no onder bitcoin trading product because if you don't want to see IT, we can't ban IT, do you know that's a fool? And people can so hold IT whatever we know we are going to trade to p to p, but you are not allowed to have a public display of what this currency is worth. And reman b and so that is what has been taken down.

And so yes, so you know the large chinese change is also Operate in mainland in china the way they do IT as they have these. And of you guys use local bit point back on the day, but it's like that it's a messaging board. There is local traders who are able to wear money in a big accounts, and you can buy in all different Crystals. And that's how you get cyp du. In china.

IT is not banned. So that's how the average retail kind of like mainly in china participant would do this with like kind of like a local bitcoin p to p type of experience. And how liquid is that market? How it's obviously not good.

like a million dollars. I mean, there are a lot of size that goes. The major change obeys will have message board in china, do decent classes. I don't have any sort of .

numbers on that is not really .

if you want cyp to in china is not hard to get is is you go to the local current deletes, you know bitcoin is a reman dollar and usdt right? U S T is like massive in china, right? People don't understand, like they think fuck and jermey layers and take some business that a little good fuck yourself.

Mother is king in china. They love IT and it's liquid and that is the flow. And the currently dealers will give you another versus roman b versus U S.

Dollar vers. Do they trust IT more because it's not like jermy layer and sort of U S. gov.

Bet like U A. I think more they're very comfortable with the bitter fenix founders. Yeah bit finex x have been involved in china since the beginning.

I mean, they started in hong kong in and so what new tether complies with all the same sexual resume and is circle. So there's no difference there. I think it's just more they know the executives theyve trusted the brand has been around for a long time.

And so that's what's used in the sort of the fly will of the a network effect. okay. So if these .

markets efficiently, if you want crip to and you live in china, that you can get crip and the chinese government said you like knows this, knows that they can fully stop kind of like p to p trading, at least not without in taking some super croco ian type measures that there's like they're not prepared to take. okay. So that's basically why if you're money printing in china, if you're money printing you're the fed in the U.

S. You're money printing in europe, IT all goes back to these store value non over non fios store value assets like cyphered currencies like bicoastal. Same money printing. If that happens, the us. Or china still flowing back to bitcoin because this is where people want to hold their values.

This is on the margin. People have the demand for bitcoin. Obviously, this bigger demand for gold and maybe foreign assets, right? So there will be capital flight out of china as they create all these currency and they know the very rich and connected able to get their exchange where you want for dollars and get out of the system at all. The same sort of flows in bitcoin sort of in that sort of glob of stuff that people are gonna.

Okay, let's shift towards the U. S. And the fed.

And what's their next move? So new, they pivoted someone in september. What's happening next?

So if you can afford that, I would highly recommend getting a subscription to sult in pazar new blog. Yeah, he's great. So he assam at a conference recently, and I have wanted got a description.

I was surfing last week. And between surfing and yoga mesage, I start of reading a red, all her stuff. And so isn't very interesting sort of notes about what quantitative tightening is doing to the markets and how the U.

S. Treasury has been fighting in. And so has been this back and fourth battle between yelling and power.

Yelling is more powerful than power because the U. S. Governments dead load is massive.

And you know, the U. S. Government will get funded. Your bank independence be damned. And so what does that mean? That means that when paul is doing qt yelland did, we're going to din the reverse repeal.

We're going to switch the duration of the types of bonds of issue issuing long the bonds and nobody wants to buy. We're going to issue these tragedy bills like lesson one year, maturity and everybody wants. And so if you've got you know cash in the feed that earns, it's a one percent all give you one point zero five percent to buy buy my debt.

So I want to take your money out of the fed and come by my stuff. And so that's what happened. And so you know, a three lots of Q T has been done since they started.

Well, Young, two point five trillion dollars of essentially Q E, and that's why the markets are ripping. Now the problem is, once the reverse rip of facility gets too low, then what happens? SHE runs at a juice.

And so where you do SHE goes over the policy that stopped that, you think? And the tapered in may when the U. S. Trade is about four and eight percent, I think. And this resulting get into a little bit more detail.

It's probably not really relevant for this podcast, but his theory is that around this level of overnight reverse repo baLances was around two hundred and billion IT actually becomes stabilizing for the money markets that underpin the functioning of the U. S. Treasure market. And so paul has to stop duty, and very soon afterward, start quantity of vision. So my basic cases, well, first, so if Harris wins the election and I think that the democrats are incentivize to make sure that financial conditions continue to ease and there is no financial labels, which means that I think the fed on thursday either stop duty entirely or they plant some questions in the crowd where power can initiate that qt is going to end in the near future. So you Better to get ready for kind of thing and sort of self sell that if truck wins, I think that they sit back on my hands and they let you could fucked up because they don't like a really .

centralized finance, held all the power. But now, d, if I gives IT back to you, enter the unlimited era with D Y D X, unlimited features, instant market listings. But you can listen, trade any market instantly with liquidity.

Experience trading like never before with all the trading you know and love all on chain and then there's made of your gateway to automatic credit and deal just deposit some U S, C, C. And art and meet demand. So leverage prediction, market prospect, future instant deposits and there's even a revive trading rewards program to get rewarded for every time you make a trade.

So go head and check out D Y D X on twitter, D Y D X to get notified once D Y D X unlimited launches. Unwto all is officially the preferred of backless and is the one we use any time when we want to transact on train. Whether your on your brother or on the go, you can swap wallet makes IT easier than never to swap anytime, anywhere, use your water to transfer funds directly from the top and change and happening thousands of tokens and over ten other chains like based arbitron optimism and delivers deep liquidity, fast execution in reliable quotes with zero gas swap through unwares X.

And when IT comes to security, you can rest easy knowing its back by unis op lab. One of the most trusted teams in defy. Their code is open source and independently reviewed.

So you know, it's protected. So why wait? Download at the union all today on chrome, IOS and android and don't forget to claim your free ef username directly in the mobile wall.

Start swapping smarter with you. Swap the arbitron portal is your one stop hub to entering the a theoria ecosystem with over eight hundred apps arbitrium offer something for everyone. Dive into the epicenter of defy, where advanced trading, lending and staking platforms are redefining how we interact with money.

Explore arbitrations rapidly growing gaming hub, from immerse plane games, fast paste fantasy and eos to casual luck battle mobile games. Move assets effortlessly between chains and access the ecosystem with us via arbiters, expensive network of bridges and on step into arbitrary forcing F, T. And creators space where artist, collectors and social converge and support your favor. Streamers all on chain find new and trending apps and learn how to earn rewards across the arctic ecosystem with limited time campaigns from your favorite projects. Empower your future with arbitron, visit portal dot arbitron dot lio to find out with next on your red tree.

So right now, the fed is ignore ing rates but still engaging in qt. And you think in a hairst world, that kind of reverses and they start moving .

direction of you. I think the people in power and get, if you in whatever, but in the interview these people hate IT, right? Jennie Ellen can camp any for Harris. Yeah, there's been a fed doctors going on the record saying i'm going to do with what's in my powers of I to make sure that downstream p doesn't when they don't say like that but they bench you download mp s name as in back for american and democracy and therefore I is an unelected bureaucrat. I'm going to forth all the people by fucking some shoot up for right so that they said this and so know well I do believe that no, from the money markets and plunge perspective, this has to happen. The timing could get a bit off if the preferred candidate of the government establishment doesn't win.

Yeah but does this, mark, kind of a new era that we're in work sort of fiscal policy in in lc, treasury is is dominant and power matters a lot less than he is to have. The fed matters a lot less. Or do they still like both matter that you like, which is the tail and which is the dog here?

Well, obviously, Young has more power than power actually has. I know four trillion dollars with the debt to finance a lot more debt you have .

the more power you have in the system.

basic. So if you know, think two two thousand and eighty two thousand and whatever point paul had the power and then they did stimulus checks to issue a bunch of money, and then power is forced to finance IT right? Inflation ing with ducks, right? Inflation is still hot, right? It's still above his target.

And yet he is cutting rates. He's tapering the run off of his ballot ship because the treasuries funny needs are so large that is causing strings and well functioning of the financial markets. And thus power has to adjust to maxim reality.

That yelling is creating is not the other way around. And so power is just, or whoever will be in charge. The said next is, as I call the beta cock bitch, total boy, curious joy.

It's like a pretty classic big coiner take that as time goes on, the money printer always just becomes more corrupted. The politicians of the money printers was inevitable, I think, like back when we created the dollar on the gold standard, that was the most like credibly neutral version time era of the dollar that we ever had. And ever as time has got onest, just like there's been just more and more political influences that are creeping closer and closer to the money printer.

And now with like kind of them like formalized flipping of power over the money printer between the fed and the treasury, IT kinds seems like we're in the final stages of like will eventually we're just gonna grip the mask off and just like not even pretend that this is political, incredible, neutral, and just start issuing money in the direction that politics, political parties wanted to go. That's the trend that I see. Is that how you.

quite right, fit in the treasure with the same organization from nineteen and forty five in one nine hundred and fifty one in the united states, right? In china, like the ppc, is just another ARM of the state, right? And so they do what he tells them.

And so I know, I think that amErica will become american capitalism with chinese characteristics. AmErica needs industrial policy to build the stuff that they outsource to china. And so they can have to do the same thing that the chinese did to build their manufacturing situation financially, press the people at home, allocate credit to the industries that they believe are relevant for fighting war, right?

The chips, you know, the factories is problems can be some new ship will bill the relationship building in the united states. But all these sort of things are extremely expensive, especially when you have a population that i'll have liberal large degrees and no one can, you know use a street driver. So it's is expensive, but has been done to poor and be done again. That's a cycle.

Speaking of liberal large degrees like me, that brings us to jobs a little bit like you care at all about recession. Is this impact kind of like your models are? You're looking like jobs reports in this sort of thing.

How do you a recession when the government is like three percent of GDP? It's almost mathematically impossible in which he is right now.

Is that why we haven't had a recession? correct? Because everyone's been talking about the looming recession.

Also an even very expensive subscriptions to people who are respect. When I look like, do you know what economics, right? GDP? Government transits are a big portion.

If the government is like thirty to forty percent of all economic activity, and they are intensified to increase Normal GDP to tax IT, why would they ever let IT go down? This doesn't make him a sense. And so there will never be sense a recession.

Will there ever be a situation where the government is not .

willing to run a fiscal deficit? Voting preferences change, hyper inflation, you know, war aftermath? Maybe they're finally delivers the baLance of this situation, but you're not in that situation right now.

This is a, this is war time for U. S, russia, china, europe, right? They're all at war with each other. And first time about my build stuff.

does europe matter at all in this equation? We talk about china. The U. S does euromark.

unfortunately. No, I feel bad for the eupeptic. They just elect some idiots who just keep taking dick from the U. S. All day.

So it's like a limited sovereign, you see, and kind of like you up over its .

economic stony erman schoolish ly said, I don't wanted, need more cheap russian gas. And now when the largest of ammonia producers, B, S F, is shutting production, all the car manufacturer can produce cars at the same Price lever as a chinese. In the gaining their asses kicked economies, slowing Price severity down.

And so what are their importing? Expensive gy from the us. And you know, you can pick a european country, and these are doing dum shit because of their religions too. We know america.

Okay, so we ve got china money printer.

We've got you money. We're all britain money. Here was OK.

So let's talk about your crypto portfolio right now. We're just like, in general, how your business for this may will start with like cash is cypher or something like that? So like how allocated are you into .

crypto right now? In my crypto bucket lizy, twenty five percent invested and I have a bit of clash. But yeah, I do know. Obviously, we run a it's all my money anyways, but it's really bitcoin ef. And then we have a lot of lock tokens and a lot of projects .

how because you your crypto bucket portfolio percentage verses non cypher liquid .

cry pta bucket I don't know over is non crap to part like five, six, six, the the other .

bucket five to six times coin and .

either then so you specially imagine either R I want to talk about that for a minute because IT feels a little bit like either the asset has been left behind this cycle. Like what happening to eat, man? Like do you have to take on this?

So I still haven't done all the numbers together, but essentially, if you've take a look at so, let's say, post F, T, X, blow up, right? So one of we done to what? Seven books and now hundred and seventy seven or sixty, some of that, right? Like amazing performance. And east went from one like twelve hundred, twenty half.

Why done so well? Well, on a sort of percent change basis, the profitability, if you own soul and stake in to become a validator has dramatically improved over the past of eighteen to twenty four months and call a IT perfectly with thorium in the Price right? Revenues up because that higher, we have the new view of MV.

You have the sort of the priority fees and all these sort of things, you know in the validate rewards from being a elated right to the profitability of the chain has improved dramatically and therefore, the Prices done very well. Eat ari came in this thing as the top dog in terms like size of the network. And so one of rate of change basis obviously didn't go down as much either, right? So one from two hundred and fifty to seven, eight went from no, what like three thousand and twelve. Now you know the person client for about that.

And so but .

everyone to need things over IT IT should be up ten thousand. Well, show me ten thousand dollars worth of improvement in the underlying metrics. S of the percent of circling and supply that has been burnt because there's been transactions on the network.

So that hasn't happened and there for the process gone anywhere. But love large numbers tells me that as the I gets larger, it's harder and harder to replicate those past returns. It's a lot of the tourists who are in sala because it's done so lot from seven to hundred and seventy or hundred and sixty because things have improved off of a very low base spread.

The network I just started almost when fx blew up. Well, you not to replicate that again. So it's going be hard going forward to replicate the past success. And I think what's that negative shifts and they get a bit of sour grapes, then you start seeing more sort of like activity back and you can like, oh, well, guess what if a one plus zero two transaction volumes higher than sana, the transaction fees are coming down. It's more secure because in a proof state situation that's got a higher total notional value of the network, therefore, it's more secure. And if you believe that there is no dangerous state actors or corporation that want to take down competing sort of free association of people using computer, then once you want the strongest chain, which is the one that has the most value to be slashed. So I think all these things started to matter when the velocity of change slows down as so I because it's as success breeds future failure OK.

So that's cool. That's interesting. Do you think that's how the market is viewing either right now relative to slam, they're looking kind of cash flows and so on is like thrown off a lot of cash. It's I was looking to like a capital asset.

I will ask though, this is different than the way people value bitcoin, right? Bitcoin does not any I an IT doesn't have any cash, doesn't have any burn IT just viewed us like this monetary asset. And so a lot of people let eat backhanders, maybe eat holders are like artha.

Dude, different rules apply. Why not? Eat is money. Man, eat could have a monetary premium.

This magic thing that just like makes IT go up the way bitcoin like has that big coin doesn't have to justify itself to like Larry think with you know the size of its cash flows. So why can either be money? Why can can either be like big coin?

They decided to teen and preserve .

usability over money when the takes.

What you do want to fuck? Yeah, they were to somebody. The community clearly spoke. We want you ability.

We believe that the centralized computer is Better served if we sort of rewrite history and go forward. You cannot be money anymore. You're not money. You you are I .

went to debate that because there's been other times post deal when the other unity did not make that same choice, especially with the parity hack and parity tried to recover like .

a large party hack percentage based on the total of the network of time. Was that the same?

I wasn't close to the percentage of the network as the that was the dow was like access central. And so I can't actually think that, that allows to my point like because the dow was exist title like IT was kind of like thereon kind of fails if the dow was allowed to proceed.

You know we don't know that that's a counterfactual argument. We really know what happened. Yeah then ah sentient you are presented choice be money, be a computer. We chose as if the community to be a computer. So guess what you're fucking .

computer and no icon. Bitcoin rolled back the block chain just like a theory um did in twenty ten like there was an inflation bugged in bitcoin and they roll back the black no one number. But I still happened.

I think like so many, these things are like lost to history. People are coming into a theory these days and don't know about the double, don't care about the double. And the properties of a theory are the same on the less.

But the problem is that, apart from the history, eat is useful. Yeah, right. I spent to do work.

When you spend them to do work, you can be money. Why is oil not money? Because I need to spend IT. It's got another.

It's oil is money. We ve got the Peter dog .

dollar is this is worth as currency. The Peter is the asset. He is an asset, is not a currency.

You know what's funny about this artist? We actually had Peter chef on the park cast and he was like, hey, the reason that bitcoin is not as good as money as gold is because gold has some like utility know like he held up a phone. He was like how much goals in this phone and he was basically like, looked they're some percentage of consumption of gold and he has some utility value that actually makes IT a Better money. I don't know about like the case that just because big coin has no other kind of like use, it's not used as a consumer able transform able kind of commodity that that makes IT a Better money because like gold has always .

been used in any of what golds youth cases. I think golds use in industry is much lower than eat, literally. We're talking about cash flows. You have to spend even the value of eat as as such as computer is predicated on you spending ease to use the computer. The value of gold as a monetary access is not predicated on industry using gold.

Let me ask another question because like we're actually know we could get into like debating because we're going to eat this money both as you know, after bullet. Let me just ask IT more general question of like what would change your mind on this because I know you're trader. I know you're super practical. I know you'd like you know, you would change your mind on particular assets in the way to frame if evidence came forward to kind of like persuade you otherwise, what would persuade you otherwise that eat actually could have some monetary premium?

I think it's so fundamental of what eve is. And unless you're saying that there is no longer any inducing ous yelled and eat, the fee is no longer paid and east to use the realize computer that's host on IT. I don't think I can ever be money in the way I think about .

interesting money. So you think because he has utility.

you ve got two hundred million dollars per eth. That's actually a problem because if it's too expensive to use, eat as the commodity that runs the computer, that nobody uses the computer. So there is a Price that which eat is too expensive and then IT becomes unuseful. And the more, okay. In fact, if the Price of oil went to a billion dollars per berl in the economy collapses and nobody is oil anymore because it's too expensive.

I got IT. I still feel like people get wrapped up around this idea like they're not separating like either is a separate asset from a syrian blocks space, like a syrian blocks space is really the oil in this case, right? And either is more the petrol dolge, the monetary unit used to just the oil.

It's not the oil itself, it's not the actual commodity. So like there in block space could run out. You know it's a different asset than either as the monitor.

If I don't have a representation of both as a currency, I can't separate them terms of an asset. So yeah absolutely make sense with okay then give me the theory um blog space money or asset or token, right? That's going to allow me to sort of defecate these things and then have the usable thing and the non usable thing right? I don't I yeah I see.

So it's both it's interesting there have been projects to really like create kind of like a gas token on either blocks space token that might be interesting the future, but still you are bullish. Eat from a pure cash flow perspective, sounds like if you're holding in your portfolio is right .

on most developers. And if you think about the most innovative new things in defy or infrastructure, they all uneath. There's copy on so long and maybe IT runs faster, whatever, but they start on peace.

And so I still think east is sort of the daddy chain IT sponsors, all the idea that has some of the smartest people developing new things to take this industry forward. And therefore, I think it's, on a long term basis, a Better asset to whole. I love training alone.

It's great. It's liquid, is smooth, fast. It's got a very good community. Do I want to hold, you know a large portion, my portfolio and so on the fuck now.

And so Arthur eath isn't money, then that implies that some external money needs to be imported into the theory, an ecosystem, because either is the only you native asset inside of the a theory master, everything else is like created down stream of IT or is imported from elsewhere. And we have a large amount of like stable coin imports into the theory economy. We have some amount of bitcoin imported into the a theoria economy. So if each isn't the money of a theory, um, what do you think will become the money of a theory?

Um no. I the money of cripe this might be the money with three. I think about i'm thinking about more portfolio.

What's my monitoring reserve asset? OK? It's biton. Yeah sure you can Operate this money within its own ecosystem. But i'm not really .

trying like sale myself and we got eat this money least .

in if the theory ecosystem grows to become the like dominant backbone of the internet economy and like we have all these later tools we have there in all these different corners of these websites, bitch ilan, different trains as specific trains and they all kind of hooked into a theoria base layer in that world if they're um does become like a backbone. The internet in terms of like you know the internet value in that world is eat money.

I could be okay. Let's see if he can do that. And then lets see what actually is .

happening on shame OK. So overall though, this cycle, the bears are said, eat is dead. This cycles, gonna kip, eat entire. Like we are discussed, your concept of the cycle, which is like why do we need for you? We don't need for years cycle les IT just is what IT is. But did you think eh has a bid at some point in the next couple years? It's not like dead we haven't already seen all time is like you're .

still believe here yeah course I am is going to very well cycle. And again, I think the enthusiasm will decline as IT so large that the percent of changes needed to equal pass returns are just not going to happen. This is hard.

What else you like in cypher? Should we talk mean coin? Should we talk the five tokens? I mean, you take us.

but what do you look at? Think my favorite ite sort of think that in our portfolio and probably the largest position, thankfully, is atha. So I think that they are going to do very, very well as yields in fia are compressed relative to the growth in nominal terms across the world.

And if cyp tis dripping, the basis that everything is capturing is going to blow out. And so you're going to give back to the fifty six, seventy percent analyzed yells in thea and that's kind of bring the TV l and the took a Price go up. Also, I think that the atha team is doing very, very good work and just systematically knocking down exchange after exchange, use case after use case and saying, okay, we want USD as collateral so that people can use IT and we want to underpin all these different economies.

And I know that they're working on some of the largest exchanges, adding uses as margin currencies for all of treating, which again is just going to increase that, that fly well and get them on the same sort of petal as usdt and USD c. And then IT becomes a question of, like what type of risk you want to take? Do you want to take U. S. Dollar big rus? Do you want to take centralize and maybe to centralize exchange juice?

I thought I know you're in a fan of meme coin speculation. I'm wondering how do you evaluate a meme coin? What is the take for me coin to get onto your are you kind of just like a eight first and investigate latter? Or like do actually have like a process for evaluating in corn.

I know it's like I gotta hear about IT, right? So everyone, I don't spend much time looking at screen, so i'm doing another shit. So if I hear about something, obviously i'm late relative everybody else.

Everyone is always late to their meaning, no early to the room.

That's point because of you. I don't know I have the exact number, but there are some pumped up fun statistics in terms of like the legitimate of a meme coin, at particular nominal values of market jack and the percentage of the total supply, all coins. The issue that made their level is way to get over like a half a billion dollar market cap is like there might be lesson fifty of these things.

right? Is I one in one hundred thousand or something? yes.

But obviously, if you're talking about mean coins as an attention asset class, you need to be sufficiently large before you get the most amount of influence to your project, right? So if i'm not sitting on my computer all day, I don't have time to try to find the next.

Ten million dollar to five hundred million, our market cap mecom then once something crosses one hundred million to two hundred million market cap, and I somehow here about IT, whether it's on twitter, somebody matches on pocket somewhere chatting about in a chat that I follow then only because, okay, it's proven that IT has enough reality to make IT across these very hard hurdles. And therefore, it's more lucky to get, you know, matt levine and money stuff and luma talking about how domain is these of the videos are buying this next right? When I see that, I want to own that because he's talking about, he heard about IT. So that means onna buy, right?

okay. So what's not talking about now?

He wrote something about goat.

goat. yeah. What do you think about this whole like A I mecca pt to kind of thing, right? It's like it's starting sort of in the mean going world, but there are other you like cypher projects like I think you've written post about this. I mean, have you pivoted to A I in terms of your report foly holdings, so you're like NVIDIA stock and that kind of thing or you think crypt to is a good way to get sure to A I and what do you think the intersection is here?

Well, I think obviously something about this, I think A I hagia will use bitcoin intrinsically because it's something that they can understand from particularly code basis via currencies. And human legal system is not intricate to their world.

so that this one thing, but they can have much agency on bitcoin.

they can do much, bit kind. Why couldn't they do much? But they can, no, couldn't they sped up their own well days and build, you know, if you have self replicating robots, you can build their own asic miners. Like.

why not? Oh, that's the future i'm not prepared to think about. I feel like that's pretty far off again.

What physical? physical?

Yeah, I A longer tail thing but i'm A I I want to use some fiat currency the last hundred years and dies every time butch humans get together and decided to base IT because they want you like, right? That's the history of all fia currencies are over the last ten thousand years.

So knowing that they've really been trained on everything we've ever done in britain and they know our history, why would you buy a dollar or a euro or a yen and will not exist in one hundred years? Yes, we know this, but big here. good. Well, I agree with that understanding.

Like human history, like humans always like inflate their own currencies, are always like make their own currencies and they just make IT up. And then therefore that like aid itself, fends itself to the value of bitcoin. But and also you could argue the opposite type things, like if humans always just end up making currencies want, the A I is also end up making their own currency.

They we don't know. Maybe this is not what a good point.

It's almost .

starnes and I move about the same as .

we all do come just behind us, right, as we all do. But like, I mean, the really me thing in watching these experiments, you like a go, you are also like luna. This kind of thing is washing them, interact on chain, like a revelation that David I have had recently, and this has been would talk about for a while that the biggest group of unbanked in the world is going to be like basically A I agent.

A I agent can't roll up and get a bank account, get. They are going to do all of this entirely on chain. And if that's not bullish, ed, for selling blocks space, this blocks space on commodity, I don't know what is having the AI agents as consumers of all of this? no. Are you following that train of thoughts? Do you think .

that's bullishly for our bag here? Yeah, but I know it's caution and I think that a agents will be able to fool all A M, L, K, Y, C forms with dig anyways, right? They can fake image.

They can be fake shit. Don't have make accounts for sure. But again, I think intrigued to like commerce that's frickin less.

That's cheap enough for them. Crypto makes the most sense now whether they create their own cypher currents. See, I am I can know, but I think this is interesting way to start. And that's why I think there's a lot of hype around these coins because it's completely knew, you know, life force that is entering our space.

okay. So we talked about the money printer how that's just like going to happen. We've talked about higher position with respect to crept a but like over the last, I don't know, two years, every so often at least once a quarter, there kind of like war scare that happens, right?

I can even think of the most recent, but obviously we've got, you know, the entire world is kind of a powder cake. You got israel and iran. Everything is going on.

The middle east got russia, ukraine at china and the U. S. Whatever power dynamics are there. And so like, the thing that keeps interrupting the secular bull feeling is like, suddenly, could there be the outbreak of war?

How do you position yourself for news events like that? You know, some country is chucking missile suddenly at another country. Like you war.

I think you have this code. But like war and generals uninvestigated, you want to be out of these high risk assets, don't even those types of conditions. So how do you like trade? The option downs of this type of thing, or do, is largely ignore IT.

I think my fundamental this is that wars inflationary. And if you look at the Price of gold, after the oil shock from one thousand and seventy three to one thousand nine hundred eighty, gold did very, very well.

Stocks didn't very, very poorly, right? So if we believe that the quinin goal, in the same sort of situation where the stores of energy and energy goes up in war, because what is war is as we spend energy to destroy things which is completely regarded, but its waves energy. And so the energy that store is, I will seen more viable.

So over time, bitcoin will keep pace with the prize of energy. In a wartime scene, the problem is, is extremely volatile. And so if you are worried about war, then you should be using little to know leverage.

And you size your position according the meaning that like when you go to bed at night, you can keep your phone on sale and do not to stir because you don't care what happens overnight. This one can be down twenty five percent. When I wake up tomorrow, i'm going to tell me, fuck milk, right? Because I understand, okay, well, there's a shortening this location.

You saw what you can now, what you want. And if big coin, extreme liquid, there is a saturday night and so many three and missile around, you know, think that people could treat bitcoin and they dump ed that so that their risk is know the right way around. And on monday morning, when all the other markets reopen, cool. I'm really a rocket and role and handle that sort of volatility because i'm not going to get liquid aid. But I know that over time, you know five, ten years or now or whatever IT is, bitcoin will keep pace with a Price of energy and energy will go up because we're destroying IT.

So that's how he feels like I should trade right? IT should trade somewhere to gold IT doesn't .

always though, yeah the short time voltige extremely vallette. There's a great chart of gold versus the german mark during the lima r republic and it's like a fucking in yoyo. But obvious ly, the general is trend is a larger with you know an expendable al increase in value and as the mark was devalued. But if you use leverage, you d have gone bankrupt ltl times throughout that cycle.

You hear about that fund that got bankrupt shorting luna. While I was crashing, they took like a hundred x leveraged and they sorted. Luna would have been a great trade because they just got bankrupt. They have drupes like three seconds into the trade.

Yeah, looks a good thing. The Price of luna was very volatile, but I was going zero mathematically. We all knew that once you knew what a desperate was in the math behind how these album is able to work but did that mean that if we didn't go from like you know ten years twenty and like a few tips because oh, they're going to fix this kind of think, right? So it's a sumas for the situation. Just don't use little leverage if you really worried about war, you know, size of properly, no leverage, and over time you'll be fine. He said this.

I like this line. The worst thing I could do as a trader is trade based on who I think is right on the right side. This war that will lead you to ruin is war will be met on either side with financial oppression, outside asset configure and destruction.

Best thing to do is get yourself in your family out of harms way and then cheered your capital into a vehicle that outperforms the debasement and maintains its energy purchasing power. That's like a common theme like for you is like you at the basement and being able to preserve and maintain your energy purchasing power. Is that still how you kind of denominate things like that? Then of the day for arthritis. And I remember one time he came on the podcast, he told like if you could you'd like denominate and like you'd have like you strap oil barrels to your back and like call them around is like the way to dominate because that's just like pure energy. Is that still how you're kind of denominating these days?

And like the cost of energy, yes, but first of, I always divide any sort of fiat assets by the respective bank baLance and see IT outperformed. Text docks did well versus the fed. Balloons from two thousand and eight.

S, A, P. Got smoke. Really, they got smoke, right? So these things are not performing as the currently is debasing goal, obviously.

Well, the quinte fucking golden do that. Well, the coinage fuck amazing, right? Obviously, from two thousand and eight, the present. And so that's my guiding light of a chart. It's like, here is what happened. I have a immerged evidence of what happens when a central bank decides to debate the currently and we weren't in a more time least in the united states, is perspective.

And so why would I own general stock industry? right? This is um I can see in the chart dos making any sense I can debase things by the Price of world and I can see that from one thousand nine seventy hundred and fifty and eighty union the s and two hundred and eighty percent less oil but in of the decade and do the beginning and so stocks in general are bad inflation hit.

There are particularly talks to do well. Is to be a stock pick. But like the general stack index, investing leads to ruin. But gold did well, gold pretty much that was even with the Price of oil over um after Young couple war in the iranian revolution, so ever seen nothing is this is this thing as A A crustal ball. But the historical precedents that I looked out, assets like golden machine will do well as V S debase in energy goes up in Price. In theatre .

you still like goto like thr or the .

I like gold because gold is what the central banks are going to buy. The central banks are buying gold to deal ize to save against war.

There is some interesting theories about how trump hair could essentially revalue the gold and the fed baLance to instantly devalue the dollar, but give the treasure, blame the doors to spend to do, you know, industrial policy your hand out or what have you, right? Because the feds, the only bank in the row day, I think, the Carrier and cost of gold in the fed's baLance at what? Two dollars and outs.

So if they just put IT at the current market Price of something like five, six hundred billion dollars of running money, they can handle the treasure, which then gets to spend to the economy without in increasing the debt load. So shit like that. So goal is what the system will buy to reflect itself.

The goal Prices ago, fourteen times for the general national bank baLance gies to match how much gold relative to the amount of currency who was issued that we had in the ninety eighties. So I love golf. okay?

You love gold because central bankers love good. But do you think that changes? Like maybe the current crop of institutional great hair, central bankers you like, need to go for that, that happened.

But like the new generation does, a cypher to currency does biton become kind of the new goal that central bankers like hord i'm not talking about, like the next ten years i'm talking about like millennia. Ls are the new central bankers or something like this? So know thirty, forty years in the future?

I mean, maybe, but I think the trade right now is goal goes up. Ten is twenty eight in the next five to ten years based on historical precedents. And who's in charge right now? Could that change? sure. Of course that could change, in my view, change. And I just, my god.

since twenty twenty two, we've had a major conflict in russia, in ukraine. We've had the largest conflict in the middle is that we've had in a very long time. We haven't had taiwan in the news for a while, but still nonetheless like things have kind of escalated over there in that region.

Is this a trend that we should pay attention to? Or was the last two years kind of just like we done with all of that? Where do you think like violence is going on the geopolitical scale?

I mean, I think they'll be conflicts in a lot of other places, right, this china versus the Philippines. There's you know that israel verses was a giano with your oil fields. There's what's going on in the former french colonies in northern western africa.

And all these are this flash points between the united states in nato and then russia, china, right? right? And so there will use different flash points.

And the theory goes as reason why, you know, nuclear powers at russia, china, in U. S. Fight, proxy war, is because no one wants to engage directly with each other, because they're afraid of their own nuclear retaliation and war. I I hope that three holds because you know, of course, is very sad that all these people are dying in all these different places. But if we exterminate the entire human race because a bunch of old fuckers decide to through messages at each other.

that be even worse. Yeah, that would be very bad for the Price Price of cyp du.

We wouldn't be really matter. Yeah, it's festival is .

totally thermonuclear war is completely uninvestigated. Are you listen with this then? Our three, over the years, you've been a lot of advice, like good advice, I think, like to eclipse investors and traders.

What's your best advice for them at this point? The cycle? Like what should they be thinking of? What should be doing? Read a book .

about what war two or two and what happened more to war when? What was life like for, know the average man, woman and child during these wartime periods. And, you know, see how studio I was.

And the next time some domains politician is trying to get you a wave of flag and go send your son, daughter after war IT fuck you to them, because this is fucked and retarded. And so I think that would save a lot of time. People on reading books, they don't understand history.

No one was around them. So they think that, you know, this is a glorious thing to go. And through this lady, each other around the world, I say, that's an advice.

And you will also see what happened in the finance with all the things that were about to do. Every major country have been done before in war time. And so the playbook is there. Of course, there wasn't bit on back in the day. There was gold in other ways of sort of trying to protect wealth, but similar sort of principles applied, and ways people made a lot of money and people lost fortune as well.

IT a big lus, one on that. And reading history, I mean, a kind of suck for us to is like the old generation that was around, like the world, world to evets than people live through a kind like they are disappearing. You can have a conversation with your ancestor or so like a way to do that is to go read a book.

Or thor hays, thanks a lot, man. Great to have back on the back station. Of course, none of this has been financial advice.

You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone over. Glad you're with us in the bankers journey. Thanks a lot.