you are being slaughtered and you don't realize this there could be a dollar crisis they're debating the currency by 15% a year I mean it is inevitable that it's going to happen but does that just mean that we're crazy and that it's going to be fine I'm not saying everybody is wrong I'm saying that people that believe in Bitcoin are wrong you're missing the point why the hell would anybody buy these These are obviously going to go to zero I'm not concerned about the Cliff of death how do we make sense of these numbers or is this a guaranteed Slaughter and we just don't know when the tension between the way the two of you think has been really instrumental in helping me and I think countless others um build a worldview that will help them navigate uh different moments in the economy well um I think right now we're going through a period of just massive transition and so I come to the debate between um crypto not crypto with that in mind so to oversimplify your guys's stances um I see r i see you as Pro crypto Peter I seeu as anti- crypto I know those are really gross simplifications so I'd love to start with Ral if you could walk us through your position um how you see crypto why you think it's valuable and then Peter will come to you for your take okay so I'm I think we will both agree that things are pretty screwed up we'll all agree right what is really screwed up is the world is massively in debt the workforce is shrinking population growth is slowing down it's slowing down GDP growth so there's not enough GDP growth to pay or service the amount of debt out there and what we found since 2008 that the answer to this debt issue has been printing of more money debasement of currency people think of it in terms of at first they think it's going to be inflation as in the price of CPI goes up but it's actually not it's actually something much worse is Wages don't rise but assets go up because optically you're debasing the currency your future self is getting poorer because assets are all about storing wealth for future deferred consumption but what's happening is you can't afford as much of that now and so your future self is in fact poorer so a classic example is a 35y old now in the United States getting married having kids a house is very expensive now compared to when Peter and I were young it was relatively cheap three times incomes now it's like 10 times incomes so there's no real way of getting up the ladder the equity Market is much more expensive your kind of percentage share of the S&P is so much less so the advantages that your parents had are not available to you so that's a problem at a problem for society overall is this issue of debasement of currency the government are doing it cuz there's no way of paying the debt so what you're going to have to do is continue to print money so then if that is the case and I found out in this everything code analysis that I talked to you about what we found is since 2008 they reset interest rates it's like a debt reset the debt Jubilee happened it was everybody was given the chance to not pay interest and everybody reset their debts on this 3 to 5e time Horizon and so four years is the middle and we've got this perfect fouryear cycle all assets are now incredibly correlated with this cycle whether it's Emerging Markets whether it's the dollar whether it's rates whether it's crypto whether it's gold whether it's equities everything so if we've got a super correlated environment where asset prices keep going up because of debasement of currency I the Optics because the value of the currency going down then your job is to find something that offsets it so the rate of basement by my calculation is about 15% a year on a globalized basis so your hurdle rate is 15% now equities have done something not far off that but that just means you're not actually making any money you're actually just standing still NASDAQ which is in a secular trend has actually beaten that 15% hurdle rate somewhat so it's actually helped the traditional way of doing it would have been gold and you know I've been a long-term gold investor I've always like gold but gold has not done particularly well in recent years against de basement on a globalized basis it still works beautifully well as a Global Currency and against Global debasement over time it works but the really strong debasement we've been having in recent years it just hasn't done well enough and many of us from the macro world started thinking okay we need to find what is this hedge what is the right way of doing this and that's where crypto which I've been involved in for a long time started to really fit in here because it offers a bunch of ways that the financial system can use it in an overly indebted system where you've got a collateral and then like 30 uses of that same collateral so nobody owns anything you own a fraction of what you think you own in an indebted system same with a bank you have money in a bank it's not your money it's actually the bank's money and that's been proven time and time again Bank bail-ins in Europe were particularly bad so we've got a broken Financial system and the blockchain rails are something that's actually very useful we can figure out who owns what at any point with instant settlement so it reduces a lot of the risk of the settlement layer but also you got you gave the rise of cryptocurrencies which also have this supply and demand Dynamic that's interesting there's a limited Supply and it has the properties somewhat of digital gold and that's worked very well if you look at that because you've got this technology adoption of the blockchain plus this store of value or this collateral layer it's massively outperformed everything so it's been a phenomenally good asset even with these massive draw Downs on Route we have enormous draw Downs monstrous and still it's the best performing asset in all recorded history almost on any time Horizon so it makes it very difficult to allocate any money in anything else um and that's why I've struggled I just do every chart against Bitcoin or every chart against the FED balance sheet and try and say okay well what goes up gold has actually gone down versus the FED balance sheet I don't think I think that's more of a temporary State of Affairs than a permanent State of Affairs again I'm actually not an anti-gold person whatsoever I just think when you've got technology plus gold call it that as a narrative you're always going to do better and in our job to help people navigate this journey if you're 65 years old go does a great job for you if you're 35 year old you ain't going to get anywhere you're going to have to you have to gain wealth not just protect wealth because you don't have it when you're young and that's the difference here the this is the core difference to me is there's a suitability factor for different types of people and you're trying to solve different problems very well laid out uh Peter what's your position how do you come to your worldview well I agree with r that inflation is a is a problem unfortunately it's the path of least resistance for politicians to go down um it's the way they finance their spending it's the way they buy their own reelection it's the way they avoid having to be honest uh with the electorate and tell them the truth about um you know how broke they are and uh it's really a hidden tax it's you know it's instead of taking your money uh by taxing you openly and directly or even you know indirectly through a sales tax they surreptitiously rob you of your purchasing power by just creating money out of thin air usually with a complicit central bank and then they spend that into circulation and that drives up prices whether it's Goods prices asset prices uh but you know what's happen is the value of each monetary unit is is going down um as more of them are spent into circulation and and that's going to continue in fact that's going to accelerate based on the F fiscal predicament that we're in based on the demographics uh certainly in the US we have the baby boom I'm one of the younger baby boomers born in 1963 1964 is the is the end of it uh but uh you know I'm 60 I'm going to be 61 in March right so I'm theoretically four years away from cashing or collecting Social Security um but you know there's a lot of people in my generation uh there's not a lot of people in the generations that follow with the ability to to make good on these commitments so you know the Ponzi is imploding uh so inflation is basically you know that's what they're going to do now I I think that they're playing with fire here I think politicians and Central Bankers probably think they can control it uh and it won't run away from them and and turn potentially in a hyperinflation and I I wouldn't be so sure I think a lot of politicians have overestimated their ability to keep that Genie uh anywhere near the bottle once once it's once it's out so I think there's a lot of inflation and so it is a problem that you need to deal with but I don't think the solution is to invent a a make-believe asset and then all pretend that that makeb believe asset has value because of some artificially imposed uh constraint on Supply uh and ignore the fact that there's an unlimited number of other cryptocurrencies uh that exist that you know for most practical purposes are actually better than Bitcoin uh they're cheaper to use they're faster to use to the extent that you want to use Bitcoin which nobody does because it's not a very good uh cryptocurrency um I mean it's certainly uh not a store value but it's not a good medium of exchange or unit of account I mean there are plenty of other cryptos that actually fit that bill better to the extent that somebody wanted to use them uh for that purpose but they don't I mean everybody uses a crypto to gamble I mean that's uh the the main use case and in fact uh that's what's happening now with these ETFs the ETFs have simply provided yet another way to gamble on on bitcoin and it's it's ironic now you have all these people buying Bitcoin through a third- party custodian who's charging a fee I mean you're getting everybody back into the very Financial system that they were supposed to be leaving and I keep hearing these people on television saying well you know it's so hard to buy Bitcoin it's so difficult and this makes it easy now everybody can buy it I thought everybody could buy it before the beauty of Bitcoin was supposed to be it was so simple and easy you didn't need a third party you didn't need a custodian you didn't need Service uh uh a service uh storage charges I mean so it's all they're doing is now trying to convince Wall Street to buy this asset uh which has no fundamental value has no income has you know no earnings no nothing but as long as we keep buying it and no nobody sells it well the price will keep going up and we can all operate under the delusion that we're getting rich as long as nobody tries to get out and everybody keeps pretending that they've got all this money because on paper you know uh they've got something but you know it's going to be very different when people try to get out and I think uh it's going to be very noticeable with these uh uh Bitcoin ETFs because I think a lot of the money that's going into the ETFs uh is is is is trading money I think a lot of of it came out of gold stocks and if you look at what's happened in the last week or two gold stocks have been clobbered even though the price of gold is unchanged to slightly higher you've seen 10 20% drops in big gold stocks uh I think maybe they've been selling them uh to put money into into Bitcoin ETFs uh but I don't think that money is married to those ETFs I think it's there for a trade a lot of people might even have stops beneath the market looking to get out if the market turns uh but I think people are going to find it's a lot easier to get money into these ETFs than to get it out I it's just going to go to money Heaven because you know when when we've had these big drops in Bitcoin before um you know what tends to happen to stabilize the market is all of a sudden there's a bunch of tethers out there and uh and and and Bitcoin gets bought uh using you know fake dollars but when these ETFs when people who own the ETFs sell now the ETFs take the Bitcoin that they own and they sell them on the market they can't they can't get tether they need real actual dollars uh to to return uh they can't send the the the shareholders tether uh so there could be just a real vacuum uh you saw like a little blip yesterday I think Bitcoin dropped from uh 63,000 or 60 yeah 64,000 whatever it was to under $59,000 $5,000 in I don't know like 30 seconds uh and you know came back but I mean it could drop a lot more than that in 30 seconds or a minute and I think it will uh maybe there's some trouble we'll see a lot of these Bitcoin mining stocks in the last couple days have been clobbered I don't know you know what's special about them but they've dropped substantially in the last couple of days uh so we're starting to see some some resistance here and some of these names uh buckling uh but you know this is just to me it's a speculative uh Mania uh and this is not the answer to the problem people are creating a whole different problem uh uh with the with these uh crypto uh tokens so I if oh I wanted to say so it's not like I don't I'm anti- crypto or I don't see value in crypto it depends on what you're talking about so if you're talking about blockchain if you're talking about the potential to use a cryptocurrency uh actually as a medium exchange and a unit of account which would mean it would be tied to something with value a stable coin uh obviously if you if you tie it to something like the dollar or the Euro you don't have the real long-term store value you don't have an inflation head but you do have a Medi of exchange you have a unit of account I think the the ideal marriage uh is between gold and blockchain if you tokenize gold and put it on a blockchain uh you can have a unit of uh a medium of exchange and a unit of account but you actually have a real store value you have something that is a superior uh monetary instrument to any of the Fiat currencies that are out there and it's far superior to to bitcoin because once you tokenize gold uh and put on a blockchain the transactions are faster and cheaper than the transactions with Bitcoin but you have a real commodity that can store value see when when people try to say well Bitcoin is you know yeah it doesn't work as a currency but it's a great store of value it's a lousy store of value because there's no value you have to have value before you can store value Bitcoin has a price and people confuse price with value you can put a price on anything doesn't mean it has any value it just means that somebody wants to buy it uh but they may want to buy it for all sorts of reasons people want to buy Bitcoin because they think it's going to keep going up it's the greater fool Theory I'm going to buy it because somebody else will buy it and pay more uh but that doesn't work eventually it collapses and and you know you can't store price you can you can store value uh and sometimes price can be very low and there could be good buying opportunities you can get a good deal if something of value has a low price because of the the market at that moment uh but but Bitcoin only has price it has no value um and so it can't be a store value and just because some people bought it and got rich and and and you know Ral maybe made a lot of money in Bitcoin I mean I know a lot of people who did um I'm here in Puerto Rico with a lot of Bitcoin whales there are a lot of guys here that got into Bitcoin ether or you name it uh early on and yeah they made a great trade they got into it when nobody was buying it uh they they put a big you know money on it and uh it it went way up but you know the majority of the people who own Bitcoin are not making a lot of money in Bitcoin I mean Bitcoin yeah it's back up to 60,000 but it was at 6,000 three years ago you know it's had a roller coaster it went down below 20,000 now it's back up it's it's kind of been moving sideways uh over the last few years so it hasn't you know done anything as far as kept up with inflation over that time period yeah if you bought it a year ago on after it dropped and you sell it now you have a you have a good trade uh but if you wrote it all the way down and all the way back up you haven't made anything and of course if you don't sell it and it goes right back down and you know there's no way to know let's say Bitcoin collapses again from the 60,000 level just like it did a few years ago it may not stop at you know 19,000 what if it goes to 10,000 or 5,000 who the hell knows how low the next drop is going to be and and maybe after that happens they manage to get the get the price back up again and then it collapses and eventually you know it collapses and never comes back um so I I think you know people who are getting out of the dollar or the Euro and and buying Bitcoin have jumped out of the frying pan into the fire I mean so you don't have to reinvent the wheel if you want to get out of Fiat currencies uh you can own gold uh but you could also own other good inflation hedge assets real assets you know most of my money is isn't in Gold either I have actually now I put a lot more money into gold stocks personally in the last week because I just thought they were giving them away and so I I wanted to buy more um but I have a lot of assets around the world that I own I own shares of businesses that generate a lot of income uh selling products providing services that that people really need and that people will pay higher prices to get and those companies pay me lots of dividends and as inflation uh you know drives up prices uh those compan increase their prices and pay me higher dividends and I own real assets that are that are not losing value I own the property the plant and the equipment you know the IP uh whatever these companies own that are tangible real assets if I'm a shareholder I own a piece of those real assets and you can own uh you know real estate you know farmland or you know land where you know you can grow trees or mine Metals you know real land productive land or you can have you know lands with factories on them or or things like that uh people own uh you know residential real estate now or commercial real estate depending on where that is uh some of these markets could could have uh have some problems uh in the near term uh but you know real assets are something that you want to own when inflation is uh is the concern and likely to get worse you don't want to own paper you don't want to own uh Bank deposits you don't want to own annuities you know things with a fixed income cash value and an insurance policy um you know munity bonds these are all the things that lose value inflation taxes those those assets and what inflation really does is it transfers wealth from debtors uh from creditors rather to debtors so the debtors get their debts wiped out and the creditors see their their assets wiped out their savings and you know the the biggest dtor in the history of the world maybe even the history of the universe as far as I know is the United States government and so the United States government is the main beneficiary of inflation and and clearly they're going to create it they they create inflation because it it suits their purposes uh the only problem for them now is they've got this national debt with such a short maturity that they're in the predicament where you know if interest rates go up which they should uh they're in you know in a in a huge problem because they can't pay which means the FED has to play an even important mon role in monetizing that debt which is why the risk of infl running away is so great so we're definitely going to go down the Where Do We Go From Here debt how this is all going to play out but I want to keep the um the the first Collision Point here in Focus which is is Bitcoin the right answer to the problem you guys both seem to agree on the problem we're printing money we're creating inflation uh you've got to find a safe haven where do you go from there um so my question is always is a big part of the appeal of of Bitcoin and cryptocurrency in general simply the volatility and this is a culture that is responding by becoming gamblers or is the appeal of Bitcoin specifically is this a change in the frame of reference of the Old Guard that looks at gold which is the result of an exploding star literally and so hey you're not going to come by any more of that very easily and so that's why all cultures over time have gravitated towards that provably scarce resource um so is is volatility the thing and one way to put our finger on whether that is what is driving um bitcoin's adoption or not R would be a question for you which is why didn't Satoshi tokenize gold and make that Bitcoin why didn't he back it by anything other than thermodynamics well we kind of have a tokenized gold and it [ __ ] everything up it's called the Futures Market um that because still gold is a very physical asset as Peter rightly says and to move it around the world is difficult so you're moving claims around the world even on blockchain now as far as I'm aware the maau exchange for gold is going to tokenize there's a bunch of people tokenizing gold we've seen gold things great it's maybe a more efficient settlement rail or an ownership rail um but it's not instant transfer of the actual asset itself if I transfer you a Bitcoin it goes straight into your Ledger wallet let's say and you own it it's yours it's self- custody gold is more difficult to self custody just because of its size now many people around the world do self custody their gold and that's fine too again I don't have an issue but in a world of 8 billion people where we live on the internet it actually is nice to have an asset and Peter's absolutely right we've meaned a trillion dollar currency into existence we've meaned it it's just human narrative but guess what so is gold so is everything that we do including religion everything is a meme how often are you checking your credit score afraid of identity theft or account breaches we all use the internet every single day for important things like Personal Banking and remote work so why not protect yourself with our sponsor Aura Aura is an all-in-one cyber security service that keeps you safe online Aura identifies data Brokers exposing your info and submits opt out requests on your behalf Ora also monitors your credit tracks your passwords for data breaches and secures your online activity with VPN and anti malware protection you can try Aura for free for 2 weeks by clicking the link in the description or scanning the QR code so memetics rule the entire way that humans understand the world around them and because we believe something to be true it is true to us so we believe that this digital asset that is scarce is valuable Peter's right there are other blockchains that are much more effective and by owning those cryptocurrencies they're not currencies and this confusion over there's all these cryptocurrencies are all competing against Bitcoin they're not these are networks where you own a tokenized part of a network and the network generates fees you make money it's like owning shares essentially but somewhat different Bitcoin itself is because we believe it to be true it has the sorts of properties that we as humans think of as holding value as does gold certain other things don't paper physically doesn't right even paper money but paper itself it destroys copper overtime destroys silver over time erodes but gold doesn't so gold has this long-term value in a digital world those properties have been mimicked but even honed down to a way that everything is knowable in Gold well when the price is high enough the gold price becomes cyclical because the miners will find new ways of getting gold out of the ground and so Supply adjusts and brings down price which is fine in Bitcoin you can't do it so it's really a function of demand in everything in Bitcoin so it's the function of how many people believe this to be true that this asset has value and when you go back and say well people shouldn't do this nobody has the right to tell people what they should or should not do this is the best performing asset the world has ever seen it is up 6 million per. since we first put it on real Vision in 2013 2014 it's up 380,000 wow you know it if if Bitcoin is a thousand 10 years from now you could still make the argument it's the best performing asset in the world if you want to start from that point in time so it doesn't matter the people didn't own it when it was pennies that's a little bit disingenuous because it actually is the best performing asset in the world on a 10e 5e four year threee 2ye oneyear basis Well it can't be on a three-year basis because it's about unchanged right it was at it was at six it was over it's all it's record taking the alltime high as the yard stick right three years ago was March 20 uh was March 2021 it was much lower well when did it hit 60 65 69,000 when was that like November 2021 all right so from from that point but yeah I made a big rally it just it's Bitcoin is up 40% in the last few weeks so obviously everything looks like a valley when you're up on this hill question is has Bitcoin performed very well over it's time lifetime the answer is provably mathematically yes that's okay doesn't mean you have to like it doesn't mean you have to like it but it's provenly gone up more than any other asset look let's see what happens when the people who own it want to get rid of it and do something with it it's been around a couple points I want to make it's been around 14 years we've gone through four Cycles where it's gone down 90% and it still is the best performing asset so your oh my God scenario goes down 90% I've gone through three of those myself it doesn't it still doesn't stop all right well you're going to go through another one and it may not come back next time but the point I want to make a couple of points that address what you said so I I I I agree that it is easier to store Bitcoin I don't know obviously we don't need these ETFs that's just the manufacturer to try to pump up demand but yes it's easy to store your Bitcoin relative to Gold but the difference is when you're storing gold you're storing something and so since you have something it takes some effort to to to to store it when you're storing Bitcoin you're storing nothing so what good is the fact that it's easy to store nothing yes I've got a very safe secure supply of nothing and Bitcoin though as long as people think it's going to go up as long as they maintain that delusion and more people want to buy it sure it will have a price and if enough people don't sell it then some people can't right there are always going to be some people who that is the nature of all Investments no it's not no it's not when you talk about gold gold is an actual commodity that is used does what in industry it's used proper what share of gold usage of gold that's mined is actually used in manufacturing no about half of it is used in jewelry that's jewelry that's just storing of gold on your physical body how much is actually used no that's used I got a gold watch here I didn't I didn't buy a tin watch and why did you buy a gold watch because you want to wear gold because it's no I can go swimming with theck watch it doesn't rust it looks beautiful it lasts Scrat it scratches cuz it's gold guys let me jump in here I want to ask a very pointed question on that fact so gold if half of it is being used for jewelry I think that's a very valid point my question is how would you feel if somebody were wearing their crypto punk as a piece of jewelry but they're not wearing their Bitcoin they're they're wearing something that has Bitcoin written on it there you don't need the Bitcoin if you want a gold watch you got to have gold actually that's not true Peter because if you have an inscription on bitcoin like a Bitcoin ordinal which is an nft yes I know what those are I created some myself and they are stored on the blockchain you actually need Bitcoin for it to exist yes you need a Satoshi yes you when you look on Twitter I have my crypto Punk that actually is also a claim on ethereum yeah all right you know but it's it's it's it's all part of the speculation of Bitcoin it's not about wearing your your your jewelry but again gold gold is a conductor of electricity it is the best conductor we know it's the best conductor we have it's used for all sorts of things and electronics it's used in medicine it's used in dentistry it would be used more if the price was lower but the price is high but the reason that the price is high is when you own gold you are storing the future use of that gold a thousand years from now somebody could use that gold to contuct electricity you don't know what they're going to use it for I I talked about this this telescope that we sent into space this Hubble telescope and they had to coat these huge mirrors with gold now that was very expensive they didn't want to coat it with gold but that was the only metal that was going to work so they they had to buy gold to to coat these these these mirrors so when you own gold you own all those properties those properties are not going to go away over time and you're storing them for future use Bitcoin doesn't have anything that anybody uses for anything I mean as long as people want to gamble on it uh there's a price but people don't have to buy gold uh for money there's always going to be people who need gold in Industry who are going to be buying it and central banks yes central banks buy it as a monetary asset because they need something to back up their Fiat they can't just back up one currency with another currency they need something real so central banks have been buying more and more gold uh they have a lot more that they need to buy uh because their reserves are still too low but you don't have that with Bitcoin you don't have industrial demand you don't have Central Bank demand you don't have jewelry demand you just have speculative demand and that's very fickle yeah if the Market's going up the speculators will buy starts going down they're going to want to get out uh but eventually the story blows up you know people stop believing in the fairy tale you know you talk about all these young kids uh that think they've reinvented the wheel and think that they know more than their parents or the grandparents you know it's like look you know little kids believe in all sorts of things they believe in the tooth fairy they believe in the Easter Bunny and and Santa Claus you know but they don't believe in these things for their whole lives as they get older uh they they start to uh see the truth and I think the same thing is going to happen with with Bitcoin uh people are going to grow up and they're going to learn from the mistakes of their youth really fast I want to jump in here I don't want to just move past this idea of uh that gold would be used more if the price were lower but the price isn't lower why is the price lower because it's really thought of as a store of value as a flex so store of value and flex seem to be the thing that actually drive the value of gold um and I think I have a hypothesis that the core thing that drives the difference between you two as archetypes is a belief that either digital things are real or digital Things Are are not real and if you believe like I do um that the future of the world is more digital where people will spend more of their lives in the digital world where I heard the story of a kid U their parent came to them and said why do you want a fortnite skin those aren't real and the kid was befuddled they had no idea what the parent meant by it's not real yeah but that that that argument is is really a straw man because I believe in digital things uh like you know music I Len I I don't have to go out and buy a a record I can can listen to music digitally uh there are a lot of things that I can do digitally but just because I believe in digital that doesn't mean that I can eat digital food right food can't be digital because I'll die if the only thing I eat is digital food I'm not going to get enough calories and I'm going to die I need actual food I can't replace food with a digital uh image and that's the same thing with gold gold is a real metal digital gold Is Not Gold it's nothing now yes if I want to you know have a character and I want him to have all kinds of gold fake gold jewelry in some video game sure but I mean it's not worth that much because you could replicate it in definitely you don't need actual gold to have an image of gold on a computer screen um you know that's why you know for a while they had people that were buying digital real estate oh I got beachfront property well who cares about beachfront property in a computer game there's an Unlimited Supply of that I mean if you want an actual beachfront property in the physical world that's more scarce than a a a a digital Beach you know that your avatar can can can can lie on uh so it's very different it's not like I I'm not into technology sure I I I can appreciate it but I can't live in a digital house I can't eat digital food and we can't have digital gold Gold's got to be real in order for it to be gold and do the things that gold does so here's an interesting thing Tom is is in a digital world we talked about and rightly as you rightly say every day is more digital than the last right that is a endless Trend that we are seeing and in a digital world we can make infinite amounts of anything digital and we've seen that so stuff like email has gone from being something we paid for to something that's free Cloud computes everything compute itself is EXP exponentially declining in cost because everything digital almost goes to zero because you can make infinite amounts so that's a real problem in a digital world until the invention of blockchain which creates digital scarcity that's a mathematical way to to create scarcity so scarcity is the asset that is why gold is valuable it is a scarce asset that's why silver is less valuable than gold there is more silver there's plenty of silver that's why copper is less valuable than gold scarcity is what we as humans value and in a digital world where everything can be created infinitely like food in the physical world what you need to maintain value is something and that's what blockchain did so that's why younger Generations who live more in the digital world say okay this is great because I'm living in this digital world and I want it interchangeable with my physical world and therefore I'm happy that digital assets have value and I can think of Bitcoin is the foundational value layer for all of this and that makes sense being scarce is not enough you have to be scarce and you have to have valuable properties that that people want and so gold has very valuable metallic properties it's the most useful metal on the periodic table and yeah there's not a lot of it so it's something that we need has it's very useful yet it's scarce so it's going to have a high price I mean something like air we all need air right air is very valuable without air we die but there's so much of it it doesn't have a high price because there's there's a lot of air in the atmosphere as opposed to how much gold there is in the ground so you could say yes Bitcoin is scarce but it doesn't have any value and so there could be one Bitcoin if nobody wants it then it's worthless right now yes people want the 21 million Bitcoin but I'd rather talk about the 2.1 quadrillion Satoshi because when you talk about gold in order to actually do something with gold you need a certain quantity of gold right a little speck of it isn't going to do anything you need a particular quantity to do a job but with Bitcoin you know whether I have an entire Bitcoin or one Satoshi doesn't matter I can't I I I can't do any more with a Bitcoin than with a Satoshi because I can't do anything with either one and and so they is 21 quadrillion Satoshi so there's plenty of Satoshi to go around everybody can have a few hundred thousand of these things uh on the planet Earth but not only is there an unlimited supply of of or of or there's a limited supply of these Satoshi there's an unlimited supply of other crypto tokens that can be created more than 20,000 have already been created in theory 200,000 2 million can be created that have proper properties that are similar to or even improve on the properties of Bitcoin uh and so so what I mean what is value about yeah people it's all the rage now people are talking about it but in a 100 years will anybody even remember uh what Bitcoin was I mean most people probably won't know about it I mean how many people even know about you know tulip Mania or stuff like that that happened in the past or Beanie Babies I mean these things are like fads they come and they go I mean some people may study it if they study history uh but to think that in 100 years uh anyone's even going to be be be thinking about Bitcoin what gives you the confidence to say you're so sure what would say make you say you know what I don't know this is interesting because it's obviously obviously people like it it attracts a lot of investors a lot of smart people if you go and see Dan mohead or Dan tapiero do you say listen guys you guys are morons you're just believing in so you wouldn't say that you wouldn't well look there are a lot of people a lot of people on Wall Street have done foolish things in my lifetime whether it wascs uh subprime mortgages I mean people were doing a lot of foolish things with their money and and they lost it uh and I know Wall Street has a a tendency just to try to make money off of any fat I mean whatever's popular you know there's an expression feed the Ducks while they're quacking and that's what Wall Street does it's like whatever the public wants they Supply it and they take a fee and and so if they could get a lot of interest in Bitcoin then they're going to create these products and they're going to make it so that uh people can trade they don't care they're operating casinos they're they're they're making they're making money but what you should think about is not okay maybe I'm wrong maybe there's a slim chance that I'm wrong but there's a slim chance that you're right I mean you're betting on a long shot the odds are it's not going to work right so it's it's a real long shot that that that that this project is actually going to succeed right would you be less concerned about the whole thing if gold had actually gone up no I mean look I gold has gone up the pro so gold Min for example gold mining equities have gone nowhere in 45 years well gold mining equities are not gold gold mining equities are not gold so gold gold in the last 100 years has gone up 100 fold so the dollar has lost 99% of its value and even if you go back to the year 2000 gold has gone from under 300 to over 2,000 in the last 20 years so it's just that during the last 10 11 years where Bitcoin has been on the scene gold has been very stable while Bitcoin has gone way up that that's in your your reference point let's assume you were less fixed on your view and you saw this new thing and saw that people also thought of it in the same kind of way that that people thought about gold and doesn't it make you go you know that's fascinating I wonder if this this really could work in a digital age but instead you'll say no no chance they shouldn't buy it they're all idiots what makes you so sure like I would never say about gold that's stupid I would say I understand it of course gold is interesting but it's it's a weird way to approach it is here is literally tens of Millions if not hundreds of millions of people owning something and you're saying they're all morons I'm right regardless of the performance of 6 million per it's all just Beanie Babies is that really what you think I'm not saying they're all morons there are people that are trading it because it's going up and they think they'll get out before the Music Stops and maybe they will I me you know how how long does this go on for I mean we're 14 years in Peter we're 14 years in you're saying is why don't I why don't I why don't I accept that nothing is something why don't I believe in this fantasy like everybody else why am I the sane person you know when you have all these insane people you should be asking yourself is why do I believe this nonsense that you know I mean there are other smart people I'm not the only person I can hold two competing ideas in my head at all times and it's a probabilistic game it's not that I don't understand Bitcoin I understand it that's why I know it's worthless but there are plenty of other smart people who look at it the exact same way as me I'm going to jump in really fast because the only way forward is to identify the base assumptions that Drive Your guys' World Views so as we go through this uh Peter what comes to the Forefront from you is that the belief system is if something doesn't have intrinsic value then it all it is is gambling do you agree with that statement around your beliefs if it doesn't have intrinsic value it's not going to to be money you know and and now currency is a money substitute and currency doesn't have any intrinsic value unless it's back by gold or some something else but then it that its value is derived from what backs it up but a Fiat currencies right which we use now have no intrinsic value but they have uh governments behind them uh they have laws that uh you know make them legal tender they have a government that demands payment of taxes in that currency so you can have a a Fiat system that will work it won't work as good as a as an honest system based on gold but it can it can work temporarily and and sometimes temporarily can be a long time but my my my premise is that if Bitcoin doesn't have an actual use Beyond uh my giving it to somebody else or selling it to somebody else whatever other than as a uh as a as a potential Exchange if its only us as I can buy it and sell it to somebody else who buys it and sells it to somebody else it's a Ponzi it's a PID it's a chain letter there are a lot of ways to describe what this is and they've been doing this for hundreds of years right it's not new all that's new is the digital part but all the all the other um uh factors have have been tried and you know over and over again it's just a modern version of this and it's going to end and the same way that in all these prior uh pyramid schemes have fallen apart okay so I'll say it a different way uh because I feel like I understand your beliefs but I'm having a hard time getting you to agree that I understand um so gold is back stop by the fact that it can be used by other things therefore it is the wiser um store of value because the price is never going to fall below what uh its usefulness in the real world is well yeah gold is is a commodity like wheat like oil like corn uh like cotton uh and people need gold just like they need these other Commodities the difference is you know gold is a better commodity to store because it doesn't tarnish it doesn't rot it doesn't Decay uh and it's relatively easy to store I mean it's certainly a lot easier to store uh gold than than than cattle you know or oil uh you know of all the Commodities that you could choose to store gold is the easiest and so that's one of the reasons that that that that we we use it now is it easier to store Bitcoin yes but then again you give up the fact that you're storing something you're storing nothing right what I'm what I'm trying to get to is the core of why R I think rightly from a just understand the world I'm not saying who's right or wrong I'm just saying to understand the world uh R's reaction makes sense if you believe that belief in the item the the mimetic ability to transfer the belief in the item is is the thing that matters and I think R tell me if I'm wrong but that you believe Gold's value is driven in the vast majority by the mimic belief that gold is a great way to store value well no it's it's its value is derived from its properties but I I I agree that that that Bitcoin Bitcoin is purely a function of your belief of confidence it's a giant game as long as we all believe it has value uh then it can have a price and people will want it but the question is can you put your faith in that confidence enduring over time that in the future people will be just as infatuated and and hold these beliefs just as strongly in the future and I think the far off into the future you want to extrapolate the harder it is uh to to to believe that that will will be the case you know tomorrow will people stop believing in Bitcoin tomorrow probably not in 6 months well probably not but in 10 years in 100 years the further you go out at some point yeah what's what's the odds and so you can't be a store of value because at any point in the future there could be absolutely no confidence whatsoever in Bitcoin you know it's you know it's to me it's more of a fat yes people people are are infatuated with it now because it's gone up people have gotten rich and there's all this money being pumped into it um but who's to say that that's going to be the case in the future I think a lot of money is going to be lost in Bitcoin in fact you know far more people are going to lose money in Bitcoin than than have made money in Bitcoin that is very possible so what I I want to be clear what I'm trying to do right now is simply State what you guys believe to be true not convince you of anything else because uh we are in a battle for ideas in the greater world and so I want people to understand the base assumptions that drive your guys' worldview so they can form their own uh Peter I feel very confident in saying that you believe the reason that gold has value is because it has intrinsic physical properties that people can use and that makes it valuable uh and so that becomes a game of I don't need people to believe so even if belief drives a certain amount of this it it really has usefulness and that is ground Truth for Peter shiff and gold the properties don't always have to be physical they could be intangible right you know there's a value there uh so I'm not I'm not against agreed intangible uh assets uh you know okay perfect so now on the Bitcoin side on Ral your argument and take this up and tell me if I'm wrong is that we are entering a phase of perception where the mimetic value the belief that computers for instance are the future it's a Bedrock that people grow up with that a certain subset of the world and I actually put myself in this so I don't have to project into other people um that they believe that the thermodynamics that you can represent on the blockchain to produce the Bitcoin is is real is as real as an exploding star therefore all that's needed is the mimetic spread of that belief and if that belief takes hold and it one hypothesis I don't know that this is true but one hypothesis about why gold is not going up in this time of massive inflation and uncertainty but Bitcoin is despite volatility is that that belief is becoming more and more common now who ends up being right on a long enough timeline financially we will get to but I just want to lay out and R please tell me if you disagreed with what I just said that seems to be the set table just so we clarify something just just using technology chat GPT 4 um and the world gold Council 10 7 and a half to 10% of gold Supply every year is used for use so 90% is mimetics to 92 and a half% it's we believe it to be so okay so that is an element of humanity but what you're touching on is okay the technology itself there are some elements of that if we believe it's scarce enough we can attach a value to it that's memetics there is also the elements of okay the Bitcoin mining itself has created opportunities so for example we are seeing in the Middle East using gas flare offs which is wasted energy reusing the energy to create tokens which then are used to release that we're seeing it with low balancing so there's an element of it's a way of sharing electricity in a world that doesn't do that very easily but it's also something more the physical property here is actually the physical property of the blockchain itself the reason this goes up so fast is not because of mania it's because it's an adoption of a technology it's meal law so what you're finding is networks as they gain adoption price gets a bit crazy now in 20 years time will bitcoin price be as crazy highly unlikely because it gets to maturity and it looks more like a mature asset so people get confused what we're doing here is saying what bitcoin's price is doing is saying yes there's the element of mimetics it has this scarce value nothing in the digital world has scarcity so this is interesting for Humanity it's not proven it's not had a thousand years of History it's interesting it also has interesting properties in how it can reuse wasted energy or rebalance energy loads okay that's interesting but also what is the future expected value of the blockchain itself now we may say today or we would have said a year ago well Bitcoin blockchain is not very useful but now we've started to see these ordinals and inscriptions which is using the blockchain for other things we're seeing other use cases of layer 2os built on bitcoin there's more incentivization in a network the more people that that invest in it or join it to create other use ches I.E there's money around there's money to do stuff with it so we don't know what the future of the Bitcoin blockchain is but if enough money is attracted to it it will create other use cases because it's a network with a lot of people on it so Network value is a weird thing for somebody who doesn't live in the digital world in the digital world that's what's created all the value in Amazon Google Apple Facebook it's what's creating the digital uh the the the value in Tesla it's what the value is in chat GPT it's Network effects so we've got this incredible asset which has these scarce properties that solves a problem we don't have that we had in the digital world it has some physical properties because what we can do with electricity and how it's mined and then it has the future expected value of the network that to me makes it a very interesting asset now the question is does it exist in 50 years time 100 years time I don't know no nobody knows would humans use gold in a hundred years time nobody knows just because they use gold yesterday doesn't mean they use gold tomorrow so everything changes people have used carry shells they've used Stone they've used all sorts of things as a store of value bushels of wheat that was a very common sort of value back in Egyptian times so take nothing for granted but observe when new things are happening and we're actually seeing people using these things in different and unique ways you pay attention and it's driving a lot of value that for me is enough because we're getting two elements here we're getting this the store of value plus the adoption of this technology that's driving it is for you um the volatility of the asset the mimetic belief is that what makes this interesting to you or are you uh Bitcoin Maxi who really believes this needs to replace physical gold for reasons of anti-seizure um better ability to store ownership Etc so I believe in the latter but that is a future we're not there yet and I'm an investor at core my job it's really you know to also make money out of Trends I'm trying trying to better my future as we all are and so yes I believe in the philosophy that's how I got into it I saw that this was probably a better answer for many of the issues within the financial system not for gold per se gold is fine it will continue being gold I have no issue with that but it just seemed to me that this was something that was going to solve the philosophical and the real problems of the financial system the real core of it who own what in an overly indebted Society it's going to really do something there and so if I can make money out of a solution well of course I will so it's both but really you know how much longer am I on this planet I'm 56 years old maybe I live for 50 years if I'm super lucky what is my job my job is yes if I think this technology is a good thing for Humanity I will help promote it the best I can but it's also my own life and my family's life and if I think it has investment properties that outperform other assets of course I'll invest in it even with the volatility because risk adjusted even if you take from draw down adjusted volatility adjusted whatever ratio still the best risk adjusted reward of any asset we've ever seen Fidelity produced this fabulous chart which is like it's a Dot Plot chart of risk adjusted returns for all of these assets and there's like gold and and NASDAQ looks really quite good and Etc right they're all clustered and there's a blank sheet of paper and then somewhere up there in the far right is Bitcoin the the risk adjusted return is alien we have never seen anything like this so regardless of what people say about the volatility everything else the risk adjusted return is like an alien asset we've never had anything like this which is why to me when I simplify everything down I just say this is the best macro opportunity of all time we got the best risk adjusted return asset that has the highest performance of any asset in history it's being adopted you're looking in the rearview mirror it may not look that way in the future in fact it's more likely to revert to the mean or way below the mean seems like if it's gone up so much in the past there's a lot of risk that it's going to go down I think you're ignoring that um you see all of these like NASDAQ and you're probably a bear of the NASDAQ too but all of these things are secular Trends in a logarithmic chart because they're they're they're secular Trends they're not cyclical this is not the commodity world around long enough to be a secular anything it's been around for 12 13 years and and really it's been around you know in the in the eye of investors for a much shorter time period maybe five years I mean I I've I've been investing since 20 2 so I'm 12 years into this yeah yeah you but most Wall Street hasn't been into it that long they they they got they got into it really you know 2,000 time frame around there you know after it really went up they kind of got interested in it uh they weren't looking at it back then well that makes me even more bullish right that makes me even more bullish if they haven't really adopted it yet so therefore they it what do you mean they're in it like got all these ETFs now they're in it they've been promoting it they've been touting it uh there's been Bitcoin commercials now for years I mean the top advertisers on cable TV are crypto companies I mean they're pumping and pumping and pumping and pumping and spending a lot of money to try to con the public into buying this stuff uh and so you know they've suckered a lot of people in you know but that there's a limit to how much longer they're going to be able to do it you you can't do it forever the bottom is going to drop out you know and as far as the NASDAQ look you know yeah I mean there's a lot of liquidity there's a lot of inflation it's been driving a tech stocks higher I'm not sure these stocks I mean I think the market could go up because I think the dollar is going to go down but at least in the tech stocks you know a lot of these companies are real businesses they may be overvalued but they have some value uh they're gener you know you mentioned a lot of companies that you say have networks like Tesla or apple but they make a ton of money selling products right they they you know I got a lot of Apple products myself apple is earning a lot of money you know you can argue about what the price of the share should be but you can't argue that there's a valuable business there uh but with Bitcoin you know there is no business it's nothing it's like you know in in in sales that you know they say sell the the sizzle not the stake well in Bitcoin there is no stake it's just Sizzle it's so it's all being hyped up yeah it's not certainly true because the people who mine it get given block rewards so they get well yeah if you're mining it you make some money sure I'm not talking about Bitcoin mining could be profitable for now as long as I could sell it above the cost of mining it but that that's that's different but that creates inic value selling Bitcoin it's the same as is this see Peter it's the same as all mining if the cost of production is above the price of the asset people don't mine and so Supply is reduced or in this case that the amount of hashing in the network either the security of the network gets when it comes to bitcoin the supply has really is very little to do with because almost all the Bitcoin have already been mined so the question is with the 19 million odd Bitcoin that exists right now forget about the couple of million more that they could bring on stream over the next few decades the question is with the 19 million that exists or however many haven't been lost is do people want to hoard them or do they want to sell them and if they want to sell them is there enough new demand to buy them if not the price what happens if China sold its gold oh the price crash happens if the FED sold their gold but buy it somebody needs it this is not an argument 10% of all gold Supply is used for industry so if a central bank comes in and dumps their gold like the UK they have dumped gold central banks have dumped gold before what Happ to absorbed in the market the price went down and so maybe the price of Bitcoin goes down when people sell it no [ __ ] that's what markets do until you find the clearing price it's normal I don't see why it has to go to zero you know what one of the things that I've learned you know over the years with Bitcoin is it is like a religion and people believe in it the way they believe in a religion or a cult and when you get to that type of mentality there's no rational argument that you can make I can't I can't logically try to tell somebody that there's no God if they believe in a God I mean it's a belief system that you you have and it's almost impossible to to entertain uh that you might be wrong right so and then you know so you believe in and believe in it I mean there's nothing I can do about it I mean uh and if if if you end up losing a lot of money you lose a lot of money and and the problem is you know some people that lose a lot of money can't afford it the best thing about Bitcoin is that most of the people who are going to lose a lot of money are young and they got plenty of time to earn it back and it's going to be a valuable lesson that people learn that they can carry into their older years the memory of all the money they lost in in Bitcoin could it possibly be you that learns the lesson I don't think so okay I mean May Maybe I'm Wrong maybe Warren Buffett is wrong maybe a lot of smart investors you know maybe we all got it wrong and and and you guys got it right I I don't think that's the case but you know I suppose anything is possible what would have to happen for you guys to reverse your opinion so Ral what would have to be true of Bitcoin down to zero for 10 years 100 years whatever before you give up Peter same to you what what would have to be true for you guys to reverse your opinion for me simply if people stop using the network if if there's less activity on the network people start becoming disinterested then it's shown that its store of value principles erode it would be the same with gold and that's one of the reasons gold has been somewhat lackluster because there's been less adopters of gold in a new digital world so it's not done as well as it would have done historically in the kind of debasement environment that we've had so if I were to observe in Bitcoin itself forget all the other crypto and I'm no Bitcoin maximalist as you all know um if we saw that people were using it less there was less activity less value was being transacted less new people were joining you know the Bitcoin Network I having wallets then I would say you know what there's something wrong here and is that persistent over time if it's persistent over time then the network may not work and we've seen many of those things happen in the past there's a possibility that happens I don't think it's the highest probability certainly not this decade could it happen after that of course possible now why don't you worry about that during the bare markets because so for example in 2022 was a great example is um the market went down 70 odd per 75% the number of uh active uh wallets in crypto went up 22% uh 42% so adoption was still ongoing while price went down activity was less but then we're seeing okay so if we step back and we hear oh governments are going to build on blockchain Rails cbdcs all the banks want to put assets on blockchain Rails we're hearing gaming companies want to put these metaverse gaming experiences on blockchain Rails we're hearing I was at the world's largest one of the world's largest commodity trading firms in Switzerland last week speaking to their uh one of their senior a agricultural Commodities physical Traders I'm like and she's an investor in my digital asset um asset management company um and I'm like are you guys using blockchain surely you should be solving supply chain she goes oh we've been using blockchain since 2021 so we are doing eight I think of the world's largest agricultural Commodities houses are putting their letters of credit their shipping their um the the uh all of the kind of Transit proofs the supply chain and the settlement all on blockchain so going back to your question Tom when I see this and I see the price of Bitcoin down 75% or the whole crypto space down 80% you say I have to ask myself is adoption stopping or is just this a cyclical Factor that's driven by the business cycle and until I would see otherwise unless these things go away then I can only assume that tomorrow is more digital than today and tomorrow more people will use blockchain technology than they did yesterday simple as that Peter what would you have to see for you to change your mind I don't know it's going to be tough I mean obviously it hasn't been changed yet I mean I've been watching Bitcoin from a few dollars a token to 60,000 right so price obviously isn't going to do it um you know the whole time I've been observing Bitcoin and and and in involved in interacting with the whole community and I've seen it grow and I I you know I've you know seen more and more people uh you know believing in it and and and speculating on it but what I haven't seen is a use case you know people make a big deal about oh Peter Schiff you know shift gold we accept Bitcoin well we started early on with uh working with bit pay uh where we enable people to take their Bitcoin through bit pay and bit pay just lets you sell your Bitcoin kind of point of sale and get dollars to buy gold uh but I I I I I haven't seen any real increase it's a tiny part of our business every once in a while somebody buys gold with with Bitcoin uh but they don't actually buy it with Bitcoin they sell the Bitcoin and then they buy the goal with dollars but you know I remember back in 2017 when Bitcoin kind of popped on everybody's radar for the first time because it kind of went from obscurity and it had that big run to 20,000 from you know under a thousand all of a sudden people started talking about it a lot of companies started to announce oh we're going to we're going to sell products in Bitcoin we're going to accept Bitcoin and there was like a rush of that and that all went away I mean nobody today is talking about how they're taking Bitcoin I mean the only company AMC the movie the the the meme stop for a while stock they they they said oh we're going to take Bitcoin at our theaters just part of the the Mania you know that stock is down like 99% you know since that I got hyped up uh uh Elon Musk uh announced at one point he was going to sell cars for Bitcoin and I don't know how many months later he pulled the plug on the whole thing and said no we're not doing it anymore but so we haven't seen that adoption it hasn't it hasn't uh become any more of a currency than it was when it was first created that's a very fair thing it hasn't because the problem is it keeps going up so you're disincentivized to sell it or it's very volatile right it's not very good as a currency well it's not very good at the main thing it was designed for but and and I remember when I first heard about it when I first heard about Bitcoin the way it was sold to me was hey you can circumvent all the AML requirements you don't have you get out of the banking system you can transact anonymously in private and you and you don't have to worry about the government spying on you you can be out of the banking system I got into it for an entirely different reason which is as Dan tapiero would call it it's the security truth machine it's the value of The Ledger it's the value of having a new way of creating trust in the world in a world where trust is broken you don't know how much gold the Federal Reserve has right this is a trust problem we've got the same trust problem with the future have any I'm going to channel the comment section right now and they are all saying Peter Schiff is religious about gold because Tom asked a question what would need to be true for you to change your mind and you've spent the last five minutes telling us all the reasons you won't change your mind well I'm not talking about gold I mean Gold's been valuable for thousands of years it's not like it's up to me what would have to be true for you to change your mind about Bitcoin if the answer is nothing that is religious conviction from where I'm sitting I've been given the same answer for you know for 10 years what will prove me wrong about Bitcoin would be if Bitcoin replaces the dollar buo you know as a uh as a currency uh when I go to the grocery store and not only does the grocery store accept payment in Bitcoin but all the prices are in Satoshi but do we do that with gold that's a bit unfair right have have you gone to have you gone to the supermarket with a gold bar no because no but gold is not being used as money right now it's being used as a commodity it's being used as a metal Bitcoin can't be used as anything so it it has to be a currency it was created to be a currency so let me see it function as a currency it hasn't done that at all since it was created your applying a different set of Standards my friend no I'm not it's like it's like you're also asking me what would it have what would have to happen for me to believe that Santa Claus is real I don't know you know I mean you're asking me you it it's a fake asset it's phony I I can't imagine what could happen to convince me that something that isn't is you know it's the the more question is what gets you to stop believing in it because you're the one that is that believes in a fantasy I live in so he answered that his answer just to recap is that the energy in the network adoption usage would have to go down very finite totally understand but you in your just gave a very concrete answer uh I don't know how I'm less worried about that but what I'm trying to do so I'm just trying to paint a sense of what the base assumptions are that build your guys's worldview uh with that answer Peter I it's very helpful um I come back to your core thesis is if it isn't real physical tangible and does not have real physical tangible use cases then it it will never cross your threshold it can be int it doesn't have to be physical to be useful but Bitcoin doesn't do anything right all it is is a is a speculative vehicle that I could trade I can yes I can hold it and I can sell it but my ability to sell it rests on the the the fact that somebody else wants it and why would somebody else want it because they think they can sell it and they think they can sell it at a higher price if they think they can sell it at a lower price they're not going to want it so the demand for Bitcoin is a function of the fact that everybody expects the future price to be higher but the minute you no longer have that expectation for an appreciating price there's no buyers there's not because there's nothing you can do with it between the time you buy it and the time you sell it and so it just goes down there's no reason to own it I am very much not trying to convince you I simply want this position to be understood you can still reject it and say that doesn't work for you and I'd completely understand but um I think one position that's worth putting on the table would be that I look at the economic situation that we're in right now and I say I need a flight to safety um so I have invested in Gold that that is one potential flight to safety I have unease about that because I have a thesis that the every new child born now is going to believe in digital things more Than Physical things in in this case now I could end up being wrong and over time that that will be in the wash but again just just trying to be understood not trying to be convincing um that the use case then for someone with that belief set becomes that if there are only 21 million there will only ever be 21 million and people keep losing them so that number is actually deflating now I have a place that mimetically people believe in that I can I can buy and hold that I don't need the price to be volatile in fact with my personality I would rather it was not volatile and now as it matures there's no volatility or at least low there's a place for me to um Park my money that cannot be inflated now I feel good buying Bitcoin today at $60 odd, thousand of Bitcoin do you think that's safe do you think it's a safe place for your money do I think it's safe no I don't think anything is safe in a shorttime horizon on a long time Horizon right now it feels the safest but even if even if in the short run it can go from 60,000 to 20,000 you still think it's safe even though you might need to sell it when it's 20,000 well so again I I I don't consider myself a a partner in this debate I'm merely trying to steer it so I just want to make sure that that that idea is understood again rejected is fine just trying to place it as a thing to be understood because I think this is the core thing that breaks between again you guys' archetypes that's where I think this breaks is when I look at Bitcoin and now I'm just speaking about Bitcoin I see Ah that's that's an inflation H that hedge that resonates with me because I believe in the same thing that R happens to believe in which is the network effects just mimetically people believe in it and then I ask myself is tomorrow when I say is tomorrow going to be more digital than today I mean will people have a baseline understanding of the world as a digital place or a physical place I think they will have a baseline understanding of the world as a digital Place more than a physical place now that that may have horrendous KnockOn effects I'm I'm not even speaking to that I'm just saying I think that is where it's going maybe you're right maybe you're wrong but regardless uh buying Bitcoin is not safe it's it's highly speculative you're speculating on a bunch of things that you think might happen but you're not playing it safe nobody should operate under delusion that I'm buying Bitcoin because I want to play it safe you're you you know you should not put any money into Bitcoin that you not 100% willing to lose all of it so if you're say yeah this is risk money I could lose every penny that I put into Bitcoin and I'm okay with that I mean I hope I don't lose all my money I hope it goes to the moon and I buy a Lambo but if I lose it all I'm okay because I got other resources that I can fall back on you know that's how you have to look at it you can't think that oh I'm going to put my money on my all my money in here because it's real safe yeah I I think that's a very very fair point and is exactly how I look at it um so just to put a fine point on it so uh for you to change your mind it would have to become uh a currency that replaces the dominant currencies in use today yeah itd have to achieve some kind of scalability as a medium of exchange unit of account and yeah eventually the volatility would obviously have to go it' have to stabilize you know you know at some price it could gradually rise you know over time slowly you know depending on you know how much inflation there is uh in other currencies but maybe no other currencies maybe all the other currencies go away and all that's left is Bitcoin right that's all that's all we have left there's no more Euro there's no more Yen the US government wants Bitcoin Bitcoin is how you pay your taxes Bitcoin is if you get a welfare check it's it's Bitcoin that's what you get right if if this all this happens then I guess I was wrong um but if all it is is a speculative vehicle if all we have is more ways to bet on the direction of the price uh then nothing has been proven and yeah the price could go up Could It Go from 60,000 to 100,000 it could but it could go from 60,000 to 10,000 or a lot lower and my my question would be and I'm sure if Bitcoin Falls today from 60,000 to 20,000 or 10,000 all the people who have been telling me how great it is they're they're not they're going to be saying the same thing they're and they're going to be saying well don't worry it'll come back it'll come back well maybe maybe not maybe it won't come back you know maybe it maybe the next time it really drops it'll just drop again there's no way to know you know they always say past performance is no a guarantee of future results so just because Bitcoin has come back in the past doesn't mean it's going to come back in the future do you do speculative investing do you have a portion of your portfolio yeah I mean I do I mean I've been buying that's what I said I bought a lot more gold stocks this week I regard that as speculative but I bought I bought them I thought I think you know I think they're cheap I think I'm going to make a lot of money on my gold stocks we'll see uh but I know I'm speculating I didn't buy I didn't buy any physical gold I I but I bought gold stocks now when I buy gold stocks I own some physical gold because the gold mining companies have gold in the ground they haven't mined it yet so as a as a stockholder I have a share of that unmined gold okay as uh for both of you as spec when you're specula atively investing do you look for volatility or do you avoid it R if I'm speculatively investing I'm looking for volatility with a risk adjusted return that I think is in my favor obviously we get bets wrong we get bets right that's the idea so you you look for a strong trending asset with some hypothesis that is relatively provable over time that should continue to drive the asset whether it's the Indian stock market a technology company or Bitcoin or even gold volatility is something you want if you're a Trader I mean if you're trying to trade a lot you volatility to trade but when I talk about speculating in an asset like a mining company I'm not looking for the volatility I'm looking to buy something that I think is cheap but I'm also hoping that there's a catalyst so that in the future it will become expensive and so I want to buy something when I think it's cheap and not a lot of other people want to buy it and I I want to hold it till I think it's expensive and everybody wants to buy it and I may be wrong right I'm making a gamble because I'm betting on things changing I'm betting on whatever exists today whatever perception people have that those perceptions are wrong and they're going to change in the future and so I don't care about volatility I mean I just want to buy I want I care about price I want a low price uh and um and what I like about the gold stocks is nobody really owns them there's just a handful of people that if you if you look at the major uh you know holders institutions endowments Pension funds hedge funds they own either no gold stocks or just a tiny amount but most of them don't own any in fact I I joked on my podcast you know there was the nvidia's increase in its market cap in a single day basically exceeded the entire gold mining industry in one day just a gain not that market cap of the whole company just the increase on that one day uh so it's a tiny little segment of the market that has the potential to be a lot less tiny you know and if that's the case you know I I can make a lot of money in these stocks meanwhile I do get some dividends a lot of my gold stocks are not my best dividend payers I mean but I three 4% dividend so I collect some interest some income on a lot of these gold stocks uh but I'm giving up some income because I get better yields in other Investments but I think there's a lot of potential for appreciation I recognize I could be wrong in which case I don't get the appreciation but I think you know some of these stocks can go up five or 10 fold some of them the smaller ones could go up 50 or 100 fold so I I I think there's a lot of uh upside potential relative to the the downside risk in these stocks so that's why I'm I'm buying them but I look at them as speculative if you had a time machine you could go back in time and buy Bitcoin 10 years ago would you do it of course I mean I'm not an idiot well first of all if I had a time machine I could do a lot of things I you know uh and I i' you I'd be the you know but of course look you know yes do I regret I mean I remember when I was sitting at my desk my studio in Connecticut in Weston and a guy working with me on my campaign they were showing me Bitcoin and the guy was like look just buy some you know what the hell and I looked at it and I don't remember if it was under a dollar or over a dollar because I can't remember but I remember it was like 2010 when I looked at it and I remember I thought about it yeah she like I mean I can throw 10 grand in it 50 Grand I don't know I thought about it and I didn't do it I was like ah you know this is ridiculous but what am I you know I I just I I I went away from it but I thought about it I I thought about all the odds and I I I didn't see this kind of bubble potential I mean I thought yeah maybe it could go up but I just didn't want to deal with it now obviously do I wish I had made the decision to have thrown 10 grand 50 Grand 100 Grand into it sure yeah I may be worth hundreds of millions assuming I didn't sell but again I don't know what I would have done had I made that decision maybe I would have put it all on Mount goau and I lost it there but you don't know maybe some of the mount gox money is coming back um I don't know what I would have done if I had bought it but yeah clearly I mean I I mean I wish I'd have bought it but you know I I would even if I had bought it even if I would have bought it I wouldn't have told other people to buy it I would have had to kept quiet about it because I I never believed in it so I would have bought it just betting on other people being dumb enough to buy it and pay a higher price right I I wouldn't have bought it because I actually believed in it I would have bought it because I believed other people would be would be foolish enough or greedy enough to buy it so I would have had to kept it quiet I couldn't have like encouraged other people to buy so I would have I I I so I think publicly I I wouldn't have had a different you know I would have been singing the same song I just would have made a lot of money if I would have if I would have bought it so you don't think there's a remote chance you might have been more enthusiastic about it had you have bought it been involved in the community made some money attended some of these conferences saw what's going on with the technology could it have been a different piz of shiff and it could have been shiff Krypto written on the wall there I think there's a chance it could have been and maybe you missed it well look I like to think that I have integrity and that I would have had the same Outlook but is it possible that had I bought it like so many other people did might the fact that it went way up might I have decided that rather than being a lucky Gambler I was some kind of a genius and I I I I maybe operated under the same delusion I mean it's possible look you know there's you know uh power corrupts so maybe money corrupts or it distorts your perception I mean it's it's easy for me to see the bubble when I'm not inside it so maybe if I was in the bubble with you guys maybe if I was a crypto billionaire uh uh maybe maybe maybe that would distort my perception so maybe I would be maybe I would be out there you know just as crazed as you guys Peter in what world do you think it's acceptable to insult asset holders and think that's a normal thing that they're idiots they can't see it they're speculated why is why is that become an acceptable way of interaction I don't do it to Apple shareholders well I mean I mean it's not it's not so there's a there's a some sort of psychology around gold that it feels like it's being threatened and that therefore there's an attack there's an attack going back I mean it's kind of strange ra I I like I talked to a lot of people during the 1990s who were in love with various stocks and they all went to zero I talked to a lot of people who thought they would get rich owning their home and multiple homes during the the the real estate bubble and so I know the psychology and and the way people act when they're trapped in a bubble and they can't see it now there were plenty of smart people that own these stocks that went to zero there are plenty of SM smart people that own real estate so I'm not saying there there are some really smart people I mean intellectually smart high IQ smart that don't Bitcoin I'm not saying they're dumbb I'm just saying they're making a mistake and their judgment is being clouded by the money uh they can't they everything is going to be obvious in hindsight see a lot of the things that I was saying when I was warning about uh the housing bubble and the subprime market a lot of the things I was saying in 2003 and four and five and six that were being dismissed all of a sudden people were saying the same thing oh yeah of course yes yes this that's Peter are house prices higher orow lower than they were then are technology stocks higher or lower than they were a a lot of them went to zero it doesn't matter most of the zero yes if you bought Amazon if you bought you know uh uh you know uh uh eBay you know if you bought there are some stocks that made it but if you bought pets.com or the globe.com you lost everything there were a lot of stocks most of them went to zero you just need to own NASDAQ it's an index that has the top 100 technology companies so the bad ones get dropped out the good ones survive and you made an enormous amount of money by backing technology but you're saying that people were stupid to buy technology in 1999 no I'm talking about individual stocks that I'm talking about people were they they were cult like you would have picked the stocks better than those people for sure cuz you saw it was all remember the NASDAQ the NASDAQ went down from 5,000 to 1,000 so it went down 80% and the only reason it didn't go down 90% was because the FED slashed interest rates to 1% so you had to Fed rescue the market it's up 15x I know where it is now it's another bubble so let's see where let's see where the next bottom is you know I mean it's not I mean we're going it's a Serial bubble blowing it's the same inflation that you're talking about that is driving these asset bubbles I'm not I'm not denying that that happened you know and I own I own some stocks that are in technology that have gone up 10 I I don't own none of these stocks I I have some so out of Interest what value do you get out of owning your gold what is it that it does for you gold gold gold is a small part of my portfolio physical gold but it's a it's a store of value it's a safe haven it's an insurance policy it's it's I I look at gold against what against what Peter rob when you ask me why do I own gold you should say why do you own dollars why do you have dollars in the bank account why do you have Euros or yen right why don't I just spend all my dollars and buy assets buy real estate buy stocks see gold is liquidity for me it is an alternative to the dollar to the euro it's not an alternative to real estate it's not really an alternative to stocks uh it's an alternative to to the dollar so what are you most overweight in do you think your your savings um mainly in real estate or you know how do you think well those are investments savings can be in Gold but you real estate would be an investment unless it's my you know my primary residence or something then it's more of as an investment you're speculating and going up right because that's what an investment is well an investment would have an income component so if I have real estate I got rental income if I own stocks I have dividend income uh so my my my investments are generating a return uh you know if you're speculating you know you're you're betting on the price is is Amazon an investment well Amazon it doesn't pay a dividend right so I'm confused it sounds like it's a bad investment for well Amazon has earnings so it could pay a dividend if it wanted to but it's reinvesting it could do but it doesn't that makes it okay okay but but you're asking me do I think Amazon is a good buy no I don't I think Amazon is is overpriced it's obviously been overpriced for a long long time you know and and and and that hasn't stopped it from going up but I do think that there is a major decline in Amazon's future whether it happens in nominal terms or in real terms so nominal terms would be the dollar price goes down in real terms the gold price goes down but one of those two things is going to happen I don't own Amazon I mean I I'm a I'm a good customer we buy from Amazon every every day so I know they you know there there's definitely value in that business model the question is what's it worth you know what's the what should the price be and I think the market has been overpricing it for a long time you can reboot your life your health even your career anything you want all you need is discipline I can teach you the tactics that I learned while growing a billion dollar business that will allow you to see your goals through whether you want better health stronger relationships a more successful career any of that is possible with the mindset and business programs in Impact Theory University join the thousands of students who have already accomplished amazing things tap now for a free trial and get started today I just want to plant flag in in World Views here for everybody tracking this so um Peter the way that I read where you're coming from is there is a a safety measure that you put in when evaluating an asset whether it has uh if it's a dividend paying stock that has a real uh profitable business behind it there's a level of safety there that you can count on that it's going to pay out uh when things are potentially bubbles you're certainly going to avoid that real assets are going to get a real good look from you uh there's something physical something tangible about it gold as a world currency that feels good because if the dollar hyperinflated or whatever you have an alternative um place to go that that all makes sense whether people agree with it or not there's at least an internal worldview that I can track everything that you're saying about integrity um again whether people agree with that or not at least it tracks uh that the what's going on in crypto does not meet your um criteria of something that you would advise other people to invest uh you tend not to invest in things minus the time machine uh that you would not recommend that other people invest in you didn't say that but I'm I'm taking that much away um so uh same thing with what was going on in uh the early.com days just there was there was a lot of Madness happening um that all tracks for me R uh you see the network adoption being a big part of this technology a big part of your thesis looking for areas of volatility where you see liquidity moving into the system you see people adopting it um yes there's going to be high volatility but there's some excitement to that there's mimics which I think is a big Schism between the two of you uh R I know that you are very much a part of meme culture you enjoy meme culture it's fun and I think that um that is a bigger part of what's happening in crypto than people give credit to uh or or maybe just that they they don't internalize what a big part of all of that that is um and what people believe in is not something that you place a judgment on it just something that is and as a as an investor who's looking for that I can buy here and it's going to go up over time you see huge opportunities in that and uh your core thesis would be to advise people the quote unquote don't [ __ ] this up idea which we will certainly get to later rather than um stay away from this new uh space because the volatilities there because so many people are going to get wrecked just stay out of it you take a very different approach do either of you fail to recognize those characterizations yeah I just want to just um add a little bit to M because I'm I don't suggest you know there's a lot of my videos and you've seen them where I talk about life the value of lifestyle and other things right so the value of a home owning a home so I'm not saying that those things don't matter they do that gives you the foundational layer to of which to take more risk and do these things and the other thing I just want to touch on is when you say I'm involved in mean culture I've learned this bell curve which is the mid twit bell curve which is like if you can explain the the the person who comes into a space kind of like number goes up that's how they think of it right Bitcoin number goes up then there's a whole group of people in the middle the mid it and they're arguing about every aspect of it whether over arguing in its favor or over arguing against it and then there's a person to the right side of the bell curve gold has exactly the same right there's a lot of people who've done a tremendous amount of work on gold and will just say well overtime Gold's a good investment I get that memes help you distill something down to its simplest Essence and if you don't understand something properly you can't get it down to simplicity so I talk about metics not also in terms of meme that's kind of fun but if you've read the book sapiens you'll understand that it is the language of humans it is the basis of everything government religion Community Law the legal system everything is based on storytelling that's the one thing humans have over other animals and we' created an entire civilization based on storytelling gold is part of Storytelling everything is storytelling so we can make it as complicated as we can or we can understand that there's some memetics to it and that's why I kind of used that term interchangeably but actually is a much deeper level it's how humans do things I mean the other thing that's very important in this whole space and I think something you and I have talked about is everything in human society is contractual some are verbal some are written some are by purpose and if you understand that all of everything we do like me turning up today was a contract now it wasn't a contract for money or anything it was like I agree to come on with you and Peter these things are really interesting because this is also part of what blockchain is doing within these things so we need to understand the deeper elements of society and why this matters at a at a larger scale so there's a there's a lot behind all of this so it's not just a network adoption it's like these are the elements of humanity much like gold has been an element of humanity in many ways because it's lasted when we needed things to last when things we didn't store things very well if you remember Peter did you recognize yourself in my description I guess somewhere in there but yeah I just can't accept the idea that we're all just going to you know pretend something and that's going to make it so I mean I I recognize that religion it it can work for a while yeah look I mean yes I mean religions have been around for thousands of years I guess so yeah I mean if you're going to say well this is a religion but it's not because because look people are going to want to spend their Bitcoin at some point the hoders are going to want to buy real things with their paper stacks of of of of Bitcoin and you know and so if there isn't a new group of converts to the religion to buy those uh Bitcoin then it's a it's a crash um and so you know yes it's all sounds good we can all just you know believe in something and because we believe it's so you know it it is so I kind of like to feel the dreams uh but the O I'm not going to bet on that I mean that's a long shot and I'm not going to put my confidence in that and um it's really got nothing to do with gold I mean the only reason that gold comes up with Bitcoin is because Bitcoin is trying to pretend that it's gold it's trying to be a counterfeit of gold I mean it's depicted as a coin when it's not a coin it's depicted as the color gold it has no color it has no substance uh it doesn't have any of the properties that gold has uh you know it's not a metal right so you can't use it instead of gold in any of the ways that gold is used um but yeah you can divide it like you can divide gold uh uh you know you can exchange it from one person to another like you can exchange gold but that doesn't make it gold that doesn't make it digital gold it makes it doesn't make it anything uh but you know but there people are trying to claim it's gold to give it value it's like what gives Bitcoin value well it's the new gold right we don't need actual gold anymore we have Bitcoin that that that's that that's the that's the selling point that's the the Spiel that you you know that you that you're out there promoting uh to get people to to own it I just don't believe in it I think it's a bunch of hype I mean you know it's again it's the latest iteration of Fool's Gold that's what it is fair okay very clear uh I want to ask you guys both um your thoughts on Michael sailor so he is rapidly um becoming one of the biggest micro strategies is becoming one of the largest companies in the world uh last check it was at 534 so just outside of the Inc five uh the S&P 500 um obviously You' have to make meet other criteria but that's all based on the rise in price in Bitcoin now you want to talk belief perhaps even religious belief um he certainly represents that never selling only ever going to borrow against it uh etc etc what what do you guys think about that at this point I don't think micro strategy is a software company I don't think the shareholder base even cares what micro strategy does I think it's a Bitcoin proxy it's kind of like a a a a closed in Bitcoin fund or something like that I mean that's really what it is so uh it's just going to rise and fall with the price of Bitcoin and um you know I know they have borrowed some money so it's a lever bet on bitcoin so so it's ultimately probably riskier than than just buying a Bitcoin ETF but you know you're levered up a bit um but I think the market cap of of uh bikro strategy is is a fiction I think I think it's going to collapse so you know I don't care you know where it weights in the S&P 500 um you know I remember years ago Mike Michael strategy uh he had a conference you know Bitcoin for CEOs and he was trying to convince CEOs to put Bitcoin on the balance sheet I don't think any of them did I mean maybe one did I don't know but I haven't heard of anybody that that did that and he's not even out there trying to sell that anymore uh but he loaded up his own balance sheet with it and yeah now that Bitcoin is back at 60,000 I think his average price is about 40,000 so he's got a gain but you know a year ago he was sitting on billions of dollars of losses um and we'll see what happens I think think he's going to lose a lot of money in Bitcoin I think uh the shareholders of micro strategy but I think you know that this people that actually bought it as a software company they're long gone they probably made money off of this they were able to sell out to a bunch of Bitcoin speculators and so I think when the price crashes it's just Bitcoin speculators who are going to lose R what's your take I won't get into the personal elements because again there's no reason to be personal about Michael and his position he holds within the community he took a very brave bet he saw something I think I was the second person ever to interview him um he saw something that nobody else in the corporate had seen and look let's face it micr strategies was a kind of going nowhere business and he saw a way out it was sitting on cash and he was worried about his cash as we've all been and he decided Ed to put some of his cash into an asset and that proved out to be really good it was a it was a it was a risky bet and it worked and then he thought about well why don't I just use my company to accumulate as much of this asset as possible no issue with that there's been several people in commodity World who've done very similar things it's a great strategy um he took more risks than I prob would have done I don't really like Leverage with a volatility of like that but it paid off um it could have gone wrong I know that there was you know there was a relative layer of comfort but in the market like crypto you don't really know so he took a very brave bet with a corporate balance sheet and the shareholders came along with him for a ride for the reason Peter said because it became a proxy to Something in the end it's does he turn it into into something more which is now he's talking about can he turn it into a whole kind of Bitcoin technology business okay that's interesting that's another call option on top because if not it's just a Bitcoin holding company and there's an ETF but if he now says hey I'm going to do what Jack dorsy is trying to do and start using uh Building Technology around Bitcoin to solve many of the problems that we see in the world today good on him if he can do that great and if you can still keep adding Bitcoin to the balance sheet no different than if we found somebody who was a gold miner or had a company and they bought gold if they if Michael sailor had bought gold Peter would love him and he'd done the same thing with his balance sheet so look he took a macro bet and he did a bloody good job of it it was risky uh I probably wouldn't have done it myself because of the leverage but it but it worked so and if he can now build something on top of this then he's taken a growth tech services company and turned it to something very interesting so he deserves plaudits for that it's a little premature to just declare that it that it worked or that it was a success now it may have been a success for some shareholders who got out and and made money I don't know how many shares mik Michael sailor has personally sold or how much money he's personally made off of this decision but to say that it's been a success for micro strategy it it's it's it's it's too soon to say uh he hasn't sold he hasn't paid off the debt the money that he borrowed so we don't know how it's going to end he may end up with a complete disaster on his hands the company could end up bankrupt that's absolutely Fair we don't know what he's going to do maybe he takes out A5 billion loan and you know we don't know right maybe he becomes too risk seeking and the whole thing implodes I totally agree it's possible but so far he he uh what he's done seems to seems to have worked it seems to have worked for now because the price has gone up it didn't look like it was working a year ago when he was when he was upside down billions of dollars and so we'll see you know we'll see where the price of Bitcoin is when those notes mature and he has to repay them you know uh so there's still a lot of risk in in micro strategy stock um so again you know I I you know you should reserve your judgment uh yeah he made a big bet you know whether it was just bravery or foolishness uh that he did it I a lot of the stuff that Michael S says I I I I I don't like I think he's led a lot of people astray I mean I've heard him talk uh encouraging people to take out loans to back take out credit card loans to buy Bitcoin all kinds of you know encouraging people to speculate uh and go into debt to buy Bitcoin I think that's a bad advice you know he he talks about Bitcoin you know as if it's energy you know I mean yes I I understand that you need energy to create a Bitcoin but owning a Bitcoin provides no energy whatsoever I can't extract energy from Bitcoin it's not like it's a battery you need energy to produce it but all that energy is a waste because you've produced nothing but he says a lot of things about it that I just think are completely deceptive uh to try to tout it up because obviously he has a big vested interest in the Bitcoin price going up and so every chance he gets he um he he wants to you know pump it up but you know he's a lot of people have tried to get him to do you and I are doing a lot of people have said hey Michael sailor will you do a Bitcoin debate with Peter shiffy he's refused every invitation but he likes to talk about me he likes to bring up my name but he he he wouldn't engage me the way you're doing so um you know I I even was at a conference I went to a conference out of the you know and he was supposed to be there and so I agreed to go and they were going to try to get me to debate him and then not only did he not want to debate me he ended up cancelling and when he didn't even show up at the conference I was there by myself so yeah he doesn't want to have he doesn't you know because there are a lot of things that he said that I've taken issue with that I wanted to challenge him on and I I've never gotten the opportunity can you guys help me understand his meme of never sell your Bitcoin so if he's buying on Leverage uh the only way I can wrap my head around it is as long as the price has gone up more by the interest on the loan you could theoretically keep taking out a loan to pay the previous loan uh is there anything I'm missing or is that literally loan after loan after loan yeah eventually he has to sell to repay the debt unless he thinks the you know the he can just keep borrowing more or if he thinks that his creditors will take will take their payment in Bitcoin in which case he can just give his creditors his Bitcoin R do you have any insight look if if your loan is this big and your assets got so the loan is your debt is this big and your collateral is this big right it's the opposite of the financial system issue doesn't really matter it's fine it's only when your collateral is below the amount of of the debt that you have so yes I mean he can just sell a small fraction of his a fraction um a you know a percentage of his Bitcoin to pay it off what would normally happen is maybe people continue to roll it maybe they don't depends what happens with his business does he build a new cash flow you know there's a lot of unknowns in this equation so I think it's very difficult to know what that answer is uh until we see it's also possible that the collateral could collapse in value and the loan amount does not and you know he borrow sailor borrowed a lot of this money in a zero interest rate environment now he didn't pay zero but he got a pretty good deal uh and when these loans mature to roll them over it would be far more expensive than it was when they were originally yeah it depends whether they Interest really makes a difference in a volatile asset like this but I mean that was the risk right in the bare Market if crypto was was his collateral going to be worth less than the debt and was he going to get called on it um you know and a lot of people were trying to work out that mechanic but you know he got it he did it he structured it well enough that he didn't get called on it okay so far I mean do you know when the debts are due when when he actually has to repay I don't know how the the maturity length but also don't forget a lot of them were from much lower levels if you didn't get tests on it when it was down 75% at 15,000 he's not out of the woods look you know all these banks that that would have failed last year you know what did they own they own they owned treasuries they owned mortgages and interest rates went up and uh you know they were they were insolvent I I think there's a lot of risk in the micro strategy balance sheet uh it it all depends on where the Bitcoin price is pet I think there's a bigger risk I think the bigger risk is hubris if you think you can if you think you can do no not you but if if once you've taken such a big bet and it's worked and you've used leverage you have a tendency to want to do more of it he may he may buy even more Bitcoin who knows I mean he already I mean it's possible that would be the bigger risk if he went out if he went out and raised another 10 billion in debt to do this trade again you know this's thing hubris is a big you know when people have a big successful trade I've had many friends who Nails stuff like the financial crisis and the subprime and the Sovereign crisis in 2012 they've never recovered because they've always thought that the next big trade is coming and and they've blown themselves up doing it I don't know there that's one thing as hubris would be my biggest risk here that can he make a mistake or can he just say I've taken the risk it worked out I'm going to build this new Bitcoin technology business and we can all sail off into the sunset and be happy look if he if he were to sell a bunch of Bitcoin now and pay off his debts early and and deleverage the balance sheet you know then you know you could say something but I I I doubt that that he's doing that I I you know and I wouldn't be surprised if he's buying into this rally I would not be surprised if we find out that he's bought more oh he had I thought he he he just made announcements yeah just oh he did two days ago I think at these prices he's been buying all the way yeah well that's part of the reason it's going up because he keeps buying it's like what happens when he starts selling we find where the price is yeah I mean we see old joke you know you're thing is he is not going to sell huh he he has stated on multiple occasions he is not going to sell all right well yeah okay he has to say that he has to say that yeah we we'll see we'll see I don't know where that goes all right I want to move on to where the economy is going so we set up in the beginning that uh we have this economic problem um I want to zero in on debt so I am Peter one of the things that I really gravitate towards you with is that I can't shake the more I learn about the economy the more I find myself pulled into this sense that the economy is Wily coyote he's already run off a cliff and it's that moment where he holds up the sign but he hasn't fallen yet and I think I heard that actually from you Ral so it's like ah H what is happening like we have so much debt how do we how do we get out of this I've been using that Wy coyote analogy for like 20 years so it shows you how long we've been off the cliff and nobody's looked down um but does that just mean that we're crazy and that it's going to be fine and look at this point you know the the the the numbers are just so big the trajectory of the debt uh with the maturity of you know we have a $34 trillion debt uh where in the next year you know 10 12 trillion of it matures it has to be refinanced it was originally the money was borrowed at very very low rates uh the rates are many many times higher the structural deficits are higher um the FED is selling treasuries uh the the government trust fund Social Security me are is selling treasuries foreign central banks are either selling or not buying uh it the bubble is just you know it's so big at this point you have you know households have record amounts of debt credit card debt Consumer Debt all-time record high you know all facets of debt you know at record highs um you know the numbers are just so big so you know can it go on for another 20 years I I just don't see how it's even remotely possible um can it go on for another two years that's that's a a more a pertinent question I don't know uh but yeah I think at any moment there's there could be a sovereign debt crisis there could be a dollar crisis I mean it is inevitable that it's going to happen the only thing that I don't know is when and obviously it's you know it's taken a lot longer than I would have thought uh the bubble's gotten a lot bigger I mean the US has been able to get away with it we've got deeper and deeper into debt uh and we've been able to survive only because we can keep borrowing more and nobody questions whether or not we can repay nobody even cares if we could repay because they know that we can print and they just assume that the dollars we print they're always going to have value no matter how many we create and that's just not true you know at some point uh you know it it ends right it's like how many straws can you put on a camel's back we're going to find out but you don't know until the last one breaks it and something's going to happen uh and and this whole system is going to collapse and when it does you know if you're an investor you better have the right portfolio and that you know I think I've been overly prepared for that for a long time but I think I think the day will come where I'm going to be Vindicated on that Rob what do you think there's uh there's no difference between getting the timing wrong and just being wrong um but let me throw out some numbers by the end of this year the national debt will be 2 trillion per year in three to four years the government will pay more in interest than they collect in taxes so uh we're already uh bigger than National Defense in terms of what we pay here in the US just servicing the debt um how if it goes for another 20 years somebody with my mentality is is just going to get slapped around the board because I'm acting like it's going to happen soon um but is it like how do we how do we make sense of these numbers is is there a nothing Burger way out of this or is this a guaranteed Slaughter and we just don't know when you are being slaughtered and you don't realize it it all happened already it is underway and everybody's waiting for that all the assets are down 90% it can't happen it simply can't happen because it all happened in 2008 in 2008 the world stopped the whole debt system blew up we had to have a debt Jubilee of resetting all government debts around the world at zero so we could afford to service it we've kept rates low we been then using the balance sheet of all of the central banks just to pay the interest on the debt from the previous Cycles this is this everything code thesis that you and I have talked about so we are paying the debts by printing money pure debasement the system broke in 2008 we then changed the financial system with the Basel 3 agreements which forced the banks to lend less and to hold more Treasury IES why there's going to be a lot of supply of treasuries the whole system everybody's aware that it's broken it broke so what is going on now well for it to actually broke the down 90% it's all going to be 1929 again can't you just see it you're missing the point they're debating the currency by 15% a year it adds up to a staggering loss of wealth it is in a tax That You Don't See 15% a year debasement is easier than increasing your tax rate 15% which is politically unacceptable which is what they need to do to pay the debt because the printing of money just abases the currency so you are paying it we are all paying it what what they should do is default on the debt that is the best thing to do because they can't they can't Peter I I agree the Austrian thing the Austrian thing is what they should have done it it it was too late and the reason being look they're not going to they're not going to they're not going to do the right thing well they can't because maybe Malay will do the right thing in Argentina at this point we'll see yeah but they see the difference of the structure of the western Society is all the money is held by old people the entire system is basically in the hands of retirees and all the wealth so if you say all of their assets are down 75% that is the wealth of the nation gone so nobody's well it's not all their assets but yeah they're they're going to their debt but they're going to lose it through inflation either way it's either default or or or de way but you know I wanted to point out you you talk about the national debt you know official national debt is two trillion but the actual national debt the budget deficit they claim is 2 trillion but the national debt is already growing at four trillion a year that's we're we're that's how that's the rate that it's growing already and during the next official re recession it's going to be on an even greater trajectory so the issue is why we all agree right but I just don't think it can collapse why because of debasement but that is a collapse that's a collapse of the monetary system that's and it could lead to hyperinflation yeah let let me just play out my thesis here which is I don't disagree you can't have assets going down 90% you know the core Al of the system if they're debating the currency because they go up optically because the currency is going down the Venezuelan stock market goes up in bolar terms and down in dollar terms right so therefore if your collateral keeps going up which is what they learned in 2008 is we can back stop the entire thing by debating the currency quickly the collateral goes up and hey Presto my debts aren't so bad okay magic it's not magic as you know it's a slight of hand it's not pure magic what they're doing is robbing you in a different way okay this has happened before this is exactly what happened in the 1940s and 50s saddled with massive debts after World War II the large economies did the same thing Financial repression that yield curve control which is buying of government bonds keeping interest rates low which we've seen and they just printed money and over time the value of the debt had eroded and what they' managed to do was create a productivity Miracle which drove GDP growth one one thing you're you're you're overlooking though a key difference back then so after the second world war and the government ran up a lot of debt uh during the War uh but they did it they paid for a lot of the war with tax hikes they had tremendous tax hikes uh particularly the income tax which tripled uh when the war started in fact they introduced a withholding tax in 1942 as a victory tax so before the second world war hardly anybody paid income taxes by the end of the second world war a lot of people were paying income taxes and when the war ended the government had all of this income tax revenue coming in and they initially it was temporary to win the war but when they stopped the war they didn't stop the income tax and so the government was flushed with cash and so it paid down a lot of that debt debt collapsed in the years because the government ran huge surpluses and paid down a lot of that debt so it wasn't all just inflated away yeah when the 1960s and70s rolled around there was a lot of inflation but the initial big drop in debt was an honest repayment because we stopped spending money on the war the problem now is we haven't cut any spending we're taxing people to the hilt right now and we don't have the type of economy we had a real industrial economy in the 1940s we had we had wealthy consumers that that loan money to the government that bought the the war bonds uh we sold the war bonds to China you know Americans are broke so we're a levered up country running huge trade deficits uh you know we're we're we're and we we have no means of repaying the debt like we did in 1946 so the the debt is now going to go straight up it's not going to go down like it did uh during those decades we're we're just go we're just getting started it's 125% of GDP it's going to go to 150 200% 300% it can't stop until everything implodes I don't disagree I'm so I'm wildly crazily bullish because I'm so bearish bullish on what assets because they're get well in nominal terms in nominal terms correct but in Gold terms a lot of these assets have to come down their real price has to come down so you know I also believe that GDP growth equals productivity plus population plus debt growth I think debt growth died in 2008 and all debt growth now servicing of old debts and population has been shrinking so economies have been slow and productivity is low because of Aging populations we're just bringing Ai and robots into the workforce it's infinite human infinite humans so we GDP growth driven by productivity and population growth is what I think is on the horizon which is what rescues this rescues this but after what 15% a year debasement of currency you know you add 10 years of that and you've lost most of your money so none of us disagree we're all getting [ __ ] but it's how are you going to get [ __ ] are you going to get [ __ ] in one go because it all Burns to the ground or they're going to [ __ ] you so you don't really know you're being screwed but you're just going to get angrier and angrier that's what we're seeing politics has gone like this because everybody's so bloody angry because they can't figure out who's screwing them and they're blaming each other what Screwed them is there was too many old people and they borrowed too much money what I want to understand is the timeline on all of this because it seems like the debt is going to ratchet up so fast uh and if we're only going to be able to print our way out of it I get at first maybe for the next three maybe five years um I don't notice that I'm being screwed over but unless you guys tell me that the amount that we can print before we break the campell's back is 180 trillion or just some unbelievable number that is so far from where we are today this feels like I If we're really in a race for do do I get to that number of trillions of dollars before the robots come and increase productivity so much that I'm back to a 1946 place where I'm generating so much productivity I can actually pay the debt down I'm sure Peter won't agree with this and you all half agree with it and half hate it and that's okay if I'm right that AI plus robots is infinite productive units and you see how fast it's coming you literally are not capable of understanding what an economy looks like Beyond 2030 that's the problem I've got here I'm not concerned about the Cliff of death right that we're going through I found an asset that I can invest in crypto or I could buy technology and it's offsetting the mess of the debasement so I'm fine what's harder is to say what the hell does an economy mean after 2030 when you've got endless Ai and robots and AGI what is a company what value do you provide in that world or I provide we sit there talking to people about it and thinking our way through it but both you and I are developing AI tools of which we will have a digital Tom and a digital ra and we don't even need to turn up to these and they'll do a pretty good job we're both working on these things right but are we going to be just repl the point being is when you go to like Nick Bostrom who who is the the key thinker about this at Oxford University who wrote the book I can't remember the famous book about the whole kind of where the future's going there's a group there an economics group there who share the same concerns as me is like if this is right you could double GDP in a year global GDP or a week what what what do companies mean when AI I have a theory that open AI is using AGI to build its own AI which is why they're iterating so fast with what 500 people it's [ __ ] Madness what they're doing how how fast they're iterating I've never seen anything like it even Elon Musk is like I've never see anything like what's going on here the more we have ai to to build AI to build build businesses the faster and faster this goes so in answer your question the explosion could be the other way around it could not it might not be the economy imploding it could be the economy exploding in a way that we don't even know how to deal with it what do humans mean what is our job you know all of this stuff you and I have talked about I actually worry about very different things I don't worry about the economy going down the toilet because I know how they're dealing with that they've kind of set the rule book I can make money from that that's okay it's this other bit that's the hard bit that's more scary what do you give the odds Peter one do you think that he's on to something or does that seem just completely sci-fi to you well um I mean I think there's no question that over time um artificial intelligence robotics is going to lead to a dramatic increase in human productivity I mean I mean that's just what capitalism does and this is a I think a potentially gamechanging Innovation the question is how long is it going to take to build out and scale up and you know uh and how are politicians going to react um to the creative destruction which always comes from uh Innovation uh there's always somebody that loses uh but net net Society gains and eventually you know over time everybody gains because we we don't want jobs I mean we want stuff I mean that that that is the the the the secret of of an economy it's the scarcity of things uh we all desire uh certain things and the constraint is the ability to supply them and and Supply is constrained by land by labor by Capital uh but uh Ai and Robotics has the potential to dramatically increase uh the supply of labor uh intellectual you know thinking and and processing and so at the end of the day we could produce a lot more with a lot less and we'd all be wealthier I mean you know again means work is a means to an ends you don't want your job you want all the things that you could buy with the paycheck that you earn if you could skip the job and go right to the stuff most people would do it right most people don't work because they like to work they'd rather not work they just like what they could buy uh with with with the paycheck so I mean I I I think that all of this could be good and you know it's certainly a lot of potential you know I'm 61 years old I'd like to think that this AI could figure out how to do something about that so so I could I could I could be younger and live longer and so that's another GameChanger I mean what if our life expectancy is dramatically extended too right I mean maybe maybe we don't live to 100 maybe we live to 150 I don't know 200 who the hell knows you know um but yeah there's a lot of things that could happen that I would be looking forward to I'm not you know apprehensive about these things um but I also don't think that it's necessarily it could be but I don't think it's necessarily A get out of jail free card uh for the sins of the past uh that we're not going to have to deal with the debt well you probably all agree Peter that we are dealing with it now right we're all we're all get having the effects of this put upon us already well we're we're feeling it and I I I've been saying for a while that's why Biden is so unpopular it's not because of his mental gaffs it's because the economy sucks and the voters know this and they're blaming Biden because he's at you know at the helmet the ship that's sinking and and so despite all the hype and all the statistics the average American family is feeling the inflation tax in a big way and and and yes there's a lot of jobs but there's second jobs and third jobs that people would rather not have they're struggling to make ends meet and they hate having to take on these extra jobs and and this is going to get worse I think the inflation Genie is out of the bottle uh it never was really gone it's just that the government was able to cover up inflation uh with a you know by cooking the books but the inflation is now so uh pricious and the and the impact on prices is so great that even when you whitewash it you know with the CPI it it can't hide it anymore because the numbers are so big the costs are rising so rapidly people can see it and there's a limit to how small they can make the package at some point they can't keep shrinking stuff they got to raise prices and make it even more obvious uh but and it's not just America it's happen in Europe it's happened in Japan I mean all these countries that said for years the problem is we don't have enough inflation we need to create more they now have too much inflation and and they can't stop it because stopping it would require politically unexpectable things they have to cut government spending you know they have to default on a bunch of promises they have to deliver a lot of bad news to the voters and nobody wants to do that and so everybody is just going to continue and they think oh we've gotten away with it before we did qe1 we did QE2 we did qe3 we did covid so we could do it again right look every time we get into trouble we just print money and we're out of trouble well all that is is inflation and so if your problem uh is uh uh uh deflation or collapse of assets or whatever and you think you can solve the problem by creating inflation the problem is when inflation is the problem when that's the source of everybody's misery you can't solve the inflation Problem by creating more inflation because that's been the solution to every problem we've had is let's create inflation that's our solution we can call it quantitative easing easy money but what we're really doing is we're solving the problem by papering it over with inflation well now we're at the point where inflation is the problem so more inflation just makes it worse so it's you know we're past the point of no return uh and it's just a question question of yeah you know when when do we look down and realize we're standing on nothing and I think that applies to bitcoin too you know you look down and you realize there's nothing there you know there's a lot of uh false perceptions that are going to uh meet reality uh in the near future just as a side note what happens Peter if all of these value assets that are going to catch up eventually and haven't done for the last 20 years don't what happens if gold continues to underperform what happens if your model of the world is out moded I'm not saying it is but could you possibly consider that not everybody's wrong it's just the way that you assume that everybody's wrong I just find that a little bit I'm not saying everybody is wrong I'm saying the people that believe in Bitcoin are wrong but that's certainly not everybody and the Market's wrong and the technology price is wrong and that that your source of truth is the truth and the market pricing is not the truth truth markets markets get it wrong a lot you know in the short run it's a voting machine in the long run it's a weighing machine and right now I think people are are making bad bad votes you know uh and and and so I you know I just think it's a Mania I mean you know every time there's a Mania right it means assets are mispriced I mean we've had plenty of Bubbles and they pop and and that's that um I just think that that that this is this is another one so you know I I I think the the is on the people who believe in it to try to say why this you know this is different of course you know that's the famous words of every bubble This Time It's Different uh I don't think it is I think this time it's the same I mean you know and and and and and so I think that the same thing is going to happen but as far as why you're saying why is gold not gone up look in the scheme of things when people look at a long-term chart of gold the fact that it's gone sideways for 10 years is is is immaterial to the you know the thousands of years that gold has been around and gold has been a store of value but that's over the period of the worst debasement that we've seen in the last 100 years and gold didn't do it right so let's say gold all of a sudden has a year or two where it catches up and it goes from 1,000 to five or 10,000 right so it it doesn't necessarily have to go there in a straight line gold could go up go sideways go up you know and so yeah over a longer period of time it's going to smooth its way out now the question is why did gold not go up higher sooner well remember it went from 300 to almost 2,000 it had a very big move uh in a in a relatively short historical period of time and and so then it went sideways for a decade and the reason I believe is because investors have complete confidence in central banks they don't believe that there's a a threat of of inflation out there or a debt bubble uh and and so they don't see the reason to buy gold they would rather buy tech stocks um and and so I I I I think it's just people have a misconception just like you know you mentioned the subprime and I remember you know when I was when I first found out about these subprime mortgages a guy showed up at my office named Andy lahti probably in 2005 or six and you know I was already bearish on the housing market and he came to me with an idea to set up a hedge fund to short these these subprime uh mortgages this tranch and he explained it to me and I was like well why the hell would anybody buy these These are obviously going to go to zero I mean how can people be buying them and they were trading above par they were they were actually paying more than than par to buy these tranches that I knew were going to zero and I was like well you know people just believed in this you know and so the assets were mispriced and they were mispriced for a few years until they eventually were priced correctly at zero but but I knew that they were worth zero the minute they were explained to me but you know and what the guy told me is he had gone to a lot of uh you institutions with the same story and everybody laughed at him I was like the first guy that didn't laugh at him because I knew that real estate prices were going to go down everybody else thought real estate prices could never fall and so as long as real estate prices never fell well then it didn't matter if anything defaulted right I was a guy that knew that eventually estate prices would come down uh and and so you can have a period of time where a lot of smart people can believe something that's wrong and so assets could be mispriced as a result of that shared delusion and I believe that's the situation with with Bitcoin and what happened to me was actually the opposite CU I was the macro bear that everything reverts to the mean that it was all terrible and it is all terrible and I realized I had the wrong mental model and the moment I actually freed myself of my own biases and tried to understand what the [ __ ] was going on and why were these assets going up why why was this happening I then could see what was going on and what the big game was and as soon as I could see that it became a game I could make money from and that I didn't have to be stuck wishing and I've seen a lot of friends of mine do this wishing that value stocks or small Caps or whatever it is are going to work for them and it's been 20 years now and I've realized I had the wrong mental model and the moment I changed it I feel felt liberated because the world kind of makes sense and I just urge all of us to just make sure that we don't get obsessed by our own mental models because they will change and the world changes and sometimes we can be dead wrong and sometimes we can be dead right I mean I nailed the financial crisis I nailed the European Sovereign crisis I nailed covid I nailed all of these things by being a big bear and something I suddenly realized is yeah but assets kept going up that whole period I should have just been long and have made more money and that made me ask the question of myself the dip by the dip that ask the question is like that dumb meme of by the dip I wanted to go all the way across the bell curve go to the middle bit arguing it all come to the other side and realize that by the dip was actually the single best strategy to have ever existed over this period of financial mess and I was stupid for not seeing it so anyway I'm just saying be careful CU Tom I can see that you're so allured by the black hole the black hole that is there you it kind of comes to you and we have this conversation I try and pull you back from the black hole and say yeah it's there but there's an opportunity here and you're like but the black hole just be careful of the mental model because it will massively restrict you in what you do even how you think about life and how you interact with people around you so it's something I've learned the hard way is we've all got to be a little more open to a everyone's opinions and B our own biases and how ingrained they are and have they become part of of our personality just because it is or it's part of the how we fear like some people fear risk so they become a certain way and present that to the world around them or somebody some people have made money and then they've worried about losing it because their family didn't come from money we're all set of our own human ridiculous biases so just we should just all in all of these conversations just step back a little bit you're looking at it from the vantage point of where we are everything is at record highs and so it looks like yes that was the right thing to do to to buy the dip but we haven't had the crisis yet that's the thing we we've been able to Kick the Can down the road and all of these structural problems have been growing the entire time uh that we've been ignoring them and and the question is you know how many more times can this work um because there we get I mean I think you got to you got to watch the bond market you got to watch the gold market the for Exchange Market but at some point it's going to crack Tom did this Tom did this earlier and it was a very good question is what would make you think the opposite and we all need to be able to do that because you we can't keep saying well asset price have gone up so therefore you don't know whether you were right or wrong it's like and this is no attack on you or anything it's me thinking through this stuff is how do you know that maybe you have done yourself a disservice or I've done myself a disservice or Tom is doing himself a disservice by thinking the way that we do have we held ourselves back have we lost an opportunity cost that we didn't imagine because we're so Anchored In what we think we think or we project to other people I'm just that's all I'm trying to get across it's not about who's right who's wrong I'm saying at a human level what happens if you had bought Bitcoin and bought the NASDAQ and were 10 times richer than you are today would you care about some of the things you think about now maybe not Tom if you hadn't made money when you were young and then fear losing it maybe you wouldn't be worried about the black hole maybe you'd be more risk seeking maybe you know just think about it in a bigger context than fighting over what price an asset is we need to ask ourselves why we think that I think that's really interesting yeah the point is as long as the underlying problems continue to get worse I don't I don't think I'm wrong so if we actually find a way to solve these problems you know if if uh you know we get dramatic Cuts in in government spending if we start paying down the debt if we get enough deregulation but Peter sorry I just want to ask you a question what is the end the worst case scenario game what is the thing that you fear that we are well the worst case scenario is we destroy the currency completely right and so the dollar has no so okay let's assume that happens right let's say we do that which we've been doing but slower but let's say it completely goes it hasn't got there's a lot there there's a long way to go between where we are now and zero okay so let's assume it goes to zero I'm long crypto and technology stocks you're long gold they all go up we're fine what's the [ __ ] problem well first of all there's a big problem because a lot of people first of all you maybe crypto goes up maybe it goes down who that you know there's no way to know but but explain to me what I'm fearing here myself when the dollar because you're wiping out the savings of a generation you're wiping out the retirement of of tbt I thought they were in debt you told me they're ruling debt so we're wiping yes you're wiping out debt but every time you wipe out one person's debt you wipe out somebody else's asset okay you wipe out the value of people's p insurance you said earlier that you wanted the big reset that we should do this and when the money is worthless you can't buy things with it the farmer doesn't want to give up his food because you have nothing of value that he that he wants America can't import anymore because nobody wants our dollars I mean if if we go through hyperinflation I mean it's going to be riots there's going to be I mean it's I mean it's going to be bad it's not like something that I'm looking forward to I understand but you've got your gold and your real estate and you'll be fine and I've got my stuff so what are you fearing what is the fear look and the other thing is the government can become even more oppressive than it is now and that the worst case is they blame it all on capitalism and the solution is that we become a complete totalitarian state and the government takes over everything I mean so there's the you ask me what's the worst thing that could possibly happen right what is it you fear you you so you're now fearing a totalitarian state where they seize all your assets I mean okay well what good is investing in gold and what good is doing anything I I don't know I guess if they if they if they throw me in jail or kill me I guess it's not going to matter but I don't know what they're going to do Tom what is it that you fear Tom what is the fear what is that black hole yeah so as somebody who is very practiced in staring into this I'll I'll walk you through so um because I feel confident I will make it to the other side sort of come hell high water when Co kicked off I realized I was afraid for uh people that I know and love that don't understand money and that that began my journey of actually understanding what's going on so like Peter I share exactly his concern um and I'm a little unclear on um the only thing that makes sense for me for you to push on this is if you think it's basically impossible for it to happen because to me it is self-evidently horrific to go through something where um it's either a war an external war or an internal War because like Peter is saying there's just so much anger and resentment at the implosion of the debt which to Peter's point is somebody's um asset that now just went away people won't do that quietly they will Rite also when you get to the point where you can't feed your populace because there's no money uh and your money's hyperinflated and people walking around with wheelbarrows full of money to try to buy a loaf of bread um that suddenly the line of Good and Evil that Soldier nson talks about in the gulg archipelago you realize it really does run through every human heart and all of a sudden all those narratives and mythology that you're talking about to hold us together as a society all of those crumble and I'm sure all three of of us are students of history but when you become a student of History you realize that the long Arc that bends towards Justice is punctuated with moments of such horrible cruelty death and destruction that you just pray to Sweet Baby Jesus you are not one of the people that are around for one of those moments of Correction and they they happen and they happen so predictably that the black hole I'm staring into again I don't feel like I'm staring into it for myself I've and I mean this is a glimpse into my soul I've told the employees here if it ever kicks off come to the house first of all we have The High Ground we are up on a hill uh I care about them all and so I want to see them Thrive we will do better as a part of a collective but the fact that I even have to say that out loud uh is is unnerving now I bend towards optimism so I actually think nothing is ever as good or bad as you think it's going to be and so I believe there is sort of this stumbly slow erosion of the dollar path that will end up looking something like what happened to England now Peter when you and I last spoke you pointed out very rightly that World War I and World War II were some pretty bad things and so since that was part of how they end up losing their empire and status as a reserve currency I I concede the point that that that is absolutely horrific so I just know every Empire of all time has crumbled and I really do think a lot about how America becomes the next Rome but the reason that becomes a meme and the reason that people think it's ridiculous is because the odds of it happening in the next two years border on zero the odds of it happening in the next 10 years go up a little bit Ray Delio puts um America being in a world war at 50% over the next 10 years but like maybe it happens in the next 20 and so if it's true that it doesn't happen for 10 or 20 years me or Peter and Peter I think you know you have this reputation and I have a feeling I'm rapidly gaining it as well is like I've predicted 10 of the last two recessions right so I'm so focused on uh the Confluence of things that go bad that I end up potentially missing the all the opportunities that are present that's what I was trying to get in I'm not saying you're right or wrong right I'm just saying we should think about these things there's another bias that I want you to think about is ask your wife if she shares the same views and her friends do because she's British and she won't it's a quite a uniquely American thing doomsday prepping the fear of the decline of Empire and the collapse of society is weirdly an American thing even though the Europeans have gone through it twice two world wars where we killed everybody each other in the most horrific ways possible Europeans don't think of the same way of the collapse of civilization that Americans do it's just a really weird cultural phenomena um and it's because it's the largest most powerful economy and it's saddled with debt and everything else so just again just there's biases in everything that we do that make us as as you said rightly Tom we some we project too far either way and it can still be pretty horrible in the middle it can still be a terrible political environment there still could be riots there still could be kinetic Wars but it may not have to be the end game yeah remember the the other thing that's uniquely American is the degree to which we depend on the dollar status as Reserve currency to run trillion dollar a year trade deficit so you know we need to be supplied goods from abroad and if we lose those Supply chains uh we have no ability to to replace them so it's it's it it we it could be you know a a major collapse but the other you we sell the best that what we did though what the US did was really clever is it created a dollar DEA system where the rest of the world owes so many dollars that they can't get rid of the dollar it's like what we exported what the Americans exported was debt oh and inflation debt and inflation but you know um yeah I mean you know there are people that think that but you know I I I I don't think that the dollar is impervious because we have so much of them and have have so much debt but the point I wanted to make about recessions is one of the problems with forecasting recessions is the government gets to Define them and the government comes out with the GDP numbers and like I think we're in a recession now I think we've been in one for a while but the government just doesn't acknowledge it because of the way they keep score I don't think the deflator is honest I think GDP is going up because of prices I don't think it's going up because the wealth of the economy is expanding we're just paying higher prices for things and we're borrowing a lot of money to do it the debt is growing faster faster than the GDP numbers so all this is an illusion we're not growing anything we're we're spending ourselves into bankruptcy we're buying products uh a lot of those products are are are imported and we're paying higher and higher prices so we we could have been in a Perpetual depression uh for years and years and years I think we it's just that the way that we keep track of it you know we don't officially acknowledge it I think look when you're debating the currency and people's savings by 15% a year over time everybody's going to feel like they're not getting ahead everybody feels this right and you're right somewhere hidden within all of this has been an ongoing depression from 2008 for the average person not for a tech company not for certain parts of society but most people have been in a miserable mess for a long time their wages haven't gone up their costs have gone up it's been terrible and they're they're like choked with debt they can't pay their kids to go to university they can't afford retirement savings yeah I agree that's it's been bad for a long time yeah so uh just to gaze into the abyss a little bit further and I'd love to get a sense of where you guys think this goes so um I I believe that Society that's a little overstated I believe that culture is becoming a toxic soup and that toxic soup is causing kids to um collapse inside of themselves eat terribly poor diet um they are having less sex less babies um just a general lack of optimism there's a a phenomenal meme that says uh we'll put it up on the screen in the Final Cut but it says uh my parents and 30s and it shows you know these little sketches standing outside of a house let's buy a house it says me in my 30s and it shows a guy just absolutely frazzled and it's like your maximum bid of a $625 cheeseburger has been rejected uh by Wendy's uh and that vibe that Meme while funny is real and that really worries me a lot in terms of um I think that ultimately culture as a battle for ideas and I think the ideas that are taking hold of people's minds are terrible and I have a feeling that to some extent maybe a massive extent this is an echo of what happened in 2008 and so this becomes a question of inflation interest rates um and so if I'm right that that this isn't like forget the Doomsday scenarios that that is just a malaise that is gripping the Young and that that's going to Ripple through Society uh I don't know how much you guys have read about the industrious Revolution um but it's an idea that I find absolutely fascinating that part of what made America great was that there was not only the Industrial Revolution but there was a sense of the Protestant work ethic I'm going to go ham I'm going to work until I Dro out of a heart attack and I know how silly that sounds but like it gave birth to the America that leads an innovation became the dominant Global superpower etc etc and man is somebody who is hiring a lot of young people I would just tell you ge zus like we have to filter through all of the people that just have that malaise of like oh companies are just taking advantage of me why would I run on the hamster wheel and make better widgets it's like those ideas will cause a real problem and when I look at okay so how do we solve it one just combating the ideas but two solve the under Ling problem and without solving the debt by I look I hear you I don't think inflation is the answer let me just say that I think that you have to have a period of austerity I think it is going to be grotesquely unpopular but I don't see a way around that even when you just take sort of that milk toasty like ah there's not going to be any big revolution but we we do have to make a societal change what do you guys think about that and if you agree three what is that path I just say again I just think I just think we're using the wrong framing we have I mean there's 76 million people in the United States who are over 70 years old now right you've got a demographic cliff in front of your face it's happening in Europe what South Korea got to a 07 replacement rate right now right we've got a population collapse coming maybe those young kids are dead [ __ ] right they should not be doing any of this stuff because it's all worthless maybe you're wrong maybe they can see what the future is for them which is they're going to be replaced pretty quick the reason you don't want to hire these people is you don't need to that's the dirty truth here and we'll need to hire less of them what is happening is a much larger disruption but it's not in the way of the past it's always so easy to say the past is going to repeat sure but in different ways there is whole revolutions happening in front of us that are going to shape Society in ways we can't yet understand and we're looking back saying well maybe the dollar gets trashed it's like oh my God can't you see what's in front of us now I'm an optimist I think there's a path that we figure it out but I don't think it's going to be without volatility but it's going to be driven by that and not that that is known and that is AI robotics that forward is AI robotics longevity you know so many structural changes cracking the entire Human Genome and figuring out Med so much to deal with that is well we spent too much money we're debating the dollar we're going to have a hyperinflation it's like yeah tell me something we don't know tell me something we don't understand we don't understand that that's scarier now it could build Al be great it could be amazing a world of opportunity but my God it's not going to be a straightforward course right just just no well first of all you know unfortunately I think inflation is the answer I mean it's not the correct answer it's not the solution and can you sorry Peter just to check something can you inflation versus debasement are they the same things to you CPI versus no I'm I I'm trying to make a point that he said inflation was the well he didn't think inflation was the answer I'm saying it's it is the answer it's the wrong answer it's not a solution unfortunately it's the politically expedient choice because the right choice is too difficult for politicians to make because politicians their primary goal is their own reelection and so that's how they see every problem is how do I get reelected and so they're not trying to make things better for the country they're trying to perpetuate their careers which are often at odds with what's right for the country so we're going to get stuck with inflation uh no matter what now can we get an offset to that by a burst of productivity which without the inflation would just be even better right because the the free market is trying to lower prices by increasing productivity the government is raising them by creating inflation and so it's a it's a a dance uh but to the extent that we can have a a huge surge in productivity that's driven by by AI or robotics or a combination of the two that's actually a good thing um you know it that's not what you'd be afraid about when it comes to AI I mean if you're going to be afraid about something the fear is that AI decides to kill us all and it can actually do it right that's the supposed fear not that it takes away our jobs we we don't want these jobs we want computers to take away our jobs that's great then we don't have to do them we still get the stuff without having to do the work I mean every advancement has you know reduced the need for human labor I mean if you go back to the beginning of society everybody had a job it was looking for food all day long that's what you did right you had no leisure you had nothing because you worked every minute of every day it's other than when you slept uh but as we in invented things and tools we didn't have to work as much and so we had more Leisure ultimately if we can replace all human labor with machines we're all going to have a lot more Leisure and we're all going to have a lot more St are we going to have a system of money because money is like expenditure of energy whether it's human brain power whatever and in exchange for money right right and ultimately in a in an Ideal World with complete abundance of everything that we won't even need money if I could just push a button and have everything I need and I wouldn't have to pay for it because it just gets conjured into existence by some super intelligence right I don't I don't need money anymore money just facilitates trade somebody has something I need or I want how do I get it well I got to give them something that they need or they want but rather than barter uh we we we we exchange a mutually but if we're not bartering if we're not bartering our own Services intelligence physical labor how do we earn money well how are we going to earn money in the future we may not need to that's my point uh but obviously between here and there people have to find how did some who got put out of business you know with a shovel you know a guy that was digging a ditch and now somebody invents a shovel and so we don't need his many ditch diggers so what did that guy do he he did something um um and so people are going to have their jobs replaced by computers or robots and they're going to do something else you know instead what I don't know what I don't know all these things like what they're going to do but the problem might be if the government says hey you lost your job so just go on welfare and here's a check because you know you that's that's a big problem if that's what happens and then people end up getting entrenched you know in that state of dependency where they don't go out and find something else to do because they just you know stick with the government check and that check is you know is is offsetting the benefits of productivity because the government prints money to pay somebody to do nothing um so it's it's the government that would make the mistakes it wouldn't be the free market innovating it would be the government uh inflating and and getting in the way looking forward we're in a big year 2024 election year obviously the having cycle the debt re structuring all happens in the same year what do you guys think the world looks like with a Biden Victory what does it look like with a trump Victory no different in in in Market terms no different you don't think the market will have a response at all to one or the other won't give a [ __ ] it's really driven by liquidity and flows you know it's going to be they're all doing the same game so no I don't think it makes a a single bit of difference I've not seen an election that has turned markets because shock somebody's come in Donald Trump huge shock what did the market do sell off for exactly one evening brexit huge shock what did the market do sell off yeah it just doesn't matter politics don't matter in the short run but obviously they can change the structure of economies in the long run but the market doesn't seem to concern itself with that when liquidity seems to be the dominant factor that drives markets and that's driven by central banks do you think they're still going to um be printing their way out of problems there is no choice either one there is no choice what are you going to do you're going to bankrupt all the Baby Boomers blow up all the banking system because for what Justice I the right answer is to blow it all up nobody's going to do that it's Insanity they will never do that so they will do absolutely everything within their power to try and not let that happen and that it goes back to what we've all been talking about is however you define inflation I don't think it's CPI inflation it's asset price inflation by debasement is the game Financial repression let's call it that that is the game and they will do that now Pizza may be right maybe it ends up in hyperinflation I put a very that's the worst case scenario I don't know that that's where we're going I me no and again I would say that's the worst case scenario and possible I don't know what probability but yeah but yeah that's what they're doing they'll keep doing repression why not but in answer you know it's it's not going to change the game I mean Trump's been president before I mean he didn't change the game then he he he ran up the debt when he was president I think on the margin you know it's it's it's worse to reelect Biden than to put Trump back in office but I don't think that Trump is going to you know change what's going to happen we're going to have a currency crisis we're going to have a sovereign debt crisis you know whether Trump or Biden is in office whether it happens during that four-year term again I don't know I mean maybe they kicked a can down the road and it happens you know on the watch of whoever replaces them because whoever wins we know one thing they can't run again right you only get to run twice so if whoever wins is not going to be president in 2026 um so maybe they get out of Dodge and maybe they don't um but I I I would think that assuming we had the collapse during the term of whoever wins right we have a a crisis I would just assume have Trump there than Biden you know Trump has a greater probability of doing the right thing than Biden Biden maybe has no chance of doing the right thing and Trump maybe has a slim chance so slim is better than none and doing the right thing in this case would be spending less at the government level well dramatic cut right they have to do the opposite of every political Instinct because what they want to do when there's a the economy is weak they want to try to stimulate it with more government they want to run bigger deficits they want to cut taxes they want to print money they have to do the opposite they have to shrink government cut spending they may even have to raise taxes I'd rather them just do it all from the spending side but they got to cut spending they got to let interest rates go up they got to let Banks fail they got let companies go bankrupt they got to let people lose money they got to allow a lot of painful things to happen to have a real recovery that that that is on the other side so do you think is that is that what they should do do you think yeah of course they have to do the right thing it's like if you have a drug habit stop taking drugs you know yeah it's not going to be good you're going to be in withdraw for a while but you got to get the stuff out of your system you got to be healthy we can't keep drugging ourselves up and then we die of an overdose that that's where you know that's that's what hyperinflation is it's the equivalent of a monetary overdose you destroy the currency and then you destroy the economy uh and so I want to avoid that I want to all I the we need to restructure the economy on a in a sustainable path it's not on that now it's it's it's it's a house of cards and I don't want to I don't want to keep the house of cards going knowing eventually it's going to collapse even worse I want to let it collapse now so we can start replacing it with with a structural that sound a real house you know not not a phony one so we've heard clearly what you want to happen what will happen what do you think they're get they're going to keep on printing until the dollar uh collapses now the question is when when the dollar do stop there a sec so they're going to keep on printing so given that information What would would you do investing wise I'm doing exactly what I'm doing now it's like I'm I you know but I'm hoping that they stop depresses at some point when it gets bad enough uh that they you know because once it's so bad then all of your assets go down right see once it's let me finish this point once it's so bad that everybody in power knows they're gone hey there's no way I'm getting reelected with the econ me this bad then maybe they'll do the right thing because they they've run out of options right they they they'll do the right thing only after they've exhausted all the other possibilities so that we may be able to do the right thing and and and stop the presses you know before before you know the dollar goes to nothing there there is there is no graceful way out at this point we we've long past that right there's there is no you know painfree uh solution here you know you could hope that AI eases the pain and and maybe it does hopefully it will you know that would be good and I take this differently I'm like if we have have an observable Behavior which is most likely to repeat however ugly the situation is around us we can actually help ourselves get out of this trap as individual level by investing correctly around this this is what I strongly believe in I think the world is truly screwed but as you pointed out there is only one way they will deal with this armed with that information that is like the Magic Bullet this is the everything behind this idea of the everything code is if you know this to be what is going to happen you can look into the future and you know what the hell to own except every time they've done it before the dollar hasn't collapsed because people have maintained confidence if the dollar Colles if the dollar collapses it's very different it's going to look very different than what you've seen in the last 20 years I don't know last time I checked the Venezuelan stock market went up like a rocket ship all I'm saying is yeah Tom I spoke about this when we first started speaking back in 2020 it's this is the life raft right the life raft is what saves people it could be gold I have no issue with that it could be Bitcoin it could be tech stocks it could be whatever you shouldn't be concerning yourself with any of this stuff this apocalypse because we know the outcome is financial repression and print more money right so we just get to hop on the life raft and we avoid all of that that's what I don't get about all of the the Doom arguments is I get it it's totally screwed but it's so predictable because we all agree what they'll do right but the thing is they've been a they they've been able to do it and not precipitate a a a real crisis that only matters if we do a different thing in the face of what we've all said too much debt inflation's the only answer no no not a different thing if we keep doing the same thing eventually it's not going to turn out the way it has the world is not going to accept it the world is not going to believe our ability to stimulate with QE with inflation is predicated on the false belief that the FED could shrink the balance sheet uh uh withdraw the liquidity normalize interest rates we could pay off the debt I mean when the markets come to the unfortunate realization that that's not true then the bottom drops out and and we can't kick the can down the road anymore because there's no more Road and then we have to deal with the consequences in a way that we haven't had to deal with them in the past right we can't send out stimulus checks because they bounce right or they don't buy anything forget about the big picture what they must do what what happens to humans in that level you and I in Investments and Tom right the individual what do it what happens right if so let's play this out and I've gone through this in great depth is when you play it out if you go to hyperinflation he who owns assets wins fact if you go to any of these you certainly lose a lot less I mean the only way you do not win is if they do what you want the most which is tighten policy so badly that you let the air out of everything then we completely get nuked we all what I want them to do what I advocate that they do is contrary to my strategy because I don't invest based on what I want but based on what I expect I expect them to do the wrong thing and so that's how I invested but even if they do the right thing I think I'll lose a lot less than everybody else which means I might win because it's all relative so if if if my portfolio goes down but the things I want to buy go down even more I'm I'm wealthier uh but yes the the best thing for my strategy is that they do the opposite of what I'm advising but that's what I expect them to do you know you you you you you hope for the best but you plan for the worst I hope they don't do these mistakes but I'm pretty sure they're going to make them you know that's just the the the the most likely scenario I'd rather they didn't do what you want them to do because everybody is going to lose their entire they're going to lose more if they do what I expect inflation is going to wipe out more people than honest default and restructuring slower uh it'll happen slower you can take your pains fast or take it it's all pain right it's all pain it's pain be slower yeah it'll be a slower death but it will be a more painful death it's all pain I get that I have one last question for you and it'll be quick over the next six months where do you guys think the price of Bitcoin is going to be well I would guess lower actually it's gone up so much at this point six months from now my my guess would be lower it's about 60,000 now right 61,000 so i' take the under for six months I'll take the over just on the historical pattern of election years uh stuff like that it tends to go up in a straight line so you know my time Horizon is not really 6 months but generally speaking in these election years this kind of Bitcoin harving cycle it tends to be higher so significantly higher significantly higher so not just higher how much higher I think I don't know but you know I it wouldn't be surprised me if it's trading at 75,000 uh by July August I'm might that would I wouldn't be surprised by that either but I also wouldn't be surprised if it's you know 20,000 or less so I mean gentlemen I cannot thank you enough I'm beyond grateful for the time that you gave all of us today to um go through those ideas I think it's really super useful hopefully this is round one of many to everybody watching at home if you haven't already be sure to subscribe and gentlemen where should they connect with you easiest place find me on Twitter at Ral GMI and if you want more of this kind of information these kind of debates realvision doccom um in fact there's realvision doccom impact it's free just sign up and start watching lots of incredible people it's not my biases Peter's been on you've been on everybody's been on uh and we have some great long form conversation so uh realvision tocom yeah so for me if you want to cash in some of your uh Bitcoin for actual gold you can contact the Reps at shift gold uh on our website we even again you know you can even take your Bitcoin and and and exchange them for gold through uh bit pay uh if you have a larger portfolio guess again uh I I I recommend that people invest uh not just save with gold but invest in productive assets I have an asset management company based here in Puerto Rico EUR Pacific Asset Management uh the website is europ pac. comom e rac.com so check us out you can give us a call there's a toll-free number on there and you can fill out a form and have a representative call you back and discuss the strategies I have a new newsletter now that I'm writing at shifts sovereign. comom so you can visit that website and sign up for our my my newsletter there uh you can follow me on social media my my biggest platform is Twitter I've got almost a million followers it seems like it's taking a long time I'm like 5,000 away uh from a million but every time I gain a few I lose a few so it's been difficult these last the this last mile uh but you can follow me on Twitter uh but I'm also on Instagram Facebook uh Tik Tok I mean I put we put out a lot of content uh YouTube I have over half a million subscribers been there for a while on my YouTube channel but make sure to listen to the Peter shift Show podcast I do one or two a week sometimes more depending on what's going on and how much time I have but you can listen at shiff radio.com uh you can listen on my YouTube channel the shift report anywhere you know app iTunes anywhere they have podcasts uh you can listen to uh to the podcast so and there are a lot of ways to follow me and invest with me and I've got mutual funds too so you could you could buy my funds at Schwab or Fidelity I'm gonna add a couple more since Peter did some money one is my my um um Asset Management business which is a uh it's a fund of crypto hedge funds we invest in the world's best crypto hedge funds that's xam exp aam exponential agent Asset Management also all of my research I've been doing for 20 years all of the stuff that I talk about comes from Global macro investor that's the epicenter of my thinking that's everything that I've done so if anyone gets a chance uh check out some of that stuff as well I love it all right everybody thanks for joining and until next time my friends be legendary take care peace to learn more about the current economic crisis be sure to check out my conversation with Patrick Bet David this guy stole 8 billion on people's money we're not talking million or $80 million $8 billion and he was practically buying politicians
