Bankless - Ben Hunt says, “Cut the BS! The Banks Are Solvent!"

Episode Date: March 25, 2023

There are bank runs and also rumors of more bank runs on the horizon. One side says, “the banks are insolvent, get to the lifeboats.” Another side says, “the banks are going to be fine…we’re sick and tired of doomers pulling the fire alarm.” Who’s right? This is our third episode in a series of conversations. To get the full debate you’ll need to listen to the last two episodes with Balaji Srinivasan and Arthur Hayes. In this episode, we’re speaking with Ben Hunt who lays out the counterpoint details on why banks are going to be fine. He believes Balaji and Arthur are dangerously wrong. Tune in to hear why!   ------ 📣 Infura | New SDK for NFT APIs For Devs https://bankless.cc/Infura  ------ 🚀 JOIN BANKLESS PREMIUM:  https://www.bankless.com/dashboard  ------ BANKLESS SPONSOR TOOLS:  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken  🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  👻 PHANTOM | FRIENDLY MULTICHAIN WALLET https://bankless.cc/phantom-waitlist  🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask  🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi   ------ Timestamps 0:00 Intro 6:55 Ben’s Crypto Credentials  10:36 Critiques of the Fed 16:55 Ben’s Understanding of Balaji’s Thesis 24:33 What Ben Believes is Untrue 33:42 Treasuries Are the Safest Assets? 43:34 Ben’s Objection 45:55 Icebergs 50:52 Fiat is Better?  57:45 Step Back for Society?  1:02:26 Checks on Power 1:07:39 Rules-Based Monetary Policy  1:12:30 How to Fix the Fed 1:15:35 Closing & Disclaimers  ------ Resources: Previous Debates  https://www.bankless.com/balaji-bets-the-dollar-will-hyperinflate-to-zero-not-a-drill   https://www.bankless.com/arthur-hayes-says-get-your-bitcoin-and-get-out  Ben Hunt https://twitter.com/EpsilonTheory  ------ Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

What makes me angry is for people to say things like, oh, there are hundreds of banks insolvent and it's hyperinflation time and the system is coming crashing down and there's no hope and buy Bitcoin. That's what makes me angry. There are real problems here and this is not helpful. In fact, it's actively harmful and that's what I'm speaking out about. Bankless Nation, we're going to get straight into the episode today. There's bank runs and there's rumors of bank runs going on. One side says the banks are insolvent. Get to the lifeboats.

Another side says the banks are going to be fine, and they're sick and tired of the doomers pulling the fire alarm. So who's right? This is the third episode in a series of conversations we've been having on bankless. And to get the full debate, you'll need to listen to the last two. On the get the lifeboat side, we had Bologi, Strenivassin. He said that Bitcoin is going to $1 million, that the dollar is hyperinflating, it's probably going to happen fast, like in 90 days fast.

Then we had Arthur Hayes. He gave us the trader's perspective. He doesn't think it'll happen as quickly as biology, but he has the same message. Get out before it's too late. So this is our first episode on the counterpoint, on the going to be fine side, the banks are okay. Ben Hunt is giving the counterpoints today. There are a few benefits, a few takeaways. We want you to get out of this episode.

Number one, why are the lifeboat people wrong? Number two, why the banks are actually. solvent. This is what Ben thinks. It's his take. Number three, why treasuries are still the safest asset in the world. Number four, why Ben thinks hyper-bitcoinization for the world is actually a really bad thing. And number five, how Ben thinks we can reform rather than replace the Fed. That seems to be a theme for this episode. There will be links in the show notes to the two previous episodes if you want to get caught up on the debate as it stands. There are two other things I want to say before. we get into this episode. Number one, tensions are high on this debate. There's going to be an

inclination to go on personal attacks into question motives. I'll remind all of us before we get in that none of us can assess motives. We should focus on attacking the argument rather than the person. And so I encourage everyone listening to this to approach the arguments on both sides with an open mind and really focus on the arguments rather than descending into personal attacks. We see our role at Bankless is to present the arguments in the best light. Our listeners are smart. They can make decisions on their own. Number two, David planned to be here, but unfortunately he had an emergency. He had to attend, so it's just Ben and myself today. Guys, we're going to get right to the episode of Ben Hunt, but before we do, we want to tell you about the sponsors that made it possible,

including Cracken, which is our number one recommended crypto platform for 2023. Go set up an account. Cracken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto, Cracken puts an emphasis on security, transparency, and client support, which is why over 9 million clients have come to love Cracken's products. Whether you're a beginner or a pro, the Cracken U.S. is simple, intuitive, and frictionless, making the Cracken app a great place for all to get involved and learn about crypto. For those with experience, the redesigned Cracken Pro app and web experience is completely customizable to your trading needs, integrating key trading features into one seamless interface. Cracken has a 24-7-365 client support team

that is globally recognized. Cracken support is available wherever, whenever, whenever you're you need them by phone, chat, or email. And for all of you NFTers out there, the brand new Cracken NFT beta platform gives you the best NFT trading experience possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Cracken does? And if not, sign up with Cracken at crackin.com slash bankless. How many total airdrops have you gotten? This last bull market had a ton of them. Did you get them all? Maybe you missed one. So here's what you should do. Go to Earnify and plug in your Ethereum wallet. and Earnify will tell you if you have any unclaimed airdrops that you can get.

And it also does POAPs and mintable NFTs. Any kind of money that your wallet can claim, Earnify, will tell you about it. And you should probably do it now because some airdrops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new irdrop for it to make sure that you never lose anirdrop ever again. You can also upgrade to Earnify premium to unlock access to air drops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just.

just one air drop. So plug in your wallets at Earnify and see what you get. That's E-A-R-N-I. And make sure you never lose another air drop. The Phantom wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet and will be offering similar staking features for Ethereum and Polygon. But that's just staking. Phantom is also the best home for your NFTs. has a complete set of features to optimize your NFT experience. Pin your favorites, hide your

uglies, burn the spam, and also manage your NFT sale listings from inside the wallet. Phantom is, of course, a multi-chain wallet, but it makes chain management easy, displaying your transactions in a human-readable format with automatic warnings for malicious transactions or phishing websites. Phantom has already saved over 20,000 users from getting scammed or hacked. So, get on the Phantom wait list and be one of the first to access the multi-chain beta. There's a link in the show notes, or you can. go to phantom.app slash waitlist to get access in late February.

Bankless Nation, I am super excited to introduce you to our guests today. Once again, Ben Hunt, he is an investor in the creator of an incredible investor community called Epsilon Theory. He's a several-time bankless guest, a perfect person to have this conversation, I think, because he's been one of the more outspoken critics against Bologi, Strinivossin's $1 million-dollar-90-day Bitcoin hyperinflation thesis. You think Bologi, of course, in our episode earlier this week, said that the dollar was going to drop to near zero, or at least Bitcoin would be going to a million dollars in short order. And I think Ben Hunt is the internet's leading candidate to push back against that theory and that thesis. So we are happy to have him today.

Ben, welcome to bankless. How are you doing? I'm doing great. And it's super to be back here with you guys. Always enjoy it. So thanks for having me on. Yeah, I think we ask for counterpoints to Bologi's thesis because at Bankless, we want to hear both sides of any arguments so that we can sort of make up our minds about this. And of course, Bankless is a, you know, crypto-friendly community. But I also know you, Ben, to be a crypto-friendly individual as well. I'm a crypto-friendly person. I am. I am. Yeah, and I know that because we've spent hours literally on previous episodes I'm talking about it. So, you know, that's why this is interesting. This is not a, you know, a crypto villain like Paul Krugman.

giving this critique of Bologi's thesis. This is somebody who has expressed, hey, you know, there are some use cases for crypto. And I think you've been excited about the things that Bitcoin and other cryptocurrencies can do in the past. So I'm wondering if you could just, as we, before we get into the discussion and the counterpoint to Bology, give us your crypto credentials a little bit. Like what are your thoughts on crypto as a technology? Look, I mean, to say that I'm, you know, a fan of, I think, crypto use cases might be going a little too far, right? I think that there's, you know, a clear use case, a wonderful use case. Alex Kleinstine, you know, has been very prominent on this about, you know, in repressive communities, right?

I mean that it's a wonderful way to, or a wonderful way. Really one of the only feasible ways to exit those kind of repressive systems. I think, though, that my main praise for Bitcoin specifically, crypto more generally, is that I think that it is elegant and wonderful art. and people think that that's a big put down when I say that, and it's actually my highest praise. Art is what inspires us, right? And I think that I'm very allied and enthusiastic about

and supportive of the ethos, as I would describe it, of the Bitcoin and larger crypto community, one of self-reliance, long-time horizons, a mindset of autonomy. I think that those are what makes a society worthwhile and vibrant and successful. I think that what makes an individual life vibrant and meaningful and successful. So that's, yeah, I'm not going to call that my credit. because I also think that Bitcoin specifically, crypto more broadly, like any application in finance, attracts fraudsters, hucksters, worse.

People I call raccoons. and that's my, that's what makes me angry. That is, has what has made me angry about Bologi, right? It's that raccoonishness, the, as Big Daddy would say in a cat on a hot tin roof, the mendacity, just the mendacity, right, of the lies, the self-interested lies. that's not the only thing that makes me angry. I have plenty of anger at the system and the perversions of the system.

But fortunately, I think it's possible to walk and chew gum at the same time that we can call out both social and societal inequities and change them, or when it's necessary, burn it the fuck down. I also think we can call out the lying liars and the lies that they tell for their own interest. And so I really think we can accomplish both things. And that's why I'm happy to be on bankless again. So we'll get to

Apology's argument in a minute. And certainly I think a lot of bankless listeners will agree that crypto has seen its fair share of raccoons. I mean, specifically, 2022 is probably the year of the raccoon. The year of the raccoon. Wasn't it? That's definitely what we had. I want to set some context more to Ben, because can you tell us, like you said there are times to burn the system down. You said that you are angry at the existing system. And I think what you mean is kind of the Fed. I remember our last conversation you talked about this idea of hollow men, hollow markets,

hollow world. I think you are in common alignment that something has gone off course in the United States and maybe other fiat regimes, what are your critiques of the Fed? Where do you think that U.S. monetary policy has gone off course before we get to Bologi's argument? I'd like to hear you on this. Sure.

I'll start with this. I think the Federal Reserve saved the world in March of 2009. I think they saved the world. I think they did in March of 2009 what it's the one job of a central bank. The one job of a central bank, this is why central banks exist. It's not for price stability. It's not for full employment.

Their one job is to be that, I'll use this word, liquidity provider, the lender of last resort, that when the global financial system, when the heart stops beating, I like the pulp fiction analogy. Their job is to come in and get that syringe of adrenaline and put it right into Uma Thurman's heart. That's their job.

And that's what they did in March of 2009. I think that saved the world. The problem was not that shot of adrenaline. The problem, and this is what always happens with emergency government action, it becomes permanent government policy. We move from that shot of adrenaline to get the heart beating again, save the world, to having a constant IV drip in our arm of 14 years of zero interest rate policy. That's a horrible mistake. and it perverts what good can come out of a fiat system, fractional reserve banking and all of that. So I have enormous disagreements with the Fed and this transition from emergency government action into permanent government policy.

More broadly speaking, and this was the topic we spoke on last time, this notion of of transforming emergency action into permanent policy, sometimes it happens without even the emergency action. So what we were talking about last time was how Alan Greenspan very intentionally, not with malice of forethought, but certainly intentionally, what he decided to do was to use monetary policy to keep interest rates artificially low in order to grow our wealth. And I understand why that's politically popular,

and I understand why he would go down that path, because for a while you can accomplish that, you can sin a little bit and not pay a big price. But since Greenspan, right, so we're going back to the mid-80s now, we've been sending a little bit more and more and more. And then with the Great Recession and putting zero interest rate policy as policy, as permanent policy, we send a lot. And so there is absolutely a horrendous imbalance in our system around debt.

I think that there is a path to, believe it or not, grow our way out of it. I still think that's possible. I think the window for that is shrinking and shrinking. I can understand people say, no, I don't think that window is there. But what I don't, it's not just that I don't agree with, what makes me angry is for people to say things like, oh, there are hundreds of banks insolvent and it's hyperinflation time, and the system is coming crashing down, and there's no hope, and buy Bitcoin. That's what makes me angry.

there are real problems here. And this is not helpful. In fact, it's actively harmful. And that's what I'm speaking out about. So, Ben, let's get into the argument. So I think that you call the Fed, there's this in the United States, there's this horrendous imbalance around debt. And I think a lot of people in crypto see that and would agree with you.

And I think what you're here saying is just because the Fed is wrong doesn't mean Bitcoin maximalists are right. right. But I want to get into the argument that that's part of what I'm saying. If I could just to interrupt that, that's absolutely part of what I'm saying. And I'm saying, and I'd love to kind of get a chance to talk about this here, I think there is a path forward from here that over a very long period of time with enough political will and resolve, it can, we can get back on a much sound or footing. I hear you.

We will talk about that about the way to kind of reform the Fed and get on that sound or footing. There may be some folks coming to this episode that aren't familiar with Bologi's argument. Now, I mentioned the outset that we did release another episode, Bology earlier this week.

It's an hour and a half long episode or so. You guys can go listen to that if you want all of the details. Ben, I just want to make sure we're starting on the same, like starting point here. Sure. Can you articulate what Bologi is actually saying? Like, what's your understanding of the point that he is making and his overarching thesis? Right. So, you know, when I first started writing Epsilon theory, and this is now, you know, 10 years ago, you know, one of the, and I wrote about this

and, you know, it's all very, you know, grandiosely titled. I wrote a manifesto. I mean, how, how egocentric is that, right? But anyway, I did. And one of the lines in the manifesto is about how important it is to call things by their proper names. I really believe that. It's important in our individual lives. It's important in our social lives. It's important in our political lives. To do just that, to call things by their proper names. And, you know, that has one aspect of it, which is, I guess, let's call it an anti-political correctness, that you don't have to walk on eggshells, that you can use, you know, call things for what they are. But inherent in that approach is that words themselves have meaning, right? That words mean

something. And words like insolvency, words like impairment that biology throws around like this, you know, these words have an actual meaning. Frankly, that's why I, you know, I think when we were first talking about doing a podcast, you know, there's a notion of a debate. There's a, there's no debate here because we'd spend the whole time talking about words. And, you know, do they have meaning or not? But a word like insolvency, word like impairment, these are not words that are just

reflect your vibes, right? They're not your feels about a bank's assets or liabilities. They have real meaning. And so what makes me so angry is for biology to just kind of throw out, you know, hundreds of banks are insolvent, all caps. your money is not safe by Bitcoin.

And what makes me, again, so angry, is that it's these big accounts, like Abology, like of Warheese, we know the big accounts who are typing out in all caps. Your money is not safe. Take your money out of the banks. And that does make me angry. I've had, you know, I've had a dozen.

Is it a dozen? No, it's not a dozen. I've had eight to ten readers of Epsilon theory, email me and say, hey, I'm nervous, I'm worried. Or asking for a friend, right? My parents are nervous or worried. What do you think? You know, they'll couch it in some ways like that. I've been thinking about taking my, you know, my money out of Wells Fargo, for fuck's sake. And I say for fuck's sake, and I don't know, I don't, sorry, I should have asked what our policy is here.

Well, this is crypto, so, you know, pretty liberal. It's all good, right. Arthur Hayes episode. Yeah, exactly. I can only imagine. No, no, no. I can only imagine. I mean, Wells Fargo is one of the two big to fail outfits.

And you're talking about taking, you know, a sub $250,000 account up clearly, right? And keeping it in your, the cash money in your, in your home? I mean, what is this? What is this? And I'll tell you what it is. It's lying liars saying this stuff, right, for their own benefit. And wittingly or unwittingly for some really rich guys who I really believe intentionally want to destabilize our country and our society. And again, that's what makes me angry.

So words like insolvency and impairment, and if the hundreds of banks are insolvent, that's just not true. It's not, right? Now, does that mean that banks can't be insolvent? Absolutely they can't. You know, the last time we had a lot of banks that were insolvent was in 2008, in 2009. And I wrote a lot about that. I ran a hedge fund.

we were on this from the very start. So it's not that I'm some freaking apologist for the banks or the bankers. But what insolvency is, right, is when your assets are permanently impaired. Like when you buy lots of mortgage-back securities and the ability of people to pay those loans back, ain't there. That is not the problem we have today. That is not the problem with buying U.S. treasuries. And Fannie Mae, i.e. U.S. government supported mortgage-backed securities or munis.

The problem is not one of impairment. The problem is one of liquidity. and that gets back to what was talking about before, about the Federal Reserves, any central banks, one job. Their one job is when the shit hits the fan, i.e., the banking system halts because there's no liquidity, there's not cash. Their job is to put the liquidity into the banking system.

That's it. That's their one job. and that's what they did with their term loan facility. It's not QE, right? It's not, again, these words have actual meaning. So QE is the Federal Reserve buying stuff and keeping it on their balance sheet. I'm buying this seven-year bond.

It's not, here's cash for a one-year-fassure, facility as emergency liquidity. Actually, most of the expansion of the balance sheet, this return to QE or reversal of QT, reversal of quantitative tightening, most of it's 90-day financing. It's that shot of adrenaline to keep liquidity, cash money in the banks for the people who want to take it out for whatever cockamamie reason they want to take it out for. So, Ben, if I'm understanding you correctly, there are two parts to this pushback. And you've even called it anger. So you've got kind of a...

Yeah, you're pissed off about this. And the two parts, it sounds like, is part one, which is you feel like there is some untruth around the actual definition of these words. I want to talk about that in a second. And the second part is motive. You're actually questioning the motive of those who are propagating it. Motive is always a hard thing to actually ascertain. But maybe we could talk about that too.

Absolutely. 100%. Let's focus on the untruth. side of things. So insolvency, impairment. What about the idea that, I don't think that, you know, to play devil's advocate to what you're saying, I don't think Abology or Eric Voorhees are saying that individual banks won't be able to meet their obligation. They're saying that individual banks aren't able to meet their obligation without Fed intervention. And the thing that is actually insolvent is more on the side of the Fed itself. And maybe one representative, whether we call it QE or whether we call it the bank term financing program. One representative of that

is how large is the balance sheet of the Fed actually growing? And we have seen it growing through this intervention over the past, you know, couple of weeks. You're saying that this is short-term growth. But I think the proponents of this argument are saying, it's never short-term growth, Ben. You know this. You just made the case back in 2008 that like once you put the morphine drip in, comes out. And so we had Arthur Hayes on the episode earlier this week, and he said, yeah, it's small now, but this BTFP alone could grow to like $4 trillion and be a COVID level increase in terms of base money dollar supply. What's your take on this? That it's not true, right? So, I mean, in any event, it's not 40. So there is a maximum, there's two trillion dollars.

in non-G-sib. Okay, what's a G-Sib? So a government systemically important banker. So the big four U.S. banks, big retail commercial banks are too big to fail, right? They cannot go into a resolution process. And this is what we're going to get to. There are real problems in our bank. banking system. Real serious problems about how these big four banks are guaranteed, your deposits

are guaranteed and outside of them your deposits aren't guaranteed. There's a real problem of $250,000. They're not guaranteed. There's a real problem in the lack of regulatory oversight of what I'll call kind of the big regional banks. It's, again, bullshit that they don't have the same level of regulatory oversight that the big banks have. It's bullshit that there are government protections on deposits for these big four banks and not for any of the other banks. These are all real problems that really need to be addressed by policy. But one of those problems is not, you know, I got 99 problems of one of them ain't that we're going to have $4 trillion of new money printed and going into the banks, right? That's not it.

That's the equivalent of saying, you know what, the S&P 500, it could go to zero. That is actually true, right? If every company, if the Western world, actually if the entire world collapses, right, and we return to a Bronze Age barter. system, right? The S&P 500 goes to zero. Those are equivalent statements that we could have $4 trillion in new money printing, money printing, and the S&P 500 could go to zero. So, yeah, I get worked up about this stuff. It's not right. It's not correct because the key difference, and again, these words have meanings, right? It makes a difference whether you are buying a mortgage-back secure.

You're the Fed. You're buying a mortgage-back security, and it has an anticipated lifespan of whatever, seven and a half years, let's say, or something that they buy from Fannie or Freddie. That has a meaning. It has a term. It, I mean, is written right there on the paper.

We can say, no, we can measure what the duration of, the assets are on the Fed's balance sheet. We can measure that. And it's not the same thing as saying, oh, well, this bank facility, well, this could be billions and billions or trillions and trillions of dollars. It has a term limit. Here's why it's not also going to expand. The interest that the Fed is charging the banks to take this facility, this is expensive money. The banks are losing money when they post a security to this Fed facility. This is the old and, I think, entirely correct saying about how the central banks should provide the emergency support, the emergency liquidity. You should apply it to solvent banks on good collateral.

at penalty rates. And that's exactly what they've done. Right? That's exactly what they've done. The collateral here is the safest stuff in the world. It's U.S. treasuries. It's government-supported mortgage-backed securities. These are not banks that reached for yield by giving out liar loans and alt-a mortgage-back

whatever. That is not what's happening here. Now, before someone asks, could there be problems on these banks' balance sheets on the asset side? Absolutely. Absolutely. You know, people, me, you're talking about commercial real estate loans. Could those loans, some of them be impaired? Yeah.

Yeah, they sure could. Because I think what's happened, and this is also an... and the others screaming about bank and so on and saying, take your bunny out, it's not safe. What they've contributed to is a credit freeze here in the United States. We are, at the leading edge, it's going to be an awful recession. It is. It's going to be an awful recession.

And this is part of the contributing factor to it. So you want to look at some of the bank loans and say, okay, I'm kind of worried about them? I agree. I agree. But that's not at the foundation of what, the Bologies of the world are saying is driving the duration, the insolvency, their vibe word, of the banks. What they're saying is, oh, the interest rates have gone up, and so the duration risk, and that's what a bank does, right? This isn't credit risk. This isn't some sort of

permanent impairment. This is what a bank does. And when people get freaked out, the central bank, has done what it does, it provides that emergency liquidity so that the banks don't fail, and they provide it at a penalty interest rate so that all the banks don't just say, oh yeah, let me have some of that. Nobody wants any of this unless they need it to tide over this liquidity-driven desire to pull the deposits out. And I think that is over, frankly. I think the Fed has done its job, right? And that all this business about, oh, your money's not safe and there's runs on the banks. I think what the Fed did is they bought time for now us to solve and let's solve them the very real problems of a two-tiered banking system that we have in the United

States. And let's try to work on this massive recession that's coming down the pike because we now do have a credit freeze here in the United States. So your high-level take, Ben, is that, they have solved the problem of the bank run, that it was temporary. They interrupted some liquidity in, and the next thing that central bankers need to worry about and all of the entire United States needs to worry about is a recession. I have a question for you, because, like, so this is probably a point of debate.

You said this. Treasuries are the safest assets in the world. I think that is a key point where, people who are making Bellagie's argument would disagree. They would say, no, Ben, they're not the safest assets in the world. Fiat is not a safe instrument. We had Arthur Hayes in the podcast earlier this week, too,

and he said that all of these fiat regimes are kind of inside money. And all of the debt that nation states are accruing of years of the morphine drip, of health care costs skyrocketing, of irresponsible fiscal policy decisions, they are going to be laden at the feet of those who are inside the system, inside money. The best thing you could do is go outside the system.

I can't think of anything more inside money than Treasury. So why do you think that treasuries are the safest asset in the world? Because when I tried to imagine a world where a Treasury, a U.S. Treasury, has credit risk. And that's, again, that's what we're talking about here. My credit risk, I mean you're not going to get paid back at the end of the term. That's why we call it a risk-free rate. It's typically what's called a Treasury bill, which officially is any duration less than a year or a year or less,

but typically people mean the 90-day obligation of the United States government. That's called the risk-free rate. And for most of the past century, that risk-free rate has been above inflation. So there is a positive real return on holding. on carrying dollars. It's called carry. Right. So in finance.

It's why my view of these kind of dollar debasement charts that go around, oh my God, the dollar has lost 98% of its purchasing power. It's, again, mendacity. It's bullshit. Because the dollar, has carry. There's an interest rate associated with dollars.

Now, again, as said this before, the last 14 years have not been a positive real rate of return. The carry on the U.S. dollar has been below inflation. And then when inflation spiked up, it's way below inflation. And that's why job one of the Fed is to get us back to a positive real rate of return on the U.S. dollar. The normalizing of interest rates. That's what that means. An abandonment of this zero interest rate policy, which does debase the currency, right? And it does penalize savers. And it does do all of these very true things that I think the Bitcoin

and more broadly crypto community quite appropriately call out. But what that does not mean, but it absolutely does not mean is that the U.S. dollar system can or should be burned down, right, or that there is actually credit risk with the United States government. Because in that scenario, if I'm not, oh, I'm not sure if I want to get paid back, you know, the next 90 days or the next two years on the treasurer, the two-year treasury I bought. I'm kind of worried about getting my money back on that. There's credit risk there. Well, let's try to imagine what that world looks like. And I'll tell you what that world looks like.

And people, you know, I get at this all the time in my tournament. Oh, well, you know, people would actually be able to buy a house because they'd be so much cheaper then. It's like, our entire GDP would be cut in half. Unemployment rate would be 40%. Mortgages would not exist. Children loans wouldn't exist. auto loans would exist, no lending would exist.

I mean, it really is returning to that, oh, yes, man, I have such fond memories of, you know, a Bronze Age barter system. And that's what, it's the epitome of fuck around and find out. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is, of course, a decentralized exchange, but you know this because you've been listening to bankless. But did you know that the Uniswap. Uniswop web app has a shiny new Fiat on ramp. Now you could go directly from Fiat in your bank to tokens in Defi inside of Uniswap.

Not only that, but Polygon, Arbitrum, and Optimism, Layer 2s are supported right out of the gate. But that's just Defi. Uniswap is also an NFT aggregator, letting you find more listings for the best prices across the NFT world. With Uniswap, you can sweep floors on multiple NFTs and Uniswop's universal router will optimize your gas fees for you.

Uniswap is making it as easy as possible to go from bank account to bankless assets across Ethereum, and we couldn't be more thankful for having them as a sponsor. So go to app.uniswap.org today to buy, sell, or swap tokens, and NFTs. Learning about crypto is hard. Until now, introducing Metamask Learn, an open educational platform about crypto, Web3, self-custody, wallet management, and all the other topics needed to onboard people into this crazy world of crypto. Metamask Learn is an interactive platform with each lesson offering a simulation for the task at hand, giving you actual practical experience for navigating Web3.

The purpose of Metamask Learn is to teach people the basics of self-custody and wallet security in a safe environment. And while Metamask Learn always takes the time to define Web3 specific vocabulary, it is still a jargon-free experience for the CryptoCurious user. Friendly, not scary. Metamask Learn is available in 10 languages with more to be added soon, and it's meant to cater to a global web-futable. Web3 audience. So are you tired of having to explain crypto concepts to your friends? Go to learn.menamask.io and add Metamask learn to your guides to get onboarded into the world

of Web3. Arbitrum 1 is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web 3 landscape. Hundreds of projects have already deployed on Arbitrum 1, producing flourishing defy and NFT ecosystems. With a recent addition of Arbitrum Nova, gaming and social daps like Reddit are also now calling our Arbitrum home. Both Arbitrum 1 and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitram Nitro, it's also now 10 times faster than

before. Visit Arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience web Web 3 development, the way it was meant to be. Secure, fast, cheap, and friction-free. I'm starting to understand kind of the picture here. You're thinking that people seem to be celebrating the idea or the fact that banks would go insolvent or that the Fed, the U.S. would be unable to meet its obligations. I want to make sure in this. The system is broken.

We might as well burn it down now. And it's like, this is just like LARP. It's lorping. It's absolutely larping. I agree with you on this. I want to make sure, though, that we are not beating up a straw man here. So I think that one of the things that you said around treasuries, I don't think that those who believe at least some portion of Bologi's argument

would say that the U.S. is going to default on its obligations. Rather, that the thing that you said that over the last 100 years, real returns on treasuries have been net positive, I don't know, 1, 2%, something like that. rather that that won't be the case for the decades to come. And that doesn't usually happen, granted. It does happen, though. Yeah, so just...

Time out. Okay, go ahead. I'm agreeing with you, right? So, again, I think it was Alex, Gladstein or somebody should have business with, well, you know, one of the reasons that I like Bitcoin is like an insurance policy against us not returning to a, you know, a positive risk-free rate, a real rate. of return, to which my response was, fair, right? Fair, right? I, I, so I surrender on that, right? That is a reason, right? And I, I get it. It's the same rationale you would have for, you know, for like 30 years, you know, why you

would own gold, for example. It's exactly the same argument. It's an insurance policy against central bank error. And as the lawyers would say, right, stipulated. Okay, so you do agree on that point. And so I think what you're saying, though, is that the Bitcoin Maximus position or this position that Bologi is presenting is far more extreme than just the case of, hey, Ben, you know, we're buying all of these outside money assets because we think the real returns on treasuries are going to be negative for the next three decades because of central bank

policy and fiscal policy and the U.S. losing its power status in the world and the U.S. dollar diminishing as a reserve currency. So that's why we're going outside the money. You would probably say that that's fair. That's a fair argument. That's also a reason to buy gold and other assets. But I think what you're more objecting to is the more extreme nature that this narrative is being portrayed. They're not saying what I just said. They are saying, get all of your money out now before it's too late. And that's what I got to tell you. So my argument is with both the portrayal, right, the hyperbole. But my, but more fundamentally, my objection is to the vision. Here's what I mean. And you see this

with, you know, in the past with with gold bugs too. The idea is that. that it's not just I've got this insurance policy if we have stresses and issues in the existing dollar system. No, no. We need to replace the existing fiat system with a gold standard. We need to replace it with a Bitcoin standard. We need to end fractional reserve banking. We need to move to fixed reserve banking. So my larger objection, my objection is not just,

to the hyperbole, my objection is very much, very much to the notion that there is an alternative financial system based on a fixed supply thing like gold or like Bitcoin. So I'm very opposed to the underlying vision in addition to the mendacity of using words, like, oh my God, hundreds of banks for insolvement and your bunny's not safe. I got it. Okay. So I want to dig into that because that is deeper in the layer of your objections. And I think one of the most crucial pieces.

So basically what's going on is there is a ship. It's hidden iceberg. People are debating on the size of that iceberg, how catastrophic it is. Maybe you disagree with the whole metaphor and scenario. But allow me to put some pieces together. So something happened. Maybe people, how about this, Ben? People are saying that the ship hit an iceberg,

and there's some debate as to whether it did or not. No, this is my point. There's no debate, right? This is like saying, when you say it's hit an iceberg, that is a metaphor. The banks are insolvent. Oh my God, your money's not safe. And what I'm telling you is that that ain't true.

Okay, so Ben here is saying, and I'm trying to make sense of this for bankless sisters. Because Bollagy just came on the podcast and said, we hit an iceberg. Now, Ben is coming on the podcast and saying, we didn't hit an iceberg at all. That's a lie. People are making this up.

Sorry, I got to interject. And I'm not saying you can't hit an iceberg. You know what? We hit an icebergs are real, is what Ben is saying. Icebergs are real. Icebergs are real. We hit an iceberg in 2008. Okay.

And everything that's happened since then was our government's both initial response to hitting the iceberg, which I think actually saved us from sinking. Yes. But then disaster, no, disaster. So that's going to be too strong. pathetically, right?

The actions they took to keep us from seeking, they said, hmm, let's just do that permanently. Understood. So icebergs are real. We hit an iceberg in 08. This wasn't an iceberg. Okay. That's what I'm saying.

So let's continue that metaphor for a second because I enjoy it anyways. I don't know if any listeners will. Okay. So we hit an iceberg. We didn't hit an iceberg is what Ben says. Some people are saying we have hit an iceberg. but Ben believes in icebergs. They are a real thing.

You can hit them in ships. Some people aboard the ship are saying, come on to the lifeboat. Everybody, aboard the lifeboat, right? And you're saying, hold on. Don't board the lifeboat. Look at that. There's only a small number of lifeboats.

We're not all going to get off. And by the way, the lifeboats are leaky. This is kind of the objection to the vision. So I want to dig into that piece of it because we've already talked about, you know, whether we hit an iceberg or not, and you've articulated why you don't think we have. But what about the lifeboat is leaky to you? So let's say that everyone followed kind of the

the strong Bitcorner case for getting aboard this alternative to Fiat monetary system. Sure. What do you object to that? What's so wrong with the vision? Why do you think the lifeboats are leaky or there's not enough to go around or whatever metaphor you choose? No, no, no. So I'll continue with this, my view, Kakamami analogy. And I'll say this, you can't cross the Atlantic Ocean on a lot of lifeboats. That's the problem. Why, why though? Right?

People don't understand why. Our economy, our economy is a big-ass ocean liner. That's what it is, right? And icebergs are real. It can sink. I get it. We're not sinking. And yet the claim is, oh, my God, we've got to, we've got to scut.

You know, this ship is sinking, right? we have to move to a system that's not a big ocean liner. No, no, no, no. We need to get on our own, all our little lifeboats. You know, what's this idea about having a captain of the ship? Oh, no, no, no, no. We need to all make our individual decisions about where our lifeboat is going. Well, you know, you're not going to cross the ocean that way.

What I mean by crossing the ocean is you can't maintain, you know, people don't like to hear it, but my God, the standard of living in the United States and the year of our Lord, 2003, is phenomenal. And for people say, oh, well, you know, I just, I kind of wish we'd just go back to like, you know, the late 19th century when, you know, men were men and, you know, sheep were scared and, you know, it was, you know, we had some rugged individualism. And this is what I mean by larping. This is what I mean by larping.

It's just like, God, you know, 8 billion people or whatever the number is in the world. And you're just saying, eh, you know, if they live, they live. You know, it's like to continue the cockamamie, you know, analogy, replacing the ocean liner with a system of lifeboats, I think that's a really poor idea. This is the crux of it. And I'm glad we got this deep in this conversation, Ben. So make that case some more, though. Okay? So you're saying that a fleet of lifeboats can't cross the Atlantic. What is so great about the Fiat system? What is so great about fractional reserve banking? What is so great about having a captain who can kind of inflate money supply to whatever kind of the ocean liner needs?

Why can't a Bitcoin-based or a crypto-based algorithmic monetary system of some kind do all of these things? I mean, nation states did exist prior to fiat regimes that were based on things like the gold standard. What are, like, why can't we return to something like this? And why do you have such objections to the lifeboat idea? Well, for two reasons. One is that the reason that governments left the gold standard was that it constrained them so much, both for doing things like, you know, fighting a war, but also it constrained them so much things like just extending credit to an economy and growing an economy.

So it's the latter of those. I'm kind of even most interested in doing because what would actually happen in wars is that you would debase a currency. I mean, this is like, you know, Henry the 8th would do this, right? You change the mix of silver in your coins, right? Or you'd say, oh, well, we're going to borrow, you know, I'm good for it. or you'd issue deposit notes that were actually kind of fractional reserve banking of the time, you'd do war bonds, you do all find all these ways to borrow money anyway to fight a war.

So I'm going to leave that aside because you can do that on a gold standard too. What is very difficult to do on a gold standard or a Bitcoin standard is to create a system in your society where you extend credit to anyone except the rich. So my objection to moving to instituting a gold standard or a Bitcoin standard is that access to credit or anyone who's not very rich does one of two things. Either it vanishes because banks will no longer be able to lend to have a velocity of money.

And my God, this is on my Twitter feed. People think the velocity of money is the speed of a transaction. It's not. Right? It's the degree, and this is at the heart of a fractional lending system, right? Which is that you lend the money to a business,

they want to expand, they want to buy something, they want to hire people. You lend the money. That money is now deposited at your bank. It's their account, so they're spending it. Those deposits, then you then take those deposits, you can lend that out. Right, so or a fraction, like 90% of it, let's say.

So this is the velocity of money. The same dollar is doing, is accomplishing more economic activity. That's the velocity of money. And that is not just possible, is at the heart of a fractional reserve system. a fractional banking system, and it's exceedingly difficult to do in a fixed banking system. Now, the counter to that, as people say, is, oh, no, it's okay, right? The banks will just originate the loans, and then they'll securitize them,

and, you know, that will fund the lending that takes place. What that means is then you have to think, well, who is buying those, who is buying the asset-backed securities, who is buying the mortgage-backed securities. And in our country, because those would be the two things that would be the securitized. And you can do this, all right? European banks, for example,

this is called a wholesale funding system. That the banks fund their loans, basically by packaging the loans and then selling those as securities to generate the funding for the next set of loans, as opposed to relying on deposits in the fractional reserve banking system. That's much more prevalent in Europe than his in the U.S., where our banks are much more supported by deposits, retail deposits.

You can do it, right? What that leads to, though, is the buyers of these securities are the banks. The buyers of these securities are the government. So when Bitcoin's standards, or gold standard people are talking about, no, no, no, we need narrow banks, we need a fixed supply and the like. And yes, there would be these other ways to accomplish lending because the banks would just be a wholesaler. They just originate the loans and we package them up and we'd sell them. Guess who the buyers are?

It's the banks and the government. You're basically calling for a far more centralized world than a world of fractional banking where banks make loans and hold their loans on their own balance sheets. Sorry, I'm a capitalist, and the root word of capitalist is capital. And to make a capitalist economy grow, you need that supply of capital and credit, particularly to the non-very rich. So that's my five-minute defense of fractional reserve banking system. And as they would say, happy to take comments.

And you know you're going to get tons of comments on this podcast. I mean, the comments are going to be, oh, you let them off the hook on XYZ. And it's like, I know that. Look, I know that. And this is why we're, we want to hear both sides of the argument. And look, I would encourage, I mean, Twitter is a nasty place. Isn't it, Ben? Like, sometimes people get personal.

I think conversations. Oh, my God. You should see my feet. I know it. I've been there too. Not for this particular issue, but others. and they're a tribe, and there's anger, and it's just a nasty, you know, nasty place. I, anything that the bankless platform supports is going to be constructive debate.

And so I would encourage all of the people wanting to comment on this. Be constructive. Let's have the conversation. Let's have the debate. Right on. No personal attacks. Okay. So could you also, like, contrast the world?

Let's say that we did move to some sort of algorithmic coin standard where it couldn't be to base, something like Bitcoin. So why is that a worse world? I mean, you've just painted the picture of why, you know, fractional reserve is necessary as kind of a cornerstone for civilization. And I think it's really, it's for people to think about it. Sorry, sorry, sorry. It's a cornerstone of modern society. A cornerstone of modern society. That's all. And now that we're here to eliminate or, you know, not eliminating, right? You're limiting it to the very rich. Mortgages, credit in general.

So, I mean, credit cards go away, auto loans go away, mortgages go away, student loans go away, except to the degree that they are absorbed by the big banks and government. That's what's happening with student loans, for example. Every student loan now is back to, the government owns those loans. So, yeah, you could still have student lending with the Bitcoin standard, but it means that we're just, we're creating a more government-reliant, centralized society for doing it. So that's what you see. Even if we just swap out the denominator, if we swap out, you know, the dollar for some other standard as a, you know, store of value, medium exchange unit of accounts, you think that that leads to a more centralized, more unequal. world that is less free. A hundred percent.

So you're saying that the product that, you know, maybe maximalist advertised is really not as advertised because the picture of their painting, at least part of it is, the ship is sinking, we have to flee to this other ship. That's kind of narrative number one. But also this other ship is a more self-sovere world with more liberties and is going to lead to greater, I, I, I, I hope this is the argument, greater economic prosperity. I mean, there are some that might even disagree with that statement and be like, no,

it's all about like bunkers and citadels and, you know, that's a very dystopian view of things. And I think there's an element to that. But it's self-reliant. Some are painting a picture of this being a good thing for society. And you're saying this is not. This is a huge step back. Yes, that is exactly what I'm saying. And the crux of that argument is that I do not know.

how it is possible to extend credit with a fixed supply system, except at extremely high interest rates, because let's say you're the bank of Bitcoin, right? And somebody comes to you, have got this great idea for this project. And I just need you to lend me this money from your deposits. You're a bank. You make loans. You say, okay, okay, okay. Right. I'll do it. it and you make the loan. And then something happens and they can't pay the loan back. What do you do? Right.

There's no loan loss reserve, right? There's no separate equity here. You've lost money for the depositors. And if the depositors are part of that decision to go and invest the money, right? And they're making that decision, A, they're going to want to, much larger, you know, the risk is larger, so they want more of a return. What banks do is that they allow us to pool social risk-taking, or fractional reserve banking does, right? And that's a really good thing, because the alternative is that credit dries up except for people who

already have a lot of money. So that's the crux of my argument, that you can't have this fixed reserve system based on gold or Bitcoin or whatever it is, and maintain societal-wide access to credit, which are there excesses in credit? Of course there are. Of course there are. And there is a necessary credit is the oxygen for our modern economy and society. If you take away that oxygen, it dies. I want to ask you about this. So another word for credit, Ben, is trust. And I think very much the whole story of humanity up to this point is a story of scalability.

Like our species is able to coordinate better than any other species. That's why we develop roads and hospitals and cities and nations. and technology. So scaling trust is kind of the name of the game if we're going to survive and thrive into this 21st century. So another word for credit is trust. But I want to ask you about this. It feels like to many people, I think you would agree to this, the central bank has kind of betrayed our trust. It's like we don't necessarily get a vote on the money supply. And I'm wondering, I want to pitch to you this idea, Ben, is there some sort of a sweet spot here? Okay. We have the ship. the big ocean liner, there is a captain, okay. But like, what's to prevent the captain from

sailing, like going to some destination we don't want to go, or making bad decisions, or treating everyone on, you know, in the ship in kind of a subpar way, making decisions that aren't democratic, that aren't liberal. Well, one prevention mechanism is leaving the system. We can basically threaten the captain and say, look, we should have the right to fork off. we should have the right to go on to these lifeboats. And if you don't steer the ship in the right direction, this is our vote. We'll leave. We'll go in the lifeboat.

We'll go find some other ship. Is there some sort of sweet spot where we have a check on power through these non-inside money systems, outside money systems like Bitcoin or Ethereum or gold or some other monetary standard? And we can use this because it feels very much, Ben. And I think you would, you'd probably agree with this, that central banks have too much power, too much unchecked power. I'm like, what can I do about this?

I mean, how much money did we print during COVID? If I disagree with that, I can vote. But like, we're just on this kind of machine. And I don't know what else to do other than to vote with capital. And that is an Adam Smith. That is a capitalist idea of being able to exit the system, vote with your capital, and get outside of a system that's no longer working for you. Is there a sweet spot we can find?

So a couple of strands I want to untangle here. The first is that I would very much be in favor of a more, I'll call it, rules-based monetary policy. Right. And, you know, that's absolutely a course correction that I think makes a ton of sense, a more rules-based monetary policy. And the main kind of big rule that I'd be very much down for, right, is an explicit recognition of the Fed's one job,

right, that lender of last resort facility, right? And in moving away from the effort, an intentional effort to guide or mold behaviors through words. And God knows I've written thousands of words about this, and it's a real problem I have with the Federal Reserve, that because they are of this church who believe that they have this, the French would call it dirrageism, this ability to direct economic activity,

and they know best for us, they are going to use their words, not as an accurate representation of what they believe or think, but to use their words intentionally to alter our behavior, you know, what we might call lying under other circumstances.

That just, again, that's the mendacity on the institutional side. So if you're asking me, should we reform, change, seer, shrink the influence and the actions of central banks and federal reserves? Absolutely. Should we eliminate central banks in our modern system,

much less a fractional reserve system, banking system? Hell no. So that's strand number one. Now strand number two, the exit. Why can't we just take our money and go somewhere else? Amen, brother. Take your money. Go somewhere else. Right. That's separate from big name accounts getting up there and on Twitter and here and every other place shouting in all caps. The banks are insolvent. Your money's not safe by Bitcoin. Again, that's what pisses me off, right? Both of those

things pissed me off. The one that's more kind of urgent and in my face right now is the latter. I see. I want to ask a question about this rules-based monetary policy really quick, because I can hear probably the bankless listener saying, but Ben, that's what crypto is. So the idea behind crypto is that any rules-based monetary policy, as long as it's tied to a human-making decisions and some sort of political apparatus, those rules will be bent and broken. And they would say that's what we actually have with crypto. Whether you believe the Bitcoin algorithm is correct or the Ethereum algorithm is correct, it's something that is immutable, very difficult to change that is kind of written in the software, that is rules-based. Now, maybe it doesn't have the right

rule, but they would say, Ben, you never get humans. I get the point. Yeah. Let me answer the question, right? So I'll answer Drake. So the core problem for a government and a Bitcoin standard or a gold standard is that the rules that are there are out of their control. Right. And this is true for the gold standard too. One of the huge problems of the gold standard was, do you have a gold mine or not? That was a big problem. That was a big problem if you're a country and you're on the gold standard and we don't

have a gold mine. That's a real problem here. Right. because we can't legislate, right? It's the exceptions. It's those emergencies that come up, and when the rule is not in your, when there's nothing where you can break the glass

in case of emergency, like the Fed did in March of 2009, like the Fed did with this bank term loan facility, it's the separateness and the inability of government to ultimately control the reason for being, the raison d'etre of any government, which is to tax. And that's why governments exist.

And you call it senior ridge. You can call it these different words, but they're basically about this is why governments exist. And you say, well, screw that. I'm going to be my own sovereign individual. I'm going to go live off on the aisle of white or whatever. And, you know, screw you. right and knock yourself out man

knock yourself out this has been kind of at the core of my of that philosophical difference I have with Bitcoin maxis and as is applied for policy right I don't think this is a battle

that is winnable and I don't think it's a battle that even if you won is a good thing for the world which is to move to a fixed supply monetary system that is inviolable and cannot be changed by the citizens, however they are represented and however their will is represented in the perversions of that in government,

but how it is separate from what citizens can do anything about. Ben, this has been great. I want to get to one more thing before we close, but I'm kind of summarizing this going back to my ham-fisted analogy, but maybe it's helpful for some listener out there. We're all in the ship together. Ben believes in icebergs. He doesn't think we hit one in this particular case. And he believes in your right to go board the lifeboat. But he takes issues with those who are screaming and shouting, run to the lifeboats, run to the light boats. And that is the crux of his issue. What do you think about that summary? I think that's pretty good.

The only thing I'd add to that is I don't, I don't, I think it's a pretty crappy world if we live in a world of lifeboats. Right. I think the ocean liner is an important thing to maintain. It has definitely gotten off course over the, you know, the last 13, 15 years. I want to change the course of the lifeboat of the, of the ocean liner, right? and replace, if not replace the captain, put more controls on the captain, and let's get better captain, you know, crew.

But I don't want to live in a world where we're all floating off in our little lifeboats. Well, let's complete this counterpoint with this then. So I'm understanding this is Ben Hunt the reformist, right? Not the radical who's telling you to, you board the lifeboats, but, hey, we can reform the ship that we're on. And I promise you to give you, like, opportunity to make the case,

earlier in the episode on how we could actually reform the existing system. Ben, what do you think that looks like? How do we fix the Fed? More rules-based, less reliant on, they'll call it communication policy or forward guidance, a real rate of return, a real rate of return, greater regulatory scrutiny of the banks, an increase in the uninsured amount of deposits, or the insurance on deposits, an increase, not unlimited, but an increase, because I want to make it possible to still have a regional bank system that is deposit driven. It still allows for banks to make loans and keep it on their books, because that is such an engine for entrepreneurialism, for risk-taking, for economic growth in our society.

That's what funds small little businesses all around, you know, this country. That's what funds farmer loans, ag loans, right? Car loans, all that stuff. That's the economic activity, the banking activity I want to strengthen. while at the top, right, we need to return to a monetary policy that has a positive real rate of return. And you do these things, and it'll take a while, but fortunately, we have time. We grow our way out of the debt. We grow our way out of the debt.

And that's going to require some real fiscal reform, too. There's a whole set of things that I'd want to do there. And then the final thing I do, right, is I wish, have a million-dollar lifetime, you know, tax-free capital gains exemption, right? And then I would tax capital gains progressively over that $1 million. But I want us to return to being a society of risk-takers, entrepreneurs, and investors. And I think our fiscal and monetary policy should support that. Ben, you think we... The window is shrinking, but that's what I think we should do.

You think we can get there. You think we can use politics as our engine to get there? I absolutely do. It's getting harder and harder, and it's made harder and harder by the biologies of the world. Right? It's made harder and harder by this because it breeds more and more distrust. And there's plenty to be distrustful of and lots of things to change, including some things to burn the fuck down. but the fractional banking system

and having a lender of last resort ain't two of them. Ben, this has been a really productive conversation. I hope so. Thank you. I've really enjoyed it. Yeah, I appreciate you coming on and making this counter argument. I'm hopeful we can have these, continue to have these kind of civil conversations and debates. I would encourage anyone listening to this is if you have a commentary or follow-up,

let's keep it on the high-rung arguments, not the low-rung attacks so that we can have some more productivity and hear all sides of the arguments and figure out what's going to happen next. That's what we're all trying to do here. Well, thanks again. I really appreciate the opportunity to come on.

Guys, you've got to end with this. Risk and disclaimers, of course. None of this was financial advice. Crypto is risky. So is defy. You could definitely lose what you put in. but we are headed west. This is the frontier.

It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.