Bankless - Fortress Russia Crumbles | Kyla Scanlon

Episode Date: March 9, 2022

A lot has changed since we had Kyla on Bankless almost a month ago. Russia invaded Ukraine and the ripple effects are being felt worldwide. Kyla's written a few posts on what's been unfolding thus far. Most recently she wrote, "Financial Warfare: Russia-Ukraine," breaking down Fortress Russia, sanctions, energy, agriculture, and the strength of Ukrainians. For those unfamiliar with Kyla, she's an independent, Gen Z friendly, new age content creator with a fantastic newsletter and youtube channel. In addition, she is the BanklessHQ TikTok correspondent, dropping weekly recaps of the crypto world. ------ 📣 OPOLIS | Sign Up to Get 1000 $WORK and 1000 $BANK https://bankless.cc/Opolis  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🍵 MATCHA | SMART ORDER ROUTING https://bankless.cc/Matcha  🚀 SLINGSHOT | LAYER 2 SOCIAL TRADING https://bankless.cc/Slingshot  🏦 GEMINI | TURN FIAT INTO CRYPTO https://bankless.cc/Gemini  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Timestamps: 0:00 Intro 7:30 Being in Putin Shoes 13:20 Financial Sanctions 23:15 Putin’s Escape Hatch? China? 26:15 Russians Remaining Resources 33:30 Global Economy Sensitivity 45:45 What’s the Fed Going to Do? 52:30 The Ripple Effects of Inflation 55:40 The Supply Chain Conundrum 56:50 How Crypto Will Be Affected 1:02:20 What Happens Next ------ Resources: Kyla on Twitter: https://twitter.com/kylascan?s=20  Kyla's Website: https://kylascanlon.com/  Financial Warfare: Russia-Ukraine by Kyla: https://kyla.substack.com/p/financial-warfare-russia-ukraine  Kyla's Recent Bankless Podcast Episode: https://youtu.be/p2QsIkEvlZw  Jake Chervinsky's Twitter https://twitter.com/jchervinsky  ----- 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://newsletter.banklesshq.com/p/bankless-disclosures 

Hey, Bankless Nation. Welcome to another State of the Nation episode. Today we are talking about the events happening in Russia. How that affects commodities? There's some kind of contagion going on. Is there a crisis? Is a recession looming? What does all this mean for crypto? David, who do we have on and what are we going to discuss today? Yeah, about a month ago, we had a Kyla Scanlon, who has just been a prolific content producer about macro, the stock market, commodities, geopolitics, energy, just a lot of just deep dives into very nuanced, very complicated, very, very integrated subjects. And this was just two weeks before the Russian invasion of Ukraine. And so much of what was discussed in that podcast with Kyla ended up unfolding. And so this conversation has progressed.

And now that we are almost two weeks on the other side of the Russian invasion of Ukraine, there are so many more things to talk about. How does Russia's energy relationship with Europe impact how sanctions are happening. How does our global supply chain just-in-time paradigm interact with supply chains itself? What is the fallout of just missing wheat and oil production out of the world? The number of consequences is large. And so we're trying to figure out how much contagion is there. Is this a global contagion event?

Is this going to be self-contained? Is this going to be a two-week adventure or a two-week? year adventure. There's a lot of questions that I have that I think are really, really important that we're all going to ask Kyla here on the state of the nation. Yeah, I think the R word has been circulating like recession and there's so many downstream effects. I also want to talk to her a little bit about the Fed. So what's the Fed going to do on the backdrop of this? We had Jim Bianco on a few episodes ago just talking about Fed raising rates. Are they still going to do that? What would be the implications or repercussions of that? So so much to unpack and discuss. This is going to be, I think, partial macro

and partial world events and then partial like crypto, right? Because we all want to understand how this affects us in the market today. I mean, bear market, David? I don't know. We're going to talk about that. I said the B word too, the R word and the B word. In the same podcast. Yeah.

Invoking it. Before we get there, guys, want to talk about a few announcements. David, you did a fantastic layers here with coin artist that just came out. And we've got Turin on the podcast coming out. pretty soon as well we should also mention our friends at opolis david well i pull up the opolis website why don't you tell them what it is this is specific to u.s workers i would say and within that subset of people in the u.s who are looking for health care if you're trying to be a self-sovereign individual self-sovereign worker you know this is the the new structure for dows you're not going

to have a corporate job you're going to work for maybe a dow maybe a handful of dows you're going to be an independent worker but you need health insurance Our friends at Opolis have an offering for you that's teed up. David, why don't you tell them about it? Yeah, if you, Apolis is basically a Dow that helps other DAOs have employees, have, offer stable employment services towards the people that are contributing to this world of Web3, the world of Dow's. And so one of the biggest barriers as to why people are afraid to get into this industry is that, like, how do we do health care? How do we have like basic stable payroll and benefits? Well, Opelus is a collective and it's a collective that offers employment services towards members of Opolis.

So it's basically an employment services DAO. It lets you get your health care, lets you get stable payroll and there's few other benefits as well. And just really helping the world of Web3 and Dow's exist in a stable way. And so if you are interested in getting health care from a collective at Opolis who will negotiate health care benefits on your behalf, you can sign it for Opolis. you'll also get a thousand work and a thousand bank tokens if you joinopolis by May 1st, 2022. That is this year. It's going to come up fast because this industry moves fast. Yeah, go book an appointment, talk to these guys, go figure it out. It's really cool to get paid in crypto as well. They can pay you in all sorts of various tokens. This is the new way pay

rule will work. All right, David, let me ask the question I always start these episodes with, which is, what is the state of the nation today? A combination of dealing with a hangover, I would say. Crypto prices are from down from 4,000, or ether prices down from 4,800, down to 2,500. And then we're also just watching commodity prices go up. So coming to terms with

like all the, we just got to pick up all the confetti off the ground is what's going on in the crypto markets. But I was asked Ryan at the beginning of this, like, all right, there's like five stages of grief. Like where are we? I think we might be in the denial phase. Wait, what are the five stages of grief again?

The five stages of grief, oh, I just had this up. It starts with denial, then there's like bargaining, then there's anger. No, then anger, then bargaining, then acceptance or something. And so if we portray these, project these onto like a bear market, I think we're at stage one, which is denial. Like, no, there's not a bar market. No way. Well, I don't know if there's a bear market yet, David.

So maybe I'm either right or I'm in denial. We'll see. But definitely, look, everything was going. really well in crypto, and now macro events have just hit us in the face. So we've got to talk about that today, particularly the events in Russia and commodities prices. Guys, we are going to do that in just a minute. We're going to bring on Kyla and talk about all of these things. But before we do, we want to thank the sponsors that made this episode possible. Slingshot is a decentralized trading platform that combines the performance and ease of a centralized exchange with the openness and

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the way it was always meant to be. Fast, cheap, and friction-free. Coming back from commercials, Kyla Scanlon knows a lot of things, about a lot of things. She's an independent content creator with brilliant and entertaining ideas on macro markets, monetary policy,

stock market, energy markets. She writes on her own substack. She makes a ton of YouTube videos, a bit of absurdist humor on TikTok as well. You might know her as the official bankless TikTok correspondent, where she recaps the week in crypto in the most dense packet of information that you'll ever get. Previously, about a month ago, she came onto the bankless podcast for what ended up being a prelude episode to much of what we are talking about today on this show. Kyla, welcome back to bankless.

Thanks starting me on. Twice. Okay. So we've got to start at the very beginning, which is, of course, the Russian invasion of Ukraine. And I'm going to ask a ridiculous question. But, Kyla, can you put us into the shoes of a madman? Putin, I think, has not gotten what he wanted to have gotten out of the war in its current state.

10 days into it. He hasn't captured anything. So what did Putin hope to have happened and what has actually kind of happened instead? Yeah. I mean, so I think that why he's doing this is largely uncertain, like the exact reason is largely uncertain. You know, you could point to NATO, you could point to him wanting to expand the quote unquote Russian Empire. I think that a lot of people thought he would just go for Eastern Ukraine and then, you know, be done with it. But obviously that's not the goal at all.

It seems to be to take Ukraine entirely. So I think for him, he thought it would be really easy. Like they took Crimea back in 2014, just basically rolled in tanks and we're good to go. And that definitely did not happen this time around. The Ukrainians have fought back really hard and really bravely and really valiantly. And I think Putin is a little bit frustrated at that because I think essentially Russia is losing right now. And I don't think he expected that at all. So I can't speak to his inner mind or what he's thinking. But I think that he is pretty shocked at how it's unfolded. And that's always a little bit worrying because essentially when you back a cat, like he's a cat into a corner, they get a little bit antsy. And so it's just like, you know, he's already threatened

nukes. They were shelling a nuclear plant or near a nuclear plant a few days ago. So, you know, yeah. And what I'm trying to wrap my head around is like, what is the trajectory of this war? Because Putin doesn't seem to be backing down, but the Ukrainians seem to be more united than ever. And it really just seems like an immovable object, unstoppable force meets an immutable object. So, like, my concern is that, like, this thing doesn't wrap up, like, in the next 10 days or the next 20 days. And it actually takes months and months to unfold. Like, who do you think caves first? Like, Ukraine or Putin?

Yeah, I mean, I'm not sure. But, like, I don't know if Russia will be able to finance the war for months and months. They're running out of money. Their economy is essentially being strangled right now. So I don't see them being able to go forward for months and months. They still have some military manpower. but I don't know how long that could last for. I think the big thing, and that's what the economic sanctions are meant to do,

is make it so they can't finance the war at all. Ukraine is holding really strong, and it seems like they've made a little bit of progress in negotiations, like Zelensky came out today and was saying that Ukraine would no longer seek NATO membership and that they could talk about the Donbass region, which is what Putin wants, you know, he wants Russian recognition of the, or he wants Ukrainian recognition of the Donbass region being a part of Russia, essentially. So Zelensky has sort of opened up that negotiation door, but with Putin and how he's been negotiating, essentially he's saying like Ukraine can't have any sovereignty and that, you know,

essentially becomes a non-country and that's just a non-negotiable for Ukraine. Like Ukraine wants to remain a country and that is why they are fighting so hard. So I think it's just going to depend on how nuanced the negotiations can get and how willing Putin is actually to negotiate and to actually not just like try and flatline the entire country, but actually take this to the dialogue and diplomacy table as the UN has been calling it. Yeah. And we have just no idea how open Putin is to negotiations. That's just like a complete black box. Yeah. I mean like I'm not sure what he's thinking in general. Like I like there's a lot of think pieces or thought pieces analysis around what's the end goal here. Like okay, let's say he takes Ukraine like what's he going to do?

next you're economically cut off from the rest of the world. And some people say, oh, you can do this. And that's the whole goal is like a pivot to Asia. Russia plans to have a pivot to Asia. And so like that could be part of his plan. He takes Ukraine and then he pivots to Asia. But I think you're seeing a lot of hesitancy from China and engaging with Russia. And I think Putin thought he had a friend in China. And it hasn't come across that way. I think to the same level that he expected. So to the point of like, is he open to the negotiation? I think he almost has to be. And I think hopefully a rational person would kind of start to realize that at this point in a war where it's like, okay, I'm actually not winning like I thought I would. So maybe like let's have a chat. But I'm not sure what he is, what he's thinking. Yeah. Kylie, can we talk about the economic sanctions for a minute? Because that's been a massive story. And obviously has some intersections with crypto, right? Crypto being a thing that you can't sanction. But let's talk about the, you know, the financial world, the system that the world, the system that the world.

world is built upon. And it's largely, it's built upon like a Western-led financial system. And there are a few things that the West has sanctioned. And maybe we could talk about, you know, three of them. The first is the removal from Swift. And I remember when we last talked, you brought up this term called swifted. And that was new to me. But Russia just got swifted. Now, it's no longer new to me. Like, I understand how this can happen. And then there's also sanctions against the central bank, the freezing of a Russian central bank assets. And then thirdly, there are some direct sanctions on Putin and the oligart class, like seizures of property, that sort of thing. So can we take these things one by one? First, let's start

with the swift sanctions. What is that? What are those? Yeah, so that's basically removing Russia from the communication infrastructure between financial institutions. So Russia can't really like talk to other financial institutions. It's really hard to execute different types of payments. They're still able to right now, I think, functionality-wise, use energy payments through the system. So that was not slifted. But basically, that just makes it really hard for them to sort of get things done and to do different things within like the broader financial universe. And that is not great from like being a country that relies on outside funding and has outside investments and has imports and exports and things like that. So that's really the big issue of a Swift. It's just like,

you know, pushing somebody out of the financial system in general, which is hard. Do they have a backup system for Swift at all? Yeah. So they have something called SPFS, which is, it's like you could call out a backup, but it's like not really backup, you know, like it doesn't really work in the same way. So they have that, but being removed from Swift just because of dollar dominance and because of West dominance in the financial ecosystem is just difficult. Yeah, and Russia is like super tight in to the West, not like how they used to be, but it's still like everything is very, very interconnected. And if all of a sudden, you know, your thread gets cut, it's a little bit difficult to function. Yeah. Let's talk about the sanctions then to the Russian Central Bank. And this one actually

surprised me. I wasn't surprised that Russia got swifted, but this one really surprised me. a substantial amount of assets were frozen, as I understand it. Can you walk us through that? Yeah. So this is like a super, super, super big deal. And not only from a rush, you know, central bank functionality perspective, but also from how the rest of the world, how money markets function, it really places a lot of pressure on everything. So essentially, you know, the central bank got sanctioned. And so that froze out about half of their assets. So they have about $630 billion dollars in assets, about half of those are completely immobilized, meaning Russia can't use them. The central bank had the hike interest rates by 20% to try and support the ruble from, you know,

not completely bottoming out. That's a big, that's a big number. That's a big number. Especially overnight, right? Like, we're having trouble raising rates here in the U.S. by like 25 basis points. And to go 20% is just a huge deal. And most of Russia's reserves are held outside of the country. And so that's kind of like the.

mobilization that I just pointed out, and a lot of you pointed out, right, is that like, okay, so you can have all these reserves and Russia has been building up, they've been like doing everything right from a sort of like building up their economy from the 2014 Crimea sanctions. They've been building everything up, but all of a sudden overnight, their half of their reserves are immobilized because they're overseas. Yeah. Yeah, so this is the sanction that Putin didn't expect. Putin was already trying to create what we are calling the title of this episode, Fortress Russia, right? Like the unsanctionable Russia. But it sounds like he just didn't think about or just kind of forgot to consider the freezing of a central bank. And can you also explain like this

has to have just so much fallout and direct impact upon like the average Russian citizen too, right? And so these decisions that have been made have been taken with that into account saying, well, we know that this is going to harm individual Russians, but like, we just have to get to Putin somehow. So a couple of questions. How much actual fallout to the average, like, Russian citizen is there as a result of this? And just like, did Putin just make an egregious error, which was, like, forgetting about, like, having foreign assets in foreign banks while he invaded a foreign country? So to the answer of the first point, like the Russian people, it's so unfortunate what's happening. That's not even the right word to use because it's more than unfortunate. They're essentially experiencing the consequences of this one man deciding that, you know, Ukraine is mine now.

And so like they are cut off from a lot of different things. You have Visa and MasterCard pulling out. You have a ton of companies pulling out of Russia. And they're essentially locked out from the global financial system too. So they're like losing jobs or inflation is biting into them as well. So I think in like medicine, like getting medicine is difficult. So, you know, when a country gets sanctioned, their people get sanctioned too. And I think the whole thing was that the goal was to say, okay, like if we sanctioned Russia's economy, like Putin's going to say, oh, don't hurt my people. I'll back down now. But that made the

inherent assumption that Putin cared about his people. And I don't know if he does, maybe in his hearts of heart. He does care about his people, but I don't think like that is the way to get to him. And to the point about, you know, the sanctions and did he overlook this? It's just like a big deal to sanction a central bank because of the contagion risk that I talked about a little bit earlier. It's like this is going to impact a lot of companies. It's going and this is beyond the point. Like a war is the most important thing if not like companies making profit or whatever. But it's it'll have it has global consequences. And so I just don't think he thought anybody would do that.

Have we ever seen this kind of like asset freezier against a central bank of this scale? I remember like so it seems to be that like the U.S. and Western countries are using this more and more, sort of this financial choke point. There's like less than 30 days ago, the U.S., or maybe it's longer than that, in the last three months anyways, The US used this against the Afghanistan government after the Taliban sort of took over again. There were a lot of Afghan essential bank assets. I think it was like $5 to $10 billion. And the U.S. just like shut it off, just like took it.

That's ours now. And $5 billion of which, like 50% or something, were going to be allocated towards a 9-11 fund, 9-11 VICT, Fund. And so that can happen to a very small government like Afghanistan, but this is a whole another scale. We're talking $630 billion in assets, a substantial amount of the Russian Central Bank's reserves. Have we seen anything like this before? Russia is a really big player in the global economy. So I'm not sure if we've seen anything in recent history quite like this. Like we've definitely seen sanctions before, but never to this scale and yeah, never to sort of like have this impact. Like this is very clearly

trying to kneecap Russia's economy. And I don't think that sanctions were implemented. Like it was, you know, we had sanctions on Iran, et cetera, but it was never really about like completely decimating them. And you could argue that the goal seems to be to sort of like completely immobilized Russia's economy. Yeah. The last sanction piece, is like the seizure of Putin and oligarch property and resources. And so we've seen some like yachts. You've been on like a yacht watch, haven't you? Have you seen some of these things frozen?

Tell us about this. Oh, yeah, that was just so tick-deck. Yeah, like, so it's direct sanctions on Putin and the oligarchs, which sounds like a band name, like Putin and the oligarchs. But like the whole goal with that is to sort of like make the oligarchs. be like, whoa, Putin, what's going on, dude? Like, they're taking my yacht and to have them sort of fight back against Putin. But as long as Putin can continue to finance their lifestyle, which arguably he's been able to do,

still through with oil and gas payments, they're not going to push back a whole lot against him. And then you have the strongmen in Russia who are like a whole other, like, sort of like a class, I guess that he's associated with. And they are very supportive of Putin. So I'm not sure if like just the oligarchs rebelling would be the solution. But the whole goal of the sanctions is to make it really difficult for Russia to finance the war and to have people get mad at Putin. Hopefully one of those succeeds. I'm not sure which one.

But from the oligarchs perspective, yeah, they're losing all their assets. Yeah. And of all the sanctions, this is the one that I think does the most harm for the least amount of collateral damage, as in there is no contagion coming out of seizing oligarch yachts. But there is pressure put on Putin because if the old. oligarchs are unhappy, Putin, I think, has to take note at the very least. And so there's some silver lining in the sanctions there at least. I believe Putin going into this considered that he might have had an escape hatch, an economic escape hatch with China. Can you kind of tell us that story and what Putin thought going into this war and how it's actually unfolded?

Yeah. So it's kind of been interesting to watch that, because I've been watching the situation since about November. And like China and Russia, like had a little friendship agreement announcement together where they were like, we're going to do, you know, international relations for everybody and support international diplomacy. And this was, oh my God, like maybe a month or so, two months ago. But it was a joint statement. They were like, we're going to be best friends. And I think Putin kind of thought that that was going to be supportive during the war. And, you know, China seemed to have asked Putin to hold off on the invasion until after the Olympics. So it seemed like, you know, they're still relatively friends. But China has come out and spoken out against the war and

has been like, we really need to return to dialogue and diplomacy. And I think part of the reason is that China's watching the West and seeing how the West has really just been like moving fast. And so I think that kind of scares China a little bit because, you know, they're eyeing Taiwan. And I think like they're sort of, you know, keeping everything in the back of their mind. And I don't think that they want to experience sanctions. They have a lot of dollar-denominated liabilities, a lot of dollar-denominated assets. And now the dollar, as you talked about a little bit earlier, can be used as a weapon in terms of sanctions. Like, that's super worrying to China. And I don't think China wants to be on the other side of it. And that's not to say that China hasn't been,

like, supportive to Russia. They still are, like I think a few days ago, they or today, maybe, they announced that they're going to maybe look at buying stakes in Gazprom, which is at the top gas producer in Russia. So they're still kind of hanging around in terms of Russia, but they're not like taking aside. It seems, yeah, they're just kind of like we're going to encourage dialogue, encourage diplomacy. But it is the case that China has not joined the rest of, you know, the West and sanctioning Russia. They just haven't condoned it, I suppose. It's just, I feel like there's maybe some mixed messages coming from China. Is that like interpretation? I would say so. Yeah, I think that's kind of generally how they operate. And I think for them, like they're just kind of trying to watch

everything and like, you know, see what plays out. They're not like super militaristically strong. So like they're going to start spending a little bit more on defense spending. That was announced recently as well. I think, you know, the pivot to Asia, they seem to want to be a part of. So they did announced this was back when they announced their friendship agreement that Russia would build another pipeline into China. So China is really worried right now about food security. So I think they're just trying to like position themselves to be in the best possible position for energy and food security at the moment. Yeah. All right. So the net effect of all of this is that the the ruble has fallen on something like 40%. And with all of the outroads of exports out of Russia, more or less cut off,

except for save a few. There's no way for, there's fewer ways, fewer tools for Russia to prop of the value of its currency, which ultimately is how Putin funds finances war. This is how countries finances war, through the value of their currency. And the value of the rubles is down like 40%. So, Kyla, like, how much resources does Putin have left to make this war happen? Like, what's he got left in the tank? Ah, I mean, it'll depend.

And like there's talks of, you know, Russia could, they sell a lot of gold. But then now Biden is talking about how do we make sure Russia doesn't have access to their gold? So I think like everything that they're going to try and do. How could Biden do that? Where's Russia's gold held? Well, I'm not quite sure. I don't know if it's like an exchange metric or something like that. I saw this just today and they didn't have a chance to like read exactly what's that. I want to like I want to learn more about that. I mean, I don't really care. But like, does Putin have gold ETFs or something he's holding on to? Like in a vault in London? Or I would expect Russia to have sort of a Fort Knox version of actual physical gold somewhere. Yeah, it could be

physical gold and maybe they have contracts that are, you know, gold held in other countries. So that could be sort of the situation. I don't know the composition. I know they've been buying a lot of gold, but I don't know, unfortunately, like the composition of their gold. Because like, yeah, to the point I was like, oh, like that, that's just going to probably be something stable for them. but it turns out nothing is stable for them. If all you have is paper, certainly. Yeah, right? Like, all you have is like IOU contracts.

Like, that's not, it's not really gold. So, yeah. Yeah. So not like, not that much resources to continue financing this war? Ah, man. Like, there was something that I was talking about. Like, they'll spend their entire GDP, I think this is correct. They'll spend their entire GDP on the war in about to,

and a half months. So they're running out. And like, was that pre-s sanctioned GDP? Yeah. Yeah. And so like, they're still like getting about a $1 billion a day in gas payment, oil and gas payments. So like, they still got money coming in. And now with oil and gas going up in price, I think that'll be like north of 70 billion extra dollars per year. So like there's still with oil and gas coming in, like they're still doing okay. But now this isn't as big as Europe sanctioning it, but the U.S. like, hey, we're not buying yourself anymore. The United Kingdom is no longer going to buy oil. They're still going to buy gas.

So I think that's going to be the big thing. It's like that will be what economically, you know, messes them up. But I think with how long can they keep on going, it's however many tanks they have left. Well, is Russia able to sell a barrel of oil at the full market price? I thought they were being forced to have to sell it at a discount because like the rest of the world is paying like $110 a barrel. Russia selling it for a lot less. Well, this is actually super interesting, right? Because like, Russian oil has essentially sanctioned itself. And so, like, there's two points to this. Like,

one is how Russia is treating it. And then the second I saw the market is treating it. So, like, nobody wants to really touch Russian oil because, like, they're like, oh, my gosh, what if I violate sanctions? And it's a really big deal. If you violate sanctions, like you get in a bunch of trouble. And so you see, like, nobody wants to buy Russian oil. So to your point, yeah, that's not super good. And then also Russia, this is for Nord Stream 2, this isn't oil per se, but they're talking about no longer sending gas through Nord Stream 2 or Nord Stream 1, which is the gas in the pipeline between Russia and Germany. So like Russia could sanction everybody back, but Russia is essentially already like the market is already essentially sanctioning Russia.

And there's still like people are still buying oil from Russia, but yeah, definitely not at the same flow that they used to. Yeah, so one of the reasons why this situation is so delicate is like we have sanctions going from the west to Russia, but then we have Russian oil going and like Germany is from what I've gathered is more or less completely dependent on Russian oil. And so like while we have this sanction, we still have a flow of value through out of Russia to Germany. And I don't think Germany has many options to keep its energy supply available to itself other

than Russia. And so like it kind of has, and so this is, this is part of the swift sanctions that actually there has been a hole in is that they have, the sanctions have sanctioned Russia except for energy payments because like we just can't break that thing because that would be way too bad. Yeah, exactly. And Germany has been like really nervous, I think, about energy. Like the economy, the economy minister said, like, if, if we sanction oil and gas, like we could have essentially social unrest within Germany. So he is pointing out to this, there's so much reliance on Russian oil and gas across Europe.

Like, Russia supplies, I think, like 30 to 40 percent of Europe's gas, which is a really big deal. That's like people freezing in the wintertime kind of supply flow, right? And so that's the big worry is that, yes, we don't, nobody really wants Russia to have the inflows that they would need to finance a war, but also there's these global consequences of globalization, which is what Germany, Europe, et cetera, has run into. And now they're saying that they're going to pivot away from Russian oil and gas, and they're going to return to coal. So that's a good one,

but not a new healer. So it's just funny. Like this whole energy market situation is just really interesting to watch unfold. Yeah. I think if listeners, watch your YouTube, they would have picked up on the micro expressions that you just gave off. But I think the average listener might have missed that. So Germany is going back to coal, but not nuclear. Can you unpack that for us? Yeah. So, like, I mean, Europe is, Europe had a really good intention with trying to switch to green energy.

And they had a bunch of green energy policy, but they didn't have the necessary infrastructure in place to have, you know, they didn't have green energy investment. That's what I say all the time. no can have green energy policy without green energy investment. And so that's the big issue with Europe, is they're like, yeah, like let's rely on renewables, solar, wind, et cetera, but that's not that reliable. And so they have nuclear power plants, but they're shutting those down. And nuclear power plants are a little bit expensive to maintain. And I think that they're still like the broad worry about that, which is, you know, that's been disproven. But that's kind of the situation is that Europe.

Nuclear meltdowns and like a breaking of a plant. Yeah. Yeah, yeah. And so I think that's the big worry with Europe is that they're trying to have renewable energy and just rely on that, but they can't. And so they end up relying on Russia instead. Okay. So you've brought up the globalization and supply chains. And so I think that's kind of where we want to take this conversation next is I think we're as a species, we are discovering the relationship between like globalized supply chains and sanctions. how the interactions between these two things don't actually really work so well. Can you kind of illustrate for us why, like, the state of our global economy might be extra sensitive to sanctions on Russia? Yeah, I mean, I think there's two points to that. Like, one is the sensitivity after the pandemic.

So, like, already supply chains were in a disarray, already commodities were sort of in a disarray. And so that is already not super good. I mean, like, we already kind of had a shipping crisis where the, ports of LA were stacked up super high with containers. And then to the second point, we just have become so reliant on this idea of comparative advantage where it's like, oh, Russia can produce oil essentially a little bit more cheaply than we can or whatever. And so we start importing Russian oil instead of producing it here. And that's really great because it allows for things to be less expensive, but it also leaves a lot of risk for if something of one of these dominoes topple,

all the dominoes are going to topple because it's a line of dominoes. So that's kind of the problem is that everything is interconnected, especially like commodities. And yeah, so. I think listeners, no matter where they are in the world, will have noticed that the price at the pump has shot up, like, massively. And it's pretty alarming when that happens. It's not just gas prices. It's also like other commodities, like wheat and corn, for example.

Can we talk about this commodity crisis that we're seeing? And so why is this happening? And is this just sort of a contagion? Is this a direct result of the sanctions? Is it more a result of the war? Is it the whole thing combined? Why are we seeing this? Yeah.

So I think like said Kennedy had a really good quote about sort of what's going on in commodities in general, that prices are moved by fear, not fundamentals. So I do think that there's an element of the war that's being baked into. commodity markets, but then also, like, people are afraid. There's a lot of uncertainty. There's, and I'm not saying that to, like, be a fearmonger, but like, literally people are really worried. You know, Ukraine and Russia together, 25% of global wheat exports. You know, we already talked about Russia is just being a huge exporter of oil. I think together, they're, like, a huge amount of sunflower oil exports. Ukraine is a huge producer of neon, like an element of

neon that goes into semiconductors. And so there's all these, like, different things. that are going into each other. And so like energy and agriculture and commodities are sort of a common denominator to all other goods. So like if the price of wheat goes up, you know, the price of bread is going to go up too just because wheat is an input into the bread output system. So that's kind of the worry and that's what we're seeing in the markets is that all these commodities are going up in price and that is going to make potentially other

goods go up in price as well. just because of that pressure. I think that's where the R word starts to come in, that word recession. This is something that Jim Bianco tweeted out, I believe earlier this week. Not every recession is led by a 50% rise in crude. Crude oil he's talking about, but every 50% rise and crude has led to a recession. Other commodity price indicators saying the same thing. I've seen people talking about the price of wheat going up and that being a key indicator

of a recession. So is that where we're headed? Is this what's going to happen now? We are now entering 2022, first quarter, and we're going to have a recession in the second quarter, and maybe for the rest of the year. Is that what it's looking like? Well, so I guess if you want to get really technical, the official definition of a recession is going to be a significant decline in economic activity for about two consecutive quarters. That was recently changed to be like over a few months. So like this will, it'll just depend on how long all of this last. I think a bigger worry is like this concept of sagflation where we have higher inflation

and just a broader growth slowdown. Like the labor market has been doing okay. But I think just this, like the price pressure is really going to be, you know, what like it's a gym's chart. Like, yeah, if you see crude oil go up that much in price, it's really hard not to have a big, big economic slowdown because all of a sudden, you know, trucks have to have oil where they can ship things. And if their shipping process becomes more expensive, products are going to have to become more expensive. Businesses are going to have to charge more.

And you do see a lot of pressure or a lot of movement in the bond market, like the yield curve has gotten a little bit closer to inverting. And that's always a big warning bell. So I'm not sure if we're going to have a recession. I hope not, but things are looking a little squeasy. Yeah. For a metaphor for the crypto-native listeners out there,

is like when gas prices go up, think about gas prices on Ethereum. Like, when gas is 400, when gas is 400, Gway, like, and you open up in that

transaction on uniswap and it costs you $100. Sometimes you just close your laptop and you just don't do anything at all. And that's akin to like not going, not driving your car to go do that thing or having just the cost of going to work just higher. everything just costs more in the world therefore economies just slow down and this is what a recession starts to look like so this is the conversation that we're that we're having another very fundamental commodity to the world is wheat and you already mentioned it a little bit but like so much wheat comes out of ukraine and also russia and from from what i've gathered some ukrainian farmers have said that like there's zero chance that we are being able to

to export the crops that we previously would have a year ago now, just because it's too disrupted, it's too late, there's no way to get this up and running. Tyler, can you kind of illustrate for us the knock-on effects of just like a wheat shortage in the world? Oh, yeah, I mean, it's super worrying, right? Like, Egypt is a huge, I think, the number one consumer of wheat from Russia and Ukraine. So you just, in, like, Africa, too, yeah, this article does a really good job.

highlighting just the risk effects of not having meat. And when you don't have food, that leads to a lot of political instability, like we saw with Erid Spring. So I think that's the big worry is that if people aren't going to be able to eat, that, I mean, that's horrible. And so that's the problem. And you're starting to see countries enact more protectionist measures.

So Hungary is no longer going to export grain. And so I think we're going to see a lot more countries begin to stockpile and say, oh, you know, we're not going to export as much this year. So that that's the bigger worry. And then, you know, Ukraine is the top four corn exporter as well. And, you know, so, yeah. And then something I've seen going around is the nickel, the price of nickel is just through the roof. Is this relevant to the invasion or is this something else? So sort of.

Like, it's a short squeeze. in nickel. And part of the reason is like Russia is only about 7% of nickel. But, you know, nickel is super important for stainless steel. But nickel is a short squeeze. So there are a lot of people, a lot of traders are short nickel to sort of hedge against physical positions. And then there's this like very large fund in China, a very large company in China that is short a lot of nickel. So if all of a sudden the price kind of goes up a little bit, that leads to a short squeeze. So that's why nickel has been going up so much. It's not really like physical supply. It's just market dynamics.

Yeah. Yeah, and all commodities across the board are going up. Like we've talked about weak, gas, corn, but like there's iron, there's copper, soy. Like commodities in general are just up across the board. What should we take away from just higher, globally higher price commodities? Like what should we be paying attention to? Yeah, I mean, I think it's just like a function of uncertainty and then a function of supply chain.

So if there's a war going on, it's a little bit harder. to sort of have a supply chain that functions, especially near Russia and near Ukraine, because you know, crossfire or whatever. So I think that's the big worry is like, how does this actually play out? And then Russia and Ukraine are the breadbasket of the world and just huge components of the energy markets. So I guess the broad takeaway is that things are going to probably be a little bit more expensive. Yeah. Kyla. Sorry, before you do that right, you said, Kylie said a little bit more expensive. Is that you moderating your language just because that's kind of what you do or what?

Yeah, like I never think it's helpful to be like things are going to be really bad and horrible. And this is the end of all times. Like I think that there's solutions, right? And I think that if one thing that has happened during this war has been, we've seen how humans can innovate and sort of rally behind each other. So I think like that is what I'm hoping for to happen is that people are like, okay, like we can sort of figure out this agriculture situation. We can figure out this energy situation. Like, you know, U.S. senior officials went down to go talk to Venezuela about getting

oil from them. So I think that there's going to be solutions, but I do think things are going to be a little, yeah, like maybe I should not hedge as much, but yeah, expensive with a capital E. So, yeah. Not pessimistic over here, but definitely want to be prepared, I think, for what's a and there's definitely seems to be a lot to prepare for. All commodities going up except crypto. Isn't Bitcoin and Ether? Aren't they commodities? They are not going up.

But we have a few more things we're going to cover, including crypto. But first we want to talk about inflation, the Fed response to all of this. What's Jay Powell going to do in the face of inflation and the prospects of a recession? So a lot more to cover. But before we do, we want to thank the sponsors that made this episode possible. When you shop for plane tickets, you're probably. probably use Kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure you're

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No matter how big or small your idea is, you can apply it for a unique grant at uniswapgrant.org and help steer uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring bankless. All right, guys, we are back talking to Kyla Scanlon all about what is going on in the world. A commodity crisis. Let's talk about on the back of this. So commodity prices are increasing. Maybe a recession, like there's whispers of a recession. It's to be determined. and to be to be proven. But just a month or two ago, the talk in the macro world was all about what is the Fed going to do next. Are they going to raise rates? Because we had and still have inflation at like 7, 8 percent CPI. That is outside of the Fed's mandate for what inflation is supposed to be in a healthy, well-functioning economy. And now Jerome Powell has the potential of a recession on his hands, too. What's the Fed going to do? And how does any action that the Fed does do in the back of this change things.

Yeah. So Jerome Powell testified in front of the government last week, and he was very clear. And he said that they were going to hike rates by 25 basis points in March and was like, I don't see a whole lot of, you know, geopolitical contagion happening from the war. This was before all the, this was a little bit before all the sanctions happened. So I'm not sure how he's feeling now. But to have a Fed, the chair of the Fed come out and be like, I'm raising by 25 basis points is a huge, huge deal. So it seems like they're going to do that and continue to on that hiking path. I'm not sure if that has changed since then.

Like the ECB was they're having their meeting this week and they were supposed to also, you know, talk about hiking rates, but that's not happening because they're like very deep into, they're in a little bit of a worse off situation than, you know, United States is just because of their reliance on Russia to the, you know, locality that they're in, and they're basically torpedoing towards a recession at the moment. So it seems like the Fed is still on their hiking path to sort of manage inflation, but I think the broader goal of the Fed will be just stability in general, like we saw during the pandemic. So I'm not sure, though, because it's kind of not awesome because they used up their toolkit during the pandemic. Like, it's not really like they can lower rates right now. I don't think they should because inflation is so high.

But we might see some unique monetary policy action because of this. Yeah. The timing that this conflict is happening is just unfortunately perfect if you want, if you want bad things. It's a perfect storm. Perfect storm. Thank you. Thank you.

Yeah, we're just like, oh, yeah, we're just coming out of COVID. We have a small needle we can thread. with like managing price stability and labor. But we think that we can do it. And then boom, Russia invades Ukraine. Like it's really couldn't happen at the worst time. And I want to actually try and get a definition underway because like we're seeing

commodity prices go like, you know, up basically, making the cost of production also go up. Is that different from inflation? Is that separate from inflation or when all but or when all commodities go up equally across the board relatively equally, is that actually what inflation looks like? So they're not really the same thing. Like you're not like, oh, commodity prices inflation. Like inflation is theoretically it is a decline in purchasing power. Commodity price increases are the movement in prices of goods. So they're not like this, like you can't look at, you know, wheat and be like, oh, we increase 40% over the past week. Inflution is 40% across the board,

right? Like it's more of a basket of goods. And it incorporates a lot more than just, agriculture and commodities and incorporate services as well. But, you know, there's a St. Louis Fed actually has an analysis around this and there is a pretty positive like a 0.7 correlation between commodity prices and inflation. So like if you see to Jim's chart, like if you see oil increase like yeah, like a recession might happen. If you see the price of different energy things increase like, you know, inflation is going to happen. Like that is going to end up carrying out into different products because that is a common denominator. So like oil is super like energy is so inflationary because that ends up showing up across the board

because energy is such a common denominator to everything. Like everything like, you know, this pin is made with oil. Like, ah, right? So it's just like super interconnected. And so if you do see the price of different things move, like that will show up in inflationary pressures eventually. Yeah. So, Kyla, use this term stagflation, right?

And that's a scary term. but that means basically, you know, recession, so GDP going negative while we have precipitous inflation. Is that the correct definition of stagflation? And we saw that during the 1970s. There was also an energy crisis in the 1970s. Is this a similar pattern? Are we just kind of going to play out the 1970s again? I'm not sure if it'll be exactly like the 1970s, like this geopolitical risk, I think, is a pretty big deal.

But yeah, I'm not sure. Like that's a super hard thing for the Fed to manage like the concept of sagplation because it's like you can't really hike rates because to manage inflation because you have a gross slowdown. And if you hike rates, like that is going to cause things to slow down even more. So I'm not sure what will end up happening from a policy perspective or if it's really similar to the 1970s. So we'll have to see what Powell does then. he's kind of in a rock, between a rock in a hard place, with respect to raising rates or not. Yeah. Yeah.

And it's, I'm not sure. I'm not sure what the right answer. Like, obviously, who knows what the right answer is? And they were already in between a rock and a hard place. Like, I don't envy their job at all. But I think, like, they probably had their foot on the gas in terms of easing for a little while too long. but also like war is inherently something they can't manage super well. From what I gathered before all of this Russia invasion of Ukraine mess,

businesses were already having trouble keeping up with being competitive with wages for their employees. And so I'm wondering like when the cost of goods for so much of just like the economy increases can businesses support that? Like how many businesses might end up getting washed out if these persistent commodity prices do stay high? Yeah, I mean, so this is interesting, too, from a fiscal policy perspective, because Biden made a comment during his State of the Union,

which was, I think, last week. Like, time is literally not even a concept anymore, but I think it was last week. And so he was basically telling companies to cut their costs to manage inflation, like, just do that, which is like, oh, that doesn't really work because everything is so expensive, right? Like, the PPI, like, it's high, too. It's not, it's producer price index. Like, producers are feeling the inflationary pressure as well. And to the point about wage is not

growing, like, yeah, oh. So I'm not sure how businesses are going to be able to manage it, because theoretically, when inflation is so high, your employees should probably get a little bit of a just to manage the cost of living a little bit better. But if businesses are also fighting, you know, higher input costs, like whether that be from maybe like they use wood or they use wheat for their bakery, that creates a lot of problems too. So I think it's just like that you've already seen a lot of worry, I think, from managing these costs.

So I'm not sure how businesses are going to respond. I'd imagine it's going to be difficult. The same conversation is probably true with individuals, right? Like we've already seen milk prices go up. We've already seen gas prices go up. Like these same challenges that businesses are going to have to face or also going to have to be faced by individuals. Yeah.

I mean, I think that what's happening is obviously, like, incredibly unfortunate. But when you have energy prices increase like this, it really puts a lot of pressure on lower income Americans because energy is a larger portion of their total expenditure. So I think that you're just going to see probably like an increase in wealth inequality because it's a little bit harder to manage the energy increase, the price of gas increasing. And the price of gasoline is not a huge expenditure as a percentage of total expenditures for the average American, but that just puts pressure on the bottom line.

And, you know, Americans have a lot of excess savings because of COVID. but that's going to be blown through pretty quick just because of how much gas has increased in price. Like I don't drive a car, but I know that I think it's like it's on average like $4 a gallon everywhere, which is like that you only need to see that in California. So it's gotten so expensive and that's going to hurt everybody. And then lastly, before we kind of zoom out and look at this thing whole holistically and also with crypto as well, supply chains was this was a big conversation that we had. when we had you on the podcast.

Supply chains are already in a predicament. How are supply chains being stressed by just the events of the last like 14 days or so? Yeah. I mean, so like there is a good Bloomberg article called the only container ship in Ukraine. There's just one little container ship in Ukraine just stuck there. And I think that's probably pretty metaphorical for just how all supply chains have to operate right now. Like there's a lot of like how do we get things across the border?

Like not across the border, but like from a point. X to point Y, like how does that actually work? You know, Russia and Ukraine are such big components of, you know, as we talked about extensively, the commodities market. And so I just think that you're seeing pressure again on supply chains and pressure again on the functionality of them and sort of how everything is supposed to flow. It just isn't flowing the way it's supposed to. And to the point earlier about dominoes, like when one supply chain domino tips, all the supply chain dominoes start falling. So that's, yeah. So, Kyla, do you have a perspective on how this affects crypto, how this impacts crypto? And I feel like people we talk to in the market are kind of undecided. And then maybe the market itself is somewhat undecided. Because, of course, crypto is sort of a risk on asset in that when people are feeling bullish and when there's high growth prospects, they're more likely to pile into crypto.

And yet it's also supposed to be this non-sendarm. sovereign store value. That means it can't be censored by a central government. It can be an outlet for the people, whether they're Ukrainian or whether they're Russian, to actually escape from their sanctioned and devastated financial system. And it can also be sort of a inflation hedge, at least in the long run, maybe that's the hope against some of the government inflation of their fiat currencies and bonds. And so right now, crypto is down, has been going down since since kind of the beginning of the year. How do you think the story plays out in crypto? Yeah, I mean, I think it's been interesting, right? So there's probably two parts to it.

Like, you know, to your point, like crypto is meant to be this escape route, this tool. But I think the worry of regulations kind of bite into that a little bit. And I, so I think to that point, like Russia is, this is very clear, and the U.S. Treasury pointed out, Russia is not going to use crypto to evade sanctions. Like, that is just not something that you can do on a public ledger. But you have seen, like, Ukrainians and Russian people being able to use crypto to, you know, save and store their wealth, which I think is super important. But then you've also seen this broader question around, you know, a decentralized asset on a decentralized exchange. And what role does that centralized exchange, like Coinbase, FDX, et cetera.

Well, I guess they're not technically centralized, but Coinbase, for example, like what role do they play in complying with sanctions? So I think that's sort of the question is like you have this thing that is inherently decentralized, but how does that actually work from a more centralized perspective? And I think that's like what everybody's trying to figure out. And then Biden is citing in this executive order that's supposed to be this big, and this has been in the works for a while. this week he decided to sign it, I guess, but that's supposed to be this big streetpeak order

around how they're going to oversee cryptocurrencies, how they're going to impact, or how they're going to work around with CBDCs, and just the economic impact of digital assets in general. So I think that, I think it's just a lot of uncertainty in the crypto market. And then I think this is like a broader theory, but I think a lot of crypto has gotten a lot institutional dollars recently. And so it ends up sort of trading like tech would, like a risk asset, like you said. So I think that's like there's just a lot of different factors that are moving it right now. I actually think that this conversation from regulators about targeting the crypto centralized entities like the coin bases, the binances, which have actually

started to fall in line with the request for sanctions is a fantastic way for the politicians and regulators of the world to like claim victory in a sense like oh like crypto is aligning with our sanctions like good job and like kind of leaving the underlying networks where they should be as underlying networks that can't really answer to sanctions so I think the fact that like the centralized entities are actually responding towards sanctions is actually giving them like a sigh of relief I think it's like oh okay we can regulate this industry it will respond to our needs And also, I do want to, before we kind of wrap up here, I do want to touch on something I know you're paying attention to, which a thread that Jake Chavinsky put together, which is that when you sanction someone, it's not that you ban them from sending money outbound, it's that you restrict countries from receiving the inbound payments. Kyle, can you kind of explain that nuance and how that's related to all these sanctions?

Yeah, so I haven't seen that exact thread that he posted. I know I saw the one where he. he was explaining, like, you know, Russia's not going to use sanctions to sort of evade, or not going to use crypto to evade sanctions. But I think, yeah, to that point, like, crypto, yeah, I actually don't quite know how to answer that one. But yeah. More or less, just for the listeners, more or less, it's when you sanction a country, what you really do is you make it illegal to accept that country's money. So, like, the payment rails can still exist, but, like, you make it a legal.

for a business to accept Russian money or to accept Russian oil. And so it's not like we are restricting Russia from sending money outbound, even if it was using crypto. What you're doing is you're making it illegal to accept Russian money from the business perspective or from the receiving perspective. And so like the whole permissionless side of crypto rails actually is less relevant here because really what you're doing is you're using your influence saying like if you accept Russian money, it doesn't matter if it's crypto or ACH or wiretrans.

for it doesn't matter, but if you accept Russian money, you'll go to jail because of sanctions. And so, like, that's a, I think that's a nuance that's not really being made relevant, I think, in the conversation with regards to crypto and sanctions. Anyways, just wanted to bring that up. No, it's a good point. Yeah. As we kind of close this out, then, I'm curious, how does this end? Like, next steps, not end, but what happens next, I guess, is a question.

And then cyclist forward, what's a reasonable worst case for all of this? And then also, what's the reasonable best case? And, you know, realizing that, like, the truth often falls somewhere in the middle and reality is somewhere in the middle. But worst case outcomes of all of this and then best case outcomes of all of this that you can see right now. So to be candid, worst case nuclear warfare. Oh, yeah. I forgot about that part.

Yeah. Yeah, and it's not like Putin can go up and press a big red button and send nukes, but yeah, like he's threatened them twice, essentially. So just the end of the world is the worst case. Yeah, I mean, if you're speaking in terms of like extremes, yes, of course, like that's going to be on that end of the distribution. And that is scary. And then I think like the best case scenario would be.

that they negotiate. Putin goes back to Russia or whatever, or hopefully gets booted out of office, gets replaced by somebody who is willing to, you know, give Russian people the life that they deserve and to treat them with the respect that they deserve and not invade other countries. And there's negotiation. Maybe Ukraine doesn't become a part of NATO. That's fine. I think they seem to be open to that idea and there's just, I think that, you know, the best, like, what's been interesting about this war, because you have seen the West become so much more united. You've seen Europe, like, finally wake up and kind of like become countries again, which has been, I think, really important instead of just like, oh, like, we're going to be friends and hold hands forever. Like that,

that's just not how geopolitics works. And so I think that the best case scenario is that Ukraine retains sovereignty that this war ends as soon as possible. And that, that's just that. And that's that the world, you know, I think from a geopolitical relations perspective, is a little bit more connected. But I do think that we're going to have to start seeing some more production within each country versus perhaps relying on a global supply chain. I do think it's actually worth repeating that there is a best case scenario that does involve basically everyone in the world just rejecting Putin and him actually being ousted from Russia. I think people are, it's not perhaps the most likely path,

but I think people are seeing a path towards the actual removal of Putin from Russia just because he's pissed off everyone, basically. Yeah, I mean, I can't imagine the Russian people are going to welcome them back with open arms after this, you know. Well, he's still in Russia, but yeah. I can't believe it's only year two of the 2020s, guys. What a mess so far, huh? It is chaotic. when christen this the weird 2020s, but it's certainly a chaotic couple years so far.

And I think it's a perfect opportunity for people to kind of get prepared and understand. Again, not be pessimistic, but be prepared. And I do think that crypto is going to stay a part of this story as people maybe need to escape at various times their existing financial system and leave with some of their assets. Kyla, thank you so much for guiding us through all of this. And it's a number of complicated topics. They're all being interwoven. You do a fantastic job of doing all of that.

And we appreciate you spending time with us today. Yeah, no. Thanks for having me on. Guys, you got to go subscribe to Kyla's YouTube as well as her substack. She writes fantastic analysis. There's more videos like this on her YouTube as well. You can find everything at Kyla scanlon.com. We'll include a link in the show notes.

Also, if you like this, don't forget to like and subscribe to the bankless YouTube channel. Make sure you do that as well. Of course, guys, risks and disclaimers, none of this was financial advice. We wouldn't presume to give you financial advice on bank list. Never do. Bitcoin and ETH are risky. So are the fiat currencies of the world. 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. Thank you.