BTC Sessions - $1 Trillion Daily Repos, Coinbase Exec To Oversee Banks, Bill In Senate Aims To Torpedo Encryption EP029

Starting point is 00:00:01 Wasabi wallet. I'm fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Before we dive in, of course, shout out to sponsors of the show, leaden.i.o. This is where you can use your Bitcoin for a variety of different services. They, of course, have their Bitcoin savings accounts where you can earn interest on your Bitcoin. They have their Bitcoin-backed loans and this was, the first product of theirs that I myself personally used just over a year ago now. I was in a pinch. I needed to get my hands on some dollars, but I really didn't want to sell my Bitcoin because I felt

Starting point is 00:00:46 like it was a bad time. And luckily, I mean, looking back, it actually was a bad time for me to have sold. So I ended up getting a Bitcoin back loan. So I used my Bitcoin as collateral, got dollars, and was able to pay those dollars back later. At which point, Bitcoin was at a much higher price and I wouldn't have been able to buy back as much, but I was able to secure my Bitcoin and ensure I didn't sell it at a terrible time. And I all was right with the world. And beyond that, they also have their B2X offering. So this is where you use Bitcoin as collateral, obtain a dollar loan and immediately use those dollars to buy more Bitcoin, essentially doubling your Bitcoin. And allowing you to experience the price fluctuations that come along with

Starting point is 00:01:34 So if you want to check out any of these services, there's a link in the show notes down below. And if you opt to get a Bitcoin back loan using those services or using that link, they'll actually credit you with an additional 50 bucks worth of Bitcoin. Secondly, we have Paxful. This is an online peer-to-peer Bitcoin marketplace. You can buy and or sell Bitcoin there along with a few other interesting things that you can do. Now, this is particularly useful for those of you that want a lot of flexibility. with payment methods. They've got over 300 different payment methods. So things like bank transfers, e-transfers, all of that, popular payment apps like PayPal and cash app. And then things like buying Bitcoin

Starting point is 00:02:16 using gift cards. So lots of unique payment methods on there. And on the flip side of that, if you're looking to make a bit of money by buying and selling, you can set yourself up as a merchant and set up your own offers and make a fair amount of coin on the spread, actually, which is really nice. They've also got a killer affiliate program. And if you're looking for super cheap gift cards that you can purchase with Bitcoin, this is the place to be. I've seen Amazon as low as 20, 30, 40% off. It's pretty wild. So be sure to check them out. Paxville.com. There's a link in the show notes as well where you can head over and sign up. With that, let's dive into the news. So plenty, plenty going on. I'm a bit out a loss for how wild things are when it comes to the excessive, what other way to put it than

Starting point is 00:03:08 just money printing that is happening. But we will dive into that in a moment. First, an interesting little tidbit here, the U.S. Treasury Secretary, Steve Mnuchin, appointed the Coinbase chief legal officer to oversee the banking system. So he stepped down from Coinbase a little while back, and now, yeah, he's overseeing the banking system. So a little excerpt from this article here from DailyHoddle.com. U.S. Treasury Secretary Steve Mnuchin, a long-time cryptocurrency and Bitcoin skeptic, has named Brian Brooks as one of the country's top banking regulators. Brooks will serve as the next chief operating officer and first deputy comptroller of the office of the comptroller of the currency.

Starting point is 00:03:54 after he stepped down from his role as chief legal officer at Coinbase, the largest cryptocurrency exchange in the U.S. The OCC or the Office of the Comptroller of the Currency established in 1863, they are the primary regulator of banks and federal savings associations in the U.S. issuing rules and regulations that govern the banks, its supervisors, and taking supervisory actions against banks that fail to comply or otherwise engage. in risky practices. So that is a description of what Brian Brooks's role will be there. However, the interesting thing is how at odds, seemingly at odds, as he is with Steve Mnuchin's views on cryptocurrency and digital currencies. So while Mnuchin is very dismissive of digital currencies, this guy tends to want to tokenize the U.S. dollar and create a digital U.S. dollar. So he did write this in November of 2019, Brooks wrote,

Starting point is 00:05:02 The Time has come for a tokenized version of the dollar. And it's not just those of us in the cryptocurrency world who thinks so. In recent months, senior U.S. officials have been exploring the idea of minting greenbacks on the distributed ledger software known as a blockchain. The idea appears inevitable. So some people are kind of drawing this as a change in tune for Mnuchin. I don't think so, but I do think that there is opportunity to exploit his knowledge of the industry, maybe to clamp down and regulate it as well.

Starting point is 00:05:45 Either way, you've got somebody that, was in a sense very pro, I won't say pro Bitcoin, but pro cryptocurrency that is now overseeing the banking system. So I'm a little bit unsure whether this is a positive or a negative, but in the end, regulation is not banning. And it is an admission of, I guess, defeat in some sense where they know that they can't stop this stuff, so they may as well try to regulate it in some sense. So we will see how that goes forward. Again, nothing crypto-specific in his title, but that may bleed over a little bit as they look at potentially regulating cryptocurrency exchanges, potentially through him. Who knows? Anyways, let's move on to the insanity

Starting point is 00:06:44 that is happening with the Federal Reserve and the money printing and the repo markets and QE and all of that. Yesterday we talked about quantitative easing was announced $700 billion as well as $500 billion for the overnight repo markets. And then there's this announcement here that says 500 billion operation for overnight repo funding markets. You might be thinking, why are you covering the same thing again? I'm not, this is a new announcement.

Starting point is 00:07:20 Another, yes, another, I'll outline it here in the video, another $500 billion. Another $500 billion. Beyond that, they're going to continue, where is it? I need to find it here. There we go. Yeah, yeah.

Starting point is 00:07:39 So this was earlier today, 500 billion operation for overnight funding in the repo market. because, well, as the day went on, this one just dropped, and the New York Fed is now pledging to offer $1 trillion a day in overnight repo loans. So they'll be dropping $500 billion each morning and additional $500 billion each afternoon. A trillion dollars per day for the repo loans. I'm totally at a loss for this. It's, it's unbelievable to be even reading this. They're, they're essentially printing multiples of the entire Bitcoin market cap every single day. Every, like 10x what Bitcoin is worth right now. They're printing every single day. Unbelievable. And I, as you can tell,

Starting point is 00:08:40 I'm, I'm at a loss for words. And on top of that, Newton came out today, essentially announcing helicopter money. Now, those of you unfamiliar with the term, that's essentially just giving every person in the country money, printing money, giving it to every single person. Now, the contrast here to what has been done with some of the other printing, with things like the repo markets and things like quantitative easing, essentially that liquidity is injected directly into either corporations or banks, which then use it to either buy back their shares or buy equities or get rid of debt. But regular people see absolutely none of that. So in a sense, this is a slightly more positive thing in that it's short-term benefiting everyday citizens.

Starting point is 00:09:38 However, there's going to be a consequence to that. So when all of that liquidity was injected through QE back in 2008 through 2014, that money, as I said, was used to buyback shares or purchase equities, which funneled us into one of the longest bull runs in recorded history for the U.S. stock market, which is now being deflated now. The bubble has been popped. and they're furiously trying to re-inflate it with all of this extra money. So what ends up happening when you drop money to individuals to everybody in the country

Starting point is 00:10:22 and we don't know how much money this is, but essentially, I'll read a little bit from this. They said, Treasury Secretary Steve Mnuchin said Tuesday that the Trump administration was considering offsetting the economic burden of the coronavirus pandemic by each. immediately cutting checks to Americans. Manuchin, speaking at a White House press conference, did not say how much money Americans could potentially expect to receive and indicated that the administration would seek to exclude those who are well off from receiving payments.

Starting point is 00:10:54 We are looking at sending checks to Americans immediately. Americans need cash now, and the president wants to get cash now. And I mean now in the next two weeks. This isn't the first time that this idea has been floated, although this is the first time from the Treasury Secretary. Even just earlier this week, Senator Mitt Romney of Utah had proposed sending every American $1,000, and that was a lot of support was signaled for that. Now, the main difference between dropping money on banks and corporations, which would then funnel a massive bubble in the stock market, when you drop it to everyday citizens, and you essentially give away money in the streets,

Starting point is 00:11:40 what happens is that money contributes directly to inflation of the actual currency. And so what I mean is when it's funneled into a specific area like stocks, those go up. But when money is just given to everybody, the price of goods go up. So while initially people will see, oh, great, I have money to.

Starting point is 00:12:07 to pay for stuff. I can cover my basic needs. The thing is, with every single American receiving who knows how much money, all of a sudden, the monetary base at the consumer level is much higher, and prices will likely increase because of that. And people will realize that the money that they've just been dropped would not have bought as much as if it hadn't been dropped in the first place. not only that, but their expenses from then on in could likely continue to grow, especially if they continue to drop money. And then you get into an area where hyperinflation is indeed possible. I believe this could be the first step towards UBI, universal basic income, which gets us on a road to potentially hyperinflation if it gets out of control, which I don't see how you reel that back in

Starting point is 00:13:05 once you've set the precedent. So we will see, but man, they are using a lot of ammo on this stuff. They dropped interest rates to zero. They're doing QE. They're injecting trillions into the repo market, a trillion dollars every single day, and they're already doing helicopter money. And really, this crisis on its head, we've only been panicky about this for about a week and a half.

Starting point is 00:13:31 and for them to have done this much this quickly is it's terrifying honestly to look at this full panic mode and the markets I don't think have seen the last of the drops I think they've got further to drop anyways

Starting point is 00:13:49 moving on in the midst of this while everybody is super distracted by chaos in the markets and the virus worldwide some sneaky legislation is sneaking into the House, or into the Senate rather. So the Senate is trying to get through a bill called Earnet. And Earnet stands for the eliminating abusive and rampant neglect of interactive technologies act. Now, what does this do?

Starting point is 00:14:22 Essentially, it will torpedo strong encryption. And they do this through a mechanism. that fails to protect corporations for people using their, or tech corporations, from the people that are using their platforms. So this whole bill is under the guise of protecting everyone from child predators, people that are sending illicit pictures of underage kids, which is a terrible thing. However, they're saying we need to essentially backdoor all encryption in order to stop these crimes and catch them in progress, which just is not true. And it also compromises the encryption and privacy of children that are on websites already using them normally.

Starting point is 00:15:19 And so what this would do is if something... is using a platform that is would have been encrypted and they're doing something illegal, well, at this point, if this bill passed, then the, the actual platform itself would be at fault for the content that's on it, which would then mean and would kind of pigeonhole all these companies into canceling encryption and parsing through all of the data of everybody going through it, which is a scary precedent to set. So it's very imperative that this does not pass because in it could open up a whole rabbit hole and open up Pandora's box where all of a sudden there's just no such thing as privacy anywhere. And the thing is when you create a backdoor

Starting point is 00:16:16 to encryption, the back door is accessible, supposed to be accessible just to. the good guys. So let's say that the government was altruistic and had everybody's best interests at heart, even if that were the case, which who knows what the next regime could be and any new politicians coming into the mix. Aside from that, other people can gain access to these backdoors. Just because you say it's only for the good guys doesn't mean only the good guys will gain access. So by backdooring encryption, anybody can gain access to anything that's supposed to be encrypted. So this is just a terrible idea altogether. I encourage you guys to head over to sign the petition to kill this bill.

Starting point is 00:17:11 It is over at action network.org. I will have a link down in the description. I also have a link to the actual act. if you want to parse through the entire thing. Either way, terrible, terrible idea. I hope it doesn't pass. Moving on from there, with all of this, and again, I'm sorry that a lot of this is focused on kind of the macro situation in the world economy, but this is very, very relevant to Bitcoin in and of itself. So I hope you'll excuse me from not focusing too much on Bitcoin these past few days. Anyways, a test for Fiat as U.S. Bank runs loom.

Starting point is 00:17:54 Now, ominous title, but I do think it has some merit. So just as the stock market was suffering its worst day in three decades, a Midtown Bank in America, a Bank of America branch in Manhattan saw lines of people at ATMs. They were trying to withdraw cash and they were draining accounts. sometimes tens of thousands of dollars at a time. The branch actually ran out of $100 bills, and people could not access their money in a sense. Now, following this, you had the managing director and Mantis V.C.

Starting point is 00:18:35 And a Forbes contributor, her name is Tatiana Kaufman. She was on Twitter just the other night. And she said, Bank of America is limiting cash withdrawals to $3,000. expect that number to drop over the next few days. Kind of ominous, there's not a specific source on this, but worrying nonetheless, and I mean, I have heard rumblings of people taking out sums of cash and putting it in their safes and getting it out of the banking system, they're just worried that if something ceases to function, they won't be able to access their money.

Starting point is 00:19:17 Even my former boss, Francis Pouliott, the other day, was saying he literally point blank said on Twitter, go to the bank, withdraw the maximum daily amount every day. Which he got a lot of pushback for that. But, you know, I see where he's coming from and it is worrying. And if the run on toilet paper is any indication. of how crazy people can get in a crisis, imagine if people start taking out money from the bank en masse. And we now know that the reserves are non-existent

Starting point is 00:20:00 because just the other day, the Fed said that the banks no longer need to have any reserves. So think of how little cash actually exists. Just for a reference, only about 8% of all money today is actual physical cash. The rest is just digits in a computer. So if this computer's failed to work, then there's an issue. So we will see, but I'm hearing rumblings.

Starting point is 00:20:31 I'm hearing little whispers around Twitter. I'm seeing articles. I'm seeing things like banks running out of cash in certain instances. I'm seeing things like reduced withdrawals. even ATMs here depending on your account they can limit it to a thousand dollars a day sometimes so and we know what happened during the the Greek banking crisis they could only take out 60 euros every single day so while I'm not saying that there should be a bank run I am saying that it's not a terrible idea to have a little bit of cash on you just in case anyways I'm going to wrap it up here

Starting point is 00:21:12 with two tweets, two tweets, one from this in Numeris on Twitter, he said, last 24 hours, and this is missing the $1 trillion in daily repeal injections, by the way, but last 24 hours, IMF printed $1 trillion, America printed $700 billion, China printed $100 billion, England to print $74 billion, Italy printed 27 billion, India printed 13.5 billion. South Korea printed 9 billion, Austria printed 4 billion, Australia printed 5.4 billion. Japan doubled their printing. Regular folks will not see a single cent of that cash. And the second one, from author of Newt Svanholm, he said,

Starting point is 00:22:03 700 billion USD yesterday. 500 billion USD today. No schedule, no limit, no guarantee. 1,800 Bitcoin per day today. 900 Bitcoin per day in less than two months. Fixed schedule, mathematically secured, more than 21 million impossible. What the fuck are you waiting for? Another virus? With that, I will wrap it up.

Starting point is 00:22:32 Thank you guys so much for watching and or listening. If you're on YouTube, do hit. like, subscribe, and share. And if you're on the pod on the audio only, then do share it to your social media. It will be great to get more people listening on the pod there. If you want to help out the show in another way, you can hit the sponsors I mentioned down below, Leden and Paxfell, as well as Wasami Wallet, which is integral to your Bitcoin, uh, Bitcoin privacy.

Starting point is 00:22:58 And finally, if you really like what you saw, you can always drop me a lightning network tip at my tippin.combe page. That's tippin.combe slash at BTC. sessions. With that, I am out. Have a wonderful evening, you guys. Stay safe and I will see you next time for your daily session.

BTC Sessions - $1 Trillion Daily Repos, Coinbase Exec To Oversee Banks, Bill In Senate Aims To Torpedo Encryption EP029

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.