TFTC: A Bitcoin Podcast - #191: Matthew Mežinskis

Episode Date: September 22, 2020

Join Marty as he sits down with Matthew Mežinskis of the Crypto Voices Podcast to discuss: - Q2 2020 Global Monetary Base update - Defining Base Monies - Where Bitcoin stands as a base money - Current growth rate of base monies - Claims on base monies - Claims on bitcoin - Proof of Reserves - History of Communism in the 20th century - How people rioting in the US are misguided - What's going on in Belarus right now (podcast link) - much more Follow Matthew on Twitter Check out Crypto Voices Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse when you download the app.

What's up freaks, it's your boy Marty Bent here to introduce this episode of Tales from the Crypt. I had the immense pleasure of sitting back down with the man behind the best voice in Bitcoin podcasting, Matthew Mazinczus from the Crypto Voices podcast. We sat down to talk about the most recent quarterly update of the global monetary base figures that he and Fernando Ulrich publish quarterly. Very interesting data collecting they're doing, and they're really highlighting just how quickly the balance sheet of the world's central banks are expanding around the world, particularly the base monies. The growth of the base money around the world is picking up steam, especially in the face of global economic shutdowns, in the face of COVID-19.

we talk about a bunch of other stuff beyond the monetary base uh conversation you guys will obviously hear it if you're listening to this now i expect you to listen to the podcast this episode is brought to you by our good friends at the motherfucking cash shop you freaks already know all about them but if you don't know about them let me tell you about them it's the easiest place to stack sats in the u.s you can stack sats send sats receive sats and sell sats if you so please we're saying sat sat sat sat sats because sats are the standard you know we're no longer buying fractions of bitcoin we're buying whole sats when you're buying whole stats you can set it and forget it too via the cash app you can dca via the cash app you can buy daily weekly

bi-weekly set it and forget it get your stack sacking stack sat sat stacking automated all right it's tongue twister so on top of this they have cash up investing which allows you to stack slivers of stonks. If stonks tickle your fancy a little bit and you want to get into the stonk market, you can do that via Cash App Investing. And guess what? You can stack slivers of stonks. You don't have to buy a whole stonk. If your favorite stonk's a little too expensive, you can buy as little as $1 via Cash App Investing. And because all of this is connected to your bank account, there's no four to five day waiting periods. You can start stacking sats or slivers of stonks today. In fact, Cash App may even be your bank account. They're offering

account numbers and routing numbers so you can get your paychecks direct deposited to the app. bank of the future cash app cash app investing is a subsidiary of square member sipc and as always when you download the cash app for the first time if you haven't done so already what are you waiting for go download it when you do use the code stacking sats that's st st a-c-k-i-n-g-s-a-t-s you're gonna get ten dollars and ten dollars gonna go to our good friends at owls lacrosse that's owls lacrosse actually had my father call me last night walking the dog uh apparently there's an owl in our neighborhood and he he gave me some owl hoot uh uh lessons from the owl in our neighborhood apparently it's a it's two

quick hoots and then a pause and like a little hoots was that's owls lacrosse download the cash app use the code stacking stats get your ten dollars Send $10 to this great organization in Chicago working to bring lacrosse and structure to inner-city kids in Chicago. Love all you freaks. Enjoy this episode. If you're liking the content, please like, share, subscribe, review. Every little bit goes a long way. We love the fact that you guys keep coming back to this podcast.

We've had our best couple of months ever and really proud that you guys keep coming back. So enjoy. Take care. you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for Bitcoin. If you're not paying attention, you probably should

be. What is up, freaks? Welcome back to Tales from the Crypt. I'm on an outdoor screened-in porch. I've got a pond in front of me. I've got a very familiar face on my laptop in front of me as well. I want to welcome back Matty Mazinxius to the podcast from the Crypto Voices podcast. Matty, how are you doing this morning? Marty, I'm all right. Good morning to you. It is early afternoon here in the Baltics. The sun is shining, and I guess I'm doing all right, all things considered.

How are you? Doing well, man. Doing well. First 8 a.m. recording I've had in a while, but to line up with a time that is formidable for you, I think getting up early is worth it, especially considering the topic we're about to dive into. i've written about it in the bent uh about a month ago august 20th i believe is when you released the most recent monetary base report uh for you freaks that don't know the crypto voices

podcast maddie and fernando ulrich have been doing uh a a report quarterly on the state of the monetary base of the world's currencies and who's leading and how much monetary base money there is so base money is probably what we're focusing on here obviously q2 2020 was a huge quarter for central banks considering the covid lockdowns and the stimulus that ensued so i figured it'd be a good idea to get you back on the podcast to sort of dissect everything that went down in q2 the state of the global base monies how bitcoin fits into that picture and what the report may look like going forward considering the way central banks are posturing right now it seems like the money printers are going to continue going burr for for quite some

time indeed indeed yeah so uh if you want to just get right into it i mean the um i think the important thing with uh the monitor base which we've uh tried to do like i've presented on this a lot and uh fernando has as well and it's been sort of a key thing that we've done throughout our uh the life of our podcast in fact pretty much from the very beginning um which i think is always very important uh when you're trying to measure something value something but also just sort of get a lay of the land uh understand you know where you are in the world is to make the proper comparison so we're talking about money uh with bitcoin uh the money supply that you use it is as you said it's called the monetary base or basic money or base money

in the past it was gold and silver uh in the past uh couple hundred years you know really from the bank of england a few hundred years ago this first modern really modern central bank um and then all the way up until 1971 we had sort of a blend of gold and silver at times uh and fiat money and then finally from 1971 we now just like purely fiat money standard as most hardcore gold bugs and bitcoiners know um but the this money supply where you find it where it is what it what it means uh it literally is that is the printing press today so like if we talk about money in the printing press and like bitcoin is you know this eventual uh coin supply of 21 million what does that compare with uh it is it is this thing called the monetary base and it's interesting

because you can't always uh well actually i have there is no data aggregator in the world that does this and i i'm kind of always been curious about why that is hard to find i think partly it's Probably their regulators are trying to be a bit sneaky. They just don't want to publicize it. Certainly the IMF, the BIS, the Bank for International Settlements in Switzerland, they know these numbers. They just don't publish it and aggregate it. There are some you can find on the Fed's websites and other websites.

But if you want to compile your own aggregate index, you've got to go to every central bank's website to get it. So we've done that for the top 30 floating currencies. um and uh and then one more thing i'll say about this just again before we can maybe speculate on the future or dive into the numbers more is the monetary base is different than any other money supply you might have heard from economists like m1 m2 m3 or even m0 and that the monetary base is the only money supply which is truly like the most ultimate settlement in the financial system like this is how banks settle with each other this is how banks settle with the central bank

this is how banks settle with their government uh it's like the highest form of settlement in the banking system so there is no more ultimate settlement like that's why they call it basic money uh and it's comprised of two things so it's like cash and coin that everybody knows you know dollars euros yen notes and coin and then uh this thing called bank reserves which it's basically each bank's account each bank account for every bank at their central bank so those two things together reserves are much more like liquid way to change the money supply obviously because it's mostly just a ledger entry different than the actual printing of cash and those that that's the monetary base and so every other money supply that you think about

or you're here you know like m1 m2 m3 those are claims they act like money we call them money but really what they are they are claims and i'm not saying that's bad or good i'm just saying Understand that that's a fundamentally different thing than Bitcoin's $18.5 million right now and eventually the $21 million that we'll get to. That is the number that would compare to that is these monetary base supplies from each central bank. And I'll give you one example like this happens all that like any article in the Bitcoin world or or even in the mainstream world now people talk about it they want to talk about inflation they want to talk about this that and the other about what money supply we can compare with like usually they'll use like US M1 which first of all like it's just the United States you know money is a global thing Bitcoin is a global thing so it shouldn't just be US M1. uh and and obviously they won't use a a global sort of index although as i mentioned we can find sort of broad money supplies that are compiled by like the bis and the imf um but those are usually a blend of like m2 us doesn't even publish m3 anymore we can talk about that

um but anyway again on this tangent sorry one of the latest articles which again i think this was improperly used was the Winklevoss twins they just made a a couple weeks ago the case for 500k bitcoin they did a lot of good reasoned arguments in that article no doubt no problem with their their reasoning and certainly where they get to that number about 500k is using the gold supply total gold supply in the world that's fine but they show like two charts again u.s only u.s only they show one is the federal reserve's balance sheet which is close that's close to the monetary base it's actually a monetary base is a subset of the u.s balance sheets it's on the liability side they show total assets which is basically how the fed gets that money that it creates and has

monopoly to create into the economy uh they show the growth of total assets of the fed okay so that's kind of close the monetary base it's good to show and then they show like talk about inflation and dangers of inflation they show usm2 again we're only looking at us here so it's an issue uh in my view if you want to like lay the the the landscape and the comparisons uh so they show us m2 and then again they talk about the inflation rates there m2 is completely different here because what when you when you start to incorporate and encompass claims in this argument claims on u.s dollars claims on monetary based money that's a very different thing than like this what the state does with its money so the state again is monetary based they're the ones

create the money it's on their balance sheet that's where you find it but the claims that includes many things it includes like a lot of free market things it might include a lot of good things might include a lot of bad things uh and by the way bitcoin has a ton of claims on it now and it has almost since its inception you know mt gox uh uh account holders have a lot of claims right now still outstanding on their bitcoin that was there whether they get that or not or a discount people already trading mt gox claims those are claims so that's a different thing that you know we can go on from there you know if you're cracking account coin discount everything those are all claims on bitcoin uh only if you hold bitcoin on your node validating is when you

have uh sort of basic money bitcoin so claims akin to leverage where you're levering out actual hard assets that those claims represent multiple times rehypothecating probably a better word yeah rehypothecation uh leverage credit um i think all of those can be used interchangeably and i would just be careful like myself to say like i i don't think that those in and of themselves are like evil or bad but i do think that when you have a system where the basic money is controlled and mandated by a central authority that basically um can at will change uh it's hard to do this on a on a audio podcast but basically you know you have you have a certain you have a certain low level amount of basic money then you have these certain leverages you say or rehypothecation

claims whatever uh sitting outside if you have a central authority that can basically at will change the supply of the basic money that can really screw up uh the society economy's view of what appropriate leverage should uh be and so another easy example bitcoin makes everything very very easy so like you can have one bitcoin um you know you and you and i could enter into a loan contract uh you lend me one bitcoin so now you don't have that bitcoin i have the bitcoin you have a claim on the bitcoin which is basically a loan but then i could take that same bitcoin i could lend it to odell odell could lend it to someone else and all of a sudden within you know a couple days we can have four uh five claims on the very same bitcoin the very very same bitcoin

so it's not like inherently evil or bad that we do that the question is just like is that a good idea economically how do people sort of manage their finances around that and that is really i think the issue that our financial system is like facing today is that we have all of these claims you know circulating a small amount of base money uh that pool of base money is completely at the control of the central banks and uh if they uh if they so choose the central banks can change the supply of base money therefore uh changing the ratio of those claims outstanding and it basically makes it very hard to calculate where we are as a society or with money or with anything else

and what the proper demand should be of those claims that circulate. So, yeah, it's a long-winded answer to your question, but basically the problem is when you have a monopolistic entity like a central bank that comes in and distorts sort of the value of the basic money and therefore the value of a lot of these claims that circulate on top of them. Yeah, and I think one of the charts

that really drives that last point that you made home that the claims can get out of hand is the chart of top 30 fiat gold reserves versus monetary base historically. If we're looking at it now, the gold reserve percentage of the global monetary base is hovering around 5%. So global fiat currency is levered 20x.

i guess is another way to say that yeah i mean if you're uh if you're a hard you know gold bug or hard money gold advocate and you view gold as like the only form of market money uh at least the gold that's in central banks today which is about 1.1 uh billion ounces of gold compared to like six billion ounces that have been mined at all time but that 1.1 billion ounces of gold if you mark that to market um it's uh i'm actually finding it here it's it's uh uh what is what is it it's two trillion i'm actually trying to find the chart here it's only a couple trillion basically compared to the total uh which is uh about 24 trillion in fiat so yeah as you said basically

um there's another example where gold is basically completely detached today from any sort of monetary uh settlement and central banks it still keeps central banks in check uh they're worried about it like they've held it historically you know ron paul's gone off against ben bernanke and these uh uh the finance committee hearings which he used to chair which they always hated that he chaired but he was like the most senior person and he would go off against ben bernanke like saying you know why do central banks hold gold and bernanke's just like well you know it's tradition so they always try to uh they always try to weasel their way out of like being beholden to any sort of hard money and that's what they've achieved since 1971 they have definitely achieved that

uh they're trying to save the system today but um yeah they're just they keep printing more and more and more and and the the amount of basic money that they have printed is way out of whack compared to the amount of gold in their vaults uh bitcoin for sure is still rounding there because We're at $200 billion valuation of that 18.5 million Bitcoin that is around the world. And unless it's done in secret, which it might be done in secret at the moment, really no central banks are publicizing that they're directly holding any Bitcoin or reserving any. So, yeah, we're very early in the game from that perspective. And I think that would be very interesting to see how that ratio will change in the future.

Yeah. Staying on gold, it's interesting to see the first two decades of this century. You have China and Russia really bolstering their gold reserves. Two countries that are historically the victims of the weaponization of the U.S. dollar and the Western-dominated financial system. and then you have somebody like Canada who in recent years has completely depleted their gold reserves uh and sold them and so uh it'll be interesting to see in the long run how that plays out like China and Russia uh making a a long calculated um play to accumulate gold to to make a move on the global currency markets is Canada going to be shit out of luck this is just a tangent but it's one thing i've been following personally uh not so much canada but the accumulation of gold reserves by china and russia who have poshered with each other in the past they would like to get away from a petrodollar system yeah absolutely and i mean uh the the long gold

definitely is like a decades long thing uh you know centrally centuries long thing as far as that goes and like whatever the game theory and stuff i mean there are plenty of arguments that the U.S. doesn't have a lot of the gold that they say that they do through these gold leasing schemes. We've talked about that a little bit on our show, and we don't have to go into that probably too much here. But I would say generally, yeah, it is this sort of – it manages the tension between countries, the gold reserves,

and no doubt, like you said, people that have suffered from the dollar – sorry, states that have suffered from the dollar, they've been pretty aware to buy it. But even then, it's hard to know because the gold reserves themselves, like, in a gross fashion, I think, topped in, like, the 60s, the 1960s. And then they trended down from the 60s until, like, literally until the financial crisis. And just after the financial crisis, it started trending back up again. So now we're at that 1.1 billion ounce number, which is, like, literally almost, it's a little bit more than a sixth of the world's gold that's held in central banks, if we believe that they actually hold the gold there. And again, that's another argument for Bitcoin as well.

It's like you can't really easily prove that reserve. There's a lot of issues there. And, you know, it just, it keeps going on and on, you know, like with these arguments, with these old school economic arguments, which I think are interesting, but in some respects just exasperating. It's like we cannot change like the policy of the Federal Reserve, no matter how much we want to rail against it. We can definitely show what they do and the problems that they cause in the economy.

We cannot change it no matter how much we think we can or somehow through our macro prudential, you know, advisors who are theoretically appointed by officials who are theoretically elected by us. You know, we just we cannot change it really at the end of the day. It's just a total beast unto its own regulatory capture creature of the state, so on and so forth. So I think it's very interesting to track all of these things. But as we see with the growth of the basic money supplies around the world, they're not really slowing down. They tried to in the last couple of years when things were sort of cooled off after the financial crisis and pre-COVID, they tried to. But now, you know, you throw a wrench in the system like COVID. And for the first six months of 2020, they have expanded the monetary base literally at a record rate for the modern central banking era, which is they're on pace to increase the monetary base globally 50%. I'm trying to decide where I want to dive into because even before COVID, they tried to unwind. What was it like $200 billion caused a credit crisis in the repo markets? yeah yeah it was in september september of last year um i can't remember if it's 200 billion was

that was the number but yeah there was that uh sort of um that that craziness in the repo markets where the rates were were spiking and people were losing confidence very quickly and the fed had intervened was it is it quantitative easing is it not but yeah they were on track to actually it was the lowest rate of increase other than maybe uh 2000 which was a year after the y2k scare so in the year 1999 they actually increased the monetary base globally like 38 percent all central banks and that was because most people were freaking out about y2k and started taking out a lot of cash out of banks and then so i sort of like had to balance that out in the year 2000 didn't have to increase it as much at least that's what it seems to be on on paper and then uh in the

uh last two years in 2018 and 2019 they only increased it a little bit less than two percent a little bit less than one percent uh respectively and yeah until that that sort of uh tantrum that happened in september in the repo market and then the um the uh obviously the covid crisis that happened in uh in in the start of this year uh they have just been back back uh greasing up those pretty impressive so it has been it has been crazy to see how you know just you know again this is not predictable in the fiat world like it is in the bitcoin world but if you draw like sort of these long long um comparisons we have 50 years of modern data now since they've been off of the gold standard um it's pretty wild to see how how much those uh those those compound growth figures

are and so that's what we we report on in the monetary base update yeah let's go back to where you said a bit earlier like we as much as we want to we think what the fed is doing is bad we cannot control them uh you also stated that the global monetary base has grown uh at a rate 50 in recent quarters uh and then tie in how these central banks are posturing nerp is becoming more popular bank of england announced last week that they're going to start figuring out ways they can implement implement negative interest rate policies we have jerome pal and friends thinking that two percent inflation is not enough they're going to try to overshoot it because by their measurements they've been undershooting it too much so they're going to print so much uh

as to try to institute more inflation than they have been able to historically and so back to your comment of as much as we want to control them and stop them from what we deem is is bad policy are they basically sowing the seeds of their own demise by doing this too quick like can you help explain the gravity of a 50 growth rate of the global monetary base yeah well it is a record it's a record rate if they keep it up um so again in y2k uh that was uh 30 i mean it's a 38 it's 34 annualized um in 1999 and in 2008 it was 41 in 2011 it was 31 percent uh annualized that's compound annual growth those are those are huge numbers so just rule it you know rule of 72 right so if something uh grows you might think that something

grows in temper 10 a year it would double every 10 years but now the rule of 72 shows us the power of compounding and 10 is about the perfect rate for the rule of 72 so if something grows at a 10 rate you slash off the percent sign how many times it's going to 72 it's going to double every 7.2 years that's a 10 a 10 compound growth your asset will double every 7.2 years at 50 you're doubling more uh like uh you're doubling in amount of time which is less than two years so it is massive growth in terms of any sort of asset that we can think about normally any sort of normal return of a bond or stock or dividend so it's a massive uh as far as the supply and then again i I try to be like somewhat balanced what we say.

I always say this in the tweet storm as well because supply is one thing, but we should look at demand. So theoretically, you know, in economics, right, like if the supply grows, but the demand also grows at the same rate, then prices will not rise. So we should say that. Like if they think they know what they're doing

and they're going to grow the money supply at 50% compounded, um uh you know run rates and and the the lifetime rate by the way compounded is over 12 percent um so if they're going to grow these numbers you know at 12 percent a year over the long term and they think that the demand will also rise for that money at the same amount then prices won't rise uh then the next question will be like well is the demand really rising at that that level now it's impossible to really measure demand unlike supply so you have to actually how do you infer that the demand is or isn't rising way of look at prices are prices rising or are they not and this is again it's just hilarious like just voodoo science that economists at you know central

banks and the government paid institutions like to do talk about this all the time on bitcoin podcasts gold podcasts you know risk averse investment podcasts is you know the hedonics and john williams measures this shadow stats like the the variables that they use in these indices have changed all the time since like the 80s so they're completely uh softening the blow of what they say is price rises actual rise in prices you know inflation as they call it price inflation and um and it makes it seem that they're not rising that much you know they throw in technology there they thought they count renting costs more than they do property costs depending on the certain time of the certain decade that it is um and then again you look at all the big

ticket items as well you look at uh education health care i mean these things are just rising like out of control and you put that into a kind of a covet economy now where like you can pay like fifty thousand dollars a year a hundred thousand dollars a year to go to some ivy league you know and take your courses on zoom uh or you know it's just it's just insane to think about how that is going to work itself out uh yeah the inflation rate on inflation rate on that alone when you factor in the quality depreciation of moving your classes from physical classrooms to zoom has to be astronomical it's unreal it's unreal man so yeah i mean i i think like i would always be careful and i might have said this last time we talked about this but you know like

i i don't know when that point is where like we really start to see um hyper bitcoinization and we start to see, you know, really, really people move into gold, uh, in a way that they haven't done in the last 50 years. Uh, I don't know, again, I'm not like, I'm not a, I don't want to be a doom and gloomer. Like we can start to start talking about some other geopolitical stuff too, at some point, but like, I'm not a fan of, uh, society breaking down for Bitcoin or whatever to go to our goals, you know, to go up, you know, 10 X or a hundred X. It's definitely not my plan. Um, but at the same time, you got to look at the picture, the picture, you got to think about your family you got to think uh globally about this stuff and it's very very hard to believe that

when you see the massive numbers uh that central banks spit out there as far as uh annualized increases in their monetary base it's very hard to believe that the demand for that currency is rising at the same rate and i can show i think on the latest tweet so i have it now so i could answer that question about the uh the gold ounces in usd terms but anyway uh if you get a tweet 28 on that tweet storm it's the last 12 months of uh of growth and literally only then other than malaysia indonesia and china uh and japan just barely got under it every currency in the top 30 is over 10 growth in the last 12 months norway at 851 growth canada at 431 turkey at 98 uh sweden at 74 percent growth so like these are just massive massive numbers you know they're

going to fund programs they're going to fund fiscal deficits uh they're going to fund government bonds that's what they're doing uh japan sometimes even buys stocks with its monetary base increases japan owns i think the the japan that the bank of japan again the the entity that that uh that manages and has a monopoly control over the money supply that compares with bitcoin in japan they own i believe one-fifth of the top five companies in the nike the bank of japan itself i think that's a great it might be 25 might be 20 but they uh you know they basically own a fifth of the top five companies in the nike uh hundreds of billions of dollars i don't know actually what they got five trillion five trillion plus on their balance sheet in usd terms it's actually

not a huge percentage of that is in stocks but but still the the it's it's this is this is interesting too because like a lot of the stuff that austrian economists and free market economists classical liberal economists have been you know hammering the table on for like 50 years is uh at the end of the day like there is no one you can say that you have some legislative rule or some policy or whatever but there is nothing that's going to stop uh these guys from printing because that's all that's the only thing they know how to do to to manage a crisis so no matter what you say they they they have the ability to print they have the monopoly power to print and they'll weasel their way into buying whatever they need to bail out their friends it's like the

united states uh federal reserve started buying mortgage-backed securities uh owned by you know bad, bad real estate loans from Fannie and Freddie in 2008. That was not allowed. It was definitely not allowed. They weaseled their way into it for technical reasons that even I don't know, but I know that it was not allowed. And they did it. So they indirectly owned real estate.

They started to do that. I mean, we have the playbook from the Bank of Japan. They started buying stocks in the 90s and early 2000s. And this is stuff that, like, Murray Rothbard and a lot of free market economists had said for a long time. They never got to see it. They never lived to see it. But they said that, yeah, all that the central bank

needs to do is buy assets with their printed money to uh sort of soften the blow of their problems in the past and they're going to do it and they were correct in their prediction they're doing it now the u.s is buying corporate bonds so they've moved away from government bonds which is the traditional thing uh as i mentioned the winklevoss twin showing the growth of the federal reserves assets that assets are the side of the balance sheet which they buy stuff with so the monetary basis on the liability side basically mirrors it's a little bit smaller but it mirrors the assets that they buy uh they're going into corporate bonds now you know with the covid crisis and you know at some point there'll probably be more real estate and probably be more

uh bonds and then at some point maybe it's going to be stocks and at that point it really gets weird because it's like you know are we just straight up nationalizing the economy um you know what does it look like there and i hope it doesn't get to there we're really far from that I think still, because obviously the stock market is an $80 trillion beast in itself, globally, globally. It's about $80 trillion. Central bank monetary base, as I've shown, is, you know, it's not all of it,

but we're about 95% of global GDP. It's a little under $25 trillion. So we got to, you know, and most of that is in government bonds. So it's not all of it. But again, I'm just getting back to your question about what the roadmap is, what the end game is, where you go, will they not stop printing? I mean, these are the things that they're thinking about.

and yeah all the tea leaves seem to be that they're you know if rates are going to stay low if not go negative now even though they tried to reverse it last couple years it's still coming so yeah things things continue to look uh good for bitcoin and gold at least in my view there completely agreed they're buying high yield etfs they're like they're buying junk bonds etfs it's fucking or they have the ability to i don't know how many they've actually bought at this point yeah they had opened up their mandate that's the other thing they completely changed their mandate in the spring uh worked around uh with some voodoo wording and just open created new facilities i believe that's how they made this work around that enabled them to

buy some of these assets and then even before then so going back to the repo market uh the ficc i forget what it stands for but they grant the fed granted the ficc access to their window and the ability to to participate in their auctions or and their ability to sell bad assets to them and they're directly funding margin rates of levered hedge funds like millennium 72 um sap cat or i forget who else but sac capital i believe uh it's it's getting insane so i have a few questions fixed income clearing corporation yes um i forgot myself i was looking it up for you yeah and uh but part of the part of the dtcc which is the clearing corporation of basically all securities and stocks uh in in the united states which again is another thing

back to talk about uh claims not to get too far off of what what you're saying because it's all i think it's all related important but the uh importance the important thing to understand between basic money and non-basic money is that uh weirdly in the u.s all of those claims are managed uh by the dtcc which is strange because like you don't even hold the certificate yourself in other countries like fernando talks about this like in brazil and stuff like you actually do own the stock certificate yourself you buy stock um or or even like if you have a money market mutual fund or whatever you have uh a direct like claim that either sits your bank sort of manages it or typically i guess it's your bank that manages it it's not that way in the u.s like in the way

your broker sort of manages a claim on a claim and the dtcc is the one that actually manages all the stock certificates uh it's slightly different because we're talking about equities and not uh money there but the same thing i believe applies for like a money market mutual fund um and all the rest of these things that are very distant sort of cash equivalents but they uh they're just weirdly managed by this entity you know the dtcc so um again you can hold some of those things you can maybe make a yield on some of those things uh back to what we talked about our bitcoin example if you have the same bitcoin it's loaned out five times you know each individual investor needs to make their decision about how much uh leverage they're comfortable with in the

paper that they hold and um if they really want uh to have their wealth and savings in claims versus in in basic money which is bitcoin and again it's happened it's happening every day in bitcoin too i mean you got wrapped bitcoin on the ethereum network like that's a claim on bitcoin you have even though it's you know i guess back to 100 at the moment um you know every exchange account that you have in bitcoin is a claim right so the moment that you send that in the coinbase or kraken or whatever uh you got a claim so you gotta you gotta manage that yourself you gotta think about that yourself and uh it's also sort of a reason why it's actually sorry i know i give them these tangents but i'm just thinking of them off the cuff i love i love

your tangents don't worry thanks buddy but there's two two things here which i think uh are important to at least i don't know ring ring one rings hollow and one rings true to me the one that rings a little bit hollow and i love them but what nick carter his sort of crusade on proof of reserves how he wants exchanges to you know post their proof of reserves and stuff i think that's a great thing and i think what caitlin long is doing in wyoming is interesting you're seeing more uh macro prudential from a crypto oriented bitcoin oriented sort of mindset where you really want to be safe with customers deposits and that's great but they're still doing that in the framework of i guess in the united states the united states sort of uh financial uh regulatory

codes and and and you know u.s constitutional laws we talk about reserves with bitcoin like there there's you you really don't need any other proof of reserves other than your own keys like you can be your own proof of reserves when you're holding bitcoin you know validate on your own like that that is proof of reserves in bitcoin so we have that we already have that in bitcoin when you start talking about other institutions proving reserves for you or managing keys for you even if they don't want to do it in a very like solid risk averse you know macro prudential sort of manner you're still you're moving away you're moving up that ladder sort of away up that risk curve away from something that is basic money so I don't I don't know I just don't have much

uh again i really like nick's writings and and all that he talks about there but i don't really have much sort of empathy or need or worry about if exchanges are proving their reserves and first of all i think it's hard to do that's why most don't do it uh from a business standpoint just with the fungibility of accounts and this is why banks don't do it either and there are other reasons too there's regulatory reasons which are problematic goes back to what i was talking before about the monopoly monopolistic control of the money supply uh i guess it's third tangent sorry but anyway the uh the the so the monopoly is a problem obviously but if you had a free market uh economy which we pretty much do in bitcoin even though the regulators are trying to get

their hands all over it uh we've had plenty of problems we have plenty of problems with claims and issues and overissued bitcoin and the market's worked itself out bitcoin hasn't failed a lot of people have lost their shirts but you know that makes it stronger so if you want proof of reserves hold your own bitcoin validate your own keys there's your proof of reserves and That's the only way it's ever going to be. It's the only way it's ever going to be. If there is some state that wants to be run by a bunch of anarcho-capitalists and does all Bitcoin and wants property taxes to be paid in Bitcoin or whatever,

that's great, but the moment that they take it off, that you take it off-chain from your own side and you send it to some institution in that state or you send it to some bank or whatever, then you're talking about claims. You're talking about M1 Bitcoin or M2 Bitcoin or M3. You're not talking about basic money Bitcoin. So that's, again, why I think it's really important to make this distinction between basic money and non-basic money.

And the second thing, second tangent, which definitely rings true to me here in the context of actually everything that's happening in Bitcoin and the crypto world, the DeFi world, the Ethereum world, but also in the regular financial world, is this quote. I said it. I think I said it at one of the Honey Badgers. It's one of my favorite quotes. It's probably my favorite quote in finance. It's by a guy named Rick Rule, who's a resource investor with Sprott, Eric Sprott, in Canada. Very successful gold and silver and platinum and precious metals investors. He has this amazing quote about printing money.

He's like, no matter how good and how efficient you think governments are at creating money, at printing money, he's like no how how good how much uh you know they can they can manage the money supply good or bad no matter how efficient how amazing governments are printing money you know what the free market will always do it better and that is a damn damn true point i mean like a lot of times as bitcoiners or as hard money people or as uh gold bugs whoever you want to be as you talk about these risk averse sort of capitalistic investors we we rail against the fed and everything else but like no one looks at the junk bond market or the corporate paper market that's just imploding there's all these problems and yeah some of that problem is is due to the monopolistic

framework that it sits in that i mentioned for sure no doubt but a lot of that's free market too like it's completely unregulated and it's just the i'm not going to say the animal spirits because i hate that phrase but like it's just the this is natural functionings of the market people prefer a little more interest a little bit less safety most of the time and a lot of people do get caught with their pants down and a lot of people do lose their shirts and you see this in like the penny stock market you see this in like the gold exploration market certainly oil this year you see it's the oil market and you certainly see it in the defi market i mean this is these are these are claims tickets tokens that are all running around uh most i mean basic money bitcoin

as i'll call it i don't think that ether is something that competes uh directly with basic money bitcoin it's even been said by the foundation and founders themselves so i wouldn't call ether something that's basic money but yeah that that is that is exactly the point like no matter no matter how good or bad you think the government is at printing money the free market's always going to do it better and uh you should you should think about that and maybe pay attention to that even more uh than than you know what the government is doing at times and be careful you know that's a good point individuals have to define their risk appetite and act accordingly with the products that they interact with um i am very risk averse so i hold my private keys

and i think going back to the proof of reserves tangent that you went on it's a very good point right like they could sign a message that proves they own a certain amount of bitcoin but then you need the users of that exchange to get together and say hey here's how many bitcoin it says i have and you have and add that together and uh amend that against the the signed message but that's logistically probably impossible yeah and i understand there are some technical ways we can get a little bit closer i haven't read um all of those proposals but um at the end of the day still it's you're falling back on something that is clearly more off-chain than on-chain and like you said the moment after you post that things probably change anyway and that's also the case

uh with with this government basic money right i mean like i don't know for sure i guarantee you it's not uh even though i i am reporting that the top 30 floating currencies in the world's monetary base is uh is is uh 23 point what's sorry 23.39 trillion u.s dollar equivalent as of june 30th uh 2020 uh obviously we know that that number is not correct we know that changes every day and even the their own accounting we can't be completely sure of i forget that what's that movie with ice cube and um and uh they they they they triple x no no no they they uh they raid the this los angeles branch of the fed and they're like uh they're they're like you know at this point at three o'clock in the afternoon like the federal reserve does not account for this

three trillion or three three hundred million in cash or whatever but it's like you know yeah so at this point at three in the afternoon the federal reserve yeah they they they're never going to know how much cash is truly issued an outstanding uh on their balance sheet unlike bitcoin which budgets balances its budget literally every 10 minutes uh you you know exactly how many satoshis are out there and it updates and everybody validates it um worldwide globally so it's truly it's truly an incredible uh comparison yeah um one question that comes up a lot when i share your monetary base updates and write about them is people can't believe that japanese yen is number one uh base money in the world can we

could we explain this to people why it is and uh get them over the mental blocker that it is the case that the yen is number one the u.s dollar is certainly catching up maybe it will surpass it the next few quarters depending on what the fed does but um to date it has been number one i think you alluded to it earlier they've been doing this for quite a long time right um so a couple things there again i understand the confusion there because you think like the dollar is this always touted as the world's reserve currency how could it be that another currency has a bigger monetary base again first of all we are talking about the monetary base we're not talking about the monetary base and claims on that monetary base two completely

different things so uh i talked about m1 m2 m3 the monetary base globally again let's just use round numbers here it's about 25 trillion dollar equivalent of which the united states dollar is only five trillion right so one-fifth uh roughly of the monetary base but claims on all government money uh again which the dollar euro yen and yuan remember are the are the top four by far then you have the great british pound which is a distant fifth claims on that monetary base money right we have a savings account checking the account uh time deposit account that is something probably $100 trillion at least. And that probably doesn't even count shadow banking.

And I'm working on this, getting this more encompassed and sort of a more real-time view of this as well for the Crypto Voices site. It's coming. It's a slow process, unfortunately. But so yeah, of that $100 trillion in claims, which again, that's $100 trillion chasing $25 trillion of monetary base money uh there's no doubt that the dollar is is the massive overwhelming uh

denomination of those claims so i don't know what that number is it's 50 40 60 i don't know the number but uh you know oil is priced in dollars for now um gold is priced in dollars right for now until that goes into bitcoin but um being priced in bitcoin for sure but but but like those all contracts all derivatives all contracts for difference all time deposits whatever and certainly you know the euro dollar the euro dollar count which euro dollars basically dollars held overseas away from the united states that number's unfortunately not published as well like i alluded to earlier uh the federal reserve doesn't publish that like they don't publish m3 anymore that number is at least probably 30 trillion in dollars itself so of dollars that are held overseas by

foreigners that were americans that hold them in switzerland or whatever so like that that it's at least you know it's probably at least 50 trillion out of the 100 trillion in claims that are dollars so there's no doubt that the u.s dollar is the world's reserve currency there at least as people trade those claims around the world what we are measuring again though is the comparable money supply with bitcoin and the comparable money supply with gold with physical gold so uh that just is what it is and as i as i said uh the japanese have had a big head start as you said as well uh to printing money compared to like like to massive quantities like they basically started quantitative easing um compared to the rest of the world in the 90s when their stock

market bubble collapsed the same thing as always happens you know there was massive credit before your stock markets your debt markets they collapse and then the people closest to the crony cap excuse me crony capitalist system they get bailed out and then there's more easy money that follows and uh you know you reflate the bubble so the japanese have been doing that for a long time and the yen has relatively held its value i mean there is of course i say relatively like it's definitely way down in the last like 20 30 years than it was before compared to the dollar but um and also uh the locals primarily own a lot of the japanese yen so like the vast majority of that balance sheet of the Bank of Japan,

the $5 trillion equivalent in yen, is held by locals holding their retirement accounts, JGBs, Japanese government bonds, and stocks. As we mentioned, stocks and other corporate paper as well. As we said, the free market can always print better than the government. So the government sometimes wants to buy that, and the Japanese government is buying that. So anyway, the point is the yen has relatively held its value

against the dollar and also the yuan the renminbi uh the chinese currency which was fixed and pegged against the dollar until 2005 i believe 2005 then it started to float not freely it's not a freely freely floating currency as all the others but it's it's it's a crawl like arrangement what it's called it definitely has to be on there in this this calculation uh they they're actually been bigger many times uh they've been number one many times in this both when we've released it and just if you look back over the decades over the not over the decades but over the last uh 10 years bitcoin's life let's say so yeah the the yen and the un uh not typically the euro has taken number one slot but the yen and the un have taken number one even above the dollar but but again that is

only on this specific metric that compares to what bitcoin's money supply compares to which is basic money that's you know it's how banks settle there's no more reducible form of money than basic money in society so if you want to like get a lay of the land check the landscape that's just that's what it is and if you want to talk claims we can talk claims but uh there's no doubt that the dollar is the mass massive super majority of claims in the world i have no uh no doubt about that and your listeners shouldn't be confused about that uh that difference yes very uh very important distinction but a distinction nonetheless that you have to take into consideration um this is fascinating stuff i'm very happy that you and fernando dive into this work and i know

you do a lot of the light work personally uh yeah yeah i mean you know that fernando's like you know i'm i'm all about not doing ad hominem but you know in in arguments but i'm happy to do that fernando's very good very good help very good uh advisor and contributor to the project as well but getting to the end game here and looping bitcoin to the center of the stage of this conversation uh you mentioned earlier you're not a doom you don't you don't like doomsday scenarios you don't want the world to have to go to shit for bitcoin to succeed neither do i i believe bitcoiners and gold bugs who like it is very descriptive like hey if you keep doing this it's probably not going to end well it's happened many times throughout history

and uh we i'm comfortable saying are in a information battle to help push people back towards better monies like bitcoin and gold and uh so does the recent development of corporations whether publicly traded or private private entities adding bitcoin to their cash reserves is that does that give you hope that maybe we don't need a doomsday it could be a slow bleed into bitcoin via corporate treasuries that this is a diversification tool at first to hedge against the inflation of the dollar sitting on their balance sheet obviously not every corporation is going to go full balls to the wall like micro strategy dumping half a billion basically all their cash into bitcoin but do you see a scenario which doomsday could be avoided by a slow trickle

via corporations yeah i i'll be i think much less verbose with this answer than others because i think a lot of people have commented on this and um i certainly agree with most of the commentary in the bitcoin space which is you know uh yeah i agree and then secondly i just i don't know i think it is amazing what microstrategy did i think that was unexpected uh just incredible incredible incredible that you know uh the guy with a three billion dollar company decided to put you know almost a half a billion of his treasury into bitcoin and what a baller move i mean because if bitcoin if if his company goes out of business he's still got half a billion of bitcoin if bitcoin goes out of business which would we pretty much suspect is pretty difficult

these days after you know 10 full years he's still got a three billion dollar business so uh it's a baller move it's a strong move i was unexpected for me and i think for a lot of bitcoiners that a company took that move i think it's awesome uh and i think it makes bitcoin all the more resilient to the regulatory attacks and the regulatory capture at least uh i don't know in the short yeah i mean i think it makes it makes it more resilient because you know how you know this is a regulated company they're not doing anything illegal and you know you're going to try to control bitcoin capture but what are you going to try to take their bitcoin um you know you don't know necessarily how they're storing it whatever uh obviously they said bitcoin that bitcoin i

believe they said right but but you know regardless like that this this adds so much to uh the story about bitcoin and uh that yeah i i should stop there because really i don't know how it's going to play out in the in the future but i really really like this move uh from mr sailor i think it's awesome it's just awesome yeah i forget what interview it was i think it may have been his interview at raul paul uh and talking about so looping back to is there demand for the currency out there uh that's being printed and it seems like it may be waning from an investor standpoint Because he basically said, hey, if I'm going to deploy capital as a corporate entity, the amount of potential returns I can get in traditional markets and traditional avenues of deploying capital just aren't there. Whether it be real estate, stock buybacks, reinvesting in the company.

It doesn't seem like I'm going to get as much return in this environment than I would betting on something as asymmetric as Bitcoin. so i think that's uh that was an interesting point he made about deploying capital and bitcoin just made sense from a risk perspective yeah yeah i saw that i saw that uh analysis and that reasoning and you know he's saying you know what's gonna what's gonna accrue value to us as a company for 100 years you know he's thinking he's in a pretty long term there and um that's just impressive very very impressive and um i don't know do you do you think more companies are going to start doing it or do you think it's a one-off for a while i think so and so this i think so and this brings us back to the fed can keep doing this forever as much as we don't

want them to like is this how they are forced to reel in their policy if corporate more and more corporations continue doing this because there was a couple companies canada yes smaller but They started announcing it and I just think it's gotten to the point in corporate boardrooms where if you're not having a discussion about whether or not you should allocate a little bit at least to this, you're probably not doing your due diligence. and i think uh that's one thing corporate boardrooms can't um can't allow is just the public thinking that they're they're not staying up to date and doing enough due diligence for for their corporate strategy that's nuts man i love it i mean i just love mixing up boardrooms like that and you hear it as well like a lot of bitcoin podcasts and people we talk to as well i mean it's just the last 12 to 24 months you know i think

uh bitcoin the the the tone and tenor around the word bitcoin in corporate boardrooms is changing uh just vastly and code is not you know it's not swinging that back in the other direction it's only increasing that yeah to be more friendly by the way if it wasn't clear so so i guess we're in a race uh between freedom money and a dystopian future trying to be thrust upon us by uh the new world order if you will the yeah we'll say let's let's we won't call it the new world order we'll call it the world economic forum and their their vision for a great reset using uh covet 19 as a an impetus to implement what seems to me to be terrible global policy they basically want to make the whole world a socialist uh lovey-dovey collective at least like if you've read the

great reset papers that's literally what they're saying yep and with their cbdc's is the the latest buzzword as they like to call their new digital money went from virtual currency to now cbdc is the buzzword that they're using and uh yeah i mean like you know nothing can be uh uh you know how do i say this bitcoin certainly can't be the one because you know it's there's no one that controls it no one that takes care of you if you lose it uh no one you know manages it in a pertinent manner it certainly can't be bitcoin so why not cbdc you know we'll take the best parts of bitcoin and we'll make it on our own dedicated ledger and see all the flows of funds all around the world which china is already doing in many ways with its uh uh its bankers claims and it's

it's banks that it controls you know completely and also it's technology companies with uh with you know wechat tencent and everything uh but they're definitely going to put in that that next layer of that cbdc where you can literally see every single transaction uh controlled and validated by the central bank uh instantly so it's going to be great it's going to be fantastic um that's the message that that uh they seem to keep keep being put out and it's like every you know is that because the bis released that paper at the start of the year about the growth of cbdc research uh we always hear about china's cbdc it's going to be christine lagarde came out last week saying that uh they're going to be doing a lot more research on cbdc's yeah yeah and they

always put in that framework of like you know the bitcoin is bitcoin but obviously it's not nearly going to satisfy our needs or the needs of uh you know our uh our wonderful populace so um yeah it's definitely a race definitely a race uh i think stable coins are gonna be a part of that i've said that for a long time i think stable coins will be easy to regulate into uh uh a framework that they want and we've obviously seen stable coins have already been blacklisted with some transactions usdc i think it was blacklisted some and um so i think stable coins will be regulated into that framework uh and then how that settles into a cbdc which uh is a totally digitally native you know controlled by the uh by federal reserve uh you know technocrat

will be interesting uh to see but um yeah it does seem like it's gonna it's it's inevitable there because i don't think uh well i know i know for sure that they're not just going to let bitcoin just you know waltz in take take yeah take over the world in such an easy easy manner but it does bitcoin is the is the peaceful way to do it which is very very interesting that we actually uh we have this technology we see we can use we can peacefully transact and man when you around the world today uh i certainly think that we we need it but um yeah well look what's going on around the world you mess up the pricing mechanism and people's quality of life goes down you're forced to have two parents in the workforce having less kids making

less money living in smaller homes owning less assets at the end of the day and it makes sense that we have a world that seems to be going to shit at least socially here uh here in america we were talking about this before we hit record but like it really pisses me off that we're the powers that be are trying to incite a race war when it is clearly a class war an economic uh class distinction that is driving the the strife in the united states that's not to say that there aren't racist people here and cops don't need to do a better job of de-escalating certain situations,

but I would argue those are not the biggest problems we have right now. They're economic, and then when you compare them to instances around the world, like what's going on in Belarus right now, it's just laughable how childish we look as a nation. Yeah, this one definitely hits close to home for me because, you know, as a Latvian American,

as most of my listeners know, you know, as having grown up in Ohio and having a pretty American upbringing and then going to see, you know, the family roots in Europe for the last 15 years, I'm just baffled to see that, like, it's the U.S. now that is faltering in its sort of upholding of just sort of

everything from individual liberty and rights to you know to uh to property rights and to like uh just just upholding these values that that you know we all like that i grew up as understand is pretty pretty sacrosanct and pretty important and uh i say this all the time like just gonna give uh maybe some of your listeners who don't haven't heard me say this with some perspective but like the greatest example of all this of just of all this madness um was the failing of the soviet union at the end of the 1980s 1990 1991 and it was an amazing event unlike what happened in yugoslavia at the start of the 90s um it was peaceful it was peaceful in the soviet end of soviet union the baltics latvia lithuania

estonia they were the first ones out they had this like singing revolution at the end of the 80s they were peaceful they were different people they knew that they never were a part of the they never wanted to be part of this communist manifesto that the soviet union started in the 20s under just horrible horrible horrible misled promises to the proletariat and poor people and people that were uneducated in eastern europe and by the way we had poor people and people with uneducated in the u.s as well as part of the progressive era a lot of bad things happened then but we also had private property rights when like more sound heads sort of won the day there at least, at least as far as those issues go, um, you know, that just destroyed lives for 50 years

in, uh, in Eastern Europe. And by the way, everyone in Eastern Europe is white. So it has nothing to do with, I completely agree with your first point. It has nothing to do with race. You can destroy an economy, whether you, whatever color, uh, color, race, or creed that you are, you can absolutely destroy an economy by bad socialist dictatorial policies and the baltics luckily ran as far away as they could they actually had pre-soviet union constitutions they could fall back on their property rights it wasn't easy there's still problems here plenty of problems but they understand and appreciate like the value of freedom and property and uh you know just liberty and like true freedom and everything that has happened in eastern europe now uh

the the other remaining soviet countries which didn't really have these independent constitutions to fall back on they didn't really have some of these values and by the way the baltics again when they ran as far as they could they ran in the you know a lot of libertarians in europe and the u.s might disagree with some of these things about defense and whatnot but like for the for the baltics it's very good that they're in the european union they use the euro and they're in nato and i'm not saying that euro is a good thing i'm just saying that as part as part of being as part of these local blocks of like-minded people it's it's very good for a small small country uh compare that with um you know so so so the russian troops and and and the you know basically the the soviet

troops they left the baltics in the 90s it's a good thing they did because if they didn't we'd have the same problems that you've had in ukraine since 2014 and now that you're having in belarus where literally you have dictators there that have been in belarus's case this guy's been in charge since 1994 absolute madman uh murders his own people there's no free press there's no free uh journalism there every media outlet is state-run media outlet and if you're you know the protests have been encouraging they've been heartwarming uh in the baltics they've been reenacting this thing uh we can put a link in the show notes maybe fernando and i interviewed a friend of mine from belarus who's not in belarus at the moment but he's very good at english and can

give a good perspective because there's not too many people that speak english there actually but um well i shouldn't say the young people definitely do but but it's it's a very slavic russian russian speaking country and um you know this this stuff is this stuff rings very very true for me because literally a hundred miles from me right now uh is a place where we were all under the same umbrella of mad horrible communist socialist run regimes with no private property black markets everything was just off by the way all white people so you know white people can be dumb and manage the economy when you have it's nothing to do with i i really feel like saying that a lot because yeah it's that i completely agree with you on the the people just

missing the mark on the racial overtones although i absolutely completely support um people that are you know you have to get like you have to get bad policemen under control in the u.s we can talk about that separately but i definitely support reform there no doubt and like stuff that the young nba players doing and trying to do like social change it's all great that's fantastic absolutely we should support that and no doubt about it but if you just look at the way that an economy is run look at what happened in eastern europe we're all under the same umbrella now the baltics literally 100 miles from me we are living no joke anywhere from 10 to 100 times better than the people in belarus and uh we have we're completely plugged into western markets uh

we have free press we have internet that works and won't get like shut off uh knock on wood although i know that everybody around the world everywhere is actually concerned about that these days in the u.s as well but uh it is just it's night and day different to what's happening to the people of belarus and the people of belarus they're finally fed up after you know 26 years of this dictator they're finally fed up and uh they're peacefully protesting they're trying their best uh but it's it's they're violent crackdowns violent crackdowns i mean as andre said i mean they're going to spray paint you they're going to spray paint you a different color when you're out protesting based on what they want to do with you if they want to just

find you if they want to get you off the streets they want to if they want to uh put you in jail they want to maybe do something pretty drastic to you they're just going to spray paint your clothes and maybe you'll have a staged suicide because that is definitely what has been happening. They beat the hell out of you in prison. So like I have just no sympathy, no empathy for anyone in the U.S. who's like looting, violent,

not respecting any property rights as probably some of these people are like sons of some socialist, sons and daughters of some socialist, socialist-leaning political professors. They live upper middle class and then they you know they're white and they're probably like saying they're part of black lives matter and then they're like you know violently attacking people and and uh and looting all right

maybe i'm not being fair i'm not over there i'm not i'm not living in portland but that's that's what i'm hearing that's what i'm saying that's uh i think new york post actually wrote an article identifying some of the people got arrested for rioting in the city and yeah all from the upper west side upper east side uh park slope i think rich middle class people are just angry at the world because of reasons i don't know i i don't again i said i try to stay away from ad hominems unless it comes to fernando and i really do uh i really do here but i mean i would like to call those people the worst thing i mean like just the worst thing like what what principle do you have uh if you're if you're i mean are you just bored with life i mean like what what principle do you

have if you go on and you're violent to people if you're looting if you're destroying businesses destroying people's property do you even know what real oppression is do you even know what you're standing up uh quote unquote against and two different stories united states former soviet union i'm not saying i'm i'm absolutely saying that the history of the united states is better as far as it comes to property rights in this regard than happens in the soviet union there are plenty of problems with race in the u.s yes absolutely 100 just like i said support nba players doing what they're doing and social change that's happening with certain young groups in the U.S.

But this violent stuff that I'm seeing in the U.S. is so discouraging and so just missing the mark. Come to Belarus, burn some buildings, burn a van, loot protests, try to burn some shops, which can't even deliver bread anyway, and then see what happens to you. I mean, see what sort of state media is going to cover your protest. see what's going to happen uh physically to you when you're picked up into a van never seen again and there's a stage suicide i mean like you have no idea you have no idea what you're up against

when it comes to you know real dictatorial authoritarian socialist threat in the world and it's all from socialist communist corrupt regimes and by the way the worst one in the world the worst one in the world until perhaps now with china but the worst one in the world in the 20th century was the soviet union they were all white they completely fucked it up completely screwed the push and literally destroyed two to three generations of lives um it's just it's maddening it's maddening to me it strikes very close to home i mean i'm not happy where i am right now in terms of a lot of things i mean there's a lot of people in the world traveling in the pandemic and everything else but to see you know to see the dichotomy here

of of these as you said this if it's upper west side or wherever this type of people these university poli-sci children in portland wherever these people are that are just completely disrespecting property rights i don't know i have no i have no respect for them and i think they have no idea uh what what true oppression uh really means so i don't know i guess i gotta get out my soapbox there no the sadistic legitimately stupid thing about the things these people are pushing for is that they will usher in a a economic governmental system like the one in belarus that you just described like if you you're literally fighting so-called oppression and your solution to that suppression

is an economic system that will suppress more people than have ever been suppressed in this country and it's it's it is scary being here and seeing it gain gain traction and seeing the media like cling on to these these socialist ideas is defund the police black lives matter the organization which is openly marxist people throwing hundreds of millions i think they've raised more than a billion dollars this year so you literally just funded a marxist institution to instill and attempt to bring their their political economic system to fruition i've heard that about the marx the marxist roots yeah some of the founders of black lives matter i've heard that as well very dangerous extremely they have it in their mission statement on the

website if you go read it like they want to unbelievable yeah um i mean yeah like there is only one end to these sorts of uh revolutions and it's basically you get shot in the back of ahead i mean i don't know how else to say it like there's no like you know people like people find this in the u.s and canada and western society they never had a real problem they find this in like books like follow you know jordan peterson jordan peterson wrote the forward of the re-release of the gulag archipelago which is solzhenitsyn's like very uh true and telling story of the soviet gulags and like they basically work death camps is what a gulag is and if if uh you know people can find that but it's a rare breed jordan peterson is a rare breed in the university ethos

uh you know definitely a closer to the business classical liberal minded type of person where most of these socialists communist professors who just babble on about you know some communist leader or something that happened in the french revolution or whatever like i don't know it's it's it's unbelievable to me that they can completely miss the mark of real history of what happens here uh the soviet union is a shining example and then we don't have to look far much farther than today than the uh people's republic of china the the communist uh the communist people's republic of china that party uh i mean like they have camps in the west of the country now to re-educate um muslims sterilize yeah sterilize re-educate sell their organs to

saudi arabia it's it's it's like this is not a free market that is doing this is not capitalism classical liberalism that is doing this this is a very specific ideology communist party and it's just you know china's going through a lot of you know i again i don't know you stopped me here in my when you want me to stop running on these tangents but like china is it's very interesting how the playbook gets repeated you read a lot of books um one i'm thinking of is mervyn kings the former governor of the bank of england who's actually very uh balanced governor again i try to look for the more balanced economic people in these central banks there's not too many uh but anyway he he's he's pretty uh sound uh balanced sort of former governor bank of england

and he writes i've i've heard this other places as well you talk to like these you know this whatever in the 90s in the 2000s as communist as china sort of sort of becoming more capitalist sort of opening up to the world and clearly is becoming a massive creditor to countries like the United States and blocs like Europe. He's talking to the leaders of the Communist Party during this more calm times, right?

And they're saying, you know, we really learned from you. We really learned from you in the West. We really learned from you. We learned from your mistakes. We're going to try to do better and we're pretty confident that we will do better and we can make a communist system

that's going to be much more just, balanced, and fair. This and that. I mean, look at what is happening. right now and even if if you want to get mad about covid and i'm not uh again this is not a race thing at all it's not a race thing but if you want to get mad about covid don't even look at the wuhan lab don't even look at any any uh anything conspiracy theory whatever just look at one thing the communist party the people's republic of china the communist party is basically uh they haven't learned anything from what happened to the soviet union with chernobyl who basically

stayed silent for i think it was a week uh it might have been even longer i can't remember off the top of my head but like uh countless it was good weather at the time countless of people have suffered from uh the problems of chernobyl uh at the end of the ages it's a great the the chernobyl miniseries on hbo by the way was filmed in lithuania in the baltics and they did a great job of showing like the incompetence of managers of something like a power plant and how no one takes responsibility you know i was sleeping or i wasn't here how could i be responsible this and that and like how disasters can occur at when you have like horribly run nuclear power plants run by a communist state anyway you bring it back to covid like if you really want to if you like i'm

not saying we have to do this i'm saying world moves past whatever you really want to blame someone i mean those google images satellite shots of those wuhan hospitals a year ago more than a year ago it was clear that they were keeping this a secret it was clear that didn't start in january I mean it's COVID-19 right it didn't start in December it was clear that it was well well before then and yeah who kept it a secret the communist party it's there no one's going to learn you know when you have all these institutional problems no one is going to learn from these mistakes or whatever it's just what they do it's institutionalism is awful awful awful way to run your society and um yeah if you want to blame one person for COVID or one thing for COVID we can

absolutely blame the communist party uh you know but they still are gonna have their fair share of champions in the u.s and people have no idea how history works so that the 100 million deaths that happened in the 20th century all happened in the face of communist uh socialist governments by the way the nazis were national socialists so i mean it's it's just it's incredible it's incredible that people can't learn this stuff oh right it seems that there's been a concerted effort in education system to keep people away from learning this type of stuff. Yeah, it's fucked, man.

How do we get it back on a positive note? I have faith, though. I have faith. Bitcoin is the largest advancement in the preservation of natural rights since the Constitution. We have that. Bring it back to property rights. Nothing protects

property rights better than the Bitcoin network, in my opinion. Yep, absolutely. balances his budget every 10 minutes and certainly if not every two weeks but it's it's an amazing system that again I think if if you look at all the other monetary systems in the world and a big fan of looking at some of these ones in the past I mean gold silver claims government fiat money whatever it's just it's incredible to me that we know precisely every 10 minutes the amount of bitcoin that there are in the world and i was actually just checking that movie is den of thieves by the way it's ice cream it was in it den of thieves but yeah like you know at three o'clock

30 million you know at this point is unaccounted for 30 million in cash is unaccounted for by the federal reserve does not exist so uh yeah and it's it's much more than that much more than that that no doubt gets uh squandered away uh bailed away bailed out to their cronies and friends and uh so on and so forth so um yeah i definitely have a lot of hope for bitcoin but it's it's scary times man scary times uh definitely would just encourage your listeners if they want to you know reach out to me if they want to learn more about what's happening in eastern europe but i would say uh try to read more about what's happening in eastern europe because this blueprint has been followed again and again and again it's usually taken up by

uneducated poor families that have nothing left to lose so they're very uh amenable to these types of promises from a marxist communist socialist government it's the same playbook again and again and again um it's it's uh it's very unfortunate and i i just cannot believe that the united states is a country right now that is sort of dealing with these issues um it's definitely a top-down issue it's not a left right issue it's not a black or white issue in my view uh and again just you don't have to look farther than eastern europe to see that's i mean shit we could tie this back to the money supply right like it's a money issue you mispriced the mecca you fuck up the pricing mechanism excuse me and it has ripple effects throughout the economy that that take a while to

to take hold but they have taken hold i would argue at this point and so i'm focusing on the big cause of consternation today which is the lack of discipline and uh ability of police forces to actually be adequate at their jobs uh i mean you print a bunch of money you go a bunch of wars the militarization of the police is very well documented like you uh bring that military gear home give it to police they have it they want to use it then on top of that they're not getting training there's an incredible podcast i know a lot of people are pooh-poohing rogan recently but he had a recent episode with jocko willick which i really think everybody should go listen to because jocko basically explains the beginning of that episode when he went on a

deployment for marines for six months a six month deployment they trained for 18 months these police are put in a situation where they only train for like three weeks for their whole careers and then they're put in these high stress situations there's no accountability for mental well-being of the police officers or physical well-being a lot of them are out of shape and can't handle high stress situations and that's where i would focus you know fixing police departments you don't have to burn down cities to do that right and this again you get you print a bunch of money you get lazy you think you print your way out of problems at least this lethargy and complacency that puts us in weird situations and again i'm optimistic

i think bitcoin is going to be more integrated in the u.s economy we've seen it with micro strategy putting it on their corporate balance sheet i would not be surprised if at least five i'm gonna put the over under at five corporate entities announce publicly traded companies announce their intention to adopt bitcoin or the fact that they already have adopted bitcoin in some capacity by the end of the year and then just what i'm seeing with bitcoin mining here in north america and oil and gas fields we're going to integrate the energy sector with bitcoin pretty aggressively in the next five years and i don't think there's any turning back once that happens yeah yeah i saw i saw some of your work that that's that's pretty uh that's pretty awesome

i definitely and definitely agree yeah so is there yeah it's it's happening the the oil and industry specifically is is really thinking about bitcoin seriously right now so yeah and you know like that's that's all good points i think like there's no start date as all this stuff there's no start date there's no end date end date to uh to all this stuff and like i i say this a lot as well when i sort of talk about inflation and like sort of the ideal view that we want to get to the society or whatever like um you know my i'm pretty sure my ideal society your ideal society you know unless we really succeed with transhumanism and stuff we probably will never like really see you know anywhere from 100 years to 500 years from now uh we're talking you know not just 200

sovereign flags around the country but you know like around the world but you know 7 billion 10 billion sovereign flags however many uh people we have at that time and again people are always going to be complaining about something at some point always going to be uh transcending and emerging from beyond uh the state where they are so like i definitely long term super super optimistic and things like you just said about oil and gas absolutely uh absolutely apply there but like bringing it back to like the state of the police in the u.s as well i agree like i've heard all that those uh ideas about retraining and stuff and if you burn it all down i mean again you're no better than former you know germany after world war ii or the soviet union

after world war ii or eastern europe just like just completely destroyed completely burnt down and took a long time to regrow and even then if you're under socialist uh leadership and system you're not going to grow nearly at all uh so so there's there are all of those things um but i just say like yeah i definitely am for the more gradual uh sort of rolling back of problems and how that goes like i would love a private i would love it where back to you know the seven billion sovereign flags i would love where we had you know private insurance private defense uh bitcoin and all sorts of other things which keep a free market society going but you know you tell i would never bring that up at a dinner party because people think you're like crazy or just

extremely boring and pessimistic like you know that's just naive it's never going to happen it's never going to happen so yeah it might not in our lifetime but i mean if you just if you just stick to a principle you try to stick to these free market principles and you try to keep pointing out that you know all you are doing when you say that our system won't work or it's unrealistic whatever you're just doing a nirvana fallacy you're showing something that's impossible to achieve and it's saying oh well your system won't achieve that so it's not going to work well i could show you the opposite of nirvana fallacy it was a fucking hell fallacy and i can show you that your system achieved that many many times 100 million times over in the last centuries

ours did not uh so that's definitely i think where we got to go we got to stay positive about it and And I would love to have more private sort of systems in the U.S., more localized city-states, whatever you want to talk about. But, I mean, yeah, it's not going to happen anytime soon. So we've just got to focus on positive. Keep chugging along. Matthew, it's always an immense pleasure. Thank you for the work that you do.

I wish we could go longer here, but I've got to jump to this funeral. Is there anything you want to leave the freaks with? Any parting notes? Where can we find you? Any information you want to share? Yep. So CryptoVoices.com is the website. CryptoVoices.com slash BaseMoney or BaseMoney.world

if we can find more information about what we've been talking about today. We publish that BaseMoney update every quarter. We are working on it. I've been saying this a lot to my listeners. It's been slower pushing out the content every week this year, frankly. But I'm working on some other content. Fernando is doing a lot with his YouTube channel down in Brazil, which i'm on sometimes uh so you can find him there but um yeah we're we're we're continuing

on and uh definitely happy to talk to you anytime marty all the best uh all the best uh this morning at this funeral and everything i'm really glad to talk to you uh beforehand yes can't wait till we can meet in person throw back some beers again yeah absolutely man gotta uh gotta yeah can't wait for that gotta gotta figure out a way to travel safely to you but uh once once we're there it'll be we'll figure it out um that's all we got this week freaks peace and love okay take care all right