TFTC: A Bitcoin Podcast - #273: Supply chain problems, a proposed solution, and Bitcoin + Natural Rights with Ross Kennedy

Episode Date: October 6, 2021

Join Marty as he sits down with Ross Kennedy, founder of Fortis Analysis, to discuss: - The global supply chain issues - How the California ports work - Why there is no easy fix - How Ross thinks we can fix the problem - Our over dependence on Southeast Asia - Woes of the Cold War mentality + USD reserve status - Bitcoin as an extension of Natural Rights - much more Follow Ross on Twitter Check out his Substack 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. Unchained Capital. Check out their white glove vault concierge service that will take you from zero to secure multisig setup in no time. Use the code TFTC and receive $50 off that package that includes 2 Trezor Model Ts and $1,000 in your vault. Braiins. Braiins are leaders in the mining industry; running Slush Pool, creating firmware to make miners more profitable (Braiins OS+), and building out Stratum V2 to help further decentralize mining and make Bitcoin more robust. Check out their mining profitability calculator. Compass Mining. Compass wants to democratize bitcoins hashrate and give everyone the ability to strengthen the network while mining bitcoin profitably. Thanks to Compass, it’s never been easier to mine bitcoin. Check them out at compassmining.io

What is up, freaks? It's your boy Marty Bent here. Touchdown in Austin, Texas. With no furniture. Luckily, my house has a nice outdoor screened-in porch. I'm here in the tool shed. Got my computer set up, standing up. The show must go on. You freaks don't care if my furniture hasn't arrived.

You don't care if I don't have a desk. Luckily, i packed my computer shit in the car that i drove down here so it's not in the moving truck that's already four days late anyway enough about me you're not here to to listen to me you're here to listen to the guests that i speak with and today's guest is a very special one uh one of which a few of you freaks have tagged in in replies to some of my tweets about the supply chain inflation and just how borked it is his name's ross kennedy goes by man integrated man underscore integrated on twitter and he called a lot of the supply chain fuckery

that we've we've seen unfold over the last year and a half early last year he wrote a bunch of threads explaining how supply chains were probably going to uh be a bit perturbed by the the top-down control of the global economy so we jump into that we talk a lot about bitcoin and natural rights uh towards the end of the show it was a really good episode got cut off at the end again uh i'm making this makeshift desk here in my my tool shed in austin texas and i didn't realize that my laptop last night was not plugged in and being charged throughout throughout the interview and right at the very end luckily it was at the very end when we were we were shilling ross's wares is his sub stack that that it cut off abruptly luckily the the audio is saved um and we

will link to to his sub stack in the show notes i thought it was an incredible conversation take it easy on the nft and crypto talk all right all right we're recording new corners okay this it was brought to you by our good friends at the motherfucking cash app cash up so you stack sats and sats receive sats and sell sats if you so please we're saying sats sats sats sats sats because sats are the standards 100 million sats in one whole bitcoin not to buy a whole bitcoin not to buy a fraction of a bitcoin you can stack whole sats instead and you better better start stacking asap they're getting more expensive by the minute here we got a nice little pamp here today, October 6th, Wednesday,

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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 sitting down with Ross Kennedy. We're going to get into a lot of stuff tonight, but we're starting with.

how cubs fans are just transient drunk assholes i used to live just south of wrigleyville and i've experienced this personally they're not really fans they're just people like you said ross that like to go and get drunk at baseball games to be fair i mean we all like to uh we all like to get drunk at baseball games you know periodically but uh it's not really the defining feature of of the fan base at least for me as a cardinals fan so uh we tend to celebrate winning and winning a lot and uh we're probably not going to do it let's be real like we're we're the eighth best team in the playoffs i think so well big streaks aside better than the phillies uh yeah phillies we we don't pride ourselves on winning we won once no or twice we won twice in the

history of the phillies at least uh should we rename it should we rename this episode the mitch williams broadcast i wish no i think this is bigger than baseball this podcast it is bigger than baseball things are fucked up right now i think we had to break the ice with some late baseball talk but we're here to talk about some pretty serious things i've had many people either dm me or just directly tag me on twitter and urging me to get you on the podcast to talk about supply chains it's something that i've briefly uh touched on over the course of the last year as supply chains obviously have been at the forefront of everybody's minds as the forced uh shutdown of the many economies across the globe has has thrown quite the wrench in the

global supply chains which are very heavily concentrated in southeast asia last year early on in the pandemic you wrote a few threads which are pinned in your uh pin tweet uh about exactly what was going to happen and it seems like that has played out so i'd love to jump into it uh your most recent uh newsletter jumped into what's going on now with the the energy crisis in china and the repercussions of that but i think just to set the stage how did you know well well i think we should describe what the problems are like we shut down the global economy what happens to supply chains when you when you have a bunch of uh politicians and and bureaucrats just decide that that the economy can't can't function as it should as normally yeah it's um a big part of why

why when i wrote it none of this made sense to anybody right but you know the to the extent that it really seems like i was just operating way ahead of the curve it was it was a few things happening. One, most of my career has been spent, all of my career has been spent in logistics and supply chain on both the international and domestic side. But a big chunk of that has been doing business in Asia, either exporting food and feed ingredients to Asia, importing chemicals or fertilizers or toys and electronics, furniture, whatever it may be. So I've got a pretty good feel the way most people do what i do for a living which is you know sort of my day-to-day is as a freight porter and and uh you know supply chain strategist and things like that for companies

and you get a feel for culturally what's like really really important to different cultures and and how their how their workflow operates and and i had my my first principle i guess of this whole thing was the second the second china feels like they've got a handle on you know and this was in even in february i was starting to feel these things once they once they sort of have a handle on uh what we now know is covet 19 then we were just calling it the coronavirus they were going to start forcing people back to work as fast as they possibly could uh because china is uh to to some degree you know xi jinping and the ccp want them to be a dual circulation economy where they're manufacturing for export, but they're also manufacturing and trying to goose consumer

demand domestically. But it's a very top-down approach. And so as, you know, the country shut down for, I think China was shut down for almost 10 weeks. When you factor in the shutdown pre-Lunar New Year, all of Lunar New Year, which is three or four weeks, and then three or four weeks after that, they weren't manufacturing much. So I was operating basically on a hunch that they were going to try to V-shape recovery that thing as fast as they possibly could. Get everybody back to work, start cranking out goods and services and things like that and get the supply chains moving again. The second of the two first principles is that the United States, particularly the United States, our logistics model is not built to stop on a dime and restart very, very

quickly. I've talked a lot lately about the accordion effect. It's a really good way to sort of visualize it for people where you, a 10 mile long line of cars will slam on their brakes in 30 seconds, a column of 10 miles may stop and come. But by the time that first car has resumed moving again, it takes that whole column an hour to get back up to speed and to get everybody's space back out and operating normally going down the highway. It'll be a parking lot at the back of that 10 miles for a long time. So when you kind of hold those two things in mind, that China is going to restart much, much faster than the U.S. would be able to absorb that volume pushing our way, that backlog of purchase orders and things like that that was starting to be manufactured,

the ocean carriers pulling capacity out. I kind of sensed that once we got into that train wreck, that congestion effect, it was going to be very, very hard to unwind. What I had no clue was going to come was uh the particular mix of lockdowns and stimulus happening sort of at the same time um but once that first round of stimulus went in and i started seeing purchase orders of factories in asia that i work with start skyrocketing and and that was for that was around may and june and i thought oh no we're never gonna fix this you know it's it's just not gonna happen And, um, yeah. And so we find ourselves in the situation we're in where what becomes congestion eventually just becomes outright failure of the system. And now we're in, you know, the term I use a lot lately is catastrophic failure cascades where, uh, the avalanche has started down the mountain. and at this point it's just going to start taking out everything in its way it'll eventually lose

steam lose energy as it hits the bottom and you'll have a period of calm and that's when we're all going to kind of pick up the pieces of of our businesses and our economies and say okay what's the real damage here and what happens after that yeah so let's let's dive deeper into like the we zoom in on some more of the the granular facets of what's going on because what i see an outsider looking in prices have gone up uh raw materials the lead times to to get those to actually uh begin building stuff again has gone up astronomically with price i'm just moving into a house trying to buy furniture and then we just keep getting email after email it's going to be two more weeks two more weeks two more weeks uh we just have a few beds in this outdoor furniture

right now and it it seems pretty scary like the the inability to get goods uh as well as the increase in the prices of the goods that you can get is putting quite a stress on the economy and i'm happy that you mentioned that we uh shut down the economy and did stimmies at the same time because that's something I've been sort of beating the drum on the last year. It's like, hey, this is exactly what the Weimar Republic did before they had their hyperinflationary event, right? They didn't want to. The French came and occupied the Weimar Republic

and they wanted to get money from the factories working. The Weimar Republic leaders said, don't go into the factories. Don't work anymore. We're going to make stuff to pay the French. We'll print a bunch of money, give it to you, and you just stay home. It seems very similar. They're obviously not exactly the same, but it seems like we're repeating or at least rhyming the problem that the Weimar Republic had.

And so that's what I've been focused on. I've just been looking out for hyperinflation, but as we zoom in on the supply chains, it's becoming more and more evident that it's going to, it seems like it will be a while before they get anywhere close to being back to normal. Yeah, it's, it's, I describe this pretty frequently as sort of a durable, you know, durable dilemma that we're in here. And an economy is not at any scale, really, even on a very local scale, it's not something you just start and stop, start and stop, right? It's not a race car. It takes time to get up to speed. It takes time to get everybody, all of the stakeholders and actors in an economy back up to speed and get them sort of the psychology of the market, if you will, able to feel like, hey, we can conduct business again. And so we've had this whipsaw effect where simultaneous to us being told that this is the end of the world, this is the big one, this is the pandemic that's going to just lay waste to everything and humanity and the whole deal, right?

You hear that alarmism maybe from some of the more extreme people who are really concerned about what the coronavirus can do to people and what it can do. But the real devastation, if you're not counting the cost of human life, which is which is the metric, you know, I think we all base things by ultimately. But if you talk about the you know, certainly about the health of the economy, if you talk about the health of the body politic and our ability to meet our needs in some way that that patient is very much on life support right now, too. Like you said, it's it's there's a time you could walk into Ashley Furniture and get, you know, pretty much anything you wanted. And if you were custom ordering something, it was going to get made in the factory in two weeks. It was then going to be on a ship. It was going to take 20 days to get to Los Angeles, then maybe another 10 days to get to the distribution center to your door. And so within 45 days, you can have kind of custom built anything. Right. And it could be made half a world away. When I were in a situation where even the main generic always stocked in the store because it's high volume items that Ashley Furniture has,

you know their distribution center that's out by ontario california is is one of the largest in the inland empire which is itself a massive distribution market and so they have this enormous dc they've got container after container after container piled up there and then all of the empty containers that they have are sitting in an unused part of ontario international airport waiting to get back to the port and every single one of those empties you know empty container is it's an empty container needs to go back to asia but it's sitting on a chassis and that chassis is needed to get another loaded box out of the port and delivered somewhere so if you don't even have those chassis that custom thing that you ordered may be sitting in los

angeles but it may be another eight to ten weeks before it can get to you because the trucker has such a line of containers ahead of that container so now you're talking from order to delivery 90 days 120 days 180 days um i've got something that i ordered and it's i was quoted when i initially ordered and i know the factory i've shipped for them in the past and i was told you'll have it in april you'll have it in april and i'm like of 2022 this was six weeks ago you know so i was i was being given almost a nine month lead time and it but it does make sense we are we are in that in that place and now because of the uncertainty we're dealing with at the front end of the supply chain in asia it has you know it's now congestion here we've got

all the power situation that people are watching in china and the whole world order because of this pandemic what started as we're worried people are going to get sick and die is now a situation where we're worried that our entire globalized way of living is going to get sick and die i'm sorry my son just uh fell out the door over here and you live you live on the 10th floor or maybe you should go deal with that. Yeah. Here, buddy. Come here.

Come here real quick. No, you're good, man. Yeah, you just fell out. I guess he opened the door. There she is. That is Tales from the Crypt of the Nostalgia here. So, yeah, we have these. And so that's been the biggest,

like how come we just can't build more chasties? get them out like that is i think right now i think that's the tweet that actually incited somebody to tag you and be like you need you need to talk to us like this it's not like straightforward as the ports or the cargo ships just being out and docked off off the coast of california it's like why the hell are they just standing there why can't we figure out something like uh like figuring out how to divert them to another port or something and unload that stuff and just get it it's like all these goods are just sitting there off the coast you can see them but you can't you can't access them and i guess what you're describing there's intricacies of

the the supply chain and the chain of shipping shit across from from asia to america that you can't you can't really just uh spin up more materials to facilitate you know that stuff like that? No, the, so the, the way the process would normally work and, and, you know, I'm sure you have an awful lot of people within, you know, within the audience who, who probably have conceptual, at least have some clue of how this works. And there's certainly have self-educated on it in the last few months, I'm sure. But the, what the, the old normal, the way we used to sort of look at it was we, okay, we figured it was going to be 15 days ish to get something from say Shanghai to Los Angeles. And that ship is going to birth almost immediately, maybe within

24 hours of entering the harbor. And it's going to take about 24 hours to what we call work the vessel, which is to get all of the loaded containers off that are supposed to be there and then put either empties back on or export containers back on. That'd be things with grain or timber products or feed ingredients or chemicals, various sorts of things that would be going back to Asia on that ship. That ship's done 24 hours, sails up to Oakland. Same process happens again so within about a five or six day period that ship may be able to call three different ports on the western seaboard of the u.s and then it's got all of its exports and empty containers back on and it's right back to asia and for a 15 to 18 day voyage and so that

that whole ship you can expect that whole ship to turn asia u.s back to asia in 40 days 45 days and that's maybe even if they're stoppages and that's because these these ports the terminals and the giant gantry cranes that we have and the very qualified and experienced longshoremen that run this equipment, the process is optimized to clear that ship as fast as possible, get all of those containers on the deck of the terminal

and then immediately begin segregating them and shuffling them around the terminal. This block of 300 containers is gonna get on a train that's gonna go to Chicago. And then this block of containers here is all for local pickup and delivery to all the distribution centers in the LA area. The port is very efficient at doing all of that, but it also relies on the ability of truckers for the local stuff to be able to gate in and gate out very, very quickly.

Not only take loaded containers back to a distribution center, whoever's contracted them to do the move, but then also to bring those empties and those chassis back, and then they just keep cycling as fast as they can. And so with the pandemic, the very first slowdowns in congestion began to be the fact that these containers were coming in fast and furious the way they always do. But there were fewer truckers because truckers were either sick or staying home or got contact traced, right? And so you saw 10, 20% of the labor force at the distribution centers and truckers and everybody else suddenly not there. and the containers begin to pile up very very quickly um when you can't turn the empty boxes back with the chassis and pull another load it starts this very quickly kind of starts a snowball effect and we've been dealing with chassis issues and and you know congestion and inability you know slow inability to turn containers and things like that for a long long time at los angeles and long

beach but it's never been this bad and so we just kept shifting demand for things that we're buying away from restaurants away from goods and services going to baseball games you know getting drunk at baseball games we change that for buying a new couch buying a new tv because we're stuck at home we can't go anywhere and we want new right so we as as we are because of the lockdowns having our buying patterns shift but also having our ability to receive and and transmit cargo sort throughout the system, as it were here in the US, we're still buying, our demand is now increasing and accelerating the amount of stuff coming in. So we're constricting at one end, the ability for the system to relieve itself and discharge cargo and run its normal operation cycle. And at the

same time, we've made the opening at the top of the tube toothpaste even bigger. And we're trying to jam more in and more in and more in. And at some point, this really around September of last year. It took about three months for this to build. And then about September of last year, we entered into this very durable state where ships weren't turning as fast, containers weren't turning as fast, and rates began to pop and pop hard. We doubled in about a month in September. And once we breached that psychological barrier of about $2,000 to the West Coast, $3,000 to the West Coast, it was off to the races. And then in January, Europe and the United Kingdom had their first $10,000 container. Uh, what was a $3,000 maybe lane the year before, uh, 12 months prior

became 10,000. And once it was 10,000, the ocean carriers realized we can do whatever the hell we want. People are going to keep buying. They're going to keep shipping cargo and keep shipping freight and the rates begin to skyrocket. And it's just that according to effects still hasn't unwound itself, man. It's it's, uh, I mean, I've got a plan to fix the ports. I have no idea if if anybody who matters is going to hear it and take it seriously. But, but I do think that as, as terrible and imperfect as my idea is, it's probably still better than anything else that's out there, but it would require a lot of coordination and a little bit of willingness to

accept some pain on the part of all the stakeholders. Well, what is your plan? How are we going to fix this? Cause it seems like a pretty massive problem. Like I, again, I'm speaking with you now because I want to learn more about it. last week in preparation for this i called my buddy who's pretty high up at molo logistics out of chicago was just like what the hell is going on how bad is it he's like it's pretty bad dude it's pretty bad for example our uh our revenue per loads of 50 year on year so this is last week i guess october to october um he's like it would take us like five to six years at

50 revenue per load growth previously so it seems like things things are are pretty massively uh ramping up here how to how would you fix the port problem specifically um there's a few things that we have to do kind of concurrently the the biggest issue to resolve is simultaneous like three things have to happen at once you have to resolve the you have to increase turn times of the container themselves get them out of the get them out of the port faster get them unloaded faster get them back faster you got to get that turn time down you have to find ways to expand chassis capacity to the extent that turn times alone don't resolve it and you have to expand the pool of drivers and so if goal if goal is to increase turn time and increase chassis

utilization which is you can't move container without a thing moving on right we have to free up we have to free up more chassis to pull more containers but do it with the the systemic constraint we have of driver shortages that we're facing in California and everywhere else in the U.S. We have to do it in the face of ongoing sort of contact tracing efforts or labor being slowed or workers not even coming back because they got all these stimulus checks and the juice isn't worth the squeeze for the laborers to come into the warehouse on a part-time or full-time basis. You have a lot of these things. So we have these constraints that we can't really fix. Um, but what we can do, what we can do is create a model that allows us to flex up capacity

intelligently, uh, of cycling these containers. And so the way I would go about that is establish drop lots of empty container for empty containers all over the greater Los Angeles, Long Beach area. your three big your three big regions that you have to account for uh going out distance wise you have immediately close to the ports you have city of industry or you know we rename the city of industry but it's compton right um you've got a lot of these you know basically uh cities or towns or jurisdictions that exist solely to be uh organizing political bodies and financial and tax collecting bodies for all the distribution centers somewhat close to the port and you have to deal

with that. You have to deal with the fact that Orange County has built up pretty significantly. And at the far edges of Orange County, where a lot of the distribution centers are, you're talking 30, 40, 50 miles that a truck's got to go in order to deliver a container and then bring it back to the port. But then you have the Inland Empire, you know, out east and sort of east and northeast of the city. And when you're talking like pretty far out in the Inland Empire, you're talking 75, 80, 90 miles from the port. People really forget how big the greater Los Angeles area is. The traffic is notoriously terrible. And so you have to work within these constraints because the issue we're really dealing with is more or less locally constrained to the port

to Los Angeles. Oakland and San Francisco have cleared up a lot of their backlog. Seattle and Tacoma are seeing some backlog, but they're still more or less turning things pretty quickly. Savannah's constrained and backed up, but not really that bad. New York's okay. Charleston's okay and so the issue really is that it takes way too long for a ship to get from shanghai to say savannah for a lot of shippers and so what they're doing they're putting it on ships going to the u.s west coast even knowing it's going to maybe sit in the harbor right now for three weeks and then it's still going to take another three weeks for it to get you know to a warehouse transloaded put on a domestic truck and then taking someone in the u.s that six weeks is still better than it

would be for them otherwise. Right. And so everybody's making the same calculation, the same trade-offs. So we have to get containers away from the receivers, the, you know, the constant needs of the importers, and we have to get them out of their facility and get them staged up and ready to go. So you establish drop lots all over, man them with longshoremen, people that want extra hours, whatever it may be, but you have the ability to connect to these lots to keep track of the containers and where they're all at and the chassis that they're sitting on all over the city. Simultaneous to that, what you need to be able to do is temporarily waive or at least increase the capacity of drivers available that can go pick these things up by increasing your

gross vehicle weight allowance and saying, okay, this guy has driven a box truck. He doesn't have a CDL that's classed up, but he knows how to drive a semi, right? And all you want that guy to do is take a 12, 13, 14,000 pound tractor, go pick up a 12,000 pound container and chassis unit. You're still about 25,000 pounds for the whole unit. And you want to maybe even 30,000 pounds, but just have pools of people shuttling empties back. Let the, let the experienced dream and the experienced container truckers pull the heavy containers do the more dangerous aspect of the work driving during the day delivering pulling containers out but get the empties away from where they're being bottlenecked at the receivers and have now here's where it gets fun national

guardsmen right there's a huge there's a huge amount of the national guard in the united states has over 50 000 heavy you know what we would consider sort of heavy vehicles that are of a class where if they were in the commercial sector, they would need a CDL. That's tractor trailers, that's heavy fuel trucks. So you have an experienced pool of operators that can drive and do these things. They don't need to deal with the port. They don't need to interchange and go through the whole rigmarole and worry about making an appointment. And then it takes four hours to get into the port just to get a container. That backlog has to be separated. What happens at the port, the delays at the port have to be separated from the ability to get an empty container

and chassis back to the port we establish drop lots we utilize as much as possible um trained but maybe not necessarily licensed drivers to you know heavy that are going to be driving 80 000 pound units they can drive 25 or 30 000 pounds safely so let's have them let's have the national guard let's have every single person capable of operating a vehicle safely of that size and start pulling that stuff back to the port and start cycling those chassis back as fast as possible getting the empties back into the port and back on the ship so we begin to clear that congestion that backlog and then the way you do that because la is of course famous for its traffic the way you do that is you establish routes from each of the major drop lots that

you have around the area and then you run all of those empties back at night the ports are going to 24 7 tti which is one of the long beach terminals um tti is piloting a 24 7 operation but your problem is we don't have enough drivers to take advantage drivers only have so many hours in a day they can drive and then they slip seat the truck a new driver comes into the same truck and then he runs for eight or ten hours but your problem is you're not getting maximum utilization of that 24 hours it doesn't matter if the port's open right there's not enough drivers to get in and out and be pulling things to take advantage of those hours you can't run three shifts most companies don't have that available so we utilize the licensed up drivers we utilize

the cdl guys the ones that are experienced at working with the ports and they are all they are doing just 24 7 is pulling loads out of the port as fast as they can to the extent they can pull empties back to the port they do it and back to the terminals but to establish these drop lots everywhere and utilize every other driver possible that's not necessarily a cdl guy but who is experienced and safe can safely operate these things get them cycling back to the port in a completely separate lane of effort and do it at night. We have express lanes all over the U.S. Most of the roadways are marked for it. So why from the hours of, say, 8 p.m. to maybe 3 a.m., 4 a.m., 5 a.m., can you not have portions of the highway that are essentially express lanes to get

these empty containers out of the Inland Empire, out of Los Angeles County, out of Orange County, and back to the drop lots at the port so we can utilize these chassis? so by dividing and reorganizing the way we think about how a container movement should work we have the ability to build sort of some excess capacity back into the system where we didn't have one before so that would be that part of the operation there's a lot of little nitty-gritty ins and outs things people who kind of know what they're talking about are going to hear what i'm saying and and go well that's not workable for this reason it is absolutely workable but i'm not going to waste your whole podcast time getting into the tiny little minutiae but it is absolutely

feasible it is absolutely possible but you can see where something like that would also take an enormous concentration and coordination of effort from a political side from a law enforcement side from a um all the ocean carriers and all the trucking companies and everything i mean it would be it'd be a big lift but we can do it but we can't do it not only well i i can't i don't have enough experience to to validate if we can do it the way you describe it it seems like we can do it i i don't care if we can do it i think we have to do something right i think that's the point uh i want to be like we have to do something like it's yeah a good a good point a good plan executed now or even a mediocre plan executed now is better than a perfect plan executed a week from

now yeah right i mean if we just stand around i mean problem admiration is a thing that you know that's what like a lot of folks in the military call it when we've identified there's this giant strategic issue and all these papers get written about what a problem is and nobody really puts a plan together and actually begins to execute towards solving that problem they just they stand around admiring the problem like it's a piece of art and they just keep talking about it well i'm sick of talking about the problem a lot of other people are sick of talking about the problem so i'm just going to be the asshole that just stands up and is like hey here here is a plan good good bad or indifferent but let's try it let's at least kind of get off the x

stop constantly talking about what the issue is and begin moving towards it the white house does not need to be holding more freaking stakeholder meetings and task force meetings and council meetings and talking to the CEOs of Amazon and Walmart and Target about it. Those guys don't know jack shit about what they need to be doing at the port. To get to that level, you have to be fundamentally a brilliant human being in so many ways. You got to be smart. You got to be politically savvy. You got to be able to do those things. But this weird, dirty, nitty gritty world of granular ground level containerized logistics in a highly congested environment, that's not something that anybody in Washington, D.C. or in the ivory towers

is going to have any concept how to do. It's going to take five truck drivers, five longshoremen, five port executives, some people from the ocean carriers, and then law enforcement and local politicians all sitting in a room together and going, here's a map. Here's where we're going to start putting all of the containers that we need to get back to the city. Here's how we're going to get the National Guard activated to start pulling these things back. Here's how we're going to get farmers, 16-year-olds, 18-year-olds who can drive a farm truck but aren't CDL'd up, but they can haul grain to market under the farm truck provisions that California has, every state has them. Get those guys in working. Have them working during hours when the system is not already

working let's make more use of the of the labor and and and the hours of the day that we have that we can't make use of now because the system is not built for this so we have to break that break that mold reorganize the work get new blood in and we would start addressing the issue you would start seeing i think within two to four weeks you'd really begin to see signs that this is the issue that particular issue of turning containers faster will begin to abate and then you can potentially begin to unwind the

you can potentially unwind that cascade I'm glad this I'm glad this video is not going out right now I might have just like look like Charlie Day and it's always sunny he's trying to explain like Pepe Silvia yeah Pepe Silvia Pepe Silvia where's the mail but

we need to think creatively like this another thing I would add though is just like we need to end the stimulus check so we need to get people back to work it's it's um it's funny i'm i'm i'm such a a free market individual sovereignty let the people decide sort of thing and i i do i do laugh at the people that that are defending the particular way we run our economy because we do not have a free economy we really don't it's it's highly regulated there's a huge amount of walled gardens and regulatory capture that's happened and we try to We try to paper over our own bad political decisions and our own captured interests and things like that by utilizing money supply and interest rates.

And we manipulate our money in such a way that it manipulates human psychology, sometimes deliberately, sometimes accidentally, because the masters of the universe can't possibly know everything. And so you're right. We have to quit creating the ability for people to unthinkingly spend on things they don't really need. It doesn't just have to be a check. It doesn't just have to be free money. There's other ways we can resolve some of the human issues that we face of how do we take care of people who, for whatever, to one degree or another, aren't as able to take care of themselves as others. We can still help those people, but we don't have to do it just by sending free money willy nilly to every Tom, Dick, and Harry in the world. And then they're turning around and buying things that are congesting the ports.

That is a perverse incentive. And I agree with you 100%. Not only that, that's one part of the perverse incentive. than the other part is like yeah i'd rather make 10 less than i would if i were actually working and sit on my ass so i'm not going to hop in that truck why would i want to drive across the country i'm just getting i'm getting money from from uncle sam um and not to call call out anybody i mean again like you described like this is what you're incentivizing when you when you give these handouts it's just the natural incentives of the system anybody would absolutely take the money and

and and choose leisure over work if if they could uh yeah the average human being would i i wouldn't but you know i i've got you know i've got a bit of like a shark mentality like if i stop moving i'll die right i won't be able to breathe and so this is this stuff is what i know it's what i love um but a lot of people maybe aren't as fortunate to to be able to do what they love for a living and make money doing it and so you're right they'll they'll choose sitting on their ass playing playstation or going to the library and reading books and and you know spending their time differently than maybe not being as economically productive as they would otherwise if they had to be yeah all right and it's that's another actually in bitcoin where we talk about this a lot right

because it's a question i have for you and i'm going to ask the question i'm going to elaborate right so how much of this was predictable right and so like if if you were in the industry in in june 2019 or you were to be told this is going to happen in march of 2020 would you have been like here's what's going to play i mean it seems like you know exactly in march of 2020 with the threads and or early 2020 with the threads that you wrote that this was going to play out and yeah so on top of that like is this avoidable and so like in bitcoin land like the u.s dollars the reserve currency of the world it got that that way um via unnatural forces right nixon took us off the gold standard in 71 and then to create demand for dollars globally we essentially

had to flood emerging markets with cheap labor with dollars and purchase goods manufactured there in favor of of goods manufactured here at home we had to create demand for dollars how do we do that you go buy goods constructed with cheap labor predominantly in southeast asia and over the course of five decades and that that urge to flood the global market with dollars has very tightly concentrated our our supply chain in one one part of the world which has made us fragile to an extent very fragile i mean we it's a mix of things right it's it's when we fully decouple I mean because we we kind of sort of were decoupled from golden 471 um but when we kind of made it official and we said look

exiting the Vietnam war to whatever extent maybe we think we achieved our political goals um there you know we certainly saw and definitely Kissinger did and some of the others saw the opportunity ahead of us to not only make the dollar the reserve currency of the world but but outsource all of like the nasty dirty things that activities and outputs of economic activity right environmental uh you know environmental spoilage things like that uh air quality uh you know we saw all of these things that come with a heavy industry that can make communities sick because the chemicals are being dumped on the whatever it was there was certainly a game theory calculation happening there as well to say how do we use how do we use monetary policy and basically

the ability to float uh our currency for for political and economic you know gain not just not just hey we're we have a theory about monetary supply um i mean it was it was a weaponized right that the decision to decouple from gold and continue to expand the dollars, the global currency was an economic weapon. And it was a deal with the devil that we made because we thought it was one way to attack the Soviet Union and degrade and disrupt them. The more countries we can tie to us economically and financially, the harder it would be for the Soviets to be able to move in on them. So we kind of littered the world with economic tripwires, not just military, but also economic ones, where nobody really wanted to work with the Soviet Union unless they absolutely had to,

unless they were basically under threat of military force. So, you know, we spent them into oblivion. We captured the world and we thought we were at the end of history, which is why we started outsourcing and globalizing so heavily in the 80s and 90s. And we allowed China to take the brunt of a lot of that. And we did fragilize.

We fragilized ourselves big time because I think in our arrogance, we never assumed that, anything beyond the first door of where the world where the reserve currency the world nobody's going to cut off their nose to spite their face and really truly try to attack us on the basis of that strength and china decided to do it and they've been remarkably effective at doing it over the last 30 years and all of that has built together now to this sort of existential crisis of globalization that we have and um so to the extent we could have seen this exact sort of thing happening um mechanically i saw exactly how it was going to play out but it was always on the premise of in the worst case scenario of port disruption what is this going to look like and that was what i sort of operated on the premise of what i don't think i saw happening in the first quarter of last year because you can read some of the stuff i wrote then and i said yeah this is major

disruption it's going to be pain for months or even years but we're not going we're not going to see a total complete stovepipe of all global supply chains. I assumed there would be at least enough flex and global capacity. We'd begin to start making some rational decisions about what to do. And we did not do that. We decided to go full Wiley coyote, strap our asses to a rocket, launch ourselves to the moon. And not in the good way, not in the way all the apes listening are probably super happy about here. We're not going to that kind of moon. It's bad. It's a rocket ship and we're all going to die. And so we decided to play economic chicken with ourselves a little bit and say, you know what, out of an abundance of safety, we're going to lock down, but don't

worry if you can't go to work because we're going to give you all this money. But then we didn't do anything to offset the very, very predictable output of giant flood of capacity, leaving the market as the factories in Asia shut down, not giving the ocean carriers any incentive to keep capacity ready to go so that the second the factories came on, the system could turn back on and at least begin moving again. It took months and months and months and months and months for the carriers to fully get all their capacity back in. And by that time, the backlog was too big already at the factories. And, you know, we had a huge, you know, had a huge opening that we were dumping freight into and a very, very small, you know, way for it to exit that part of the system

and get moving to the u.s and so i don't think i could have predicted i don't think anybody could have predicted it with this level of specificity that this scenario was going to happen certainly once the factories began kicking back on and the u.s was just moving into lockdowns in march and april you know at that point my spidey senses were telling me and i was saying someone publicly that guys the this is not going to go away at this point like we're every day that goes by that we're allowing this paradigm to exist for creating three days of misery on the other side and here we are right um i'd figured early on i figured a year ago like september october of last year i figured we were going to be well into 2021 possibly into 2022 and i started doing the math on

when the labor strikes and things you know could potentially be starting in 2022 at the west coast And, you know, that's when I really started to realize, you know, we're going to clear up one mess just in time to start another. And so at this point, the decisions that we make on a monetary policy side, the next, I'd say, three to four months is going to determine how severe and extreme inflation is going to be for a while. We're probably going to move right into stagflation, right out of inflation. And that's going to be durable for maybe two or three years. And then we're going to move into deflation. because we're we're overbuilding everything now we're trying to fill inventories as fast as we can because we're all operating we being actors in the economy companies and things like that

and inflation right both from both from a fiscal policy side but also just from a a real price side because of how economic actors behave particularly in the u.s we're going to go from deficit we're going to just overexpand, overbuild, do everything we can to get as much goods and cargo into the system as possible. Price collapses are going to hit, companies are going to be left with excess inventory all of a sudden, and then prices are going to start to fall. And what used to take 20 or 30 years to have that sort of whipsaw effect is now going to take maybe four years or five years. And so it's going to be more severe, more catastrophic. There's things we could do to mitigate that, but I don't know that there's enough adults in the room in DC and New York and

at the fed uh to prevent us from really stepping on our own tails here yeah that's what i was going to say the the greatest shame of this all is that we have a bunch of making decisions at the top of everything i mean you truly are completely disconnected from not only the economy but your everyday american and they don't operate on the same field that the the rest they have no idea they really don't it's um the ones that get it the ones that truly get it i think are few and far between and they're usually i i mean the classic example of course is ron paul right uh and before him really ross perot i i all they did when ross perot was talking about a lot of these issues back in the 90s and pat buchanan was talking about these issues in

the 80s and 90s and they were mocked ruthlessly you know the globalization is the way and all the harvard mbas and all these assholes that that are lords of the universe that think that i don't mean to slander everybody that's harvard mba but at least a good 80 of them in the early 90s were certainly pushing this um they thought they were right because they everybody thought we were at the end of history the soviet union fell and now it's going to be renewal of pax americana and an american-led global world order and that was dumb as it turned out right there's always going to be someone biting at your ankles and eventually one of them's going to you know another dog is going to get big enough to be able to mess with you and but we made these decisions we made

these calculations they turned out to be extremely dumb ross perot and pat buchanan to some extent the 90s turned out to be completely right and then juan paul who i think has been right on damn near everything, going back maybe 30 years, we're going to look back and recognize that he was really John the Baptist out in the wilderness eating honey and grasshoppers. And we're going to think that God Almighty, he was right. Why weren't we listening? The Bitcoin community has been listening for a long time, which I think is why the Bitcoin community is the way it is. You have such a high degree of people within the community who are really focused on these concepts, individual sovereignty and following the steps of the Austrian school and the Chicago

school after that. And that's awesome. That's awesome. The exciting thing for me about the crypto world and blockchain and all these emergent technologies and ways of transacting commerce is it's, I think for the first time, forcing a scale of people, a real significant market and political economy moving scale of people to make decisions outside the framework of what does this cost in dollars and how do we uphold and support that system? There are a lot of people inside the community that are going, no, that insurgent mentality is going to rip the system apart from the inside. And the real battle is not to what extent is the house of cards going to come crashing down it's going to be how how do we leverage these ideas and this this sort of revival

of the individual human spirit how do we leverage that to build a system that that works better for people at a small scale and at a big scale instead of just for the captured interest in dc and new york and la yeah and i guess the bitcoiners argument right is like bitcoin the protocol itself is just an extension of natural law theory of natural rights it is the embodiment of the perfect protection of private property rights in the digital age and it fixes uh probably the most important tool that humans it is the most important tool that humans leverage which is money the fact that we've been completely disconnected from any semblance of a hard money or a monetary good that sort of curbs the the ability for central bankers and politicians alike to to

print money ex nihilo just on a whim central bankers central bankers operate inside a system every time they they uh increased money supply beyond a certain amount meant that they had to get a cat and nine tails across the back 10 times i'm not necessarily advocating for violence uh i'm not not advocating for violence every now and again but you know to what extent i'm kidding only people who really know me will know, but, um, I mean, you know, the joke being, no, if there were real tangible consequences to the very small body of people that make these decisions, I think their decision-making would certainly be a lot different, right? The more you eliminate consequences, uh, for, for bad decision-making at scale, the greater it is that,

That they will continue making bad decisions and building the potential for a complex cascade failure to happen. And that has to be part of the equation, too, as to what extent are we building new perverse incentives into a new system, vice-maximizing individual freedom to conduct trade by and between sovereign citizens. i mean i think it's imperative that we just go build the system in parallel and tell them to fuck off okay they were doing this you've messed i mean just look at the last year i mean he the fed actively attempted to overshoot their traditional historical two percent inflation target they did and then they acted surprised and told us that inflation don't worry it's only only transitory nobody could have seen this happening right yeah that's what they told us we it's like they just

piss on your face and tell you it's their ending they told us like hey we're gonna print so much money that we're gonna overshoot our target you overshoot our target oh shit we're surprised at what's going like and again like you mentioned there's no repercussions just today and biden who isn't making any decisions you can't even think but whoever's holding the strings of joe biden has announced that they intend to reaffirm jerome powell as the fed chairman um just in the last month you're free that's how that's how it works you got drone pile running the fed you got general millie running you know joint chiefs of staff and he's done he's done so terrific um it's uh that was sarcasm people couldn't see me rolling my eyes so hard it hurts

now um but yeah there's no consequences for these bad actors and they're really stupid self-interested captured decision making and and i gotta tell you i was having a conversation with someone um about uh about nfts and and it's a it's a thing that i've just now kind of started to try to wrap my head around but like the really exciting thing about nfts like if you take an artist like there's someone i follow on twitter and and and you know she's a she's an artist who does traditional art but she does photography and now she's something digital art and so she was sort of describing this whole nft thing to me and you know how she's how she's working on like selling her digital art this way and and the thought just kind of hit me that like if if if this if this artist you know who

has like uh you know like a screen name of of cake can can go create something and then completely independent of any government intervention list it for sale get paid in a currency that has zero government input into it. And really only has the government and monetary policy only having to the extent that when you have to pull it out of that currency to get it into a fiat currency, to go use it at the store or whatever. But we're now creating a marketplace and an ability for people completely independent of fiat currency, taxation, anything else to create something of value and to transmit something of value to someone else and have zero government intervention in any of that process and that is uh an anomaly an anomaly in at least the last thousand years

of economic history yeah that is incredibly that's incredibly exciting to me it's powerful it's powerful nfts are a big uh they're like a big a big meme right now like but like yeah The concept of being able to monetize content, again, like you said, individually. I'm trying to find notifications. I don't have any right now. But this podcast, it'll go out to the world. And in my RSS feed, I have a Bitcoin address,

a Lightning Network address in it. And as people listen on particular apps that have Lightning Network wallets on them, Bitcoin wallets on them, they'll be able to stream me, Satoshi's, per minute listened. Or if they like a particular point that we make throughout this conversation, they'll be able to send me Bitcoin directly to my wallet, which is just embedded in my RSS feed. It gets picked up on that open protocol. And it's crazy what's going on.

Like if you had a Lightning Network address, like there's ways in which like for this episode, I could split the sats with you too. I could say, all right, I'm going to take 50% of the sats and Ross is going to get 50 others. And it would go directly to your wallet. We wouldn't have to coordinate at all. and you handing me the address and you'd be able to profit from this episode as well in Bitcoin. And I really think it is the most important project in the world right now

because we need to wrest control of the money from the government because every bad decision, every top-down centrally planned decision that has put us in the precarious situation that we are today stems from the ability of these kleptocrats to to print money and go spend it on these terrible decisions as they see fit and so if you can just take control of that ability away from them the just opportunity cost of the economy on a global scale and really forces you to allocate capital more efficiently and towards things that

are actually worthwhile and and will add positive economic value to the overall economy the biggest thing that and and this and this is the real potential of of you know of bitcoin as as a as a currency but uh the entire model from a scalability side is the security of the security of transactional and contractual law um when i when i ship when i when i ship a thing right for me to be the whole thing's governed by a set of commercial documents there's a bill of lading which is an actual contract of carriage between all of what we call the beneficial interest or the beneficial parties, who basically at some degree or another hold title to the goods at one level or another. And it's all outlined according to the eco terms or international

commerce terms. And so you hear people talk about XWorks or FOB or SIF or whatever in the industry, and all that is, is a measure of how much does each party have to pay and what's their level of risk at different points in the transaction. Chris Bounds So being able to and you get into things like disputes over which document is the valid governing document. I have this commercial invoice that says X. Somebody else, the counterparty, has commercial invoice that says Y. And which of these is the authentic document? You spend a lot of time wrangling over what is legitimate. Right. So the ability to to secure and validate a transaction alone is an enormous step forward from a benefit, in my view, that benefits real world supply chains. But the next thing that has to really be resolved, and this is where I think the sort of wild, wild west thing that the NFT is kind of giving rise to over the last year, right, and will continue to, is that we are innovating a model of commerce that is only now starting to have some sort of output in the real world.

And that's always been the weakness of Bitcoin is how does a thing physically get made, physically get paid to be made, physically get shipped through time and space and do so in a way that's not denominated in fiat currency. And so that's been like that hard, really kind of choke point that I think Bitcoin and the system in general has faced. But we're closer now than we've ever been to creating a holistic model of commerce that accounts for the legal rights of all the stakeholders, physically making a thing and moving it through time and space to another place. uh we're closer than we've ever been to resolving that and i think the tipping point's going to come when everything except maybe customs fees can be paid for in some form of crypto well if we i don't i don't see the u.s government they're allowing us to ever pay customs fees in bitcoin um but we're gonna bankrupt the u.s government they're already bankrupt we're gonna we're gonna make sure they never do what the trend i would pay attention to and actually when i'm very close to i'm in the bitcoin mining industry outside this podcast i'm sorry for

whatever the hell is in the background here and it's very loud uh sounds like sounds like tree frogs or cicadas cicadas whatever whatever's going on but one thing that i'm very close to and i'm very excited about i don't think many people are paying attention to is the convergence of the energy sector and the bitcoin mining world right and bitcoin mining is very heavily dependent on energy and the cheapest forms of energy are stranded and wasted energy sources throughout the the energy sector where to be wasted hydro solar wind natural gas that's being flared whatever it be you're they're being those wasted and stranded sources are being utilized to mine bitcoin and what i'm just seeing i work predominantly with oil and gas companies

using their flare gas to mine bitcoin we show up with generators we say don't flare that pipe it these generators will create electricity in texas right that's part of the reason why i'm down here and uh they they're having aha moments so they are beginning to realize that they particularly natural gas can get the multiples and multiples of the value that they're able to get at market price at henry hub nimex whatever it may be and so they're having aha moments and i think what you're going to see that convergence of the physical and the digital world is going to to happen in the energy sector and they're going to start pricing things uh in bitcoin and settling energy trades in bitcoin i think that's the big moment for bitcoin is when it is you transition

away from petrodollar having to go to saudi arabia convert your local currency the dollars to them by that oil and ship it back at some point it's just going to be hey i'm going to send you bitcoin it's going to have a settlement relatively in like pretty much instantly and and you're going to send me the goods, and we're not going to do any currency conversion on the back end. I'm just going to send you this hard currency, this digital currency in Bitcoin. I think we're closer to that moment than most people realize. All the big energy companies are seriously considering it, and some of them are already implementing it into their business stack.

I think that I would agree with that, right? Because without energy, food, water, and energy, right? If you can find a way to convert commerce in those three domains and the infrastructure of those domains to utilize Bitcoin at a fundamental level, the way they do dollars today, you're probably 90% of the way to solving the problem. And so the really interesting thing would be like, I know like Russell Ocum, for example, is, you know, the football player, the NFL player, you know, he and I've had some level of interaction kind of publicly on Twitter about this issue. And, you know, for him, a big passion project is increasing food security and jobs training and technological training inside inner cities and inside urban environments. Right. And so that always got me thinking, like, how does a guy like that marry his passion and advocacy for Bitcoin and individual sovereignty to real physical, tangible outputs that increase human health and security in places there wasn't before? Or like almost how to use Bitcoin essentially as a tool for good rather than as a tool for just a different way of transferring wealth, right? From one person to another. How do you actually create positive output with it?

And so the ability for someone to get paid in Bitcoin to tap into, you know, maybe their flare off, you know, gas and things like that. But then to convert that into a pipe, a physical pipeline of energy that maybe is powering a small vertical farming operation inside of a city that is a schoolhouse for agriculture and food for students and provides meals and healthy things to their families, but also gives them training. And that's where I think if you can convince that whole pipeline of stakeholders and people from the natural gas well all the way through to food in people's bellies in a city maybe 100 miles away, being able to do that, I think we're closer to that than we've ever been. And I'm not even worried that it's going to happen. I think it's inevitable. Human innovation is absolutely unbelievable.

And this pandemic has been a huge spark for innovation, really. as scary as it is we're talking about the supply chain disasters at the same time underneath and innovation you know like like necessity is the mother of innovation right and we're getting there and it is exciting that's one of the reasons i'm so hopeful particularly about america like i you know adam townsend talking it's like never short america and i really believe that like america is uniquely in some ways uniquely and fundamentally suited for the crypto and bitcoin revolution it really is we just we have a higher appetite for complacency in some ways in the u.s like we've been fat and sassy for a long time um but now we're being challenged in ways economically

and militarily we haven't been in anybody's memory really and i think that's going to spark a level of innovation and creative capacity in people and get them off their asses to start doing some really interesting things and i like what you're talking about you're starting to denominate a fit physical creation of power in in a in a non-fiat currency that's amazing to me absolutely amazing to me that we're already at that point it's going to happen within a decade it's it's moving much faster than people realize and to your point about the food and the circular economy there that's happening as well i've had a gentleman on the podcast he gives my name untapped growth on Twitter at Untyped Growth.

His name is Joel, but he's doing... Very, very smart guy. Yeah, he's doing regenerative cattle farming. He's creating these cattle farming bonds that are paid for in Bitcoin. You can get paid out in meat and you can own droves of roaming cattle that are working to regenerate desolate farmland.

If you can capture their methane and run Bitcoin mining rigs off of it, there you go. Like cow farts, literally. People are doing that as well. it's all no way come on yeah oh yeah that's amazing what's happening there's uh there's manures there's the ability to capture that methane and the the question is is is how is the flow variability of of the methane coming from cow farts is it is it enough to sustain the

money operate long enough that's something that needs to be figured out but people are working on they're at least going to figure out whether or not it does work necessity is the mother of you know of invention man so here we are cow farts running bitcoin money rigs that's pretty incredible it's the bitcoin mining incentivizes bitcoin mining the the pure mechanism of proof of work and the its demand for energy the need to create electricity to produce hashes that could potentially uh allow you to add a block to the bitcoin blockchain which then gets you bitcoin that then drive is going to drive crazy and i mean it already is it's going to incentivize nuclear energy i know nuclear reactors that want to go to or nuclear people nuclear companies that

want to build reactors and put them in basically remote places that are using diesel generators that are costing their localities 30 cents a kilowatt hour they want to go and bring cheap nuclear energy to these localities however you know you can't just bring a reactor plug it in and serve electricity it takes time to build out the transmission lines to actually connect to that grid and bitcoin mining is the perfect mechanism to incentivize that you can bring the reactor and create a small connection to a mining operation that will pay you for the electricity while you're building out those transmission lines and once those transmission lines are done you serve that electricity from the nuclear reactor to the local community and you take up

your mobile bitcoin mining operation you move down the road and you do it to another community like we're in bitcoin is going to bring cheap abundant energy to the world it's going to take time but it's happening it's going to make us the most energy efficient civilization that's ever existed on this planet so the global the global commercial fleet of ships is like 50 000 let's say maybe 30 of them are of a size where it makes sense to run them with nuclear power the way we do submarines or the way we do like aircraft carriers i don't know you know i've thought forever that we need to have nuclear powered commercial fleets we do not need to be burning freaking heavy fuel oil and marine fuel you know bunkers in the ships we don't need to be

mixing them with all sorts of other crap to to get to this ultra low sulfur content uh that's wrecking ships engines and causing them all sorts of distress i mean very famously we had a whole run of these issues in the late part of last year in the early part of this year um you know to the extent that we should be thinking that way i mean hell i don't know man maybe maybe putting a you know bitcoin mining operation on the back of a commercial ship that's run on nuclear power is a hell of a way to argue for converting commercial fleets over i mean it's possible too especially if skynet becomes a thing you're gonna have internet in the remote areas of the sea as well so you can just connect skynet and send the hashes over that satellite connection

maybe the matrix had to figure it out we should just be like utilizing people's batteries this just gets away from the this gets us away from from the matrix we're gonna get back to to building things and meet space i love it well we came here to talk about supply chains maybe we should end this i i'm sorry for going off on bitcoin tangent i can go talk about that stuff no it's a fact it's a fascinating thing it's one of the reasons i was like super excited when when you reached out i was like because uh i get to talk about like why things are screwed up a lot i tell customers every day i have conversations with customers that you know it could be a company that makes fitness equipment it could be a electronics company

it could be a food and feed ingredient you know importer but what are tires it's not a thing everybody's freaking out about some amount of tires and there's not um that whole supply chain is disintermediated and disrupted really bad too but to the extent that i get to talk about like really negative things all the time and like to the to the point that the opposite of my personality i'm a very optimistic and hopeful person i really am there's a reason i sign all my like newsletters and stuff it's like been sparrow sparrow while i breathe i hope and i mean that and and that's what like this whole thing was like super fascinating to me to like get in this conversation and start bridging that gap because there's not enough conversation

outside of bitcoin world outside of crypto and blockchain world about what does this all mean like like to one extent or another this is happening it's already happening it's a net i think we've reached past the point of it's an inevitability it is happening but it's also an inevitability that it's going to be at some scale a challenge to to the to the current global world order not to mean that like experience sense just the way in which we order and and govern our lives and that's our supply chains fundamentally right if logistics is a map of human intent supply chains or human terrain it's it's the way in which we navigate and solve our own differences and we move up

Maslow's hierarchy of need economically. And so Bitcoin is already there in that we have to rationalize with and accept the fact that if nothing else, it's going to be a parallel economy and parallel institutions to the existing and has a better than not likely chance of usurping the old way at some point. I would even argue it's imperative

that it usurps the old way as we get Bitcoin or we get the chinese social credit system exported to the rest of the world the u.s intelligence agencies and the governments they want to do that jerome powell christine lagarde augustine carstens the bank of international settlements they've all come out and said they want to institute central bank digital currencies of which the central bankers have granular control of who can send money to who how much money anybody has at any given point in time whether or not your money expires at a certain date that is not a future i want myself or my children to live in and the only way out of that is is bitcoin and i do it's bitcoins already succeeded

like the hash rate migration that we witnessed earlier this year china banning minor mining and literally kicking out the whole mining industry or at least 90 of it out of its borders having that hash rate come off the network the network difficulty just adjust and keep moving and producing blocks like nothing happened um was a huge stress test of the network that bitcoin past with with flying colors there's no turning back it's just a matter of how quickly the the old guard recognizes that that this is superior and will be the future uh of a free humanity i don't question whether or not they want a free humanity i would argue i i put my tinfoil hat on i think there's a controlled demolition of the global economy to cattle herd us into these

these social credit scoring systems like you said money food and energy are the three most important pillars of human life and civilization and they seem to be actively attempting to fuck up all three of those things at once i mean money obviously they're printing a shit ton of it the energy and they're they're actively decommissioning reliable baseload energy like natural gas and nuclear in favor of unreliable uh renewables that only fuck up grids and make electricity more expensive and now in the infrastructure bill it seems like they're they're targeting cattle and pig farmers pretty pretty aggressively they're trying to disincentivize the proliferation of of reliable proteins um so that's i don't know if you want

to put your world hat on but i i think there's some world economic forum controlled demolition one world new world order fucking forces trying to push us in a in a global communist system yeah i said it i i think um and maybe i'm just a little bit more myopic about the elites um i i think that and in some case we're dealing with a little bit of of maybe ex post fast or ex post facto rationalization of just really stupid things that the elites are doing because they're not in fact intellectually elite yeah yeah it's it's but it's both right it's it's it's malignant stupidity it's it's like it's it's malign midwit behavior right and

yeah yeah malign midwit man it's like we're we're a bunch of we're being led by i mean we're being led by the top of the bell curve like i'll say it um there there are i think i think one of my i mean that's you know i feel like uh you know mcmurray and letter kenny like i'll say it to his face um but probably probably my favorite meme template on earth is the midwet template where you've got the bell curve and then you've got like the brain dead drooling guy that says a thing and then you've got like the freaking neck beard that's trying to make it this really complex thing. And then you've got like the wise Jedi at the other end of the bell curve who is saying the same thing as the stupid guy. And the reason I love that is because we as a society are living

at the top of the bell curve right now. We've got a bunch of 100 to 115 IQ people who are put in positions where really stupid people or really smart people, truly smart people would make better decisions because they're not going to be you know if they're not governed by malice if they're not governed by a desire for control and so when you've got midwit intellects operating from a real desire for need and for control i think you're in the situation we're in now where they're they were kind of too dumb and a lot of a lot of them at least maybe there's some geniuses and architects in there but a lot of them are just like in my view kind of dumb they don't they don't really they're like cavemen playing with with with modern firearms and so to the

extent that a few of them can kind of grasp what they're dealing with right you're gonna have a whole lot of them that are just creating a lot of negative output and pain and harm for other people because they're they're they're playing you know they're they're we're primitive in a lot of ways we are emotionally mentally primitive creatures playing with space age tools and monetary policy my view supply chain policy are very much space age tools to a caveman in a lot of ways yeah yeah and a lot of them don't have any real world experience they just came up through mckinsey or their career politicians and they they read in a textbook the perfect way to run a business and run economy they think that which was written by someone who probably never themselves actually

ran a business yeah um it's one of my favorite things to do is just to bag on um life lifelong elites who've never actually lived in the real world in my view nobody should be president who's never starved right and i don't care whether that's trump or biden or anybody else if you've never been hungry if you've never tasted desperate at some point in your life if you've never had to innovate your way out of an existential crisis you damn sure shouldn't be running a country you shouldn't be running an economy you shouldn't be running the military well i can't even get into the whole conversation like is the democracy in its current form in america even scalable like i think i'm pro balkanization back to like that was the silver

lining of of covid for me is this reassertion of states rights like i think we need to get back to the constitutional republic build on autonomous states making their own decisions like i think the federal i mean that's what we were envisioned as i mean we're not a democracy we are a a constitutional republic with federal with federalist uh connective tissue as it were and the the nation was designed from the outset constitutionally we were designed to have a self-contained like we had a a governing mechanism built into the constitution that would have prevented these catastrophic failure cascades in the first place and the first real time that was challenged was in, you know, was in the, the what do they call it? The nullification crisis or

whatever, where states and, you know, states and the federal government were, were instituting tariffs on one another and, and all of that. I, in a lot of ways, I think that's a mechanism we should have just let play out and resolve itself and let the adults operating at a smaller scale, figure it out by and amongst each other. And we fought, we fought a whole ass war for states rights to exist we fought a whole ass war over how much states rights would continue to exist and we didn't square those circles very well but the constitution itself as envisioned had a had a delimiting mechanism in it that would never let the system get so complex and so big that the whole house of cards falls apart and the way we're seeing it fall apart retreating to and

that kind of dude and it drives me insane and whatever i'll get canceled by this for both left and right but i don't give a shit um so i'll just say it the the extreme affection of of broadly the left and in the u.s right everybody thinks left and right but broadly the left in the u.s has more collectivist leanings with some real authoritarian impulse problems right it's on the broadly on the right not this audience right like like yeah the bit the big the bitcoin crowd is like largely autarkic or even anarchic you know uh anarcho-capitalist to nature and and i'm i'm totally down with that or at least large parts of it but but as an economic model and a political model a large part of the right in the u.s is either co-opted by this idea like like this

main street capitalism chamber of commerce crap uh which is why we have what we have today this sort of neoconservative view of the world um but then there there is an ascendant movement this this traditionalism on the right which pretends to give lip service to the constitution but really doesn't i think the the natural output of a traditionalist model i say traditionalism capital t sort of in the the kind of the the model of like what alexander dugan's got going or uh this kind of weird hybrid of of like you know evila and some of the other philosophers that were you know that were very fascistic in nature the desire for a strongman monarchy with some small of like limitations constitutionally but but generally a beneficent strongman you know appeal you you've

got all these things happening and none of them are the way right like if you like if you want to get back to like mandalorian this is the way the the way it was given to us 250 freaking years ago it was served up on a silver platter and it was like here you guys go like this is this is the best thing ever and as ben franklin said you know a republic name if you can keep it uh we've got that we don't need to rewrite the playbook all we need to do is just update it you know like to the extent that we use modern technology maybe ways they couldn't have conceived that so i'm all for it i'm all for it all right yeah and i think again i think it all goes back to the money like that started degrading once you

bastardize the money and again money is the ultimate private property once you start bastardizing that via taxation and confiscation and granular control over how you can use your money that's when you have the dissolution

of the constitution to some extent right and I think we can get back to I think Bitcoin gets us closer like I said Bitcoin is literally code it is law it is a form of law the law the consensus of the law of the bitcoin network is a law that protects and extends private property rights in the digital age which hopefully can be restorative for for the u.s republic not only the u.s republic but it'll that's actually

truly bringing freedom abroad that's how you that's how you uh that's how you bring freedom to the masses of the world is by giving them a money that respects their private property rights. I think people forget that, I mean, well, not in Bitcoin world, but broadly speaking, a lot of people forget the impact to which John Locke himself was- Formative. Probably 70% of what we've gotten, the Declaration of Independence, and then what became that because Locke was really talking about, Locke was really just dealing with an update to the to the ideas that were first sort of promulgated in magna carta and then a lot came along 500 years

later and was talking about those same things but in a way that made sense to the context of the of the the beginning of that westphalian era what we saw in the 1500s 1600s and so a lot came along talking about those and had a huge impact on the 18th century minds that would become the founding fathers and as well as their philosophical forebears and so you take all of that and Locke's formulation of natural rights, which I subscribe to, but as well as the one we ended up with in the Declaration of Independence, was life, liberty, property, private property. The first three natural rights of man, life, liberty, property, the ability to individually own a thing and be the sovereign over whatever you own and reinforce that. and and i think maybe that was too like constructivist or something for the founding fathers they changed it to life liberty and pursuit of happiness but they were very much

operating on the frame of if you look at the progression of thought that gets you from life liberty and property to life liberty and pursuit of happiness the the fundamental recognition is is that the ability of humans to own their own shit and to engage in commerce with one another under terms that they set within the framework of that and that's why and that's why like the concept of nfts or whatever you sort of end up with that comes out of that wild west iterative process that's happening right now it's awesome that someone on twitter can make and create really cool art uh and and then and then mint it post it somewhere and get paid for it completely without government interference but it's also awesome that we're playing with these ideas of how do we take

natural gas to convert into power sources to do bitcoin mining and all of that because i and i agree with you that bitcoin is not perfect but it gets us closer to perfect or to an ideal state it's closer than anything else i think we have in the world it's got a lot of challenges it's got a lot of real real politic type things that that i think have to be addressed and worked through um but it's gonna take it's gonna take people like me who don't know jack squat about how it all works the technology of of bitcoin and all of that i have like a very loose construct of how it works but the extent to which you can get people like me on board with it who ideologically and practically speaking can at least kind of grok the general thrust of the whole thing and to say how

do we convert this notional thing that makes no sense to mainstream because bitcoin is a travesty it's going to take time not travesty but it's like a it's like a vague magical thing to the the average person right now. The second you can convert them to this mental model of, I pay my rent. I can, I have the option to pay my rent, to make my car payment, to purchase gas, to buy things at the grocery store, or to go to Joel's farm and transact with him in a way completely free of government interference on purchasing, processing, and taking delivery of a side of beef to my house, the closer we can get to that, where that mental model, that optionality to transact outside of dollars and U.S. government contractual law that's been built basically to serve the

interest of the corporatocracy. I'm up on my soapbox. Thank God I'm not drunk right now. It'd be way weirder. But the extent to which you can take what I do, which is very pragmatic, very real world, very, very cold blooded, right? And start to convert the mentality of people like me into how do we convert ones and zeros into full bellies and lights on at night and television programming that we can watch as a family get that middle step right a to b if a is bitcoin maximum individual sovereignty things like that and and b is people sitting on their couches fat and happy because they were able to buy some shit with bitcoin that dash that that got the guys like me and there's millions of us in the world you know i'm not special unique or anything like

that. I just have kind of a unique way of presenting commonly known information within my community to people and help them understand it. But the extent to which you can filter A to B and that dash in the middle of A and B through the minds of millions of people and convert it to action and physical goods and physical fulfillment of Maslow's hierarchy. Like that's, that's the magic. We're closer now than we were a year ago without the pandemic. I don't think we ever get there. I really don't. Or I think it would have taken so long that it's possible the juggernaut would have been able to crush it or co-opt it in some way. But I think the pandemic has inverted people's mental models and amplified their fear of supply

chain failure to such a point they're willing to consider anything to know that their family is going to be able to eat tomorrow and in 10 years. And I just, I feel that that's coming and I feel it's inevitable to a certain point and that the two great conflicts that are going to define the next generation is the bifurcation of the Westphalian order into, and really the collapse of it into a china-led sphere of influence and into a u.s sort of anglosphere sphere of influence that traces its legacy i do think at some level you're eventually going to see the u.s and the uk and others get away from some of these really idiotic hyper-managed economy ideas we have and get back to saying you know what we we are the ideological

and philosophical construct france scotland england uh germany a little bit but but for the most part it was western europe and the anglosphere that iterated and led the way on natural rights of man individual sovereignty those sorts of things which is really an anomaly in human history it's always kill or be killed rule or be ruled right the enlightenment happens and all of a sudden we have this mental model of i have the same inherent value as a human being as the king and he can go die in a fire if he thinks he can tell me what to do right and so that that bit of that v for you know that v for vendetta that guy fox mentality right you know remember the 6th of november um the maybe it's 5th of november hell i don't know it's hugo weaving said it though so

it must be true um six remember remember the fifth note six now i gotta look it up i don't know i don't know i'll put a guy you know i'll do a podcast on the six and i'll put like a guy fox mask in the background see if anyone you know pick it out but um that but that mentality i think is is almost unique to the anglosphere is it fit that's all right good i'd have been i look like a weirdo celebrating at a daylight what an idiot um but that really is an anglosphere idea and so what you've got is this tension of ideological and political and economic models. That's going to happen. Authoritarianism led by China and everybody lined up under them.

A movement, I think, or at least a very large influence, probably starting in the autarkic anarchic kind of Bitcoin mentality that exists at some level on the ideological spectrum is going to, is going to end up having a governing and shaping effect within the Anglosphere. And, and there, I think there will be a bit of a renewal or revival of that natural rights spirit, which is going to lead to the micro thing of a trend over the next 5, 10, 15, 25 years towards build out of decentralized financial systems, decentralized commercial systems, and decentralized supply chains, underpinning both of those things that allows an individual to have more optionality than they've probably had in a century or two of how they live their life and how they fulfill their needs their

way according to their own rights as a human being and i gotta tell you man i love the united states not i'm not jingoistic i mean yeah i'm red white and blue i got a giant bourbon by the way that flag's made out of bourbon barrels, uh, by, by an army veteran in Louisville. And, uh, I don't know, I don't make anything from it, but I'll shout it out. Uh, where's my patch cruise customs, cruise customs. If he's still in business by bourbon barrel flag from it's like the best hundred bucks you'll ever spend. It's heavy as shit. It's mounted into the, the cement wall behind me because I can't even hang it. But, uh, it's, it's, um, like to the extent that I should be able to buy that in Bitcoin or dollars and have that

optionality, like that's the way, right? Like that's how we get to it. If I want to go buy a side of beef from Joel and have it processed and exactly the way I want and shipped to me to be stored in my freezer, that's great. That's the bogey. That's the goal. That's natural rights of man is not me being told that I can't do certain things that doesn't harm anybody. and so that's where i depart with libertarianism in a lot of ways but that's where i can really line up behind the libertarian idea of individual rights for individual people because i think that's what america is i think that's what we were intended to be it's why i love our constitution it's why i think it's the most perfect political document ever created

and probably ever will be because it's the first to really codify at a certain level it it the magna carta recognized that the king has limits over the individual right the constitution is the first document to ever say there's no such thing as kings there's no masters of the universe telling me how to live my life we have this laboratories of innovation at the state level and if i don't like it i have the ability to participate in a different state that maybe is trying things a little bit differently and then the conflict and the resolution of those ideas between and amongst the states and even within communities within the states is how we create a more perfect union at a smaller level but do so in a way that

also maximizes the success and freedom of the nation collectively how do we get to that point oh my son's coming to visit you coming to say hi tristan hey buddy the viewers won't get to see how cute this kid is but he is freaking adorable come here bud what are you doing are you looking for snacks i'll tell you what marty you're uh your kid's falling through doors my kid's like invading invading the pantry outside my office here in the basement so yeah this is a brand new house is day two in the house for for my son and uh he just he just discovered the side door and the steep found it you know what he's never gonna forget that door's there as long as no but i i agree that's my soapbox we're on that path i think we're going to get there i think

bitcoin's going to be driving for us to get us there it's happening slowly but surely that's what i tell everybody's like i want all this out of the box i want all this immediately it's not going to come immediately it takes hard work it takes people writing code people implementing mining infrastructure on the well pad people building apps that that leverage the code that that makes bitcoin work but you said magna carta declaration of independence or the constitution or the bill of rights uh i think the bitcoin white paper will be right up there with with those documents in human history because again it codifies that there's no trusted third parties anymore in the realm of of digital e-cash it's uh it's it's the next step we needed to take

humanity to the next level and drive us away from this dystopian future that that we're barreling towards um i think we i i i am very like you i'm very pessimistic in my newsletters not that i'm not that you're pessimistic but there's a lot of times where i'm highly pessimistic in some ways i mean let's be real like i've made pretty clear my repeatedly and openly my view of the elites as you know being midwitzed at the wheel um but at the same time man i just i i can't i will not and i cannot bring myself to despair too hard or too far because human history is absolutely chock-a-block full of humans finding ways against all odds to pull ourselves back from the brink of stupid destruction right it's uh we we have we have this incredible ability to just you know i

put it in one of my newsletters the one about 9-11 the long defeat we have this remarkable ability as humans to just completely burn the fields of our civilization down right um and that's a negative thing in one way like you know burning the crops and things like that but but that's also the regenerative agriculture guys understand the importance of slash and burn to regenerative ag cycles is that's the fastest and most efficacious way to, uh, release the nutrients that are trapped in the stocks and the residue of the crops and get it back into the soil. Um, slash and burn was the best way we had actually to achieve, uh, soil renewal and regeneration for centuries until we came up with synthetic fertilizers and chemicals. So we had,

Hey buddy, can you have dessert? Sure. You can have dessert. I don't know. Marty, did you even dinner man i don't know i didn't see i didn't see it uh i didn't see it well we'll just assume he did um it'll avoid a fight later um but you know so if you look at it from that perspective it's like wow it's negative it's fire it's scary it's dark it's all these terrible it's ash and soot in the atmosphere and then people like you and i and millions and millions of others we look at it and go no no we're we're burning the fields of our civilization because we're laying the groundwork for the cycles of renewal to happen as they always have in the past and i think they always will i don't i don't think we'll ever face a day unless the book of revelations is correct

um i don't think we'll ever face a day where we're just like talking about an output of total destruction humanity i think every fourth turning always leads into a first and if we're in a fourth turning now i don't really give a shit because it's some because i'm not going to be scared of things i can't change i'm only going to do what i can to to fight that and to help others do the same and eventually we find ourselves you know having sitting under trees that we planted 50 years ago and we thought we'd never sit under but we figured it out and man i just you know i'm totally here for that so yeah as much of a perma bear as i seem like i can be talking about gray zone warfare and china and freaking sterilization of minorities that's happening in that country and

all the other terrible things that happen not to laugh at the uterus uh sterilization but it is but it's it's horrible things and it's really hard to look at that and go man how is there a thread through the thorns on any of this how how is there ever going to be a dawn because it's pretty freaking bleak right now and dark but we know jamie dimon always pick up jamie dimon says hey don't think about it sometimes you just got to put up with the the sterilization of muslim minorities if if i could do one thing yeah you can have a popsicle but i'm just giving i'm just giving away treats of sugar at this point it's fine i'm gonna have totally pay that price in about 30 minutes when they're all wound

up we'll go to bed but um you know we the the the thing i hope the most for is that to whatever extent collapse is coming is that the collapse is likely to hurt the elites once it arrives almost as much or more even than it hurts the average person and man i'm dude i am so freaking hopeful for that i think i think we're in the middle of it i think it's happening i think more and more people are realizing that the emperor wears no clothes it's uh it's happening um again like you i write pessimistically but i'm very optimistic just seeing what's going on on the front lines particularly the bitcoin space and then i'd say the success of your podcast and the others in this community it it wouldn't be possible without a spirit an underlying spirit

of hope recognition of reality rational recognition of reality but also an irrational belief that at some point we can bend the arc of history toward back towards you know individual sovereignty so i i do i do think we'll get there or at least we will get way closer than we've lived in the last four or five generations i do as well i think that's a great note to end on you need to go spend time with your boys i and i do as well before bedtime it's coming up um keep him in the house man yeah yeah this has been a fascinating conversation i can go i think we should do this again at some point in the future yeah i'm down for that man uh thank you for doing what you do thank you for educating me on the intricacies of the supply chain and the freak

out there who are listening to this it's uh it's again i think they ended on like a hot scary out there. But identify the problem. I hope somebody listening to this is if they're not able to implement the solution that you want to put forth, or at least able to bring it to somebody who may be able to. Well, I'm having a way more professional approach addressing the problem in my own like my own sub stack. And, you know, it's going to be written as a white paper. Like I said, nitty gritty, ugly, boring, dirty details that nobody really cares about outside of the people actually have to implement it. Um, but again, I I'd rather, I'd rather fail spectacularly, but learn something and fail forward fast and at least begin addressing the problem and take that hit to my ego that

people think I'm an idiot who failed because I don't really care because if I fail, but someone else gets, you know, takes the germ of a plan of any plan towards doing any of these really good and amazing things that can help people. Um, it's okay to be the first to fail, right? It's okay to be, because eventually someone's not going to fail. That iterative process is, is, has an exponential factor and, and, but we got to start somewhere, man. So yeah, now I'm going to professionally tie it all together and, and, uh, get it released and, and hopefully somebody listens or, you know, my, my real hope is that somebody comes up with something better than I happen we implement that instead well i'll be looking out for for that white paper and i'll

be sharing it with uh all my friends in the logistics world which i do have a few um because again we need to figure something out and the assholes in control quote unquote in control are not gonna not gonna be able to fix it so it's gonna take people like yourself to actually put these ideas out there and try to have private enterprise implement them to actually get something going we can't wait the infrastructure bill we're just gonna print three and a half A trillion dollars is going to fix everything. It's going to magically fall out of the sky. It's magical money supply.

It is so beautiful that we can just make that money printer, just keep churning stuff out without any consequences to the economy or our own lives. It's all paid for. It's all paid for. It's all paid for. It's all paid for. Yeah.

Inflation is infrastructure, right? It is. It is. Where can we find your sub stack? you're man underscore integrated on twitter correct man underscore integrated um which is a total lie i'm probably the most disintegrated human being and in so many ways but i have like a couple mental models and tricks that make me sound really smart uh but yeah it's man underscore integrated my screen name is is either huntsman or usually some variation of it uh my sub stack

is fortis analysis f-o-r-t-i-s uh analysis uh that's sub stack.com and and that's like a whole movement um i plan you know there's already several thousand uh readers and and i just set the thing up like a month ago so it's uh it's pretty it's pretty amazing the growth and and uh you know i want to use whatever little bit of clout moment we have in the sun in this day and age to you know pursue the advancement of humans and and not make it not make us subjugated to the whims of tyrants or our own stupidity so yeah you're either perfectly still or you froze Thank you. you

you you Thank you.