TFTC: A Bitcoin Podcast - #414: The Dollar Endgame Theory with Peruvian Bull

Episode Date: April 25, 2023

Marty sits down with Peruvian Bull to discuss how the world will move away from the USD reserve. Peruvian Bull on Twitter: https://twitter.com/peruvian_bull Check out Dollar Endgame: https://thedollarendgame.com/ 12:01 - Starting out writing on Reddit 17:48 - Is the dollar currently in its endgame? 23:02 - Weaponizing dollar against Russia hurt US 25:19 - Past the debt event horizon 33:45 - Bitcoin reserve 36:21 - Will BRICS BUCS gain traction? 41:06 - A great opportunity for bitcoiners 44:01 - Nations missing the Bitcoin bus 49:40 - Converting individuals to Bitcoin 52:02 - Why Latin America understands intuitively 55:43 - SUPERSTONK 58:42 - Suffering in the streets 1:00:51 - Price post-hyperbitcoinization 1:03:57 - Societal impact of hyperbitcoinization 1:10:24 - The next 3 months 1:17:01 - technical difficulties 1:17:59 - Dollar losing network effect 1:21:42 - Plugs Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠CrowdHealth⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠

what's up freaks it's your uncle marty here voice is a little how does my voice sound logan voice sounds deep and rich it does i'm sick i'm sick if you caught uh booger gate on rhr last thursday that was the beginning of a cold rocked me I lost my voice I didn't have a voice Friday or Saturday still

getting it back now as you can see a little cold won't stop your Uncle Marty I'll be here freaks the content needs to get there there's a lot of stuff

going on in the world just because I have a cold doesn't mean we can't get the content out there don't say your Uncle Marty doesn't fight through adversity I mean I'm hearing

my voice in the headphones right now it is pretty sultry should i start a jazz radio station come to you live from austin texas yeah that's my my best saxophone we got logan troy in the corner ready to ready to serenade you freaks with a nice sax melody it was a valiant effort hopefully i'm better by the next episode we'll see great rip peruvian bull talking about the dollar end game theory dollar end game theory that he has his book this is a back to basics episode back to the basics

with how royally screwed the incumbent financial monetary system is. Good bull fuel episode. Apparently, the cold makes it so. I can't even speak. I can't articulate words, thoughts. But enough of that. We've got to do the top four boostograms of RIP 413, resisting mRNA food with Charles Mayfield.

Great RIP. You guys got to go listen to it. At Eric99, 50,000 sats. Stay humble, stack sats. Eric, thank you for your continued support. Great advice. You can do that every time. I'm going to be Matt now.

At VikingUSA, 5,000 sats. Great guest. Thank you. Thank you, VikingUSA. Are you in Minnesota? At Mark C, 3,333 sats. Three is across the board. ballander and boost technically great rip be fat on my face signed up for crowd health mrna free

thriving that does seem like a good setup there mark you are thriving i'm happy you're thriving and last but not least at agrarian contrarian 3000 sats real local food support your local beef initiative producers with a flex emoji i think my muscles are bigger than the flex emoji what do you think Logan I mean the emojis little dot on a screen yeah this is

this is a force of nature right here Logan maybe that's enough actually do you even have arms I can't see anything there yeah I'm in camo they're here maybe I can use this voice to become an influencer in the manosphere

should I do that need more beard and less hair on your head and I think I'd need to be 45 divorced without children the manosphere is an interesting sphere

should we be taking advice from these men don't trust any woman no that's what they'll tell you a lot of these guys seem like they're projecting

if you ask me projecting their insecurities and lack of success onto impressionable young men. If you're a young man out there, just don't think too much about it.

Just find a good girl. Be a good lady. Just don't think too much about it. Stay away from the dating apps. I'm officially a Manosphere influencer now. What's up with River?

River, it's funny you ask that. It's a pretty dope company. It's a Bitcoin company. It's the main sponsor of this podcast. It's a great way to stack sats. Talk about stacking sats.

Great advice. So if you want to follow that advice, you go to river.com slash tftc. You set up an account. You start stacking sats via River.

you set up a dca if you set up a dollar cost average a set cadence of when you're going to buy a certain amount of bitcoin using river you don't have to pay any fees on those buys it's a beautiful thing but beyond that you can stack sats differently as well with river you can mine with river mining they're expanding their capacity so you would buy an asic plug it in with a hosting contract stack sats into your river account via mining you can do that as well river.com slash mining to check that out after you set up your account using river.com slash tftc yeah it's a bitcoin company built for bitcoiners by bitcoiners no trusted third parties they built their own exchange to build their own wallets they built their own coding libraries they don't

have third-party dependencies like prime trust if you hold bitcoin on river they don't recommend it but if you do it's in a multi-sig cold storage with 100 reserves behind it it's a beautiful thing it's a beautiful team it's a beautiful time to be live freaks don't waste your time time is precious you got to respect your time by saving good money called bitcoin so set up your account on river today river.com slash tftc and when you do that like you need to move your sats off river where you go guess what it's a few dozen people down on more than a few dozen people down the hall at unchained rebrand they had their facebook movement they dropped the unchained capital they dropped the capital now it's just unchained sexy short to the point

they have sexy products they're going to help you eliminate single points of failure their vault two or three multi-sig if you need to custody your bitcoin you want to distribute your risk eliminate single points of failure unchained vault allows you to do that two or three multi-sig you hold two keys unchained holds one they announced in their funding announcement last week that they're even gonna expand the optionality within that vault service as well in the future so maybe you don't have to hold two keys they have a trading desk if you want to buy bitcoin put it right in that vault you don't have to pull out a wallet put an address on the website you set up your vault you get an expo with that vault you buy bitcoin via the trading desk at unchained.com

slash trading and it goes straight to the vault it's a beautiful thing they have their lending desk if you want to use your bitcoin it's collateral to get out us dollar loans put out the bitcoin you get a dollar loan you pay back your loan if you want to put your ira into bitcoin and hold your own keys you can do that go to unshamed.com check all this out tell them the tftc sent you it's time to step up your game freaks work with bitcoin companies not crypto companies certainly not dirty fiat companies which crypto companies are actually dirty fiat companies like on crack this room is also brought to you by good friends at crowd health crowd health is here using it today i am using crowd health today my son has a doctor's appointment

he's getting a test done we're using crowd health to pay for it crowd health community that is trying to bring sovereignty to health care incumbent health insurance company is if If you go listen to the episode with Charles, we talk about it. Opaque, impersonal, expensive. CrowdHealth is here to change that. It's not health insurance. You pay a monthly fee. It builds up an account, a bank account.

If you ever have a health event, you go to the doctor, you get the bill, you bring it to CrowdHealth. You pay the first $500 and the rest gets crowdfunded by the CrowdHealth community. Again, it's community. They don't like fatties. It's all healthy people. So the overall healthcare cost of the crowd health community is lower. So you're going to pay out less than you would with typical health insurance. You build up your account, you get your bill,

you pay the first $500 and the rest gets crowdfunded. They've had a hundred percent of bills funded to date. I can't guarantee it, but it's working so far. What else do we got to say about crowd health? I feel like I'm missing something. oh, they have a Bitcoin community where you build up your account to a certain extent. And then once it's built up,

going forward on a month-by-month basis, you'll pay your monthly fee. Part of it will go into your bank account. Part of it will go into Sats. You can speculative attack your future healthcare costs. And if you listen to this episode of Peruvian Bull, it's pretty like you may have your healthcare funded for quite a while.

The dollar endgame plays out. excuse me you're gonna need some crowd health I need some crowd health I got the black lung pa I got the black lung in the coal mines go to

joincrowdhealth.com slash tftc set up an account today I'm losing it last but not least this program is brought to you by our good friends at Bitcoin Talent Co recruiting firm built by Bitcoiners for Bitcoiners if you're a company in the space that's looking for talent

you need the best talent go to bitcointalent.co connect with their team get onboarded they'll understand your needs what you're looking for they'll go get you the talent that you need co-founder

build up the recruiting team at Uber not sure if you heard about it unicorn I can't even do a high pitch voice stop laughing at me logan now alternatively if you're looking to get in the space you're in tech you're in banking you're in finance you're a bitcoiner you're stranded on an island at the company you're working for you don't like it but you don't have a way to get in and access the industry that you so desperately want to work in go to bitcointalent.co set up an account if you

have the skills to be placed at a job in one of the bitcoin companies also partner with bitcoin talent co you will get placed go to bitcointalent.co tell them that tftc sent you and enjoy this rep i'm gonna go cough you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be what is up freaks your boy marty bent here what a lovely monday afternoon in austin texas

sitting down with peruvian bull that's right is that what uh we should go by the name here yeah yeah um yeah that's what i go by peruvian bull it's just my pseudonym that i've been using for writing um but yeah happy to be on the show thanks for having me on thanks for coming on i mean i think this uh this conversation was incited by me finding your dollar end game series on youtube and writing about it in my newsletter and i wrote about it because i thought it was just a very good succinct there's 20 30 minutes all in dissection of the path um that that led us to breton woods and then eventually where we are today so i guess to jump into it using that as the launching pad. What drove you to start that series specifically and get this story out there?

Because again, I think it's important for people to understand the historical context of how we got here. And what you did was a really good, succinct distillation of the events that led us here. Yeah, sure. So I actually started writing this series about two years ago in the summer of 2021. I was part of a Reddit community and it was mostly focused on stocks and specifically like corruption in the financial markets. And I started getting into arguments with people over monetary policy and economics. And so I just decided to write a series. And one of the benefits of using Reddit as my medium for posting was it forced me to limit the character count of each post. And so I had to distill all these readings I've done and

education I've had through, you know, for monetary economics over the past six years into like very, very succinct, concise statements. And so you're referring to part one in part 1.5, which is entitled The New Rome. And it's basically, yeah, laying out how the U.S., you know, was instated as the world's reserve currency after Bretton Woods and how that worked well enough for a few decades as the reserve system worked its way through this, through the monetary and economic milieu. And then we ran into what's called Triffin's dilemma, which is expanded on in several different chapters of my book. But it's essentially this paradox that an economist, Robert Triffin, brought in front of Congress in 1960. And he pointed out

that in a gold reserve system, the world reserve currency holder faces a dilemma because they have to export enough currency to meet the demands for global trade and the demands for the reserve currency. And so if you think about it, the US being the reserve currency has to be a net exporter of our own dollars. And that means we have to be a net importer of goods. But it means in the long run that we have to create more dollars than would be otherwise justified by our amount of gold reserves. And so he said, we're either going to print too many dollars to dilute our holdings of gold reserves, or we're not going to do that. And global trade and global commerce is going to grind to a halt because there won't be enough liquidity in the system to handle

global settlement. And so that came to a head in 1971. Obviously, under Nixon, he decided to go the route of just completely disconnecting us from the gold standard. And so now we're on this petrodollar fiat system, and that's been the status quo for the last 50 years. But yeah, My series is trying to explain this strange dichotomy of our position as a world reserve currency and how it benefits us for sure in the short term and has a bunch of military and economic benefits for the United States. But in the long run, it is, I believe, a risk to the United States. And I expand upon that in a chapter called The Sword of Damocles in my book. yeah no i think we're definitely seeing the the ramifications of triffin's dilemma today i mean another part of that if you're going to have to export dollars and main vehicle of that export

being importing goods from other countries obviously that has led to the complete decimation of our manufacturing capacity and all the factories here in the united states and that has led to a crisis of good jobs or more humble jobs, blue collar jobs, not being able to sustain your average American's lifestyle. And so fast forward to today, where we have trillions of dollars on the Fed's balance sheet, inflation is high, and people really don't have good jobs here in the United States or hope for the future because the reserve currency status forced us to move all those jobs overseas. Yeah, exactly.

And I point that out as well. You know, in my opinion, one of the driving factors for Trump's election was the deindustrialization of the American heartland. And you can look at it, you know, basically in every single state that was affected by, you know, manufacturing being exported,

you saw rampant increases in crime, in depression, in, you know, mental health disorders, suicide, drug abuse. You know, it's really taken a toll on these people especially men who who you know need to earn in in order to provide a living for their families and so it's you know our status has definitely helped us in some ways but i think it's hurt us in in more ways than people realize and that and that these these uh the drawbacks of the reserve status are starting to build up more and more and we're gearing up for a total switch

um of a monetary system yeah i mean that gets to the name of the series the end game are we in the end game and if we are what comes next yeah i've talked about this a lot with um i'm not sure if you're uh aware of brent johnson santiago capital on twitter yes yes he's not yeah too fond of bitcoin but yeah he's kind of agnostic he's a he's a dollar bull um and he and i have had some interesting back and forth along with luke roman but i i've read a lot of his work i've i've deep dived into it and talked to him a lot and he believes as well that we're kind of in the end game in the next five to seven years here um for the u.s dollars reserve currency and the reason for that is you know there's there's multiple signs pointing to this but um this is where i

start to go into the analogy of the sword of damocles and so um damocles is a it's a parable written by cicero um in like you know 200 a.d about this um king in sicily who was threatened all the time by his enemies and he was so paranoid that he would have his daughters shave his beard because he wouldn't trust another person and he had a court flatterer named named damocles who would tell him that you know being a king must be amazing and so he said well why don't you i'll let you be king for a day and so he let he lets him sit in the middle of the court on a sofa and gets fed grapes and wine um you know by beautiful women and and damocles is sitting there and enjoying it and then he looks up and he realizes there's a sword hanging by a single

strand of horse hair above his head um and so this parable is an analogy for you know with great power comes great risk, right? The heavy lies the head that wears the crown. Anyone who controls a reserve currency system at the same time has immense hegemony, but they also have immense risk because if they lose that hegemony, the drawbacks and the ramifications from that will come in the form of an extreme devaluation of their currency. And the reason for that is because if you think about it, we've been exporting dollars for several decades, right? And these dollars have built up, obviously, in the form of petrodollars. These are, you know, surpluses for oil exporting nations, also just for other just general exporting nations, nations that export

as manufactured goods like Japan or Germany. And they recycle these dollar surpluses back into treasuries. And so this results in trillions and trillions of dollars of treasuries building up overseas. And, you know, while inflation is low and muted, and while treasury rates are high enough to justify them holding them, you know, this system makes sense. But as Luke Groman pointed out, in 2015, foreign central banks stopped buying treasuries on net. And so they were just holding their, you know, they're holding their holdings flat. They're basically not adding to their treasury holdings anymore. And then starting in 2022, 2021, a lot of these countries started divesting from treasuries. And now we're running to an issue where a lot of these countries like

Japan, you know, or China, they might be facing devaluations of their currencies on the Forex market. And the only response for them, you know, all these countries need dollars in order to transact globally and to settle, you know, international trade as well as they need it as a reserve currency. And so if they're running out of dollars and their currency is falling on the Forex market, they're going to have to sell treasuries to get their hands on dollars that they can prop up their own currency in, you know, in the Forex market because they can't print dollars right the bank of japan ran into this issue last september and october and so what's been happening is you know what i call the sword of damocles the u.s has had this great immense

you know hegemony and power built up over all these decades and it's done so well for us but it's also built up this sword that's that stands above our head with you know hanging by by a horsehair and if japan or china or russia or some other country starts dumping treasuries in mass This would force the Fed to make a decision like, are we going to allow treasury rates to soar to 10% or are we going to print a couple more trillion in QE to swallow up all the debt that they're dumping on the market? And that would further exacerbate the feedback loop of inflation domestically and make more and more issues for entities who are relying on low interest rate borrowing. And so this is, in my opinion, it's extremely, it's a danger that exists, like, and that's very prevalent, it's becoming more and more real. And unfortunately, it seems like people at, you know, the highest levels of state and treasury don't really, you know, seem that aware of this problem, they kind of believe that the US will remain, you know, a hegemonic superpower forever. And I think that's where, you know, Brent Johnson makes some really good points. Like, yes, the U.S. has an extreme, the U.S. dollar has an extremely strong network effect.

But even he has pointed out, and I can point to some tweets that he's made about, you know, the U.S. not being able to hold this position forever. Because no country has been able to hold a reserve currency forever because of Triffin's dilemma, right? We have to continually export more dollars forever, you know, and as the global economy grows faster than our domestic economy, That means we have to print more dollars into like our exporting surpluses to send out to foreigners. And eventually they'll lose faith in the dollar and eventually they'll have to switch to a new currency. Yeah. Then this problem is exacerbated by a bunch of other stuff too. I mean, with the weaponization of SWIFT and the settlement networks that exist, the dollar has this network effect.

And I don't know if I said this on Twitter or in a newsletter or just said it in person to somebody, but we essentially just destroyed part of our network effect by cutting Russia off from SWIFT and doing all the sanctions. You can think what you want about the situation between Russia and Ukraine right now, but weaponizing the dollar system to that degree certainly lowered the network effect directly with Russia, but then it sent a signal to the rest of the market like, oh, at a moment's notice, they can flip a switch and cut us out from the dollar system. we should start diversifying and obviously we've seen bricks countries begin to huddle up and say all right let's create this alternative settlement network outside the dollar system and then on top of that seems like the problem's coming to our shores too with fed policy jacking rates up creating this duration mismatch throughout our banking system i mean the the amount of losses that are sitting on bank balance sheets because of what's going on with treasuries

is amounting close to, I believe, a trillion dollars now at this point. So they're just getting hit from all angles. You could have foreign countries dumping their treasuries because they need to defend their peg like Japan. But if a banking crisis continues here in the States, you can find our own domestic banks banks have to actually sell treasuries to to um to handle withdrawals if people begin pulling their money out of the system it's an absolute shit show exactly and so you know everyone this is

the thing that people don't understand is people are buying treasuries because obviously treasuries are collateral but really what everyone needs is dollars and so if there's a surplus of treasuries in the system that are sitting at you know massive unrealized losses um you know the banks may not want to realize those losses but if they need to get their hands on dollars because they're suffering a liquidity crisis they're going to have to to sell them um and this is this is a risk to the u.s treasury market obviously and it's a risk to the united states yeah that's a big question because there's many theories out there trying to basically get into jerome pal's mind and think about what he how he's thinking about all this uh like how long do you think

can keep rates high because i was actually shocked that they could actually take them above two and a half three percent to where they are now and hold them there as long as they they have so there's a school of thought that the banking system here in the states persists through this summer they'll have to reverse course but there's another school of thought that says no they're going to keep them high and keep them high for long because it's hurting the european banking system which which the Fed doesn't really care about. Yeah, the Fed is kind of a bull in a china shop. They raise rates.

I wrote this in that chapter. I was like, they raise rates and they say, consequences be damned. We don't care what happens in Japan. We don't care what happens in Germany. We don't care what happens in the Eurozone. We just want rates to be high domestically to fight inflation. And that works as long as these other countries aren't dumping their treasuries to get their hands on dollars.

And as soon as they start doing that, the Fed is going to have to reverse course and think, hey, is our policy of being completely oblivious to what other countries are going through? Is that a good one? And I honestly don't think it is. In regards to your question about, you know, rates, I really – I mean, look, they want to raise rates, obviously, because they want to give the appearance of fighting inflation just like every central bank wants to. But in the long run, I don't see how it's sustainable at all. And this runs into my – what I call the Peruvian bull debt paradox, right? It's like the Fed raises rates to fight inflation, but the most indebted entity in our system is the U.S. Treasury. And so that just puts the Treasury in further risk of default because rates are higher and they can't pay them.

So they have to issue more Treasury debt to pay off these higher rates. And who's going to buy all these bonds? Well, the U.S. banking system is already at capacity, basically. The money market funds have had a little bit more inflows. And so that has helped the Treasury market out a little bit. Um, but as soon as the TGA is fully drawn down, which is coming soon here in a couple months, and we no longer have, um, you know, these low, low rate bonds that, that are funded, we'll have to roll them over with higher rate bonds. You know, the treasury's deficits will

start to expand and expand and expand. And if they want to keep rates high, that's fine, but the Fed's going to have to, to finance it. The Fed's going to be the buyer. And so that's where I come in you know that's where I term this as debt paradoxes the higher the Fed raises rates the farther out the farther behind they they move on the curve so basically like they're supposed to move up the curve and and stay ahead of inflation or at least slightly behind it but they'll actually be behind the curve and be moving further behind because the higher they raise the rates the more the treasury has to borrow which means the more the Fed has to print which means which means the more inflation will rise which means the more the Fed will hike and so this process will just kind

of repeat repeat repeat and we'll be stuck in a in a exponential feedback loop for inflation for the time being which is why that's that's kind of one of the main points of the dollar endgame is that we're we're now in a you know we're not we're now past the event horizon um the fed has trapped the treasury in a black hole and there's there's no escape the debasement is inevitable yeah i mean just look over to argentina right now they had 100 inflation over the last year and their rates are at like 80 percent or something like that which is insane exactly and see this is against all traditional keynesian thinking right all the keynesians will say hey higher rates phillips curve higher rates you know we'll fight inflation inflation will be

muted and unemployment can you know uh stay stay stay high and that's okay but you see using an economy like argentina where unemployment's high inflation's high and the more they're hiking rates the more inflation is going up just because of you know what we just talked about the proving bull debt paradox that the higher you raise rates the more the treasury has to to pay and that means the more the fed has to print yeah and you think it's like it seems like it should be intuitive like if you raise rates you raise the cost of capital which makes it more expensive to do things to get goods to market services to market which means the producers of those goods and services you have to raise their prices onto the consumer and it just

feels very weird that we find ourselves in this situation and going back to the event horizon the black hole so you're saying they cannot kick the can down the road again because that's been the big question go all the way back to like 2001 2001 08 european credit crisis 2020 and now today it seems like everything's becoming more compressed and more exacerbated on shorter timelines and there are some people out there like no the fed still has some room to maneuver they can probably kick the can and extend this this basically throw the ball and pray strategy moving forward but i'm not convinced that that they have many options on the table that this may be the end game yeah no that's that's basically my thesis right that's

that's why I called it the dollar end game. And, you know, Luke Groman pointed out in October of 2021, that true interest expense on the debt is now 111% of federal tax receipts. And true interest expense is calculated as entitlement, pay goes plus nominal interest on the debt per quarter. And that was during a period 2021 was period of record high tax receipts, you know, record high stock market valuations, crypto was pumping at all time highs, you know, the Treasury wasn't was in its best position it could be and if you looked at the entitlement you know payments and as well as the you know interest on the debt um it was more than the tax receipts so the treasury's already passed the event horizon and this problem will only get worse with time because you know as

we know with them trying to uh trying to hike rates into a inflationary crisis causing a recession tax receipts are going to fall and so this problem is just going to get worse and the more they hike rates the more the the more severe the recession will get and the lower tax receipts they're going to have um and so yeah i believe that they are past the event horizon now can they can they delay delay delay you know the true crisis by these temp you know temporary quote-unquote temporary programs like the btfp um or not qe um expansion of the balance sheet yeah not qe expansion of the balance sheet yeah they can they can delay but the inevitable is is coming the biggest problem is the treasury and the treasury's you know underwater and there's no way to rescue it

you know besides debasement the numbers don't add up and the reason why i think luke groman and you know i as well like consider entitlements as basically interest expense uh on the debt is because you know entitlements are categorized as what's called um non-discretionary funding by the congressional budget office so if you go to their website you can check out what kind of funding they have and what kind of payments they that the u.s government has to make and about 70 percent of all payments the u.s government makes uh what are called uh federal tax outlays or federal uh yeah just federal outlays um 70 are non-discretionary which means these funds already are basically earmarked and forced to be sent out to you know the the programs that they're intended

for and so it means that congress can't easily just move the funds or or change um the funding parameters just by you know a congressional committee you'd have to have a a bill passed and so these programs are on autopilot and they're they're just spending and spending and spending and spending and as inflation rises you know we've seen this already with social security the social security budget will have to increase because now seniors are going to pound the table and want to have a higher social security stipend and so what will happen is you'll have tech federal tax receipts increase uh or decrease you'll have federal tax outlays increase the deficit will get bigger and the treasury will have to borrow more and then add that onto the to the interest

rate problem we talked about earlier um the treasury will just have to spend more and more and borrow more and more exponentially in order to keep the wheels on the bus yeah this is further exacerbated by demographics problem where you have all the boomers retiring at the same time exactly oh it's a beautiful shit show so how does uh how does bitcoin fit into all this in your mind So this is where I've been talking about, you know, Bitcoin as the new reserve currency. And it's a very interesting dynamic because, you know, reserve currencies typically are centrally issued, right? You have the U.S. dollar. And then before that, you have the British pound.

You had, you know, the Spanish peso. You had the Portuguese. I believe it was the peso as well. And all these currencies fall into the problem of trifted settlement because they're centrally issued. They have to be exporting more of these currency units than they otherwise would. And that creates these imbalances. But with a non-centrally issued currency like Bitcoin, Triffin's dilemma is obsolete. It doesn't apply because we don't have to worry about these issues of trade imbalances

because there is no trade imbalance because there's no central issuer. And so Bitcoin potentially completely solves Triffin's dilemma. And that means that it, in my opinion, is a much more superior reserve currency than any other one that we could imagine. And so if Bitcoin becomes, you know, like more widespread and more used by especially, you know, shippers or importers in international trade, you could see a move by central banks to start holding it as a reserve currency. And this brings up a really interesting game theory, right? Like there's obviously the Bitcoin or game theory of the earlier you get in, right? everyone gets Bitcoin at the right price. And the earlier you get in, the better off you are. And that's true for sure. But think about it from the nation state level. If Zimbabwe adopts

Bitcoin as a reserve currency and starts hoarding it, and then five other countries around them start doing the same, and then another couple of countries around them start doing the same. And then obviously El Salvador, and then let's say Panama, and Colombia, and Peru, and Chile, and then Korea, and you have all these other countries starting to enter the Bitcoin reserve currency network, you could see an explosion in value, not only in price, but also just in network usage. And this would push more and more countries in, because of the flywheel effect, it would funnel more and more countries in because they'd be seeing the losses they have on their books from these treasury holdings that they'd say, hey, would I rather hold this? Or would

rather hold a pristine reserve asset that's non-centrally issued that solves triffin's dilemma that i could hold on my books forever and not worry about you know counterparties freezing it or or taking it yeah which i completely agree with and that's i think that's a big question right now especially if you consider the brics countries primarily russia and china beginning to position okay we're going to do this basket gold back yuan back ruble back whatever it is who knows exactly what they're thinking but i think they believe that they're going to usurp the us dollar as a reserve currency with their cock and any scheme of whatever they come up with that's been the big question in my mind over the last six months as that trend has gotten stronger

and it's become very apparent that they are dead set on releasing their own settlement currency whatever it ends up being we'll find out but that's the big question will that effort be in vein or will there be like a temporary transitionary period where it gains some traction before people realize like actually no bitcoin superior to this i think i mean it's going to be a learning process obviously but you know just this week we saw russia taking more action in the mining space and working to to increase their share of bitcoin mining which is again this is all adding up to my my basically my theory of of you know this reserve currency war between these nation states and them deciding which one's going to get in first and start stacking huge amounts

of sats on their on their balance sheets in order to get ready for the new monetary system um and i i do think look i i talked about this in another podcast but you know of course these countries want to move away from the dollar the dollar is you know a you know hegemonic currency controlled by the u.s treasury and the fed and so they can censor transactions um directly literally And any transaction in the world, because if you're a bank in Kazakhstan and you're sending a payment to a bank in Russia and it's a U.S. dollar payment, those payments have to be cleared through the U.S. banking system because by definition, they have to be fungible with U.S. dollars. And so that means that the U.S. Treasury can essentially and other entities obviously can directly censor transactions. And so this creates a massive economic lever for the Treasury and for the U.S. State Department. And it's allowed them to basically censor people they don't like, you know, at will. And, you know, of course, their first inclination is, of course, terrorism and, you know, like violent hate groups and anti-U.S. groups in the Middle East. And, you know, that may make sense at the time, but they can always expand this indefinitely to whoever doesn't support U.S. policy.

And so I think these countries want to move away from the dollar, obviously. They want to create their own settlement and currency network. And China has been working on creating the digital yuan and creating a settlement layer that they can trade with. But all these countries will run into the same issue of Triffin's dilemma of how are we going to export more currency outside of our country than we normally should? That means we have to be net importers. And Russia and China both are net exporters of goods. And so they're going to have to completely strip their industrial base if they want to do this. And I'm not sure they want to do that.

And so, you know, we're running into this issue. And this is what Brent Johnson points out. Like, if the U.S. dollar is shaky, which it is, how much more shaky is the Chinese digital yuan, right? And they might say it's backed by commodities, but who's there to audit it? Who's there? You know, you have to trust. It's a trust me, bro, again. Yeah.

So that's always been my biggest hang-up. People are like, oh, we're going to go to this temporary yuan-slash-gold-slash-ruble-backed system. It's like there's no transparency at the bank, the People's Bank of China or the Russian Central Bank. There's no way, even if the BRICS countries all are a bit perturbed with what's going on here in the U.S., I find it hard to believe that they would be so naive to be like, all right, let's just trust China and the People's Bank of China with the global reserve currency. Yeah. And not to mention, you know, like I said, China, they literally can't do it because right now they have what, you know, they have what's called a closed capital account, which means it's not easy for funds to flow out of the country. Right. So this is why all these rich Chinese investors use this casino and Macau and they use, you know, other casinos in Shanghai to launder their money and to send it out and just hoard up on Canadian American real estate because they're trying to get out of their own country and they can't because there are capital controls. Yeah, I actually experienced that in my own life.

There's a Chinese national who owns the house that I rent. It's definitely happening. I mean, I've seen it firsthand. And that's the other thing, too, is as a U.S. citizen, as somebody who's been observing these markets and this trend develop over the last decade, I really want to get to the people in charge, or maybe not even the people in charge,

just incite this idea in the minds of the masses here in the united states it's like we have an incredible opportunity if we embrace bitcoin there's a lot of people out there who don't like what we've been doing they don't like the dollar as a reserve currency we should probably just cut our losses because as we've described earlier in this conversation there's the feds backed into a corner there's really no way out except for inevitable hyperinflation at some point probably the next decade or two uh maybe we should be first movers in bitcoin which arguably we already are americans own the largest stake uh of bitcoin in the world and i would really like us to cut our losses embrace bitcoin and make it so we don't have like an empire collapse like many

civilizations throughout throughout history have when they use when they lose the reserves currency status. Yeah, exactly. That would be my hope. And I talked about this with Daniel Prince on his podcast the other week. But if I could convince any single person to orange pill them and turn them into a Bitcoiner, it probably would be Jerome Powell. Because even though I do not like him and I don't like his policies, I don't like what the Fed's done. I think they've made huge policy errors. If we could get the Fed to start to switch gears and completely start moving off the dollar standard and into a Bitcoin standard, this would rapidly force every other country on earth to jump on the bandwagon. Because the Fed is the linchpin that upholds

the entire global monetary system. When I was studying this whole thing and reading all these research papers from the 1950s and reading all these books and talking to Brent Johnson, I kept running into this issue of the US being basically the sole, almost like a hyper power uh you know internationally in terms of the monetary system where we we basically run the entire global economy and so if if the fed starts switching that's when things will really change and the u.s will be at a stronger position you know globally like this is a smart move for us yeah and when you think about it i mean luckily because of the spirit of american entrepreneurship the citizens have already set us up to succeed wildly if if they were to embrace it i mean we

have a material amount of hash rate a lot of the companies that are building the technology and the applications that are giving people access to the bitcoin network and making bitcoin better are are built here obviously there are many more throughout the world but it seems like there is a lot of innovation happening around bitcoin here in the united states particularly like we are set up to succeed again it's just whether or not there is a political will to allow us to succeed because that would be that would be the worst possible scenarios where we have all this progress and all the these good innovations and things happening around bitcoin here in the united states and we just shoot ourselves in the foot i guess that's a good topic to jump into like

what does the world look like if we do shoot ourselves in the foot and don't allow ourselves to succeed and embrace bitcoin well this is the this is the difficult part right because if we move to a completely you know bitcoin based reserve currency system and every other country has stacked sass you know long before we did at much cheaper prices and let's say bitcoin you know if you know what global debt and currency markets are 400 trillion and so let's say bitcoin rises to half that market cap 200 trillion you know who knows what the price would be per coin right that That's an insane amount. That means each sat is worth tens of thousands of dollars.

And the U.S. now with zero on our balance sheet, the rest of the world has moved there and we start stacking. It puts us in a very precarious position because we're still dealing with the after effects, you know, with the hangover from five decades of a fiat monetary system and exporting on manufacturing. So we'd be walking into a world where everyone else has a reserve currency and we don't. And in order to earn it, we have to actually provide value and create goods and not just print money and export it, you know, to get our hands on some sats. And so it would basically impoverish the U.S., in my opinion, for at least a decade or so as we have to rebuild our domestic manufacturing and start earning back, you know, some sats to trade globally. So it would put us back pretty far, in my opinion. And, you know, there would be obviously there's there's going to be institutional resistance to this because the current institutional actors benefit greatly from the current system. So they don't want to move to a Bitcoin monetary system where they won't have censorship rights and they won't have exclusive transfer rights and ability to move freely within the system.

And so, you know, U.S. institutions like the Fed and the Treasury won't be, you know, they won't be too thrilled about this approach. But I think if they look at this seriously enough and realize that, you know, per Jason Lowry's software, like this is a form of almost geopolitical, you know, like strategy warfare, they might be forced to start changing their minds and start stacking sats and getting ready for a new system. Do you think this is on their minds at all? Do you think they think about this or do you think they're so caught up in the problems that they're having to deal with that they're too distracted to even consider it? I think there are probably a few people at higher levels of treasury who are considering this, especially after Jason Lowery posted his thesis. Again, I'm not super connected at that level. I do have a friend who's a former special ops soldier, and he has a lot of people he knows in high levels of government. Not insanely high level, but medium high level.

And he said that actually a few of them mentioned Jason Lowery's book. and so that that itself is making a way its way especially around the defense department and people are starting to talk about that so that's a very you know i think uh comforting sign that people are starting to take this seriously but i don't think it's being taken seriously enough especially by the people at the highest levels like yellen and powell yeah yeah software is very controversial i mean i can see what jason's trying to do with it but i just worry like again if the defense department if you do label bitcoin military grade weaponry particularly mining it becomes nationalized so that's the other part of this too is like how

much do we want governments getting in it that's why i think again we have a great opportunity here in the united states if we stay true to the ideals of this country was founded on freedom freedom speech freedom property or good property rights sound money and i would think i think the best case scenario for us is the government saying like all right just go do your thing entrepreneurs take care of the network build out your mining operations we're not going to tell you to do anything because that at the end of the day is what is going to allow bitcoin to maintain its values if it's sufficiently distributed uh hash rate ownership is distributed amongst many individuals and the whole mining industry doesn't become nationalized globally where you just have

nation states controlling the mining and censoring blocks back and forth it completely defeats the purpose for bitcoin uh and why it exists in the first place yeah i agree i should mention i don't you know wholeheartedly and unequivocally agree with everything that jason wrote um i still i've only read like a little bit of his book i need to read the rest of it but i don't i don't necessarily like want to see bitcoin national you know bitcoin mining nationalized or see you know industrial production regulated that highly. But what I really want to, you know, I really want the Treasury and the State Department to take seriously is this idea of, you know, Bitcoin is a new reserve asset and being traded freely in terms of international trade. And so if that's the

case, then the US should absolutely buy some. And, you know, maybe the Defense Department should create their own a few mining rigs. But I agree with you, I don't think that it should be to the level that um you know he might be be wanting and mentioning i think it should it should stay obviously a production of the free market yeah yeah it's gonna be fascinating what a time to be alive stuff's fun to think about it gets daunting at times heavy at times but this is the cart we've been dealt and uh it's important to have discussions like these and get these out there like how do you how do you think this plays out like convincing individuals that's the other hard part. We have to convince individuals globally that Bitcoin is good. It's good money. It's not

a Ponzi scheme. It's not destroying the environment. You're going to want to adopt this. And I think that's another big hurdle. Not only do we have to convince governments like, hey, you should cut your losses. This fiat monetary system is in its end game. It's going to implode and explode right in front of your, in your face. Not only do we have to convince them, but then we have to convince individuals that hey that yeah this digital money that you've been hearing about is actually legitimate it's not a ponzi scheme it's not a get rich quick get rich quick scheme it is the best money we've ever come into contact with yeah the the you know the convincing process is difficult especially in first world countries but from my experience you know i have family

in venezuela i have family in peru obviously in chile and argentina and they are much more open and accepting of Bitcoin or other, even other cryptocurrencies, because usually they don't have the technical knowledge or just the understanding of the difference between the two, then they are traditional fiat currency. And so I think as, as we, you know, progress further down this road of monetary debasement and inflation, and as these feedback loops start to get worse and worse, and explanation starts to move exponential, like we've said, I think people will start to, you know, it'll be like, if you don't accept Bitcoin, you're an idiot, right? it'll be it'll get to that point where everyone's using it and the only people who aren't are these

stubborn um you know hermit types who who are now the new conspiracy theorists of the people who don't you know want to to be included in modern society so it'll be just you know much like the internet where there's a lot of resistance at first there's a lot of people saying why do i even need this you know like why do i need to search things up on on uh you know aol like i can just look in my phone book um but as the network effect grows and as the utility grows and then also as our current monetary system dies i think people will be convinced more and more of its utility and usefulness and it'll become bitcoin adoption will become like basically inevitable right once it gets to a certain point it'll be every new participant is basically forced

into the market by other participants and at that point you can't stop it yeah so what do your friends and family members say who are down in peru and chile and colombia and venezuela what are what are they why do you think they get it intuitively i think obviously there's you know the the inflation cultural um aspect of they are really struggling with the current monetary system they're mad and upset at their government um peru's had a had a new president and he is you know a school teacher and he hasn't really had a plan he's replaced the cabinet like 12 times and And my mom keeps talking to me about this, and she's very upset about how they're currently running things. And inflation is at 20-year highs in Peru.

It's at, obviously, record highs in Argentina. All these people are very upset and very, I'd say, maybe disenfranchised with their local currency and the running of their monetary policy because it's hurting their checkbook directly. And they're much poorer than we are here, so they have a lot less buffer zone. and so you know that's really pushing them to realize that they need to you know move into a new currency um and i have cousins in venezuela who actually i taught my mom how to send them bitcoin and so they're my mom sends them about a hundred dollars of bitcoin um about once i think it's once a month and that's enough for them to buy corn and flour and uh oil so they're able to live on that yeah it's pretty crazy it works it does work it is uh i actually had to do that my

wife i had a friend a venezuelan friend when we were living in new york and her one of her parents had to get cancer treatment and i had to teach her the only way for her to get money in the country is i had to teach her how to spin up a bitcoin wallet load it up and send it to her parents but it was cool to see it is a shame that the media does the masses a a disservice by just trying to paint bitcoin as this currency for criminals or this ponzi scheme or this destroyer of the environment when it is an incredibly empowering tool for people the world over yeah exactly it's the last you know the last vestiges of the dying system are are fighting you know the inevitable and and they're they're gonna do everything they can obviously to fight

against it but i think you know the debasement's inevitable the inflation's inevitable um you know and so there's they can argue with it they can try to try to point out some supposed flaws but i think as uh you know as as inflation rages higher and higher we're gonna see more and more people just move to it i mean just out of necessity like who cares what your political views are who cares what your you know views are on on you know um on on like the the rights of people to own bitcoin or what is security or commodity like honestly like most people don't care about that they're going to care about surviving and the reality is going to be you know people are going to either accept bitcoin and and be able to to you know provide for the families or not and

and so they're going to be be forced to do this one way or another in my opinion um so i i don't like seeing all this gaslighting i mean it's disgusting it's reminiscent of a lot of stuff we've seen with wall street in 2008 and um you know with the gamestop phenomenon um a lot of people you know basically blamed it all on retail traders and and and you know padded the hedge funds on the back for over shorting a company um and for a broken settlement and naked shorting system but um you know this no system lasts forever and in my opinion the system is is reaching the you know the end of the road we're starting to move into the end game for sure yeah and you mentioned you got your start writing this book and getting this thesis out there on

reddit was a wall street bets no it was this reddit called super stonk um it was specifically about the gamestop uh phenomenon and and you know them being the you know the buy button being turned off essentially and and a lot of these you know these gme uh apes as they like to call themselves are actually you know a lot of them are turning into bitcoiners because a lot of them were disenfranchised and angry at the system in 2021 was seeing the stock trading get shut down arbitrarily just to protect a few hedge funds and protect the interests of the prime brokers and so them seeing directly like in your face face broad daylight the buy button being turned off and you not being allowed to buy a stock that's being you know experiencing a short squeeze was it was a

up moment and a lot of them have said that they've read my work and started to buy bitcoin because of it um hell yeah yeah that's funny because i remember when wall street bets was going on gamestop amc bed bath and beyond whatever all the stocks and i would dive into that wall street bet bets read it and just like read what people are saying and they were like hey this is the way to get back at the system and it's like hey i get what you're doing and i understand i think it's somewhat admirable and virtuous that you're trying to fight back against the incumbent financial system that is completely controlled by a select few and very much manipulated but that's not going to be your your best bet at actually making a material impact on that system bitcoin is that

so again you can take this all the way back to 2008 um the aftermath which bitcoin was birthed out of like with occupy wall street it was the same thing it was like you can protest you can get to Zucchetti Park or whatever the hell it was called and try to voice your discontent with the state of the world. But you need a tool that's actually going to be able to defang these people, and Bitcoin is that tool. So I think the fact that the GameStop apes are beginning to turn to Bitcoin is an extremely encouraging sign

because when that was all going on, I was watching from afar. I was like, oh, this is funny. um i like that you guys are doing this but this is the wrong strategy like you need to defund these people at the root of the problem which is money yeah monetary power you know is economic and military power and political power right so if you if you have a new system where these people no longer have any monetary power and cannot accrue it by you know cozying up to the fed and sitting next to the money printer to to profit off contillion effects you can essentially you know reorder the global system um overnight and and make sure that corruption and

and uh you know societal decay becomes a lot harder for these people to to um instantiate in our economy becomes a lot harder to do these things because there's no money printer to profit off of no no that's what we have right out here in the studio fix the money fix the world like you get beyond just like the financial aspects like all this money printing leads to a misallocation of capital, perverse incentives. That's why our country's fat, arguably why we're stupid,

arguably why all of our real estate is shit, why our roads are crumbling. It's because we don't have a correct pricing mechanism to actually accurately weigh opportunity costs to make capital allocation decisions that actually end up in better goods, better services,

a more productive economy overall. Exactly. And, you know, this is where I start to think about, you know, the homelessness crisis and the drug epidemic and, you know, seeing suffering on the streets every day in the cities of the U.S. Like there's so much – so many people who are hurting and it's honestly depressing and it makes me mad. I mean this is part of the reason why I wrote the whole series is because when I first discovered how the Fed works and how the Treasury works, I was just pissed off for a week. Like I couldn't believe that this was accepted. And it was taught about in academic schools and at the university I attended by PhDs who defended this system not only on its practical grounds but on its moral grounds. They said that this is the right way for a government to work, and I couldn't believe that stealing from the citizens en masse was something that they thought was acceptable.

It's one thing to tax people, and then they can vote out the people who tax them too high or they can change the tax laws. It's another thing to just have an arbitrary board of governors that are unelected who decide the price of money and decide how much we're going to print today, and they can just impoverish everyone else at the expense of – or at the profit of their friends. yeah hey man debt is just money we owe ourselves we're just going to keep printing don't worry about it that's one of the most insidious uh lines of thinking that has ever entered the thought of economics and we're still paying the price today uh so end game we've passed the event horizon i think we both believe bitcoin is going to be the next reserve currency of the world what are you thinking in terms of potential purchasing power value of bitcoin once this happens especially if you have that flywheel begin going off which i mean we got a signal

that it's happening last week too unfortunately for the the baton sovereign wealth fund they got caught up in block fine celsius so that made the world aware that they were stacking bitcoin within their sovereign wealth fund so that's country number two publicly maybe three i think everybody would concede that russia is definitely stacking bitcoins we have el salvador russia butan publicly stacking bitcoin once that flywheel gets off in earnest how crazy do you think this gets in terms of the value that will accrue to the bitcoin network i think it i mean this is where i think it goes exponential um and again people think i'm when i say about this talk about this in terms of inflation people also think i'm i'm insane and i'm a conspiracy theorist but really when you

look at the network effect and you look at the flywheel effect like we talked about that keeps dragging in more and more participants it's not hard to do to imagine this to actually taking place um you know there's you know in international monetary economics there's a phenomenon called currency wars and beggar that neighbor policies where currencies will you know countries will devalue their own currency and then another country will have to devalue their currency to to try to get more trade um uh exports from their countries so they'll basically be in a race to the bottom devaluing each devaluing and fighting against each other to try to get the best rate um right against the dollar and there's no reason to think that that wouldn't that that wouldn't

play out um in terms of stacking sats right the first nations to move are going to be the the the four the fastest and strongest movers in the system and then once they start moving and start moving rapidly and the price goes to 50 and then to 80 then 100 then 200 then 300 other nation states are going to start worrying and being like hey would you rather hold on to our own currency or onto these dollars that are depreciating daily and that can be censored or seized or we rather start stacking sats and uh like i said the last nation to move on is going to be the loser in the system they're going to essentially have nothing they're going to have to rebuild all their wealth from the ground up because they're going to have to export

goods to to gain any sats and so um you're gonna see in my opinion you're gonna see this accelerate and you're gonna start to see the price go you know especially at a certain point in the end game you know the price will basically go exponential and it'll be every almost every day will be up you know 10 10 10 10 10 percent for months on end because everyone will be rushing because there's no supply limit on a fiat currency they can put as much as they want to try to get their hands on it um and so i think that it goes exponential like i said i i didn't do i haven't done the math so i don't know what it'd be per sat but just do the numbers of 400 trillion of global debt um and forex markets divided by 21 million bitcoin and that

should give you a rough estimate of where it should be at at the end of this yeah so we got to stay humble and stack sass freaks it's uh it's gonna get crazy what do you think the social ramifications of this type of rapid monetization of bitcoin will have you have hopes for a somewhat peaceful transition or is it going to be so chaotic that there's going to be a bit of a societal upheaval for some time before the dust settles and we get back to being able to be civil economic partners well i think you look i think that we're going to have obviously some societal uh upheaval i think people are not going to be happy with inflation ripping because you know kind of the point of my thesis is bitcoin going exponential happens especially

towards the later stages of this what's going to happen first is just inflation is just going to get worse and bitcoin may rise to 100 200 300 000 but it won't really go exponential until inflation gets so untenable that people can't even live and um there's a study done forgot by who uh that showed that in about 20 countries that experienced food riots, it was because inflation had reached, the average price of food was more than 40% of the average, the median person's salary. So once we hit that threshold, that's when riots break out and are basically like, you know, widespread throughout a country. We saw this in the Arab Spring. You see this in Venezuela right now. And so once we hit that threshold of median food prices per month being

more than 40 percent of someone's income that's when things start to get not so great but i i don't believe that we're going to go into you know the zombie apocalypse that some people are preparing for that everyone's going to be hurting each other and we're going to be like fighting at walmart over the last you know snickers bar right i think that people the adoption of bitcoin will be be more will speed up and all these tech companies if you think about it like from a monetary perspective they'll think like wow think how much money and funding will be going moving into bitcoin very rapidly as we switch completely from the from uh from the system from the old system to the new one and so you'll see this huge influx of capital and resources and intellectual

capital um into bitcoin and you'll see all these companies start popping up new payments new payments companies you know new ones setting up um you know probably financial statements and balance sheets for for small businesses they can operate on a bitcoin standard um and that all can happen very quickly, right? We're talking a matter of months, I mean, six to 12 months for most of these things to be spun up. And so I think, you know, giving you exact timelines and giving you exact things that will happen is obviously impossible, but I think, you know, there'll be more and more unrest and people will be very upset. And probably when we finish moving to the new system, everyone will act as if all this was obvious in hindsight. They'll say, hey,

you know, oh, of course the Bitcoiners knew about this. I knew about it too. And I didn't stacks hats earlier because i just you know i didn't have the money or i they'll make up some excuse um but um i think they'll probably be also honestly some jealousy also against the bitcoin the original big corners because of their newfound wealth um but people being like it's not fair and you know life isn't fair but you have the chance to stack now so might as well you were on tinder when i was learning the blockchain exactly i was doing i was doing my hard work and due diligence i made an educated decision it was not luck no i agree that's gonna happen but i'm also optimistic yeah like i think

i'm optimistic as well because i do think we have been afforded somewhat of a luxury now that bitcoin's 14 years old white paper will be 15 later this year we've had a lot of time to build out the network the layers above the network the mining industry the ux around interacting with the network and i do think like you said once that light bulb goes off for many people particularly in the tech sector they are savvy entrepreneurs and more importantly competent technologists who know how to implement this stuff into their stacks that the network and the ecosystem around it has gotten to a point where it'll be relatively trivial to begin implementing the ability to receive and send Bitcoin or interact with Bitcoin or use Bitcoin as some financial collateral

within a tech stack or a banking stack. Yeah. And I mean, to not only add to that, but like think of the game theory that'll play out as we have a dual monetary system. You know, and Lynn Alden's talked about this, but there's something called Gresham's law, right where um there's basically a war between two different currencies one that's overvalued and one that's undervalued um and the undervalued one will be used at first more because it's it's losing value and people want to get rid of it but once that happens you know there'll be almost a game theory like push into the new monetary system that will hurt the old one so an example is let's say you know bitcoin's at 500k and appreciating quickly and there's you know let's say a third

of the businesses in the u.s now except bitcoin well if you see this happening and you see hey bitcoin is rising um everyone's moving to bitcoin standard i might as well go to the bank max out all my credit cards max out all my loans and just buy bitcoin and then just go and pay for my groceries and everything in bitcoin and who cares about my credit score who cares about all these old fiat you know mechanisms of control because they won't matter anymore because what are they going to do seize a bank account with zero dollars in it they can't do that um and if you don't have any collateral posted for any of these loans and how are they going to collect it so you know there there could be people that start you know inadvertently maybe hurting the old system in

order to get into the new one and that would speed its demise obviously yeah that's when gresham's law flips to thier's law instead of bad money driving out good you get the good money driving out the bad exactly and that's the switch that um will i think that's one of the the catalyst to turning bitcoin exponential that's when again like we won't just see 200k to 400k we'll see 1 million to 5 million and then 5 million to 20 million yeah it's gonna be fun it's gonna be exhilarating i don't know fun's the word to describe it but it's gonna be it's gonna be crazy that's that's for sure it's gonna be a ride i keep telling people it's a ride i i'm not gonna tell you if it's gonna be all good or all bad it's probably gonna be both but it's gonna

be a ride for sure yeah so what do you think uh short term here obviously we had the blow up of silicon valley bank signature bank uh we've had this banking crisis very eerily similar to oh wait where you had a few bank failures in the beginning of the year and then the fireworks went off in the fall of 2008 obviously um feds got rates staying high they're still raising by 25 bps at least um what do you think happens in the short term next three months what are you looking at i saw you're posting about um uh the reverse repo is there any signal in that market right now yeah so reverse repo is essentially right like money market funds and and you know primary dealers parking their cash at the fed in order to get

their hands on treasuries because they need that collateral and it's better for them to do it there than it is for them to outright buy treasuries because if they buy them they're going to have unrealized losses on a balance sheet. Um, but I think, you know, obviously the banking system is under stress right now and the, in BTFP and other programs that have been created are trying to, to, you know, hold the system together with duct tape and bailing wire. Um, and a lot of people have asked me if I think that 2008 is coming again, coming again, but personally, I actually don't. Um, and the reason is multi, you know, multifaceted, uh, the Naldon's done some great articles on this, but mainly because the Fed now knows how to fight a banking crisis

and they're going to create as many liquidity programs and funding programs and zero interest rate loans as they need to in order to keep the wheels on the bus. And so I believe that even if there is a banking crisis, the Fed will step in and print as much money as needed to keep everything solvent. But in terms of Bitcoin, what's been really encouraging is seeing the price rise into a crisis that's us seeing this decoupling of market narrative start to emerge where instead of viewing bitcoin as a risk asset and as something that trades basically on par with nasdaq and and you know the higher beta s p stocks we're now seeing it trade as its own bonafide um you know basically like safe haven asset kind of like gold um and actually it's obviously been

outperforming gold by multiple factors because gold's up eight or ten percent and bitcoin's up what 80 since the start of the year um and so i think that the market's starting to sniff out the coming to basement and coming qe and the pivot and they're starting to get ready for for a move so i think into this year we're going to see bitcoin trade probably sideways and up so i'm not expecting this year to be a huge bull year but i'm expecting this year to be um overall a good year for bitcoin and and we'll see a rally maybe up to 40 000 i don't know but the true debasement really starts kicking in um end of this year early next year when the fed is forced to pivot because they are you know obviously the the tga is which is something else that we should mention like their

own checking accounts running out of funds um they have about 190 billion dollars as of uh april 15th and then they're going to get an influx obviously because the tax taxes and that could buy them a few you know a few more months but probably by the end of this year we're going to be seeing um them having to raise the debt ceiling and kick the can again um and start and the federal start probably start to have you know chart qe just to hold the interest rates down because they'll run into the same problem we've talked about if they keep rates high the banks aren't solvent companies are going under left and right and the treasury itself will be pulling itself deeper and deeper into the black hole yeah so for the freaks out there when you say tga you mean

treasury general account correct yeah exactly it's basically the us government checking account and you can see it on uh fred um if you look it up and i believe some some people have also published it on trading view yeah yeah it's gonna be fun i wouldn't mind like a just a flat to humble pump here more time to stack more sets because when it happens when it rips freaks it's gonna rip and there's gonna be a lot of people like damn i should have bought when it was 25k when it was was 27k when it was 40k so like you said i don't think people realize people just literally chemically our brains cannot comprehend exponential functions in real time and that's what we're going to experience is an exponential move exactly and that's i mean that's what we saw with the

game stop stock that's what we've seen with um you know different different securities that have underlying factors of feedback loops where like a gamma squeeze or short squeeze where the more and more they buy the more they have to buy because the more underwater they are um and you'll see the fed run into the same dilemma right like the treasury's underwater they print more money to to buy the bonds the treasury spends them into the real economy and then inflation rises and the treasury has to spend more next year or in the next quarter and the fed will have to print more and this this cycle doesn't end like this is what i've been trying to tell people is i know that you know the u.s dollar has been stable relatively stable for the last 50 years

but no fiat currency lasts forever and and no country's immune from feedback loops and so you know the us is no exception we can fall victim to this just as easily as anyone else yeah that's another thing too is they're able to give themselves a little bit of breathing room due to how they manipulate the cpi so they're able to come out and say yeah inflation's only 6.1 percent But, I mean, down here, I just know that not to be true just by looking at my grocery bill and then gas prices, too. Like, I went home to Philadelphia for a few weeks, then came back to Austin, and gas prices were up 10% to 15% within a three-week period. They're back above $3.40 where I am. They were below $3 a month ago.

Yeah, OPEC is cutting production, and, you know, we're seeing more and more countries trying to move off the petrodollar system. I think – was it France for the first time ever paid for liquid natural gas shipment in March not using U.S. dollars? And so if – the network effect of the dollar is strong, and it's actually incredibly strong, which is what Brent Johnson points out. But of course he admits it's not a golden – it's a golden handcuff. It doesn't work forever. It's not a diamond set thing. no you can see death by a thousand cuts you know macron welching on hit on his drive to support the dollar you have obviously cutting off russia i think that's uh-oh lose you can you hear

me and he's back okay it's all good i wouldn't worry about it okay i'm on my phone now because my computer died okay i'll um yeah i guess we can just wrap up we were talking about what were we uh we're just ending on logan um we're talking about um let's see we're talking about um bitcoin as reserve currency people switching to it um and then we're talking about social like the very end of um like how basically if there's gonna be social unrest in the system after um you know during this one during this switch and we kind of said there was but um yeah i apologize for that it's oh yeah my computer's been having battery issues and um no need it's it's plugged in and charging but it's or it's plugged in it's not charging and

it's gone on zero and it just died so well sorry about that you don't need to apologize and i remember what we were touching on which is the network effect of the dollar and the fact that macron is doing lng settlement trades in a currency other than the dollar like you said brett johnson says yes we do have this massive network effect it's very powerful but i mean a signal like macron and france doing an energy trade outside the dollar is a very strong one yeah i mean that's that's a sign of the system starting to fall apart right um and you know this This current paradigm isn't – it never lasts forever, which is something else I point out in my book. A really interesting tidbit is the average life expectancy of a reserve currency is 80 years.

And guess what? We entered reserve currency status in 1944, and so that means our lifeline is up by 2024. And so this is coming very soon. It's coming down the pike. And so, definitely concerning and, you know, other countries too have expressed desires to move off. We see India and, you know, China and some other countries are trying to make a regional settlement currency so they can trade with each other. And, you know, the other options are really poor, right? And also, let me know, is vertical okay or should I go horizontal?

Vertical is good. Vertical is good, okay. um but the other the other options right like aren't actually good good solutions for for the for the global system because if we create a if we get a regional currency block that's traded between um several different countries like you know india russia and china um that's another closed system that people won't really have access to and they can't make it an open system because they'll need to export more currency units than they have and so that'll cause their own currency to debase. And so all these countries doing these measures, in my opinion, they're stopgap measures.

And I've been talking with Brent Johnson and Luke Roman about this, and both of them kind of agree that it's extremely hard to move off the dollar system. Brent points out that the U.S. will enforce our hegemony with violence. And that's absolutely true. We have the entire U.S. military complex standing behind us, ready to fight anyone who wants to move off the petrodollar system. and this is where bitcoin comes in as the perfect solution right because bitcoin is unkillable you know it doesn't matter how big your military is doesn't matter how powerful your treasury is doesn't matter how many bombs or weapons you have you can't destroy it and so as a reserve currency it's not only probably the best solution it's probably the only solution because it's the only

one that can fulfill all the requirements that reserve currency must have which is pristine reserve basket asset um minimal counterparty risk used for widespread use in global trade and not not a centralized issuer which is what gold used to be in the old system before we moved to a pure fiat system yeah when you put it that way it's almost like bitcoin can lead to a more peaceful world where you don't have to defend your world reserve reserve currency with uh a massive military because you don't have the ability because you don't have control over it it and you can't force people to use it or not use it they're going to use it it's the best one but you have no control over it this is the future i want to see pb i'm going to call you pb

just easier yeah that's fine um well this has been great thank you for doing this um that's a good bull fuel peruvian maybe you should call it peruvian bull fuel throw it on the Bitcoin space right now or throw a bowl of fuel on it? Yeah, absolutely. I'm glad that my message is getting out there and my way of thinking is getting out there. I'm relatively new to the Bitcoin world.

So there's been several large other Bitcoin accounts that have been starting to read some of my writings and put me on these spaces. So I'm definitely grateful for that. And I'll be at the Bitcoin conference in Miami me if anyone else is going um so definitely would love to meet up and talk if you're going to go there i will be there be on a couple panels we'll be doing a live podcast there too um the open source stage so come check that out looking forward to meeting you in person where can

anybody find out more about what you're writing your youtube twitter yeah sure so on twitter i'm peruvian underscore bull just how it sounds all lowercase uh same thing on medium um and i have a website called the dollar endgame.com where i've published all my writings um and put up um you know a lot of resources as well as reading lists for basically understanding what i have come to understand about the monetary system um and i have a youtube channel called peruvian bull which is the handle at peruvian underscore bull again um and i've published parts one through three of my dollar end game series there's five parts so it's about 60 percent of the way done so if you want to see a video version of my series for free you can go on there and check it out

um and i also have a book on on amazon that's uh called the dollar end game and that's also by peruvian bull and so you can check that out too if you want to um but yeah that's where you can find me um and i'm looking forward to meeting in miami for sure hell yeah go check it all out freaks thank you for your time on this glorious monday peace and love